Bill Summary – FastDemocracy

SENATE BILL NO. 598
     October 19, 2023, Introduced by Senator ALBERT and referred to the Committee on Oversight.
          A bill to regulate political activity; to require certain
    elected state supreme court justices and judges to file financial
    reports; to prescribe the powers and duties of certain state
    officers and agencies; to impose fees; to prescribe penalties and
    civil sanctions; and to provide remedies.
                     THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
       Sec. 1. This act may be cited as the "judicial branch
 financial disclosure act".
       Sec. 2. As used in this act:
    OOI                                                                             04457'23 *
                                         2
         (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 or net earnings from self-employment for the taxable
 year.
         (d) "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.
         (e) "Liabilities" means what a person owes to another person,
 including, but not limited to, mortgages or other debts.
         (f) "Lobbyist" means that term as defined in section 5 of 1978
 PA 472, MCL 4.415.
         (g) "Lobbyist agent" means that term as defined in section 5
 of 1978 PA 472, MCL 4.415.
         (h) "State judicial official" means an individual who is
 serving in the office of justice of the supreme court or judge of
 the court of appeals.
         Sec. 3. (1) If an individual is a state judicial official at
 any time during a calendar year, that individual 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 May 15, 2024 and by
     OOI                                                          04457'23 *
                                       3
 May 15 of each year thereafter. This subsection does not apply to
 an individual who was a state judicial 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 senator financial disclosure act.
       (b) State representative financial disclosure act.
       (c) 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, occupation of, and the
 state office held or sought by, the individual filing the report.
       (b) The name of each member of the immediate family of the
 individual filing the report.
       (c) The name, address, and principal activity of each employer
 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) 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.
       (e) The source and type of all other income not reported under
     OOI                                                        04457'23 *
                                       4
 subdivision (d) that is received during the preceding calendar year
 by the individual filing the report 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 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 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, if the
 interest in the asset has a value of $10,000.00 or more on the date
 the report is 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.
     OOI                                                         04457'23 *
                                       5
       (i) The identity of all compensated positions held by the
 individual filing the report 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. 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
 subdivision.
       (j) A description of any interest the individual filing the
 report 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.
       (k) A description of all liabilities owed by the individual
 filing the report and the identity of each creditor. For purposes
 of this subdivision, the individual filing the report is required
 to report a liability under this subparagraph only if the liability
 owed to each creditor is $5,000.00 or more during the preceding
 calendar year.
       (l) 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
     OOI                                                        04457'23 *
                                        6
 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.
       (m) A list of all gifts and expenditures for food and
 beverages reported by a lobbyist or lobbyist agent under state law.
       (n) A list of all travel and lodging expenses paid for or
 reimbursed by a lobbyist or lobbyist agent that are required to be
 reported by the lobbyist or lobbyist agent under state law.
       (o) A description of each payment made by a lobbyist or
 lobbyist agent to a charity in lieu of honoraria.
       (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.
       (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
 holds a beneficial interest in a blind trust, the individual is not
 required to include the interests or assets of the blind trust in
 the individual's statement under subsection (1). However, the
 individual must indicate in the individual's report that 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
     OOI                                                         04457'23 *
                                       7
 4(1)(f) or (g) if both of the following apply:
       (i) The item is not in any way, past or present, derived from
 the income, assets, or activities of the individual filing the
 report.
       (ii) 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 arising from dissolution of the individual's or member's
 marriage.
       (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 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) Prepare forms, instructions, and manuals required under
 this act.
     OOI                                                        04457'23 *
                                       8
       (d) 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 an individual required to file a report or an individual whose
 participation is essential to the preparation of the report.
       (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
     OOI                                                         04457'23 *
                                       9
 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 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
     OOI                                                       04457'23 *
                                      10
 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.
       Sec. 7. (1) The secretary of state shall make a report filed
 under this act available without charge to the public on a separate
 internet webpage or on its website homepage.
       (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 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 in accordance with 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