AN ACT Relating to campaign financing; amending RCW 42.17.105; adding new sections as new subchapters in 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 prevent the appearance of large contributors' obtaining disproportionate influence over the decisions of elected representatives and to 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 20 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 20 of this act:

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

(2) "Bona fide political party" means an organization that 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, that is 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 is 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 a loan, gift, deposit, subscription, forgiveness of indebtedness, donation, advance, pledge, payment, or transfer of anything of value, including personal and professional services for less than full consideration, made for the purpose of influencing an election for state office. "Contribution" does not include:

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

(b) Ordinary home hospitality;

(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; or

(d) 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 are deemed to have a money value equivalent to the fair market value of the contribution. 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 20 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 is a contribution. The money value of contributions of postage is the face value of the postage.

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

(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 that 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 the candidate qualifies for the general election ballot under the laws of this state and ending on November thirtieth after the date of the general election or on the date on which the candidate withdraws from the campaign or otherwise ceases actively to seek election, whichever occurs first.

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

(11) "Labor organization" means an organization, agency, or employee committee that 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.

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

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

(14) "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 that uses, in large measure, the procedures established in chapter 29.18 or 29.21 RCW.

(15) "Primary period" means the period beginning on the first day of December after the date of the last election for the office and ending on the tenth day after the next primary conducted for the office or the date on which the candidate withdraws from the election or otherwise ceases actively to seek election, whichever occurs first.

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

(17) "State campaign fund" or "fund" means the election campaign fund of this state established in section 10 of this act.

(18) "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.

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

NEW SECTION. Sec. 3. To be eligible to receive payments under this subchapter (sections 2 through 14 of this act) a candidate shall, within seven days after qualifying for the general election ballot under state law:

(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 committees of the candidate have received contributions in a 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 section 5 of this act;

(3) Certify to the commission under penalty of perjury that the candidate and the authorized committees of the candidate have not made expenditures for the primary that 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 candidate's authorized committees:

(a) Have not made and will not make expenditures for the general election that 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 that in the aggregate exceed forty percent of the following amount: The sum of the expenditure limits applicable to the candidate under section 4(1) (a) and (b) of this act minus the total of all public funds that may legally be distributed to the candidate and the candidate's authorized committees from the state campaign fund for the election. This subsection (b) does not apply to contributions from a bona fide political party, a caucus of the state legislature, or a candidate's authorized committee;

(c) Will deposit all payments received under this section in a separate checking account that 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;

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

(e) Will cooperate in the case of any audit and examination by the commission under section 11 of this act; and

(f) Will apply to the commission for a payment as provided for in section 9 of this act.

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) 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.

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

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

(b) For a 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 before the election in which the candidate is seeking office, independent expenditures by a 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 an opposing candidate, the expenditure limitation applicable to the candidate (not the opposing candidate) is increased by an amount equal to the amount of the independent expenditures. The candidate (not the opposing 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 aggregating more than 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) is increased by an amount equal to the base amount established for the office sought; or

(b) If, during the primary period preceding the election, any other candidate for the office sought by the candidate makes expenditures that 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 is increased by an amount equal to the base amount established for the office sought.

For the purposes of this subsection (4), the amounts applicable to such an "other" candidate are those that 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 within seven days after qualifying for the general election ballot, 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) is increased by an amount equal to the base amount established for the office sought. This subsection applies 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 under this subsection 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.

(6) For the purposes of this subchapter, the expenditures made and the contributions received by a candidate and the expenditures made and the contributions received by each of the authorized committees of the candidate are considered to be expenditures made and contributions received by the candidate.

NEW SECTION. Sec. 5. For a contribution received by a candidate or the candidate's authorized committees to qualify as being one that 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 8 of this act, the contribution must satisfy each of the following requirements:

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

(2) The contribution must be made directly to the candidate, or the candidate's authorized committees. Contributions made through any other person do not count. This subsection does 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 adopted 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 must have come from an individual or individuals residing in the state of Washington or from another entity or entities whose principal offices for conducting the activities of the entities are located within this state;

(4) A contribution from a person shall not exceed two hundred dollars when added to the total amount of all other contributions made by the person to or for the benefit of the candidate. This provision applies to contributions during the period specified in subsection (5) of this section;

(a) For the purposes of this subsection, 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) A contribution by a subsidiary, branch, division, department, or local unit of an association shall be considered to have been made by the association, and (ii) a contribution by a political committee controlled by a person shall be considered to be a contribution by that person;

(b) The provisions of (a) 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 a district or county organization of that party or a caucus of the state legislature of the members of that party;

(c) In determining whether a person is controlled by any other person for the purposes of (a) 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, 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 must be received on or after January 1st of the calendar year before 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 must 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. 6. (1) A candidate who receives 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 by section 4(1) of this act for the office sought. 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 is considered to be an expenditure by the candidate.

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

(3) A candidate who receives, either directly or through the candidate's authorized committees, a payment from the state campaign fund shall not accept or use during the election cycle contributions from political committees, corporations, or labor organizations that in the aggregate exceed forty percent of the following amount: The sum of the expenditure limits applicable to the candidate under section 4(1) (a) and (b) of this act minus the total of all public funds that may legally be distributed to the candidate and the candidate's authorized committees from the state campaign fund for the election. This subsection does 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 after a general election for a state office is 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 a debt or obligation incurred to influence the outcome of that election.

NEW SECTION. Sec. 7. At the beginning of each calendar year, the commission shall increase or decrease 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 16 of this act 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. 8. (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 that satisfies all provisions of section 5 of this act regarding contributions; and

(b) The aggregate amount of independent expenditures made or obligated to be made during the twelve months before the election by any person in opposition to, or on behalf of an opponent of, the eligible 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) (c) of this act and shall be used to pay for goods and services furnished during the election period for which the payments were received. The payments shall not be used:

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

(b) To make an expenditure other than an expenditure to further the election of the candidate;

(d) To repay a loan to a person except to the extent the proceeds of the loan were used to further the general election of the candidate.

(3) A candidate is not 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. 9. 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, pay to the candidate from the fund the full amount to which the candidate is entitled.

A candidate desiring such payments shall file a request with the commission that 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 principal campaign 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.

NEW SECTION. Sec. 10. The state election campaign fund is 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. 11. (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 their 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 the commission determines that 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 commission shall so notify the candidate, and the candidate shall pay to the commission an amount equal to the excess.

(3) If the commission determines that any amount of a payment made to a candidate under this subchapter was not used as provided for in this subchapter, the commission shall so notify the candidate and the candidate shall pay to the commission a sum equal to two hundred percent of the amount.

(4) If the commission determines that a candidate who has received payments under this subchapter has made expenditures that in the aggregate exceed the limitation under section 4(1) of this act by not more than five percent, the commission shall so notify the candidate and the candidate shall pay to the commission an amount equal to the amount of the excess expenditure.

(5) If the commission determines that a candidate who has received payments under this subchapter has made expenditures that in the aggregate exceed by more than five percent the limitation set forth in section 4(1) of this act, the commission shall so notify the candidate and the candidate shall pay the commission an amount equal to three times the amount of the excess expenditure. However, a candidate shall not be required to pay the commission any amount in excess of the aggregate of payments received by the candidate for the election.

(6) 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.

(7) 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.

(8) The commission shall deposit all moneys received under this section in the state election campaign fund.

NEW SECTION. Sec. 12. (1) It is unlawful for a candidate to accept public payments under this subchapter that the candidate knows are in excess of the aggregate payments to which the candidate is entitled.

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

(a) To use or transfer funds for any purpose prohibited by section 8(2) of this act; or

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

(3) It is unlawful for a person:

(a) To furnish to the commission under this subchapter evidence, books, or information (including a certification, verification, notice, or report) that the person knows is false, fictitious, or fraudulent, or to include in evidence, books, or information so furnished a misrepresentation of a material fact, or to falsify or conceal 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 unlawful for a person to accept a payment if the person knows that the payment is in violation of section 8(2) of this act or knows that it is in excess of the expenditure limitation applicable under section 4 of this act.

(5) Conduct that is unlawful under this section is a crime, punishable as a class C felony under chapter 9A.20 RCW.

NEW SECTION. Sec. 13. (1) Action taken by the commission under this subchapter is subject to review by the superior court in accordance with chapter 34.05 RCW. The court shall advance on the docket and expeditiously take action on all petitions filed under this subchapter.

(2) The commission may, through the attorney general, institute actions in the superior court to seek recovery of amounts determined under section 11 of this act to be payable to the commission.

NEW SECTION. Sec. 14. (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 made by each eligible candidate and the authorized committees of each candidate, shown in such detail as the commission determines appropriate;

(b) The amounts paid by the commission under section 9 of this act to each eligible candidate;

(c) The amount of repayments, if any, required under section 11 of this act, and the reasons for each payment required; and

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

(2) The commission may adopt 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. 15. The definitions in section 2 of this act apply to this subchapter (sections 15 through 20 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. 16. (1) No person, other than a bona fide political party or a caucus of the state legislature, may make contributions during an election cycle that in the aggregate exceed: (a) One thousand dollars to a candidate for state legislative office; (b) five thousand dollars to a candidate for governor; or (c) two thousand five hundred dollars to a candidate for a state executive office other than the office of governor.

(2) No person, other than a bona fide political party or a caucus of the state legislature, may make contributions during a recall campaign that in the aggregate exceed: (a) One thousand dollars to a state legislator against whom recall charges have been filed or to a political committee having the expectation of making expenditures in support of the recall of a state legislator; (b) five thousand dollars to a governor against whom recall charges have been filed or to a political committee having the expectation of making expenditures in support of the recall of the governor; or (c) two thousand five hundred dollars to a state executive officer other than governor against whom recall charges have been filed or to a political committee having the expectation of making expenditures in support of the recall of such other state executive officer.

(3) During an election cycle, no bona fide political party may make contributions that in the aggregate exceed and no caucus of the state legislature may make contributions that in the aggregate exceed: (a) Two thousand dollars to a candidate for state legislative office; (b) ten thousand dollars to a candidate for governor; or (c) five thousand dollars to a candidate for a state executive office other than the office of governor.

(4) During a recall campaign, no bona fide political party may make contributions that in the aggregate exceed and no caucus of the state legislature may make contributions that in the aggregate exceed: (a) Two thousand dollars to a state legislator against whom recall charges have been filed or to a political committee having the expectation of making expenditures in support of the recall of a state legislator; (b) ten thousand dollars to a governor against whom recall charges have been filed or to a political committee having the expectation of making expenditures in support of the recall of the governor; or (c) five thousand dollars to a state executive officer other than governor against whom recall charges have been filed or to a political committee having the expectation of making expenditures in support of the recall of such other state executive officer.

(5) No candidate for state office may accept contributions from political committees, corporations, or labor organizations that in the aggregate exceed forty percent of the total of all contributions received by the candidate during the election cycle. No state elected official against whom recall charges have been filed and no political committee having the expectation of making expenditures in support of the recall of a state elected official may accept contributions from political committees, corporations, or labor organizations that in the aggregate exceed forty percent of the total of all contributions received by the elected official or political committee during the recall campaign. This subsection does 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 an authorized political committee of a candidate, or of a state elected official against whom recall charges have been filed, is considered to be a contribution to the candidate or state elected official.

(7) A contribution received within the twelve-month period after a general election for a state office or for a recall election concerning a state office, is 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 a debt or obligation incurred to influence the outcome of that election.

(8) 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.

NEW SECTION. Sec. 17. Children under eighteen years of age may make contributions to the extent authorized in section 16 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. 18. (1) For purposes of the contribution limitations in section 16 of this act: All contributions by a person who is controlled by any other person are considered to have been made by such other person. 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 a 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) A contribution by a subsidiary, branch, division, department, or local unit of a association is considered to have been made by the association; and

(b) A contribution by a political committee controlled by a person is 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, 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. 19. All contributions made by a person, either directly or indirectly, to a candidate, to a state elected 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 elected official are considered to be contributions from such person to the candidate, state elected official, or political committee, as are contributions that are in any way earmarked or otherwise directed through an intermediary or conduit to the candidate, state elected 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, that is intended to result in or that does result in all or any part of a contribution being made to a certain candidate or state elected official. If a conduit or intermediary exercises any direction or control over the choice of the recipient candidate or state elected official, the contribution is considered to be by both the original contributor and the conduit or intermediary.

NEW SECTION. Sec. 20. (1) No person may make or accept a contribution that he or she knows, or has reason to know, violates any provision of sections 15 through 19 of this act. A person who violates this subsection is subject to a civil penalty, imposed by the commission, of up to double the amount of the contribution. This civil penalty is in addition to any other penalty prescribed under this chapter.

(2) A contribution received in excess of the limits prescribed in section 16 of this act escheats to the state of Washington unless, within ten days of its receipt, the recipient of the contribution returns it to the contributor.

Sec. 21. 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.))

NEW SECTION. Sec. 22. Contributions made and received before the effective date of this act are not considered to be contributions under sections 2 through 20 of this act.

NEW SECTION. Sec. 23. 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. 24. This act shall take effect on January 1, 1990.

NEW SECTION. Sec. 25. Sections 2 through 14 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. 26. Sections 15 through 20 of this act shall be added to chapter 42.17 RCW as a subchapter and codified with the subchapter heading of "campaign contribution limitations."

NEW SECTION. Sec. 27. Subchapter headings used in this act do not constitute any part of the law.