SB-1252, As Passed Senate, December 6, 2018

 

 

 

 

 

 

 

 

 

 

 

 

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

 

organizationís 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.