INITIATIVE AND REFERENDUM ‑- CORPORATIONS ‑- FINANCING AN INITIATIVE OR REFERENDUM CAMPAIGN WITH FUNDS OF OUT-OF-STATE CORPORATION

INITIATIVE AND REFERENDUM ‑- CORPORATIONS ‑- FINANCING AN INITIATIVE OR REFERENDUM CAMPAIGN WITH FUNDS OF OUT-OF-STATE CORPORATION

The provisions of RCW 29.79.490 (6) are applicable to a corporation whose principal office is, or a majority of whose members or stockholders have their residence outside, the state of Washington, even though such corporation may possess a certificate of authority to transact business within the state of Washington under RCW 23A.32.020.

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                                                                 February 2, 1971

Honorable A. Ludlow Kramer
Secretary of State
Legislative Building
Olympia, Washington 98501

                                                                                                                   Cite as:  AGO 1971 No. 6

Dear Sir:

            This is written in response to your recent request for our opinion on a question pertaining to corrupt practices in connection with initiative and referendum campaigns.  We paraphrase your question as follows:

            Are the provisions of RCW 29.79.490 (6) applicable to a corporation whose principal office is, or a majority of whose members or stockholders have their residence outside, the state of Washington, even though such corporation may possess a certificate of authority to transact business within the state of Washington under RCW 23A.32.020?

            We answer this question in the affirmative for the reasons set forth in our analysis.

                                                                     ANALYSIS

            RCW 29.79.490 (6) is one of several subsections of this statute which declares it to be a gross misdemeanor for any person to engage in certain described activities in connection with the procurement of signatures on any statewide  [[Orig. Op. Page 2]] initiative or referendum petition which is being circulated under the provisions of Article II, § 1 (Amendment 7) of our state Constitution, and implementing legislation.  This particular subsection applies to any person who:

            "Receives, handles, distributes, pays out or gives away, directly or indirectly, money or any other thing of value contributed by or received from any person, firm, association,or corporation whose residence or principal office is, or the majority of whose members or stockholders have their residence outside, the state of Washington, for any service rendered for the purpose of aiding in procuring signatures upon any initiative or referendum petition or for the purpose of aiding in the adoption or rejection of any initiative or referendum measure."  (Emphasis supplied.)

            In your letter requesting our opinion on the applicability of this statute to an out-of-state corporation which possesses a certificate of authority to transact business in this state, you have made note of an earlier opinion of this office on this same subject.  See opinion dated April 28, 1952, to former Secretary of State Earl Coe, the essence of which you have described in your letter as follows:

            ". . .  That opinion took the position that a foreign corporation qualified to do business in Washington was exempted from the provisions of RCW 29.79.490 (6).  The opinion was based to a large degree on the corporation laws in effect at that time, which were said to temper the clear language of the statute.  As you know, the corporation laws, then in effect, were replaced in 1965 by the enactment of the Washington Business Corporation Act (now contained in Title 23A RCW).  In addition, the opinion seems to have placed an unusual construction on the word 'residence' as it may be applied to corporations."

            After reviewing the provisions of RCW 29.79.490 (6), together with such portions of the new Washington Business Corporation Act as might, arguably, have some bearing upon the matter,  [[Orig. Op. Page 3]] it is now the opinion of this office that (notwithstanding the reasoning contained in the foregoing 1952 opinion) the question which you have posed must be answered in the affirmative.  We can see no legitimate basis in law for excluding from the statute a corporation whose principal office is, or a majority of whose members or stockholders have their residence outside, the state of Washington, simply because it possesses a certificate of authority to transact business in this state under RCW 23A.32.020.

            To the extent that the language of RCW 29.79.490 (6) is deemed to be susceptible to two interpretations, resort may be had to the rules of statutory construction for the resolution of such an ambiguity.  One such rule is that ambiguities may be resolved, where possible, on the basis of the legislative history of an act.  Ropo, Inc. v. City of Seattle, 67 Wn.2d 574, 409 P.2d 148 (1965).  Although RCW 29.79.490 (6) was most recently enacted by § 9, chapter 29.79.490, Laws of 1965, the language of the statute was actually reinstated unchanged from the original version of this statute which was enacted by § 32, chapter 138, Laws of 1913 ‑ immediately following the adoption by the voters (at the 1912 election) of the provisions of Amendment 7 of our Constitution relating to the initiative and referendum.  To inquire into the legislative history of this statute, it is therefore necessary to consider its history during the 1913 legislative session.

            This history, in our judgment, makes it clear that the statute which is now codified as RCW 29.79.490 (6) was intended to reach all out-of-state corporations described therein, without regard to whether or not they were authorized to transact business in the state of Washington under the general corporation laws.  During the consideration of this then proposed enactment in the state senate, the journal of that body reveals that an attempt was made by Senator Nichols:

            ". . . to amend the bill by striking the words 'having his, their or its residence or principal office outside of the State of Washington, or corporation' in lines 5 and 6, page 22, section 32 of the engrossed bill."1/

             [[Orig. Op. Page 4]]

            Senator Nichols explained the reasoning which prompted his proposed amendment (and his refusal to accept the unamended bill) as follows:

            "'I believe that a bill of this character is wise and necessary, but when, by the provisions thereof, it is provided, when the property rights of any person or corporation authorized to do business in this state are attacked, that such person or corporation is precluded from making any effective defense, I do not desire to have my record show that I voted for a measure which would do this, therefore I vote no.'

            "Ralph D. Nichols."2/

             However, not withstanding this argument, the legislature refused to adopt Senator Nichols' proposed amendment; instead, the legislature adopted the enactment without striking the words and phrases to which the Senator's objections had been expressed.  From this it seems apparent that the subject statute, when first enacted, was understood and intended to apply to corporations authorized to transact business in the state of Washington, where their principal office or the residence of a majority of their members or stockholders was elsewhere.

            In so far as the new Washington Business Corporation Act (Title 23A RCW) is concerned, we note that RCW 23A.32.020 provides as follows:

            "A foreign corporation which shall have received a certificate of authority under this title shall, until a certificate of revocation or of withdrawal shall have been issued as provided in this title, enjoy the same, but no greater, rights and privileges as a domestic corporation organized for the purposes set forth in the application pursuant to which such certificate of authority is issued; and, except as in this title otherwise provided, shall be subject to the same duties, restrictions, penalties and liabilities now or hereafter imposed upon a domestic corporation of like character."