Applicability of Initiative 134 to nonreimbursed public office related expenses

OFFICES AND OFFICERS--ELECTIONS--CAMPAIGN CONTRIBUTIONS--PUBLIC DISCLOSURE LAW--PUBLIC DISCLOSURE COMMISSION--Applicability of Initiative 134 to nonreimbursed public office related expenses.

1.  RCW 42.17.125, which governs the personal use of campaign contributions, does not authorize the use of such contributions for nonreimbursed public office related expenses.

2.  Prior to Initiative 134, RCW 42.17.095 authorized a public officer to use surplus campaign contributions for nonreimbursed public office related expenses.  Initiative 134 repealed this authority such that surplus campaign contributions can no longer be used for this purpose.

3.   Although campaign contributions and surplus campaign contributions may not be used for nonreimbursed public office related expenses, a public office may solicit gifts for the specific purpose of defraying nonreimbursed public office related expenses.

4.   If a public officer solicits gifts to defray nonreimbursed public office related expenses, such gifts must be reported to the Public Disclosure Commission pursuant to RCW 42.17.240 and .2415.

                                                                  * * * * * * * * * *

                                                                   June 15, 1993

HonorableTim Erwin
State Senator, District 44
109-A Institutions Building
P.O. Box 40444                                                                                              
Olympia, WA  98504-0444

                                                                                                Cite as:AGO 1993 No. 12

Dear Senator Erwin:

            By letter previously acknowledged you have asked for our opinion on a question related to the use of campaign funds for nonreimbursed public office related expenses, such as maintaining a legislative district office, or paying for travel associated with legislative business.  During the time since we have received your opinion request and have been engaged in researching and preparing an answer, we have been contacted by several other public officials with similar questions.  In order to fully clarify our answer to your original question, and in the hope that the answer will also serve to resolve the related questions posed by others, we have taken the liberty of subdividing your question into several separate questions and phrasing them as follows:

            1.  Under Initiative Measure 134 (Laws of 1993, ch. 2), may campaign contributions be used by a candidate or public officer for nonreimbursed public office related expenses?

            2.  May surplus campaign contributions, which a candidate has decided are not needed for campaign purposes, be used to defray nonreimbursed public office related expenses?

            3.  May a public officer or candidate for public office solicit contributions for the specific purpose of defraying nonreimbursed public office related expenses?

            4.  If the answer to Question 3 is in the affirmative, is the candidate or public officer who solicits and receives contributions for nonreimbursed public office related expenses obligated to report and account for those contributions as "gifts" pursuant to chapter 42.17 RCW?

                                                               BRIEF ANSWER

            The answer to Question 1 is no.  RCW 42.17.125 limits the personal uses to which campaign contributions can be put.  This personal use does not include nonreimbursed public office related expenses.  The answer to Question 2 is also no.  RCW 42.17.095, as amended by Initiative Measure 134, eliminates the ability of a public officer to use surplus campaign funds for nonreimbursed public office related expenses.  The answer to Question 3 is yes.  Although campaign funds and surplus campaign funds may not be used for nonreimbursed public office related expenses, an elected public official may solicit contributions to defray nonreimbursed public office related expenses.  With regard to Question 4, if a public official solicits funds for nonreimbursed public office related expenses, the contributions will be a gift to the officer.  RCW 42.17.240, as amended by Initiative 134, requires elected officials to file an annual statement describing any gifts received during the preceding calendar year.

                                                                BACKGROUND

            Initiative 134, an act relating to the regulation of political contributions and campaign expenditures, was approved by a majority of the voters at the 1992 General Election and became law pursuant to the Washington Constitution 30 days after the election.  Const. art. 2, § 1(d).  The new law[1]restricts and limits contributions to political campaigns in a number of ways, as well as placing limitations on the ways in which campaign funds may be spent and imposing new accounting requirements on funds received for campaign and other political purposes.

The Law Before Initiative 134

            In order to understand the full effect of Initiative 134, it is necessary to understand the law as it existed before the initiative was adopted.  The history of regulation of political contributions and campaign finances begins, for most purposes, with the passage of Initiative Measure 276, approved by the voters at the 1972 General Election.  Much of Initiative 276 was codified as chapter 42.17 RCW, and remains the basic law on campaign finance, as well as several related issues (lobbyist reporting, reporting of public officials' financial affairs, reporting by public treasurers, public records, and political advertising).

            In its original form, this law was a "sunshine act" which was primarily designed to require candidates to fully disclose the source and amount of their campaign contributions and to fully account for their use, but did not contain specific restrictions on the possible uses of campaign contributions.  Between 1972 and 1992, the Legislature amended these laws on several separate occasions, so that, as of November 1992, there were not only continuing reporting and accounting requirements with respect to campaign and other political contributions, but also certain restrictions on the ability of candidates to shift their use of funds between one reporting category and another.

            One of the subjects the Legislature dealt with on two or three occasions was the collection of contributions and the use of funds for "nonreimbursed public office related expenses", which is the subject of your questions.  Central to our discussion was the enactment of chapter 336, Laws of 1977, 1st Ex. Sess., which contains several provisions on the use of funds for nonreimbursed public office related expenses.  Section 3 of this chapter, codified as RCW 42.17.095, contained specific language permitting the use of surplus campaign funds for "nonreimbursed public office related expenses" and required such expenditures to be reported.  RCW 42.17.095(6) (pre-1992 version); Laws of 1977, 1st Ex. Sess., ch. 336, § 2, p. 1310;see also RCW 42.17.090(1)(i) (pre-1992 version).

            In an even more significant change, section 5 of chapter 336, Laws of 1977, 1st Ex. Sess., added a new section to chapter 42.17 RCW (codified as RCW 42.17.243), requiring elected and appointed officials to "report for themselves and for members of their immediate family to the commission any contributions received during the preceding calendar year for the officials' use in defraying nonreimbursed public office related expenses."  This section went on to define contributions reported under the section as a "public office fund" and to require reporting for the receipt and expenditure of such funds.[2]  Although these statutory sections were all slightly amended between 1977 and 1992, they remained in substantially their original form until the adoption of Initiative 134 in November of 1992.

            To summarize the state of the law before Initiative 134, public officers were free to solicit contributions for nonreimbursed public office related expenses.  Those elected and appointed officials who were subject to statutory reporting requirements (see RCW 42.17.240, .2401) were required to report and account for any such contributions as a "public office fund" and to follow the requirements of former RCW 42.17.243.  If properly reported and accounted for, certain "surplus" campaign contributions could lawfully be used to defray nonreimbursed public office related expenses.  RCW 42.17.095 (former).  Finally, the 1991 Legislature added a provision requiring the annual reporting of "gifts".  Laws of 1991, 1st Sp. Sess., ch. 18, § 3, p. 2819, codified as RCW 42.17.2415.[3]  Because it was clear that contributions to a "public office fund" were separately reportable under RCW 42.17.243, no serious question arose whether such contributions should be reported as "gifts" under RCW 42.17.2415.

Enactment of Initiative 134 - Role of the Public Disclosure Commission

            In addition to making substantial changes in the law with respect to limitations on campaign contributions and political expenditures, Initiative 134 significantly changes the law with respect to nonreimbursed public office related expenses.  Those portions of RCW 42.17.095 which had permitted the use of "surplus" campaign contributions for nonreimbursed public office related expenses were eliminated by the new initiative.  RCW 42.17.243, which had contained the reporting and accounting requirements for "public office funds", has been repealed entirely.  Your questions concern the effect of these changes.

            Before we go on, we should note the role of the Public Disclosure Commission in administering (and therefore, necessarily, in interpreting) the provisions of Initiative 134.  The initiative consists of a series of amendments to chapter 42.17 RCW.  The Public Disclosure Commission (itself created by RCW 42.17.350) has the primary job of applying and enforcing chapter 42.17 RCW, including the amendments enacted by Initiative 134.  See RCW 42.17.360, .370.

            We understand that the Public Disclosure Commission is currently in the process of assembling information, conducting research, and preparing for public hearing before adopting formal rules implementing Initiative 134.  As of the date of this opinion, the Public Disclosure Commission has not adopted any formal rules on the subject of your questions.  The Public Disclosure Commission has adopted certain interpretive and policy statements bearing on your questions, which are intended as preliminary statements of the agency's position, while formal rulemaking is pending.  The rules and policy statements adopted by the Public Disclosure Commission, and eventually its rulings on adjudicative proceedings arising under Initiative 134, should serve in the future to answer many or all of the additional questions raised by Initiative 134.

Definition of Terms

            Before we address your specific questions, it is important to discuss the definition of the term "nonreimbursed public office related expenses".[4]  This term is not defined in statute, but it has been defined by the Public Disclosure Commission as follows:  "'[N]onreimbursed public office related expense' is an expenditure incurred by an elected or appointed official, or a member of his or her immediate family, solely because of being an official."  WAC 390‑24‑032.  This definition was adopted before the enactment of Initiative 134, but we can find nothing in the initiative which renders the definition obsolete or inappropriate.

            For the purposes of this opinion, we will assume that the term "nonreimbursed public office related expense" is as defined by WAC 390‑24‑032, but we do emphasize two points not specifically covered in the rule.

            First, the statute itself refers to "nonreimbursed" expenses.  To fall within this definition, an expense must be one which, though related to the activities of a public office, has not actually been reimbursed out of public funds. Nonreimbursement could occur either where (1) reimbursement from public funds is not available because of legal restrictions or the absence of funds appropriated for that purpose, or (2) reimbursement from public funds is legally available, but the officer has voluntarily declined to file a claim for reimbursement from the public treasury.[5]

            Second, the regulatory definition necessarily implies an expenditure actually incurred in relation to a public office, and would exclude situations in which no out-of-pocket expenses have actually occurred.

                                                                    ANALYSIS

            With the foregoing background in mind, we turn to your specific questions:

            Question 1:

            Under Initiative Measure 134 (Laws of 1993, ch. 2), may campaign contributions be used by a candidate or public officer for nonreimbursed public office related expenses?

            As noted in your letter, Initiative 134 (section 21) amends RCW 42.17.125 (which relates to candidate personal fund loans and other personal uses of campaign funds).  This statute, even before Initiative 134, placed restrictions on the extent to which candidates for public office could make "personal use" of campaign contributions.  The statute (even before the passage of the initiative) limited these "personal uses" to the following:  (1) reimbursement to the candidate for loans to cover lost earnings, (2) reimbursement for direct out-of-pocket election campaign and post-election campaign related expenses made by the candidate, or (3) repayment of loans made by the individual to political committees.  RCW 42.17.12 (pre-1992 version).  Initiative 134 leaves this section unchanged, other than to set a $3,000 limitation on the total reimbursement to a candidate of loans made by the candidate to the candidate's own authorized committee or campaign.  Initiative 134, section 21.

            The first question asks whether campaign contributions may be used for nonreimbursed public office related expenses.  With respect to RCW 42.17.125, the question becomes whether these "nonreimbursed public office related expenses" are a "personal" use of campaign contributions.  We conclude that even though many of these expenses are not "personal" in the sense that they provide a personal benefit to the officeholder, they are "personal uses" for purposes of RCW 42.17.125.  Our conclusion is based upon the opening language of the section, which reads as follows:

                        Contributions received and reported in accordance with RCW 42.17.060 through 42.17.090 may only betransferred to the personal account of a candidate, or a treasurer or other individual or expended for such individual's personal use under the following circumstances[.]

Although there is a theoretical possibility that a nonreimbursed public office related expense might also, by its nature, be sufficiently "campaign related" to justify the use of campaign funds, this would be a mere coincidence.  In most cases, the types of expenditures referred to would not be directly related to any pending campaign for political office.  Because this category does not match any of the purposes for which RCW 42.17.125 (before or after the initiative) allows campaign funds to be transferred, we conclude that the law does not allow such a transfer.[6]

            To summarize, even before Initiative 134 was enacted, a direct transfer of campaign contributions for use as nonreimbursed public office related expenses might have been questionable, although the question was not too important in light of the fact that RCW 42.17.095 (before the initiative) allowed a candidate to declare some fund surplus and use them for precisely this purpose.  The amendments of Initiative 134 to RCW 42.17.095 leads us to the discussion of Question 2.

            Question 2:

            May surplus campaign contributions, which a candidate has decided are not needed for campaign purposes, be used to defray nonreimbursed public office related expenses?

            As noted earlier, RCW 42.17.095 enumerates the ways in which candidates or political committees may dispose of "surplus funds".  The term "surplus funds" is defined in RCW 42.17.020:

                        (28) "Surplus funds" means, in the case of a political committee or candidate, the balance of contributions that remain in the possession or control of that committee or candidate subsequent to the election for which the contributions were received, and that are in excess of the amount necessary to pay remaining debts incurred by the committee or candidate prior to that election.  In the case of a continuing political committee, "surplus funds" means those contributions remaining in the possession or control of the committee that are in excess of the amount necessary to pay all remaining debts when it makes its final report under RCW 42.17.065.^[[7]^]

            This statute works together with RCW 42.17.125 (discussed above) to create a system in which the term "campaign funds" is used for campaign contributions received during the course of the campaign (with any transfer to other use governed by RCW 42.17.125).  Once the campaign is over (or perhaps sooner than that, if a candidate definitely determines that not all of the contributions received will be needed for the campaign), funds remaining over and above that needed to pay the campaign's debts are defined as "surplus funds" whose use is governed by RCW 42.17.095.

            Before the passage of Initiative 134, RCW 42.17.095 clearly permitted the use of "surplus funds" for "nonreimbursed public office related expenses".  The critical language of the statute formerly read as follows:

                        The surplus funds of a candidate, or of a political committee supporting or opposing a candidate, may only be disposed of in any one or more of the following ways:

                       . . . .

                        (6) Hold the surplus in the campaign depository or depositories designated in accordance with RCW 42.17.050 for possible use in a future election campaign, for political activity, for community activity, or for non-reimbursed public office related expenses[.]

(Emphasis added.)  However, Initiative 134 removed the critical language from subsection (6), so that the subsection now reads as follows:

                        (6) Hold the surplus in the campaign depository or depositories designated in accordance with RCW 42.17.050 for possible use in a future election campaign, for the same office last sought by the candidate[.]

Initiative 134, section 20 (RCW 42.17.095(6)).

            Because this section implicitly states that the list of permitted uses of "surplus funds" is exclusive, and because the initiative removed language from the section permitting the use of such funds for "nonreimbursed public office related expenses", it is very clear that surplus funds may no longer be used for this purpose.[8]

            Question 3:

            May a public officer or candidate for public office solicit contributions for the specific purpose of defraying nonreimbursed public office related expenses?

            As we noted earlier, Initiative 134 repealed a section of chapter 42.17 RCW which specifically regulated the solicitation and use of funds for "nonreimbursed public office related expenses".  That section was RCW 42.17.243, which required certain elected and appointed officials to "report for themselves and for members of their immediate family to the commission any contributions received during the preceding calendar year for the officials' use in defraying nonreimbursed public office related expenses."  RCW 42.17.243 defined these contributions as a "public office fund" and imposed certain requirements relating to their reporting and accounting.  When this statute is read together with the others we have discussed above, it is clear that RCW 42.17.243 concerned something other than "campaign contributions" in the ordinary sense of that term.  The "public office fund" statute concerned contributions sought and received not for election purposes, but for the use by a public officer in "defraying nonreimbursed public office related expenses".  In other words, this statute contemplated that a candidate or a public officer (or perhaps others on behalf of the candidate or public officer) might specifically solicit money for a "public office fund".

            RCW 42.17.243 permitted such solicitation, and explicitly required public officials to report and account for any money received as a result of such solicitations.  This statute, moreover, tied in with the former version of RCW 42.17.095, which permitted the transfer of "surplus" campaign contributions for this purpose, and with RCW 42.17.090, which describes the contents of campaign contribution reports and, among other things, shows "expenditures for nonreimbursed public office related expenses" as one of the categories the candidates and their treasurers must use in reporting the purposes for which they have spent campaign funds.  RCW 42.17.090(1)(f)(ii).

            The repeal of RCW 42.17.243 by Initiative 134 raises several questions about the status of "public office funds".[9]  Foremost among those questions is: Does the repeal of RCW 42.17.243 eliminate the authority for public officials to have "public office funds", or merely eliminate the requirement that officials report and account for contributions to such a fund?  Secondarily, if there is no longer a statute specifically discussing "public office funds", are public officials nonetheless authorized to seek and accept contributions for the purpose of defraying nonreimbursed public office related expenses?

            We conclude that appointed and elected officials covered by chapter 42.17 RCW still have the authority to seek and solicit contributions for this purpose.  The enactment of RCW 42.17.243 by the 1977 Legislature did not confer a "new" authority on public officials to solicit contributions to a "public office fund".  Such funds had existed (though, perhaps not under that name) both before the 1972 initiative, which for the first time began to regulate political contributions, and after the 1972 initiative but before the 1977 statute.

            The effect of RCW 42.17.243 was to clarify the distinction between the type of solicitation used for "public office funds" and the type used for a regular election campaign, a distinction which had been unimportant before the passage of Initiative 276 (when neither was regulated), but became important after 1972 when campaign contributions (but not "public office fund" contributions) became reportable and accountable.  Because the 1972 initiative left doubt as to the precise distinction between "campaign" contributions and contributions solicited for such purposes as nonreimbursed public office related expenses, the 1977 statute defined terms, created the "public office fund", and specified reporting requirements for the uses of such a fund.[10]

            The repeal of a statute has the effect of restoring the law to its position before the statute was enacted.  See, e.g.,Lau v. Nelson, 89 Wn.2d 772, 575 P.2d 719 (1978).  Applying this principle, we conclude that the intent behind the repeal of RCW 42.17.243 was not to eliminate the authority of candidates or public officers to solicit funds to defray nonreimbursed public office related expenses, but rather to eliminate the specific requirement that these expenditures be denominated a "public office fund" and that separate reports be filed concerning such a fund and its uses.

            Nevertheless, by virtue of our answers to the first two questions, the law is not now in all respects as it was before 1977.  For instance, the transfer of surplus campaign funds and their use for nonreimbursed public office related expenses, which was implicitly permitted before the 1977 amendments and explicitly permitted between 1977 and 1992, is now clearly prohibited by Initiative 134.  As a result, funds intended for this purpose must now be solicited separately from election campaign funds and carefully accounted for separately from campaign contributions, to avoid violating the new language added by the initiative.

            To summarize, we conclude that, even after the repeal of RCW 42.17.243, elected and appointed officials have the authority to solicit contributions to defray nonreimbursed public office related expenses as defined in Public Disclosure Commission regulations.  Campaign contributions (including surplus campaign funds) may not be used for this purpose, however, and the effect of the changes to Initiative 134 is to require careful separate accounting of any funds raised for the purposes described in your question.

            Question 4:

            If the answer to Question 3 is in the affirmative, is the candidate or public officer who solicits and receives contributions for nonreimbursed public office related expenses obligated to report and account for those contributions as "gifts" pursuant to chapter 42.17 RCW?

            Initiative 134 adds language to RCW 42.17.240 which has the effect of requiring "every elected official and every executive state officer" to file an annual statement "describing any gifts received during the preceding calendar year".  Initiative 134 (Laws of 1993, ch. 2, § 31(1), p. 20), amending RCW 42.17.240(1).  The initiative also contains a new section (codified as RCW 42.17.021) defining the term "gift".

            Meanwhile, the special session of the 1991 Legislature had already passed a statute requiring the reporting of gifts (Laws of 1991, 1st Sp. Sess., ch. 18, § 3, p. 2819, codified as RCW 42.17.2415), together with a definition of "gift".  Laws of 1991, 1st Sp. Sess., ch. 18, § 1, p. 2813, codified as RCW 42.17.020(16).  The initiative neither amends nor repeals the 1991 statute.[11]  The result of this situation is that the initiative provisions about "gifts" are now law alongside the 1991 legislative enactment.  Although the definitions and the reporting requirements are very similar, they contain sufficient differences as to prove an administrative problem for the Public Disclosure Commission and for officials subject to the gift reporting requirements.

            We will not here attempt to resolve all the possible conflicts between these two recent enactments.  We will, however, restate a couple of general principles.  First, when more than one statute is enacted on the same subject, the two are read together to the maximum extent to give effect to both of them.  Henderson v. McCullough, 61 Wn.2d 90, 377 P.2d 244 (1962).  Second, to the extent there is an unavoidable conflict between the two statutes, the later enactment (which here is Initiative 134) will prevail.Whitfield v. Davies, 78 Wash. 256, 138 P. 883 (1914);see also RCW 1.12.025.

            Our answers to your first three questions raise an interesting issue:  In light of the elimination of RCW 42.17.243 and its references to a "public office fund", should contributions received by a public officer for nonreimbursed public office related expenses be reported as "gifts"?  We conclude that such contributions would ordinarily be reportable as "gifts" on the assumption that most, if not all, contributions solicited and received by an official would meet one or both of the "gift" definitions just discussed.

            Our conclusion is based upon the assumption that a public officer will solicit and receive funds for nonreimbursed public office related expenses in much the same way as the officer might have solicited and received them for a "public office fund" before the enactment of Initiative 134.  If that assumption is correct, the funds in question will be contributed or transferred to the officer in such a way as to meet (at least in most cases) the definitions of "gift" in the current version of the statute.  We do, frankly, recognize that the repeal of RCW 42.17.243 leaves a "gap" in the statutory scheme and that the Public Disclosure Commission will have the initial job of closing the gap.  One way of doing that is through the "gift" reporting requirement.[12]

            Finally, in light of the potentially conflicting enactments on the subject of gifts, along with the questions of interpretation referred to earlier, the Legislature might wish to consider these particular portions of Initiative 134 as a candidate for corrective amendments.[13]

            We trust the foregoing will be of assistance to you.

                                                                        Very truly yours,

                                                                        CHRISTINE O. GREGOIRE
                                                                        Attorney General

                                                                        JAMES K. PHARRIS
                                                                        Senior Assistant Attorney General

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