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