AN ACT Relating to campaign finance law enforcement and reporting; amending RCW 42.17A.110, 42.17A.755, 42.17A.765, 42.17A.235, 42.17A.255, 42.17A.240, and 42.17A.450; adding new sections to chapter 42.17A RCW; adding a new section to chapter 43.09 RCW; creating new sections; making an appropriation; and providing an expiration date.

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

Sec. 2.  RCW 42.17A.110 and 2015 c 225 s 55 are each amended to read as follows:

The commission may:

(1) Adopt, amend, and rescind suitable administrative rules to carry out the policies and purposes of this chapter, which rules shall be adopted under chapter 34.05 RCW. Any rule relating to campaign finance, political advertising, or related forms that would otherwise take effect after June 30th of a general election year shall take effect no earlier than the day following the general election in that year;

(2) Appoint an executive director and set, within the limits established by the office of financial management under RCW 43.03.028, the executive director's compensation. The executive director shall perform such duties and have such powers as the commission may prescribe and delegate to implement and enforce this chapter efficiently and effectively. The commission shall not delegate its authority to adopt, amend, or rescind rules nor may it delegate authority to determine ((whether)) that an actual violation of this chapter has occurred or to assess penalties for such violations. Any action taken by the commission or by the executive director or his or her staff, pursuant to delegated authority by the commission to resolve complaints or correct technical violations, constitutes state action for purposes of this chapter;

(3) Prepare and publish reports and technical studies as in its judgment will tend to promote the purposes of this chapter, including reports and statistics concerning campaign financing, lobbying, financial interests of elected officials, and enforcement of this chapter;

(4) Conduct, as it deems appropriate, audits and field investigations;

(5) Make public the time and date of any formal hearing set to determine whether a violation has occurred, the question or questions to be considered, and the results thereof;

(6) Administer oaths and affirmations, issue subpoenas, and compel attendance, take evidence, and require the production of any records relevant to any investigation authorized under this chapter, or any other proceeding under this chapter;

(7) Adopt a code of fair campaign practices;

(8) Adopt rules relieving candidates or political committees of obligations to comply with the election campaign provisions of this chapter, if they have not received contributions nor made expenditures in connection with any election campaign of more than five thousand dollars; and

(9) ((Adopt rules prescribing reasonable requirements for keeping accounts of, and reporting on a quarterly basis, costs incurred by state agencies, counties, cities, and other municipalities and political subdivisions in preparing, publishing, and distributing legislative information. For the purposes of this subsection, "legislative information" means books, pamphlets, reports, and other materials prepared, published, or distributed at substantial cost, a substantial purpose of which is to influence the passage or defeat of any legislation. The state auditor in his or her regular examination of each agency under chapter 43.09 RCW shall review the rules, accounts, and reports and make appropriate findings, comments, and recommendations concerning those agencies; and

(10))) Develop and provide to filers a system for certification of reports required under this chapter which are transmitted by facsimile or electronically to the commission. Implementation of the program is contingent on the availability of funds.

Sec. 3.  RCW 42.17A.755 and 2011 c 145 s 7 are each amended to read as follows:

(1) The commission may (((a))) determine whether an actual violation of this chapter has occurred((;)) and (((b))) may issue and enforce an appropriate order following such a determination, or otherwise take action to resolve the matter as appropriate under the circumstances.

(2) ((The commission, in cases where it chooses to determine whether an actual violation has occurred, shall hold a hearing pursuant to the administrative procedure act, chapter 34.05 RCW, to make a determination. Any order that the commission issues under this section shall be pursuant to such a hearing.)) If a complaint is filed with the commission or initiated by the commission, in determining whether an actual violation of this chapter has occurred, the commission may:

(3) ((In lieu of holding a hearing or issuing an order under this section, the commission may refer the matter to the attorney general or other enforcement agency as provided in RCW 42.17A.105.

(4))) The commission may issue orders for violations in accordance with this chapter. The person against whom an order is directed under this section shall be designated as the respondent. The order may require the respondent to ((cease and desist from the activity that constitutes a violation and in addition, or alternatively, may impose one or more of the remedies provided in RCW 42.17A.750(1) (b) through (e))) take remedial action to ensure compliance with this chapter. The commission may assess a penalty in an amount not to exceed ((ten)) fifty thousand dollars per violation, unless the parties agree by stipulation to a higher amount. Any order that the commission issues under this section that imposes a financial penalty must be made pursuant to a hearing, held in accordance with the administrative procedure act, chapter 34.05 RCW.

(((5))) (4) The commission has the authority to waive a ((fine)) penalty for a first-time violation. A second violation of the same ((rule)) requirement by the same person or individual, regardless if the person or individual committed the violation for a different political committee, shall result in a ((fine)) penalty. Succeeding violations of the same ((rule)) requirement shall result in successively increased ((fines)) penalties. The commission may suspend any portion of an assessed penalty contingent on future compliance with this chapter. The commission may create a schedule to enhance penalties based on repeat violations by the person.

(((6))) (5) An order issued by the commission under this section shall be subject to judicial review under the administrative procedure act, chapter 34.05 RCW. If the commission's order is not satisfied and no petition for review is filed within thirty days, the commission may petition a court of competent jurisdiction of any county in which a petition for review could be filed under that section, for an order of enforcement. Proceedings in connection with the commission's petition shall be in accordance with RCW 42.17A.760.

The legislature intends for the public disclosure commission to retain its authority to take action on behalf of the state and the state attorney general and county prosecuting attorneys to receive citizen complaints as defined herein in limited circumstances to supplement and enhance the authority vested in the public disclosure commission, or to provide an alternative in the event that the commission is unable to fulfill its responsibilities as mandated by the voters.

Sec. 5.  RCW 42.17A.765 and 2010 c 204 s 1004 are each amended to read as follows:

(1)(a) The attorney general and the prosecuting authorities of political subdivisions of this state may bring civil actions in the name of the state for any appropriate civil remedy, including but not limited to the special remedies provided in RCW 42.17A.750.

(2) The attorney general and the prosecuting authorities of political subdivisions of this state may investigate or cause to be investigated the activities of any person who there is reason to believe is or has been acting in violation of this chapter, and may require any such person or any other person reasonably believed to have information concerning the activities of such person to appear at a time and place designated in the county in which such person resides or is found, to give such information under oath and to produce all accounts, bills, receipts, books, paper and documents which may be relevant or material to any investigation authorized under this chapter.

(3) When the attorney general or the prosecuting authority of any political subdivision of this state requires the attendance of any person to obtain such information or produce the accounts, bills, receipts, books, papers, and documents that may be relevant or material to any investigation authorized under this chapter, he or she shall issue an order setting forth the time when and the place where attendance is required and shall cause the same to be delivered to or sent by registered mail to the person at least fourteen days before the date fixed for attendance. The order shall have the same force and effect as a subpoena, shall be effective statewide, and, upon application of the attorney general or the prosecuting authority, obedience to the order may be enforced by any superior court judge in the county where the person receiving it resides or is found, in the same manner as though the order were a subpoena. The court, after hearing, for good cause, and upon application of any person aggrieved by the order, shall have the right to alter, amend, revise, suspend, or postpone all or any part of its provisions. In any case where the order is not enforced by the court according to its terms, the reasons for the court's actions shall be clearly stated in writing, and the action shall be subject to review by the appellate courts by certiorari or other appropriate proceeding.

(4) A person ((who has notified the attorney general and the prosecuting attorney in the county in which the violation occurred in writing that there is reason to believe that some provision of this chapter is being or has been violated)) may himself or herself bring in the name of the state any of the actions (hereinafter referred to as a citizen's action) authorized under this chapter. (((a))) This citizen action may be brought only if:

(((i))) (a) The person first has filed a complaint with the commission, providing a reasonable basis to believe that a violation of this chapter has occurred, and the commission has not:

(c) The attorney general and the prosecuting attorney have ((failed to commence an action hereunder)) not acted within ((forty-five)) sixty days after the notice in (b) of this subsection by either:

(ii) Not commencing an action based on a reasonable determination that the complaint amounts to a remediable violation;

(((ii))) (d) The person has ((thereafter further notified)) provided an additional written notice to the attorney general and prosecuting attorney that the person will commence a citizen's action within ten days upon their failure to do so((;

(iii))) and the attorney general and the prosecuting attorney have in fact failed to bring such action within ten days of receipt of said second notice; and

(((iv))) (e) The citizen's action is filed within two years after the date when the alleged violation occurred.

(((b))) (5) The citizen's action must be dismissed by the court if, within fifteen days after the action is filed, the attorney general or prosecuting attorney reasonably determine that the complaint amounts to a remediable violation.

(6) If the person who brings the citizen's action prevails, the judgment awarded shall escheat to the state, but he or she shall be entitled to be reimbursed by the ((state of Washington)) defendant for costs and reasonable attorneys' fees he or she has incurred. The court must consider the severity of the violation in determining the amount of costs and attorneys' fees to be paid. In the case of a citizen's action that is dismissed and that the court also finds was brought without reasonable cause, the court may order the person commencing the action to pay all costs of trial and reasonable attorneys' fees incurred by the defendant, which may be increased to an amount of no more than treble the defendant's costs of trial and reasonable attorneys' fees if it is determined that the action was commenced for the purpose of harassment.

(((5))) (7)(a) In any action brought under this section, the court may award to the state all of its costs of investigation and trial, including reasonable attorneys' fees to be fixed by the court. If the violation is found to have been intentional, the amount of the judgment, which shall for this purpose include the state's costs, may be trebled as punitive damages. If damages or trebled damages are awarded in such an action brought against a lobbyist, the judgment may be awarded against the lobbyist, and the lobbyist's employer or employers joined as defendants, jointly, severally, or both.

(b) If the defendant prevails, he or she shall be awarded all costs of trial, and may be awarded reasonable attorneys' fees to be fixed by the court ((to be paid by the state of Washington)).

NEW SECTION.  Sec. 6.  A new section is added to chapter 42.17A RCW to read as follows:

(1) Any person against whom an order has been issued and enforced by the commission or a court, pursuant to RCW 42.17A.765, within two years before the effective date of this section, may petition the commission or the court, respectively, to review the order and determine whether any order or penalty should be modified or vacated based on the provisions of this act.

(2) The commission or the court may reimburse any person who had been ordered to pay costs to the state in a citizen's action if warranted by any modified or vacated order.

(3) This section expires July 1, 2023.

NEW SECTION.  Sec. 7.  A new section is added to chapter 42.17A RCW to read as follows:

The public disclosure transparency account is created in the custody of the state treasurer. All receipts from penalties collected pursuant to enforcement actions under this chapter must be deposited into the account, and shall be appropriated by the legislature for purposes consistent with the implementation and administration of duties under this chapter and may not be used to supplant general fund appropriations to the commission.

NEW SECTION.  Sec. 8.  A new section is added to chapter 43.09 RCW to read as follows:

(1) To help assess the effectiveness of state campaign finance reporting requirements in providing transparency of campaign financing in state elections, the state auditor must enter into an interagency agreement with the public disclosure commission to conduct, at no cost to the commission, certain audits each biennium of political committees' performance in complying with those requirements. The audits must examine the performance of reporting practices of a sample of political committees or candidate campaigns that raise more than one hundred thousand dollars within a single election cycle for compliance with chapter 42.17A RCW.

(2) The public disclosure commission must develop a process for selecting from those political committees that exceed the one hundred thousand dollar threshold so that the selection is conducted in a manner that ensures fairness and impartiality. Each audit must include the political committees on both sides of an election campaign and the commission may prioritize campaigns where, as compared to other committees in an election cycle, either or both committees have the most:

(a) Contributions in the aggregate;

(b) Donors; or

(c) Out-of-state contributions.

(3) The interagency agreement must include a reasonable schedule for the audits authorized in subsection (1) of this section, based on:

(a) Year;

(b) Workload of each agency;

(c) Funding considerations;

(d) The manner in which the audits are to be conducted; and

(e) A procedure to ensure any violations that are found in an audit are immediately referred to the commission.

(4) The state auditor must conduct the audits immediately upon receiving the selected political committees from the public disclosure commission. The state auditor must report its findings to the commission. In addition, the state auditor and the commission must report the findings to the relevant standing committees of the legislature.

Sec. 9.  RCW 42.17A.235 and 2015 c 54 s 1 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)) an initial report of all contributions received and expenditures made prior to that date, if any, on the next reporting date.

(2) Each treasurer 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((;

(c))) and on the ((tenth)) fifth 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)) fifth 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)(a) 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.

(b) At the time of making the appointment, a person wishing to inspect the books of account must provide the treasurer the name and telephone number of the person wishing to inspect the books of account. The person inspecting the books of account must show photo identification before the inspection begins.

(c) A treasurer may refuse to show the books of account to any person who does not make an appointment or provide the required identification.

(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. All penalties assessed by the commission or by court order must be paid before the committee is dissolved and the treasurer's responsibilities end.

Sec. 10.  RCW 42.17A.255 and 2011 c 60 s 24 are each amended to read as follows:

(1) For the purposes of this section the term "independent expenditure" means any expenditure that is made in support of or in opposition to any candidate or ballot proposition and is not otherwise required to be reported pursuant to RCW 42.17A.220, 42.17A.235, and 42.17A.240. "Independent expenditure" does not include: An internal political communication primarily limited to the contributors to a political party organization or political action committee, or the officers, management staff, and stockholders of a corporation or similar enterprise, or the members of a labor organization or other membership organization; or 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 section, means services or labor for which the individual is not compensated by any person.

(2) Within five days after the date of making an independent expenditure that by itself or when added to all other such independent expenditures made during the same election campaign by the same person equals one hundred dollars or more, or within five days after the date of making an independent expenditure for which no reasonable estimate of monetary value is practicable, whichever occurs first, the person who made the independent expenditure shall file with the commission an initial report of all independent expenditures made during the campaign prior to and including such date.

(3) ((At the following intervals)) Each person who is required to file an initial report pursuant to subsection (2) of this section shall file with the commission a further report of the independent expenditures made since the date of the last report((:

(a))) on the ((twenty-first day and the)) seventh day preceding the date on which the election is held((; and

The report filed pursuant to paragraph (a) of this subsection (3) shall be the final report, and upon submitting such final report the duties of the reporting person shall cease, and there shall be no obligation to make any further reports)). A person required to file an initial report who makes additional independent expenditures in the same election campaign shall, on the fifth day of each month, file with the commission a further report of independent expenditures. Reports filed on the fifth day of the month shall report independent 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.

(4) All reports filed pursuant to this section shall be certified as correct by the reporting person.

(5) Each report required by subsections (2) and (3) of this section shall disclose for the period beginning at the end of the period for the last previous report filed or, in the case of an initial report, beginning at the time of the first independent expenditure, and ending not more than one business day before the date the report is due:

(a) The name and address of the person filing the report;

(b) The name and address of each person to whom an independent expenditure was made in the aggregate amount of more than fifty dollars, and the amount, date, and purpose of each such expenditure. An email address constitutes the official address for purposes of all communications from the commission. The person filing the report must provide any new email address to the commission within thirty days, if his or her address has changed after filing the report. If no reasonable estimate of the monetary value of a particular independent expenditure is practicable, it is sufficient to report instead a precise description of services, property, or rights furnished through the expenditure and where appropriate to attach a copy of the item produced or distributed by the expenditure;

(c) The total sum of all independent expenditures made during the campaign to date; and

(d) Such other information as shall be required by the commission by rule in conformance with the policies and purposes of this chapter.

Sec. 11.  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) The money value of contributions of postage shall be 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 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)) five hundred ((fifty)) dollars ((or in the amount of more than fifty dollars that has been outstanding for over thirty days)). The recurring expenditures that are not late or outstanding do not need to be reported under this subsection;

(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. 12.  RCW 42.17A.450 and 1993 c 2 s 5 are each amended to read as follows:

(1) Contributions by ((a husband and wife)) spouses are considered separate contributions.

(2) Contributions by unemancipated children under eighteen years of age are considered contributions by their parents and are attributed proportionately to each parent. Fifty percent of the contributions are attributed to each parent or, in the case of a single custodial parent, the total amount is attributed to the parent.

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