Bill
SB 1198
The bill defines “gift” by fair market value over $25 per month and requires lobbyists to prove valuations, using market prices and a specified hierarchy for determining fair value
Subject: Public employees and officers — ethics; modify definition of “gift”
Status & procedural note
- Introduced: February 10, 2025
- Current status (per user info): Referred to Committee on Government Operations
- What it amends: Sections 3 and 4 of 1978 PA 472 (MCL 4.413 & 4.414) and adds a new section (8a) governing valuation.
Purpose / intent
- To clarify how the statutory term “gift” is measured (by fair market value) and to prescribe a concrete method for determining that fair market value for purposes of lobbyist/official reporting and gift-exemption rules. The bill also places evidentiary obligations on lobbyists to substantiate value determinations when requested.
Key provisions
- Definition of “gift” (amended MCL 4.414)
- A “gift” is any payment, item, service, or anything of value whose fair market value exceeds $25.00 (subject to statutory CPI adjustments) in any one‑month period, unless equal or greater consideration is given.
- Explicitly retains several exclusions (these are not gifts), including:
- Campaign contributions reported under the Michigan Campaign Finance Act;
- Loans made in the normal course of business by specified financial institutions;
- Gifts from immediate family or certain relatives;
- Meals/refreshments consumed immediately (breakfast, luncheon, dinner);
- Contributions to registered legal defense funds for officials; and
- Tickets or free/reduced admission to charity events (501(c)(3)) and admission to conferences/educational events directly related to the official’s duties.
- Definition of “fair market value” (amends MCL 4.413; adds Sec. 8a)
- “Fair market value” is defined as the value available to any member of the public at the time the item/service is exchanged.
- Sec. 8a prescribes a hierarchy and factors for valuation:
- Use market prices on the date of exchange (pre‑ or post‑date price swings do not change the determination).
- If available on a primary market, use primary‑market price; if not, use public secondary‑market price.
- If exact item/service not available, use a comparable item/service (similar type, quality, age, quantity).
- A lobbyist has the burden to provide evidence supporting the fair market value.
- On request by a public official or the Secretary of State, a lobbyist must submit supporting evidence no later than 9 days after receipt of the item/service.
- Miscellaneous
- Clarifies that “fair market value” applies when assessing whether a transaction crosses the statutory $25 threshold (as adjusted).
- Terminology clarifications for “expenditure,” “immediate family,” and “loan” included/updated.
Who is affected
- Public officials covered by the Lobbyist Registration Act and Public Officers Financial Disclosure rules (those required to report gifts/expenditures).
- Lobbyists and persons who provide items, services, or other things of value to public officials — they bear the evidentiary burden to substantiate valuation on request.
- Agencies that administer reporting and enforcement (Secretary of State; reporting offices).
Potential impacts
- Administrative: clearer valuation rules should reduce ambiguity in reporting and enforcement but may increase requests for valuation evidence and compliance workload for lobbyists and the Secretary of State.
- Compliance: lobbyists must track market prices and retain documentation supporting valuations; public officials will have clearer guidance on what must be reported.
- Fiscal: committee analyses of similar proposals have often concluded little or no direct fiscal impact, though implementation may generate modest administrative costs.
Effective date
- Not specified in the summary material provided. (Procedural status: bill is under committee consideration.)
Compiled from official sources — confirm details with the bill’s official record.
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