AN ACT Relating to campaign financing; amending RCW 42.17.105, 42.17.390, 67.70.040, and 67.70.240; adding a new section to chapter 34.05 RCW; adding new sections as new subchapters in chapter 42.17 RCW; adding new sections to chapter 42.17 RCW; adding a new section to chapter 29.80 RCW; adding a new section to chapter 67.70 RCW; creating new sections; prescribing penalties; providing effective dates; and declaring an emergency.

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 22 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 22 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) "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.

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

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

(8) "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.

(9) "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 12 of this act shall be considered as part of any future independent expenditure.

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

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

(12) "Multi-candidate political committee" means a political committee which, during a period of three calendar years: Receives contributions of twenty-five dollars or more from each of twenty-five or more persons; and makes contributions of at least twenty-five dollars to each of five or more candidates or to the authorized committees of five or more candidates.

(13) "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.

(14) "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.

(15) "State campaign account" or "account" means the election campaign account of this state established in section 14 of this act.

(16) "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.

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

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

NEW SECTION. Sec. 3. (1) To be eligible to receive payments under this subchapter (sections 2 through 17 of this act) a candidate shall:

(a) Certify to the public disclosure commission under penalty of perjury that the candidate has or will file as a candidate for a state office; and

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

(i) Will fully comply with the fair campaign practices code;

(ii) Have not made and will not make expenditures during the election cycle which exceed any expenditure limitation applicable to the candidate under section 4 of this act for the office sought by the candidate;

(iii) Will deposit all payments received under section 9 of this act 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;

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

(v) Will cooperate in the case of any audit and examination by the commission under section 15 of this act.

(2) The certifications and agreement required by subsection (1) of this section must be filed with the commission by the third business day after the candidate has first received during the election cycle contributions in an aggregate amount of:

(a) For a candidate for the office of governor, twenty-five thousand dollars;

(b) For a candidate for state executive office other than the office of governor, seven thousand five hundred dollars; and

Such aggregate contributions include both those which satisfy and those which do not satisfy the provisions of section 10 of this act.

(3) 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. Such a statement shall include a promise signed by the candidate that the candidate has not and will not exceed the expenditure limitation applicable to the candidate under section 4 of this act.

(4) Nothing in this subchapter requires any candidate to apply for or accept public funding under section 9 or 11 of this act.

NEW SECTION. Sec. 4. (1) Except as provided in subsection (4) of this section, the expenditure limit for the election cycle for a candidate for state office who agrees to the limitations established in this subchapter in exchange for matching funds from the state campaign account is the greater of: (a) The base amount established for the office sought under subsection (2) of this section; or (b) the base amount plus the amount applicable to the candidate under subsection (3) of this section regarding independent expenditures.

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

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

(b) For state executive office other than the office of governor, seven hundred fifty 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) during the election cycle shall be increased by an amount equal to the amount of the independent expenditures.

(4) A candidate for an office is not subject to an expenditure limitation under this subchapter, if during the election cycle another candidate for that office:

(a) Receives contributions, less any loan repayments, aggregating more than the amount listed in section 3(2) of this act for that office; and

(b) Has not filed with the commission the certifications and agreement for eligibility under section 3(1) of this act within three business days of receiving that aggregate amount in contributions.

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

(1) 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.

(2) 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.

(3) 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 ending with that election. 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 or the primary conducted for that election.

NEW SECTION. Sec. 6. (1) The expenditure limitations imposed by this subchapter are limitations on a candidate's expenditures for the candidate's own campaign for state office. (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 the election cycle for any other election.

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 account for use during an election cycle shall not make, during the election cycle, expenditures from the personal funds of the candidate, or the funds of any member of the immediate family of the candidate, aggregating in excess of the following:

(a) For a candidate for the office of governor, thirty thousand dollars;

(b) For a candidate for state executive office other than the office of governor, ten thousand dollars; and

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 a campaign 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 account for use during the election cycle and the authorized committee of the candidate shall not make expenditures during the election cycle which in the aggregate exceed any expenditure limit applicable to the candidate under section 4 of this act.

NEW SECTION. Sec. 8. The threshold amounts established in section 3(2) of this act, the base amounts established in section 4(2) of this act, the amounts in section 7(1) of this act, and the campaign contribution limitations established in section 19 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 1989.

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 account equal to:

(a)(i) One dollar for each qualifying dollar received by the candidate as a contribution for the campaign of the candidate unless the provisions of section 4(4) of this act apply to the candidate; or (ii) two dollars for each qualifying dollar received by the candidate as a contribution for the campaign of the candidate if the provisions of section 4(4) of this act apply to the candidate; 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.

A qualifying dollar is one which satisfies all of the provisions of section 10 of this act regarding contributions.

(2) Payments received by a candidate under this section shall be deposited as required in section 3(1)(b)(iii) of this act and shall be used to pay for goods and services furnished during the election cycle 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 nomination or 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 nomination or election of the candidate.

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

(a) At least one other candidate for the office sought by the candidate has received during the election cycle contributions which, in the aggregate, exceed the amount listed in section 3(2) of this act for the office sought; and

(b) The candidate and the authorized committee of the candidate have received contributions in an aggregate threshold amount of at least the amount listed in section 3(2) (a), (b), or (c) of this act for the office sought and all of the contributions received for this purpose satisfy the provisions of section 10 of this act.

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

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

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

(iii) For state legislative office, five thousand dollars.

(b) Except as provided in (c) of this subsection, if no expenditure limitation applies to the candidate as a result of the provisions of section 4(4) of this act, the sum of all payments from the state campaign account to that candidate for the general election may not exceed the following amounts for the office sought:

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

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

(iii) For state legislative office, ten thousand dollars.

(c) 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) or (b) of this subsection, as it applies to the candidate, shall be increased by an amount equal to those independent expenditures.

NEW SECTION. Sec. 10. For a contribution received by a candidate or the candidate's authorized committee to qualify as being one which satisfies the requirements of section 9(3)(b) of this act for raising a threshold amount of contributions or to qualify to be matched by public moneys from the state campaign account 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 qualify. The provisions of this subsection do not disqualify money received through 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. However, the contribution shall not have come from a candidate for any office;

(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 account. 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 state legislative office, 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. The provisions of this subsection (c) shall not be construed as applying to the relationship between an individual and the spouse of the individual;

(d) The provisions of section 21 (2) and (3) of this act apply in determining whether a person is controlled by any other person for the purposes of (c) of this subsection; and

(5) The contribution shall be received during the election cycle.

NEW SECTION. Sec. 11. A candidate desiring payments from the state campaign account 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 account and, if the candidate is eligible to receive such payments, disburse to the candidate from the account the full amount to which the candidate is entitled.

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. 12. 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. 13. (1) The commission shall decide all applications for payment from the state campaign account. 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 34.05 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. 14. The state election campaign account is hereby established in the state treasury. Notwithstanding RCW 43.84.090, all earnings of investments of balances in the account shall be credited to the account. Moneys in the account shall only be disbursed, subject to legislative appropriation, by the commission in the form of payments to eligible candidates as authorized by this subchapter.

NEW SECTION. Sec. 15. (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 account 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) Within sixty days after the election cycle 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.

(3) Examinations and audits shall not be made by the commission under this section with respect to an election cycle more than three years after the cycle.

NEW SECTION. Sec. 16. (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 any expenditure limitation applicable under section 4 of this act;

(d) To violate the agreement under section 3(1)(b) 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. 17. (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 11 of this act to each eligible candidate;

(d) The balance in the state campaign account.

(2) The commission is authorized to prescribe such rules in accordance with chapter 34.05 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. 18. Unless the context clearly requires otherwise, the definitions in section 2 of this act apply to this subchapter (sections 18 through 22 of this act). Unless the context clearly requires otherwise, the definitions in RCW 42.17.020 also apply to this subchapter except as they are modified by the definitions in section 2 of this act.

For the purposes of sections 18 through 22 of this act, "contribution" does not include a loan, gift, payment, pledge, or transfer of anything of value owned by the candidate which is made by the candidate to the candidate's own authorized political committee.

NEW SECTION. Sec. 19. (1) No person, other than a multi-candidate political committee or 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) Two thousand dollars to any candidate for state legislative office; or (b) five thousand dollars to any candidate for any state executive office. 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 multi-candidate political committee or 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) 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; or (b) five thousand dollars to any state executive officer 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 a 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) No multi-candidate political committee may make contributions during an election cycle which in the aggregate exceed: (a) Three thousand dollars to any candidate for state legislative office; or (b) seven thousand five hundred dollars to any candidate for any state executive office. No candidate and no authorized committee of a candidate may accept contributions from a multi-candidate political committee which exceed the contribution limitation provided by this subsection for that multi-candidate political committee.

(4) No multi-candidate political committee may make contributions during a recall campaign which in the aggregate exceed: (a) Three 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; or (b) seven thousand five hundred dollars to any state executive officer 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 a 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 multi- candidate political committee which exceed the contribution limitation provided by this subsection for that multi-candidate political committee.

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

(6) No bona fide political party and no caucus of the state legislature may make contributions during a recall campaign which in the aggregate exceed: (a) Five 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; or (b) ten thousand dollars to any state executive officer 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 a 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 bona fide political party or from a caucus of the state legislature which exceed the contribution limitation provided by this subsection for that party or caucus.

(7) 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.

(8) 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 ending with that election or during that recall campaign if the contribution is used to pay any debt or obligation incurred to influence the outcome of that election or the primary conducted for that election or of that recall campaign.

(9)(a) The contributions allowed by subsection (2) of this section are in addition to those allowed by subsection (1) of this section, the contributions allowed by subsection (4) of this section are in addition to those allowed by subsection (3) of this section, and the contributions allowed by subsection (6) of this section are in addition to those allowed by subsection (5) 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.

(10) No state legislator, or authorized political committee for such legislator, may, during the course of a regular session of the legislature, accept a campaign contribution for a state legislative office from any person. The provisions of this subsection do not apply during a recall campaign to a state legislator against whom recall charges have been filed pursuant to RCW 29.82.015.

NEW SECTION. Sec. 20. Children under eighteen years of age may make contributions to the extent authorized in section 19 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. 21. (1) For the purposes of the contribution limitations in section 19 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 or under section 10(4)(c) of this act 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. 22. 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 a 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. 23. 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.

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 16(1) of this 1989 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 16(2)(a) of this 1989 act, up to the greater of ten thousand dollars or the amount used or transferred for a prohibited purpose;

(iii) For violations of section 16(2)(b) of this 1989 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 16(4) of this 1989 act, up to the greater of ten thousand dollars or the amount of the payment in violation of section 9(2) of this 1989 act; and

(v) For violations of section 19 of this 1989 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. 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 23 of this act and sections 24 and 25, chapter .., Laws of 1989 (sections 24 and 25 of this act).

NEW SECTION. Sec. 27. A new section is added to chapter 34.05 RCW to read as follows:

This chapter shall not apply to any action taken by the public disclosure commission under section 13 of this act on applications for payments from the state campaign account.

NEW SECTION. Sec. 28. A new section is added to chapter 29.80 RCW to read as follows:

The secretary of state shall secure from the public disclosure commission a list of the names of candidates for state legislative and state executive offices who have agreed to limit their expenditures under section 3 of this act. The secretary shall add a notice in the candidates' pamphlet following the statement of each person on that list indicating that the candidate has so agreed. The secretary shall use the most current list available from the commission on the last date on which the secretary will accept statements for publication.

NEW SECTION. Sec. 29. The public disclosure commission shall, on an annual basis, estimate the funding needed to provide public matching moneys for election campaigns under sections 2 through 17 of this act. Each annual estimate shall identify funding needs for each of the successive four years. The commission shall determine the revenues to the state campaign account which must be available for appropriation each year to satisfy these needs and promptly transmit this determination to the lottery commission as the goal for the annual game conducted under section 30 of this act. The first annual determination of the public disclosure commission shall be transmitted to the lottery commission not later than forty-five days after the effective date of this section.

NEW SECTION. Sec. 30. A new section is added to chapter 67.70 RCW to read as follows:

Under its authority in RCW 67.70.040, the lottery commission shall offer an instant scratchoff game for the purpose of providing funds to the state election campaign account created in section 14 of this act. The game shall be offered once each calendar year. Revenues accruing from the sale of tickets for the game shall be apportioned among (1) the payment of prizes to the holders of winning tickets or shares, which shall not be less than forty-five percent of the gross annual revenue from such game, (2) transfers to the administrative account created by RCW 67.70.260, and (3) transfers to the state election campaign account. The game shall be structured with a goal of depositing in the state election campaign account at least the amount determined by the public disclosure commission under section 29 of this act.

Sec. 31. Section 4, chapter 7, Laws of 1982 2nd ex. sess. as last amended by section 801, chapter 289, Laws of 1988 and RCW 67.70.040 are each amended to read as follows:

The commission shall have the power, and it shall be its duty:

(1) To promulgate such rules governing the establishment and operation of a state lottery as it deems necessary and desirable in order that such a lottery be initiated at the earliest feasible and practicable time, and in order that such lottery produce the maximum amount of net revenues for the state consonant with the dignity of the state and the general welfare of the people. Such rules shall include, but shall not be limited to, the following:

(a) The type of lottery to be conducted which may include the selling of tickets or shares, or the use of electronic or mechanical devices or video terminals which do not require a printed ticket: PROVIDED, That approval of the legislature shall be required before entering any agreement with other state lotteries to conduct shared games;

(b) The price, or prices, of tickets or shares in the lottery;

(d) The manner of selecting the winning tickets or shares;

(e) The manner and time of payment of prizes to the holder of winning tickets or shares which, at the director's option, may be paid in lump sum amounts or installments over a period of years;

(f) The frequency of the drawings or selections of winning tickets or shares, without limitation;

(g) Without limit as to number, the type or types of locations at which tickets or shares may be sold;

(h) The method to be used in selling tickets or shares, which may include the use of electronic or mechanical devices and video terminals;

(i) The licensing of agents to sell or distribute tickets or shares, except that a person under the age of eighteen shall not be licensed as an agent;

(j) The manner and amount of compensation, if any, to be paid licensed sales agents necessary to provide for the adequate availability of tickets or shares to prospective buyers and for the convenience of the public;

(k) Except as provided in section 30 of this 1989 act, the apportionment of the total revenues accruing from the sale of lottery tickets or shares and from all other sources among: (i) The payment of prizes to the holders of winning tickets or shares, which shall not be less than forty-five percent of the gross annual revenue from such lottery, less amounts of unclaimed prizes deposited in the general fund under RCW 67.70.190 during the fiscal year ending June 30, 1989, (ii) transfers to the lottery administrative account created by RCW 67.70.260, and (iii) transfer to the state's general fund. Transfers to the state general fund shall be made in compliance with RCW 43.01.050;

(l) Such other matters necessary or desirable for the efficient and economical operation and administration of the lottery and for the convenience of the purchasers of tickets or shares and the holders of winning tickets or shares.

(2) To ensure that in each place authorized to sell lottery tickets or shares, on the back of the ticket or share, and in any advertising or promotion there shall be conspicuously displayed an estimate of the probability of purchasing a winning ticket.

(3) To amend, repeal, or supplement any such rules from time to time as it deems necessary or desirable.

(4) To advise and make recommendations to the director for the operation and administration of the lottery.

Sec. 32. Section 24, chapter 7, Laws of 1982 2nd ex. sess. as last amended by section 7, chapter 513, Laws of 1987 and RCW 67.70.240 are each amended to read as follows:

The moneys in the state lottery account shall be used only: (1) For the payment of prizes to the holders of winning lottery tickets or shares; (2) for purposes of making deposits into the reserve account created by RCW 67.70.250 and into the lottery administrative account created by RCW 67.70.260; (3) for purposes of making deposits into the state's general fund; (4) for purposes of making deposits into the housing trust fund under the provisions of section 7 of this 1987 act; (5) for purposes of making deposits into the state election campaign account under section 14 of this 1989 act; (6) for the purchase and promotion of lottery games and game-related services; and ((~~(6)~~)) (7) for the payment of agent compensation.

The office of financial management shall require the allotment of all expenses paid from the account and shall report to the ways and means committees of the senate and house of representatives any changes in the allotments.

NEW SECTION. Sec. 33. 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. 34. Sections 18 through 26 and 29 through 32 of this act are necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect immediately.

NEW SECTION. Sec. 35. Sections 1 through 17, 27, and 28 of this act shall take effect January 1, 1990.

NEW SECTION. Sec. 36. Sections 2 through 16 and 29 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. 37. Sections 18 through 22 of this act shall be added to chapter 42.17 RCW as a subchapter and codified with the subchapter heading of "campaign contribution limitations."