HOUSE SUBSTITUTE FOR

SB-0576, As Passed House, March 18, 2014

SENATE BILL NO. 576

A bill to establish supplemental conflict of interest

standards for members of regulatory bodies in the department of

licensing and regulatory affairs; to require disclosure of certain

interests; to provide grounds for removal of members of regulatory

bodies; to provide a process for raising and determining possible

conflicts of interest; and to provide for voiding certain actions

taken in violation of this act.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 1. (1) This act shall be known and may be cited as the

"regulatory boards and commissions ethics act".

(2) As used in this act:

(a) "Board" means a board, commission, committee, or

subcommittee in the department that has authority in regulatory

actions concerning private individuals or entities.

(b) "Department" means the department of licensing and

regulatory affairs.

parent-in-law, stepparent, sibling, spouse, child, or stepchild.

Sec. 2. In addition to any other standard of conduct or

disclosure requirement that may apply to a member or designated

alternate member of a board, each member or designated alternate

shall comply with the standards set forth in this act.

Sec. 3. (1) A board member shall do all of the following:

(a) Disclose to the board and the director of the department

any pecuniary, contractual, business, employment, or personal

interest that the board member may have in a contract, grant, loan,

or a regulatory, enforcement, or disciplinary matter before the

board. Disclosure is also required if a spouse, child, or stepchild

of a board member is a director, officer, direct or indirect

shareholder, or employee of an entity under consideration for a

contract, grant, or loan or is the subject of a regulatory,

enforcement, or disciplinary action before the board. A board

member shall make a written disclosure of the conflict to the board

unless the board member verbally discloses the conflict at a

meeting of the board and the disclosure is included in the official

minutes of the meeting.

(b) Refrain from participating in any discussion, directly or

indirectly, with other board members regarding a matter before the

board if the board member has a direct or indirect interest

described in subdivision (a).

to a matter in which the board member has a direct or indirect

interest described in subdivision (a).

(d) Use state resources, property, and funds under the board

member's official care and control judiciously and solely in

accordance with prescribed constitutional, statutory, and

regulatory procedures and not for personal gain or benefit.

(2) A board member shall refrain from all of the following:

(a) Divulging to an unauthorized person any confidential

information acquired in the course of the member's service on the

board before the time prescribed or authorized for release to the

public.

(b) Representing his or her personal opinion as that of the

board or the department.

services, or other thing of value for the benefit of a person or

organization other than this state that could reasonably be

expected to influence the manner in which the board member performs

official duties.

(d) Engaging in a business transaction in which the board

member may profit from his or her official position or authority as

a board member or benefit financially from confidential information

that the board member obtained or may obtain incident to the board

membership.

(e) Rendering services for a private or public interest if

that service is incompatible or in conflict with the discharge of

the board member's official duties at the time the services are

rendered.

(f) Participating in his or her official capacity as a board

member in negotiating or executing contracts, making loans,

granting subsidies, fixing rates, issuing permits or certificates,

or other regulation or supervision relating to a business entity in

which the board member or an immediate family member of the board

member has a pecuniary or personal interest, other than a 2% or

smaller interest in a publicly traded company.

Sec. 4. A contract, grant, or loan that a board enters into

with or awards to a board member or an immediate family member of a

board member with an interest in the matter is adopted in violation

of conflict of interest standards and is voidable at the option of

the department unless the affected board member complies with all

of the following:

(a) Except as expressly permitted by applicable law, the

affected board member has abstained from participating in the

discussion or vote on the matter.

(b) The affected board member immediately upon knowledge or

discovery discloses the pecuniary, contractual, business,

employment, or personal interest in the contract, grant, or loan in

the manner required by this act and other applicable law.

Sec. 5. (1) A person who has reason to believe that a board

member has failed to disclose an interest described in section

3(1)(a) or has an interest that is not required to be disclosed but

that would have a tendency to affect the ability of the member to

render an impartial decision on a matter may request, not later

than 1 year after the board takes any action on the matter, that

the director of the department or his or her designee consider the

issue of a conflict of interest as to that matter. The director or

his or her designee shall investigate the matter and decide the

issue of whether or not the board member has an undisclosed

interest described in section 3(1)(a) or has another conflict of

interest sufficient to raise a reasonable doubt as to whether the

board member could render an impartial decision. The director or

his or her designee may refer the matter to the board of ethics

created in section 3 of 1973 PA 196, MCL 15.343, at his or her

discretion.

(2) If the director or his or her designee determines under

subsection (1) that a board member has an undisclosed interest or a

conflict of interest that is sufficient to raise a reasonable doubt

as to whether the board member could render an impartial decision,

the department shall review the action to determine if that board

member cast a deciding vote in any action the board took regarding

the matter in which there is a reasonable doubt of the board

member's ability to have rendered an impartial decision. If the

action did not depend on the vote of that board member, the action

of the board stands. If that board member was the deciding vote in

an action regarding the matter, the board shall reconsider the

action without the participation of the board member who was found

to have an interest that was sufficient to raise a reasonable doubt

as to whether he or she could have rendered an impartial decision.

Sec. 6. This act is intended to supplement existing ethics

laws, and if there is a conflict, the following laws prevail:

(a) Section 10 of article IV of the state constitution 1963.

(b) 1978 PA 566, MCL 15.181 to 15.185.