SENATE BILL REPORT
SB 5207
As of January 24, 2023
Title: An act relating to campaign contributions by controlled entities.
Brief Description: Concerning campaign contributions by controlled entities.
Sponsors: Senators Billig, Valdez, Hunt, Kuderer and Nguyen.
Brief History:
Committee Activity: State Government & Elections: 1/24/23.
Brief Summary of Bill
  • Aggregates the values of an individual's campaign contributions with contributions made by any entities that individual directs or controls or majority-owns for determining contribution limits.
  • Aggregates the values of campaign contributions of entities directed or controlled by a majority of the same persons.
  • Requires limited liability companies (LLCs) not classified as corporations for tax purposes to file a declaration that the LLC is not created for the sole purpose of making campaign contributions prior to making any contributions.
SENATE COMMITTEE ON STATE GOVERNMENT & ELECTIONS
Staff: Samuel Brown (786-7470)
Background:

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

 

Aggregation of Campaign Contributions.  Washington law limits the amount an individual donor may contribute to a particular candidate.  A donor may contribute up to $2,000 in each of the primary and general elections to candidates for statewide office and some special purpose districts; for all other offices, the donor may contribute up to $1,000 each in the primary and general elections. 

 

In some instances, contributions of multiple persons or entities are aggregated together to determine whether the contribution limit has been reached.  A contribution by a political committee whose funds have been provided exclusively by a single individual is considered a contribution by that individual.  Contributions of a subsidiary, branch, or department of a corporation are aggregated with the main corporation's contributions, as are contributions of local units or branches of labor organizations with the main organization itself.  Contributions of any person or committee whose activities are financed exclusively by any trade association, labor union, or collective bargaining association are considered contributions of that entity.
Summary of Bill:

Aggregation.  For the purpose of determining campaign contribution limits, a person's campaign contributions must be aggregated with those of:

  • any entity the person directs or controls; and
  • any entity of which the person is the majority owner which does not act independently in making decisions about how to contribute to campaigns.

 

The campaign contributions of any entities directed or controlled by a majority of the same persons are aggregated for the purpose of determining campaign contribution limits.

 

Contributions by Limited Liability Companies.  A limited liability company (LLC) that has not elected to be classified as a corporation for federal tax purposes may make campaign contributions only if the LLC has:

  • existed for at least one year; and
  • filed a declaration with the PDC that the LLC was not created for the sole purpose of making campaign contributions.

 

The PDC must post all declarations from LLCs not classified as corporations for federal tax purposes on its website.
Appropriation: None.
Fiscal Note: Available.
Creates Committee/Commission/Task Force that includes Legislative members: No.
Effective Date: Ninety days after adjournment of session in which bill is passed.