SENATE BILL REPORT

SHB 2772

As of February 26, 2020

Title: An act relating to the administration of election campaign activities and reporting statements of financial affairs.

Brief Description: Concerning the administration of election campaign activities and reporting statements of financial affairs.

Sponsors: House Committee on State Government & Tribal Relations (originally sponsored by Representatives Walsh, Hudgins and Pollet; by request of Public Disclosure Commission).

Brief History: Passed House: 2/18/20, 97-1.

Committee Activity: State Government, Tribal Relations & Elections: 2/26/20.

Staff: Samuel Brown (786-7470)

Background: The Public Disclosure Commission. The PDC was created by the passage of Initiative 276 in 1972. The PDC is empowered to provide timely public access to information about the financing of state and local political campaigns, lobbyist expenditures, and the financial affairs of public officials and candidates, and to ensure compliance with contribution limits and other campaign finance restrictions.

The PDC is composed of five commissioners, appointed for single five-year terms by the Governor and subject to Senate confirmation. No more than three commissioners may be members of the same political party. During their terms, commissioners are prohibited from:

• holding or campaigning for office;

• serving as political party or committee officers;

• soliciting or making campaign contributions;

• participating in election campaigns; or

• lobbying, except on matters directly related to campaign finance law.

Personal Financial Affairs Reporting. Every elected official and executive state officer must file a statement of financial affairs, also known as an F-1 statement, for the preceding calendar year with the PDC. The F-1 statement requires disclosure of financial and personal information relating to the filer and the filer's immediate family. Required items for disclosure include the following:

• the filer and filer's immediate family members' occupation, name of employer, and business address;

• compensation for preparing, promoting, or opposing legislation or agency rules, rates, or standards;

• real property holdings;

• bank accounts, insurance policies, stocks, mutual funds, and other intangible personal property holdings;

• any ownership interests of 10 percent or greater in private entities, and, if applicable, compensation;

• any gifts of food or beverage in excess of $50; and

• any other information deemed necessary by the PDC.

The PDC may grant a reporting modification and waive completion of any part of the F-1 reporting requirement where the requirement imposes extreme hardship on the filer and the modification would not frustrate the PDC's purposes of increased disclosure and access for up to three years, or up to an elected official's term of office.

Ballot Propositions. Persons or committees supporting or opposing ballot propositions must report information on contributions and expenditures above certain amounts to the PDC. In State v. Evergreen Freedom Foundation, 192 Wn. 2d 782 (2019), the state Supreme Court held that local ballot measures are considered "propositions," subjecting supporters and opponents to disclosure requirements, prior to signature gathering, if the measure's language and signatures needed to submit the measure to the local governing body are subsequently filed with an elections official.

Summary of Bill: Personal Financial Affairs Reporting. The dollar code ranges used to identify monetary amounts reported on the F-1 statement are removed. The PDC may, by rule, adopt value codes for reporting monetary amounts within certain ranges. The threshold values triggering the requirement to disclose on the F-1 bank accounts, investment assets, compensation, real property, and real property held by and government contracts to a filer's business are raised.

F-1 statements of legislative staff are subject to disclosure upon request, but may not be posted by the PDC on any website.

Political Advertising. Any political advertising that includes an endorsement must include a disclaimer if the endorsement was made in support of the candidate for a different office or a different election than the subject of the advertising. Political advertising encouraging votes for a person who has not filed a declaration of candidacy or write-in candidacy after the candidate filing period must include a disclaimer that the person is not a candidate for office as of the date the advertisement is first presented.

Endorsement disclaimers must appear adjacent to the endorsement and in at least the largest type used. For televised advertisements or advertisements with visual images, the disclaimer must either be clearly spoken or appear in print and be visible for at least four seconds in letters greater than four percent of the visual screen height in a reasonable color contrast with the background. For advertisements with no visual image, the disclaimer must be clearly spoken.

Ballot Propositions. A ballot measure is considered a proposition at the time it is initially filed with an elections official or circulated for signatures, whichever occurs first.

Other Provisions. The PDC must conduct a statistically sufficient number of audits and field investigations as staff capacity permits. The PDC may provide recommended uniform methods of recordkeeping and reporting for people required to file campaign finance reports, without having to publish a manual.

Appropriation: None.

Fiscal Note: Available.

Creates Committee/Commission/Task Force that includes Legislative members: No.

Effective Date: This bill takes effect 90 days after adjournment of the session in which the bill is passed, except for section 3, relating to the creation of new advertisement disclaimers, which takes effect immediately.

Staff Summary of Public Testimony: PRO: This updates a few technical matters. It allows the financial disclosure limits to be adjusted by the PDC on an ongoing basis. It does clarify that while legislative staff have to file F-1s, that information will not be available online, but will be available upon request. It clarifies that endorsements have to be current and relevant to the race at hand. There were mailers that used real endorsements from past election cycles in a way that may have deceived some voters.

Persons Testifying: PRO: Representative Jim Walsh, Prime Sponsor.

Persons Signed In To Testify But Not Testifying: No one.