Legislative Analysis
Phone: (517) 373-8080
TAX TRIBUNAL PROTECTIVE ORDERS
http://www.house.mi.gov/hfa
House Bill 5645 as reported
Analysis available at
Sponsor: Rep. Nate Shannon http://www.legislature.mi.gov
Committee: Tax Policy
Complete to 12-7-24
SUMMARY:
House Bill 5645 would amend the Tax Tribunal Act to issue protective orders to protect the
confidentiality of confidential information in certain circumstances. Currently, the act requires
the tribunal to comply with the Freedom of Information Act (FOIA). The bill would still require
it to comply with FOIA, but would allow it to issue protective orders for confidential
information as described below.
Confidential information would include, at a minimum, parts of correspondence,
reports, testimony, audio or video recordings, photos, documents, or stored information
containing particular data, statements, locational information, information about
manufacturing processes or other operational information, trade secrets, financial
information, personal information, information generated using proprietary software
developed by the person seeking to protect its confidentiality, information relating to
safety or security, or other information, that has been kept confidential and is one or
more of the following:
• Information that is protected by a Michigan court rule, by a federal or state
constitutional provision, by a federal or state law, rule, or regulation, or by the
order of a court of competent jurisdiction.
• Information that, if disclosed, reasonably could compromise the security or
safety of a place, one or more persons, or property.
• Information that, if disclosed, either individually or in conjunction with other
information, could cause a competitive disadvantage to the person seeking to
protect its confidentiality.
• Information, including electronically stored information in its native format,
that is subject to a preexisting confidentiality or licensing agreement entered
into in the normal course of business.
• Information that is subject to a privilege existing under state law, the Michigan
court rules, or the Michigan rules of evidence.
• Information of a personal nature if public disclosure of the information would
constitute a clearly unwarranted invasion of an individual’s privacy.
• A tax return or portion of a tax return containing taxpayer information that was
filed with either the Michigan department of treasury or the Internal Revenue
Service.
Under the bill, if all parties to a proceeding before the tribunal agree to the entry of a protective
order for confidential information or if a party moves the tribunal to protect confidential
information and no other party objects to the granting of the motion, the tribunal would issue
a protective order to reasonably protect that information. The issuance of the order would not
subject the tribunal to liability for failing to disclose information subject to the order under
FOIA or to conduct a closed session to consider the information under the Open Meetings Act.
House Fiscal Agency Page 1 of 3
 If the tribunal determines that information, in whole or in part, covered by a protective order is
not confidential after it is issued, the order would have to be vacated or amended to reasonably
protect only the confidential information.
Protective orders written under the bill would have to be narrowly written to reasonably protect
the confidentiality of the confidential information without inhibiting disclosure of all other
information in a matter. When possible, confidential information would be separated from
information that is not confidential so records and documents containing both confidential and
nonconfidential information could be disclosed with the confidential information excerpted or
redacted. If a tribunal opinion is based on confidential information, the tribunal would have to
attempt to balance the public’s right to know the basis of its opinion with the right of the person
or persons who might be harmed by the disclosure of confidential information.
Disputed claims of confidentiality
If one party moves to protect confidential information but another party objects to the motion,
the tribunal would have to hold an in camera proceeding that is a closed session under the Open
Meetings Act to determine whether the information in question is confidential. After the
tribunal determines the whether the information is confidential, either party would have 21
days after the tribunal’s order is issued to seek appellate review.
In addition, if a protective order is not granted, the party seeking the order could notify the
tribunal and other parties that it has decided not to produce the information and to accept any
consequences for failing to produce the information. In those cases, the information would be
returned to the party that submitted it for purposes of the in camera proceeding.
FOIA and Open Meetings Act
Information for which the tribunal issued a protective order would not be subject to disclosure
under FOIA unless the order is vacated or amended as described above. Meetings at which the
confidential information is discussed would have to be held in closed session under the Open
Meetings Act. If an order were amended, the information determined to be confidential would
remain exempt from FOIA and meetings would still be held in closed session to the extent
necessary to protect the confidential information.
MCL 205.746
BRIEF DISCUSSION:
Supporters of the bill testified that it would streamline the process of reviewing taxpayer
information while ensuring the protection of sensitive information.
FISCAL IMPACT:
House Bill 5645 would not have a direct fiscal impact on the Department of Licensing and
Regulatory Affairs (LARA), specifically the Michigan Tax Tribunal. According to LARA, the
bill would effectively enshrine existing practice implemented by the Michigan Tax Tribunal
pursuant to a 2024 Michigan Court of Appeals opinion in New Covert Generating Company,
LLC v Covert Township.
House Fiscal Agency HB 5645 as reported Page 2 of 3
POSITIONS:
The following entities indicated support for the bill (12-4-24):
• Michigan Chamber of Commerce
• Honigman LLP
• Michigan Manufacturers Association
The following entities indicated a neutral position on the bill (12-4-24):
• Michigan Municipal League
• Michigan Townships Association
The Michigan Assessors Association indicated opposition to the bill. (12-4-24)
Legislative Analyst: Alex Stegbauer
Fiscal Analyst: Ben Gielczyk
■ 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 5645 as reported Page 3 of 3


Statutes affected:
House Introduced Bill: 205.746