Purpose: Allow candidates and political committees to receive incidental in-kind contributions without reporting the activity or having the contributions count against any applicable contribution limit.

Citation of Existing Rules Affected by this Order: Amending WAC 390-16-207 In-kind contributions--Explanation and reporting.

Statutory Authority for Adoption: RCW 42.17.370(1).

Adopted under notice filed as WSR 98-09-019 on April 7, 1998.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, amended 0, repealed 0; Federal Rules or Standards: New 0, amended 0, repealed 0; or Recently Enacted State Statutes: New 0, amended 0, repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, amended 0, repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, amended 1, repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, amended 1, repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, amended 0, repealed 0; Pilot Rule Making: New 0, amended 0, repealed 0; or Other Alternative Rule Making: New 0, amended 1, repealed 0.

Effective Date of Rule: Thirty-one days after filing.

May 28, 1998

Melissa Warheit

Executive Director

WAC 390-16-207  In-kind contributions ((and expenditures))--Explanation and reporting. (1) Whenever a candidate or a political committee makes one or more in-kind expenditures which (i) directly or indirectly, in whole or in part, benefit another identifiable candidate or political committee and (ii) in the aggregate amount to a value of fifty dollars or more in the reporting period, then, for the purpose of complying with the provisions of RCW 42.17.090 (1)(f);

(a) Such candidate or political committee shall identify the candidate or political committee benefitted by such expenditure and state the value thereof; and

(b) The candidate or political committee that receives benefit of such expenditure or expenditures shall report a corresponding amount as a contribution received and as an expenditure made by such candidate or political committee.

(2) Whenever a candidate or a political committee makes an in-kind expenditure which supports or opposes more than one candidate or ballot proposition, the person making such expenditure shall identify each candidate or ballot proposition to which such support or opposition is directed and, if the aggregate expenditure amounts to fifty dollars or more, shall state the prorated amount of the expenditure or expenditures properly attributable to each such candidate or ballot proposition.

(3) Whenever a candidate or political committee provides its equipment, property or other facilities owned, retained, leased or controlled by it to another candidate or political committee, the fair market value of the use of such equipment, property or other facilities, if it amounts to fifty dollars or more, shall be reported as follows:

(a) By the candidate or political committee providing the equipment, property or other facilities, by attaching to its form C-4, Schedule B, a statement setting forth the name of the candidate or political committee benefitted and the date, description and value of the in-kind contribution made by it;

(b) By the candidate or political committee benefitting from the use of such equipment, property or other facilities, by reporting the value of such use in its form C-4, Schedule B, both as a contribution and as an expenditure.

(4) Notwithstanding subsections (1) through (3) of this section, whenever a candidate or political committee subject to the contribution limits of RCW 42.17.640 receives an in-kind contribution from any person valued at more than $25 in the aggregate during the election cycle, or year for political committees, the contribution is reportable pursuant to RCW 42.17.090 and subject to limits provided in RCW 42.17.640.

An in-kind contribution occurs when a person provides goods, services or anything of value, other than money or its equivalent, to a candidate or political committee free-of-charge or for less than fair market value, unless the item or service given is not a contribution according to RCW 42.17.020 (14)(b) or WAC 390-17-405.

(2) An in-kind contribution also occurs when a person makes an expenditure that

supports or opposes a candidate or a ballot measure,

meets the definition of contribution in RCW 42.17.020(14) or WAC 390-05-210, and

is other than a monetary contribution made directly to a candidate or political committee.

For example, an in-kind contribution occurs when a person, after collaborating with a candidate or a candidate's agent, purchases space in a newspaper for political advertising supporting that candidate or opposing that candidate's opponent.

(3) According to RCW 42.17.095(8) and WAC 390-16-238, a candidate may not use his or her campaign funds to make a contribution, including an in-kind contribution, to another candidate or a political committee. However, under RCW 42.17.095(3), a candidate may use surplus funds as defined in RCW 42.17.020 to make a contribution to a political party or caucus political committee.

(4) In-Kind Contributions to Recipients Who Have Limits. (a) If a state office candidate receives in-kind contributions from any person valued at more than $25 in the aggregate during an election cycle, the contribution is reportable by the giver and the recipient pursuant to RCW 42.17 and is subject to the applicable contribution limit provided in RCW 42.17.640.

(b) If a bona fide political party or legislative caucus committee receives in-kind contributions from any person valued at more than $25 in the aggregate during a calendar year, the contribution is reportable by the giver and the recipient pursuant to RCW 42.17 and is subject to the applicable contribution limit provided in RCW 42.17.640.

(c) If a state official against whom recall charges have been filed or a political committee supporting the recall of a state official receives in-kind contributions from any person valued at more than $25 in the aggregate during a recall campaign, the contribution is reportable by the giver and the recipient pursuant to RCW 42.17 and is subject to the applicable contribution limits provided in RCW 42.17.640.

(5) Political Committees That Make In-Kind Contributions. A political committee that makes in-kind contributions to a candidate or political committee totaling more than $50 in the aggregate during a reporting period must identify the recipient and the amount of the contribution as part of its C-4 report covering that period.

If the in-kind contribution is in the form of an expenditure that has been obligated, but not yet paid, the identity of the recipient candidate or political committee, along with a good faith estimate of the value of the contribution, must be disclosed in part 3 of Schedule B, in addition to the other information required by the form. When the expense is paid, the recipient's name and the amount of the contribution must be disclosed on Schedule A, along with the other information required by the form.

If a political committee provides equipment, property or anything else of value owned, leased or controlled by it to a candidate or political committee, the contributing committee must attach a statement to its C-4 report showing the name of the candidate or political committee to whom the contribution was made and the date, description and fair market value of the in-kind contribution.

(6) Reporting by Recipients. Except as provided in subsection (4), in-kind contributions from one source are not reportable by the recipient candidate or political committee until the aggregate value of all in-kind contributions received from that source during a reporting period is more than $50. If this threshold is met, the in-kind contributions must be reported in part 1 of Schedule B to the C-4 report covering that reporting period.

(7) Valuing In-Kind Contributions. (a) For purposes of determining the value of goods or services provided as in-kind contributions, refer to WAC 390-05-235, Definition -- Fair Market Value.

(b) If an expenditure that constitutes an in-kind contribution is made, the value of the in-kind contribution to a particular candidate or political committee is the portion of the expense that benefits the candidate or political committee.

[Statutory Authority: RCW 42.17.390. 94-11-016, § 390-16-207, filed 5/5/94, effective 6/5/94. Statutory Authority: RCW 42.17.370. 93-22-002, § 390-16-207, filed 10/20/93, effective 11/20/93; 93-16-064, § 390-16-207, filed 7/30/93, effective 8/30/93. Statutory Authority: RCW 42.17.370(1). 86-04-071 (Order 86-01), § 390-16-207, filed 2/5/86; 82-14-016 (Order 82-04), § 390-16-207, filed 6/28/82; Order 79, § 390-16-207, filed 6/25/76.]

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.