SENATE BILL No. 1252
November 29, 2018, Introduced by Senator ROBERTSON and referred to the Committee on Elections and Government Reform.
A bill to amend 2008 PA 288, entitled
"Legal defense fund act,"
by amending the title and sections 3, 5, 7, 11, and 19 (MCL 15.523,
15.525, 15.527, 15.531, and 15.539), section 11 as amended by 2017
PA 183.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
TITLE
An act to regulate and to require certain reports to be filed
that document contributions for purposes of defending an elected
official in a criminal, civil, or administrative action; to
regulate contributions made for purposes of defending an elected
official in a criminal, civil, or administrative action; to
prescribe certain powers and duties of the secretary of state fair
political practices commission as to legal defense funds; and to
prescribe criminal penalties and civil sanctions.
Sec. 3. As used in this act:
(a) "Commission" means the fair political practices commission
created in section 15a of the Michigan campaign finance act, 1976
PA 388, MCL 169.215a.
(b) (a) "Contribution" means a payment, gift, subscription,
assessment, expenditure, contract, payment for services, dues,
advance, forbearance, loan, or donation of money or anything of
ascertainable monetary value, or a transfer of anything of
ascertainable monetary value to a person, made for or allocated to
the purpose of defending an elected official in a criminal, civil,
or administrative action that arises directly out of the conduct of
the elected official's governmental duties. Contribution includes
an officer holder's own money or property, other than the officer
holder's homestead, used on behalf of the officer holder's defense,
the granting of discounts or rebates not available to the general
public, and the endorsing or guaranteeing of a loan for the amount
the endorser or guarantor is liable. Contribution does not include
an offer or tender of a contribution if expressly and
unconditionally rejected, returned, or refunded within 30 business
days after receipt.
(c) (b) "Elected official" means an individual who holds an
elective office in state or local government in this state.
(d) (c) "Elective office" means a public office filled by an
election. A person An individual who is appointed to fill a vacancy
in a public office that is ordinarily elective holds an elective
office. Elective office does not include the office of precinct
delegate. Elective office does not include a school board member in
a school district that has a pupil membership of 2,400 or less
enrolled on the most recent pupil membership count day. Elective
office does not include a federal office.
(e) (d) "Financial institution" means a state or nationally
chartered bank or a state or federally chartered savings and loan
association, savings bank, or credit union whose deposits are
insured by an agency of the United States government and that
maintains a principal office or branch office located in this state
under the laws of this state or the United States.
(f) (e) "Legal defense fund" means all contributions received,
held, or expended for the legal defense of an elected official. For
purposes of this act, a legal defense fund does not include a fund
of a local government association that is an exempt organization
under section 501(c)(4) of the internal revenue code of 1986, 26
USC 501, or of a local government organization, if money in the
organizations organization's fund is composed of money that is
excluded from the definition of gross income under section 115 of
the internal revenue code of 1986, 26 USC 115.
(g) (f) "Person" means a business, individual, proprietorship,
firm, partnership, joint venture, syndicate, business trust, labor
organization, company, corporation, association, committee, or any
other organization or group of persons acting jointly.
(h) (g) "Treasurer" means the individual designated as
responsible for a legal defense fund's record keeping, report
preparation, or report filing or, in the absence of such an
individual, the elected official who is the beneficiary of the
legal defense fund.
Sec. 5. (1) An elected official who is the beneficiary of a
legal defense fund shall file a statement of organization with the
secretary of state commission within 10 days after the earlier of
the date the legal defense fund first receives a contribution or
first makes an expenditure of a contribution.
(2) A statement of organization required by this section shall
must include all of the following information:
(a) The name, street address, and telephone number of the
legal defense fund. The name of the legal defense fund shall must
include the first and last names of the elected official who is the
beneficiary of the legal defense fund and the words "legal defense
fund".
(b) The name, street address, and telephone number of the
individual designated as the treasurer of the legal defense fund.
(c) The name and address of the financial institution in which
money of the legal defense fund is or is intended to be deposited.
(d) The full name of and office held by the elected official
who is the beneficiary of the legal defense fund.
(e) A description of the criminal, civil, or administrative
action arising directly out of the conduct of the elected
official's duties for which a contribution to or expenditure from
the legal defense fund was made.
(3) If any of the information required in a statement of
organization under this section changes, the legal defense fund
shall file an amended statement of organization when the next
transaction report under section 7 is required to be filed.
(4) An elected official who fails to file a statement of
organization as required by this section shall pay a late filing
fee of $10.00 for each business day the statement remains unfiled.
A late filing fee shall must not exceed $300.00. An elected
official who fails to file a statement of organization under this
subsection is guilty of a misdemeanor punishable by imprisonment
for not more than 93 days or a fine of not more than $1,000.00, or
both.
(5) When a legal defense fund is dissolved, the elected
official shall file a statement of dissolution with the secretary
of state, commission, in the form required by the secretary of
state, commission, and shall return any unexpended funds to the
contributor of the funds or forward the unexpended funds to the
state treasurer for deposit into the general fund of the state or
to the state bar of Michigan for deposit into the state bar of
Michigan client protection fund.
Sec. 7. (1) From the earlier of the date that a legal defense
fund receives its first contribution or makes its first expenditure
of a contribution until the date the elected official files a
statement of dissolution under section 5, the treasurer of a legal
defense fund shall file transaction reports according to the
schedule in subsection (2). A transaction report shall must
disclose all of the following information:
(a) The legal defense fund's name, address, and telephone
number and the full name, residential and business addresses, and
telephone numbers of the legal defense fund's treasurer.
(b) The following information about each person from whom a
contribution is received during the covered period:
(i) The person's full name.
(ii) The person's street address.
(iii) The amount contributed.
(iv) The date on which each contribution was received.
(v) The cumulative amount contributed by that person.
(vi) If the person is an individual whose cumulative
contributions are more than $100.00, the person's occupation,
employer, and principal place of business.
(c) The following information itemized as to each expenditure
from the legal defense fund that exceeds $50.00 and as to
expenditures made to 1 person that cumulatively total $50.00 or
more during a covered period:
(i) The amount of the expenditure.
(ii) The name and address of the person to whom the
expenditure is made.
(iii) The purpose of the expenditure.
(iv) The date of the expenditure.
(2) Subject to subsections (3) and (4), the treasurer of a
legal defense fund shall file a transaction report on or before
each of the following dates covering the period beginning on the
day after the closing date of the preceding transaction report and
ending on the indicated closing date:
(a) January 25, with a closing date of December 31 of the
previous year.
(b) April 25, with a closing date of March 31 of that year.
(c) July 25, with a closing date of June 30 of that year.
(d) October 25, with a closing date of September 30 of that
year.
(3) The beginning date of the first transaction report
required by this section shall be is the date the first
contribution is received by the legal defense fund.
(4) The treasurer of a legal defense fund shall file a final
transaction report with its statement of dissolution under section
5. The final transaction report shall must cover the period
beginning on the day after the closing date of the preceding
transaction report and ending on the latest date that the legal
defense fund received a contribution, made an expenditure, or
transferred unexpended funds and dissolved.
(5) A transaction report required by this section shall must
include a verification statement, signed by the treasurer for the
legal defense fund and the elected official, stating that he or she
used all reasonable diligence in preparing the report and that to
his or her knowledge the statement is true and complete.
(6) A treasurer or other individual designated on the
statement of organization as responsible for the legal defense
fund's record keeping, report preparation, or report filing shall
keep detailed accounts, records, bills, and receipts as required to
substantiate the information contained in a statement or report
required under this act. The records of a legal defense fund shall
must be preserved for 5 years and shall be made available for
inspection as authorized by the secretary of state. commission. A
treasurer who knowingly violates this subsection is subject to a
civil fine of not more than $1,000.00.
(7) A treasurer or elected official who knowingly submits
false information under this section is guilty of a misdemeanor
punishable by imprisonment for not more than 180 days or a fine of
not more than $5,000.00, or both.
Sec. 11. (1) The secretary of state commission shall make a
statement or report required to be filed under this act available
for public inspection and reproduction, as soon as practicable, but
not later than the third business day following the day on which it
is received, during regular business hours of the filing official.
The secretary of state commission shall also make the report or all
of the contents of the report available to the public on the
internet, without charge, as soon as practicable, at a single
website established and maintained by the secretary of
state.commission.
(2) A copy of a statement or part of a statement shall must be
provided by the secretary of state commission at a reasonable
charge.
(3) A statement open to the public under this act shall must
not be used for any commercial purpose.
(4) Except as otherwise provided in this subsection, a
statement of organization filed under this act with the secretary
of state shall commission must be preserved by the secretary of
state commission for 15 years from the official date of the
committee's dissolution. Any other statement or report filed under
this act with the secretary of state shall commission must be
preserved by the secretary of state commission for 15 years from
the date the filing occurred. Upon a determination that a violation
of this act has occurred, all complaints, orders, decisions, or
other documents related to that violation shall must be preserved
by the filing official who is not the secretary of state commission
or the secretary of state commission for 15 years from the date of
the court determination or the date the violation is corrected,
whichever is later. Statements and reports filed under this act may
be reproduced pursuant to the records reproduction act, 1992 PA
116, MCL 24.401 to 24.406. After the required preservation period,
the statements and reports, or the reproductions of the statements
and reports, may be disposed of in the manner prescribed in the
management and budget act, 1984 PA 431, MCL 18.1101 to 18.1594, and
section 11 of the Michigan history center act, 2016 PA 470, MCL
399.811.
(5) A filing official shall not collect a charge for the
filing of a required statement or report or for a form upon which
the statement or report is to be prepared, except a late filing fee
required by this act.
(6) The secretary of state commission shall determine whether
a statement or report filed under this act complies, on its face,
with the requirements of this act. The secretary of state
commission shall determine whether a statement or report that is
required to be filed under this act is in fact filed. Within 4
business days after the deadline for filing a statement or report
under this act, the secretary of state commission shall give notice
to the filer by registered mail of an error or omission in the
statement or report and give notice to a person the secretary of
state commission has reason to believe is a person required to and
who failed to file a statement or report. A failure to give notice
by the secretary of state commission under this subsection is not a
defense to a criminal action against the person required to file.
(7) Within 9 business days after the report or statement is
required to be filed, the filer shall make any corrections in the
statement or report filed with the secretary of state. commission.
If the report or statement was not filed, then the report or
statement shall must be late filed within 9 business days after the
time it was required to be filed and shall be is subject to late
filing fees.
(8) After 9 business days and before 12 business days have
expired after the deadline for filing the statement or report, the
secretary of state commission shall report errors or omissions that
were not corrected and failures to file to the attorney general.
(9) A statement or report required to be filed under this act
must be filed not later than 5 p.m. of the day in which it is
required to be filed. A transaction report that is postmarked by
registered or certified mail, or sent by express mail or other
overnight delivery service, at least 2 days before the deadline for
filing is filed within the prescribed time regardless of when it is
actually delivered. Any other statement or report required to be
filed under this act that is postmarked by registered or certified
mail or sent by express mail or other overnight delivery service on
or before the deadline for filing is filed within the prescribed
time regardless of when it is actually delivered.
Sec. 19. The secretary of state commission may promulgate
rules to implement this act and may issue declaratory rulings
pursuant to the administrative procedures act of 1969, 1969 PA 306,
MCL 24.201 to 24.328.
Enacting section 1. This amendatory act does not take effect
unless Senate Bill No._1250
of the 99th Legislature is enacted into law.