BillCam

HOUSE BILL No. 5317

September 2, 2009, Introduced by Reps. Opsommer, Genetski, Rick Jones and Wayne Schmidt and referred to the Committee on Ethics and Elections.

A bill to regulate political activity; to regulate certain

candidates for elective office and state officials; to require

financial statements and reports; to prescribe the powers and

duties of certain state and local governmental officers and

agencies; to impose fees; to prescribe penalties and civil

sanctions; and to provide remedies.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 1. This act shall be known and may be cited as the

"financial disclosure act".

Sec. 2. As used in this act:

(a) "Candidate" means that term as defined in section 3 of the

Michigan campaign finance act, 1976 PA 388, MCL 169.203.

(b) "Candidate for state or local office" means a candidate

for any of the following offices:

(i) Governor.

(ii) Lieutenant governor.

(iii) Secretary of state.

(iv) Attorney general.

(v) State senator.

(vi) State representative.

(vii) Member of the state board of education.

(viii) Justice of the supreme court.

(ix) Regent of the university of Michigan, member of the board

of trustees of Michigan state university, or member of the board of

governors of Wayne state university.

(x) An elective public office for which the salary is greater

than 1.5 times the statewide median gross income as determined

under section 143(f) of the internal revenue code, 26 USC 143(f),

excluding a judge of a court of record.

(xi) The head of the Michigan economic development corporation.

compensation, and net earnings from self-employment for the taxable

year.

(d) "Household assets" means household goods and personal

effects, including jewelry, collections of stamps, coins, firearms,

or artwork, household equipment, household furnishings, clothing,

and nonrecreational vehicles for personal use, if the assets are

not held for investment purposes.

(e) "Immediate family" means a dependent child, a spouse, any

other individual residing in the same household, or an individual

claimed as a dependent for federal income tax purposes by the

person required to file a report under this act.

(f) "Income" means money or any thing of value received, or to

be received as a claim on future services, whether in the form of a

fee, salary, expense, allowance, forbearance, forgiveness,

interest, dividend, royalty, rent, capital gain, grant,

scholarship, or any other form of recompense that is considered

income under the internal revenue code, 26 USC 1 to 9833.

(g) "Municipality" means a county, township, city, village,

school district, intermediate school district, community college

district, metropolitan district, district library, or other local

governmental authority.

(h) "Principal residence" means that term as defined under

section 7dd of the general property tax act, 1893 PA 206, MCL

211.7dd.

(i) "State or local official" means any of the following:

(i) The holder of an office described in subdivision (b).

(ii) The head of each principal department, if the office is

filled by appointment.

(iii) A member of a board or commission heading a principal

department, if the office is filled by appointment.

Sec. 3. (1) If an individual is a state or local official at

any time during a calendar year, that individual shall file with

the secretary of state by May 1 of the following year a report that

meets the requirements of section 4. This subsection does not apply

to an individual who was a state or local official only on the

first day of the calendar year.

(2) If an individual is a candidate for state office and has

not already filed a report under subsection (1) covering the

preceding calendar year, that individual shall file with the

secretary of state a report that meets the requirements of section

4 within 30 days after the earliest of the following events, but

not later than 11 days before the first election at which the

individual's name appears on the ballot as a candidate following

the event:

(a) If the individual files a fee, affidavit of incumbency or

identity, or nominating petition for the state office, the deadline

for filing the fee, affidavit of incumbency or identity, or

nominating petition established by the Michigan election law, 1954

PA 116, MCL 168.1 to 168.992.

(b) If the individual is nominated at a political party caucus

or convention, the deadline for holding the caucus or convention

established by the Michigan election law, 1954 PA 116, MCL 168.1 to

168.992.

(3) An individual who has not already filed a report under

subsection (1) covering the preceding calendar year and who will

appear on the ballot as a candidate for local office in a regular

or special election shall file a report that meets the requirements

of section 4 with the secretary of state by September 1 of the

calendar year of the election.

(4) An individual who is a candidate for the office of

governor shall file with the secretary of state on June 15 of the

year in which the election for the office of governor will be held

a copy of the individual's federal tax returns for the 3 preceding

calendar years. A social security number on a tax return filed

under this subsection may be redacted.

(5) An individual is not required to file more than 1 report

under this act in any calendar year.

Sec. 4. (1) Subject to section 5 and except as provided in

section 6, a report required by section 3 shall include a complete

statement of all of the following:

(a) The full name, address, occupation of, and the state

office held or sought by, the individual filing the report.

(b) The name and address of each employer of the individual

filing the report during the calendar year covered by the report.

(i) The source, type, and amount or value of earned income

received during the preceding calendar year by the individual

filing the report if the total earned income from that source

equals $1,000.00 or more during that calendar year.

(ii) The source and type of earned income received during the

preceding calendar year by an immediate family member of the

individual filing the report if the total earned income from that

source equals $1,000.00 or more during that calendar year.

(d) The source, type, and amount or value of all other income

not reported under subdivision (c) that is received during the

preceding calendar year by the individual filing the report or a

member of the immediate family of that individual if the total

amount or value of the other income from that source equals

$1,000.00 or more during that calendar year.

(e) The identity and value of each asset, except household

assets, held during the preceding calendar year by the individual

filing the report or a member of the immediate family of that

individual, including, but not limited to, investments, real or

personal property, or cash, if the asset had a fair market value of

$2,500.00 or more at any time the asset was held during the

preceding calendar year. However, if the individual filing the

report owns, controls, or has an interest in all or a portion of a

farm, trust, or business, the identity and value of each asset held

during the preceding year that is used in the operation or

management of the farm, trust, or business is not required to be

reported under this subdivision if the report includes a complete

statement of the identity and value of the farm, trust, or

business.

(f) The identity and address of the creditor and value of each

liability owed during the preceding calendar year by the individual

filing the report or a member of the immediate family of that

individual if the amount of the liability was $10,000.00 or more at

any time during the preceding calendar year. This subdivision does

not apply to loans secured by household assets.

(g) A brief description and value of a purchase, sale, or

exchange of real property, or of stocks, bonds, commodities,

futures, or other forms of securities during the preceding calendar

year by the individual filing the report or a member of the

immediate family of that individual, if the value is $1,000.00 or

more. This subdivision does not require a description of each

purchase, sale, or exchange of stocks, bonds, commodities, or other

forms of securities if those items are part of a mutual fund and if

the identity and value of the mutual fund is otherwise reported

under this act.

(h) Except as otherwise provided by this subdivision, the

identity of all positions held by the individual filing the report

during the preceding calendar year as an officer, director, member,

trustee, partner, proprietor, representative, employee, or

consultant of a corporation, limited liability company, limited

partnership, partnership, or other business enterprise; of a

nonprofit organization; of a labor organization; or of an

educational or other institution other than this state. An

individual filing the report who is required to have a license to

practice or engage in a particular occupation or profession is not

required to identify a position held as a consultant of a

corporation unless the corporation is a publicly held corporation

that has shares that are listed or traded over the counter or on an

organized exchange or has gross revenues over $4,000,000.00. This

subdivision does not require the reporting of a position held in a

religious, social, fraternal, or political entity, or of a position

solely of an honorary nature for which no compensation is payable.

(i) If the individual filing the report has an agreement or

has made an arrangement with respect to future employment, a leave

of absence during that individual's term of office, continuation of

payments by a former employer, or continuation of participation in

an employee benefit plan maintained by a former employer, a

description of the agreement or arrangement, including the dates,

parties, and terms.

(j) The source, nature, and value of all gifts or

reimbursements, including those related to travel, sporting events,

and other recreational activities but excluding campaign

contributions, aggregating $250.00 or more that the individual

filing the report or a member of his or her immediate family

received during the preceding calendar year from a registered state

or federal lobbyist or lobbyist agent.

(2) Information required to be reported under this section

shall include information with respect to the holdings of a trust

that is not an irrevocable trust and the income from any trust or

other financial arrangement from which income is received by, or

with respect to which a beneficial interest in principal or income

is held by, an individual required to file a report under this

section or an immediate family member of the individual.

(3) Information required to be reported under this section

need not be identified to a particular member of the immediate

family of the individual filing the report.

(4) A report required under section 3 shall include a sworn

statement by the person required to file that the report is

complete and accurate.

Sec. 5. (1) An amount or value reported under section 4(1)(c),

(d), (e), or (g) shall be reported by category as follows:

(a) $1,000.00 or more but less than $10,000.00.

(b) $10,000.00 or more but less than $50,000.00.

(d) $100,000.00 or more but less than $500,000.00.

(e) $500,000.00 or more.

(2) An amount or value reported under section 4(1)(f) shall be

reported by category as follows:

(a) $10,000.00 or more but less than $50,000.00.

(b) $50,000.00 or more but less than $100,000.00.

(d) $500,000.00 or more.

(3) Instead of specifying the category of the amount or value

of an item in a report under this act, an individual may indicate

the exact amount or value of the item or, if stock shares, the

number of shares.

Sec. 6. A report under section 4 may omit any of the

following:

(a) Information required to be reported under the Michigan

campaign finance act, 1976 PA 388, MCL 169.201 to 169.282.

(b) An item otherwise required to be reported under section

4(1)(e), (f), or (g) if all of the following apply:

(i) The item represents the sole financial interest and

responsibility of a member of the immediate family of the

individual filing the report about which the individual filing the

report does not have actual knowledge.

(ii) The item is not in any way, past or present, derived from

the income, assets, or activities of the individual filing the

report.

(iii) The individual filing the report does not derive, or

expect to derive, financial benefit from the item.

apart from the individual filing the report with the intention of

terminating the marriage or maintaining a legal separation.

(d) Compensation from a publicly held corporation that has

shares that are listed or traded over the counter or on an

organized exchange paid to a business owned by the individual

filing the report or in which the individual filing the report has

an interest, if the report under section 4 includes a complete

statement of the identity and value of that business and the

individual filing the report is required to have a license as

described in section 4(1)(h).

(e) Benefits received under the social security act, chapter

531, 49 Stat. 620.

Sec. 7. The secretary of state shall do all of the following:

(a) Prepare and make available appropriate forms and

instructions for the reports required by this act.

(b) Receive reports as required by this act.

business day on which a report required to be filed under this act

is received, make the report or all of the contents of the report

available without charge to the public on the internet at a single

website established and maintained by the secretary of state, and

not later than the third business day following the day on which

the report is received, make the report available for public

inspection and reproduction during regular business hours.

(d) Promulgate rules and issue declaratory rulings to

implement this act pursuant to the administrative procedures act of

1969, 1969 PA 306, MCL 24.201 to 24.328. Rules may provide for the

redaction of information in a report before release to the public

if the information may jeopardize the personal safety of a person

identified in the report.

(e) Conduct investigations as necessary to determine whether

there is reason to believe that a violation of this act occurred.

Investigations shall be conducted pursuant to the administrative

procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

(f) The secretary of state, for the purposes of this act, may

administer oaths; certify to official acts; and issue subpoenas to

compel the attendance of witnesses and the production of papers,

books, accounts, and documents pertaining to the matter. The party

on whose behalf a subpoena is issued may file a petition in the

circuit court for Ingham county for an order requiring compliance

with the subpoena.

Sec. 8. (1) A citizen of this state may file a complaint with

the secretary of state alleging a violation of this act. The

secretary of state, upon receipt of a complaint, shall investigate

the allegations as provided in section 7.

(2) If the secretary of state, upon investigation, determines

that there is reason to believe that a violation of this act

occurred, the secretary of state shall endeavor to correct the

violation or prevent a further violation by using informal methods

such as a conference, conciliation, or persuasion and may enter

into a conciliation agreement with the person involved. Unless

violated, a conciliation agreement is a complete bar to any further

action with respect to matters covered in the conciliation

agreement. If the secretary of state is unable to correct or

prevent further violation by these informal methods, the secretary

of state may refer the matter to the attorney general for the

enforcement of a criminal penalty provided by this act or commence

a hearing as provided in subsection (3), if the attorney general is

not the subject of the complaint. If the attorney general is the

subject of the complaint, the secretary of state shall forward the

results of the investigation to the prosecuting attorney for Ingham

county for enforcement of this act.

(3) The secretary of state may commence a hearing to determine

whether a civil violation of this act has occurred. A hearing shall

not be commenced during the period beginning 30 days before an

election and ending the day after that election except with the

consent of the person suspected of committing a civil violation.

The hearing shall be conducted in accordance with the procedures

set forth in chapter 4 of the administrative procedures act of

1969, 1969 PA 306, MCL 24.271 to 24.287. If, after a hearing, the

secretary of state determines that a violation of this act has

occurred, the secretary of state may issue an order requiring the

person to pay a civil fine of not more than $1,000.00 for each

violation.

(4) A final decision and order issued by the secretary of

state is subject to judicial review as provided by chapter 6 of the

administrative procedures act of 1969, 1969 PA 306, MCL 24.301 to

24.306. The secretary of state shall deposit a civil fine imposed

under this section in the general fund. The secretary of state may

bring an action in the Ingham county circuit court to recover the

amount of a civil fine.

(5) When a financial statement or report is filed under this

act, the secretary of state shall review the report or statement

and may investigate an apparent violation of this act under the

rules promulgated under this act. If the secretary of state

determines that there is reason to believe that a violation of this

act has occurred and the procedures prescribed in subsection (2)

have been complied with, the secretary of state may refer the

matter to the attorney general for the enforcement of a criminal

penalty provided by this act or commence a hearing under subsection

(3) to determine whether a civil violation of this act has

occurred.

(6) The attorney general or, if the attorney general is the

individual who is alleged to have violated this act, the

prosecuting attorney for Ingham county shall enforce this act

against an individual who violates this act.

Sec. 9. (1) An individual who fails to file a report as

required under this act shall pay a late filing fee not to exceed

$1,000.00, determined as follows:

(a) Twenty-five dollars for each of the first 3 business days

that the report remains unfiled.

(b) Fifty dollars for each of the next 7 business days after

the first 3 business days that the report remains unfiled.

10 business days that the report remains unfiled.

(2) Any individual required to file a report under this act

who fails to file a report by December 31 of that calendar year or

knowingly files an incomplete or inaccurate report shall pay an

additional late filing fee of $5,000.00.

(3) Any late filing fees assessed by the secretary of state

that remain unpaid for more than 180 days shall be referred to the

department of treasury for collection.

(4) Upon receipt of a written request and the required filing,

the secretary of state may waive payment of a late filing fee if

the request for the waiver is based on good cause not stemming from

negligence and accompanied by adequate documentation.

(5) If an individual required to file a report under this act

fails to file 2 reports and if both of the reports remain unfiled

for more than 30 days, the individual is guilty of a misdemeanor

punishable by imprisonment for not more than 1 year or a fine of

not more than $2,000.00, or both.

(6) If an individual required to file a report under this act

fails to file 3 or more reports and if the reports remain unfiled

for more than 30 days past the yearly May 1 deadline, the

individual is guilty of a felony punishable by imprisonment for not

more than 4 years or a fine of not more than $10,000.00, or both.

(7) A default in the payment of a fee due or ordered under

this act, or an installment of the fee, may be remedied by any

means available under the revised judicature act of 1961, 1961 PA

236, MCL 600.101 to 600.9947.

(8) This act does not create a legal or equitable private

cause of action. The remedies provided in this act are the

exclusive means to enforce this act and to redress any harm

resulting from a violation of this act.

Enacting section 1. This act takes effect May 2, 2010.