Legislative Analysis
Phone: (517) 373-8080
ALLOW USE OF PUBLIC RESOURCES FOR PAYROLL
http://www.house.mi.gov/hfa
DEDUCTION PLANS UNDER CAMPAIGN FINANCE LAW
Analysis available at
House Bill 4234 (H-1) as reported from committee http://www.legislature.mi.gov
Sponsor: Rep. Penelope Tsernoglou
Committee: Elections
Complete to 10-14-23
(Enacted as Public Act 244 of 2023)
SUMMARY:
House Bill 4234 would amend the Michigan Campaign Finance Act to allow the use of public
resources to establish or administer payroll deduction plans for contributions to campaign
committees and to remove other restrictions on the use of payroll deduction plans for political
contributions.
Public bodies
Under the Michigan Campaign Finance Act, a public body or a person acting on its behalf
generally cannot use or authorize the use of public resources to make an expenditure, make a
contribution, or provide volunteer services. The act specifically prohibits public bodies from
using public resources to establish or administer a payroll deduction plan for contributions to
or expenditures for a committee, including reimbursements or advance payments made to a
public body to cover the costs of the use of the resources.
House Bill 4234 would remove the prohibition on the use of public resources to establish or
administer a payroll deduction plan, and it would allow a payroll deduction plan to be set up
by a public employer for a consenting individual’s contributions to a separate segregated fund
(SSF). 1 An individual’s affirmative consent to a payroll deduction would not expire until it is
revoked by that individual. Additionally, the bill would amend definition of payroll deduction
plan to explicitly include public bodies as employers.
The bill would also remove provisions that currently allow a person that alleges a use of public
resources to establish or administer a payroll deduction plan for campaign purposes to bring a
civil action against the public body or person acting on its behalf.
Connected organizations
The Michigan Campaign Finance Act allows a connected organization to solicit or obtain
contributions for an SSF from certain individuals on an automatic basis, including through a
payroll deduction plan, with the contributing individual’s consent. A separate segregated fund
established by a connected organization must be organized as a political committee or an
independent committee.
Connected organization means either of the following:
• A corporation, joint stock company, domestic dependent, or a labor
organization formed under law.
1
A complementary change would be made to 1978 PA 390, the wages and fringe benefits act, by House Bill 4230.
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 • A member of any of those entities that is not an individual and does not
maintain its own separate segregated fund, unless its separate segregated fund
and the separate segregated fund of the entity of which it is a member are
treated as a single independent committee.
Generally, expenditures made by a corporation to provide for the collection and transfer of
contributions to a separate segregated fund for which it is not a connected organization are
prohibited in-kind contributions unless the expenditures are made in that corporation’s ordinary
course of business, including reimbursements or advance payments made to cover the costs of
the use of the corporation’s resources.
House Bill 4234 would remove these provisions.
Definition of contributions and expenditures
Contributions or expenditures made to establish or administer a separate segregated fund or to
solicit, collect, or transfer contributions to the SSF are not considered contributions or
expenditures under the Michigan Campaign Finance Act if the contribution or expenditure is
made by a connected organization of that SSF.
House Bill 4234 would remove the requirement that such a contribution or expenditure be
made by a connected organization and would provide that contributions or expenditures made
to facilitate contributions to an SSF through a payroll deduction plan also do not qualify as
contributions or expenditures.
Currently, the act’s definition of an expenditure generally includes the costs of establishing an
administering a payroll deduction plan to collect and deliver a contribution to a committee. (It
does not, however, include expenditures made for the facilitation of contributions to an SSF,
as described above.)
House Bill 4234 would remove this provision and specify that any costs of establishing or
administering a payroll deduction plan for contributions to an SSF are not considered
expenditures.
MCL 169.204 et seq.
FISCAL IMPACT:
The bill would have no direct fiscal impact to the state or local units of government.
POSITIONS:
Representatives of the following entities testified in support of the bill (5-16-23):
• Amalgamated Transit Union
• UAW Local 4911
• UAW Local 2256
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 The following entities indicated support for the bill (5-16-23):
• AFSCME Council 25
• IBEW Michigan State Conference
• International Union of Operating Engineers Local 324
• Michigan AFL-CIO
• Michigan Education Association
• Michigan Nurses Association
• Michigan Regional Council of Carpenters and Millwrights
• SEIU Michigan
Pure Integrity for Michigan Elections indicated opposition to the bill. (5-16-23)
Legislative Analyst: Holly Kuhn
Fiscal Analyst: Michael Cnossen
■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their
deliberations and does not constitute an official statement of legislative intent.
House Fiscal Agency HB 4234 (H-1) as reported Page 3 of 3


Statutes affected:
Substitute (H-1): 169.204
House Introduced Bill: 169.204
As Passed by the House: 169.204
As Passed by the Senate: 169.204
House Concurred Bill: 169.204
Public Act: 169.204
House Enrolled Bill: 169.204