PUBLIC DISCLOSURE COMMISSION
[Filed April 3, 2019, 10:25 a.m., effective May 4, 2019]
Effective Date of Rule: Thirty-one days after filing.
Purpose: To update rules for the DISCLOSE Act of 2018. The 2018 legislature passed SSB 5991, chapter 111, Laws of 2018, pertaining to campaign finance disclosure.
Citation of Rules Affected by this Order: New WAC 390-05-521, 390-05-535, and 390-16-013.
Statutory Authority for Adoption: RCW 42.17A.110
(1) and chapter 111, Laws of 2018.
Adopted under notice filed as WSR 19-02-070 on December 28, 2018.
Changes Other than Editing from Proposed to Adopted Version: WAC 390-05-521, includes exceptions to the definition of payments for restricted funds and appreciation of assets.
WAC 390-05-535, changes definition for a nonprofit organization to an entity that is exempt from federal income tax, instead of an entity that is eligible for such exemption.
WAC 390-16-013, includes prefatory language summarizing the statutory requirements for incidental committees; clarifies that contributions by an organization to its sponsored committee are included towards the $25,000 threshold; clarifies that contributions to out-of-state committees are not included towards the $25,000 threshold; clarifies that the aggregated payment from multiple sources does not count as top source of income; and clarifies that the dissolution of an incidental committee is not intended to have any effect on the legal status of the underlying organization.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 3, Amended 0, Repealed 0.
Number of Sections Adopted at the Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's own Initiative: New 0, Amended 0, Repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 3, Amended 0, Repealed 0.
Number of Sections Adopted using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 3, Amended 0, Repealed 0.
Date Adopted: March 28, 2019.
B. G. Sandahl
WAC 390-05-521Definition—Payments received by incidental committees.
(1) Except as provided in subsection (2) of this section for the purpose of reporting the top ten largest sources of payments to an incidental committee, pursuant to RCW 42.17A.235
, a "payment" means any monetary transfer or in-kind value accepted by the incidental committee, regardless of the donative intent or benefit received by the person making the transfer.
(2) A "payment" does not include:
(a) A source of funding the nonprofit organization is legally bound and explicitly prohibited from using for the purpose of supporting or opposing a candidate or ballot proposition campaign; or
(b) The fair market appreciation of assets held by an incidental committee such as in an investment account, including a brokerage account, and the sale or transfer of such assets from the account to the incidental committee.
WAC 390-05-535Definition—Nonprofit organization within the meaning of incidental committee.
A "nonprofit organization," as the term is used in the definition of incidental committee in RCW 42.17A.005
, means an entity that meets one or more of the following criteria:
(1) An entity that is exempt from income tax under Title 26 U.S.C. Sec. 501(c) of the federal Internal Revenue Code;
(2) An organization, association or corporation whose income is not paid directly or indirectly to its members, stockholders, officers, directors or trustees except in the form of services rendered by the organization, association, or corporation in accordance with its purposes and bylaws and the salary or compensation paid to officers of such organization, association or corporation is for actual services rendered and compares to the salary or compensation of like positions within the public services of the state; or
(3) A limited partnership or limited liability company where an entity described in subsection (1) or (2) of this section is a general partner or managing member, respectively.
WAC 390-16-013Incidental committees—Registration and reporting requirements and method for reporting.
(1) Chapter 42.17A
RCW requires the disclosure of monetary and in-kind contributions and expenditures by nonprofit organizations that participate significantly in candidate and ballot proposition campaigns in Washington state. Nonprofit organizations that make contributions or expenditures in Washington elections above specified thresholds, and are not otherwise defined under the law as political committees, must file organizational statements with the PDC and disclose certain contributors, regardless of the organization's primary purpose. These are referred to in the law as "incidental committees." To be an incidental committee, triggering the requirements to file a statement of organization with the PDC and then file the required disclosure reports, an organization must expect to make contributions or expenditures of at least twenty-five thousand dollars in a calendar year for an election campaign and receive a payment of at least ten thousand dollars from a single source.
(2) The official form for providing the statement of organization by incidental committees as required by RCW 42.17A.207
is designated the incidental committee registration report, or "C-1-IC."
(3) The official form for reporting top ten payments and expenditures by incidental committees as required under RCW 42.17A.240
is designated the incidental committee payments and political expenditures report, or "C-8."
(4) These reporting forms must be filed electronically when the PDC has provided an electronic method to do so. Until an electronic method is provided, the reporting forms should be downloaded from the PDC's web site, www.pdc.wa.gov, or obtained at the PDC office, in Olympia, Washington, and submitted by postal mail or hand delivery. The executive director may make exceptions on a case-by-case basis for an incidental committee that lacks the technological ability to file reports electronically.
(5) For purposes of determining whether a nonprofit organization has the expectation of making contributions or expenditures aggregating at least twenty-five thousand dollars in a calendar year that then triggers the reporting requirements:
(a) Contributions include any monetary or in-kind contributions made to a political committee, including a political committee that the nonprofit organization sponsors; and
(b) Contributions do not include contributions made to an out-of-state political committee, unless the contribution is earmarked or otherwise designated specifically for any in-state election campaign or political committee.
(6) The sources of the top ten largest cumulative payments of ten thousand dollars or greater, as required to be reported on the C-8 report, must include:
(a) The top ten sources of payments within the current calendar year through the applicable reporting period, including any changes to the top ten sources from the previous reporting period; and
(b) The total cumulative payment value, within the current calendar year through the applicable reporting period, made from a person who is reported on the current report as a source of a top ten payment.
(7) For purposes of reporting the sources of the top ten largest cumulative payments of ten thousand dollars or greater, for payments received from multiple persons in an aggregated form, only a payment of more than ten thousand dollars from any single person must be reported, but not the aggregated payment to the nonprofit organization itself or through any intermediary aggregated payment.
(8) An incidental committee may request a modification or suspension of reporting requirements in cases of manifestly unreasonable hardship pursuant to RCW 42.17A.120
, as set forth in chapter 390-28 WAC.
(9) Each incidental committee is automatically dissolved at the end of the calendar year in which it was registered, or upon completion of all reporting requirements for that year, whichever is later. Dissolution does not absolve the nonprofit organization that registered as an incidental committee from responsibility for any obligations resulting from a finding before or after dissolution of a violation committed prior to dissolution. Dissolution in this context refers only to the termination of an incidental committee created to fulfill the nonprofit's reporting responsibilities under chapter 42.17A
RCW, and is not intended to affect the legal status of the nonprofit organization itself.