HOUSE BILL NO. 5975

A bill to amend 1976 PA 388, entitled

"Michigan campaign finance act,"

(MCL 169.201 to 169.282) by adding section 30a.

the people of the state of michigan enact:

Sec. 30a. (1) Beginning 18 months after the effective date of the amendatory act that added this section and subject to subsection (3), no principal of a contractor or prospective contractor that has entered into or is seeking a state contract shall directly or indirectly make a donation or contribution to any of the following:

(a) A candidate committee of a candidate for state elective office.

(b) A political party committee.

(c) A 527 committee.

(d) A candidate affiliated 501(c)(4) committee or contractor affiliated 501(c)(4) committee.

(2) Beginning 18 months after the effective date of the amendatory act that added this section and subject to subsection (3), no principal of a contractor or prospective contractor that has entered into or is seeking a local government contract shall directly or indirectly make a donation or contribution to any of the following:

(a) A candidate committee supporting a candidate for office within the contracting jurisdiction.

(b) A state political party committee.

(c) A local political party committee within the contracting jurisdiction.

(d) A noncandidate 527 committee.

(e) A candidate affiliated 501(c)(4) committee or contractor affiliated 501(c)(4) committee.

(3) The prohibition under subsection (1) or (2) begins 18 months before a contractor seeking a state or local government contract and ends 18 months after the termination of the contract period. Contractors seeking a government contract but not subsequently entering into a contract agreement are subject to the prohibitions under this section for only the 18 months before seeking the contract.

(4) A contractor that violates this section may have the contractor's contracts canceled or be disqualified from consideration for future contracts for 3 years, or both. A prospective contractor that violates this section may be disqualified from consideration for the prospective contract or disqualified from consideration for future contracts for 3 years, or both. No violation of this section occurs if the improper contribution is returned to the principal by the date of the proposal for the contract or 30 days after receipt of the improper contribution by the recipient committee treasurer.

(5) As used in this section:

(a) "Candidate affiliated 501(c)(4) committee" means an organization claiming tax-exempt status under section 501(c)(4) of the internal revenue code of 1986, 26 USC 501, that is established by, controlled by, directed by, or employs or contracts with any of the following:

(i) A candidate.

(ii) An individual who holds or has held elective office.

(iii) An employee, staff member, contract employee, or family member of a candidate or an individual who holds elective office.

(iv) A political party committee.

(b) "Contract" means an agreement of contract, let through a procurement process or otherwise, for the rendition of services; the furnishing of any goods, material, supplies, equipment, or any items of any kind; the construction, alteration, or repair of any public building or public work; or the acquisition, sale, or lease of any land or building. Contract does not mean any of the following:

(i) Loans or loan guarantees.

(ii) Subsidies or grants allocated through the appropriations process.

(iii) Collective bargaining agreements.

(iv) Agreements between political subdivisions of this state such as counties or municipalities that have agreements with the state or one another.

(c) "Contractor" means a person, business entity, or nonprofit organization entered or entering into a state or local government contract and receiving an aggregate of $250,000.00 or more in contract awards from the respective state and local government.

(d) "Contractor affiliated 501(c)(4) committee" means an organization claiming tax-exempt status under section 501(c)(4) of the internal revenue code of 1986, 26 USC 501, that receives at least half of its funding from a contractor or contractor principal or is established by, controlled by, directed by, or employs or contracts with any of the following:

(i) The contractor or prospective contractor.

(ii) An employee, director, staff member, contract employee, or family member of a contractor or prospective contractor.

(e) "Family member" means spouse, ex-spouse, child, stepchild, grandchild, step-grandchild, parent, stepparent, grandparent, step-grandparent, sibling, stepsibling, niece, stepniece, nephew, or stepnephew.

(f) "527 committee" means an organization claiming tax-exempt status under section 527 of the internal revenue code of 1985, 26 USC 527.

(g) "Lobbying firm" means any business that engages in lobbying as that term is defined in section 5 of 1978 PA 472, MCL 4.415.

(h) "Local government" means a county, city, village, township, or political subdivision of this state.

(i) "Principal" means any of the following:

(i) The chief executive officer or a comparable officer.

(ii) A member of the board of directors or the equivalent of the board of directors.

(iii) An individual who has an ownership interest in the contractor or prospective contractor of 5% or greater.

(iv) The contractor or prospective contractor.

(v) A president, treasurer, or executive vice president.

(vi) Any officer or employee who has managerial or discretionary responsibilities with respect to government affairs or a contract with this state, a state agency, a local government, or a political subdivision of a local government.

(vii) The spouse or dependent child of an individual listed under subparagraphs (i) through (vi).

(viii) A political committee established or controlled by an individual listed under subparagraphs (i) through (vii), the contractor, or the prospective contractor.

(ix) Any subsidiary business controlled directly or indirectly by the contractor or prospective contractor.

(x) Any person acting on behalf of the persons listed under this subdivision. As used in this subparagraph, "any person acting on behalf" includes any lobbying firm, employee of the lobbying firm, or family member of an employee of the lobbying firm if the lobbying firm has a contract with a contractor or prospective contractor.

(j) "Prospective contractor" means a contractor that submits a response to a government contract solicitation or submits a proposal in response to a request for proposals for solicitations or proposals that may be worth an aggregate of $250,000.00 or more in contract awards from state and local government contracts.

(k) "State agency" means an office, department, board, council, commission, institution, or other agency in the executive or legislative branch of state government.