HOUSE BILL REPORT
HB 1284
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; R. 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 REPORTED BY COMMITTEE ON WAYS & MEANS/APPROPRIATIONS
JANUARY 29, 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:
SUBSTITUTE BILL: 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. The portion of the contributions received by a candidate that may come from political committees, corporations, or labor organizations is also regulated.
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 Fund is established which is funded primarily by monies appropriated by the Legislature. The Commission is authorized to make payments of matching monies from the Fund to eligible candidates. Generally, the maximum amount that a candidate may receive from the Fund is:
!tm8,8,1,8 !tlCandidates for!tj2!tcMatching Monies
!tlGovernor!tj1!tr=!tr$300,000
!tlOther State Executive Office!tj1!tr=!tr$100,000
!tlState Senator!tj1!tr=!tr$ 15,000
!tlState Representative!tj1!tr=!tr$ 10,000
This maximum amount is doubled for a candidate if the expenditure limit base amount is doubled for the candidate. This amount is also increased in an amount equal to certain independent expenditures made against the candidate or for another candidate.
Subject to these maximum amounts, an eligible candidate is entitled to payments from the Fund equal to : one dollar for each dollar in "qualifying" contributions received by candidate for the election campaign; or two dollars for each such dollar raised by candidate if the expenditure limit base amount is doubled for the candidate. An eligible candidate is also entitled to one dollar from the Fund for each dollar in certain independent expenditures made against the candidate or for another 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$100,000
!tlOther State Executive Office!tj1!tr=!tr$ 20,000
!tlState Senator!tj1!tr=!tr$ 10,000
!tlState Representative!tj1!tr=!tr$ 5,000
"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 Fund, 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 in-state sources. 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 or between certain units of a political party).
Other Restrictions. A candidate who receives a payment from the Fund 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. With certain exceptions, the candidate may not accept contributions from political committees, corporations, or labor organizations which in the aggregate exceed 40% of the expenditure limits applicable to the candidate.
No matching monies are available from the Fund 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.
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!tlState Political Party or
!tj1!tl Caucus of Legislature!tj1!tr= $10,000
!tj1!tlAny Other Entity!tj1!tr= $ 5,000
Other State!tj1!tlState Political Party or
Exec. Office!tj1!tl Caucus of Legislature!tj1!tr= $ 5,000
!tj1!tlAny Other Entity!tj1!tr= $ 2,500
State Legislator!tj1!tlState Political Party or
!tj1!tl Caucus of Legislature!tj1!tr= $ 2,000
!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.
40% Limitation. With certain exceptions, no candidate for state executive or legislative office, no official holding such an office who is the object of a recall campaign, and no recall committee may accept contributions from political committees, corporations, or labor organizations which in the aggregate exceed 40% of the total of all contributions received by the candidate, official, or recall committee for the election or recall campaign.
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.
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.
SUBSTITUTE BILL COMPARED TO ORIGINAL: The original bill designates certain violations of the bill as being class C felonies; the substitute bill establishes civil rather than criminal penalties for such violations. Deleted from the original bill is a provision requiring that a contribution exceeding the limitations escheat to the state unless it is returned to the contributor within 10 days. The original bill limits to $200 the amount of the contributions from one person or entity that may be matched by public funds or may be counted toward the minimum threshold amount required of a candidate; the substitute bill establishes higher limits on that amount for candidates for executive state offices. Provided by the substitute bill are the provisions: regarding special elections to fill vacancies, providing special rules which apply when a primary for such an election is prohibited by state law, and requiring persons making certain independent expenditures to file reports with the Commission. Altered by the substitute bill are the provisions: for calculating the 40% limitation on contributions from political committees, corporations, and labor organizations; and for determining when independent expenditures cause the expenditure limitation for a candidate to be increased and permit the candidate to receive additional public monies. The deadline for entering an agreement regarding expenditure limitations is clarified by the substitute bill.
CHANGES PROPOSED BY COMMITTEE ON WAYS & MEANS/APPROPRIATIONS: Deleted from the first substitute bill are the provisions which provide public monies for a candidate to compensate for adverse independent expenditures and which raise the limit on the amount of monies that a candidate may receive from the State Campaign Fund based on such independent expenditures. Added by the second substitute bill are provisions: requiring candidates who accept public matching funds to comply with the Fair Campaign Practices Code; and prohibiting contributions from any candidate from being matched with public funds or being counted toward the "threshold" amount that a candidate must raise.
Fiscal Note: Available.
Effective Date:The bill takes 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.