HB-4983, As Passed House, September 13, 2006

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HOUSE BILL No. 4983

 

June 22, 2005, Introduced by Reps. Bieda, Ward, Byrum, Condino, Tobocman, Lipsey, Gleason, Espinoza, Wojno, Accavitti, Plakas, Hopgood, Kolb, Clack, Anderson, Leland, David Law, Vagnozzi, Mayes, Murphy, Stahl, Palmer, Drolet and Shaffer and referred to the Committee on House Oversight, Elections, and Ethics.

 

     A bill to regulate and to require certain reports to be filed

 

by persons who receive contributions for purposes of defending

 

elected officials from criminal, civil, and administrative actions;

 

to regulate contributions made for purposes of defending elected

 

officials from criminal, civil, and administrative actions; to

 

prescribe certain powers and duties of the secretary of state; and

 

to prescribe penalties and civil sanctions.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 1. This act shall be known and may be cited as the "legal

 

defense fund act".

 

     Sec. 3. As used in this act:

 

     (a) "Contribution" means a transfer of money, services, or


 

anything of ascertainable monetary value made for the purpose of

 

defending an elected official of this state against a criminal,

 

civil, or administrative action. Contribution does not include a

 

transfer from the elected official or a member of his or her

 

immediate family.

 

     (b) "Elected official" means an individual who holds an

 

elected office as that term is defined in section 5 of the Michigan

 

campaign finance act, 1976 PA 388, MCL 169.205.

 

     (c) "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.

 

     (d) "Immediate family" means a child residing in the elected

 

official's household, the elected official's spouse, or an

 

individual claimed by the elected official or the elected

 

official's spouse as a dependent for federal income tax purposes.

 

     (e) "Legal defense fund" means a person who receives a

 

contribution from another person with the intent to use the

 

contribution to defend an elected official of this state against a

 

criminal, civil, or administrative action or to transfer the

 

contribution to another legal defense fund. A legal defense fund

 

does not include a financial institution that only acts as a

 

depository of contributions for a legal defense fund.

 

     (f) "Person" means an individual, partnership, corporation,

 

association, governmental entity, or other legal entity.


 

     (g) "Treasurer" means the individual designated as responsible

 

for a legal defense fund's record keeping, report preparation, or

 

report filing.

 

     Sec. 5. (1) A legal defense fund shall file a statement of

 

organization with the secretary of state within 10 days after the

 

legal defense fund first receives a contribution.

 

     (2) A statement of organization required by this section shall

 

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

 

include the first and last name of the elected official intended to

 

be the beneficiary of the 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 each financial institution in

 

which money of the fund is or is intended to be deposited.

 

     (d) The full name of and office held by the elected official

 

intended to be the beneficiary of the legal defense fund.

 

     (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

 

contribution report under section 7 is required to be filed.

 

     (4) A legal defense fund that 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 not exceed $300.00. A legal defense fund

 

that fails to file a statement of organization for more than 30


 

days after the statement is required to be filed is subject to a

 

civil fine of not more than $1,000.00.

 

     (5) When a legal defense fund is dissolved, the fund shall

 

file a statement of dissolution, in the form required by the

 

secretary of state, with the secretary of state.

 

     Sec. 7. (1) From the date that a legal defense fund receives

 

its first contribution until the date it files a statement of

 

dissolution under section 5, a legal defense fund shall file

 

contribution reports according to the schedule in subsection (2). A

 

contribution report shall 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.

 

     (2) Subject to subsections (3) and (4), a legal defense fund

 

shall file a contribution report on or before each of the following

 

dates covering the period beginning on the day after the closing


 

date of the preceding contribution report and ending on the

 

indicated closing date:

 

     (a) January 31, with a closing date of December 31 of the

 

previous year.

 

     (b) July 25, with a closing date of July 20.

 

     (3) The beginning date of the first contribution report

 

required by this section shall be the date the first contribution

 

is received by the legal defense fund.

 

     (4) A legal defense fund shall file a final contribution

 

report with its statement of dissolution under section 5. The final

 

contribution report shall cover the period beginning on the day

 

after the closing date of the preceding contribution report and

 

ending on the last date that the legal defense fund received a

 

contribution.

 

     (5) A contribution report required by this section shall

 

include a verification statement, signed by the treasurer for the

 

legal defense fund, 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.

 

     Sec. 9. (1) If a report required by section 7 is filed late,

 

the legal defense fund or the treasurer shall pay a late filing

 

fee. If the legal defense fund has raised $10,000.00 or less during

 

the previous 2 years, the late filing fee shall be $25.00 for each

 

business day the report remains unfiled, but not to exceed $500.00.

 

If the legal defense fund has raised more than $10,000.00 during

 

the previous 2 years, the late filing fee shall be determined as

 

follows, but shall not exceed $1,000.00:


 

     (a) Twenty-five dollars for each business day the report

 

remains unfiled.

 

     (b) An additional $25.00 for each business day after the first

 

3 business days the report remains unfiled.

 

     (c) An additional $50.00 for each business day after the first

 

10 business days the report remains unfiled.

 

     (2) A legal defense fund's treasurer who fails to file 2

 

contribution reports required by section 7, if both of the reports

 

remain unfiled for more than 30 days, is guilty of a misdemeanor

 

punishable by a fine of not more than $1,000.00 or imprisonment for

 

not more than 90 days, or both.

 

     (3) A legal defense fund's treasurer who knowingly files an

 

incomplete or inaccurate contribution report is subject to a civil

 

fine of not more than $1,000.00.

 

     Sec. 11. (1) The secretary of state shall make a statement or

 

report required by section 5 or 7 available for public inspection

 

and reproduction as soon as practicable after receipt, but not

 

later than the third business day following the day of receipt. The

 

manner of making the statement or report available to the public

 

may include displaying the report on the internet.

 

     (2) The secretary of state shall keep a statement or report

 

filed under section 5 or 7 until 5 years after the date of the

 

legal defense fund's dissolution.

 

     (3) A late filing fee or civil fine assessed under this act

 

shall be paid to the secretary of state and used to pay the

 

expenses of administering this act.

 

     Sec. 13. (1) A person shall not make or accept an anonymous


 

contribution. An anonymous contribution received by a legal defense

 

fund shall not be deposited into an account the legal defense fund

 

maintains with a financial institution, but shall be given to a

 

person that is exempt from taxation under section 501(c)(3) of the

 

internal revenue code, 28 USC 501. The person receiving the

 

contribution from the legal defense fund shall provide the legal

 

defense fund with a receipt, which shall be retained by the legal

 

defense fund's treasurer.

 

     (2) A contribution shall not be made, directly or indirectly,

 

by a person in a name other than the name by which that person is

 

identified for legal purposes.

 

     (3) A person who knowingly violates this section is guilty of

 

a misdemeanor punishable as follows:

 

     (a) If the person is an individual, by a fine of not more than

 

$1,000.00 or imprisonment for not more than 90 days, or both.

 

     (b) If the person is other than an individual, by a fine of

 

not more than $10,000.00.