AN ACT Relating to campaign financing; amending RCW 42.17.105 and 42.17.390; adding a new section to chapter 34.04 RCW; adding new sections as new subchapters in chapter 42.17 RCW; adding new sections to chapter 42.17 RCW; creating new sections; prescribing penalties; and providing an effective date.

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

NEW SECTION. Sec. 1. The legislature finds that:

(1) The costs of campaigns for state offices and the size of contributions to candidates for state offices have skyrocketed in recent years;

(2) Under the decisions of the United States supreme court, statutory limits on campaign expenditures by candidates are only permissible when accomplished by agreements under which candidates agree to the limits in exchange for public financing for their campaigns;

(3) The perpetuation of a democracy requires the participation of its citizens; and

(4) Limitations on contributions to, and limited public financing of, campaigns for elective office are necessary to: (a) Prevent corruption and the appearance of corruption; (b) prevent the appearance of large contributors' obtaining disproportionate influence over the decisions of elected representatives; and (c) ensure the participation of the citizens of this state in the election process.

CAMPAIGN EXPENDITURE LIMITATIONS AND MATCHING FUNDS

NEW SECTION. Sec. 2. The definitions under RCW 42.17.020 apply to sections 2 through 21 of this act except as modified by this section. Unless the context clearly requires otherwise, the definitions in this section apply throughout sections 2 through 21 of this act:

(1) "Authorized committee" means the political committee authorized by a candidate, or by the state official against whom recall charges have been filed, to accept contributions or make expenditures on behalf of the candidate or state official.

(2) "Bona fide political party" means an organization which has filed a valid certificate of nomination with the secretary of state under chapter 29.24 RCW or the governing body of the state organization of a major political party, as defined in RCW 29.01.090, which shall be the body authorized by the charter or bylaws of the party to exercise authority on behalf of the state party.

(3) "Candidate" means an individual seeking nomination for election or seeking election to a state office. Such an individual shall be deemed to be seeking nomination for election or seeking election when the individual first:

(a) Announces publicly or files for the office;

(b) Receives contributions or makes expenditures or reserves space or facilities with intent to promote his or her candidacy for the office; or

(c) Gives his or her consent to another person to take on behalf of the individual any of the actions in (b) of this subsection.

(4) "Caucus of the state legislature" means the caucus of the members of a major political party in the state house of representatives or in the state senate.

(5) "Contribution" includes any loan, gift, deposit, subscription, forgiveness of indebtedness, donation, advance, pledge, payment, transfer of funds between political committees, or transfer of anything of value, including personal and professional services for less than full consideration, made for the purpose of influencing any election for state office. For the purposes of sections 2 through 16 of this act, "contribution" does not include:

(a) Interest on moneys deposited in a political committee's account;

(b) Ordinary home hospitality; or

(c) The rendering of "part-time" personal services of the sort commonly performed by volunteer campaign workers, or incidental expenses personally incurred by volunteer campaign workers not in excess of twenty-five dollars personally paid for by the worker. "Part-time" services, for these purposes, means services in addition to regular full-time employment, or, in the case of an unemployed person, services not in excess of twenty hours per week, excluding weekends.

For the purposes of sections 17 through 21 of this act, "contribution" does not include the items described in (a) through (c) of this subsection or a loan, payment, pledge, or transfer of anything of value owned by the candidate to the candidate's authorized political committees.

Contributions other than money or its equivalents shall be deemed to have a money value equivalent to the fair market value of the contribution. The money value of contributions of postage is the face value of the postage. Sums paid for tickets to fund-raising events such as dinners and parties are contributions. However, the amount of any such contribution may be reduced for the purpose of complying with the requirements of sections 2 through 21 of this act, by the actual cost of consumables furnished in connection with the purchase of the tickets, and only the excess over the actual cost of the consumables shall be deemed a contribution.

(6) "Election cycle" means the period beginning on the first day of December following the date of the last previous general election for the office or seat which the candidate seeks and ending on November thirtieth following the next election for the office or seat. 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 November thirtieth following the special election.

(7) "Eligible candidate" means a candidate for a state office who is eligible under section 3 of this act to receive payments under this subchapter.

(8) "General election" means the election which directly results in the election of a person to a state office. It does not include a primary.

(9) "General election period" means the period beginning on the day after the date on which primary results are certified for the office sought by the candidate under RCW 29.62.100, or under RCW 29.62.020 for a legislative office the district for which is entirely within one county, and ending on November thirtieth following the general election. In the case of a special election to fill a vacancy in an office, "general election period" means the period: (a) Beginning the day after the date primary results are certified for the office under RCW 29.62.100, or under RCW 29.62.020 for a legislative office the district for which is entirely within one county, and ending on November thirtieth following the special election if a primary is conducted for the special election; and (b) beginning the sixtieth day before the special election and ending on November thirtieth following the special election if a primary for the special election is prohibited under RCW 29.13.075.

(10) "Immediate family" means a candidate's spouse, and any child, stepchild, parent, grandparent, brother, half-brother, sister, or half-sister of the candidate and the spouse of any such person and any child, stepchild, parent, grandparent, brother, half-brother, sister, or half-sister of the candidate's spouse and the spouse of any such person.

(11) "Independent expenditure" means an "expenditure" as defined in RCW 42.17.020 which: (a) Is not required to be reported under RCW 42.17.060, 42.17.065, 42.17.080, or 42.17.090; (b) is made in support of or opposition to a candidate; (c) pays in whole or in part for any political advertising which either specifically names the candidate supported or opposed, or clearly and beyond any doubt identifies such candidate without using the candidate's name; and (d) alone, or in conjunction with other expenditures in support of or opposition to that candidate, has a value of five hundred dollars or more. A sequence of expenditures each of which is under five hundred dollars shall constitute one independent expenditure as of the time that the last expenditure brings the total value of the sequence to five hundred dollars or more, and no expenditure in the sequence which has been reported to the commission under section 11 of this act shall be considered as part of any future independent expenditure.

(12) "Labor organization" means an organization, agency, or employee committee which exists for the purpose, in whole or in part, of representing employees in dealings with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work.

(13) "Major party" means a major political party as defined in RCW 29.01.090.

(14) "Minor party" means a minor political party as defined in RCW 29.01.100.

(15) "Primary" means the procedure for nominating a candidate to state office under chapter 29.18 or 29.21 RCW or any other primary for an election which uses, in large measure, the procedures established in chapter 29.18 or 29.21 RCW.

(16) "Primary period" means the period beginning on the first day of December following the date of the last election for the office and ending on the date primary results are certified for the office sought by the candidate under RCW 29.62.100, or under RCW 29.62.020 for a legislative office the district for which is entirely within one county. In the case of a special election to fill a vacancy in an office for which a primary is conducted, "primary period" means the period beginning on the day the vacancy in the office occurs and ending on the date the results of the primary are certified for the office under RCW 29.62.100, or under RCW 29.62.020 for a legislative office the district for which is entirely within one county. In the case of a special election to fill a vacancy in an office for which a primary is prohibited under RCW 29.13.075, "primary period" means the period beginning on the day the vacancy in the office occurs and ending on the sixty-first day before the special election.

(17) "Recall campaign" means the period of time beginning on the date of the filing of recall charges pursuant to RCW 29.82.015 and ending thirty days after the recall election.

(18) "State campaign fund" or "fund" means the election campaign fund of this state established in section 13 of this act.

(19) "State legislative office" means the office of a member of the state house of representatives and the office of a member of the state senate.

(20) "State office" means the office of a member of the state legislature or of governor or of any other elective state executive officer.

(21) "State official" means a person who holds a state office.

NEW SECTION. Sec. 3. To be eligible to receive payments under this subchapter (sections 2 through 16 of this act) a candidate shall, by the sixtieth day before the election in the case of a special election to fill a vacancy for which a primary is prohibited under RCW 29.13.075 or within seven days after the certification of primary results under RCW 29.62.100 or, for a legislative district entirely within one county, under RCW 29.62.020:

(1) Certify to the public disclosure commission under penalty of perjury that the candidate qualifies for the general election ballot for a state office and that, as of the date of this certification, the candidate and the authorized committee of the candidate have received contributions in an aggregate threshold amount of at least:

(a) For a campaign for the office of governor, one hundred thousand dollars;

(b) For a campaign for state executive office other than the office of governor, twenty thousand dollars;

(d) For a campaign for the office of a member of the state house of representatives, five thousand dollars;

(2) Certify to the commission under penalty of perjury that all contributions received for the purposes of subsection (1) of this section satisfy the provisions of section 6 of this act;

(3) Certify to the commission under penalty of perjury that the candidate and the authorized committee of the candidate have not made expenditures for the primary which exceed the expenditure limitation for the primary established in section 4(1) of this act for the office sought by the candidate if a primary is conducted for the office;

(4) Agree in writing that the candidate and the authorized committee of the candidate:

(a) Have not made and will not make expenditures for the general election which exceed the expenditure limitation for the general election established in section 4(1) of this act for the office sought by the candidate;

(b) Have not accepted and will not accept during the election cycle contributions from political committees, corporations, or labor organizations which in the aggregate exceed forty percent of the expenditure limitation applicable to the candidate under section 4(1)(c) of this act or forty percent of the sum of the expenditure limitations applicable to the candidate under section 4(1) (a) and (b) of this act. The provisions of this subsection (b) do not apply to contributions from a bona fide political party, a caucus of the state legislature, or a candidate's authorized committee;

(c) Have not made and will not make expenditures during the primary period or during the general election period from the personal funds of the candidate or the funds of a member of the immediate family of the candidate which exceed the limitations provided in section 7(1) of this act;

(d) Will deposit all payments received under this section in a separate checking account which shall contain only funds so received, and will make no expenditures of funds received under this section except by checks drawn on that account. The account shall be in a financial institution located in this state whose deposits are insured by the federal deposit insurance corporation, federal savings and loan insurance corporation, or national credit union administration;

(e) Will furnish campaign records, evidence of contributions, and other appropriate information to the commission;

(f) Will cooperate in the case of any audit and examination by the commission under section 14 of this act; and

(g) Will apply to the commission for a payment as provided for in section 10 of this act;

(5) The provisions of this section shall not be construed as preventing a candidate from filing a statement of intent with the commission at any time prior to the certification of the results of the primary. Such a statement shall include a promise signed by the candidate that: (a) The candidate will apply for matching funds from the state campaign fund if the candidate qualifies for the general election ballot; and (b) the candidate has not and will not take actions during the election cycle which would disqualify the candidate from receiving matching funds from the state campaign fund.

NEW SECTION. Sec. 4. (1)(a) The expenditure limit for a primary for a candidate for state office who agrees to the limitations established in this subchapter in exchange for matching funds from the state campaign fund for the general election is the greater of: (i) The base amount established for the office sought under subsection (2) of this section; or (ii) the base amount plus the amounts applicable to the candidate under subsections (3) and (4) of this section.

(b) Except as provided in (c) of this subsection, the expenditure limit for a general election for a candidate for state office who agrees to the limitations established in this subchapter in exchange for matching funds from the state campaign fund is the greater of: (i) The base amount established for the office sought under subsection (2) of this section; or (ii) the base amount plus the amounts applicable to the candidate under subsection (3) of this section and under subsection (4) or (5) of this section.

(c) In the case of a special election to fill a vacancy in a state office for which a primary is prohibited under RCW 29.13.075, the expenditure limit for the election cycle for a candidate for the office who agrees to the limitations established in this subchapter in exchange for matching funds from the state campaign fund is the greater of: (i) Two times the base amount established for the office sought under subsection (2) of this section; or (ii) two times the base amount plus the amounts applicable to the candidate under subsection (3) of this section and under subsection (4)(a) or (5) of this section.

(2) The base amount referred to in subsection (1) of this section is:

(a) For the office of governor, one million dollars;

(b) For state executive office other than the office of governor, three hundred thousand dollars;

(d) For the office of a member of the state house of representatives, twenty-five thousand dollars.

(3) If, during the twelve months preceding the election in which the candidate is seeking office, independent expenditures by any person or persons aggregating more than an amount equal to ten percent of the base amount established in subsection (2) of this section for the office sought are made in opposition to the candidate or for any other candidate for the office sought by the candidate, the expenditure limitation applicable to the candidate (not the other candidate) shall be increased by an amount equal to the amount of the independent expenditures. The candidate (not the other candidate) may choose to apply this amount to the candidate's expenditure limitation for the primary or for the general election or may choose to apply a portion of the amount to the primary expenditure limitation and the remaining portion to the expenditure limitation for the general election.

(4) (a) If, during the election cycle in which the candidate is seeking state office, any other candidate for the office sought by the candidate receives contributions, less any loan repayments, aggregating more than the expenditure limitation applicable to that other candidate under subsection (1)(c) of this section or the sum of the expenditure limitations applicable to that other candidate under subsections (1) (a) and (b) of this section, the expenditure limitation applicable to the candidate (not the other candidate) shall be increased by an amount equal to the base amount established for the office sought; or

(b) If, during the primary period, any other candidate for the office sought by the candidate makes expenditures which exceed the expenditure limitation applicable to that other candidate under subsection (1) (a) of this section, the expenditure limitation for the candidate (not the other candidate) for the primary shall be increased by an amount equal to the base amount established for the office sought.

For the purposes of this subsection (4), the expenditure limitations applicable to such an "other" candidate are those which could not be exceeded for that candidate to qualify for moneys from the state campaign fund.

(5) If a candidate agrees to accept the expenditure limits in exchange for public matching funds under section 3 of this act by the deadline specified in section 3 of this act, but an opposing candidate does not so agree, then the expenditure limitation for the general election as it applies to the candidate (not the opposing candidate) shall be increased by an amount equal to the base amount established for the office sought. The provisions of this subsection apply only if: (a) The candidate is a major party candidate, or the candidate is an independent or minor party candidate who received more than fifteen percent of the votes cast for the office at the preceding primary; and (b) the opposing candidate is a major party candidate, or the opposing candidate is an independent or minor party candidate who received more than fifteen percent of the votes cast for the office at the preceding primary.

NEW SECTION. Sec. 5. (1) For the purposes of this subchapter:

(a) The expenditures made by and the contributions received by a candidate and the expenditures made by and the contributions received by the authorized committee of the candidate are considered to be expenditures made by and contributions received by the candidate.

(b) Payments made by a candidate to repay loans made to the candidate shall be reported but shall not be counted when determining the total expenditures made by the candidate and the candidate's authorized committee with regard to any of the expenditure limitations provided by this subchapter.

(2) The provisions of this subchapter apply to a special election conducted to fill a vacancy in a state office. However, the contributions received by a candidate and the expenditures made by a candidate for a primary or special election conducted to fill such a vacancy shall not be counted toward any of the limitations which apply to the candidate under this subchapter for any other primary or election.

NEW SECTION. Sec. 6. For a contribution received by a candidate or the candidate's authorized committee to qualify as being one which satisfies the requirements of section 3(1) of this act for raising a threshold amount of contributions or to qualify to be matched by public moneys from the state campaign fund under section 9 of this act, the contribution must satisfy each of the following requirements:

(1) The contribution shall be a gift of money made by a written instrument which identifies the person making the contribution;

(2) The contribution shall be made directly to the candidate or the candidate's authorized committee. Contributions made through any other person shall not count. The provisions of this subsection do not apply to bona fide joint fund-raising efforts conducted solely for the purpose of sponsorship of a fund-raising reception, dinner, or other event, under rules prescribed by the commission, by: (a) Two or more candidates, or (b) one or more candidates and one or more national, state, or local committees of a political party acting on their own behalf;

(3) The contribution shall have come from an individual who is a resident of the state of Washington or from an entity, other than an individual, whose headquarters office for conducting the activities and affairs of the entity is located within this state;

(4)(a) Of the total amount of all contributions made by a person to the candidate and the authorized committee of the candidate or for the benefit of the candidate, not more than the amount listed in (b) of this subsection for the office sought may be counted toward the threshold amount or be matched by moneys from the state campaign fund. The provisions of this subsection shall not be construed as limiting the total amount of contributions that may be made by a person to or for the benefit of a candidate or that may be accepted by the candidate or the candidate's authorized committee from the person;

(b) The amount referred to in (a) of this subsection is: (i) For the office of governor, one thousand dollars; (ii) for state executive office other than the office of governor, five hundred dollars; and (iii) for the office of a member of the state legislature, two hundred dollars;

(c) For the purposes of this subsection (4), all contributions by one person who is controlled by any other person shall be considered to have been made by such other person. Without limiting its scope and effect whatsoever, this general rule means that: (i) Any contribution by a subsidiary, branch, division, department, or local unit of any association shall be considered to have been made by the association, and (ii) any contribution by a political committee controlled by any person shall be considered to be a contribution by that person;

(d) The provisions of (c) of this subsection shall not be construed as applying to the relationship between an individual and the spouse of the individual or to the relationship between a bona fide political party and any district or county organization of that party or a caucus of the state legislature of the members of that party;

(e) In determining whether a person is controlled by any other person for the purposes of (c) of this subsection, the following shall, if applicable, be considered:

(i) Ownership of a controlling interest in voting shares or securities;

(ii) Provisions of bylaws, articles of incorporation, charters, constitutions, or other documents by which one person has the authority, power, or ability to direct another;

(iii) The authority, power, or ability to hire, appoint, discipline, discharge, demote, or remove or influence the decision of the officers or members of an entity;

(iv) Similar patterns or contributions; and

(v) The extent of the transfer of funds between the persons.

(5) The contribution shall be received on or after January 1 of the calendar year preceding the year in which the general election involved is held and by the date on which the general election involved is held. However, in the case of a special election for a state office, the contribution shall be received on or after the date on which the vacancy occurs in that office and by the date on which the general election involved is held.

NEW SECTION. Sec. 7. (1) A candidate who receives, either directly or through the authorized committee of the candidate, a payment from the state campaign fund for use in a general election under this subchapter shall not make expenditures, during the primary period or during the general election period, for the candidate's primary or general election campaign from the personal funds of the candidate, or the funds of any member of the immediate family of the candidate, aggregating in excess of three percent of the expenditure limit established for the office sought by section 4(1) of this act. For the purposes of this subsection, a loan by a candidate or a member of the immediate family of the candidate to the campaign of the candidate shall be considered to be an expenditure by the candidate.

(2) A candidate who receives, either directly or through the authorized committee of the candidate, a payment from the state campaign fund for use in a general election under this subchapter and the authorized committee of the candidate shall not make expenditures for the general election which in the aggregate exceed the expenditure limit applicable to the candidate under section 4(1)(b) or (c) of this act.

(3) A candidate who receives, either directly or through the candidate's authorized committee, a payment from the state campaign fund shall not accept or use during the election cycle contributions from political committees, corporations, or labor organizations which in the aggregate exceed forty percent of the expenditure limitation applicable to the candidate under section 4(1)(c) of this act or forty percent of the sum of the expenditure limitations applicable to the candidate under section 4(1) (a) and (b) of this act. The provisions of this subsection do not apply to contributions from a bona fide political party, a caucus of the state legislature, or a candidate's authorized committee.

(4) For the purposes of this subchapter, a contribution received within the twelve-month period following a general election for a state office shall be considered to be a contribution during the election cycle for the state office. This subsection only applies to the extent the contribution is used to pay any debt or obligation incurred to influence the outcome on that election.

NEW SECTION. Sec. 8. The threshold amounts established in section 3(1) of this act, the base amounts established in section 4(2) of this act, and the campaign contribution limitations established in section 18 of this act shall be increased or decreased by the commission by rule at the beginning of each calendar year based on changes in economic conditions as reflected in the inflationary index used by the commission under RCW 42.17.370. The base year to be used for revisions made under this section is 1988.

NEW SECTION. Sec. 9. (1) Except as provided in subsections (3) and (4) of this section, an eligible candidate is entitled to payments from the state campaign fund equal to:

(a) (i) One dollar for each qualifying dollar received by the candidate as a contribution for the election campaign of the candidate if the expenditure limitation applicable to the candidate is not increased under section 4 (4) or (5) of this act; or (ii) two dollars for each qualifying dollar received by the candidate as a contribution for the election campaign of the candidate if the expenditure limitation applicable to the candidate is so increased. A qualifying dollar is one which satisfies all of the provisions of section 6 of this act regarding contributions; and

(b) The aggregate total amount of independent expenditures made or obligated to be made during the twelve months preceding the election by any person in opposition to the candidate or for any other candidate for the office sought by the candidate if that amount exceeds ten percent of the base amount established in section 4(2) of this act for the office sought.

(2) Payments received by a candidate under this section shall be deposited as required in section 3 (4) (d) of this act and shall be used to pay for goods and services furnished during the election period for which the payments were received. Such payments shall not be used:

(a) To make any payments, directly or indirectly, to the candidate or to any member of the immediate family of the candidate;

(b) To make any expenditure other than expenditures to further the election of the candidate; or

(c) To repay any loan to any person except to the extent the proceeds of such loan were used to further the general election of the candidate.

(3) A candidate shall not be eligible to receive payments from the state campaign fund for a general election for an office unless:

(a) At least two major party candidates qualify under state law for the same general election ballot for the same office; or

(b) One major party candidate and one or more independent or minor party candidates qualify under state law for the same general election ballot for the same office and at least one of those independent or minor party candidates received more than fifteen percent of the votes cast for the office at the preceding primary.

(4) (a) Except as provided in (b) of this subsection, the sum of all payments from the state campaign fund to a candidate for a general election may not exceed the following amounts for the office sought:

(i) For the office of governor, three hundred thousand dollars;

(ii) For state executive office other than the office of governor, one hundred thousand dollars;

(iii) For the office of a member of the state senate, fifteen thousand dollars;

(iv) For the office of a member of the state house of representatives, ten thousand dollars.

(b) If the expenditure limitation applicable to the candidate is increased under section 4 (4) or (5) of this act, the amount listed for the office sought by the candidate in (a) of this subsection shall be doubled as it applies to the candidate. If the expenditure limitation applicable to the candidate is increased under section 4(3) of this act as a result of independent expenditures, the amount listed for the office sought by the candidate in (a) of this subsection or double that amount as provided by this subsection, as it applies to the candidate, shall be increased by an amount equal to those independent expenditures.

NEW SECTION. Sec. 10. A candidate desiring payments from the state campaign fund shall file a request with the commission which shall contain:

(1) Such information and be made in accordance with such procedures as the commission may provide by rule; and

(2) A verification signed by the candidate and the treasurer of the authorized committee of the candidate stating that the information furnished in support of the request, to the best of the knowledge of each, is correct and fully satisfies the requirements of this subchapter.

No later than two business days after an eligible candidate files a request with the public disclosure commission to receive payments under this section, the commission shall determine whether the candidate is eligible to receive payments from the state campaign fund and, if the candidate is eligible to receive such payments, disburse to the candidate from the fund the full amount to which the candidate is entitled.

Upon receiving a request from a candidate for such payments in which the candidate claims the right to receive payments under section 9(1)(a)(ii) or (b) of this act, the commission shall immediately send a notice of the request to all other candidates for the office sought by the candidate. This requirement does not apply to a request for payments under section 9(1)(a)(ii) of this act if the candidate submitting the request has previously received payments under section 9(1)(a)(ii) of this act for the election.

A candidate is not limited to filing only one request for payments under this section during each election cycle. After filing an original request, a candidate may file one or more supplemental requests to receive the payments to which the candidate is entitled.

NEW SECTION. Sec. 11. Within two days after the date of making an independent expenditure, the person making the expenditure shall file with the commission a report, on a form prescribed by the commission, providing the date and amount of the expenditure; what the expenditure purchased; the name of the candidate supported or opposed; the office sought by that candidate; and any other information which the commission believes will assist it in carrying out its responsibilities under this chapter.

NEW SECTION. Sec. 12. (1) The commission shall decide all applications for payment from the state campaign fund. Each application shall be decided as quickly as possible in accordance with rules adopted by the commission, and the commission's decision on the application shall be final unless appealed as provided in subsection (2) of this section. The commission's review of applications, and all actions taken by the commission on applications, shall be exempt from chapter 34.04 RCW.

(2) Any person adversely affected by the commission's decision and who believes the decision to be unlawful may appeal to the superior court of Thurston county by petition setting forth his or her reasons why the decision is unlawful. A copy of the petition on appeal together with a notice that an appeal has been taken shall be served upon the commission, upon the attorney general, and upon each candidate for the office sought by the applicant. The decision of the superior court shall be final. Such appeal shall be heard without costs to either party.

NEW SECTION. Sec. 13. The state election campaign fund is hereby established in the custody of the state treasurer. The fund is not subject to appropriation. The fund is subject to the allotment procedure provided under chapter 43.88 RCW. Notwithstanding RCW 43.84.090, all earnings of investments of balances in the fund shall be credited to this fund. Moneys appropriated by the legislature to the fund and interest and other payments to the fund under this subchapter shall be disbursed by the commission in the form of the payments to eligible candidates for state office as authorized by this subchapter.

NEW SECTION. Sec. 14. (1) After each general election, the commission shall conduct such examinations and audits of the campaign accounts of eligible candidates who received payments from the state campaign fund for the general election and of authorized committees as are sufficient to determine, among other things, whether candidates have complied with the expenditure limits and other conditions of eligibility and requirements of this subchapter.

(2) If any portion of the payments made to a candidate under this subchapter was in excess of the amount to which the candidate was entitled, the candidate shall pay to the commission an amount equal to the excess.

(3) If any amount of any payment made to a candidate under this subchapter was not used as provided for in this subchapter, the candidate shall pay to the commission the amount improperly used.

(4) If any candidate who has received payments under this subchapter has made expenditures which in the aggregate exceed the limitation under section 4(1) of this act, the candidate shall pay to the commission an amount equal to the amount of the excess expenditure.

(5) Within sixty days after the date of the general election for which the payment was received, the candidate shall return to the commission any unexpended funds received by the candidate under this subchapter. The commission may adopt exceptions to this requirement for instances where debts are in dispute.

(6) Notification shall not be made by the commission under this section with respect to a general election more than three years after the date of such an election.

(7) The attorney general shall be responsible for collecting amounts due the state under this section. The attorney general may institute legal action or take whatever measures the attorney general considers appropriate to carrying out this responsibility. The commission shall not conduct any hearings to determine whether an amount is due under this section, but shall provide for sharing with the attorney general information showing that amounts may be due under this section. All amounts recovered under this section shall be deposited in the state campaign fund.

(8) This section does not affect or impair the authority to impose or enforce civil remedies and sanctions under other provisions of this chapter.

NEW SECTION. Sec. 15. (1) It is a violation of this chapter for any candidate to accept public payments under this subchapter which are in excess of the aggregate payments to which the candidate is entitled.

(2) It is a violation of this chapter for any candidate who has received public payments under this subchapter or for any officer, member, employee, or agent of a political committee for the candidate:

(a) To use or transfer funds for any purpose prohibited by section 9(2) of this act;

(b) To make expenditures which he or she knows exceed the expenditure limitation applicable under section 4 of this act;

(d) To violate the agreement under section 3(4) of this act.

(3) It is a violation of this chapter for any person:

(a) To furnish to the commission under this subchapter any evidence, books, or information (including any certification, verification, notice, or report), which is false, fictitious, or fraudulent, or to include in any evidence, books, or information so furnished any misrepresentation of a material fact, or to falsify or conceal any evidence, books, or information relevant to a payment by the commission or an examination and audit by the commission under this subchapter; or

(b) To fail to furnish to the commission any records, books, or information requested by it for purposes of this subchapter.

(4) It is a violation of this chapter for any person to accept any payment if the person knows, or has reason to know, that the payment is in violation of section 9(2) of this act.

NEW SECTION. Sec. 16. (1) The commission shall, as soon as practicable after each election, submit a full report to the governor and the legislature setting forth:

(a) The expenditures shown in such detail as the commission determines appropriate made by each eligible candidate and the authorized committee of each candidate;

(b) The amounts paid by the commission under section 10 of this act to each eligible candidate;

(c) The amount of repayments, if any, required under section 14 of this act, and the reasons for each payment required; and

(d) The balance in the state campaign fund and any account maintained in the fund.

(2) The commission is authorized to prescribe such rules in accordance with chapter 34.04 RCW, to conduct such examinations and investigations, and to require the keeping and submission of such books, records, and information, as it deems necessary to carry out the functions and duties imposed on it by this subchapter.

CAMPAIGN CONTRIBUTION LIMITATIONS

NEW SECTION. Sec. 17. The definitions in section 2 of this act apply to this subchapter (sections 17 through 21 of this act).

The definitions in RCW 42.17.020 apply to this subchapter to the extent that they are consistent with the definitions in section 2 of this act.

NEW SECTION. Sec. 18. (1) No person, other than a bona fide political party or a caucus of the state legislature, may make contributions during an election cycle which in the aggregate exceed: (a) One thousand dollars to any candidate for state legislative office; (b) five thousand dollars to any candidate for governor; or (c) two thousand five hundred dollars to any candidate for any state executive office other than the office of governor. No candidate and no authorized committee of a candidate may accept contributions from a person which exceed the contribution limitations provided by this subsection for that person.

(2) No person, other than a bona fide political party or a caucus of the state legislature, may make contributions during a recall campaign which in the aggregate exceed: (a) One thousand dollars to any state legislator against whom recall charges have been filed or to any political committee having the expectation of making expenditures in support of the recall of any state legislator; (b) five thousand dollars to a governor against whom recall charges have been filed or to any political committee having the expectation of making expenditures in support of the recall of the governor; or (c) two thousand five hundred dollars to any state executive officer other than governor against whom recall charges have been filed or to any political committee having the expectation of making expenditures in support of the recall of such other state executive officer. No state official against whom recall charges have been filed, no authorized committee of such an official, and no political committee having the expectation of making expenditures in support of the recall of any state official may accept contributions from a person which exceed the contribution limitation provided by this subsection for that person.

(3) During an election cycle, no bona fide political party may make contributions which in the aggregate exceed and no caucus of the state legislature may make contributions which in the aggregate exceed: (a) Two thousand dollars to any candidate for state legislative office; (b) ten thousand dollars to any candidate for governor; or (c) five thousand dollars to any candidate for any state executive office other than the office of governor. No candidate and no authorized committee of a candidate may accept contributions from a political party or a caucus of the state legislature which exceed the contribution limitation provided by this subsection for that political party or caucus.

(4) During a recall campaign, no bona fide political party may make contributions which in the aggregate exceed and no caucus of the state legislature may make contributions which in the aggregate exceed: (a) Two thousand dollars to any state legislator against whom recall charges have been filed or to any political committee having the expectation of making expenditures in support of the recall of any state legislator; (b) ten thousand dollars to a governor against whom recall charges have been filed or to any political committee having the expectation of making expenditures in support of the recall of the governor; or (c) five thousand dollars to any state executive officer other than governor against whom recall charges have been filed or to any political committee having the expectation of making expenditures in support of the recall of such other state executive officer. No state official against whom recall charges have been filed, no authorized committee of such an official, and no political committee having the expectation of making expenditures in support of the recall of any state official may accept contributions from a political party or a caucus of the state legislature which exceed the contribution limitation provided by this subsection for that political party or caucus.

(5) Except as provided in section 7(3) of this act, no candidate for state office may accept contributions from political committees, corporations, or labor organizations which in the aggregate exceed, on the date of filing any of the reports required under RCW 42.17.080, forty percent of the total of all contributions received by the candidate during the election cycle. No state official against whom recall charges have been filed and no political committee having the expectation of making expenditures in support of the recall of any state official may accept contributions from political committees, corporations, or labor organizations which in the aggregate exceed forty percent of the total of all contributions received by the state official or political committee during the recall campaign. The provisions of this subsection do not apply to contributions from a bona fide political party, a caucus of the state legislature, or a candidate's authorized committee.

(6) For the purposes of this subchapter, a contribution to the authorized political committee of a candidate, or of a state official against whom recall charges have been filed, shall be considered to be a contribution to the candidate or state official.

(7) Any contribution received within the twelve-month period following a general election for a state office or for a recall election concerning a state office, shall be considered to be a contribution during the election cycle for the state office or during the recall campaign. This subsection only applies to the extent the contribution is used to pay any debt or obligation incurred to influence the outcome of that election.

(8) (a) The contributions allowed by subsection (2) of this section are in addition to those allowed by subsection (1) of this section, and the contributions allowed by subsection (4) of this section are in addition to those allowed by subsection (3) of this section.

(b) The provisions of this subchapter apply to a special election conducted to fill a vacancy in a state office. However, the contributions made to a candidate or received by a candidate for a primary or special election conducted to fill such a vacancy shall not be counted toward any of the limitations which apply to the candidate or to contributions made to the candidate under this subchapter for any other primary or election.

NEW SECTION. Sec. 19. Children under eighteen years of age may make contributions to the extent authorized in section 18 of this act only if:

(1) The decision to contribute is made knowingly and voluntarily by the child;

(2) The funds, goods, or services contributed are owned or controlled exclusively by the child, such as income earned by the child, the proceeds of a trust for which the child is the beneficiary, or a savings account opened and maintained exclusively in the child's name; and

(3) The contribution is not made from the proceeds of a gift, the purpose of which was to provide funds to be contributed, or is not in any other way controlled by another individual.

NEW SECTION. Sec. 20. (1) For purposes of the contribution limitations in section 18 of this act: All contributions by any person who is controlled by any other person shall be considered to have been made by such other person. The provisions of this section shall not be construed as applying to the relationship between an individual and the spouse of the individual or to the relationship between a bona fide political party and any district or county organization of that party or a caucus of the state legislature of the members of that party.

(2) Without in any manner limiting its scope and effect, the general rule under subsection (1) of this section means that:

(a) Any contribution by a subsidiary, branch, division, department, or local unit of any association shall be considered to have been made by the association; and

(b) Any contribution by a political committee controlled by any person shall be considered to be a contribution by that person.

(3) In determining whether a person is controlled by any other person for the purposes of subsection (1) of this section, the following shall, if applicable, be considered:

(a) Ownership of a controlling interest in voting shares or securities;

(b) Provisions of bylaws, articles of incorporation, charters, constitutions, or other documents by which one person has the authority, power, or ability to direct another;

(c) The authority, power, or ability to hire, appoint, discipline, discharge, demote, or remove or influence the decision of the officers or members of an entity;

(d) Similar patterns of contributions; and

(e) The extent of the transfer of funds between the persons.

NEW SECTION. Sec. 21. All contributions made by a person, either directly or indirectly, to a candidate, to a state official against whom recall charges have been filed, or to political committee expecting to make expenditures in support of the recall of a state official shall be considered to be contributions from such person to the candidate, state official, or political committee, as shall contributions which are in any way earmarked or otherwise directed through an intermediary or conduit to the candidate, state official, or political committee. For purposes of this section, "earmarked" means a designation, instruction, or encumbrance, whether direct or indirect, express or implied, or oral or written, which is intended to result in or which does result in all or any part of a contribution being made to a certain candidate or state official. If a conduit or intermediary exercises any direction or control over the choice of the recipient candidate or state official, the contribution shall be considered to be by both the original contributor and the conduit or intermediary.

NEW SECTION. Sec. 22. A new section is added to chapter 42.17 RCW to read as follows:

A contribution received by a candidate or political committee which is returned to the contributor within five days of the date on which it is received by the candidate or committee is not a contribution for the purposes of this chapter.

NEW SECTION. Sec. 23. A new section is added to chapter 42.17 RCW to read as follows:

The provisions of sections 3(4)(b) and 7(3) of this act shall be of no force or effect, and shall be considered terminated, as of the date of any court decision which has the effect of rendering unenforceable any provisions of section 18(5) of this act. If any candidate governed by the provisions of section 18 of this act does not have to comply with the requirements of section 18(5) of this act, then all candidates who have agreed to limit their expenditures under section 3 of this act shall be exempted from having to comply with the related requirements in sections 3(4)(b)and 7(3) of this act.

Sec. 24. Section 1, chapter 176, Laws of 1983 as last amended by section 2, chapter 228, Laws of 1986 and RCW 42.17.105 are each amended to read as follows:

(1) Campaign treasurers shall prepare and deliver to the commission a special report regarding any contribution which:

(a) Exceeds five hundred dollars;

(b) Is from a single person or entity;

(d) Is received: (i) After the period covered by the last report required by RCW 42.17.080 and 42.17.090 to be filed before that primary; or (ii) within twenty-one days preceding that general election.

(2) Any political committee making a contribution which exceeds five hundred dollars shall also prepare and deliver to the commission the special report if the contribution is made before a primary or general election and: (a) After the period covered by the last report required by RCW 42.17.080 and 42.17.090 to be filed before that primary; or (b) within twenty-one days preceding that general election.

(3) Except as provided in subsection (4), the special report required by this section shall be delivered in written form, including but not limited to mailgram, telegram, or nightletter. The special report required by subsection (1) shall be delivered to the commission within forty-eight hours of the time, or on the first working day after, the contribution is received by the candidate or campaign treasurer. The special report required by subsection (2) of this section and RCW 42.17.175 shall be delivered to the commission, and the candidate or political committee to whom the contribution is made, within twenty-four hours of the time, or on the first working day after, the contribution is made.

(4) The special report may be transmitted orally by telephone to the commission to satisfy the delivery period required by subsection (3) if the written form of the report is also mailed to the commission and postmarked within the delivery period established in subsection (3).

(5) The special report shall include at least:

(a) The amount of the contribution;

(b) The date of receipt;

(d) The name and address of the recipient; and

(e) Any other information the commission may by rule require.

(6) Contributions reported under this section shall also be reported as required by other provisions of this chapter.

(7) The commission shall publish daily a summary of the special reports made under this section and RCW 42.17.175.

(((8) It is a violation of this chapter for any person to make, or for any candidate or political committee to accept from any one person, contributions reportable under RCW 42.17.090 in the aggregate exceeding fifty thousand dollars for any campaign for state-wide office or exceeding five thousand dollars for any other campaign subject to the provisions of this chapter within twenty-one days of a general election. This subsection does not apply to contributions made by, or accepted from, a major political party as defined in RCW 29.01.090.))

Sec. 25. Section 39, chapter 1, Laws of 1973 and RCW 42.17.390 are each amended to read as follows:

(1) One or more of the following civil remedies and sanctions may be imposed by court order in addition to any other remedies provided by law:

(a) If the court finds that the violation of any provision of this chapter by any candidate or political committee probably affected the outcome of any election, the result of said election may be held void and a special election held within sixty days of such finding. Any action to void an election shall be commenced within one year of the date of the election in question. It is intended that this remedy be imposed freely in all appropriate cases to protect the right of the electorate to an informed and knowledgeable vote.

(b) If any lobbyist or sponsor of any grass roots lobbying campaign violates any of the provisions of this chapter, his registration may be revoked or suspended and he may be enjoined from receiving compensation or making expenditures for lobbying: PROVIDED, HOWEVER, That imposition of such sanction shall not excuse said lobbyist from filing statements and reports required by this chapter.

(c) Any person who violates any of the provisions of this chapter may be subject to a civil penalty of not more than ten thousand dollars for each such violation. However, for the following violations, the penalty shall be as follows:

(i) For violations of section 15(1) of this 1988 act, up to the greater of ten thousand dollars or the amount in excess of the aggregate payments to which the candidate is entitled;

(ii) For violations of section 15(2)(a) of this 1988 act, up to the greater of ten thousand dollars or the amount used or transferred for a prohibited purpose;

(iii) For violations of section 15(2)(b) of this 1988 act, up to the greater of ten thousand dollars or the amount of the expenditures in excess of the applicable expenditure limitation;

(iv) For violations of section 15(4) of this 1988 act, up to the greater of ten thousand dollars or the amount of the payment in violation of section 9(2) of this 1988 act; and

(v) For violations of section 18 of this 1988 act, up to the greater of ten thousand dollars or the amount of the contribution illegally made or accepted.

(d) Any person who fails to file a properly completed statement or report within the time required by this chapter may be subject to a civil penalty of ten dollars per day for each day each such delinquency continues.

(e) Any person who fails to report a contribution or expenditure may be subject to a civil penalty equivalent to the amount he failed to report.

(f) The court may enjoin any person to prevent the doing of any act herein prohibited, or to compel the performance of any act required herein.

NEW SECTION. Sec. 26. A new section is added to chapter 34.04 RCW to read as follows:

This chapter shall not apply to any action taken by the public disclosure commission under section 12 of this act on applications for payments from the state campaign fund.

NEW SECTION. Sec. 27. Contributions made and received prior to the effective date of this section shall not be considered to be contributions under the provisions of sections 2 through 21 of this act.

NEW SECTION. Sec. 28. 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.

NEW SECTION. Sec. 29. This act shall take effect on January 1, 1989.

NEW SECTION. Sec. 30. Sections 2 through 16 of this act shall be added to chapter 42.17 RCW as a subchapter and codified with the subchapter heading of "campaign expenditure limitations and matching funds."

NEW SECTION. Sec. 31. Sections 17 through 21 of this act shall be added to chapter 42.17 RCW as a subchapter and codified with the subchapter heading of "campaign contribution limitations."