Bill Summary – FastDemocracy

HOUSE BILL NO. 5255
     October 25, 2023, Introduced by Reps. Martus, Hill, Miller, MacDonell, Morgan, Stone, Byrnes,
       Wilson, Conlin, Andrews, Coffia, McFall, Skaggs, Price, Hope, Rheingans, Brixie,
       Dievendorf, Brabec, McKinney and Arbit.
          A bill to regulate political activity; to require candidates
    for the state board of education 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 "candidate for the state
 board of education financial disclosure act".
       Sec. 2. As used in this act:
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       (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) "Candidate" means that term as defined in section 3 of the
 Michigan campaign finance act, 1976 PA 388, MCL 169.203.
       (d) "Candidate for office" means a candidate for the office of
 member of the state board of education.
       (e) "Dependent" means an individual claimed by the candidate
 for office or the candidate for office's spouse as a dependent for
 federal income tax purposes.
       (f) "Earned income" means salaries, wages, tips, bonuses,
 commissions, or other compensation or net earnings from self-
 employment for the taxable year.
       (g) "Gift" means that term as defined in section 4 of 1978 PA
 472, MCL 4.414.
       (h) "Immediate family member" means the spouse or a dependent
 of the candidate for office.
       (i) "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.
       (j) "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
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 unsecured debt that is from a financial institution or the federal
 government.
       (k) "Lobbyist" means that term as defined in section 5 of 1978
 PA 472, MCL 4.415.
       (l) "Lobbyist agent" means that term as defined in section 5 of
 1978 PA 472, MCL 4.415.
       (m) "Person" means an individual, partnership, corporation,
 association, or other legal entity.
       (n) "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.
       (o) "Spouse" means an individual who is lawfully married to
 the candidate for office as described under 26 CFR 301.7701-18.
       (p) "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 candidate for office 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,
 or if the candidate for office files a statement of organization
 for that candidate's candidate committee after May 15 in order to
 be nominated by a political party at the political party's
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 nominating convention, the report required to be filed under this
 subsection must be filed no later than 30 days after that candidate
 files the statement of organization for that candidate's candidate
 committee. This subsection does not apply to an individual who,
 under any of the following acts, files a report in the current
 calendar year:
        (a) State board of education financial disclosure act.
        (b) Executive office financial disclosure act.
        (c) Candidate for executive office financial disclosure act.
        (d) State representative financial disclosure act.
        (e) Candidate for state representative financial disclosure
 act.
        (f) State senator 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 candidate for office who is required to file a report
 under this act receives notice from the secretary of state under
 section 6(1)(g), the candidate for office 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 candidate for
 office during the reporting period:
        (i) The full name, mailing address, and occupation of the
 candidate for office.
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       (ii) The name, address, and principal activity of each employer
 of the candidate for office.
       (iii) The source and type of all income, including earned and
 unearned income, received by the candidate for office. For purposes
 of this subparagraph, the candidate for office 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
 candidate for office has an ownership interest in, including, but
 not limited to, commercial, industrial, or agricultural buildings.
 For purposes of this subparagraph, the candidate for office 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 candidate for office 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 candidate for office or held jointly with
 the candidate for office's spouse. For purposes of this
 subparagraph, the candidate for office 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 candidate for
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 office and the identity of each creditor. For purposes of this
 subparagraph, the candidate for office 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
 candidate for office 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 candidate for office, 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.
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       (xi) A description of each payment made by a lobbyist or
 lobbyist agent to a charity in lieu of honoraria.
       (xii) If the candidate for office filing the report or an
 immediate family member of that candidate for office 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 candidate for office or the immediate family member
 of the candidate for office for lobbying.
       (xiii) A description of any interest the candidate for office
 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 candidate
 for office shall indicate for each legal entity the candidate for
 office 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 candidate for office or the immediate family member of the
 candidate for office has an interest, with this state.
       (xv) A description of any employment that the candidate for
 office or the immediate family member of the candidate for office
 had with this state at any time during the reporting period. For
 purposes of this subparagraph, if the candidate for office or the
 immediate family member of the candidate for office 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 candidate for
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 office of real property or securities from the candidate for
 office's name into the name of an immediate family member of the
 candidate for office 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 candidate for office during the
 reporting period:
       (i) The name of the spouse of the candidate for office.
       (ii) The principal activity of the spouse of the candidate for
 office, 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 candidate for office.
 For purposes of this subparagraph, the spouse of the candidate for
 office 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 candidate for office has an ownership interest in,
 including, but not limited to, commercial, industrial, or
 agricultural buildings. For purposes of this subparagraph, the
 spouse of the candidate for office 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,
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 shares in mutual funds, or other forms of securities held by the
 spouse of the candidate for office. For purposes of this
 subparagraph, the spouse of the candidate for office 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 candidate
 for office 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 candidate for office during the
 reporting period; for purposes of this subdivision, the candidate
 for office may refer to each dependent using the dependent's first
 and last initial:
       (i) The number of dependents that the candidate for office and
 the spouse of the candidate for office claim for federal income tax
 purposes.
       (ii) The principal activity of each employer of each dependent
 of the candidate for office, 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 candidate for
 office, 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 candidate for office has an ownership interest in,
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 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 candidate for office. For purposes of this
 subparagraph, each dependent of the candidate for office 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
 candidate for office 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 candidate for
 office 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 t