(Source: MIRS.news, Published 10/24/2023) Legislators and statewide executives will need to publicly disclose their income and assets with the Secretary of State by April 15 under legislation introduced Tuesday afternoon and slated to be in front of a Senate committee on Wednesday (October 25).
The legislation – SB 613 by Sen. Jeremy Moss (D-Southfield), SB 614 by Senate Oversight Chair Sam Singh (D-East Lansing), SB 615 by Sen. Mark Huizenga (R-Walker) and SB 616 by Sen. Ed McBroom (R-Waucedah Twp.) – implements the requirements of Proposal 1, which voters adopted last November.
Singh confirmed to MIRS his Senate Oversight Committee will take testimony on the bills Wednesday with the hope the panel can vote on them next week. If there's bi-partisan consensus, they could be up on the Senate floor for a chamber-wide vote.
Mentioning his desire to take up extending the Freedom of Information Act (FOIA) to the Legislature and the Governor's office, lobbying reform or tackling other campaign finance issues with the financial disclosure package, Singh did say ultimately, that “those are issues that are different.”
"I understand that there are people that want us to talk about a lot of topics, and I think we will get to a lot of topics, but what we're talking about tomorrow is specifically the financial disclosure aspects," Singh said, adding earlier that "we obviously have Republicans and Democrats that have introduced the package, and that was something we wanted to make sure happened here in the fall."
Starting on April 15, 2024, under Moss' SB 613, public officers must report to the Department of State:
- The name and address of an employer and the position they held if they earned $1,000 or more annually from the role.
- Their spouse's name and their occupation.
- The roles they hold – including consulting posts – in a nonprofit organization, business enterprise, corporation, firm or other organizations that are not solely honorary, religious, social, fraternal or part of a political entity.
- Every source of income that contributed at least $1,000 during the reporting period.
- Not including business assets, they must report a list of each asset held for investment or for "production of income" with a fair market value of at least $1,000, as well as unearned income – like retirement income, stock dividends and annuities that are not earned from employment – that exceed $200 during the reporting period. The legislation calls for the fair market value to be adjusted for inflation every four years, and for amounts to be rounded to the nearest $1,000.
- Liabilities owed to a creditor that become greater than $10,000 at any time during the reporting period.
- A list of stocks, bonds or other types of securities held by a public officer, or jointly by them and a spouse, that reaches a total fair market value of at least $1,000. The value would be subjected to inflation-related adjustments every four years through the Detroit Consumer Price Index. Exemptions would be offered to stock within a widely held investment fund, where they do not exercise control over its financial interests and the fund is either publicly traded or is composed of widely diversified assets.
- Real property with a fair market value of at least $1,000, with the public officer authorized not to include street numbers in their filing.
- Information related to future employment agreements or arrangements and a leave of absence they might have taken to serve as a public officer. The report will include any payment deferrals or continuations from a previous or current employer that is not the state, as well as any ongoing participation in an employer-offered welfare or benefit plan.
- A list of gifts and travel payments that have already been reported by a lobbyist or lobbyist agent under state law, and a list of each payment a lobbyist made to a charity affiliated with the public officer.
"This is a full-circle moment to achieve the goals we set out years ago to enact Michigan's first-ever financial disclosure law that would reveal conflicts of interests from lawmakers," Moss said in a statement on the legislation. "Our Prop. 1 legislation is not an end but a long-overdue beginning to finally implementing transparency laws."
After the first April 2024 deadline, the financial disclosures will be due by May 15 during each year afterward.
On Monday evening, The Detroit News was the first to report that the legislation, in its present-day draft, would not bring light to trips paid for by those not registered as lobbyists in Michigan, and would not bring clarity to how a public officer's nonprofit could have been used as an artery for lobbyist-funded gifts or travel.
The statewide office holders to be affected by the legislation would be the Attorney General, the Governor, the Lt. Governor and the Secretary of State.
Proposal 1 of 2022, which was backed by more than 2.83 million voters – more than 66% – in the last general election, required that the Legislature approve new financial disclosure mandates affecting lawmakers and state executives for after this year.
On this week's episode of the MIRS Monday Podcast, co-chair Richard Studley of the Proposal 1 campaign questioned if such obligations should be extended to other state leaders, like members of the Michigan Strategic Fund (MSF) Board who are overseeing large-scale, tax-dollar-funded corporate incentives.
Moreover, some have pointed out that in the legislation, the penalty for knowingly filing an incomplete or inaccurate report could be a $1,000 civil fine. However, in Congress, policy makers could face a $50,000 fine and five years in prison for intentionally lying in a federal financial disclosure, journalist Simon Schuster pointed out on social media.
Under this newly-introduced financial disclosure package in the Michigan legislature, the maximum punishment for intentionally lying in a disclosure is a $1,000 fine.
In Congress, it's $50,000 and/or five years in prison.
— Simon D. Schuster (@Simon_Schuster) October 24, 2023
Singh said to MIRS he would be pleased to explore additional opportunities when it comes to penalties, while recognizing that in the Legislature, "sometimes you get well-meaning people who put their name forward and have never run for anything . . . we want to ensure that people who sort of get caught up in that and might not always know all of the issues, we do have fines."
