BILL REQ. #:  S-3243.3 

Read first time 01/15/14.   Referred to Committee on Governmental Operations.

     AN ACT Relating to increasing transparency of campaign contributions; amending RCW 42.17A.125, 42.17A.205, 42.17A.235, 42.17A.240, 42.17A.250, and 42.17A.300; reenacting and amending RCW 42.17A.005 and 42.17A.220; and creating a new section.

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

NEW SECTION.  Sec. 1   The legislature finds that the public has the right to know who is contributing to election campaigns in Washington state and that campaign finance disclosure deters corruption, increases public confidence in Washington state elections, and strengthens our representative democracy.
     The legislature finds that campaign finance disclosure is overwhelmingly supported by the citizens of Washington state as evidenced by the two initiatives that largely established Washington's current campaign finance system. Both passed with over seventy-two percent of the popular vote, as well as winning margins in every county in the state.
     The legislature finds that nonprofit organizations are increasingly engaging in campaign activities in Washington state and across the country, including taking a more active role in contributing to candidate and ballot proposition campaigns. In some cases, these activities are occurring without adequate public disclosure due to loopholes in campaign finance regulations.
     Therefore, the legislature intends to increase transparency and accountability, deter corruption, and strengthen confidence in the election process by closing campaign finance disclosure loopholes and requiring the disclosure of contributions and expenditures by nonprofit organizations that participate significantly in Washington state elections.

Sec. 2   RCW 42.17A.005 and 2011 c 145 s 2 and 2011 c 60 s 19 are each reenacted and amended to read as follows:
     The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Actual malice" means to act with knowledge of falsity or with reckless disregard as to truth or falsity.
     (2) "Agency" includes all state agencies and all local agencies. "State agency" includes every state office, department, division, bureau, board, commission, or other state agency. "Local agency" includes every county, city, town, municipal corporation, quasi-municipal corporation, or special purpose district, or any office, department, division, bureau, board, commission, or agency thereof, or other local public agency.
     (3) "Authorized committee" means the political committee authorized by a candidate, or by the public official against whom recall charges have been filed, to accept contributions or make expenditures on behalf of the candidate or public official.
     (4) "Ballot proposition" means any "measure" as defined by RCW 29A.04.091, or any initiative, recall, or referendum proposition proposed to be submitted to the voters of the state or any municipal corporation, political subdivision, or other voting constituency from and after the time when the proposition has been initially filed with the appropriate election officer of that constituency before its circulation for signatures.
     (5) "Benefit" means a commercial, proprietary, financial, economic, or monetary advantage, or the avoidance of a commercial, proprietary, financial, economic, or monetary disadvantage.
     (6) "Bona fide political party" means:
     (a) An organization that has been recognized as a minor political party by the secretary of state;
     (b) The governing body of the state organization of a major political party, as defined in RCW 29A.04.086, that is the body authorized by the charter or bylaws of the party to exercise authority on behalf of the state party; or
     (c) The county central committee or legislative district committee of a major political party. There may be only one legislative district committee for each party in each legislative district.
     (7) "Candidate" means any individual who seeks nomination for election or election to public office. An individual seeks nomination or election when he or she first:
     (a) Receives contributions or makes expenditures or reserves space or facilities with intent to promote his or her candidacy for office;
     (b) Announces publicly or files for office;
     (c) Purchases commercial advertising space or broadcast time to promote his or her candidacy; or
     (d) Gives his or her consent to another person to take on behalf of the individual any of the actions in (a) or (c) of this subsection.
     (8) "Caucus political committee" means a political committee organized and maintained by the members of a major political party in the state senate or state house of representatives.
     (9) "Commercial advertiser" means any person who sells the service of communicating messages or producing printed material for broadcast or distribution to the general public or segments of the general public whether through the use of newspapers, magazines, television and radio stations, billboard companies, direct mail advertising companies, printing companies, or otherwise.
     (10) "Commission" means the agency established under RCW 42.17A.100.
     (11) "Compensation" unless the context requires a narrower meaning, includes payment in any form for real or personal property or services of any kind. For the purpose of compliance with RCW 42.17A.710, "compensation" does not include per diem allowances or other payments made by a governmental entity to reimburse a public official for expenses incurred while the official is engaged in the official business of the governmental entity.
     (12) "Continuing political committee" means a political committee that is an organization of continuing existence not established in anticipation of any particular election campaign.
     (13)(a) "Contribution" includes:
     (i) A loan, gift, deposit, subscription, forgiveness of indebtedness, donation, advance, pledge, payment, transfer of funds between political committees, or anything of value, including personal and professional services for less than full consideration;
     (ii) An expenditure made by a person in cooperation, consultation, or concert with, or at the request or suggestion of, a candidate, a political committee, the person or persons named on the candidate's or committee's registration form who direct expenditures on behalf of the candidate or committee, or their agents;
     (iii) The financing by a person of the dissemination, distribution, or republication, in whole or in part, of broadcast, written, graphic, or other form of political advertising or electioneering communication prepared by a candidate, a political committee, or its authorized agent;
     (iv) Sums paid for tickets to fund-raising events such as dinners and parties, except for the actual cost of the consumables furnished at the event.
     (b) "Contribution" does not include:
     (i) Standard interest on money deposited in a political committee's account;
     (ii) Ordinary home hospitality;
     (iii) A contribution received by a candidate or political committee that is returned to the contributor within five business days of the date on which it is received by the candidate or political committee;
     (iv) A news item, feature, commentary, or editorial in a regularly scheduled news medium that is of primary interest to the general public, that is in a news medium controlled by a person whose business is that news medium, and that is not controlled by a candidate or a political committee;
     (v) An internal political communication primarily limited to the members of or contributors to a political party organization or political committee, or to the officers, management staff, or stockholders of a corporation or similar enterprise, or to the members of a labor organization or other membership organization;
     (vi) The rendering of personal services of the sort commonly performed by volunteer campaign workers, or incidental expenses personally incurred by volunteer campaign workers not in excess of fifty dollars personally paid for by the worker. "Volunteer services," for the purposes of this subsection, means services or labor for which the individual is not compensated by any person;
     (vii) Messages in the form of reader boards, banners, or yard or window signs displayed on a person's own property or property occupied by a person. However, a facility used for such political advertising for which a rental charge is normally made must be reported as an in-kind contribution and counts towards any applicable contribution limit of the person providing the facility;
     (viii) Legal or accounting services rendered to or on behalf of:
     (A) A political party or caucus political committee if the person paying for the services is the regular employer of the person rendering such services; or
     (B) A candidate or an authorized committee if the person paying for the services is the regular employer of the individual rendering the services and if the services are solely for the purpose of ensuring compliance with state election or public disclosure laws; or
     (ix) The performance of ministerial functions by a person on behalf of two or more candidates or political committees either as volunteer services defined in (b)(vi) of this subsection or for payment by the candidate or political committee for whom the services are performed as long as:
     (A) The person performs solely ministerial functions;
     (B) A person who is paid by two or more candidates or political committees is identified by the candidates and political committees on whose behalf services are performed as part of their respective statements of organization under RCW 42.17A.205; and
     (C) The person does not disclose, except as required by law, any information regarding a candidate's or committee's plans, projects, activities, or needs, or regarding a candidate's or committee's contributions or expenditures that is not already publicly available from campaign reports filed with the commission, or otherwise engage in activity that constitutes a contribution under (a)(ii) of this subsection.
     A person who performs ministerial functions under this subsection (13)(b)(ix) is not considered an agent of the candidate or committee as long as he or she has no authority to authorize expenditures or make decisions on behalf of the candidate or committee.
     (c) Contributions other than money or its equivalent are deemed to have a monetary value equivalent to the fair market value of the contribution. Services or property or rights furnished at less than their fair market value for the purpose of assisting any candidate or political committee are deemed a contribution. Such a contribution must be reported as an in-kind contribution at its fair market value and counts towards any applicable contribution limit of the provider.
     (14) "Depository" means a bank, mutual savings bank, savings and loan association, or credit union doing business in this state.
     (15) "Elected official" means any person elected at a general or special election to any public office, and any person appointed to fill a vacancy in any such office.
     (16) "Election" includes any primary, general, or special election for public office and any election in which a ballot proposition is submitted to the voters. An election in which the qualifications for voting include other than those requirements set forth in Article VI, section 1 (Amendment 63) of the Constitution of the state of Washington ((shall)) is not ((be)) considered an election for purposes of this chapter.
     (17) "Election campaign" means any campaign in support of or in opposition to a candidate for election to public office and any campaign in support of, or in opposition to, a ballot proposition.
     (18) "Election cycle" means the period beginning on the first day of January after the date of the last previous general election for the office that the candidate seeks and ending on December 31st after the next election for the office. In the case of a special election to fill a vacancy in an office, "election cycle" means the period beginning on the day the vacancy occurs and ending on December 31st after the special election.
     (19)(a) "Electioneering communication" means any broadcast, cable, or satellite television or radio transmission, United States postal service mailing, billboard, newspaper, or periodical that:
     (i) Clearly identifies a candidate for a state, local, or judicial office or a ballot proposition either by specifically naming the candidate or ballot proposition, or identifying the candidate without using the candidate's name;
     (ii) Is broadcast, transmitted, mailed, erected, distributed, or otherwise published within ((sixty)) ninety days before any election for that office in the jurisdiction in which the candidate is seeking election, during the period between the primary and general elections for that office in the jurisdiction in which the candidate is seeking election, or ninety days before the election in which the ballot proposition will appear on the ballot; and
     (iii) Either alone, or in combination with one or more communications identifying the candidate or ballot proposition by the same sponsor during the ((sixty)) ninety days before an election or, if the communications refer to a candidate, during the ninety days before an election period between the primary and general elections, has a fair market value of one thousand dollars or more.
     (b) "Electioneering communication" does not include:
     (i) Usual and customary advertising of a business owned by a candidate, even if the candidate is mentioned in the advertising when the candidate has been regularly mentioned in that advertising appearing at least twelve months preceding his or her becoming a candidate;
     (ii) Advertising for candidate debates or forums when the advertising is paid for by or on behalf of the debate or forum sponsor, so long as two or more candidates for the same position have been invited to participate in the debate or forum;
     (iii) A news item, feature, commentary, or editorial in a regularly scheduled news medium that is:
     (A) Of primary interest to the general public;
     (B) In a news medium controlled by a person whose business is that news medium; and
     (C) Not a medium controlled by a candidate or a political committee;
     (iv) Slate cards and sample ballots;
     (v) Advertising for books, films, dissertations, or similar works (A) written by a candidate when the candidate entered into a contract for such publications or media at least twelve months before becoming a candidate, or (B) written about a candidate;
     (vi) Public service announcements;
     (vii) A mailed internal political communication primarily limited to the members of or contributors to a political party organization or political committee, or to the officers, management staff, or stockholders of a corporation or similar enterprise, or to the members of a labor organization or other membership organization;
     (viii) An expenditure by or contribution to the authorized committee of a candidate for state, local, or judicial office; or
     (ix) Any other communication exempted by the commission through rule consistent with the intent of this chapter.
     (20) "Expenditure" includes a payment, contribution, subscription, distribution, loan, advance, deposit, or gift of money or anything of value, and includes a contract, promise, or agreement, whether or not legally enforceable, to make an expenditure. "Expenditure" also includes a promise to pay, a payment, or a transfer of anything of value in exchange for goods, services, property, facilities, or anything of value for the purpose of assisting, benefiting, or honoring any public official or candidate, or assisting in furthering or opposing any election campaign. For the purposes of this chapter, agreements to make expenditures, contracts, and promises to pay may be reported as estimated obligations until actual payment is made. "Expenditure" ((shall)) does not include the partial or complete repayment by a candidate or political committee of the principal of a loan, the receipt of which loan has been properly reported.
     (21) "Final report" means the report described as a final report in RCW 42.17A.235(2).
     (22) "General election" for the purposes of RCW 42.17A.405 means the election that results in the election of a person to a state or local office. It does not include a primary.
     (23) "Gift" has the definition in RCW 42.52.010.
     (24) "Immediate family" includes the spouse or domestic partner, dependent children, and other dependent relatives, if living in the household. For the purposes of the definition of "intermediary" in this section, "immediate family" means an individual's spouse or domestic partner, and child, stepchild, grandchild, parent, stepparent, grandparent, brother, half brother, sister, or half sister of the individual and the spouse or the domestic partner of any such person and a child, stepchild, grandchild, parent, stepparent, grandparent, brother, half brother, sister, or half sister of the individual's spouse or domestic partner and the spouse or the domestic partner of any such person.
     (25)(a) "Incidental committee" means a person, except a candidate or an individual dealing with his or her own funds or property, not otherwise classified as a political committee but that may incidentally become a political committee by making a contribution or an expenditure in support of, or opposition to, any candidate or any ballot proposition in Washington, directly or through another political committee.
     (b) "Incidental committee" may include, but is not limited to, any organization under section 501(c) or 527 of the internal revenue code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time.
     (26) "Incumbent" means a person who is in present possession of an elected office.
     (((26))) (27) "Independent expenditure" means an expenditure that has each of the following elements:
     (a) It is made in support of or in opposition to a candidate for office by a person who is not (i) a candidate for that office, (ii) an authorized committee of that candidate for that office, (iii) a person who has received the candidate's encouragement or approval to make the expenditure, if the expenditure pays in whole or in part for political advertising supporting that candidate or promoting the defeat of any other candidate or candidates for that office, or (iv) a person with whom the candidate has collaborated for the purpose of making the expenditure, if the expenditure pays in whole or in part for political advertising supporting that candidate or promoting the defeat of any other candidate or candidates for that office;
     (b) The expenditure pays in whole or in part for political advertising that either specifically names the candidate supported or opposed, or clearly and beyond any doubt identifies the candidate without using the candidate's name; and
     (c) The expenditure, alone or in conjunction with another expenditure or other expenditures of the same person in support of or opposition to that candidate, has a value of eight hundred dollars or more. A series of expenditures, each of which is under eight hundred dollars, constitutes one independent expenditure if their cumulative value is eight hundred dollars or more.
     (((27))) (28)(a) "Intermediary" means an individual who transmits a contribution to a candidate or committee from another person unless the contribution is from the individual's employer, immediate family, or an association to which the individual belongs.
     (b) A treasurer or a candidate is not an intermediary for purposes of the committee that the treasurer or candidate serves.
     (c) A professional fund-raiser is not an intermediary if the fund-raiser is compensated for fund-raising services at the usual and customary rate.
     (d) A volunteer hosting a fund-raising event at the individual's home is not an intermediary for purposes of that event.
     (((28))) (29) "Legislation" means bills, resolutions, motions, amendments, nominations, and other matters pending or proposed in either house of the state legislature, and includes any other matter that may be the subject of action by either house or any committee of the legislature and all bills and resolutions that, having passed both houses, are pending approval by the governor.
     (((29))) (30) "Legislative office" means the office of a member of the state house of representatives or the office of a member of the state senate.
     (((30))) (31) "Lobby" and "lobbying" each mean attempting to influence the passage or defeat of any legislation by the legislature of the state of Washington, or the adoption or rejection of any rule, standard, rate, or other legislative enactment of any state agency under the state administrative procedure act, chapter 34.05 RCW. Neither "lobby" nor "lobbying" includes an association's or other organization's act of communicating with the members of that association or organization.
     (((31))) (32) "Lobbyist" includes any person who lobbies either in his or her own or another's behalf.
     (((32))) (33) "Lobbyist's employer" means the person or persons by whom a lobbyist is employed and all persons by whom he or she is compensated for acting as a lobbyist.
     (((33))) (34) "Ministerial functions" means an act or duty carried out as part of the duties of an administrative office without exercise of personal judgment or discretion.
     (((34))) (35) "Participate" means that, with respect to a particular election, an entity:
     (a) Makes either a monetary or in-kind contribution to a candidate;
     (b) Makes an independent expenditure or electioneering communication in support of or opposition to a candidate;
     (c) Endorses a candidate before contributions are made by a subsidiary corporation or local unit with respect to that candidate or that candidate's opponent;
     (d) Makes a recommendation regarding whether a candidate should be supported or opposed before a contribution is made by a subsidiary corporation or local unit with respect to that candidate or that candidate's opponent; or
     (e) Directly or indirectly collaborates or consults with a subsidiary corporation or local unit on matters relating to the support of or opposition to a candidate, including, but not limited to, the amount of a contribution, when a contribution should be given, and what assistance, services or independent expenditures, or electioneering communications, if any, will be made or should be made in support of or opposition to a candidate.
     (((35))) (36) "Person" includes an individual, partnership, joint venture, public or private corporation, association, federal, state, or local governmental entity or agency however constituted, candidate, committee, political committee, political party, executive committee thereof, or any other organization or group of persons, however organized.
     (((36))) (37) "Political advertising" includes any advertising displays, newspaper ads, billboards, signs, brochures, articles, tabloids, flyers, letters, radio or television presentations, or other means of mass communication, used for the purpose of appealing, directly or indirectly, for votes or for financial or other support or opposition in any election campaign.
     (((37))) (38) "Political committee" means any person (except a candidate or an individual dealing with his or her own funds or property), organized or located inside or outside the state, having the expectation of receiving contributions or making expenditures in support of, or opposition to, any candidate or any ballot proposition in Washington. "Political committee" includes incidental committees as defined in this section.
     (((38))) (39) "Primary" for the purposes of RCW 42.17A.405 means the procedure for nominating a candidate to state or local office under chapter 29A.52 RCW or any other primary for an election that uses, in large measure, the procedures established in chapter 29A.52 RCW.
     (((39))) (40) "Public office" means any federal, state, judicial, county, city, town, school district, port district, special district, or other state political subdivision elective office.
     (((40))) (41) "Public record" has the definition in RCW 42.56.010.
     (((41))) (42) "Recall campaign" means the period of time beginning on the date of the filing of recall charges under RCW 29A.56.120 and ending thirty days after the recall election.
     (((42))) (43)(a) "Sponsor" for purposes of an electioneering communications, independent expenditures, or political advertising means the person paying for the electioneering communication, independent expenditure, or political advertising. If a person acts as an agent for another or is reimbursed by another for the payment, the original source of the payment is the sponsor.
     (b) "Sponsor," for purposes of a political committee, means any person, except an authorized committee, to whom any of the following applies:
     (i) The committee receives eighty percent or more of its contributions either from the person or from the person's members, officers, employees, or shareholders;
     (ii) The person collects contributions for the committee by use of payroll deductions or dues from its members, officers, or employees.
     (((43))) (44) "Sponsored committee" means a committee, other than an authorized committee, that has one or more sponsors.
     (((44))) (45) "State office" means state legislative office or the office of governor, lieutenant governor, secretary of state, attorney general, commissioner of public lands, insurance commissioner, superintendent of public instruction, state auditor, or state treasurer.
     (((45))) (46) "State official" means a person who holds a state office.
     (((46))) (47) "Surplus funds" mean, in the case of a political committee or candidate, the balance of contributions that remain in the possession or control of that committee or candidate subsequent to the election for which the contributions were received, and that are in excess of the amount necessary to pay remaining debts incurred by the committee or candidate with respect to that election. In the case of a continuing political committee, "surplus funds" mean those contributions remaining in the possession or control of the committee that are in excess of the amount necessary to pay all remaining debts when it makes its final report under RCW 42.17A.255.
     (((47))) (48) "Treasurer" and "deputy treasurer" mean the individuals appointed by a candidate or political committee, pursuant to RCW 42.17A.210, to perform the duties specified in that section.

Sec. 3   RCW 42.17A.125 and 2011 c 60 s 21 are each amended to read as follows:
     (1) At the beginning of each even-numbered calendar year, the commission shall increase or decrease the dollar amounts in RCW 42.17A.005(((26))) (27), 42.17A.405, 42.17A.410, 42.17A.445(3), 42.17A.475, and 42.17A.630(1) based on changes in economic conditions as reflected in the inflationary index recommended by the office of financial management. The new dollar amounts established by the commission under this section ((shall)) must be rounded off to amounts as judged most convenient for public understanding and so as to be within ten percent of the target amount equal to the base amount provided in this chapter multiplied by the increase in the inflationary index since July 2008.
     (2) The commission may revise, at least once every five years but no more often than every two years, the monetary reporting thresholds and reporting code values of this chapter. The revisions ((shall)) must be only for the purpose of recognizing economic changes as reflected by an inflationary index recommended by the office of financial management. The revisions ((shall)) must be guided by the change in the index for the period commencing with the month of December preceding the last revision and concluding with the month of December preceding the month the revision is adopted. As to each of the three general categories of this chapter, reports of campaign finance, reports of lobbyist activity, and reports of the financial affairs of elected and appointed officials, the revisions shall equally affect all thresholds within each category. The revisions authorized by this subsection ((shall)) must reflect economic changes from the time of the last legislative enactment affecting the respective code or threshold.
     (3) Revisions made in accordance with subsections (1) and (2) of this section ((shall)) must be adopted as rules under chapter 34.05 RCW.

Sec. 4   RCW 42.17A.205 and 2011 c 145 s 3 are each amended to read as follows:
     (1)(a) Every political committee except for incidental committees shall file a statement of organization with the commission. The statement must be filed within two weeks after organization or within two weeks after the date the committee first has the expectation of receiving contributions or making expenditures in any election campaign, whichever is earlier.
     (b) A political committee other than an incidental committee organized within the last three weeks before an election and having the expectation of receiving contributions or making expenditures during and for that election campaign shall file a statement of organization within three business days after its organization or when it first has the expectation of receiving contributions or making expenditures in the election campaign.
     (2)(a) An incidental committee must file a statement of organization with the commission within two weeks after the effective date of this section or two weeks after the date the committee first has the expectation of receiving contributions or making expenditures of at least the following amounts: One hundred thousand dollars in an election campaign for statewide office or a statewide ballot proposition in Washington or twenty thousand dollars in any other election campaign in Washington.
     (b) If, in the last three weeks before an election, an incidental committee first has the expectation of receiving contributions or making expenditures of the amounts specified in (a) of this subsection or greater, then it must file a statement of organization within three business days.
     (c) An incidental committee that does not receive contributions or make expenditures in the amounts specified in (a) of this subsection is not required to file a statement of organization with the commission.
     (3) The statement of organization shall include but not be limited to:
     (a) The name and address of the committee;
     (b) The names and addresses of all related or affiliated committees or other persons, and the nature of the relationship or affiliation;
     (c) The names, addresses, and titles of its officers; or if it has no officers, the names, addresses, and titles of its responsible leaders;
     (d) The name and address of its treasurer and depository;
     (e) A statement whether the committee is a continuing one;
     (f) The name, office sought, and party affiliation of each candidate whom the committee is supporting or opposing, and, if the committee is supporting the entire ticket of any party, the name of the party;
     (g) The ballot proposition concerned, if any, and whether the committee is in favor of or opposed to such proposition;
     (h) What distribution of surplus funds will be made, in accordance with RCW 42.17A.430, in the event of dissolution;
     (i) The street address of the place and the hours during which the committee will make available for public inspection its books of account and all reports filed in accordance with RCW 42.17A.235;
     (j) Such other information as the commission may by regulation prescribe, in keeping with the policies and purposes of this chapter;
     (k) The name, address, and title of any person who authorizes expenditures or makes decisions on behalf of the candidate or committee; and
     (l) The name, address, and title of any person who is paid by or is a volunteer for a candidate or political committee to perform ministerial functions and who performs ministerial functions on behalf of two or more candidates or committees.
     (((3))) (4) No two political committees may have the same name.
     (((4))) (5) Any material change in information previously submitted in a statement of organization shall be reported to the commission within the ten days following the change.
     (((5))) (6) As used in this section, the "name" of a sponsored committee must include the name of the person that is the sponsor of the committee. If more than one person meets the definition of sponsor, the name of the committee must include the name of at least one sponsor, but may include the names of other sponsors. A person may sponsor only one political committee for the same elected office or same ballot measure per election cycle.

Sec. 5   RCW 42.17A.220 and 2010 c 205 s 3 and 2010 c 204 s 405 are each reenacted and amended to read as follows:
     (1) All monetary contributions received by a candidate or political committee ((shall)) must be deposited by the treasurer or deputy treasurer in a depository in an account established and designated for that purpose. Such deposits ((shall)) must be made within five business days of receipt of the contribution.
     (2) Political committees that support or oppose more than one candidate or ballot proposition, or exist for more than one purpose, may maintain multiple separate bank accounts within the same designated depository for such purpose only if:
     (a) Each such account bears the same name;
     (b) Each such account is followed by an appropriate designation that accurately identifies its separate purpose; and
     (c) Transfers of funds that must be reported under RCW 42.17A.240(((1)(e))) (5) are not made from more than one such account.
     (3) Incidental committees may maintain separate bank accounts within the same depository for contributions to the committee that are designated by the contributor as not to be used in support of or opposition to a candidate or ballot proposition so that those contributions do not need to be reported to the commission under RCW 42.17A.240(2)(d).
     (4) Nothing in this section prohibits a candidate or political committee from investing funds on hand in a depository in bonds, certificates, or tax-exempt securities, or in savings accounts or other similar instruments in financial institutions, or in mutual funds other than the depository but only if:
     (a) The commission ((are [is])) is notified in writing of the initiation and the termination of the investment; and
     (b) The principal of such investment, when terminated together with all interest, dividends, and income derived from the investment, is deposited in the depository in the account from which the investment was made and properly reported to the commission before any further disposition or expenditure.
     (((4))) (5) Accumulated unidentified contributions, other than those made by persons whose names must be maintained on a separate and private list by a political committee's treasurer pursuant to RCW 42.17A.240(((1)(b))) (2), in excess of one percent of the total accumulated contributions received in the current calendar year, or three hundred dollars, whichever is more, may not be deposited, used, or expended, but ((shall)) must be returned to the donor if his or her identity can be ascertained. If the donor cannot be ascertained, the contribution ((shall)) escheats to the state and ((shall)) must be paid to the state treasurer for deposit in the state general fund.

Sec. 6   RCW 42.17A.235 and 2011 c 60 s 23 are each amended to read as follows:
     (1) In addition to the information required under RCW 42.17A.205 and 42.17A.210, on the day the treasurer is designated, each candidate or political committee must file with the commission a report of all contributions received and expenditures made prior to that date, if any.
     (2) Each treasurer of a political committee or incidental committee required to file a statement of organization under RCW 42.17A.205 shall file with the commission a report containing the information required by RCW 42.17A.240 at the following intervals:
     (a) On the twenty-first day and the seventh day immediately preceding the date on which the election is held;
     (b) On the tenth day of the first month after the election; and
     (c) On the tenth day of each month in which no other reports are required to be filed under this section only if the committee has received a contribution or made an expenditure in the preceding calendar month and either the total contributions received or total expenditures made since the last such report exceed two hundred dollars.
     The report filed twenty-one days before the election shall report all contributions received and expenditures made as of the end of one business day before the date of the report. The report filed seven days before the election shall report all contributions received and expenditures made as of the end of one business day before the date of the report. Reports filed on the tenth day of the month shall report all contributions received and expenditures made from the closing date of the last report filed through the last day of the month preceding the date of the current report.
     (3) For the period beginning the first day of the fourth month preceding the date of the special election, or for the period beginning the first day of the fifth month before the date of the general election, and ending on the date of that special or general election, each Monday the treasurer shall file with the commission a report of each bank deposit made during the previous seven calendar days. The report shall contain the name of each person contributing the funds and the amount contributed by each person. However, persons who contribute no more than twenty-five dollars in the aggregate are not required to be identified in the report. A copy of the report shall be retained by the treasurer for his or her records. In the event of deposits made by a deputy treasurer, the copy shall be forwarded to the treasurer for his or her records. Each report shall be certified as correct by the treasurer or deputy treasurer making the deposit.
     (4) The treasurer or candidate shall maintain books of account accurately reflecting all contributions and expenditures on a current basis within five business days of receipt or expenditure. During the eight days immediately preceding the date of the election the books of account shall be kept current within one business day. As specified in the committee's statement of organization filed under RCW 42.17A.205, the books of account must be open for public inspection by appointment at the designated place for inspections between 8:00 a.m. and 8:00 p.m. on any day from the eighth day immediately before the election through the day immediately before the election, other than Saturday, Sunday, or a legal holiday. It is a violation of this chapter for a candidate or political committee to refuse to allow and keep an appointment for an inspection to be conducted during these authorized times and days. The appointment must be allowed at an authorized time and day for such inspections that is within twenty-four hours of the time and day that is requested for the inspection.
     (5) Copies of all reports filed pursuant to this section shall be readily available for public inspection by appointment, pursuant to subsection (4) of this section, at the principal headquarters or, if there is no headquarters, at the address of the treasurer or such other place as may be authorized by the commission.
     (6) The treasurer or candidate shall preserve books of account, bills, receipts, and all other financial records of the campaign or political committee for not less than five calendar years following the year during which the transaction occurred.
     (7) All reports filed pursuant to subsection (1) or (2) of this section shall be certified as correct by the candidate and the treasurer.
     (8) When there is no outstanding debt or obligation, the campaign fund is closed, and the campaign is concluded in all respects or in the case of a political committee, the committee has ceased to function and has dissolved, the treasurer shall file a final report. Upon submitting a final report, the duties of the treasurer shall cease and there is no obligation to make any further reports.
     (9) By December 31, 2014, the commission shall adopt rules for the dissolution of incidental committees.

Sec. 7   RCW 42.17A.240 and 2010 c 204 s 409 are each amended to read as follows:
     Each report required under RCW 42.17A.235 (1) and (2) must be certified as correct by the treasurer and the candidate and shall disclose the following:
     (1) The funds on hand at the beginning of the period;
     (2) The name and address of each person who has made one or more contributions during the period, together with the money value and date of each contribution and the aggregate value of all contributions received from each person during the campaign, or in the case of a continuing political committee, the current calendar year, with the following exceptions:
     (a) Pledges in the aggregate of less than one hundred dollars from any one person need not be reported;
     (b) Income that results from a fund-raising activity conducted in accordance with RCW 42.17A.230 may be reported as one lump sum, with the exception of that portion received from persons whose names and addresses are required to be included in the report required by RCW 42.17A.230;
     (c) Contributions of no more than twenty-five dollars in the aggregate from any one person during the election campaign may be reported as one lump sum if the treasurer maintains a separate and private list of the name, address, and amount of each such contributor; ((and))
     (d) Contributions to an incidental committee that satisfy all of the following requirements need not be reported:
     (i) The contribution is designated by the contributor as not to be used for campaign purposes;
     (ii) The contribution is maintained in a separate bank account from any accounts used to receive contributions or make expenditures in support of or opposition to a candidate or ballot proposition; and
     (iii) The contribution is not commingled with any bank accounts used to receive contributions or make expenditures in support of or opposition to a candidate or ballot proposition;
     (e) The commission may suspend or modify reporting requirements for contributions to an incidental committee in cases of manifestly unreasonable hardship under RCW 42.17A.120; and
     (f) The money value of contributions of postage ((shall be)) is the face value of the postage;
     (3) Each loan, promissory note, or security instrument to be used by or for the benefit of the candidate or political committee made by any person, including the names and addresses of the lender and each person liable directly, indirectly or contingently and the date and amount of each such loan, promissory note, or security instrument;
     (4) All other contributions not otherwise listed or exempted;
     (5) The name and address of each candidate or political committee to which any transfer of funds was made, including the amounts and dates of the transfers;
     (6) The name and address of each person to whom an expenditure was made in the aggregate amount of more than fifty dollars during the period covered by this report, the amount, date, and purpose of each expenditure, and the total sum of all expenditures;
     (7) The name and address of each person directly compensated for soliciting or procuring signatures on an initiative or referendum petition, the amount of the compensation to each person, and the total expenditures made for this purpose. Such expenditures ((shall)) must be reported under this subsection in addition to what is required to be reported under subsection (6) of this section;
     (8) The name and address of any person and the amount owed for any debt, obligation, note, unpaid loan, or other liability in the amount of more than two hundred fifty dollars or in the amount of more than fifty dollars that has been outstanding for over thirty days;
     (9) The surplus or deficit of contributions over expenditures;
     (10) The disposition made in accordance with RCW 42.17A.430 of any surplus funds; and
     (11) Any other information required by the commission by rule in conformance with the policies and purposes of this chapter.

Sec. 8   RCW 42.17A.250 and 2010 c 204 s 411 are each amended to read as follows:
     (((1) An out-of-state)) A political committee ((organized for the purpose of supporting or opposing candidates or ballot propositions in another state that is not otherwise required to report under RCW 42.17A.205 through 42.17A.240 shall report as required in this section when it makes an expenditure supporting or opposing a Washington state candidate or political committee. The committee shall file with the commission a statement disclosing:
     (a) Its name and address;
     (b) The purposes of the out-of-state committee;
     (c) The names, addresses, and titles of its officers or, if it has no officers, the names, addresses, and the titles of its responsible leaders;
     (d) The name, office sought, and party affiliation of each candidate in the state of Washington whom the out-of-state committee is supporting or opposing and, if the committee is supporting or opposing the entire ticket of any party, the name of the party;
     (e) The ballot proposition supported or opposed in the state of Washington, if any, and whether the committee is in favor of or opposed to that proposition;
     (f) The name and address of each person residing in the state of Washington or corporation that has a place of business in the state of Washington who has made one or more contributions in the aggregate of more than twenty-five dollars to the out-of-state committee during the current calendar year, together with the money value and date of the contributions;
     (g) The name, address, and employer of each person or corporation residing outside the state of Washington who has made one or more contributions in the aggregate of more than two thousand five hundred fifty dollars to the out-of-state committee during the current calendar year, together with the money value and date of the contributions. Annually, the commission must modify the two thousand five hundred fifty dollar limit in this subsection based on percentage change in the implicit price deflator for personal consumption expenditures for the United States as published for the most recent twelve-month period by the bureau of economic analysis of the federal department of commerce;
     (h) The name and address of each person in the state of Washington to whom an expenditure was made by the out-of-state committee with respect to a candidate or political committee in the aggregate amount of more than fifty dollars, the amount, date, and purpose of the expenditure, and the total sum of the expenditures; and
     (i) Any other information as the commission may prescribe by rule in keeping with the policies and purposes of this chapter.
     (2) Each statement shall be filed no later than the tenth day of the month following any month in which a contribution or other expenditure reportable under subsection (1) of this section is made. An out-of-state committee incurring an obligation to file additional statements in a calendar year may satisfy the obligation by timely filing reports that supplement previously filed information)) or incidental committee organized outside the state of Washington is subject to the same requirements under this chapter as a political committee or incidental committee organized in the state of Washington.

Sec. 9   RCW 42.17A.300 and 2010 c 204 s 501 are each amended to read as follows:
     (1) The legislature finds that:
     (a) Timely disclosure to voters of the identity and sources of funding for electioneering communications is vitally important to the integrity of ((state, local, and judicial)) elections.
     (b) Electioneering communications that identify political candidates for state, local, or judicial office or ballot propositions, and that are distributed ((sixty)) ninety days before an election ((for those offices)) or, in candidate elections, in the ninety days before an election or the period between the primary and general elections are intended to influence voters and the outcome of those elections.
     (c) The state has a compelling interest in providing voters information about electioneering communications in political campaigns ((concerning candidates for state, local, or judicial office)) so that voters can be fully informed as to the: (i) Source of support or opposition to those candidates or propositions; and (ii) identity of persons attempting to influence the outcome of ((state, local, and judicial candidate)) elections.
     (d) Nondisclosure of financial information about advertising that masquerades as relating only to issues and not to candidate campaigns fosters corruption or the appearance of corruption. These consequences can be substantially avoided by full disclosure of the identity and funding of those persons paying for such advertising.
     (e) The United States supreme court held in McConnell et al. v. Federal Elections Commission, 540 U.S. 93, 124 S.Ct. 619, 157 L.Ed.2d 491 (2003) that speakers seeking to influence elections do not possess an inviolable free speech right to engage in electioneering communications regarding elections, including when issue advocacy is the functional equivalent of express advocacy. Therefore, such election campaign communications can be regulated and the source of funding disclosed.
     (f) The state has a sufficiently compelling interest in preventing corruption in political campaigns to justify and restore contribution limits and restrictions on the use of soft money in RCW 42.17A.405. Those interests include restoring restrictions on the use of such funds for electioneering communications, as well as the laws preventing circumvention of those limits and restrictions.
     (2) Based upon the findings in this section, chapter 445, Laws of 2005 is narrowly tailored to accomplish the following and is intended to:
     (a) Improve the disclosure to voters of information concerning persons and entities seeking to influence state, local, and judicial campaigns through reasonable and effective mechanisms, including improving disclosure of the source, identity, and funding of electioneering communications concerning state, local, and judicial candidate campaigns;
     (b) Regulate electioneering communications that mention state, local, and judicial candidates and that are broadcast, mailed, erected, distributed, or otherwise published right before the election so that the public knows who is paying for such communications;
     (c) Reenact and amend the contribution limits in RCW 42.17A.405 (7) and (15) and the restrictions on the use of soft money, including as applied to electioneering communications, as those limits and restrictions were in effect following the passage of chapter 2, Laws of 1993 (Initiative Measure No. 134) and before the state supreme court decision in Washington State Republican Party v. Washington State Public Disclosure Commission, 141 Wn.2d 245, 4 P.3d 808 (2000). The commission is authorized to fully restore the implementation of the limits and restrictions of RCW 42.17A.405 (7) and (15) in light of McConnell et al. v. Federal Elections Commission, 540 U.S. 93, 124 S.Ct. 619, 157 L.Ed.2d 491 (2003). The United States supreme court upheld the disclosure and regulation of electioneering communications in political campaigns, including but not limited to issue advocacy that is the functional equivalent of express advocacy; and
     (d) Authorize the commission to adopt rules to implement chapter 445, Laws of 2005.

NEW SECTION.  Sec. 10   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.