BILL REQ. #:  S-4467.2 

Read first time 01/20/2006.   Referred to Committee on Government Operations & Elections.

     AN ACT Relating to establishing the Washington clean elections act; amending RCW 42.17.095 and 42.17.128; adding a new chapter to Title 42 RCW; and prescribing penalties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   The legislature finds that our current election financing system:
     (1) Gives incumbents an unhealthy advantage over challengers;
     (2) Hinders communication to voters by many qualified candidates;
     (3) Undermines public confidence in the integrity of public officials;
     (4) Drives up the cost of running for state office, discouraging otherwise qualified candidates who lack personal wealth or access to special interest funding; and
     (5) Requires that elected officials spend too much of their time raising funds rather than representing the public.

NEW SECTION.  Sec. 2   This chapter, to be known as the Washington clean elections act, establishes an alternative campaign financing option available to candidates running for office. The alternative campaign financing program is funded entirely through voluntary donations made by individuals. The commission shall administer this chapter and the Washington clean elections account. Participating candidates must also comply with all other applicable election and campaign laws and rules.

NEW SECTION.  Sec. 3   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Account" means the Washington clean elections account established under section 6 of this act.
     (2) "Commission" means the public disclosure commission.
     (3) "Exploratory period" means the period beginning on the day after a general election and ending the day before the start of the qualifying period.
     (4) "General election period" means the period beginning upon certification of the primary election and ending on the day of the general election.
     (5) "General election spending limit" means amounts fifty percent greater than the primary election spending limit for that office.
     (6) "Nonparticipating candidate" means a candidate who does not become certified as a participating candidate under this chapter.
     (7) "Participating candidate" means a candidate for governor, lieutenant governor, secretary of state, attorney general, state auditor, state treasurer, commissioner of public lands, insurance commissioner, superintendent of public instruction, state senator, or state representative who becomes certified as a participating candidate under this chapter.
     (8) "Primary election period" means the period starting ten days after the close of candidate filing and ending on the day of certification of the primary election.
     (9) "Primary election spending limit" means for a candidate for legislature, ten thousand dollars; for a candidate for secretary of state, lieutenant governor, or attorney general, eighty thousand dollars; for a candidate for governor, three hundred eighty thousand dollars; and for all other candidates, forty thousand dollars.
     (10) "Qualifying contribution" means a contribution that is:
     (a) Made during the qualifying period by an elector who at the time of the contribution is registered in the electoral district of the office the candidate is seeking and who has not given another qualifying contribution to that candidate during the election cycle;
     (b) Made by a person who is not given anything of value in exchange for the qualifying contribution;
     (c) In the sum of five dollars, exactly;
     (d) If made by check or money order, made payable to the candidate's campaign committee or, if in cash, deposited in the candidate's campaign account; and
     (e) Reported to the commission in compliance with section 4 of this act.
     (11) "Qualifying period" means the period beginning on the first day of August in a year preceding an election and at the close of candidate filing under chapter 29A.24 RCW.

NEW SECTION.  Sec. 4   (1) A candidate who wishes to be certified as a participating candidate shall submit to the commission by the close of candidate filing under chapter 29A.24 RCW for that election year:
     (a) An application that identifies the candidate, the office that the candidate plans to seek, and the candidate's political party, if any;
     (b) A report that provides the name and other information required by the commission of all persons who have made qualifying contributions under this chapter on behalf of the candidate and an amount equal to the qualifying contributions collected by the candidate to be deposited in the account;
     (c) A statement signed by the candidate under oath, certifying that the candidate:
     (i) Has complied with the restrictions of this chapter during the election cycle to date;
     (ii) Agrees to comply with the requirements of this chapter during the remainder of the election cycle and will not accept private campaign contributions other than qualifying contributions as provided in this chapter;
     (iii) Agrees that all money received from the account will be used exclusively for financing his or her primary or general election campaign; and
     (iv) Will comply with expenditure reporting requirements in RCW 42.17.070 and 42.17.080; and
     (d) A copy of the candidate's declaration of candidacy.
     (2) The commission shall act on the application within one week. Unless, within that time, the commission denies an application and provides written reasons that all or part of a certification in subsection (1) of this section is incomplete or untrue, the candidate shall be certified as a participating candidate. If the commission denies an application for failure to file all complete and accurate campaign finance reports or failure to make the certification in subsection (1) of this section, the candidate may reapply within two weeks of the commission's decision by filing complete and accurate campaign finance reports and another sworn certification.

NEW SECTION.  Sec. 5   (1) Participating candidates may not:
     (a) Accept any campaign contributions other than qualifying contributions and early contributions as specified in this chapter;
     (b) Make campaign expenditures of more than a total of five hundred dollars of the candidate's personal money for a candidate for legislature or more than one thousand dollars for a candidate for statewide office;
     (c) Make campaign expenditures in the primary election period in excess of the primary election spending limit; or
     (d) Make campaign expenditures in the general election period in excess of the general election spending limit.
     (2) Participating candidates must comply with section 12 of this act regarding campaign accounts and section 16 of this act regarding returning unused money to the account.

NEW SECTION.  Sec. 6   (1) The Washington clean elections account is created in the custody of the state treasurer. All receipts from voluntary contributions from sources listed in subsection (2) of this section must be deposited into the account. Expenditures from the account may be used only for distributions as authorized by this chapter. Only the commission or the commission's designee may authorize expenditures from the account. The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.
     (2) Voluntary contributions to the account may be made in the following manner and must be deposited in the account:
     (a) Qualifying contributions collected by candidates and submitted to the commission under section 4 of this act;
     (b) Contributions made to the account or the commission for the account;
     (c) Contributions made through a voluntary check off on driver's license application and renewal forms;
     (d) Contributions made through a voluntary check off on vehicle registration and renewal forms;
     (e) Contributions made through a voluntary check off on state college and university registration forms;
     (f) Contributions made through a voluntary check off on department of fish and wildlife license and renewal forms;
     (g) Contributions made through a voluntary check off on department of natural resources license and renewal forms;
     (h) Contributions made through a voluntary check off on professional license and renewal forms; and
     (i) Transfer of surplus funds under RCW 42.17.095.

NEW SECTION.  Sec. 7   (1) By January 1st of each election year, the commission shall publish an estimate of revenue in the account available for distribution to participating candidates during the upcoming elections.
     (2) The commission may use up to ten percent of the amount in the account for reasonable and necessary expenses of administration and enforcement. Any portion of the ten percent not used for this purpose must remain in the account.
     (3) The commission may use up to ten percent of the amount in the account for reasonable and necessary expenses associated with voter education. Any portion of the ten percent not used for this purpose must remain in the account.

NEW SECTION.  Sec. 8   (1) The civil penalty for a violation of any contribution or expenditure limit in section 5 of this act by or on behalf of a participating candidate shall be ten times the amount by which the expenditures or contributions exceed the applicable limit.
     (2) In addition to any other penalties imposed by law, the civil penalty for a violation by or on behalf of any candidate of any reporting requirement imposed by this chapter or chapter 42.17 RCW shall be one hundred dollars per day for candidates for the legislature and three hundred dollars per day for candidates for statewide office. The penalty imposed by this subsection shall be doubled if the amount not reported for a particular election cycle exceeds ten percent of the adjusted primary or general election spending limit. No penalty imposed under this subsection shall exceed twice the amount of expenditures or contributions not reported. The candidate and the candidate's campaign account shall be jointly and severally responsible for any penalty imposed under this subsection.
     (3) Any campaign finance report filed indicating a violation of section 5 of this act involving an amount in excess of ten percent of the sum of the adjusted primary election spending limit and the adjusted general election spending limit for a particular candidate shall result in disqualification of a candidate or forfeiture of office.
     (4) Any participating candidate adjudged to have committed a knowing violation of section 5 of this act shall repay from the candidate's personal money to the Washington clean elections account all money expended from the candidate's campaign account and shall turn over the candidate's campaign account to the Washington clean elections account.
     (5) All civil penalties collected pursuant to this section shall be deposited into the account.

NEW SECTION.  Sec. 9   (1) A participating candidate may accept early contributions only from individuals and only during the exploratory period and the qualifying period, subject to the following limitations:
     (a) No contributor shall give, and no participating candidate shall accept, contributions from a contributor exceeding one hundred dollars during an election cycle;
     (b) Early contributions to a participating candidate from all sources for an election cycle shall not exceed, for a candidate for governor, forty thousand dollars or, for other candidates, ten percent of the sum of the original primary election spending limit and the original general election spending limit;
     (c) Qualifying contributions shall not be included in determining whether the limits in this subsection have been exceeded.
     (2) Early contributions specified in subsection (1) of this section and the candidate's personal money specified in section 5 of this act may be spent only during the exploratory period and the qualifying period. Any early contributions not spent by the end of the qualifying period shall be paid to the account.
     (3) If a participating candidate has a debt from an election campaign in this state during a previous election cycle in which the candidate was not a participating candidate, then, during the exploratory period only, the candidate may accept, in addition to early contributions specified in subsection (1) of this section, contributions subject to campaign contribution limitations for nonparticipating candidates, or may exceed the limit on personal money in section 5 of this act, if such contributions and money are used solely to retire such debt.

NEW SECTION.  Sec. 10   (1) A candidate, or any other person acting on behalf of a candidate, who knowingly violates section 5 of this act is guilty of a gross misdemeanor.
     (2) Any person who knowingly pays any thing of value or any compensation for a qualifying contribution is guilty of a gross misdemeanor.
     (3) Any person who knowingly provides false or incomplete information on a report filed under section 18 of this act is guilty of a gross misdemeanor.

NEW SECTION.  Sec. 11   (1) During the qualifying period, a participating candidate may collect qualifying contributions, which shall be paid to the account.
     (2) Qualifying contributions must be accompanied by a three-part reporting slip that includes the printed name, registration address, and signature of the contributor, the name of the candidate for whom the contribution is made, the date, and the printed name and signature of the solicitor.
     (3) A copy of the reporting slip shall be given as a receipt to the contributor, and another copy shall be retained by the candidate's campaign committee. Delivery of an original reporting slip to the commission excuses the candidate from disclosure of these contributions on campaign finance reports filed under this chapter and chapter 42.17 RCW.

NEW SECTION.  Sec. 12   (1) A participating candidate shall conduct all financial activity through a single campaign account of the candidate's campaign committee. A participating candidate shall not make any deposits into the campaign account other than qualifying and early contributions.
     (2) A candidate may designate other persons with authority to withdraw funds from the candidate's campaign account. The candidate and any person so designated shall sign a joint statement under oath promising to comply with the requirements of this chapter.
     (3) The candidate or a person authorized under subsection (2) of this section shall pay money from a participating candidate's campaign account directly to the person providing goods or services to the campaign and shall identify, on a report filed under this chapter or chapter 42.17 RCW, the full name and street address of the person and the nature of the goods and services and compensation for which payment has been made. However, a campaign committee may establish one or more petty cash accounts, which in aggregate shall not exceed one thousand dollars at any time. No single expenditure shall be made from a petty cash account exceeding one hundred dollars.
     (4) Money in a participating candidate's campaign account shall not be used to pay fines or civil penalties, for costs or legal fees related to representation before the commission, or for defense of any enforcement action under this chapter. Nothing in this subsection prevents a participating candidate from having a legal defense fund.

NEW SECTION.  Sec. 13   (1) A candidate who has made an application for certification may also apply, in accordance with subsection (2) of this section, to receive funds from the account instead of receiving private contributions.
     (2) To receive clean campaign funding, the candidate must present to the commission within one week after the end of the qualifying period a list of names of persons who have made qualifying contributions on behalf of the candidate. The list shall be divided by county. At the same time, the candidate must tender to the commission the original reporting slips identified in section 11(3) of this act for persons on the list and an amount equal to the sum of the qualifying contributions collected. The commission shall deposit the amount into the fund.
     (3) The commission shall select at random a sample of five percent of the number of nonduplicative names on the list and forward facsimiles of the selected reporting slips to the secretary of state. Within ten days, the secretary of state shall provide a report to the commission identifying as disqualified any slips that are unsigned or undated or that the recorder is unable to verify as matching a person who is registered to vote, on the date specified on the slip, inside the electoral district of the office the candidate is seeking. The commission shall multiply the number of slips not disqualified by twenty and, if the result is greater than one hundred ten percent of the quantity required, shall approve the candidate for funds. If the result is less than ninety percent of the quantity required, the commission shall deny the application for funds. Otherwise, the commission shall forward facsimiles of all of the slips to the secretary of state for verification to be checked in accordance with this section.
     (4) To qualify for clean campaign funding, a candidate must have been approved as a participating candidate and have obtained the following number of qualifying contributions:
     (a) For a candidate for legislature, two hundred;
     (b) For a candidate for treasurer, superintendent of public instruction, state auditor, insurance commissioner, or commissioner of public lands, one thousand five hundred;
     (c) For a candidate for secretary of state, lieutenant governor, or attorney general, two thousand five hundred; and
     (d) For a candidate for governor, four thousand.

NEW SECTION.  Sec. 14   (1) At the beginning of the primary election period, the commission shall pay from the account to the campaign account of each participating candidate who qualifies for clean campaign funding:
     (a) For a major party candidate who appears on a party primary ballot, an amount equal to the original primary election spending limit;
     (b) For an independent candidate or minor party candidate who qualifies to appear on the general election ballot, an amount equal to seventy percent of the original primary election spending limit; and
     (c) For a qualified participating candidate who is unopposed for an office in that candidate's primary, in the primary of any other party, by any minor party candidate, and by any opposing independent candidate, an amount equal to five dollars times the number of qualifying contributions for that candidate certified by the commission.
     (2) At the beginning of the general election period, the commission shall pay from the account to the campaign account of each candidate who qualifies for clean campaign funding:
     (a) For a candidate who has been certified to appear on the general election ballot, an amount equal to the original general election spending limit; and
     (b) For a candidate who is unopposed by any other candidate, an amount equal to five dollars times the number of qualifying contributions for that candidate certified by the commission.

NEW SECTION.  Sec. 15   (1) When during a primary election period a report is filed, or other information comes to the attention of the commission, indicating that a nonparticipating candidate who is not unopposed in that primary has made expenditures during the election cycle to date exceeding the original primary election spending limit, including any previous adjustments, the commission shall immediately pay from the account to the campaign account of any participating candidate in the same party primary as the nonparticipating candidate an amount equal to any excess of the reported amount over the primary election spending limit, as previously adjusted, and the primary election spending limit for all such participating candidates shall be adjusted by increasing it by the amount that the commission is obligated to pay to a participating candidate.
     (2) When during a general election period a report has been filed, or other information comes to the attention of the commission, indicating that the amount a nonparticipating candidate who is not unopposed has received in contributions during the election cycle to date less the amount of expenditures the nonparticipating candidate made through the end of the primary election period exceeds the original general election spending limit, including any previous adjustments, the commission shall immediately pay from the account to the campaign account of any participating candidate qualified for the ballot and seeking the same office as the nonparticipating candidate an amount equal to any excess of the reported difference over the general election spending limit, as previously adjusted, and the general election spending limit for all such participating candidates shall be adjusted by increasing it by the amount that the commission is obligated to pay to a participating candidate.
     (3) For the purposes of subsections (1) and (2) of this section the following expenditures reported under this chapter shall be treated as follows:
     (a) Independent expenditures against a participating candidate shall be treated as expenditures of each opposing candidate, for the purposes of subsection (1) of this section, or contributions to each opposing candidate, for the purposes of subsection (2) of this section;
     (b) Independent expenditures in favor of one or more nonparticipating opponents of a participating candidate shall be treated as expenditures of those nonparticipating candidates, for the purposes of subsection (1) of this section, or contributions to those nonparticipating candidates, for the purposes of subsection (2) of this section;
     (c) Independent expenditures in favor of a participating candidate shall be treated, for every opposing participating candidate, as though the independent expenditures were an expenditure of a nonparticipating opponent, for the purposes of subsection (1) of this section, or a contribution to a nonparticipating opponent, for the purposes of subsection (2) of this section;
     (d) Expenditures made during the primary election period, by or on behalf of an independent candidate or a nonparticipating candidate who is unopposed in a party primary, shall be treated as though they were made during the general election period, and equalizing funds under subsection (2) of this section shall be paid at the start of the general election period;
     (e) Expenditures made before the general election period that consist of a contract, promise, or agreement to make an expenditure during the general election period resulting in an extension of credit shall be treated as though they were made during the general election period, and equalizing funds under subsection (2) of this section shall be paid at the start of the general election period; and
     (f) Expenditures for or against a participating candidate promoting or opposing more than one candidate who are not running for the same office shall be allocated by the commission among candidates for different offices based on the relative size or length and relative prominence of the reference to candidates for different offices.
     (4) If an adjusted spending limit reaches three times the original spending limit for a particular election, then the commission shall not pay any further amounts from the account to the campaign account of any participating candidate, and the spending limit shall not be adjusted further.

NEW SECTION.  Sec. 16   (1) At the end of the primary election period, a participating candidate shall return to the account all money in the candidate's campaign account above an amount sufficient to pay any unpaid bills for expenditures made during the primary election period and for goods or services directed to the primary election.
     (2) At the end of the general election period, a participating candidate shall return to the account all money in the candidate's campaign account above an amount sufficient to pay any unpaid bills for expenditures made before the general election and for goods or services directed to the general election.
     (3) A participating candidate shall pay all uncontested and unpaid bills referenced in this section within thirty days after the primary or general election. A participating candidate shall make monthly reports to the commission concerning the status of the dispute over any contested bills. Any money in a candidate's campaign account after payment of bills shall be returned promptly to the account.

NEW SECTION.  Sec. 17   (1) If the commission finds that there is reason to believe that a person has violated this chapter, the commission shall serve on that person an order stating with reasonable particularity the nature of the violation and requiring compliance within fourteen days. During that period, the alleged violator may provide any explanation to the commission, comply with the order, or enter into a public administrative settlement with the commission.
     (2) Upon expiration of the fourteen days, if the commission finds that the alleged violator remains out of compliance, the commission shall make a public finding to that effect and issue an order assessing a civil penalty in accordance with section 8 of this act, unless the commission publishes findings of fact and conclusions of law expressing good cause for reducing or excusing the penalty. The violator has fourteen days from the date of issuance of the order assessing the penalty to appeal to the superior court.
     (3) Any candidate in a particular election contest who believes that any opposing participating candidate has violated this article for that election may file a complaint with the commission requesting that action be taken under this section. If the commission fails to make a finding under subsection (1) of this section within thirty days after the filing of the complaint, the candidate may bring a civil action in the superior court to impose the civil penalties prescribed in this section.

NEW SECTION.  Sec. 18   (1) Any filing under this chapter on behalf of a candidate may be made by the candidate's campaign committee. All candidates shall deposit any check received by and intended for the campaign and made payable to the candidate or the candidate's campaign committee, and all cash received by and intended for the campaign, in the candidate's campaign account.
     (2) Any report filed under this section shall be filed in electronic format.
     (3) During the primary election period and the general election period, all candidates shall make available for public inspection all bank accounts, campaign finance reports, and financial records relating to the candidate's campaign, either by immediate disclosure through electronic means or at the candidate's campaign headquarters, in accordance with rules adopted by the commission.

NEW SECTION.  Sec. 19   Every two years, the commission shall modify the primary election spending limit and the dollar values specified in sections 5(1)(b), 9, and 12(3) of this act to account for inflation.

NEW SECTION.  Sec. 20   A participating candidate shall use funds in the candidate's campaign account to pay for goods and services for direct campaign purposes only. A participating candidate's payment from a campaign account to a political committee or civic organization is not a contribution if the payment is reasonable in relation to the value received. Payment of customary charges for services rendered, such as for printing voter or telephone lists, and payment of not more than one hundred fifty dollars per person to attend a political event open to the public or to party members shall be considered reasonable in relation to the value received.
     (2) A participating candidate shall not use funds in the candidate's campaign account for:
     (a) Costs of legal defense in any campaign law enforcement proceeding;
     (b) Personal use, which includes household food items or supplies; clothing other than items of de minimis value that are used in the campaign; tuition payments other than those associated with training campaign staff; mortgage, loan, rent, lease, or utility payments for any part of any personal residence of the candidate or a member of the candidate's family except for fair market value payments for real or personal property owned or leased by the candidate or a member of the candidate's family that is used for campaign purposes; admission to a sporting event, concert, theater, or other form of entertainment, unless part of a specific campaign activity; dues, fees, or gratuities at a country club, health club, recreational facility, or other nonpolitical organization, unless they are part of the costs of a specific fund-raising event that takes place on the organization's premises; and gifts or donations;
     (c) Fixed assets with a value in excess of six hundred dollars.

NEW SECTION.  Sec. 21   When any person is found, in any superior or district court, liable for a civil penalty or guilty of having committed a crime, there shall be imposed upon that person a penalty assessment. The assessment shall be in addition to any other penalty or fine imposed by law and shall be ten percent of the penalty or fine. The assessment must be paid into the account.

NEW SECTION.  Sec. 22   The commission shall adopt rules to implement this chapter.

Sec. 23   RCW 42.17.095 and 2005 c 467 s 1 are each amended to read as follows:
     The surplus funds of a candidate, or of a political committee supporting or opposing a candidate, may only be disposed of in any one or more of the following ways:
     (1) Return the surplus to a contributor in an amount not to exceed that contributor's original contribution;
     (2) Transfer the surplus to the candidate's personal account as reimbursement for lost earnings incurred as a result of that candidate's election campaign. Such lost earnings shall be verifiable as unpaid salary or, when the candidate is not salaried, as an amount not to exceed income received by the candidate for services rendered during an appropriate, corresponding time period. All lost earnings incurred shall be documented and a record thereof shall be maintained by the candidate or the candidate's political committee. The committee shall include a copy of such record when its expenditure for such reimbursement is reported pursuant to RCW 42.17.090;
     (3) Transfer the surplus without limit to a political party or to a caucus political committee;
     (4) Donate the surplus to a charitable organization registered in accordance with chapter 19.09 RCW;
     (5) Transmit the surplus to the state treasurer for deposit in the general fund, the oral history, state library, and archives account under RCW 43.07.380, or the legislative international trade account under RCW 44.04.270, as specified by the candidate or political committee; ((or))
     (6) Hold the surplus in the campaign depository or depositories designated in accordance with RCW 42.17.050 for possible use in a future election campaign for the same office last sought by the candidate and report any such disposition in accordance with RCW 42.17.090: PROVIDED, That if the candidate subsequently announces or publicly files for office, information as appropriate is reported to the commission in accordance with RCW 42.17.040 through 42.17.090. If a subsequent office is not sought the surplus held shall be disposed of in accordance with the requirements of this section((.));
     (7) Hold the surplus campaign funds in a separate account for nonreimbursed public office-related expenses or as provided in this section, and report any such disposition in accordance with RCW 42.17.090. The separate account required under this subsection shall not be used for deposits of campaign funds that are not surplus((.));
     (8) No candidate or authorized committee may transfer funds to any other candidate or other political committee; or
     (9) Transfer the surplus to the Washington clean elections account.
     The disposal of surplus funds under this section shall not be considered a contribution for purposes of this chapter.

Sec. 24   RCW 42.17.128 and 1993 c 2 s 24 are each amended to read as follows:
     Except as provided in chapter 42.-- RCW (sections 1 through 22 of this act), public funds, whether derived through taxes, fees, penalties, or any other sources, shall not be used to finance political campaigns for state or local office.

NEW SECTION.  Sec. 25   Sections 1 through 22 of this act constitute a new chapter in Title 42 RCW.