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HB 5582

AN ACT RELATING TO COMMERCIAL LAW--GENERAL REGULATORY PROVISIONS -- INTERCHANGE FEE RESTRICTION ACT

2025 Regular Session Introduced by Pat Serpa

Defines 501(c)(4) and 527 groups tied to state candidates or officials; requires their registration with the Michigan SOS for disclosure, with civil penalties for noncompliance.

04/03/2025 Committee recommended measure be held for further study
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Bill Summary · HB 5582

Summary — HB 5582 (Substitute H‑1)

Status: Referred to second reading (reported with substitute H‑1 12/05/2024). Introduced: March 14, 2024. Sponsor: Rep. Jason Morgan. Companion: SB 553. Effective date (if enacted): January 1, 2026. Note: HB 5582 is tie‑barred to HB 5580 and does not take effect unless HB 5580 (or the Senate companion) is also enacted.

Main purpose

HB 5582 amends the Michigan Campaign Finance Act (MCL 169.205 & 169.207) by adding definitions for two types of tax‑exempt political nonprofit organizations — “501(c)(4) organization” and “527 organization” — that would be subject to registration and disclosure requirements contained in the companion bill (HB 5580). In short, the bill targets certain tax‑exempt nonprofits with direct personnel or governance ties to state candidates or officials so they can be identified for campaign finance disclosure.

Key definitional provisions

  • Adds definitions to MCL 169.207 for:
    • “501(c)(4) organization”: an entity claiming tax‑exempt status under IRC §501(c)(4) if the organization employs, has a board member who is, or is controlled/directed by any of the following connected with state elective office:
    • a candidate for state elective office;
    • an elected official;
    • an appointed official for state elective office;
    • any employee, contract employee, or staff member of the persons above;
    • any family member (defined below) of the persons above.
    • “527 organization”: same trigger language for entities claiming IRC §527 status.
  • “Elected official” is defined as an individual who holds a state elective office.
  • “Family member” is defined comprehensively to include spouse/ex‑spouse, children, stepchildren, grandchildren, parents, siblings, nieces, nephews, and their spouses.

Related policy mechanics (from companion HB 5580 — tie‑bar)

  • Organizations meeting these definitions would be required to electronically register with the Michigan Secretary of State (SOS) within 10 days of becoming such an organization (existing organizations meeting the criteria as of Jan 1, 2026 would have 10 days after that date to register).
  • SOS must publish the registration information on its website.
  • Certain political party committees and House/Senate caucus committees would be excluded.

Enforcement, penalties & fiscal impact (from companion bill)

  • Failure to register: treated as a state civil infraction with graduated fines based on the organization’s balance (e.g., $1,000 for balances ≤ $10,000; $4,000 for $10,000–$20,000; $5,000 for ≥ $20,000).
  • The associated elected official or candidate reported under the registration requirement could also be guilty of a civil infraction with fines up to $1,000.
  • Fiscal impact on the state and local governments is indeterminate — depends on number of organizations required to register and enforcement actions. Fine revenue has specified distributions (including public/county law libraries and the Justice System Fund).

Who is affected

  • Primary: 501(c)(4) and 527 tax‑exempt organizations that have personnel, board members, or are controlled/directed by state candidates, elected officials, appointed state officials, their staff/contractors, or family members as defined.
  • Secondary: the state Secretary of State (administration and publication duties), affected candidates/elected officials (reporting implications), courts/localities (if civil infractions are adjudicated).

Procedure & timing

  • Reported with substitute H‑1 12/05/2024. The bill specifies an effective date of January 1, 2026, but will not take effect unless the companion substantive bill (HB 5580) is enacted as well. Current legislative status: read first time and referred to committee; later referred to State Affairs (4/7/2025).

Bottom line

HB 5582 narrowly amends campaign‑finance statute definitions to capture certain 501(c)(4) and 527 organizations that are directly connected to state candidates or officials. It functions as the definitional component of a pair of tie‑barred bills that, together, would create new registration and disclosure obligations (and civil‑infraction penalties) for such organizations beginning Jan 1, 2026.

Compiled from official sources — confirm details with the bill’s official record.

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