Bill Text: MI HB4323 | 2021-2022 | 101st Legislature | Introduced
Bill Title: Public employees and officers: ethics; financial disclosure report; require state representatives to file. Creates new act.
Spectrum: Moderate Partisan Bill (Democrat 48-12)
Status: (Introduced - Dead) 2021-02-25 - Bill Electronically Reproduced 02/24/2021 [HB4323 Detail]
Download: Michigan-2021-HB4323-Introduced.html
HOUSE BILL NO. 4323
February 24, 2021, Introduced by Reps. LaGrand,
Liberati, Calley, Rabhi, Schroeder, Kuppa, Stone, Brenda Carter, Pohutsky,
Cavanagh, Koleszar, Brann, Mueller, Bellino, Manoogian, Filler, Sowerby, Brabec,
Tate, Bolden, Aiyash, O'Neal, Sabo, Haadsma, Hood, Hertel, Brixie, Beson,
Rogers, Tyrone Carter, Steven Johnson, Yaroch, Young, Camilleri, Cynthia
Johnson, Sneller, Coleman, Jones, Clemente, Lasinski, Hammoud, Breen,
Thanedar, Neeley, Cambensy, Witwer, Garza, Puri, Shannon, Cherry, Morse,
Scott, Steckloff, Tisdel, Marino, Hope, Anthony, Ellison, Peterson and
Outman and referred to the Committee on Elections and Ethics.
The people of the state of michigan enact:
Sec. 1. This act shall be known and may be cited as the "state representative financial disclosure act".
(a) "Beneficial interest" includes, but is not limited to, the interest in a trust of a qualified trust beneficiary or a trust beneficiary as those terms are defined in section 7103 of the estates and protected individuals code, 1998 PA 386, MCL 700.7103.
(b) "Blind trust" means a qualified blind trust or qualified diversified trust as those terms are defined in 5 CFR 2634.403.
(c) "Earned income" means salaries, tips, or other compensation, and net earnings from self-employment for the taxable year.
(d) "Immediate family of an individual", except as otherwise provided in this act, means a spouse or dependent child of that individual or a person claimed by that individual or that individual's spouse as a dependent for federal income tax purposes.
(e) "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, or any other form of recompense that is considered income under the internal revenue code of 1986, 26 USC 1 to 9834.
(f) "State official" means a state representative whose current term began after the effective date of this act.
Sec. 3. (1) If an individual is a state official at any time during a calendar year, that individual shall electronically file with the secretary of state by May 15 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 official only on the first day of the calendar year or who, under any of the following act files a report in the current calendar year:
(a) State senator financial disclosure act.
(b) University board member financial disclosure act.
(c) State board of education financial disclosure act.
(d) Judicial branch financial disclosure act.
(e) Executive branch financial disclosure act.
(2) If an individual required to file a report under this act receives notice from the secretary of state under section 6(1)(g), the individual shall, within 9 business days after receiving the notice, file corrections to the errors or omissions or file the report, as applicable.
Sec. 4. (1) Subject to subsection (4) and except as provided in section 5, a report required under section 3 must include a complete statement of all of the following:
(a) The full name, mailing address, and occupation of the individual filing the report.
(b) The name of each member of the immediate family of the individual filing the report who is not a dependent child and the number of members of the immediate family of the individual filing the report who are dependent children.
(c) The name, address, and principal activity of each employer of the individual and of each member of the immediate family of the individual filing the report during the calendar year covered by the report if the individual's or member's total earned income from the employer equals $5,000.00 or more during that calendar year.
(d) Both of the following, as applicable:
(i) The source and type of earned income received during the preceding calendar year by the individual filing the report if the total earned income from that source equals $5,000.00 or more during that calendar year.
(ii) The source and type of earned income received during the preceding calendar year by each member of the immediate family of the individual filing the report if the total earned income from that source equals $5,000.00 or more during that calendar year.
(e) The source and type of all other income not reported under subdivision (d) 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 income from that source equals $5,000.00 or more during that calendar year.
(f) Excluding a primary residence, the address of each parcel of real property held during the preceding calendar year by the individual filing the report or a member of the immediate family of that individual if the real property had a fair market value of $50,000.00 or more at any time the real property was held during the preceding calendar year. An individual filing a report may exclude the street number of a parcel of real property listed under this subdivision.
(g) A description of any stocks, bonds, commodities, futures, shares in mutual funds, or other forms of securities held by the individual filing the report or a member of the immediate family of that individual during the preceding calendar year, if the security has a total aggregate fair market value of $10,000.00 or more on the date the report is filed.
(h) A description of any interest in any of the following types of assets held by the individual filing the report or a member of the immediate family of that individual, if the interest in the asset has a value of $10,000.00 or more on the date the report was filed:
(i) A qualified or nonqualified annuity.
(ii) A benefit under a qualified or nonqualified plan of deferred compensation.
(iii) An account in, or benefit payable under, any pension, profit-sharing, stock bonus, or other qualified retirement plan.
(iv) An individual retirement account or trust.
(v) A benefit under a plan or arrangement that is established under section 401, 403, 408, 408A, or 457 of the internal revenue code of 1986, 26 USC 401, 403, 408, 408A, and 457, or a similar provision of the internal revenue code of 1986, 26 USC 1 to 9834.
(i) The identity of all compensated positions held by the individual filing the report or a member of the immediate family of that individual 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, if the total compensation received from a position equals $1,000.00 or more during that calendar year. A position reported under this subdivision must include the title of the position, the name of the entity within which the position exists, and the principal activity of the entity.
(j) If the individual filing the report or a member of the immediate family of that individual was required during the previous calendar year to register as a lobbyist or lobbyist agent under section 7 of 1978 PA 472, MCL 4.417, the name, address, and principal activity of all persons who gave compensation to or reimbursed the individual or immediate family member for lobbying. As used in this subdivision, "immediate family" includes the child of an individual, whether dependent or not, parent of an individual, and spouse of a child of an individual.
(k) A description of any interest the individual filing the report or a member of the immediate family of that individual had during the preceding calendar year in a legal entity that conducts business in this state, if the interest has a book value of $10,000.00 or more, unless the entity has shares that are listed or traded over the counter or on an organized exchange.
(2) Subject to subsection (4), information an individual is required to report under this section includes information with respect to the income from a 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 a member of the immediate family of that individual.
(3) An individual is not required to disclose the value of any real or personal property disclosed under subsection (1).
(4) If an individual required to file a report under section 3 or an immediate family member of the individual holds a beneficial interest in a blind trust, the individual is not required to include the interests or assets of the blind trust in his or her statement under subsection (1). However, the individual must indicate in his or her report that the individual or the immediate family member of the individual holds a beneficial interest in a blind trust.
Sec. 5. An individual filing a report under section 3 may omit any of the following:
(a) Information an individual is required to report 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)(f) or (g) if all of the following apply:
(i) The item represents the exclusive 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.
(c) An item that concerns a spouse who is living separate and apart from the individual filing the report with the intention of terminating the marriage or maintaining a legal separation.
(d) An item that concerns income of the individual filing the report or a member of the immediate family of that individual arising from dissolution of the individual's or member's marriage or a permanent legal separation from the individual's or member's spouse.
(e) 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.
(f) Benefits received under the social security act, chapter 531, 49 Stat 620.
Sec. 6. (1) The secretary of state shall do all of the following:
(a) Make available through his or her offices appropriate forms, instructions, and manuals required by this act.
(b) Create and operate an electronic, internet-accessible system to receive all statements and reports required by this act to be filed with the secretary of state.
(c) Prepare forms, instructions, and manuals required under this act.
(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.
(e) Upon receiving a written request and the required filing, waive payment of a late filing fee if the request for the waiver is based on good cause and accompanied by adequate documentation. One or more of the following reasons constitute good cause for a late filing fee waiver:
(i) The incapacitating physical illness, hospitalization, accident involvement, death, or incapacitation for medical reasons of an individual required to file a report, an individual whose participation is essential to the preparation of the report, or a member of the immediate family of 1 of these individuals.
(ii) Other unique, unintentional factors beyond the individual's control that are not the result of a negligent act or nonaction so that a reasonably prudent person would excuse the filing on a temporary basis. These factors include the loss or unavailability of records because of a fire, flood, theft, or similar reason and difficulties related to the transmission of the filing to the secretary of state, such as exceptionally bad weather.
(f) As soon as practicable, but not later than 5 business days after 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.
(g) Within 9 business days after the deadline for filing a report under this act, notify, by registered mail, an individual of any error or omission in the individual's report or that the individual failed to file the required report.
(2) The secretary of state shall issue a declaratory ruling under this section only if the person requesting the ruling has provided a reasonably complete statement of facts necessary for the ruling or if the person requesting the ruling has, with the permission of the secretary of state, supplied supplemental facts necessary for the ruling. Within 2 days after receiving a request for a declaratory ruling, the secretary of state shall make the request available in the manner provided for under subsection (1)(f). An interested person may submit written comments regarding the request to the secretary of state within 10 business days after the date the request is made available to the public. Within 45 business days after receiving a declaratory ruling request, the secretary of state shall make a proposed response available in the manner provided for under subsection (1)(f). An interested person may submit written comments regarding the proposed response to the secretary of state within 5 business days after the date the proposal is made available to the public. Except as otherwise provided in this section, the secretary of state shall issue a declaratory ruling within 60 business days after receiving a request for a declaratory ruling. If the secretary of state refuses to issue a declaratory ruling, the secretary of state shall notify the person making the request of the reasons for the refusal and issue an interpretative statement providing an informational response to the question presented within the 60-day period. A declaratory ruling or interpretative statement issued under this section must not state a general rule of law, other than that which is stated in this act, until the general rule of law is promulgated by the secretary of state as a rule pursuant to the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328, or under judicial order.
(3) Under extenuating circumstances, the secretary of state may issue a notice extending, for not more than 30 business days, the period during which the secretary of state shall respond to a request for a declaratory ruling. The secretary of state shall not issue more than 1 notice of extension for a particular request. A person requesting a declaratory ruling may waive, in writing, the time limitations provided by this section.
(4) The secretary of state shall make available to the public an annual summary of the declaratory rulings and interpretative statements issued by the secretary of state under this section.
(5) A person may file with the secretary of state a complaint that alleges a violation of this act. Within 5 business days after a complaint that meets the requirements of subsection (6) is filed, the secretary of state shall mail notice to the person against whom the complaint is filed. The notice must include a copy of the complaint. Within 15 business days after the notice is mailed, the person against whom the complaint was filed may submit a response to the secretary of state. The secretary of state may extend the period for submitting a response an additional 15 business days for good cause. The secretary of state shall mail a copy of a response received to the complainant. Within 10 business days after the response is mailed, the complainant may submit a rebuttal statement to the secretary of state. The secretary of state may extend the period for submitting a rebuttal statement an additional 10 business days for good cause. The secretary of state shall provide a copy of the rebuttal statement to the person against whom the complaint was filed.
(6) A complaint filed under subsection (5) must satisfy all of the following requirements:
(a) Be signed by the complainant.
(b) State the name, address, and telephone number of the complainant.
(c) Include the complainant's certification that, to the best of the complainant's knowledge, information, and belief, formed after a reasonable inquiry under the circumstances, each factual contention of the complaint is supported by evidence. However, if, after a reasonable inquiry under the circumstances, the complainant is unable to certify that certain factual contentions are supported by evidence, the complainant may certify that, to the best of his or her knowledge, information, or belief, there are grounds to conclude that those specifically identified factual contentions are likely to be supported by evidence after a reasonable opportunity for further inquiry.
(7) A person shall not file a complaint with a false certificate under subsection (6)(c). A person may file a complaint under subsection (5) alleging that another person has filed a complaint with a false certificate under subsection (6)(c).
(8) The secretary of state shall investigate allegations brought under this act pursuant to the rules promulgated under this act. If an allegation involves the secretary of state, or a member of the immediate family of the secretary of state, the secretary of state shall refer the matter to the attorney general to determine whether a violation of this act occurred.
(9) No later than 45 business days after receiving a rebuttal statement submitted under subsection (5) or, if no response or rebuttal is received under subsection (5), 45 business days after receiving a complaint under subsection (5), the secretary of state shall post on the secretary of state's website whether there may be reason to believe that a violation of this act occurred. If the secretary of state determines whether there may be reason to believe that a violation of this act occurred or determines to terminate its proceedings, the secretary of state shall, within 30 days after that determination, post on the secretary of state's website any complaint, response, or rebuttal statement received under subsection (5) regarding that violation or alleged violation and any correspondence that is dispositive of that violation or alleged violation between the secretary of state and the complainant or the person against whom the complaint was filed. If the secretary of state determines that there may be 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 civil action with respect to matters covered in the conciliation agreement. The secretary of state shall, within 30 days after a conciliation agreement is signed, post that agreement on the secretary of state's website. If, after 90 business days, the secretary of state is unable to correct or prevent further violation by these informal methods, the secretary of state shall commence a hearing as provided in subsection (10) for enforcement of this act.
(10) The secretary of state may commence a hearing to determine whether a violation of this act occurred. The hearing must be conducted pursuant to chapter 4 of the administrative procedures act of 1969, 1969 PA 306, MCL 24.271 to 24.288.
(11) A final decision or order issued by the secretary of state under this act 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 act in the general fund. The secretary of state may bring an action in circuit court to recover the amount of a civil fine.
(12) The secretary of state shall review a report or statement filed under this act and may investigate an apparent violation of this act pursuant to the rules promulgated under this act. If the secretary of state determines that there may be reason to believe a violation of this act occurred and the procedures prescribed in subsection (9) have been complied with, the secretary of state may commence a hearing under subsection (10) to determine whether a violation of this act occurred.
(13) In addition to any other sanction provided for by this act, the secretary of state may require a person who violates subsection (7) to do either or both of the following:
(a) Pay to the secretary of state some or all of the expenses incurred by the secretary of state as a direct result of the violation.
(b) Pay to the person against whom the complaint was filed some or all of the expenses, including, but not limited to, reasonable attorney fees incurred by that person in proceedings under this act as a direct result of the violation.
(14) There is no private right of action, either in law or in equity, under this act. The remedies provided in this act are the exclusive means by which this act may be enforced and by which any harm resulting from a violation of this act may be redressed.
Sec. 7. (1) The secretary of state shall provide a copy of a report, or part of a report, required to be filed under this act at a reasonable charge.
(2) A report that is made available to the public under this act must not be used for any commercial purpose.
(3) The secretary of state shall preserve a report filed under this act for 15 years after the date the report is filed. If the secretary of state or attorney general determines under section 6 that a violation of this act occurred, the secretary of state shall preserve all complaints, orders, decisions, or other documents related to that violation for 15 years after the date of the determination or the date the violation is corrected, whichever is later. 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 reports, or the reproductions of the 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.
(4) The secretary of state shall not collect a charge for the filing of a report under this act, except a late filing fee required by this act.
(5) The secretary of state shall determine whether a statement or report filed under this act complies, on its face, with the requirements of this act and the rules promulgated under this act. The secretary of state shall determine whether a statement or report that is required to be filed under this act is in fact filed.
(6) A report required to be filed under this act must be filed not later than 5 p.m. of the day it is required to be filed.
Sec. 8. (1) An individual who fails to file a report as required under this act shall pay a late filing fee determined as follows:
(a) Twenty-five dollars for each of the first 10 business days that the report remains unfiled.
(b) Fifty dollars for each business day after the first 10 business days that the report remains unfiled.
(c) In addition to the late filing fees imposed under subdivisions (a) and (b), $5,000.00 if the report remains unfiled for more than 105 business days.
(2) If an individual required to file a report under this act knowingly files an incomplete or inaccurate report, the individual shall be ordered to pay a civil fine of not more than $10,000.00.
(3) A late filing fee collected under this act must be deposited into the state official financial disclosure fund created in section 9. A late filing fee assessed under this act that remains unpaid for more than 180 days must be referred to the department of treasury for collection.
Sec. 9. (1) The state official financial disclosure fund is created within the state treasury.
(2) The state treasurer may receive money or other assets from any source for deposit into the fund. The state treasurer shall direct the investment of the fund. The state treasurer shall credit to the fund interest and earnings from fund investments.
(3) Money in the fund at the close of the fiscal year shall remain in the fund and shall not lapse to the general fund.
(4) The secretary of state shall be the administrator of the fund for auditing purposes.
(5) The secretary of state shall expend money from the fund, upon appropriation, only to implement and enforce the following acts:
(a) This act.
(b) State senator financial disclosure act.
(c) University board member financial disclosure act.
(d) State board of education financial disclosure act.
(e) Executive branch financial disclosure act.
(f) Judicial branch financial disclosure act.
