HOUSE BILL REPORT

E2SHB 1284

BYHouse Committee on Ways & Means/Appropriations (originally sponsored byRepresentatives J. King, Fisher, Crane, Meyers, Pruitt, Todd, Leonard, Belcher, Winsley, Hine, Nelson, Unsoeld and Bristow)

Revising provisions governing campaign financing.

House Committe on Constitution, Elections & Ethics

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (4)

      Signed by Representatives Fisher, Chair; Pruitt, Vice Chair; King and Leonard.

Minority Report:  Do not pass.  (3)

      Signed by Representatives Amondson, Barnes and Sanders.

House Staff:Kenneth Hirst (786-7105)

Rereferred House Committee on Ways & Means/Appropriations

Majority Report:  The second substitute bill by Committee on Ways & Means/Appropriations be substituted therefor and the second substitute bill do pass.  (13)

      Signed by Representatives Locke, Chair; Belcher, Brekke, Bristow, Ebersole, Grimm, Hine, Peery, Sayan, H. Sommers, Spanel, Sprenkle and Wang.

Minority Report:  Do not pass.  (6)

      Signed by Representatives Brough, Butterfield, Fuhrman, Holland, Nealey and Silver.

House Staff:      Randy Acker (786-7136)

AS PASSED HOUSE FEBRUARY 15, 1988

BACKGROUND:

In 1972, the voters approved Initiative Measure No. 276 regarding public disclosure.  One section of the initiative established mandatory expenditure limits on campaigns for elective office.  In 1974, the state's Supreme Court found that section to be unconstitutional.

A series of federal court cases has identified a number of constitutional limitations on the regulation of campaign financing.  Certain constitutionally permissible restrictions on such financing have also been identified in those decisions.  In those cases, the courts found the following to be permissible:  (1) limitations on contributions by individuals or organizations to candidates for federal office; (2) limitations on contributions by individuals or organizations to political action committees; (3) limitations on contributions by political action committees to candidates for federal office; (4) limitations on total contributions by individuals in a calendar year to candidates for federal office; (5) public financing for presidential elections; and (6) federal public disclosure requirements.

Found to be impermissible were ceilings on candidate expenditures or on "independent expenditures" (that is, campaign expenditures not subject to the control of a candidate).  Upheld, however, were ceilings on candidate expenditures which become effective only as part of a public financing agreement under which a candidate agrees to abide by the limits in exchange for public financing. Also found to be impermissible were any ceilings on contributions or expenditures in ballot proposition campaigns.

SUMMARY:

A system is established for providing public matching funds for the election campaigns of candidates for state executive and legislative offices.  The matching monies are available to candidates who agree to abide by specified campaign expenditure limits and other restrictions in exchange for the public matching funds.

Restrictions are established on the size of the contributions that may be given to a candidate for state executive or legislative office or to a political committee.

I.  CAMPAIGN EXPENDITURE LIMITS & MATCHING FUNDS

Expenditure Limits.  The expenditure limits are expressed as base amounts for each office and increases to the base amounts which may apply to a candidate as the result of certain specified circumstances.  The base amounts of the expenditure limits are:

!tm8,8,1,8 !tlCandidates for!tj2!trBase Amount

!tlGovernor!tj1!tr=!tr$1,000,000

!tlOther State Executive Office!tj1!tr=!tr$  300,000

!tlState Senator!tj1!tr=!tr$   40,000

!tlState Representative!tj1!tr=!tr$   25,000

Without the application of any of the increases which may apply to a given candidate, these are the expenditure limits for the primary campaign of a candidate.  Once the primary is over, they are also the expenditure limits for the general election campaign of a candidate.  Public matching funds are available only for the general election campaign; adhering to the limits for the primary is one of the conditions a candidate must agree to if the candidate is to qualify for matching funds for the general election.

Increases Over Base Amounts.  If, during the 12 months preceding the election, certain independent expenditures are made in opposition to a candidate or for another candidate for the office sought by the candidate, the expenditure limit for the candidate (not the other candidate) is increased by an amount equal to the amount of the independent expenditures.  This increase applies only if the independent expenditures, in the aggregate, total more than 10% of the base amount for the office.  A person making such independent expenditures must file special reports with the Public Disclosure Commission if the expenditures equal, in the aggregate, $500 or more.

The expenditure limit for a candidate is also increased by doubling the base amount for the office for that candidate if any of the following apply: (1) during the election cycle, any other candidate for the office receives contributions totaling more than the sum of the expenditure limits applicable to that other candidate for the primary and the general election; (2) during the primary period, any other candidate for the office makes expenditures which exceed the expenditure limit applicable to that other candidate; or (3) the candidate agrees to accept the expenditure limits in exchange for public matching funds by a specified deadline but an opposing candidate, with certain exceptions, does not so agree.

Matching Monies.  A State Election Campaign Account is established.  The Commission is authorized to make payments of matching monies from the Account to eligible candidates.  Generally, the maximum amount that a candidate may receive from the Account is:

!tm8,8,1,8 !tlCandidates for!tj2!tcMatching Monies

!tlGovernor!tj1!tr=!tr$30,000

!tlOther State Executive Office!tj1!tr=!tr$10,000

!tlState Senator!tj1!tr=!tr$ 1,500

!tlState Representative!tj1!tr=!tr$ 1,000

If the expenditure limit base amount is doubled for a candidate, the maximum amount that the candidate may receive from the Account is increased to:

!tm3,6,1 !tlCandidates for!tlMatching Monies

!tlGovernor!tl$600,000

!tlOther State Executive Office!tl$200,000

!tlState Senate!tl $30,000

!tlState Representative!tl $20,000

Subject to these maximum amounts, an eligible candidate is entitled to payments from the Account equal to : one dollar for each dollar in "qualifying" contributions received by candidate for the election campaign; or four dollars for each such dollar raised by candidate if the expenditure limit base amount is doubled for the candidate.  A candidate must agree to the expenditure limitations and other restrictions within 7 days of the date the results of the primary are certified.

A candidate must have received "qualifying" contributions in a threshold amount of at least:

!tm8,8,1,8 !tlCandidates for!tj2!tcQualifying Dollars

!tlGovernor!tj1!tr=!tr$ 50,000

!tlOther State Executive Office!tj1!tr=!tr$ 10,000

!tlState Senator!tj1!tr=!tr$  5,000

!tlState Representative!tj1!tr=!tr$  2,500

"Qualifying" Contribution Restrictions.  For a contribution received by a candidate to qualify as being one which may be counted toward this threshold amount or to qualify to be matched by public monies from the Account, the contribution:  must be a gift of money made by a written instrument identifying the person making the contribution; must be contributed directly to the candidate or the candidate's authorized committee (certain joint fund-raising activities are exempted from this); must be raised during the period beginning January 1 of the year preceding the election year and ending the date of the general election; and must be from an individual residing in the state.  The contribution must not have come from a candidate for any office.  A limit is established on the total amount of the contributions to a candidate from one individual or entity that may be matched or may counted toward the minimum threshold amount.  The limit is $1,000 to a candidate for Governor, $500 to a candidate for any other state executive office, and $200 to a candidate for the state Legislature.  Contributions by a person controlled by another person are credited to the controlling person (this provision does not apply to the relationship between spouses).

Other Restrictions.  A candidate who receives a payment from the Account must agree to comply with the Fair Campaign Practices Code.  Further, such a candidate may not, during the primary period, spend or receive as loans for his or her own campaign personal funds or the funds of a member of the candidate's immediate family which in the aggregate are more than 3% of expenditure limit for the office.  This restriction applies, separately, for the general election period as well.

No matching monies are available from the Account for a campaign for an office unless at least the following qualify for the general election ballot for that office:  two major party candidates; or one major party candidate and one independent or minor party candidate who received more than 15% of primary vote.

Funding.  On the ballot during each Presidential general election, each voter will be asked whether he or she wants $2 per year allocated to the state election campaign account to provide matching monies for the matching fund program.  In January of each year, the State Treasurer must transfer $2 from the general fund to the Account for each "yes" response received to the question at the most recent Presidential general election.  Monies in the Account are subject to legislative appropriation.

Administration.  The matching fund program is administered by the Public Disclosure Commission.  The Commission must respond to applications for matching funds within two business days.  Its decisions regarding such applications are not subject to the provisions of the Administrative Procedures Act.  In an appeal regarding the Commission's response to such an application, the decision of the superior court is final. The Commission must conduct certain audits and must report to the Governor and the Legislature regarding the matching fund program after each election.

II.  CAMPAIGN CONTRIBUTION LIMITATIONS

Limitations are established on the aggregate size of the campaign contributions that may be made by a person or entity to a candidate for state executive or legislative office.  The limits are:

!tm6,9,9,1    To Candidate For!tj1!tlFrom!tj1!trLimit

   Governor!tj1!tlMulti-candidate

!tj1!tl   Political Committee!tj1!tr= $15,000

!tj1!tlAny Other Entity!tj1!tr= $ 5,000

   Other State!tj1!tlMulti-candidate

   Exec. Office!tj1!tl   Political Committee !tj1!tr= $ 7,500

!tj1!tlAny Other Entity!tj1!tr= $ 2,500

   State Legislator!tj1!tlMulti-candidate

!tj1!tl   Political Committee!tj1!tr= $ 3,000

!tj1!tlAny Other Entity!tj1!tr= $ 1,000

These limits also apply to contributions to an official holding such an office who is the object of a recall campaign and to contributions to a political committee expecting to make expenditures supporting the recall of such an elected official.

For an election campaign, the limits apply during the period beginning on December 1st following the date of the last previous general election for the office sought by the candidate and ending on November 30th following the next election for the office.  For a recall campaign, the limits apply from the date of the filing of recall charges and until 30 days after the recall election.  Special rules are established for contributions which are earmarked or otherwise directed through an intermediary to a candidate.

Contribution Limit to Political Committees.  A limit is also established on contributions to a political committee other than a candidate's committee.  No person may make contributions to such a political committee for the purpose of promoting the election or defeat of any candidate which exceed $5,000 in the aggregate during a calendar year.  This restriction does not apply to contributions made to an elected official regarding a recall election or to a committee seeking the recall of the official.

Lobbyist Contributions.  No state legislator may, during the course of the legislative session, accept a campaign contribution from a registered lobbyist or the employer of a registered lobbyist.

Entities Controlled By Others.  Contributions by an entity which is controlled by another person are considered to have been made by the other person.  This provision does not apply to the relationship between spouses or between certain units of political parties.  Special rules apply to contributions made by minors.

III.  OTHER PROVISIONS

Special Elections.  Although the restrictions on contributions and the expenditure limitation/public matching program apply to campaigns for special elections to fill vacancies, the expenditures and contributions made for the special elections are not counted toward any of the limitations which apply to other elections.  Special rules are established for such an election for which a primary is prohibited under state law.

Contributions received up to one year after an election are considered to be contributions for the election campaign if they are used to pay any debt or obligation incurred to influence the outcome of the election.

Disclosure Reports.  The services of volunteer campaign workers who reside outside of the counties which are part of the candidate's district must be reported to the Commission by the candidate.  The employer of each individual who contributes more than $200 to a political committee during a calendar year or more than $200 to a candidate during an election cycle must also be disclosed in reports filed with the Commission.  A candidate must transmit to each other candidate for the office a copy of:  each disclosure report filed by the candidate with the Commission; and each statement and request filed with the Commission under the matching fund program.  The copies must be transmitted as the reports, statements, or requests are filed with the Commission or immediately thereafter.

Penalties.  Civil penalties are established for violations of various provisions concerning the expenditure limitation and matching fund program and for violations of the contribution limitations.

Fiscal Note:      Available.

Effective Date:The provisions of the bill establishing the voter "check-off" system for providing funds for the Account take effect on July 1, 1988.  The remaining provisions of the bill take effect on January 1, 1989.

House Committee ‑ Testified For:    (Constitution, Elections & Ethics)  Speaker Joe King; Senator Vognild; Senator Talmadge; former Senator Tanner; Roger Douglas, Robert Main and George Hess, Common Cause; Mark Brown, Washington Federation of State Employees (supported concept); and Michele Radosevich, Washington Education Association (supported concept).

(Ways & Means/Appropriations)  Representative Ruth Fisher.

House Committee - Testified Against:      (Constitution, Elections & Ethics)  None Presented.

(Ways & Means/Appropriations)  None Presented.

House Committee - Testimony For:    (Constitution, Elections & Ethics)  (1) This state has recently conducted an election in which more campaign money was spent for each vote cast than in any other election in the nation.  The trend for expenditures for campaigns and for contributions from PAC's continues upward.  Expenditure limitations are necessary to restore the credibility of the political process. (2) Some public funding of campaigns is necessary; both the state and U. S. supreme courts have said that campaign expenditures cannot be limited without reasonable public financing. (3) The public too often thinks that the Legislature is for sale.  It is not, but fear can be a factor when a person votes on a key bill and a powerful interest group says it can spend large sums to defeat a candidate.  (4) Expenditure limits will reduce the amount spent on gloss and packaging which will result in better races.  (5) The people of the state support expenditure limits.  Initiative 276, adopted by the voters, contained such a limitation. (6) Too much of an elected official's time is spent raising campaign funds.  (7) The bill may encourage people to challenge incumbents and will reinvolve people in the election process.

(Ways & Means/Appropriations)  The Supreme Court has ruled that the government can only limit campaign spending by providing partial public financing in exchange for a candidate agreeing to limit spending.  Under this proposal the money given to candidates would come to an average of 80 cents per registered voter per year.  The public supports such a program.  A poll found that 79 percent of the public favors limits on presidential campaign spending and 59 percent believe the government should provide partial public financing.

House Committee - Testimony Against:      (Constitution, Elections & Ethics)  (1) The limits on contributions to candidates for the Legislature should be increased; if limits are set too low, the restriction will foster a proliferation of political action committees (PAC's).  (2) The limits for contributions to House and Senate candidates should be the same. (3) Expenditure limits for the personal funds of a candidate should be doubled and the personal funds should be matched.

(Ways & Means/Appropriations)  None Presented.

VOTE ON FINAL PASSAGE:

      Yeas 54; Nays 42; Excused 2

Voting Nay: Representatives Amondson, Ballard, Barnes, Beck, Betrozoff, Bristow, Brooks, Brough, Bumgarner, Butterfield, Chandler, Doty, Ferguson, Fuhrman, Grant, Hankins, Hargrove, Heavey, Holland, Jesernig, Kremen, Lewis, May, McLean, Miller, Moyer, Nealey, Padden, Patrick, Prince, Rayburn, Sanders, Schmidt, Schoon, Silver, Sommers D, Taylor, Walker, Williams B, Williams J, Wilson S, Zellinsky

Voting Nay:

Excused:    Representatives Allen, Smith C