Preproposal statement of inquiry was filed as WSR 00-16-137.
Title of Rule: WAC 390-16-226 Loans.
Purpose: To implement PDC Interpretation 96-02 and Attorney General Opinion 2000 No. 4.
Statutory Authority for Adoption: RCW 42.17.370(1).
Statute Being Implemented: RCW 42.17.720(3) and 42.17.125(3).
Summary: The rule amendment would implement PDC Interpretation 69-02 [96-02] and AGO 2000 No. 4 to address commercial loans to candidates, their committees or campaigns. The amendment will also explain the circumstances under which campaign contributions may be used to repay the loans.
Reasons Supporting Proposal: The rule will clarify RCW 42.17.720(3) and 42.17.125(3).
Name of Agency Personnel Responsible for Drafting and Implementation: Doug Ellis, Public Disclosure Commission, 711 Capitol Way, Room 403, Olympia, (360) 664-2735; and Enforcement: Phil Stutzman, Public Disclosure Commission, 711 Capitol Way, Room 403, Olympia, (360) 664-8853.
Name of Proponent: Public Disclosure Commission, governmental.
Rule is not necessitated by federal law, federal or state court decision.
Explanation of Rule, its Purpose, and Anticipated Effects: The rule amendment would implement PDC Interpretation 96-02 and AGO 2000 No. 4 to address commercial loans to candidates, their committees or campaigns. The amendment will also explain the circumstances under which campaign contributions may be used to repay the loans.
The rule will clarify RCW 42.17.720(3) and 42.17.125(3) and assist candidates in complying with the law.
Proposal Changes the Following Existing Rules: This rule amendment would implement PDC Interpretation 96-02 which addresses commercial loans to candidates, their committees or campaigns.
No small business economic impact statement has been prepared under chapter 19.85 RCW. The implementation of this rule does not impact small businesses. The rule would only apply to commercial lenders who loan funds to candidates, a candidates' committee or a candidates' campaign.
Section 201, chapter 403, Laws of 1995, does not apply to this rule adoption. The Public Disclosure Commission is not an agency listed in subsection (5)(a)(i) of section 201. Further, the Public Disclosure Commission does not voluntarily make section 201 applicable to this rule adoption pursuant to subsection (5)(a)(ii) of section 201, and to date the Joint Administrative Rules Review Committee has not made section 201 applicable to this rule adoption.
Hearing Location: Commission Hearing Room, Evergreen Plaza Building, 711 Capitol Way, Room 206, Olympia, WA, on October 24, 2000, at 9:00 a.m.
Assistance for Persons with Disabilities: Ruthann Bryant, (360) 753-1111.
Submit Written Comments to: Doug Ellis, Public Disclosure Commission, P.O. Box 40908, Olympia, WA 98504-0908, fax (360) 753-1112, by October 20, 2000.
Date of Intended Adoption: October 24, 2000.
September 20, 2000
(1) Only loans which are recorded in a written loan agreement executed at the time of the loan and properly reported may be repaid by a candidate or political committee. Surplus campaign funds under RCW 42.17.020 and 42.17.095 may only be used to return a contribution to the candidate if the contribution was properly reported as a loan from the candidate, as described in subsections (2) and (3).
(2) If any person gives or loans the candidate funds in connection with his or her campaign, the funds are not considered personal funds of the candidate. See WAC 390-17-305. Such funds are considered a contribution from the original source of the contribution under chapter 42.17 RCW and, unless the loan meets the exemption provided in RCW 42.17.720(3) and this subsection, the contribution is subject to the contribution limits provided in chapter 42.17 RCW.
(a) If a candidate or candidate's own political committee or campaign or authorized committee receives a loan from a commercial lending institution, the loan is exempt from the contribution limits of RCW 42.17.640 and WAC 390-16-310 only if all the following criteria are met:
(i) the loan is not guaranteed by any other person;
(ii) the loan is made in the regular course of business; and,
(iii) the loan is made on the same terms ordinarily available to the public.
(b) A commercial loan to a candidate's own committee or campaign or authorized committee is presumed to be guaranteed by the candidate. The presumption is rebuttable by clear, cogent and convincing evidence.
(3) The amount of campaign contributions which may be used
to repay a loan made by the candidate to the candidate's own
political committee or campaign, or to repay a commercial loan to
a candidate's own political committee or campaign where the
candidate is the borrower or guarantor, is limited to the loan
repayment limit in RCW 42.17.125(3) as adjusted by WAC 390-05-400. For purposes of the ((
$3,000)) loan repayment limit
(( imposed by RCW 42.17.125(3))), these loans (( by a candidate))
are aggregated for each primary, general, special or recall
election and must be designated accordingly by the candidate at
the time the loan is made.
(4) If a candidate makes documented out-of-pocket campaign expenditures on behalf of his or her campaign expecting repayment (not intending to make an in-kind contribution), the campaign committee must repay the candidate within 21 days of the expenditure or the candidate will be deemed to have made a loan to his or her campaign committee which must qualify for repayment under subsections (1) and (2) in order for the candidate to be repaid. Undocumented out-of-pocket campaign expenditures by the candidate are in-kind contributions not eligible for repayment.
[Statutory Authority: RCW 42.17.370. 93-16-064, § 390-16-226, filed 7/30/93, effective 8/30/93.]
Reviser's note: RCW 34.05.395 requires the use of underlining and deletion marks to indicate amendments to existing rules. The rule published above varies from its predecessor in certain respects not indicated by the use of these markings.
Reviser's note: The typographical error in the above section occurred in the copy filed by the agency and appears in the Register pursuant to the requirements of RCW 34.08.040.