Bill Text: MI HB5252 | 2023-2024 | 102nd Legislature | Introduced
Bill Title: Public employees and officers: ethics; financial disclosure reports; require state senators to file. Creates new act.
Spectrum: Partisan Bill (Democrat 22-0)
Status: (Introduced) 2023-10-26 - Bill Electronically Reproduced 10/25/2023 [HB5252 Detail]
Download: Michigan-2023-HB5252-Introduced.html
HOUSE BILL NO. 5252
The people of the state of michigan enact:
Sec. 1. This act may be cited as the "state senator 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) "Dependent" means an individual claimed by the state official or the state official's spouse as a dependent for federal income tax purposes.
(d) "Earned income" means salaries, wages, tips, bonuses, commissions, or other compensation or net earnings from self-employment for the taxable year.
(e) "Gift" means that term as defined in section 4 of 1978 PA 472, MCL 4.414.
(f) "Immediate family member" means the spouse or a dependent of the state official.
(g) "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.
(h) "Liabilities" means what a person owes to another person, including, but not limited to, mortgages or other debts. For purposes of this act, a debt does not include a revolving or unsecured debt that is from a financial institution or the federal government.
(i) "Lobbyist" means that term as defined in section 5 of 1978 PA 472, MCL 4.415.
(j) "Lobbyist agent" means that term as defined in section 5 of 1978 PA 472, MCL 4.415.
(k) "Person" means an individual, partnership, corporation, association, or other legal entity.
(l) "Reporting period" means both of the following:
(i) For the first report required to be filed under section 3, from January 1, 2024 to April 15, 2024.
(ii) For subsequent reports required to be filed under section 3, January 1 to December 31 of the preceding calendar year in which the report is filed.
(m) "Spouse" means an individual who is lawfully married to the state official as described under 26 CFR 301.7701-18.
(n) "State official" means an individual who is serving in the office of state senator.
(o) "Unearned income" means income that is not earned from employment, including, but not limited to, inheritance money, financial prize, unemployment benefits, annuities, stock dividends, deferred compensation, pension, profit sharing, or retirement income.
Sec. 3. (1) An individual who is a state official at any time during a calendar year shall electronically file with the secretary of state a report that meets the requirements of section 4. The report required to be filed under this subsection must first be filed by April 15, 2024 and by May 15 of each year thereafter. 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 acts, files a report in the current calendar year:
(a) State board of education financial disclosure act.
(b) Candidate for the state board of education financial disclosure act.
(c) Executive office financial disclosure act.
(d) Candidate for executive office financial disclosure act.
(e) State representative financial disclosure act.
(f) Candidate for state representative financial disclosure act.
(g) Candidate for state senator financial disclosure act.
(h) University board member financial disclosure act.
(i) Candidate for university board member financial disclosure act.
(2) If a state official who is required to file a report under this act receives notice from the secretary of state under section 6(1)(g), the state official 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 following information regarding the state official during the reporting period:
(i) The full name, mailing address, and occupation of the state official.
(ii) The name, address, and principal activity of each employer of the state official.
(iii) The source and type of all income, including earned and unearned income, received by the state official. For purposes of this subparagraph, the state official shall report a source of income only if the income received from that source is $1,000.00 or more and indicate whether the amount of income received from each source of income is between $1,000.00 and $49,999.99 or $50,000.00 or more.
(iv) A description of each real property or property that the state official has an ownership interest in, including, but not limited to, commercial, industrial, or agricultural buildings. For purposes of this subparagraph, the state official is required to include a real property or property described under this subparagraph in the report only if that real property or property has a fair market value of $1,000.00 or more during the reporting period. A state official may exclude the street number of a parcel of real property or property listed under this subparagraph.
(v) A description of any stocks, bonds, commodities, futures, shares in mutual funds, or other forms of securities defined under 26 USC 1236 held by the state official or held jointly with the state official's spouse. For purposes of this subparagraph, the state official is required to include a security described under this subparagraph in the report only if that security has a total value of $1,000.00 or more on a specified day that is within the final month of the calendar year covered in the reporting period.
(vi) A description of all liabilities owed by the state official and the identity of each creditor. For purposes of this subparagraph, the state official is required to report a liability under this subparagraph only if the liability owed to a creditor is $1,000.00 or more during that reporting period.
(vii) The identity of all compensated positions held by the state official 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 institution or other institution other than this state, if the total compensation received from a position equals $1,000.00 or more during the reporting period. A position reported under this subparagraph must include the title of the position, the name of the entity within which the position exists, and the principal activity of the entity. A position held in any religious, social, fraternal, or political entity, or a position that is solely of an honorary nature, is excluded under this subparagraph.
(viii) The date, parties to, and general terms of any agreements or arrangements with respect to future employment, a leave of absence while serving as a state official, continuation or deferral of payments by a former or current employer other than this state, or continuing participation in an employee welfare or benefit plan maintained by a former employer.
(ix) A list of all gifts and expenditures for food and beverages reported by a lobbyist or lobbyist agent under state law.
(x) A list of all travel and expenses paid for or reimbursed by a lobbyist or lobbyist agent that are reported by the lobbyist or lobbyist agent under state law.
(xi) A description of each payment made by a lobbyist or lobbyist agent to a charity in lieu of honoraria.
(xii) If the state official filing the report or an immediate family member of that state official was required during the reporting period 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 state official or the state official's immediate family member for lobbying.
(xiii) A description of any interest the state official had during the reporting period in a legal entity that conducts business in this state, if the interest has a book value of $1,000.00 or more. For purposes of this subparagraph, the state official shall indicate for each legal entity the state official has an interest in the name of the legal entity and if the financial value in the legal entity is between $1,000.00 and $49,999.99 or $50,000.00 and more.
(xiv) A description of all contracts entered into, or in which the state official or the state official's immediate family member has an interest, with this state.
(xv) A description of any employment that the state official or the state official's immediate family member had with this state at any time during the reporting period. For purposes of this subparagraph, if the state official or the state official's immediate family member was employed by this state, the name of the state agency or department and a description of the position with the state agency or department must be included.
(xvi) A description of any transfers made by the state official of real property or securities from the state official's name into the name of an immediate family member of the state official over the previous 2 calendar years that have a value of $50,000.00 or more.
(b) Beginning January 1, 2028, the following information regarding the spouse of the state official during the reporting period:
(i) The name of the spouse of the state official.
(ii) The principal activity of the spouse of the state official, if the spouse's total earned income from the employer equals $50,000.00 or more during that reporting period.
(iii) The source and type of all income, including earned and unearned income received by the spouse of the state official. For purposes of this subparagraph, the spouse of the state official is required to include the source of income described under this subparagraph only if the total income from that source equals $50,000.00 or more during that reporting period.
(iv) A description of each real property or property that the spouse of the state official has an ownership interest in, including, but not limited to, commercial, industrial, or agricultural buildings. For purposes of this subparagraph, the spouse of the state official is required to include a real property or property described under this subparagraph in the report only if the real property or property had a fair market value of $50,000.00 or more at any time the real property was held during that reporting period. The street number of a parcel of real property listed under this subparagraph may be excluded from the report.
(v) A description of any stocks, bonds, commodities, futures, shares in mutual funds, or other forms of securities held by the spouse of the state official. For purposes of this subparagraph, the spouse of the state official is required to include a security described under this subparagraph in the report only if the security has a total aggregate fair market value of $50,000.00 or more on a specified day that is within the final month of the calendar year covered in the reporting period.
(vi) A description of any interest the spouse of the state official had during the reporting period in a legal entity that conducts business in this state, if the interest has a book value of $50,000.00 or more.
(c) Beginning January 1, 2028, the following information regarding a dependent of the state official during the reporting period; for purposes of this subdivision, the state official may refer to each dependent using the dependent's first and last initial:
(i) The number of dependents that the state official and the spouse of the state official claim for federal income tax purposes.
(ii) The principal activity of each employer of each dependent of the state official, if the dependent's total earned income from the employer equals $50,000.00 or more during the reporting period.
(iii) The source and type of all income, including earned and unearned income received by each dependent of the state official, if the source of income described under this subparagraph equals $50,000.00 or more during that reporting period.
(iv) A description of each real property or property that each dependent of the state official has an ownership interest in, including, but not limited to, commercial, industrial, or agricultural buildings. For purposes of this subparagraph, the dependent is required to include a real property or property described under this subsection only if the real property or property had a fair market value of $50,000.00 or more at any time that the real property or property was held during that reporting period. The street number of a parcel of real property or property listed under this subparagraph may be excluded from the report.
(v) A description of any stocks, bonds, commodities, futures, shares in mutual funds, or other forms of securities held by each dependent of the state official. For purposes of this subparagraph, each dependent of the state official is required to include a security described under this subparagraph in the report only if the security has a total aggregate fair market value of $50,000.00 or more on a specified day that is within the final month of the calendar year covered in the reporting period.
(vi) A description of any interest each dependent of the state official had during the reporting period in a legal entity that conducts business in this state, if the interest has a book value of $50,000.00 or more.
(2) Subject to subsection (4), information a state official 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, the state official required to file a report under this section or that state official's immediate family member.
(3) A state official is not required to disclose the value of any real item reported under subsection (1)(a)(iii),(iv) to (vii),(xiii), or (xvi), (1)(b)(iii), or (iv) to (vi), or (1)(c)(iii), or (iv) to (vi).
(4) If a state official required to file a report under section 3 or that state official's immediate family member holds a beneficial interest in a blind trust, the state official is not required to include the interests or assets of the blind trust in the state official's statement under subsection (1). However, the state official must indicate in the state official's report that the state official or the state official's immediate family member holds a beneficial interest in a blind trust.
(5) A state official shall preserve the records used to prepare a report under this act for 5 years and make the records available for inspection, on request.
Sec. 5. A state official 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)(a)(iv) or (v), (b)(iv) or (v), or (c)(iv) or (v) if all of the following apply:
(i) The item represents the exclusive financial interest and responsibility of the spouse or dependent of the state official about which the state official 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 state official.
(iii) The state official 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 state official with the intention of terminating the marriage or maintaining a legal separation.
(d) An item that concerns income of the state official or the spouse of that state official arising from dissolution of the state official's marriage or a permanent legal separation from the state official's spouse.
(e) 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 the secretary of state's 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) Create all forms, instructions, and manuals required under this act.
(d) Promulgate rules and issue declaratory rulings to implement this act under the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.
(e) On 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 a state official.
(ii) Other unique, unintentional factors beyond the state official'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 a separate internet webpage or its website homepage.
(g) Within 9 business days after the deadline for filing a report under this act, notify an individual of any error or omission in the individual's report or that the individual failed to file the required report.
(2) Except as otherwise provided in subsection (13), 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 business 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 under 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) 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 (5) is filed, the secretary of state shall notify the person against whom the complaint is filed. The notice must be in writing and include a copy of the complaint. Within 15 business days after the notification, 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 send a copy of a response received to the complainant. Within 10 business days after the response is sent, 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. If, on review of the complaint, the secretary of state determines that the complaint is frivolous, illegible, indefinite, or unsigned, or does not identify an alleged violator, allege a violation of the act or the rules promulgated under this act, or contain a verification statement, the secretary of state may summarily dismiss the complaint without prejudice. If a complaint is summarily dismissed, the complainant shall be notified in writing as to the reason the complaint was dismissed.
(5) A complaint filed under subsection (4) 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 the complainant's 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.
(6) A person shall not file a complaint with a false certificate under subsection (5)(c). A person may file a complaint under subsection (4) alleging that another person has filed a complaint with a false certificate under subsection (5)(c).
(7) The secretary of state shall investigate allegations brought under this act under the rules promulgated under this act. If an allegation involves the secretary of state, or a spouse or dependent 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.
(8) No later than 45 business days after receiving a rebuttal statement submitted under subsection (4) or, if no response or rebuttal is received under subsection (4), 45 business days after receiving a complaint under subsection (4), 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 (4) 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 may commence a hearing as provided in subsection (9) for enforcement of this act.
(9) The secretary of state may commence a hearing to determine whether a violation of this act occurred. The hearing must be conducted under chapter 4 of the administrative procedures act of 1969, 1969 PA 306, MCL 24.271 to 24.288.
(10) 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.
(11) The secretary of state shall review a report or statement filed under this act and may investigate an apparent violation of this act under 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, the secretary of state may commence a hearing under subsection (9) to determine whether a violation of this act occurred.
(12) 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.
(13) The secretary of state may refuse to issue a declaratory ruling under subsection (2) if the request is anonymous, the secretary of state determines that the subject matter of the request is frivolous on its face, or the request is indefinite or lacks specificity. If the secretary of state refuses to issue a declaratory ruling, the person requesting the ruling, if known, shall be notified of the reason for the refusal.
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 under 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 charge a fee 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) A state official 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 a state official required to file a report under this act knowingly files an incomplete or inaccurate report, the state official 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 general fund.
(4) A late filing fee or civil fine assessed under this act that remains unpaid for more than 180 days must be referred to the department of treasury for collection.
