Candidates for elected offices pay for their campaigns through private contributions and their own money. State law limits some contribution amounts. These limits apply to contributions from individuals, corporations, unions, and political action committees. The contribution limit for legislative candidates is $1,000 per election. For statewide offices and judicial offices the contribution limit is $2,000 per election.

State law prohibits the use of public funds to finance political campaigns for state or school district offices. The statute does allow local governments to publicly finance local political campaigns under certain circumstances.

Political campaigns are required to report contributions and spending to the Public Disclosure Commission (PDC). Political advertising must also disclose the top five contributors to the campaign. Reports of contributions and expenditures are available to the public, including on the PDC's web site. Candidates are prohibited from coordinating their spending with other groups that support their campaigns.

Candidates are generally prohibited from using contributions for personal use. Campaigns may reimburse candidates for earnings lost as a result of campaigning and for direct out-of-pocket campaign expenses. If a candidate loans money to his or her campaign, the campaign may repay those loans up to a limit.

State law provides several ways campaigns may dispose of surplus funds when a campaign is over. Surplus funds may be returned to donors. They may also be used to reimburse the candidate for lost earnings. They may be transferred to a political party or caucus campaign committee, but may not be transferred to another candidate or political committee. They may also be donated to charity or to the state. The campaign may hold the funds for possible future use in another campaign for the same office. Finally, surplus funds may be used for expenses incurred in holding a public office that are not otherwise reimbursed.

The PDC enforces campaign contribution and expenditure laws. The PDC can do this through administrative orders. The PDC may also refer charges to the Attorney General, who may bring actions in superior court to enforce the law. An individual or entity found to have violated the law is subject to financial penalties and liability for the state's investigative costs and attorney fees.

Lobbyists are currently required to register with the PDC. Lobbyists are required to identify themselves and their employers, the amount they are paid, and the subjects on which they lobby. Lobbyists are also required to file monthly reports about their activities and compensation. They must also report all contributions they make to candidates, elected officials, and others.

Lobbyists and employers of lobbyists are required to inform the PDC if they employ certain people who remain employed by the state. These include members of the legislature, members of a state board or commission, and full-time state employees. The state ethics act prohibits all state employees from being paid by private parties for performing (or failing to perform) their job duties. State employees are not allowed to receive any outside compensation that is incompatible with their jobs.

People who don't live in Washington are exempt from paying sales taxes on items they buy in Washington for use out of state. This exemption applies only if they live in states or Canadian provinces that do not have their own sales taxes or that exempt Washington residents from their sales taxes.

The Effect of the Proposed Measure if Approved

This measure would make a number of changes to the laws governing elections and lobbying.

It would establish a new program under which registered voters and certain other eligible Washington residents could make donations to campaigns for certain elected offices using public funds. The law calls such donations "democracy credit contributions." Each individual could designate up to three such "contributions" of $50 each to qualified candidates they select every election. The PDC could raise both the number and size of contributions in the future.

All Washington registered voters could choose candidates to receive contributions from public funds. Starting in 2020 the PDC may also verify others as eligible to choose candidates to receive such contributions. Only those eligible to make campaign contributions under state and federal law could be verified by the PDC as eligible. The right to designate contributions from public funds cannot be transferred, and selling the right to designate contributions would be a crime.

"Democracy credit contributions" would come from state funds. The measure would repeal the nonresident sales tax exemption and require nonresidents to pay the sales tax on retail purchases in the state. Revenue from those sales would be dedicated to funding the new program. Some revenue could also be used to enforce campaign finance laws. The measure would repeal the law that currently prohibits using state funds for political campaigns.

The new public financing program would first apply only to candidates for the state legislature. In the future, the PDC could expand the program to statewide elected offices and to judicial offices. It could later be expanded to apply to candidates for federal office if the Attorney General concludes that such an expansion would be lawful. At first the program would apply only to elections held in even-numbered years. The PDC could later expand it to elections held in odd-numbered years.

To be eligible to receive public funding, candidates must meet certain qualifications. Candidates must collect at least 75 private contributions of at least $10. Candidates must promise not to ask for or accept private donations that exceed half of the maximum limit for the office they seek (e.g., if the law limits individual contributions for a particular office to $1,000, the candidate could only accept contributions up to $500). Candidates must also promise not to use more than $5,000 of their personal funds on their campaign. Candidates could use public funds only for specified campaign purposes. The total amount of public funds that any candidate could receive would be limited. Initial limits would be $150,000 total for candidates for the state House of Representatives and $250,000 for state Senate candidates. Those limits could change in the future. Candidates would stop being eligible to receive contributions if their campaign ends or if they violate program rules. At the end of a campaign, candidates would be required to give back to the state the proportionate part of the campaign's surplus funds that came from program contributions.

In addition to creating the new program concerning public financing of campaigns, the measure would change several state laws regarding campaign finance and lobbying.

The initiative would limit lobbyists' ability to hire officials who previously worked in state or local government. This includes elected officials, appointed officials, and public employees. They could not accept employment or receive compensation from any lobbyist who lobbied on any matter in which the official had any decision-making role for three years after the official left office or five years after the lobbying, whichever is sooner.

It would also restrict lobbying by former state or local elected or appointed officials. They could not be paid to lobby their prior office within three years of leaving office. And it would prohibit officers of a candidate's campaign from being paid to lobby the office to which their candidate was elected until three years after working for the campaign.

The initiative would add new restrictions on certain campaign contributions. Public contractors and prospective public contractors would have a lower contribution limit for contributing to candidates for an office having a decision-making role over the contract. The same would be true for lobbyists making contributions to candidates for offices responsible for matters they lobby about. Their contributions to such candidates would be limited to $100 per election. They would also be prohibited from gathering contributions from other people and giving them to the candidate. They would not be allowed to solicit other people for contributions for the candidate of more than $100 each or $500 total. They would also be prohibited from soliciting contributions for the candidate from their employees. And they would be prohibited from doing business with the candidate.

The measure would provide new ways to enforce the new and existing campaign finance laws. The penalties for candidates or campaigns that recklessly or intentionally violate campaign finance laws would be increased. The PDC would be authorized to require violators to take actions to remedy their violations, in addition to paying money. Penalty money would be directed half to the state treasury generally and half to the PDC. The half directed to the PDC would be designated for enforcement of campaign finance laws. The initiative would allow the PDC to assess costs of investigation and attorney fees against people who intentionally violate campaign finance laws. It would broaden the range of people who might be required to pay penalties for violations and restrict the use of campaign funds to pay penalties. It would shorten the notice period for private parties intending to file lawsuits alleging violations of campaign finance laws during the 60 days before an election. It would require the PDC to establish a telephone hotline for receiving tips of violations and require certain people to post notices of the hotline. It would establish new requirements for the PDC's web site. It would change requirements for online filing of reports with the PDC by government agencies and lobbyists.

The measure would also change the requirement for identifying the top five contributors in political advertising and other campaign communications. If the top five contributors include a political committee, then the top five contributors to the political committee must be identified and disclosed as if they had contributed directly to the sponsor of the advertising or communication.

The measure would modify the law against coordination of campaigns by candidates and other entities. It would create a presumption that candidates coordinate spending with others under certain circumstances.