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HomeMy WebLinkAbout02 Statutory Authority STATUTORY AUTHORITY TAB 2 Public Employee Retirement System Investment Act 1965 PA 314, as amended; MCL 3 8 . 113 2 et seq PUBLIC EMPLOYEE RETIREMENT SYS l'EM INVESTMENT ACT Act 314 of 1965 AN ACT to authorize 1he investment of assets of public employee retirement systems or plans created and established by the state or any political subdivision; to provide for the payment of certain costs and investment expenses; to authorize investment in variable rate interest loans; to define and limit the investments which may be made by an investment fiduciary with the assets of a public employee retirement system; and to prescribe the powers and duties of investment fiduciaries and certain state departments and officers. History: 1965,Act 314,hnd,8ff.July 22,1965;-Airy. 1980,Act 31,find.Fi11:Mar.8,1980; Ann. 1982,Act 55,find.Eff.Apr.6, 1982-1 Art), 1988,Act 252,F,ff.Jan. I, 1989=Am. 1989,Act 253,Eff.Jan. 1, 1989;Am.1988,Act 343,ltnd.Eff Oct. 19,19SS. The People of the Stale of JYlichigan enact: 38.1121-38.1131 Repealed. 1982,Act 55, imd. Eff. Apr, 6, 1982. Compiler's note:Prior to the repeal of MCL 38.1121 to 38.1 131,MCL 38J 125a had expired by its own tenns. 38.1132 Short title; meanings of words and phrases. Sec. 12. (1) This act shall be known and may be cited as the "public employee retirement system investment act". (2) For the purposes of this act, the words and phrases defined in sections 12a to 121'have [lie meanings ascribed to them in those sections. History:Add. 1982,Act 55,Imd,Eff.Apr,6,1982,-Ai. 1988,Act 127,lid.Eff:May 24, 1988;-Am. 1996,Act 485,find,Eff. Dec.27,1996, 38.1132a Definitions; A. See. 12a. "Assets", for the purpose of meeting asset limitations contained in this act,means the total of the cash and investments of a system valued at market. History:Add.1996,Act 485,lid.Eft.Dec.27, 1996, 38.1132b Definitions; D to G. See. 12b, (1) "Defined contribution plan" means a defined contribution plan as defined in section 414(i)in the internal revenue code,26 USC 414. (2)"Derivative"means either of the following: (a)A contract or convertible security that changes in value in concert with a related or underlying security, fixture, or other instrument or index; or obtains much of its value from price movements in a related or underlying security,fiiturc,or other instrument or index;or both. (b)A contract or security, such as an option, forward, swap,warrant, or a debt instrument.with 1 or more options, forwards, swaps, or warrants embedded in it or attached to it, the value of which contract or security is determined in whole or in part by the price of 1 or more underlying instruments or markets. (3) "Equity interests" means limited partnership interests and other interests in which the liability of the investor is limited to the amount of the investment, but does not mean general partnership interests or ether interests involving general liability of the investor. (4)"Global security" means any of the following: (a) A fixed income security issued by a government, a governmental agency, or a public or private company that is traded outside of the United Slates and may be issued in a currency other than the United States dollar. (b) An equity position in a company traded on an exchange outside of the United States or a security that may be issued in a currency other than the United States dollar or an unregistered American depository receipt. (c) An equity or fixed income derivative that derives its value from an investment described in subdivision (a)or(b)or a global security or bond index traded on an exchange outside of the United States. History:Add. 1996,Act 485,In-id,Eff.Dec,27, 1996-1 Am,2000,Act 307,Imd.Eft Oct, 16,2000,-Ain.2012,Act 347,FfL Mar, 29,2013, 38.1132c Definitions; I. Sec. 12c.(1) "Investment fiduciary" means a person other than a participant directing the investment of the assets ol'his or her individual account in a defined contribution plan who does any of the following: (a) Exercises any discretionary authority or control in the investment of a systern's assets. Investmcni Rendered Friday,b1ay 17,2013 Page 1 Michigan Compiled Laws Complete"through PA 29 of 2^,13 �o Legislative Council, Stale of Michigan Courtesy of tvww.legrs/ature,rni.,yov Fiduciary under this subdivision includes the state treasurer and his or her investment personnel for the systems described in section 13(4), (b)Renders investment advice for a system for a fee or other direct or indirect compensation. (2)"invest" or"investment" means the utilization of money in the expectation of future returns in the fionn of income or capital gain. Investments initially purchased in accordance with this act that subsequently do not qualify for purchase for any reason shall be considered to continue to meet the requirements of this act. Investment includes a guarantee by an investment fiduciary but does not include, as a sole investment, a pledge of the system's assets as collateral to guarantee the repayment of obligations made by a third party to a borrower. (3)'Investment grade"means graded in the top 4 major grades as determined by 2 national rating services. History:Add.1996,Act 485,find.Eff.Dec.27, 1996;Am,2000,Act 307,lnid.Eff.Oct:16,2000;---Am.2012,Act 347,Eff Mar, 28,2013. 38.1132d Definitions; N to P. Sec. 12d. (1) "National rating services" means Moody's investors service, inc.; Standard & Poor's ratings group; Fitch investors service inc.; Duff & Phelps credit rating Corp.; or any other nationally recognized statistical rating organization as deternined by the state treasurer. (2) "Net earnings available for fixed charges"means net income after deducting operating and maintenance expenses, taxes other than federal and state income taxes, depreciation, and depiction, but excluding extraordinary expenses appearing in the regular financial statements of the system. (3) "Obligations" means bonds, notes, collateral trust certificates, convertible bonds, debentures, equipment trust certificates, conditional sales agreements, guaranteed mortgage certificates, pass-through certificates, participation certificates, mortgages, trust deeds, general obligation bonds, revenue bonds, or other similar interest bearing instruments of debt. Obligations may be secured or unsecured and may be publicly offered or privately placed. (4)"Party in interest"means,as it relates to a system,any of the following: (a)An investment fiduciary,counsel,or employee of the system. (b)A person providing services to the system. (c)The political subdivision sponsoring the system. (d)An organization,any of whose members are covered by the system. (e) A spouse, ancestor, lineal descendant, or spouse of a lineal descendant of an individual described in subdivision(a)or(b). (f)An entity controlled by an individual or organization described in subdivisions(a)to(e). (5) "Portfolio company" means an entity in which the investment fiduciary has invested or has considered investing system assets. (6) "Private equity" means an asset class consisting of equity or debt securities in entities that are not publicly traded, which may include,but are not limited to, investments in leveraged buyouts, venture capital, growth capital,distressed or special situations,mezzanine capital,and secondary investments in equity or debt interests. History:Add. 1996,Act 485,Imd.tiff.Dec.27, 1996,—Am,2000,Act 307,Imd,Eff.Oct, 16,2000;—Am,2008,Act 425,Inrd,Eff. Jan.6,2009. 38.1132e Definitions; S. Sec. 12e. (1)"Small business"means a corporation,partnership, sole proprietorship, or other entity which does not meet the specific requirements of investments permitted under this act. (2) "Small business investment company" means an incorporated body or a limited partnership under section 301 of title III of the small business investment act of 1958,Public Law 85-699, 15 U.S,C. 681. (3)"Solt dollar'means brokerage commissions that are used by the system to purchase goods or services. (4) "Stock" means capital stock, common stock, preferred stock, American depository receipts, or any other evidence of residual ownership of a corporation. (5) "System" means a public employee retirement system created and established by this state or any political subdivision of this state. History:Add. 1996,Act 485,Imd.Eff Dec.27,f 996, 38.1132f Definitions; V. Sec. 12f. "Venture capital firm" means a corporation, partnership, proprietorship, or other entity, the principal business of which is or will be the making of investments in small business, either directly or indirectly by investing in entities the principal business of which is or will be the making of investincnts in Rendered Friday,May 17,2013 Page 2 Michigan Compiled Laws Complete Through PA 29 of 2013 Cc.,Legislative Council, State of Michigan Gourlesyof wv✓tv.legrslata,e.mi.gov. small businesses. History:Add. 1996,Act 485,Incl.Eff.Dec.27,19,56. 38,1133 Investment authority; investment fiduciary; investing, reinvesting, holding in nominee form, and managing assets of system; powers and duties; costs; disclosure of fees or other compensation by investment service provider; "investment service provider" defined; prohibited acts; exceptions; requirements; debt instrument issued by foreign country. See. 13. (1) The provisions of this act sliall supersede any investment authorily previously granted to a system under any other law of this state. (2) The assets of' a system may be invested, reinvested, held in nominee fond, and managed by an investment fiduciary subject to the terms, conditions, and limitations provided in this act. An investment fiduciary of a defined contribution plan may arrange for 1 or more investment options to be directed by the participants of the defined contribution plan. The limitations on the percentage of total assets for investments provided in this act do not apply to a defined contribution plan in which a participant directs the investment of the assets in his or her individual account,and that participant is not considered an investment Fiduciary under this act. (3)An investment fiduciary shall discharge his or her duties solely in the interest of the participants and the beneficiaries,and shall do all of the following: (a) Act with the same care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a similar capacity and familiar with those matters would use in the conduct of a similar enterprise with similar aims. (b)Act with due regard for the management,reputation,and stability of the issuer and the character of the particular investments being considered. (c) Make investments for the exclusive purposes of providing benefits to participants and participants' beneficiaries,and of defraying reasonable expenses of investing the assets of the system. (d)Give appropriate consideration to (hose facts and circumstances that the investment fiduciary knows or should know are relevant to the particular investment or investment course of action involved, including the role the investment or investment course of action plays in that portion of the system's investments for which the investment fiduciary has responsibility; and act accordingly. For purposes of this subsection, "appropriate consideration" includes, but is not limited to, a determination by the investment fiduciary that a particular investment or investment course of action is reasonably designed,as part of the investments of the system,to Further the purposes of the system, taking into consideration the risk of loss and the opportunity for gain Or other return associated with the investment or investment course of action; and consideration of the following factors as they relate to the investment or investment course of action: (i)The diversification of the investments of the system. (ii) The liquidity and current return of the investments of the system relative to the anticipated cash flow requirements of the system. (iii)The projected return of the investments of the system relative to the funding objectives of the system. (e) Give appropriate consideration to investments that would enhance the general welfare of this state and its citizens if those investments Offer the safety and rate of return comparable to other investments permitted under this act and available to the investment fiduciary at the time the investment decision is made. (f) Prepare and maintain written objectives, policies,and strategies with clearly defined accountability and responsibility for implementing and executing the system's investments. (g) Monitor (he investment of the system's assets with regard to the limitations on those investments pursuant to this act. Upon discovery that an investment causes the system to exceed a limitation prescribed in this act, [lie investment fiduciary shall reallocate assets in a prudent manner in order to comply with the prescribed limitation. (h) Prepare and maintain written policies regarding ethics and professional training and education, including travel, which policies contain clearly defined accountability and reporting requirements for the system's inveslmeflt fiduciaries. (i)Publish it summary annual report that includes all orthe following: (i)The name of the system. (ii)The names of(lie system's investment fiduciaries. (iii)The names of the system's service providers. (iv)The system's assets and liabilities and changes in net plan assets on a plan-year basis. (v) The system's funded ratio based upon [he ratio of'valuation assets 10 actuarial accrued liabilities on it plan.-year basis. Rendered Friday,May 17,2013 Page 3 MlchiOan Compiled Laws COmpletre ThrOUGh PA 29 of'2013 ,D Legislative Council, State of Michigan Courtesy of tlnvtv.legis!a!ure.mi:oov (vi) Except as otherwise provided in this subparagraph, the system's investment performance net of fees on a rolling calendar-year basis for the previous 1-, 3-, 5-, 7-, and 10-year periods_ For a system for which the stale treasurer is the investment fiduciary, the summary annual report shall include the System's investment performance net of fees on a rolling calendar-year and fiscal-year basis for the previous 1-, 3-, 5-, 7-, and 10-year periods. (vii) The system's administrative and investment expenditures pursuant to standards of the governmental accounting standards board, including, but not limited to, a list of all expenditures made with soil dollars and all expenditures for professional training and education, including travel expenditures, by or on behalf of system board members that are paid by the system,if any. (viii) The system's itemized budget containing all projected expenditures, including, but not limited to, expenditures for professional training and education, including travel expenditures, by or on behalf of system board members that are paid by the system. (ix)The following information as provided in the system's most recent annual actuarial valuation report: (A)The number of active members. (B)The number of retirees and beneficiaries. (C)The average annual retirement allowance. (D)The total annual retirement allowances being paid. (E)The valuation payroll. (F)The employer's computed normal cost of benefits expressed as a percentage of valuation payroll. (G)The employer's total contribution rate expressed as a percentage of valuation payroll. (H)The weighted average of member contributions, if any. (1)The actuarial assumed rate of investment return. (J)The actuarial assumed rate of long-term wage inflation. (K)The smoothing method utilized to determine the funding value of assets. (� The amortization method and period utilized for funding the system's unfunded actuarial accrued liabilities,if any. (M)The system's actuarial cost method. (N) Whether system membership is open or closed to specific groups of employees. (4) An investment fiduciary who is an investment fiduciary of any of the following shall comply with the divestment fi•om terror act,2008 PA 234,MCL 129.291 to 129.301,in snaking investments under this act: (a)The Tier 1 retirement plan available under the state employees'retirement act, 1943 PA 240,MCL 38.1 to 38.69. (b) The 'Tier i retirement plan available under the judges retirement act of 1992, 1992 PA 234, MCL 38,2101 to 38.2670. (c)The Michigan state police retirement system created under the state police retirement act of 1986, 1986 PA 182,MCL 38.1601 to 38.1648, (d) The Michigan public school employees' retirement system created under the public school employees retirement act of 1979, 1980.PA 300,MCI,38.1301 to 38.1437. (5)An investment fiduciary may use a portion of the income of the system to defray the costs of investing, managing, and protecting the assets of the system; may retain investment and all other goods and services necessary for the conduct of the affairs of the system, including investment advisors, consultants, custudians, accountants, auditors, altomevs, acluaries, investment personnel, administrators, and physicians; and may enter into contracts for and pay reasonable compensation for those services. Subject to an annual appropriation by the legislature, a deduction from the income of a state-administered system resulting from the payment of those costs shall be made. (6) Subject to this subsection, an investment Fiduciary may use a portion of(he income of the system to defray the costs of professional training and education, including travel costs, of system board members, which professional training and education, including travel, are directly related to the administration, management, and operation of' the system. The governing board vested with the general administration, management, and operation of the system or other decision-making body that is responsible for iruplementation and supervision of the system shall adopt an annual budget for professional training and education, including travel, authorized under this subsection. The budget adopted under this subsection shall reflect the number of board members,the size of the system,and the educational ol_jcclives of the system,The system's total aggregate cost for professional training and education, including Iravcl costs, authorized under this subsection for a fiscal year shall not exceed S150,000,00 or an amount that is equal to the lotai number of system board members multiplied by S12,000.00, whichever is less. The system's total cost fur professional training and education, including travel costs,authorized under this subsection for an individual system board member in a fiscal year shall not exceed S30,000.00. Beginning January 1, 2013, the deparlmcnt of treasury Rendered Friday,May 17.2013 Page 4 Michigan Compiled Laws Cornp ele Irrough PA 29 of 2013 J Legislative Council, State of Michigan Courle45yo;www.legislature.mi.gov shall adjust the dollar amounts in this subsection by an amount determine(] by the state trcasurcr at the end of the immediately preceding calendar year to reflect the curnuladve annual percentage change in the consumer price. index. As used in this subsection, "consumer price index" means the most comprehensive index of consumer prices available for this state from the bureau of labor statistics of the United States department of labor. (7) Before any investment services are provided, an investment sen-ice provider shall provide the investment fiduciary of the system with a complete written disclosure of all fees or other compensation associated with its relationship with the system. After investment services are provided to the investment fiduciary of the system, an investment service provider shall provide un an annual basis written disclosure of all fees including, but not limited to,commissions, 12b-1 and related fees, compensation paid or to be paid to third parties, and any other compensation paid by the system to the investment fiduciary of the system. As used in this subsection, "investment service provider" means any individual, third-party agent or consultant, or other entity that receives direct or indirect compensation for consulting, investment management, brokerage, or custody services related to the system's assets. Investment service provider does not include a retirement system. (8) The system shall be a separate and distinct trust fund and the assets of the system shall be for the exclusive benefit of the participants and their beneficiaries and of defraying reasonable expenses of investing the assets of the system. With respect to a system, an investment fiduciary shall not cause the system to engage in a transaction if he or she knows or should know that the transaction is any of the following, either directly or indirectly: (a)A sale or exchange or a leasing of any property from the system to a party in interest for less than the fair market value,or from a party in interest to the system for more than tile.fair market value, (b) A lending of money or other extension of credit from the system to a party in interest without the receipt of adequate security and a reasonable rate of interest, or from a party in interest to the system with the provision of excessive security or at an unreasonably high rate of interest. (c) A transfer to, or use by or for the benefit of, the political subdivision sponsoring the system of any assets of the system for less than adequate consideration, (d) The furnishing of goods, services, or facilities from the system to a party in interest for less than adequate consideration,or from a party in interest to the system for more than adequate consideration. (9)With respect to a system subject to this act,an investment fiduciary shall not do any of the following: (a)Deal with the assets of the system in his or her own interest or for his or her own account. (b) In his or her individual or any other capacity act in any transaction involving the system on behalf'of a party whose interests are adverse to The interests of the system or the interest of its participants or participants' beneficiaries. (c) Receive any consideration for his or her own personal account from any party dealing with the system in connection with a transaction involving the assets of the system. (10)This section does not prohibit an investment fiduciary from doing any of the following: (a)Receiving any benefit to which he or she may be entitled as a participant or participant's beneficiary of the system. (b) Receiving any reimbursement of expenses properly and actually incurred in the performance of his or her duties for the system. (c) Serving as an investment fiduciary in addition to being an officer, en-tployee, agent, or other representative of the political subdivision sponsoring the system. (d)Receiving agreed upon compensation for services from the system. (I 1)Except for an employee of a system,this state; or the political subdivision sponsoring a system,when acting in the capacity as an investment fiduciary, an investment fiduciary who is qualified under section 12c(1)(b)shall meet 1 of the following requirements: (a)Be a registered investment adviser under the investment advisers act of 1940, 15 USC 801b-1 to 80b-21, or the uniform securities act(2002),2008 PA 551, MCL 451.2101 to 451.2703. (b) Be a bank as defined under the investment advisers act of 1940, 15 USC 80b-1 to 80b-21. (c)Be an insurance company qualified under section I6(3). (12)An investment fiduciary shall not invest in a debt instrument issued by a loreign country that has been designated by the United States department of state as a state sponsor of terror. History.Add, 1982,Act 55,1md.ISE Apr.6, 1982;Am. 1996,Act 485,Imd,Eft: Dec.27, 1996; Am.2000,Act 307, hnd- Eff. Oct. 10,2000;--Am.2008,Act 273.ln,d. HE Sept.29,2008;--Am. 2008,Act 425, Irtd Eff. tau.6,2009: Ain,2009, Act 84, Itud L:fr.Aug.31,2009; Am.2012,Act W4 F.fT..Mor,29,2013. 38.1133a "MacBride principles" defined; duties of investment fiduciary; effect of unlawful Rendered Friday,May 17,2013 Page 5 Michigan Compiled Laws Ccmple'e Thruugh PA 29 of 2013 %0 Legislafive Council, State of Michigan Courtesy of wV"I'vlegislafure.rni.gov principle. See. 13a. (1)As used in this section,"NlacBride principles"mcans those requirements for companies doing business in Northern Ireland designed to do all of the following: (a) Increase the representation of individuals from underrepresented religious groups in the work three including managerial,supervisory,administrative,clerical,and technical jobs, (b) Provide adequate security for the protection of minority employees both at the workplace and while traveling to and from the workplace. (c)Ban provocative religious or political emblems from the workplace. (d) Publicly advertise all employment openings and make special recruitinent,efforts to attract applicants from underrepresented religious groups. (e) Provide that layoff, recall, and termination procedures shall not in practice favor particular religious groupings. (f) Abolish job reservations, apprenticeship restrictions, and differential employment criteria, which discriminate on the basis of religion or ethnic origin. (g) Develop training programs that will prepare substantial numbers Of'current minority employees for skilled jobs, including the expansion of existing programs and the creation of new programs to train,upgrade, and improve the skills of minority employees. (h) Establish procedures to assess, identify, and actively recruit minority employees with potential for Further advancement. (i) Appoint senior management staff members to oversee the efforts to comply with these principles and the implementation of timetables to achieve these principles. (2) With respect to investments qualified under section 14 or 20k, the investment fiduciary shall use all capital stock,common stock,preferred stock,American depositary receipts,or any other evidence of residual ownership of a corporation in which it has investments to support either of the following: (a) Shareholder resolutions and initiatives proposing the adoption of the MacBride principles for companies doing business in Northern Ireland. (b) Shareholder resolutions and initiatives proposing to recognize efforts to end employment discrimination contained in any agreement between the government of the. Republic of Ireland and the government of the United Kingdom,signed on November 15, 1985,which agreement is commonly referred to as the Anglo-Irish agreement. (3) If a provision of the MacBride principles is found to be in violation of the law of the United Kingdom by a court in the United States or the United Kingdom, then the duties of the investment fiduciary prescribed by this section shall not apply to the extent that a shareholder resolution or initiative includes the provision that has been Pound unlawful. History:Add, 1988,Act 343,find.ME Oct, 19,1988;Am.2000,Act 307,Imd.EIT Oct_ 16,2000. 38.1133b, 38.1133c Repealed, 1993, Act 214, Imd. Eff. Oct. 27, 1993. Compiler's note:The repealed sections pertained to encouragement or condonation of legally required discrimination;extension of deadlines for divestment of assets, developing and maintaining register of certain companies; and providing register to boards of retirement systems. 38.1133c Definitions; effort by fiduciary to identify scrutinized companies; assembly into scrutinized companies list; update and availability of list; procedures; report; effectiveness of section; exemption of fiduciary from conflicting statutory or common law obligations; liability; affirmative exclusion from federal sanctions; severability. Sec. 13c. (1) As used in this section: (a)"Active business operations"nicans all business operations that are not inactive business operations. (b) "Business operations" mcans engaging in commerce in any form in Sudan, including by acquiring, developing, maintaining, owning, selling, possessing; leasing, or operating equipment, facilities, personnel, products,services,personal property,real property,or any other apparatus of business or commerce. (c) "Company" mcans any sole proprietorship, organization, association, corporation, partnership, joint venture, limited partnership, limited liability partnership, limited liability company, or other entity or business association, including all wholly owned subsidiaries, majority-owned subsidiaries, parent companies, or affiliates of such entities or business associations,Baal exists For profit-making purposes. (d)"Complici(" means taking actions during any preceding 20-month period which have directly supported or promoted the genocidal campaign in Darfur, including, but not limited to, preventing Darfur's victimized population from connriunicating with each other, encouraging Sudanese citizens to speak out against an internationally approved security force for Darfur, actively working to dell)', Covar up, or alter the record on Rendered Friday,May 17.2013 Page 6 Ml:ichigan Compiled Laws Complote 1 hrough PA 29 of 2013 Cc)Legislative Council, State of Michigan Courtesy of tr,%,wJegislature.n#.yov human rights abuses in Darfur,or other similar actions. (c)"Direct holdings" in a company means all securities of that company held directly by the fiduciary cr in an account or find in which the.fiduciary owns all shares or interests. (f) 'Fiduciary" means the Michigan legislative retirement system board of trustees for the Tier 1 plan for the Michigan legislative retirement system created by the Michigan legislative retirement system act, 1957 PA 261, MCL 38.1001 to 38.1090, and the treasurer of this state for the retirement systems created under all of the following acts: (i)The state police retirement act of 1986, 1986 PA 182,MCI-38.1601 to 38.1648. (ii) The Tier 1 retirement plan available under the judge's retirement act of 1992, 1992 PA 234, MCL 3 8.2 101 to 38.2670. (iii)The Tier 1 retirement plan available under the stale employees retirement act, 1943 PA 240,MCL 38.1 to 38,69. (iv)The public school employees retirement act of 1979, 1980 PA 300,MCL 38.1301 to 38.1408. (g) "Government of Sudan" means the government in Khartoum, Sudan, which is led by the national congress party or any successor government formed on or after October 13, 2006 and does not include the regional government of southern Sudan. (h) "Inactive business operations" means the mere continued holding or renewal of rights to property previously operated for the purpose of generating revenues but not presently deployed for such purpose. (i) "indirect holdings" in a company means all securities of that company held in an account or fund,such as a mutual fund or other commingled fund,managed by 1 or more persons not employed by the fiduciary,in which the fiduciary owns shares or interests together with other investors not subject to the provisions of this net. (j)"Marginalized populations of Sudan"includes,but is not limited to,all of the following: (i)The portion of The population in The Darfur region that has been geuocidally victimized. (ii)The portion of the population of southern Sudan victimized by Sudan's north-south civil war. (iii)The Beja, Rashidiya,and other similarly underserved groups of eastern Sudan. (iv) The Nubian and other similarly underserved groups in Sudan's Abyei, Southern Blue Nile, and Nuba Mountain regions. (v)The Amri,llatnadab,Manasir,and other similarly underserved groups of northern Sudan. (k) "Military equipment"means weapons,arms,military supplies, and equipment that readily may be used for military purposes, including, but not limited to, radar systems or military-grade transport vehicles; or supplies or services sold or provided directly or indirectly to any force actively participating in armed conflict in Sudan. (� "Mineral extraction activities" includes exploring, extracting, processing, transporting, or wholesale selling or trading of elemental minerals or associated metal alloys or oxides, including gold, copper, chromium, chromite,diamonds, iron, iron ore, silver, tungsten, uranium, and zinc, as well as facilitating such activities,including by providing supplies or services ill support of such activities. (m) "Oil-related activities" includes,but is not limited to,owning rights to oil blocks;exporting,extracting, producing, refining, processing, exploring for, transporting, selling, or trading of oil; constructing, maintaining, or operating a pipeline, refinery, or other oil-field infrastructure; and facilitating such activities, including by providing supplies or services in support of such activities, provided that the mere retail sale of gasoline and related consumer products shall not be considered oil-related activities. (n) "Power production activities" means any business operation that involves a project commissioned by the national electricity corporation of Sudan or other similar government of Sudan entity whose purpose is to facilitate power generation and delivery,including,but not limited lo, establishing power-generating plants or hydroelectric darns,selling or installing components for the project,providing service contracts related to the installation or maintenance of the project, as well as facilitating such activities, including by providing supplies or services in support of such activities. (o) "Scrutinized company" means any company, except n social development company and a company described in subsection (10) that is not complicit in the Darfur genocide, that meets the criteria in subparagraph(i),(ii),or(iii): (i)The company has business operations that involve contracts with or provision of supplies or services to 1 or more of the following: (A)The government of Sudan. (B)Corripanies in which the government of Sudan has any direct or indirect equity share. (C) Government of'Sudan-commissioned consortia or projects. (D) Companies involved in government of Sudan•-commissi(ined consortia or projects and that have 1 or more of the following: Rendered Friday,May 17,2.0':.1 Page 7 41 chigan Comp'kc!Laws Complete Through PA 29 of 2013 ce)Legislative Council,State of Michigan Courtesy of t1 wwleg!staiure.mi.gov (1) More than 10% of the company's revenues or assets linked to Sudan involve oil-related activities or mineral extraction activities, less (han 75°4) of the company's revenues or assets linked to Sudan involve contracts with or provision of oil-related or mineral extracting products or services to the regional government of southern Sudan or a project or consortium created exclusively by that regional government, and the company has frilcd to take substantial action. (11) More than 10% of the company's revenues or assets linked to Sudan involve power production activities, less than 75% of the company's power production activities include projects whose intent is to provide power or electricity to the marginalized populations of Sudan, and the company has Iailed to lake substantial action. (H)The company is complicit in the Darfur genocide, (W) The company supplies military equipment within Sudan, unless the fiduciary finds that the military equipment will not be used to facilitate offensive military actions in Sudan or the fiduciary finds that the company implements rigorous and verifiable safeguards to prevent use of that equipment by forces actively participating in armed conflict. (p) "Social development company" means a company whose primary purpose in Sudan is to provide humanitarian goods or services, including medicine or medical equipment, agricultural supplies or infrastructure, educational opportunities, journalism-related activities, information or information materials, spiritual-related activities, services of a purely clerical or reporting nature, food, clothing, or general consumer goods that are unrelated to oil-related activities, mineral extraction activities, or power production activities. (q) "Substantial action" means adopting, publicizing, and implementing a formal plan to cease scrutinized business operations within 1 year and to refrain from any new business operations, undertaking significant humanitarian efforts in coniunction with an international organization, the government of Sudan, the regional government of southern Sudan,or a nonprofit entity and evaluated and certified by an independent third party to be substantial in relationship to the company's Sudan business operations and of benefit to 1 or more marginalized populations of Sudan, or through engagement with the government of Sudan, materially improving conditions for the genocidally victimized population in Darfur. (2)Within 90 days after the effective date of the amendatory act that added this section, the fiduciary shall make its best efforts to identify all scrutinized companies in which the fiduciary has direct or indirect holdings or could possibly have such holdings in the Raure.The efforts shall inchrcic 1 or more of the following: (a) Reviewing and relying, as appropriate in the fiduciary's judgment, on publicly available information regarding companies with business operations in Sudan, including information provided by nonprofit organiz<ltions,research firms,international organizations,and government entities. (b) Contacting asset managers contracted by the fiduciary that invest in companies with business operations in Sudan. (c) Contacting other institutional investors that have divested from or engaged with companies (hat have business operations in Sudan. (3) At the end of(lie 90-day period or by the first meeting of the fiduciary following the 90-day period described in subsection(2),the fiduciary shall assemble all scrutinized companies identified into a scrutinized companies list. (4) The fiduciary shall update the scrutinized companics list on a quarterly basis based on evolving information from, among other sources, those sources listed in subsection (2). The fiduciary shall make the scrutinized companies list freely available to the fiduciaries of other public retirement systems located in this state if making the list available does not violate any agreements with third parties or reveal proprietary information of a third party. (5)The fiduciary shall adhere to the following procedure for companies on the scrutinized companies list: (n)The fiduciary shall immediately deteruine the companies on the scrutinized companies list in which the Fiduciary oversees pursuant to its responsibilities as defined in subsection(1)(1). (b) For each company identified in subdivision (a) wi(h only inactive business operations, the fiduciary shall send a written notice informing the company of this section and encourage the company to continue to refrain from initiating active business operations in Sudan until it is able to avoid scrutinized business operations and further encourage the company to engage in substantial humanitarian operations in the country.The fiduciary shall continue the correspondence on a scmianmrai basis. (c) For each company newly identified in subdivision, (a) with active business operations, the fiduciary shall send a written notice informing the company of'its scrutinized company status and that it may become Subject to divestment by the fiduciary. the notice. shall offer the company the opportunity to clarify its Sudan-related activities and shall encourage the company, within 90 days, to either cease its scrutinized business operations or Convert such oper iion> to inactive busines er s opations in order to avoid qualifying for Rendered Friday,clay 17;2013 Pace 9 M.chigan Compiled Laws Complele-through PA 29 of 2013 (c,)Legislative Council, State of I0chigan Courtesy of lvww.legislature.mi:gov divestment by the fiduciary. (d) if, within 90 days following the fiduciary's first engagement with a company pursuant to subdivision (c), that company ceases scrutinized business operations,the company shall be removed from the scrutinized companies list and this section shall cease to apply to it unless it resumes scrutinized business operations. If, within 90 days following the fiduciary's test engagement, the company converts its scrutinized active business operations to inactive business operations,the company shall be subject to this section. (c)If, after 90 days following the fiduciary's first engagement with a company pursuant to subdivision(c), the company continues to have scrutinized active business operations;and only while the corrlpany continues to have scrutinized active business operations,the fiduciary shall sell,redeem,divest,or withdraw all publicly traded securities of the company,according to the following schedule: (i) At least 50% of the assets shall be removed from the fiduciary's assets under management within 9 months after the company's most recent appearance on the scrutinized companies list. (d) 100% of the assets shall be removed from the Fiduciary's assets under management within 15 months after the company's most recent appearance on the scrutinized companies list. (f) Except as provided in subdivisions (g) and (h), at no time shall the fiduciary acquire securities of companies on the scrutinized companies list that have active business operations. (g)No company which the United States government affirmatively declares to be excluded from its present or any future federal sanctions regime relating to Sudan shall be subject to divestment or investment prohibition pursuant to subdivisions(e)and(f). (h) Subdivisions(e) and (f)shall not apply to indirect holdings in actively managed investment finds. For purposes of this section, actively managed investment funds include private equity funds and publicly traded funds. Before the fiduciary invests in a new private equity fiord that is not in the fiduciary's portfolio as of the effective date of the amendatory act that added this section, the fiduciary shall perform due diligence to prevent investment in any private equity fund where the offering memorandum or prospectus identifies the purpose of the private equity fund as investing in scrutinized companies with active business operations in Sudan.The fiduciary is not required to identify holdings in private equity funds or submit engagement letters to those finds. If the manager of a publicly traded, actively managed fund that is in the fiduciary's portfolio on the effective date of the amendatory act that added this section creates a similar publicly traded, actively managed fund with indirect holdings devoid of identified scrutinized companies with scrutinized active business operations as defined in this section, the fiduciary shall replace all applicable investments with investments in the similar fund in an expedited time frame consistent with prudent investment standards. (6) The fiduciary shall file a publicly available report to the legislature that includes the scrutinized companies list within 30 days after the list is created. Annually (hereafter, the fiduciary shall file a publicly available report to the legislature and send a copy of that report to the United States presidential special envoy to Sudan that includes all of the following: (a)A summary of correspondence with companies engaged by the fiduciary under this section. (b)All investments sold,redeemed,divested,or withdrawn in compliance with this section. (c)All prohibited investments under this section. (d)Any progress made under subsection(5)(h). (7)This section is effective until the first occurrence of any of the following: (a)The United States congress or the president of the United States declares that the Darfur genocide has been halted for at least 12 months. (b)The United States revokes all sanctions imposed against the government of Sudan. (c) The congress or presidermt of the United States declares that the government of Sudan has honored its commitments to cease attacks on civilians, demobilize and demilitarize the Janjaweed and associated militias, grant free and unfettered access for deliveries of humanitarian assistance,and allow for the safe and voluntary return of refugees and internally displaced persons. (d) The congress or president of the United Slates, through legislation or executive order, declares that mandatory divestment of the type provided for in this act interferes with the conduct of United Stales foreign policy. (8) With respect to actions taken in compliance with this section, including all good faith deterninations regarding companies as required by this section, the fiduciary shall be exempt from any conflicting statutory or common law obligations, including any obligations in respect to choice of asset managers, investment funds,or investments for the fiduciary's securities portfolios. (9) The fiduciary, members of an investment advisory committee, and any person with decision-making authority with regard to investments of the fiduciary- shall not be held liable for any action undertaken for(he purpose of complying with or executing the innudate.s required)under this section. (10) Scrutinized company does not include a company that the federal government has affirmatively Rendered Friday,May 17,2013 Page 9 Michigan Compiled Laws Complele Through PA 29 of 2013 (o Legislative Council, State of Michigan Courtesy of wrvw.legisloture.mLgov excluded from federal sanctions for b1.1J1t1CSS the scrutinized company conducts relating (o Sudan, or that has consistently obtained applicable licenses or approvals to conduct transactions with Sudan. If the fiduciary becomes aware at any time that a company(hat has not been affirmatively excluded from federal sanctions for business it conducts relating to Sudan and has not received from the United States government applicable licenses or approvals to conduct transactions with Sudan, that company is immediately subject to subsection (5). (11) if any provision, section, subsection, sentence, clause, phrase, or word of this legislation or its application to any person or circumstance is louud to be invalid, illegal, unenforceable, or unconstitutional, the same is hereby declared to be severable and the balance of this legislation shall remain effective and functional notwithstanding such invalidity, illegality, unenforceability,or unconstitutionality. Usto y:Add.2008,Act 233,Ind.F.ff.July 17,2008, 38.1133d Definitions; scrutinized companies; identification by fiduciaries; assembling scrutinized companies list; update by fiduciary; procedure; report; effectiveness of section; conditions; liability of fiduciary; scrutinized company affirmatively excluded from federal sanctions; effect; severability. See, 13d.(1)As used in this section: (a)"Active business operations"means all business operations that are not inactive business operations. (b) "Business operations" means engaging in commerce in any form in Iran, including by acquiring, developing, maintaining, owning, selling, possessing, leasing, or operating equipment, facilities, personnel, products,services,personal properly,real property,or any other apparatus of business or commerce. (c) "Company" means any sole proprietorship, organization, association, corporation, partnership, joint venture,limited partnership,limited liability partnership, limited liability company,or other entity or business association, including all wholly owned subsidiaries, majority-owned subsidiaries, parent companies, or affiliates of such entities or business associations, that exists for profit-making purposes. (d) "Direct holdings" in a company means all securities of that company held directly by the fiduciary or in an account or fund in which the fiduciary owns all shares or interests. (e) "Fiduciary" means the ivlichigan legislative retirement system board of trustees for the Tier 1 plan for the Michigan legislative retirement system created by the Michigan legislative retirement system act, 1957 PA 261, MCL 38.1001 to 38,1080, and the treasurer of(his stale for the retirement systems created under all of the following acts: (i)The state police retirement act of 1986, 1986 PA 182.MCL 38.1601 to 38.1648. (H) The Tier I retirement plan available under the judge's retirement act of 1992, 1992 PA 234, MCL 38.2101 to 38.2670. (W)The Tier 1 retirement plan available under the stale employees retirement act, 1943 PA 240,MCL 38.1 to 38.69, (it))The public school employees retirement act of 1979, 1980 PA 300,MCL 39.1301 to 38.1409. (1) "Government of Iran" means the government of Iran, its instrumentalities, and companies owned or controlled by the government of Iran. (g) "inactive business operations" means the mere continued holding or renewal of rights to property previously operated for the purpose of generating revenues but not presently deployed for such purpose. (h) "Indirect holdings" in a company means all securities of that company held in an account or fond,such as a mutual fund or other commingled fund, managed by 1 or more persons not employed by the fiduciary,in which the fiduciary owns shard or interests together with other investors not subject to the provisions of this act. (i) "Iran"means the Islamic republic of Iran. 0) "Military equipment" mans weapons, arms, military supplies, and equipment that readily may be used for military purposes,including,but not limited to,radar systems or military-grade transport vehicles. (k) "Mineral extraction activities" includes exploring, extracting, processing, transporting, or wholesale selling or trading of elemental minerals or associated metal alloys or oxides, including gold; copper, chromium, chromite, diamonds, iron, icon ore, silver,tungsten, uranium,and zinc, as well as Facilitating such activities,including by providing supplies ur services in support ol'such activities. (1) "Oil-related activities" includes, but is not limited to, owning rights to oil blocks; exporting, extracting, producing, refining, processing, exploring fitr, transporting, selling, or trading of oil; constructing, maintaining, or operating a pipeline, refinery, or other oil-field infrastructure; and facilitating such activities, including by providing supplies or services in support of such activities,provided that (he mere retail sale of gasoline and related consumer products shall not be considered oil-related activities. (nr) "Petroleum resources" nicans pctruletnn or natural gas. 4enderei Friday,May 17,2013 Page 10 Michigan Compiled Laws Complete Through PA 29 of 2013 (:;Legislative Council, State of Michigan Courtesy of www.leglslalure.mi:gov (n) "Power production activities" means any business operation that involves a project commissioned by the government of [ran whose purpose is to facilitate power generation and delivery, including, but not limited to, establishing power-generating plants or hydroelectric dams, selling or installing components for the project, providing service contracts related to the installation or maintenance of the project, is well as facilitating such activities,including by providing supplies or services in support of such activities. (o) "Scrutinized company" means any company not described in subsection (10) that has business operations that involve contracts with or provision of supplies or services to the government of Iran; companies in which the government of]ran has any direct or indirect equity share, consortiums, or projects commissioned by the government of Iran; or companies involved in consortiums and projects commissioned by the government of Iran and 1 or more of the following: (i) More than 10% of the company's total revenues or assets are linked to Iran, and involve oil-related activities or mineral-extraction activities,and the company has failed to take substantial action. (d) The company has, with actual knowledge, on or after August 5, 1996, made an investment of $20,000,000.00 or more, or any combination of investments of at least $10,000,000.00 each, which in the aggregate equals or exceeds $20,000,000.00 in any 12-month period, and which directly or significantly contributes to the enhancement of Iran's ability to develop petroleum resources. (p) "Substantial action" means adopting, publicizing, and implementing a formal plan to cease scrutinized business operations within I year and to refrain from any new business operations. (2)Within 90 days after the effective date of the amendatory act that added this section,the fiduciary shall make its best efforts to identify all scrutinized companies in which the fiduciary has direct or indirect holdings or could possibly have such holdings in the future.The efforts may include 1 or more of the following: (a) Reviewing and relying, as appropriate in the fiduciary's judgment, on publicly available information regarding companies with business operations in Iran, including information provided by nonprofit organizations,research firms,international organizations,and government entities. (b) Contacting asset managers contracted by the fiduciary that invest in companies with business operations in Iran. (c) Contacting other institutional investors that have divested from or engaged with companies that have business operations in Iran. (d) Reviewing the laws of the United Statcs regarding the levels of business activity that would cause application of sanctions against companies conducting business or investing in countries that are designated state sponsors of terror. (3) At the end of the 90-day period or by the first meeting of the fiduciary following the 90-day period described in subsection(2),the fiduciary shall assemble all scrutinized companies identified into a scrutinized companies list. (4) The fiduciary shall update the scrutinized companies list on a quarterly basis based on evolving information from, among other sources, those sources listed in subsection (2). The fiduciary shall make the scrutinized companies list freely available to the fiduciaries of other public retirement systems located in this state if' making the list available does not violate any agreements with third parties or reveal proprietary information of a third party. (5)The fiduciary shall adhere to the following procedure for companies on the scrutinized companies list: (a)Tile fiduciary shall immediately determine the companies on the scrutinized companies list in which the fiduciary oversees pursuant to its responsibilities as described in subsection (I)(c), (b)For each company identified in subdivision(a)with only inactive business operations,not later than 60 days after the identification of the company, the fiduciary shall send a written notice informing the company of(his section and encourage the company to continue to refrain from initiating active business operations in ]ran until it is able to avoid scrutinized business operations. The fiduciary shall continue the correspondence on a semiannual basis. (c) For each company newly identified in subdivision (a)with active business operations,not later than 60 days after the company is newly identified, the fiduciary shall send a written notice informing the company of its scrutinized company status and that it may become subject to divestment by the fiduciary.'file notice shall offer the company the opportunity to clarify its Iran-related activities and shall encourage the company, within 90 days, to either cease its scrutinized business operations through substantial action or convert such operations to inactive business operations in order to avoid qualifying for divestment by the fiduciary. (d) If, within 90 days following the fiduciary's first engagement with a company pursuant to subdivision (c), that company announces a plan ol'substanlial action, the company shall be removed from the scrutinized companies list and this section shall cease to apply to it unless it fails to iunplemenl its plan of substantial action within the designated time frame. If, within 90 days following the fiduciary's first engagement, the company converts its active business operations to inactive business operations,the company shall be subject Rendered Friday.ytay 17,2013 Page 11 N ichigan Compiled taws Complete l hrough PA 29 of 2013 (0 Legislative Council, State of Michigan Courtesy of mvw.legislature.rid.gov to this section. (e)If,after 90 clays following the fiduciary's first engagement with a company pursuant to subdivision(c), the company continues to have active business operations, and only while the company continues to have active business operations,the fiduciary shall sell, redeem,divest,or withdraw all publicly traded securities of the company,according to the following schedule: (i) At least 50% of the assets shall be removed from the fiduciary's assets under management within 9 months a ier the company's most recent appearance on the scrutinized companies list. (ii) 100% of the assets shall be removed from the fiduciary's assets under management within 15 months after the company's most recent appearance on the scrutinized companies list, (f) Except as provided in subdivisions (g) and (h), at no time shall the fiduciary acquire securities of companies on the scrutinized companies list that have active business operations. (g)No company which the United States government affirmatively declares to be excluded from its present or any future federal sanctions regime relating to Iran shall be subject to divestment or investment prohibition pursuant to subdivisions(e)and(f). (h) Subdivisions(c)and (f) shall not apply to indirect holdings in actively managed investment funds.For purposes of this section, actively managed investment funds include private equity funds and publicly traded hands. Before the fiduciary invests in a new private equity fund or publicly traded fund that is not in the fiduciary's portfolio as of the effective date of the amendatory act that added this section, the fiduciary shall perform due diligence to prevent investment in any private equity fund or publicly traded find where the offering memorandum or prospectus identifies a purpose of the private equity fund or publicly traded fund as investing in scrutinized companies with active business operations in Iran. The fiduciary is not required to identify holdings in private equity funds or submit engagement letters to those funds. if the manager of a publicly traded, actively managed fund that is in the fiduciary's portfolio on the effective date of the amendatory act that added this section creates a similar publicly traded, actively managed fund with indirect holdings devoid of identified scrutinized companies with scrutinized active business operations as defined in (his section, the fiduciary shall replace all applicable investments with investments in the similar fund in an expedited time frame consistent with prudent investment standards. (6) The fiduciary shall file a publicly available report to the legislature that includes the scrutinized companies list within 30 days after the list is created, Annually thereafter, the fiduciary shall file a publicly available report to the legislature that includes all of the following: (a)A summary of correspondence with companies engaged by the fiduciary under this section. (b)All investments sold,redeemed,divested,or withdrawn in compliance with this section. (c)All prohibited investments under this section. (d)Any progress made under subsection(5)(h). (7)This section is no longer effective upon the occurrence of 1 or more of the following: (a) The congress or president of the United States affirmatively and unambiguously states, through legislation,executive order,or written certification from the president to congress,that the government of Iran has ceased to acquire weapons of mass destruction and support international terrorism. (b)The United States revokes all sanctions imposed against the government of Iran. (c) The congress or president of the United Slates affirmatively and unambiguously states, through legislation,executive order, or written certification from the president to congress,that mandatory divestment of the type provided for in this section interferes with the conduct of United States foreign policy. (8) With respect to actimis taken in compliance with this section, including all good faith determinations regarding companies as required by this section, the fiduciary shall be exempt from any conflicting statutory or common law obligations, including any obligations in respect to choice of asset managers, investment fiends,or investments for the fiduciary's securities portfolios. (9) The fiduciary, members of an investment advisory committee, and any person with decision-making authority with regard to investments of(he fiduciary shall not be held liable fbr any action undertaken for the purpose of complying with or executing the mandates required under this section. (10) Scrutinized company does not include a company that the federal government has affirmatively excluded from federal sanctions for business the scrutinized company conducts relating to Iran, or that has consistently obtained applicable licenses or approvals to conduct transactions with Iran. If the fiduciary becomes aware at any time(hat a company that has not been affirmatively excluded from federal sanctions for business it conducts relating to Iran and has not received from the United States government applicable licensers or approvals to conduct transactions ,vilh Iran, that company is immediately subjec(to subsection(5). (11) If any peovisiou, section, subsection, sentence, clause, phrase, or word of this legislation or its application to any person or circumstance is found to be invalid, illegal, unenforceable, or unconstitutional, the same is hereby declared to be severable and the balance of this legislation shall remain effective and Rendered Friday,May 17,2013 Page 12 Michigan Compiled 1-aws Complete Through PA 29 of 2013 (0 Legislative Council, State of Michigan Courtesy of www.leyislature.mLgov functional notwithstanding such invalidity,illegality, uneuforceability,or unconstitutionality. History:Add,2005,Act 2-12,Inid.h_'ff July 17,2008. 38.1133e Prohibited conduct by investment fiduciary, service provider, or covered associate of service provider; exceptions; definitions. Sec. 13e- (1) An investment fiduciary shall not make a payment from the assets of a system to a service provider if the service provider or a covered associate of the service provider has made a contribution to an official of a governmental entity during the immediately preceding 24-calendar-month period, which period does not include any calendar month before the effective date of(his section. An investment fiduciary, a service provider, or a covered associate of a service provider shall not do anything indirectly that, if done directly, would violate this subsection. This subsection does not apply under any of the following circumstances: (a) The contribution was made by a service provider or covered associate of the service provider to an official of a governmental entity for whom the service provider or covered associate of the service provider was entitled to vote at the time of the contribution and the contributions by the service provider or covered associate of the service provider to that official in the aggregate do not exceed$350.00 per election, (b) The contribution was made by a service provider or covered associate of the service provider to an official of a governmental entity for whom the service provider or covered associate of the service provider was not entitled to vote at the time of the contribution and the contributions by the service provider or covered associate of the service provider to that official in the aggregate do not exceed$150.00 per election. (c)The contribution was wade to an official of a governmental entity by an individual inore than 6 months before lie or she became a covered associate of the service provider. (d)The contribution was made to an official of a governmental entity by a covered associate of the service provider and all of the following requirements are met: (i)The service provider discovers the contribution that violates this subsection on or before the expiration of 4 months after the contribution was made. (ii)The contribution that violates this subsection was for$350.00 or less. (iii) The covered associate of the service provider obtains the return of the contribution that violates this subsection on or before the expiration of 60 calendar days after the date of the discovery of the contribution under subparagraph(i). (2)As used in this section: (a)"Contribution"means a payment made under any of the following circumstances: (i)For the purpose of influencing an election for federal,state,or local office. (ii)For a debt incurred in connection with an election for federal,state,or local office. (iii)For transition or inaugural expenses of a successful candidate for federal,state,or local office. (iv)To a legal defense fund established by or on behalf of an official of a governmental entity. (b)"Covered associate of the service provider"means any of the following: (i) A general partner, managing member, agent, or officer of the service provider or any other individual with a similar status or lunclion for the service provider. (ii) An employee of the service provider who solicits a governmental entity on behalf of the service provider and any individual employed by the service provider who directly or indirectly supervises that employee. (iii) A political action committee controlled by the service provider or by any individual described in subparagraph (i) or (ii). As used in this subparagraph, "political action committee" means a political committee or an independent committee as those terms are defined in the Michigan campaign finance act, 1976 PA 388,MCC, 169,201 to 169.282. (c) "Governmental en(ity" means this state or a political subdivision of this state. Governmental entity includes a system and an agency, authority, or instrumentality of this state or of a political subdivision of this state. (d) "Official of a governmental entity" means an individual who, at the time of the contribution, was an incumbent, candidate, or successful candidate for in elective office in a governmental entity if the office meets any of the following requirements: (i) Is directly or indirectly responsible for or can influence the outcome of the hiring of a service provider by a system sponsored by the governmental entity. (ii)Has the authority to appoint an individual who is directly or indirectly responsible for or can influence the outcome of the hiring of a service provider by a system sponsored by the governmental entity. (e)"Payment" nicans a gift,subscription, loan,advance, or deposit of money or anything of value. (t) "Regulated inveAnent adviser" nicans an investment adviser ar covered associate of in investment RendeNd Friday,May 17,2013 Page 13 Michigan Compiled Laws Complete Through PA 29 of 2013 (0 Legislative Council, Stale of Michigan Courtesy of www.legisl)ture.n7i.gov adviser that is regulated under the investment advisers act of 1940, 15 USC 80b-1 to 80b-21, (g) "Service provider" means a person retained to provide services to a system and includes investment advisers, consultants, custodians, accountants, auditors, attorneys, actuaries, administrators, and physicians. Service provider includes an investment service provider as defined in section 13(7), Service provider does not include a regulated investment adviser. History:Add.2012,Act 347,Eff.Mar,28,2013. 38.1133f Breach of public trust by investment fiduciary or service provider; "service provider"defined. Sec. 13f. (1) An investment fiduciary or a service provider who is convicted of or who enters a nolo contendcre plea accepted by a court for a felony or misdemeanor arising out of his or her service to a system is considered to have breached the public trust and shall reimburse the system for all costs, including legal defense fees, that were paid by the system. The system shall use reasonable efforts to collect any fees and costs recoverable under this subsection. (2)As used in this section, "service provider"means that term as defined in section 13e. History:Add.2012,Act 347,Eff.Mar.28,2013. 38.1134 Investment in stock or global security; Sec. 14. (1) An investment fiduciary shall not invest more than 70% of a system's assets in stock or the type of global security described in section 12b(4)(b). An investment fiduciary shall not invest in more than 5%of(lie outstanding stock of any 1 corporation,or invest more than 5%of a system's assets in the stock of any 1 corporation,unless otherwise provided in this act. (2)An investment fiduciary may invest in stock or global securities under subsection(1)if it meets I of the following requirements; (a) is registered on a national securities exchange regulated under title 1 of the securities exchange act of 1934, 15 USC 78a to 78pp,or on an industry-recognized exchange outside the United States, (b) Is on the national association of securities dealers automated quotation system or a successor to this system or is on an industry-recognized system outside the United States. (c)Is issued pursuant to rule 144a under the securities act of 1933, 17 CPR 230.144a. (3) Notwithstanding subsection(2), an investment fiduciary may designate an American depository receipt or the type of global security described in section 12b(4)(b)that satisfies the requirements of subsection(2)as an investment qualified under this section or ns an investment in global securities qualified under section 20k. llislory:Add, 1982,Act 55,find.Eff Apr.6, 1982;Am. 1996,Act 485,Ind_Eff.Dec.27, 1996;Am.2000,Act 307,Imd.Eff, Oct.16,2000,Am.2012,Act 347,Eff.Mar,28,2013. 38.1135 Investment in investment companies. Sec. 15. An investment fiduciary may invest in investment companies registered tinder the investment company act of 1940, 15 USC 80a-1 to 80a-64. "Ihe management company of the investment company shall have been in operation for at ]east 5 years and shall have assets under management of more than $500,000,000,00, An investment company may be established as a limited partnership, corporation, limited liability company, trust, or other organizational entity for which the liability of an investor does not exceed the arnotmt of the investment under the laws of the United States or the applicable laws of the state, district, territory, or foreign country under which the investment company was established. An investment in an investment company shall be considered an investment in the underlying assets for all purposes under this act. Ilistory:Add. 1982,Act 55,Imd.Eff.Apr.6, 1982;Am, 1996,Ad 485,Imd.Eff,Dec.27, 1996; Am,2012,Act 347,Eff.Mar. 28,2013. 38.1136 Investment in annuity investment contracts or participations in separate accounts of life insurance company; investment in general account of life insurer; requirements. Sec. 10. (1) An investment fiduciary may invest in annuity investment contracts or participations in separate real estate, mortgage, bond, stock, or other special investment accounts of a life insurance company au1hori7cd to do business in this state. An investment in such a separate account shall be considered an investment in stock under section 14 only to the extent that the separate accouut's assets include stock, and then only for the pulposc of determining the 70%maximum investment limit under section 14,An investment in such a separate account shall also be considered an investment in real or personal property under section 19(1), but only to the extent that the separate account's assets include real or personal property,and then only for the punoose of determining the 5%maximuno inveshnent limit under section 19(1). (2) Au iuvestnleni fiduciary may invest in the general account ofa life insurer authorized to do business in Rendered Friday.vlay 17,2013 Page 14 Michigan Compiled Laws Complete Through PA 29 of 2013 U Legislative Council, State of Michigan Courtesy of movdegislalure,migov this slate under the insurance code of 1956, 1956 PA 218, MCL 500.100 to 500.8302,but the total amount of assets of any I syslern invested in any 1 insurer shall riot exceed 501K of the capital and surplus of the insurer. (3) A life insurance company under this section shall have been in operation for at least 5 years and have assets under management of snore than $500,000,000.00. The insurance company shall have a claims-paying ability rating no less than ,single A according to A.M. Best & company or AA- according to Duff&Phelps credit rating core., and an overall company financial strength rating no less than Aa3 according to Moody's investors service, inc. or AA-according to Standard&Poor's ratings group. History:Add, 1982,Act 55,Inul. riff.Apr,6, 1982-Ani. 1996,Act 485,Imd.Eff,Dec.27, 19961----Am.2000,Act 307,find.Eff. Oct, 16,2000. 38.1137 Other authorized investments; prohibited investments. Sec. 17. (1)An investment fiduciary may invest in any of the following: (a)Obligations issued, assumed,or guaranteed by a solvent entity created or existing under the laws of the United Slates or of any state, district,or territory of the United Slates,which are not in default as to principal or interest,including,but not limited to,the following: (i) Obligations secured by the mortgage of real property or the pledge of adequate collateral if,during any 3, including 1 of the last 2, of the 5 fiscal years immediately preceding the time of investment, the net earnings of the issuing, assuming, or guaranteeing entity available for fixed charges, as determined in accordance with standard accounting practice, shall have been not less than the total of its fixed charges for the year on an overall basis, nor less than 1-1/2 limes its fixed charges for the year on a priority basis after excluding interest requirements on obligations subordinate to the issue as to security_ (ii) Equipment trust certificates of railroad companies organized under the laws of any state of the United States or of Canada or any of its provinces, payable within 20 years from their date of issue, in annual or semiannual installments, beginning riot later than the fifth year after the date of issue,which certificates are a first lien on the specific equipment pledged as security for the payment of the certificates, and which certificates are either the direct obligations of the railroad companies or are guaranteed by the railroad companies,or are executed by trustees holding title to the equipment. (iii) Obligations other than those described in subparagraphs (i) and (ii) and in section 12c(3). The aggregate investments made under this subparagraph shall not exceed 15%of the system's total assets. (b)Obligations secured by a security interest in real or personal property and a lease obligation given by a solvent entity whose obligations would be qualified investments under the provisions of this act, if the investment does not exceed 100%of the appraised value of the property subject to the lease, and if all of the following requirements are met: (i)'file lease has an unexpired term equal to or exceeding the rcmaining tern of the investment. (ii)The]ease is uoncancelable unless the lessee first pays the sum of all unpaid rents due or to become due during tile,remaining lease term. (iii) The lease provides for net rental payments equal to or exceeding the periodic payments on the investment. (iv) The lease provides that the net rental payments are to be made without abatement or offset during the full term of the lease. (1))The lease and the lease payments are assigned to the system, an agent of the system,or an independent trustee. (c) Obligations issued, assumed, or guaranteed by the United States, its agencies, or United States government-sponsored enterprises. (d) Obligations of a possession, territory, or public instrumentality of the United States, or of any state, city, county,township, village, school district,authority, or any other governmental unit having the power to levy taxes,or in obligations of other similar political units of the United States.These investments shall be of investment grade:. These investments shall not be permitted if in the 3 preceding years the governmental unit has failed to pay its debt or any part of its debt or the interest on the deb(. The aggregate investments made under this subdivision shall not exceed 5%of the system's total assets. (e) Banker's acceptances, commercial accounts, certificates of deposit; or depository receipts issued by a bank,trust company,savings and loan association,or a credit union. (1) Commercial paper rated at the time of purchase within the 2 highest classifications established by not less than 2 national rating services,and which matures within 270 days after the date of issue. (g) Repurchase agreements for the purchase of securities issued by the United States government or its agencies and executed by a bank or trust company or by members of the association of primary dealers or other recognized dealers in United States government securities. (h) Reverse repurchase agreements for the sale of'securities issued by the United Stales government or its Rene eyed Friday,May 17,2013 Page 15 Michigan Compiled Laws Complete Through PA 29 of 2013 g�Legislative Council, State of Michigan Courtesy of www.legislature.rm.gov agencies and executed with a bank or(rust company or with members of the association of primary dealers or other recognized dealers in United States government securities. (i)Any investment otherwise permitted by this section in which the interest rate varies from time to time. Notwithstanding a provision of any other act to the contrary, a loan shall not be considered to be in violation of the usury statutes of this state by virtue of the fact that the loan is made on a variable interest rate basis. 0)Obligations secured by any of the obligations described in subdivision(a)or(c), (k) Dollar denominated obligations issued in the United States by foreign governments, supranationals, banks,or corporations.These investments shall be of investment grade. (2) Except as otherwise provided in this act and except for obligations described in subsection (1)(c), an investment fiduciary shall not do any of the following: (a)Invcst in more than 5%of the outstanding obligations of any 1 issuer. (b)Invcst more than 5%of a system's assets in the obligations of any 1 issuer. Histeu'y:Add. 1982,Act 55,hnd.Eff.Apr.6, 1982,•—Am. 1996,Act 485,lord.F.1T,Dec.27, 1996;—Am,2000,Act 307,hnd.Eff. Oct.16,2000p---Am.2012,Act 347,Eff.Mar.28,2013. 38.1138 Investment in real estate or mortgages on certain leased real property. Sec. I S. An investment fiduciary may invest in real estate or mortgages on real property leased or to be leased to the United Slates government,or to a state, territory,agency, authority, or public instrumentality of the United States,if the investment does not exceed 100%of the appraised value of the property subject to the mortgage and if all of the following requirements are met: (a) The lease has an unexpired term exclusive of optional renewal terms equal to or greater than the remaining term of the investment. (b) The lease provides for net rental payments equal to or greater than the periodic payments on the investment. (c)The lease and the lease payments are assigned to the system. llistory:Add. 1982,Act 55,lhnd.Fff.Apt,6, 1982, 38.1139 Investment in real estate investment trust or real or personal property. Sec. 19. (1) An investment fiduciary may invest up to 10% of a system's assets in publicly or privately issued real estate investment trusts or in real or personal property otherwise qualified pursuant to section 15, 16,or 20c. (2) In addition to investments authorized under subsection (1),an investment fiduciary of a system having assets of more than$100,000,000.00 may do any of the following: (a) Invest in, buy, sell, hold, improve, lease, or acquire by foreclosure or an agreement in lice of foreclosure,real or personal property or an interest in real or personal property. (b)Develop,maintain,operate,or lease the real or personal property referred to in subdivision(a). (c) Form or invest in 1 or more limited partnerships, corporations, limited liability companies, trusts, or other organizational entities for which liability of an investor cannot exceed the amount of the investment under the laws of the United Stales or of any state,district,or territory of the United States or foreign country, The limited partnership,corporation,limited liability company, trust,or other organizational entity may invest in, buy, sell, hold, develop, improve, lease, or operate real or personal property, or originate a mortgage or invest in an annuity separate account that invests in real or personal property to hold title to, improve; lease, manage, develop, maintain, or operate real or personal properly whether currently held or acquired after December 27, 1996. An entity formed under this subdivision has the right to exercise it]] powers granted to the entity by the laws of the jurisdiction of formation, including, but not limited to, the power to borrow money in order to provide additional capital to benefit and increase the overall return on the investment held by the.entity. (d)Invest in inveslmc;nts otherwise qualified pursuant to subsection(1). (3) Except as otherwise provided in this section,the aggregate investments made under subsection (2)shall not exceed 10%of the assets of the system.The purchase price of an investment made under this section shall not exceed the appraised value of the real or personal property. (4) If the investment fiduciary of a system is the state treasurer, investments described ili subsection (1) or (2)may exceed 10%of the assets of the system. (5) An investment qualified under this section in which the underlying asset is an interest in real or personal property constitutes an investment under this section for the purpose of meeting the asset limitations contained in (his act. This subsection applies even though the investment may be qualified elsewhere in this act. Notwithstanding this subsection, an investment fiduciary may designate a real estate investment trust which satisfies the requirements of section 14(2) as an investment qualified under this section or as an Rendered Friday,May 17,2013 Page 16 Michigan Compiled Laws Complete Through PA 29 of 2015 rc; Legislative Council, State of Michigan Courtesy of www.legislafure.mi.gov investment in stock under section 14. History:Add, 1982,Act 55,imd.Uff.Apr.6, 1982; Am, 1996,Act 485,Imd,Eff.Dec,27, 1996;—Am.2000,Act 307,find.Eff. Oct, 16,2000;—1m.2008,Act 425,lrnd.Eff.Jan.6,2009;—•Am.2012,Act 347,Eff'.Mar.28,2013. 38.1139a State treasurer as investment fiduciary; investments in private equity; limitation; investment fiduciary not state treasurer; limitation. Sec. 19a. (1) if the investment fiduciary is the state treasurer, investments in private equity shall not be more than 30%of the system's total assets. If the investment fiduciary is not the state treasurer and the system has assets of$1,000,000,000.00 or more, investments in private equity shall not be more than 10% of the system's total assets. An investment fiduciary described in this subsection may invest not more than an additional 5%of the system's assets in Michigan private equity only. (2) An investment fiduciary of a system that has assets of $250,000,000.00 or more but less than $1,000,000,000.00 shall not invest more than 5% of the system's assets in Michigan private equity. An investment fiduciary may otherwise invest in private equity under section 20d. History:Add,2008,Act 425,find.Eff.Jan.6,2009=Am.2012,Act 347,Eff.Mar.28,2013. 38.1140 Investment in secured loans; real property not considered encumbered; investment in part of obligation or participation interest in loan or group of loans; investment in real estate loan; investment in loan or loans or certificate of participation secured by loan or loans made on single family residential property; investment in certificates representing interest in mortgages or group of mortgages; limitations and restrictions; investment in second mortgage; investment with variable interest rate, Sec,20, (1)An investment fiduciary may invest in loans secured by any of the following: (a) First liens upon improved or income bearing real property, including but not limited to improved agricultural land,and improved business,industrial,and residential properties. (b)First mortgages or deeds of trust on leasehold estates having an unexpired tens equivalent to the term of the mortgage,inclusive of the term or terns that may be provided by enforceable options of renewal. (c) First mortgages on unimproved real property, at least 60%of which real properly is under contract of sale and that contract or contracts are pledged as additional collateral. (2) Investments made in loans described in subsection (1) shall not exceed 80%of the appraised value of the real property at the time of the loan and shall not have a terns longer than 35 years, except under the following conditions: (a)A loan on improved land with permanent buildings used for agriculture shall be repayable by annual or more frequent installment payments sufficient to amortize 40% or more of the principal of the loan within a period of not more than 10 years, (b) A loan on single family residential property shall be repayable by installment payments sufficient to amortize the entire principal of the loan within a period of not more than 30 years, (3) Real property shall not be considered to be encumbered within the meaning of this section if the real property is subject to lease in whole or in part and under the terms of the lease rents or profits are reserved to the owner. (4) An investment fiduciary may invest in a part of an obligation or a participation interest in a loan or a group of loans if the investment of each participant is not less than$50,000.00 at the time of investment,and if the entire indebtedness of which participation is a part would qualify under the provisions of this section. (5) An investment fiduciary shall not invest in a real estate loan unless the investment fiduciary has reviewed a written appraisal of the real estate securing the loan. (6) An investment fiduciary may invest in a loan or loans or certificates of participation secured by a loan or loans made on single family residential property in an atnount not to exceed 95%of the appraised value,at the time of the loan,of the real estate offered as security,if the loan is secured by a mortgage,deed of trust,or other instrument under the terms of which the installment payments are sufficient to amortize the entire principal of the loan within a period of not more than 30 years; and the loan is insured by a private inortgage insurer licensed to do business in this state and approved by the federal home loan mortgage corporation and the federal national mortgage association. (7) An investment fiduciary may invest in certificates representing an interest in a mortgage or group of mortgages if the certificates are insured or guaranteed by a private mortgage insurance company or the United Slates govcnlmcnl or an agency or instrumentality of the United States government. (8)The limitations and restrictions of subsections (1)to(7) shall not apply to loans that are made pursuant to the servicemen's readjustment act of' 1944, chapter 268, 58 Stat. 284, insured under the provisions of the Rendered Friday,May 17,2013 Page 17 Michigan Compiled Laws Complete Through PA 29 of 2013 (D Legislative Council, State of Michigan Courtesy of wmv.legisfalure.mr.gov. national housing act,chapter 847,48 Stat. 1246,by the federal housing administration,nor to real estate loans which are guaranteed as to principal by the United States government or an agency or an instrumentality of the United States government. (9) Notwithstanding subsection (1), an investment fiduciary may invest in a second mortgage if all of the following requirements are met: (a) Tile total of'the balance owing on the first mortgage and the amount of the second mortgage do not exceed 80%of the appraised value of the real property at the time of the second mortgage, (b)The second mortgage does not have a term longer than 30 years.. (c)The investment fiduciary has the absolute right to pay the underlying first mortgage in part or in full at any time. (d)The investment fiduciary assumes no liability for payment of the underlying first mortgage. (10) Art investment fiduciary may invest in any investment otherwise permitted by this section in which the interest rate varies from time to time.A loan shall not be considered to be in violation of the usury statutes of this state by virtue of the fact that the loan is made on a variable interest rate basis. History:Add. 1982,Act 55,bud.Eff.Apr.6,1982;Am.1996,Act 485,Ind.Eff.Dec.27,1996. 38.1140a Investment in debt, warrant, or equity interest in small business, small business investment company, or venture capital firm; creation of small business investment companies or venture capital firms to invest in small businesses; limitation. Sec. 20a. (1) Except as provided in subsection (2), an investment fiduciary of a system having assets of more than $250,000,000.00 may invest not more than 2% of a system's assets in a debt, warrant, or equity interest in a small business having more than 1/2 of the small business's assets or employees within this state, or i❑a debt,warrant,or equity interest in a small business investment company or venture capital firm having its principal office or more than 1/2 of its assets within this state, or the system may create, own, hold,buy, sell, operate, manage, and direct 1 or more small business investment companies or venture capital firms designed to invest in small businesses having more than 1/2 of their assets or employees within this state. An investment fiduciary may also join with a group composed of other public employee retirement systems, pension systems subject to the employee retirement income security act of 1974, Public Law 93-406, 88 StaL 829, financial institutions, corporations, or governmental agencies or instrumentalities to accomplish the purposes of this section.An investment in stock under this section shall be considered an iuvestnent in stuck under section 14 only for the purpose of determining the 70% maximum investment limitation contained in section 14. (2) If the investment fiduciary of a system is the state treasurer, investments described in subsection (1) may exceed 2%of the assets of the system,but shall not exceed 5%of the assets of the system. History:Add. 1982,Act 55,find, Eff.Apr.6,1982, Ani. 1996,Act 485,Imd, Eff.Dec.27, 19961---Ain.2000,Act 307,Imd.Eff. Oct.16,2000, 38.1140b Deposits by investment fiduciary. Sec. 20b. An investment fiduciary may make interest bearing deposits with the treasurer of the political subdivision sponsoring the system or with the state treasurer,either of whom may then manage and invest the deposits in a collective investment fund,common trust fund,or pooled fund that is established and maintained for investment of those assets by the treasurer of the political subdivision sponsoring the system or by the state treasurer in accordance with this act, History;Add. 1982,Act 55,Imd.FIT..Apr.6,1982,-Ain, 1996,Act 485,Imd.Eff.Dec.27,1996, 38.1140c Financial institution, trust company, or management company retained as investment fiduciary; investment of system assets in collective investment fund, common trust fund, or pooled fund established and maintained by financial institution or management company; "financial institution" defined. Sec. 20c. (t) A financial institution, a trust company, a management company qualified under section 15, or any affiliate of a person described in this section if that affiliate qualifies as an investment fiduciary under section 13(1 1), retained to act as an investment fiduciary may invest the assets of a system in any collective investment fund, common trust fund, or pooled find that is established and ;maintained for investment of those assets under federal or state statutes or rules or regulations or an applicable foreign law, The investment fiduciary of the collective investment fund, common trust fund,or pooled fund shall be a financial institution, a trust company, a management company qualified under section 13(11)(a), or an affiliate of 1 of these entities if that affiliate qualifies as an investment fiduciary under section 13(I 1)(a).The collective investment fund, common trust fund, or pooled fund may be established as a limited partnership, corporation, limited Rendered Friday.May 17,2013 Page 18 N ichigan Compiled Laws Comp;ele Througri PA 29 of 2013 V Legislative Council, State of Michigan Courtesy of wwwlegislature.rni.gov liability company, trust, or other organizational entity for which liability of any investor does not exceed the amount of the investment under the laws of the United States or the laws of the state, district, territory, or foreign country that applied to the organization of the collective investment fund, common trust fund, or pooled fund.A pool in which the state treasurer has administrative or investment authority and the investment pools of' the municipal employees retirement system and retirement board created under the municipal employees retirement act of 1984, 1984 PA 427,MCL 38.1501 to 38.1555, are not pooled fields for purposes of this section. An investment in a collective investment fund, common trust find, or pooled fund is considered an investment in the underlying assets of that fund for all purposes under this act (2) As used in this section, "financial institution" means a state or nationally chartered bank or a state or federally chartered savings and loan association, savings bank, or credit union whose deposits are insured by an agency of the United States government and that maintains a principal office or branch office located in this stale under the laws of this state or the United Stales, History:Add; 1982,Act 55,Ind.Eff.Apr.6, 1982;-Am. 1996,Act 485,In-id. Eff.Dec,27, 1996,-Am. 1997,Act 42,Intd.Eff. June 30, 1997,Am.2000,Act 307,Ind.Fff.Oct.16,2000;Am.2012,Act 347,Eff,Mar.28,2013, 38.1140d Investments not qualified under act. Sec. 20d. (1) An investment fiduciary of a system having assets of less than $250,000,000.00 may invest not more than 15% of the system's assets in investments not otherwise qualified under this act, except as qualified in section 19a,whether the investments are similar or dissimilar to those specified in this act. (2) An investment fiduciary of a system having assets of $250,000,000.00 or more but less than $1,000,000,000.00 may invest not more than 20% of the system's assets in investments described in subsection(1). (3) An investment fiduciary of a system having assets of$1,000,000,000.00 or more may invest not more than 25%of the system's assets in investments described in subsection(.1). (4) An investment fiduciary of a system who is the state treasurer may invest not more than 30% of the system's assets in investments described in subsection(1), (5)If an investment described in subsection (1) is subsequently determined to be permitted under another section of this act, then the investment shall no longer be included tinder this section. (6) This section shall not be used to exceed a percentage of total assets limitation for an investment provided in any other section of this act. History:Add. 1982,Act 55,find.Fff.Apr.6, 1982;Am. 1996,Act 485,lmd.Eff,Dec.27, 19961-An:,2000.Act 307,find,Etf. Oct. 16,2000,-Ain,2008,Act 425,find.Eff.Jan.6,2009=Am,2012,Act 347,Eff.Mar.28,2013. 38.114Oe Loan of securities by investment fiduciary. Sec. 20e. (1) An investment fiduciary may loan bonds, stocks,or other securities if at the time the loan is executed, at least 102% of the full market value of the security loaned is secured by collateral of cash to be invested in 1 or more of the following: (a) Securities graded in the top 4 major grades as determined by at least 1 national rating service,but not graded below the top 4 grades as determined by any of the national rating services, or determined by the investment fiduciary to be of comparable quality in the case of unrated securities. (b) Repurchase agreements collateralized by securities graded in the top 4 major grades as determined by at least 1 national rating service,but not graded below the top 4 grades as determined by any of the national rating services, or determined by the investment fiduciary to be of comparable quality in the case of unrated securities. (c)Irrevocable bank letters of credit. (d) Securities issued or guaranteed by the United States government or an agency of the United Statcs government. (2)AI all times during the term of a loan under subsection (1),the collateral shall be equal to not less than 100%of the full market value of the security loaned, History:Add, 1982.Act 55,Ind.Eff.Apr.6, 1982-1-Am. 1996,Act 485,find.Eff.Dec.27, 1996;-Am.2000,Act 307,Ind.h.ff. Oct. 16,2000. 38.114Of Transferring and holding securities. Sec. 20f. An investlmeni fiduciary may use i or more nominees to facilitate transfer of a system's securities and may hold the securities in safekeeping with the federal reserve system, a clearing corporation, or a custodian bank which is a member of the federal reserve system. Historv:Add, 1982,Act 55,lu:d.HT Apr.6, 1982. Rendered Friday,May 17,2013 rage 19 `vl ch gan Compi!(.c,Laws Carnet:Throu<;n PA 29 of 2013 ©Legislative Council, State of Michigan Courfes•vof leyrslrtlure.rni.gov t 38.1140g Investment in securities exempt from taxes. Sec. 20g. Notwithstanding any other provision of this act, investment in securities wholly or partially exempt from income or other taxes levied by the United States shall be made only at taxable-equivalent yields or returns available in the marketplace on otherwise comparable securities at the lime the investment decision is made. llistoi-y:Add. 1982,Act 55,Ind,l ff.Apr.6,1992, 38.1140h Applicable law; retention of financial records; "financial records" defined; disclosure of certain information; actuarial valuation; supplemental actuarial analysis; "proposed pension benefit change" defined; availability of summary annual report. Sec. 20h. (1) In addition to the provisions of this act, it system is subject to the applicable accounting, auditing,and reporting requirements contained in the following acts and parts of acts: (a) 1919 PA 71,MCL 21.41 to 21.55. (b)The uniform budgeting and accounting act, 1968 PA 2,MCL 141,421 to 141.440a, (c)Section 91 of the executive organization act of 1965, 1965 PA 380,MCL 16.191. (2)A system shall retain its financial records fora minimum period of 6 years from the date of the creation of the record unless state or federal law requires a longer retention period. As used in this subsection, "financial records" includes, but is not limited to,records pertaining to expenditures for professional training and education, including travel expenditures, by or on behalf of system board members that are paid by the system. (3) Except as otherwise provided in this subsection, information regarding the calculation of actual or estimated retirement benefits for members of the system is exempt from disclosure by the system or the political subdivision sponsoring the system pursuant to section 13(1)(d) of the freedom of information act, 1976 PA 442, MCL 15.243. Upon a majority vote of the governing body of the political subdivision sponsoring the system,the system shall provide the designated representative of the political subdivision with a reasonable opportunity to inspect, copy, or receive copies of all information regarding the calculation of actual or estimated retirement benefits for members of the system. The system may require that information provided by the system under this subsection be provided only upon a promise of confidentiality by the political subdivision sponsoring the system.A system may make reasonable rules to ensure the confidentiality of records exempt from disclosure under applicable state and federal law.The system may charge a fee under this subsection in accordance with section 4 of the freedom of information act, 1976 PA 442, MCL 15.234. All fees and expenses incurred by the political subdivision sponsoring the system that are related to this subsection shall be borne by the political subdivision and shall not be deducted from or offset against the political subdivision's required pension contributions to the system. (4)Except as otherwise provided in this subsection,a system shall have an annual actuarial valuation with assets valued on a market-related basis.The actuarial present value of total projected benefits shall include all pension benefits to be provided by the system to members or beneficiaries pursuant to the terns of the system and any additional statutory or contractual agreements to provide pension benefits through the system that are in force at the actuarial valuation date, including, but not limited to, service credits purchased by members, deferred retirement option plans, early retirement programs, and postretirement adjustment programs. A system that has assets of less than $20,000,000.00 is only required to have an actuarial valuation as required under this subsection done every other year. (5) A system shall provide a supplemental actuarial analysis before adoption of pension benefit changes. System assets shall not be used for any actuarial expenses related to the supplemental actuarial analysis under this subsection. The supplemental actuarial analysis shall be provided by the system's actuary and shall include an analysis of the long-term costs associated with any proposed pension benefit change. The supplemental actuarial analysis shall be provided to the board of the particular system and to the decision-making body that will approve the proposed pension benefit change at least 7 clays before the proposed pension benefit change is adopted. For purposes of this subsection, "proposed pension benefil change" means a proposal to change the amount of pension benefits received by persons entitled to pension benefits tinder the system, Proposed pension benefit change does not include a proposed change to a health care plan or health benefits. (6) The system shall make the summary annual report created tinder section 13 available to the plan participants and beneficiaries and the citizens of the political subdivision sponsoring the system. if the system has a website, the system shall publish the summary annual report on the websitc. If the system does not have a websitc, the political subdivision sponsoring the system shall publish the sunmlary annual report on a website that the political subdivision has created or may create. Rendered Friday,May 17,2013 Page-20 Michigan Compiled Lass Complete Through PA 29 of 2013 CO Legislative Council, State of Michigan Courtesy of www.legislaturp.mi.gov 11isrory:Add. 1982,Act 55,find.Eff.Apr,6, 1982; Am. 1996,Act 485,Imd.Eff.Dec,27, 1996,—Ant.2002,Act 728,find.Eff. Dec.30,2002;—Ann,2012,Act 347,FIT Mar,28,2013. 38.1140i Repealed. 2000, Act 307, Imd. Eff, Oct. 16,2000. Compiler's note:'1 he repeated section pertained to guaranteed rcpayn;cnt of loans. 38,1140j Investment in derivatives. Sec. 20j.(1) Subject to qualification elsewhere in this act,an investment fiduciary may invest in any oi-the following: (a) A derivative that hedges positions of a nonderivativc component of a portfolio that clearly reduces a defined risk. (b) A derivative that replicates the risk/return profile of an asset or asset class,provided the asset or asset class is permitted in other sections of this act. (c)A derivative that rebalances the country or asset class exposure of a portfolio. (d) A derivative in which the investment fiduciary has examined the price, yield, and duration characteristics in all market envirarunenis both at the time of investment and on an ongoing basis. : (e) A commingled or pooled investment fund that uses derivatives, if the fund's use of derivatives is consistent with the guidelines outlined in this section, (f) Over-the-counter derivatives if,in the case of an over-the-counter security, a minimum of 2 competing bids or offers are obtained. All counter party risk in over-the-counter derivative transactions shall be examined at the time of investment and on an ongoing basis. (2)The aggregate market value of the underlying security,future, or other instrument or index made under (his section shall not exceed 15% of the assets of the system. For purposes of the asset limitation in this section only,"derivatives"does not include: (a)Asset backed pools, mortgage backed pools, or collateralized mortgage obligations that are otherwise qualified under this act and are no more exposed to prepayment risk or interest rate risk than the underlying collateral including planned amortization classes and sequential-pay collateralized mortgage obligations. (b) Convertible bonds, convertible preferred stock, rights or warrants to purchase stock or bonds or notes or partnership interests, floating rate notes, zero coupon securities, stripped principal securities, or stripped interest securities,which items are otherwise qualified under this act. (c) Exchange-listed derivatives trading on a daily basis and settling in cash daily or having a limited and fully defined risk profile at an identified,fixed cost, including futures contracts and purchased options. (d) Currency forwards trading on a daily basis and settling in cash daily or having a limited and fully defined risk profile at an identified, fixed cost, (3)Notwithstanding any other provision of this act to the contrary,an investment fiduciary shall not invest in derivatives for the purpose of leveraging a portfolio or shorting securities as a sole investment. History:Add, 1996,Act 485,Ind.Eff.Dec.27, 1996. 38.1140k Investment in global securities; prohibited conduct. Sec. 20k. (1) Notwithstanding a percentage of total assets limitation for an investment provided in any other section of this act, an investment fiduciary who is the state treasurer or the investment fiduciary of a system that has assets of$2,000,000,000.00 or more may invest not more than 30% of a system's assets in global securities.An investment fiduciary of a system that has assets of less than $2,000,000,000.00 and who is not the state treasurer may invest not more than 20% of a system's assets in global securities. Except as otherwise provided in this act,an investment fiduciary shall not do any of the following: (a)Invest in more than 5%of the outstanding global securities of any 1 issuer. (b) Invest more than 5%of a system's assets in the global securities of any i issuer, (2) Investments in global securities under this section shall be made only by investment fiduciaries described in section 13(l 1)who have demonstrated expertise in investments of that(ype. History,Add,1996,Act 485,Intd,Eff,Dec.27, 1996;—Am.2012,Act 347,Eff.Mar.28,2013. 38.11401 Financial or proprietary information. Sec.20l(1)A record or portion of a record,material,or other data received,prepared,used,or retained by an investment fiduciary in connection with the invcstment of assets of a system that relates to financial of- proprietary infornration pertaining to a portfolio company in real estate or alterna(ive investments in which the investment fiduciary has invested or has considered an investment that is considered by the portfolio company and acknowledged by the investment fiduciary as confidential; or that relates to financial or proprietary informatiou whether prepared by or for the investment fiduciary regarding loans and assets directly owned by the investment fiduciary and acknowledged by (lie investment fiduciary as confidential is riot subject to the Rendered Friday,May 17,2013 Page 21 Michigan Curnp'r:.ed Laws Complete Through PA 29 of 2013 U Legislative Council, State of Michigan Courtesy of wmviegislalure.mlgov disclosure requirements of the freedom of information act, Act No. 442 of the Public Acls of 1976, being sections 15.231 to 15.246 of the Michigan Compiled Laws. (2) A document to which the investment fiduciary is a party evidencing an investment is not considered financial or proprietary information that may be exempt from disclosure pursuant to subsection(1). (3) As used in (his section, "financial or proprietary information" means information that has not been publicly disseminated or that is unavailable from other sources, the release of which might cause the portfolio company or rile inveshnent fiduciary significant competitive harm. Financial or proprietary information includes but is not limited to financial performance data and projections, financial statements, list of coinvestors and their level of investment,product and market data,rent rolls,and leases. History:Add. 1996,Act 495,hid.F.f1:Dec.27,1996, 38.1140m Employer contribution. Sec. 20m. The governing board vested with the general administration, management, and operation of a system or other decision-making body that is responsible for implementation and supervision of any system shall confirm in the annual actuarial valuation required under section 20h and the summary annual report required under section 13 that each system under this act provides for the payment of the required employer contribution as provided in this section and shall confirm in the summary annual report that the system has received the required employer contribution for the year covered in the summary annual report. The required employer contribution is the actuarially determined contribution amount. An annual required employer contribution in a system under this act shall consist of a current service cost payment and a payment of at least the annual accrued amortized interest on any unfunded actuarial liability and the payment of the annual accrued amortized portion of the unfundcd principal liability. For fiscal years that begin before January 1, 2006,the required employer contribution shall not be determined using an amortization period greater than 40 years. Except as otherwise provided in this section, for fiscal years that begin after December 3.1. 2005, the required employer contribution shall not be determined using an amortization period greater than 30 years. For (he Tier 1 retirement plan under the state employees' retirement system, created under the state employees' retirement act., 1943 PA 240, MCL 38.1 to 38.69; the Michigan public school employees' retirement created under the public school employees retirement act of 1979, 1980 PA 300, MCL 38.1301 to 38.1437; and the Michigan state police retirement system created under the state police retirement act of 1986, 1986 PA 182, MCL 38.1601 to 38,1648, only, for the fiscal year beginning October 1, 2006, the contribution for the unfunded actuarial accrued liability shall be equal to the product of the assumed real rate of investment return times the unfunded actuarial accrued liability. In a plan year, any current service cost payment may be offset by a credit for amortization of accrued assets, if any, in excess of actuarial accrued liability. A required employer contribution for a system administered under this act shall allocate the actuarial present value of future plan benefits between the current service costs to be paid in the future and the actuarial accrued liability. The governing board vested with (he general administration,management, and operation of a system or other decision-making body that is responsible for implementation and supervision of a system shall act upon the recommendation of,in actuary and the board and the actuary shall take into account the standards of practice of(he actuarial standards board of the American academy of actuaries in making the determination of the required employer contribution. History:Add.2002,Act 728,ltnd.Eff.Dec.30,2002;Am.2007,Act 22,]md.Eff.June 26,2007-1 Am.2012,Act 347,Eff:Mar. 28,2013, 38.1141 Removal of member of board or body. Sec. 21. (1) Subject to this section, the governing board vested with the general administration, management,and operation of a system or other decision-making body that is responsible for implementation and supervision of a system may remove a member of the board or body as provided in subsection (2)by any of the following: (a)A unanimous vote of all of the members of the board or body,other than [lie member who is the subject of the vote for removal. (b) An order of a circuit court with jurisdiction entered in an appropriate action authorized by a majority vote of the members of the board or body. (c) The process for the removal of a member of[he board or body that is contained in the system's plan provisions if(flat process is less restrictive than either process provided for in subdivision (a)or(b). (2)The governing board vested with the general administration,management,and operation of a system or other decision-making body that is responsible for implementation and supervision of a system shall give notice and hold a hearing on the removal of a member of that board or body for any of the following reasons: (a) For an elected member of(he board or body, upon receipt of a petition requesting the removal of the Rendered Friday,May 17,2013 Page 22 Michigan CongMed Laws Complete Through PA 29 of 2013 00 Legislative Council, State of Michigan Courtesy of www.legislature.mi.gov member,which petition is signed by 2/3 of the individuals eligible to vote in the election of the member of the board or body. (b)The member is legally incapacitated from executing his or leer duties as a member of the board or body and neglects to perform those duties. (c)The member has committed a material breach of the system provisions or system policies or procedures and the removal of the member is in the interests of the system or the interest of its participants or participants'beneficiaries. (d)The member is convicted of a violation of law and the removal of the member is in the interests of the system or the interest of its participants or participants'beneficiaries. (3)Upon the removal of a member of a board or body under this section before expiration of the member's term,a uew successor member shall fill the vacancy as follows: (a)For an elected member of the board or body, by election in the same manner as the removed member for the remainder of that term of office. (b) For an appointed member of the board or body, by appointment by the appointing authority of the removed member for the remainder of that term of office. (c) For an ex officio member serving by virtue of his or her office,by appointment by the governing body of the political subdivision sponsoring the system until the time that a new individual is elected or appointed to the office from which the removed member served as a member. (4) An individual who is removed from office as a member of a board or body under this section may appeal the removal to the circuit court with jurisdiction if the removal is by the board or body or, if the removal is by the circuit court, to the appropriate court with jurisdiction. A successor member of a board or body may be elected or appointed during the pendency of an appeal of a removed member under this subsection until the appeal is withdrawn or there is a final judgment in the matter. (5)If,upon an appeal under subsection(4), the court finds that the petition for removal of the member was filed in bad faith and that removal is contrary to the interests of the system or the interest of its participants or participants'beneficiaries,the court may order that the individuals seeking the removal of the member pay all or a portion of the costs of the proceedings,including reasonable attorney fees. History:Add.2012,Acl 347,Eff.Mar,28,2013. Rendered Friday,May 17,2013 Page 23 Mic:^,igan Comp'ed Laws Crrnpleie 1 hrough PA 29 of 2013 Co Legislative Council,State of Michigan Courtesy of www.legislalure.m4gov TAB 3 Reciprocal Retirement Act 1961 PA 88, as amended; MCL 3 8 . 1101 et seq RECIPROCAL RETIREMENT ACT Act 88 of 1961 AN ACT to provide for the preservation and continuity of retirement system service credits for public employees who transfer their employment between units of government. History:1961,Act 88,Eff.Sept.8,1961. The People of the State of Michigan enact: 38.1101 Reciprocal retirement act; short title. Sec. 1.This act shall be known and may be cited as the"reciprocal retirement act". History:1961,Act 88,Eff.Sept.8,1961. 38.1102 Reciprocal retirement act; definitions. Sec.2.As used in this act: (a) "State unit" means the state employees' retirement system, established by Act No. 240 of the Public Acts of 1943, as amended, being sections 38.1 to 38.43 of the Compiled Laws of 1948; the public school employees' retirement system, established by chapter 1 of Act No. 136 of the Public Acts of 1945, as amended, being sections 38.201 to 38.234 of the Compiled Laws of 1948; the judges' retirement system, established by Act No. 198 of the Public Acts of 1951, as amended, being sections 38.801 to 38.830 of the Compiled Laws of 1948;the probate judges'retirement system,established by Act No. 165 of the Public Acts of 1954, as amended, being sections 38.901 to 38.933 of the Compiled Laws of 1948; the department of public safety pension, accident and disability fund,established by Act No. 251 of the Public Acts of 1935, as amended, being sections 28.101 to 28.110 of the Compiled Laws of 1948; and the legislative retirement system, established by Act No. 261 of the Public Acts of 1957, as amended, being sections 38.1001 to 38.1060 of the Compiled Laws of 1948. (b) "Municipal unit" means a county, city, village, township or school district of the first class; any separate corporation or instrumentality established by 1 or more counties, cities or villages, as permitted by law; any corporation or instrumentality supported in most part by counties,cities and villages,or any of them; any public corporation charged by law with the performance of a governmental function and whose jurisdiction is coextensive with 1 or more counties,cities and villages. (c) "Governmental unit" means the state to the extent the employees of the state are covered under an applicable state unit;and any municipal unit. (d)"Reciprocal unit"means any state unit or municipal unit which elects to come under the provisions of this act. (e) "Retirement system" means the retirement, pension or annuity system, plan or fund under which a governmental unit covers its employees. The term "retirement system" shall not include the federal social security old-age survivors'and disability insurance program. (f) "Reciprocal retirement system", in the case of a municipal unit electing to become a reciprocal unit, means the retirement systems under which the municipal unit covers its employees. In the case of a state unit, "reciprocal retirement system"means a state unit which elects to become a reciprocal unit. (g) "Accumulated deposits" or "accumulated contributions" means the amounts deducted from the compensations of a member of a reciprocal retirement system and credited to his individual account in the system,together with interest,if any,credited thereon. (h) "Final average salary" means the salary or the average of salaries used in computing a retirement allowance,as set forth in the retirement system plan. (i) "Retirement allowance"means the annuity,pension or retirement allowance payable to a member of a reciprocal retirement system on account of his employment with a reciprocal unit. 0)"Retirement"means the withdrawal of a member of a reciprocal retirement system from the employ of a reciprocal unit with a retirement allowance payable from funds of the reciprocal retirement system. History:1961,Act 88,Eff.Sept.8,1961;--Am. 1965,Act 106,Imd.Eff.June 30,1965. 38.1103 Reciprocal retirement act; adoption by municipal or state unit; certification, force and effect. Sec. 3. (1) Any municipal unit, which covers its employees under a retirement system or systems, by a majority vote of its governing body may elect to adopt the provisions of this act for its employees covered under such retirement system or systems. (2) Any state unit, by a majority vote of its governing body, may elect to have the provisions of this act Rendered Monday,September 15,2014 Page 1 Michigan Compiled Laws Complete Through PA 281 of 2014 ©Legislative Council,State of Michigan Courtesy of www.legislature.mi.gov made applicable to its members. (3) The governing body of a municipal or state unit, within 10 days after it elects to come under the provisions of this act,shall file written certification of its action with the secretary of state.Upon the filing of the certification the municipal unit or state unit shall be a reciprocal unit. The secretary of state shall maintain a list of reciprocal units,which list shall be available to any municipal unit or state unit requesting a copy. (4)The provisions of this act, when adopted by a municipal or state unit shall be effective for the unit in addition to the provisions of charter, ordinance, resolution or state law governing the retirement systems for the reciprocal unit,as the provisions of charter,ordinance,resolution or state act are in force and as amended. History: 1961,Act 88,Eff.Sept.8,1961;--Am.1965,Act 106,Imd.Eff.June 30,1965. 38.1104 Reciprocal retirement system; eligibility for retirement allowance; conditions; commencement of retirement allowance. Sec.4. A member of a reciprocal retirement system who leaves the employ of a reciprocal unit,designated as the preceding reciprocal unit, and enters the employ of another governmental unit, designated as the succeeding governmental unit, shall be entitled to a retirement allowance payable by the preceding reciprocal unit's retirement system subject to the following conditions: (a) The member has 30 months or more of credited service in force acquired in the employ of the preceding reciprocal unit. (b)Beginning September 1,2006,the member does not withdraw his or her accumulated deposits from the preceding reciprocal unit's retirement system, or if the member has withdrawn the accumulated deposits,the member deposits with the preceding reciprocal unit the amount withdrawn together with interest compounded annually at the rate in effect for the preceding reciprocal unit;the deposit to be made within 20 years after the date the member becomes employed by the succeeding governmental unit. (c) Beginning September 1, 2006, the member enters the employ of each succeeding governmental unit within 20 years after the date of leaving the employ of each preceding governmental unit. (d) The member's credited service in force with the preceding reciprocal retirement systems plus the member's credited service acquired in the employ of succeeding governmental units equals or exceeds the minimum credited service required for age and service retirement in the applicable preceding reciprocal retirement system. (e)The retirement allowance payable by any preceding reciprocal retirement system shall be determined at the time the member ceased to be a member of the preceding reciprocal retirement system,upon the basis of the retirement allowance formula of the preceding reciprocal retirement system,the member's credited service in force in the preceding reciprocal retirement system,and the member's final average salary at that time. (f)Payment of a retirement allowance by a preceding reciprocal retirement system shall begin on the first day of the second calendar month immediately following the month in which proper written application is filed with the governing body of the preceding reciprocal retirement system on or after attainment of 60 years of age. The retirement allowance shall not begin before attainment of the minimum age for age and service retirement required in the preceding reciprocal retirement system. History:1961,Act 88,Eff.Sept.8, 1961,--Am. 1963,Act 186,Eff.Sept.6,1963;-Am. 1965,Act 106,Imd.Eff.June 30,1965,- Am. 1971,Act 48,Imd.Eff.June 28, 1971;--Am. 1975,Act 103,Eff.Jan. 1,1976;--Am. 1979,Act 115,Imd.Eff.Oct.9,1979,--Am. 1982,Act 520,Imd.Eff.Dec.31, 1982,Am. 1988,Act 15,Imd.Eff.Feb. 18, 1988,-Am. 1990,Act 274,Imd.Eff.Dec.3, 1990;- Am.2008,Act 502,Imd.Eff.Jan.13,2009. 38.1105 Credited service generally. Sec. 5. A member of a reciprocal retirement system who has 30 months or more of credited service acquired as a member of the system and who has attained the age but has not met the service requirements for age and service retirement shall be entitled to use his or her credited service in force previously acquired as a member of governmental unit retirement systems in meeting the service requirements of the system from which he or she retires. Beginning September 1, 2006, if the member has a break in governmental unit employment for a period longer than 20 years,his or her service rendered in the employ of the governmental units prior to his or her last break in service shall not be used in satisfying the service requirement for age and service retirement in the system from which he or she retires.Except as provided in section 6,credited service acquired in a governmental unit in which the member was previously employed shall not be used in determining the amount of his or her retirement allowance payable by the reciprocal retirement system from which he or she retires unless otherwise provided by the retirement system. History: 1961,Act 88,Eff. Sept. 8, 1961;-Am. 1965,Act 106,Imd.Eff.June 30, 1965;Am. 1990,Act 274,Imd.Eff.Dec. 3, 1990;-Am.2008,Act 502,Imd.Eff.Jan.13,2009. Rendered Monday,September 15,2014 Page 2 Michigan Compiled Laws Complete Through PA 281 of 2014 ©Legislative Council, State of Michigan Courtesy of www.iegisiature,mi.gov 38.1106 Transfer of credited service; agreement between preceding reciprocal unit and succeeding reciprocal unit; resolution; financial consideration; actuarial present value of retirement allowance; written policy. Sec. 6. (1)A reciprocal unit,designated as the preceding reciprocal unit,may enter into an agreement with a reciprocal unit, designated as the succeeding reciprocal unit, to transfer credited service of a member who leaves the employ of the preceding reciprocal unit and enters the employ of the succeeding reciprocal unit. The agreement shall be by resolution of the governing body of each reciprocal unit. The resolution shall specify the amount of credited service being transferred from the preceding reciprocal unit to the member's credit in the succeeding reciprocal unit and the amount of financial consideration being transferred from the preceding reciprocal unit to the succeeding reciprocal unit. The financial consideration transferred under this section shall not be greater than the larger of the following: (a)The accumulated contributions of the member whose credited service is being transferred. (b)The actuarial present value of the retirement allowance payable by the preceding reciprocal unit under section 4 if the preceding reciprocal unit does not transfer the member's credited service under this section. (2) A succeeding reciprocal unit, before passing a resolution described in subsection (1), shall determine the actuarial present value of the retirement allowance that will be payable to the member under the retirement plan of the succeeding reciprocal unit attributable to the credited service to be transferred under subsection (I)• (3)The actuarial present value of the retirement allowance payable by the preceding reciprocal unit under subsection(1)and by the succeeding reciprocal unit under subsection(2)shall be calculated using the interest rate and mortality tables specified by the Pension Benefit Guarantee Corporation for calculating the actuarial present value of immediate and deferred pensions under a terminated pension plan as provided in part 2619 of subchapter C of chapter XXVI of title 29 of the Code of Federal Regulations,29 C.F.R.part 2619. (4)Each reciprocal unit,by resolution of the governing body of the reciprocal unit,shall establish a written policy to implement the provisions of this section in order to provide uniform application of this section to all members of the reciprocal retirement system. History:Add. 1990,Act 274,Imd.Eff.Dec.3,1990. Rendered Monday,September 15,2014 Page 3 Michigan Compiled Laws Complete Through PA 281 of 2014 ©Legislative Council, State of Michigan Courtesy of www.iegisiature.mi.gov TAB 4 Public Employee Retirement Benefit Protection Act 2002 PA 100; MCL 3 8 . 1681 et sey PUBLIC EMPLOYEE RE,ETIREMENT BENEFIT PROTECTION ACT Act 100 of 2002 AN ACT to protect certain rights that public employees have in retirement benefits under certain circumstances; to provide for the establishment of certain fiends and arrangements; and to prescribe the powers and duties of certain retirement systems, state departments, courts, public officials, and public employees. History:2002,Act 100,Imd,Eff.Mar.27,2002. The People of the State of Michigan enael. 38.1681 Short title. Sec. 1, This act shall be ]mown and may be cited as the "public employee retirement benefit protection act". History:2002,Act 100,Imd,W.Mar.27,2002. 38.1682 Definitions. Sec.2. As used in this act: (a)"Department"means the department of management and budget, (b) "Employer contributions" means the amount transferred by an employer to a participating unit retirement system on behalf of members of the retirement system to pay for the actuarial accrued liabilities of the retirement system. (c) "Member" means a member, vested former member, deferred member, beneficiary, designated beneficiary,or refund beneficiary of a retirement system, (d)"Participating unit"means a retirement system that elects to come under the provisions of section 6. (e)"Retirant"means a person who has retired with a retirement benefit payable from a retirement system. (f) "Retirement benefit" means an annuity, a retirement allowance, an optional benefit, a postretirement benefit, a benefit received from a defined contribution plan,defined benefit plan,deferred compensation plan, disability plan, life insurance plan, all money, investments and income of the various hinds created under a public employee retirement system,and any other right accreting to a member under a retirement system. (g)"Retirement system"means a public employee retirement system established by this state or a political subdivision of this state. (h) "State unit"means a retirement system established under the state employees' retirement act, 1943 PA 204,MCL 38.1 to 38.69, the public school employees retirement act of 1979, 1980 PA 300, MCL 38.1301 to 38.1467, the judges retirement act of 1992, 1992 PA 234, MCL 38.2101 to 38.2670, the state police retirement act of 1986, 1986 PA t 82, MCL 38.1601 to 38.1648, and the Michigan legislative retirement system act, 1957 PA 261,MCL 38,1001 to 38.1080. History:2002,Act 100,Imd,Eff.Mar,27,2002. 38.1683 Rights not subject to process of law or assignment. See. 3. The right of a member or retirant of a retirement system to a retirement benefit shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or insolvency laws, or other process of law and shall be unassignable. History:2002,Act 100,Imd.Eff.Mar,27,2002. 38.1684 Rights subject to forfeiture and domestic relations orders. Sec. 4. (1) 'The right of a member or retirant to a retirement benefit described in section 3 is subject to forfeiture under the public employee retirement benefits forfeiture act, 1994 PA 350, MCL 38.2701 to 38,2705, (2)The right of a member or retirant to a retirement benefit described in section 3 is subject to an award by a court under section 18 of 1846 RS 84, MCL 552.18, an eligible domestic relations order under the eligible domestic relations order act, 1991 PA 46, MCL 38.1701 to 38.1711,and to any other domestic relations order of a court pertaining to alimony or child support. Ilistory:2002,Act 100,Imd.Eff.Mar.27,2002, 38.1685 Award or order requiring withholding payments; limitations. Sec. 5, If an award or order described in section 4 requires a retirement system to withhold payment of a retirement benefit or requires the retirement systcm to make payment or requires the individual to request that the retirement system make payment of a retirement benefit for the purposes of meeting the member's or Rendered Thursday,March 08,2007 Page 1 Michigan Compiled Laws Complete Through PA 1 of 2007 Legislative Council, State of Michigan Courtesy of Ivwlv.Ieq/slalure.mLgov retirant's obligations to a spouse, former spouse,or child, the withholding or payment provisions of the award or order are effective only against amounts that become payable to the member or retirant, unless otherwise provided in an eligible domestic relations order under the eligible domestic relations order act, 1991 PA 46, MCL 38.1701 to 38.1711. The limitations contained in this section do not apply to the accumulated contributions of a person who terminates employment before acquiring a vested member status. History:2002,Act 100,Imd.Ef ,Mar.27,2002. 38,1686 Benefit payments; establishment of arrangement and fund. Sec. 6. (1) A retirement system may elect by a majority vote of its governing body to establish and administer an arrangement and fiind to pay accrued benefits of its members to its members to the extent that the accrued benefits paid out of the fund would not otherwise be payable under limitations in section 415 of the internal revenue code. An arrangement and fund established under this section shall be kept separate from the pension assets of participating units. (2)If an arrangement and fund is established by a retirement system under subsection (1), the arrangement and fund shall be established and administered in accordance with section 415(m) of the internal revenue code. The governing board of the participating unit or the department on behalf of a state unit may establish and adopt policies and procedures for the arrangement and fund. (3)If an arrangement and find is established under subsection(1), the benefits that are paid from the fiend shall be paid out of employer contributions or other eligible assets. The governing board shall determine the amount of the employer contribution that shall be allocated to the arrangement and fund. Employer contributions and other eligible assets that are contributed to the arrangement and fund shall be deposited in the arrangement and fund before deposits are made to the pension system of the participating unit. (4)Nothing in this section is intended to limit the amount of employer contributions that are contributed to a retirement fund of a participating unit for the accrued benefits that are allowed to be paid under section 415 of the internal revenue code. History:2002,Act 100,Imd,Eff.Mar,27,2002, 38.1687 Retirement system and benefits subject to §§800.401 to 800.406. Sec, 7. The retirement system and retirement benefits shall be subject to claims made under the state correctional facility reimbursement act, 1935 PA 253,MCL 800.401 to 800.406. History:2002,Act 100,Imd.Eff.Mar,27,2002, 38.1688 Loan eligibility; correcting records and recovering overpayments. Sec. 8. (1) This act is not intended to prohibit a member or retirant from receiving a loan from the retirement system if the retirement system concludes that the member or retirant is otherwise eligible for a loan. (2)Nothing in this act shall prevent a retirement system administrator from correcting records and seeking to recover overpayments that the retirement system made to a retirant or member. History;2002,Act 100,Imd.Eff.Mar.27,2002. 38.1689 Notification of disqualification from U.S. internal revenue service. Sec, 9. If the department receives notification from the United States internal revenue service that this act or any portion of this act will cause any state unit to be disqualified for tax purposes under the internal revenue code,then the portion that will cause the disqualification does not apply. History:2002,Act 100,Imcl.E.ff.Mar.27,2002. Rendered Thursday,March 08,2007 Page 2 Michigan Compiled Laws Complete Through PA 1 of 2007 © Legislative Council, State of Michigan Courtesy ofwww.legislature.mi.yov TAB 5 Public Employee Retirement Benefits Forfeiture Act 1994 PA 350, as amended; MCL 3 8 .2701 et sey PUBLIC EMPLOYEE RETIREMENT BENEFITS FORFEITURE ACT Act 350 of 1994 AN ACT to provide for the forfeiture of retirement benefits by public employees under certain circumstances; to prescribe the powers and duties of certain retirement systems, state departments, courts, public officials,and public employees; and to prescribe penalties and provide remedies. History: 1994,Act 350,Eff.Mar.30, 1995. The People of the State oj'Michigan enact. 38.2701 Short title. Sec. 1. This act shall be known and may be cited as the "public employee retirement benefits forfeiture act". History: 1994,Act 35D,Eff,Mar.30, 1995. 38.2702 Definitions. Sec.2,As used in this act: (a)"Felony arising out of his or her service as a public employee"means l or more of the following: (i)A felony resulting from the misuse of public funds. (ii) A felony resulting from the receipt of a bribe or other financial benefit in that person's capacity as a public employee, (b)"Member"means a member,vested former member,or deferred member of a retirement system. (c)"Retirant"means a person who has retired with a retirement benefit payable from a retirement system, (d) "Retirement benefit" means an annuity, a retirement allowance, a pension, an optional benefit, a postretirement benefit, and any other right accrued or accruing to a member under a retirement system. Retirement benefit does not include health benefits provided to a retirant or his or her beneficiaries by a retirement system. (e) "Retirement system"means a public employee retirement system established by this state or a political subdivision of this state. History:1994,Act 350,Eff.Mar.30,1995,--Am. 1996,Act 467,Imd.Eff,Dec.26,1996, 38.2703 Forfeiture of retirement rights. See.3.A member or retirant who is convicted of or who enters a nolo contendere plea accepted by a court for a felony arising out of his or her service as a public employee is considered to have breached the public trust and may have his or her rights to an otherwise vested retirement benefit and all accumulated contributions standing to that person's credit in the retirement system forfeited as provided in this act.This act applies only to the retirement system of which the person was a member or retirant at the time the felony was committed and only to the retirement system established by the entity affected by the felony. History: 1994,Act 350,Eff.Mar.30, 1995, 38.2704 Court; forfeiture orders; delivery to retirement system. Sec.4. (1)If a member or retirant is convicted of or enters a nolo contendere plea accepted by the court for a felony arising out of his or her service as a public employee, the court may order forfeiture as provided in this section, If a court orders forfeiture under this section, the order shall contain all of the following, as applicable: (a) The portion of the member's or retirant's retirement benefit under a retirement system established by that person's employer at the time the act or acts that resulted in the felony were committed that accrued to that member or retirant on or after the date the first act that resulted in the felony was comiitted is forfeited, (b)The member's or retirant's accumulated contributions standing to that person's credit in the individual account established for that purpose in the retirement system shall be refunded to the member or retirant. (c) The retirement system shall pay to an individual, if any, who would otherwise be a beneficiary of the member or retirant whose retirement benefit is being forfeited under this act an actuarially equivalent monthly retirement allowance at the age that member or retirant would have become eligible for unreduced retirement benefits under that retirement system. (d) The retirement system shall provide hospitalization and medical coverage insurance to the member or retirant whose retirement benefit is being forfeited under this act and to his or her beneficiaries in the same manner and under the same restrictions as is provided to other retirants and beneficiaries of that retirement system. Rendered Thursday,March 08,2007 Page I Michigan Complied Laws Complete Through PA 1 of 2007 ©Legislative Council, State of Michigan Courtesy of www.legislature.mLgov (2)If a court enters an order described in subsection(1), the clerk of the court shall deliver the order to the retirement system. History:1994,Act 350,Eff,Mar.30,1995;—Am, 1996,Act 467,Imd.Eff.Dec.26,1996. 38.2705 Retirement system; compliance with court order. Sec, 5. (1) The retirement system shall comply with an order of the court described in section 4. The retirement system shall not pay to a member or retirant whose retirement benefit is forfeited under this act any retirement benefits on or after the day the governing body of the retirement system receives the order of the court under section 4. (2) A retirement system shall comply with any subsequent orders of a court based upon an appeal of an order previously submitted to the retirement system under this act. (3)A retirement system that complies with a court order under this act is released and discharged from any and all liability pertaining to retirement benefits arising on account of the former member's or retirant's service to the employer upon receipt of the order of the court under section 4. History: 1994,Act 350,Eff.Mar.30,1995;----Am,1996,Act 467,Imd.Eff,Dec.26, 1996. Rendered Thursday,March 08.2007 Page 2 Mlchlgan Compiled Laws Complete Through PA 1 of 2007 0 Legislative Council, State of Michigan Courtesy of www,legislature.mL_gov TAB 6 Eligible Domestic Relation Order Act 1991 PA 46 ; MCL 3 8 . 170 1 , et seq ELIGIBLE DOMESTIC RELATIONS ORDER ACT Act 46 of 1991 AN ACT to authorize the payment of public employee retirement system assets to certain individuals; and to prescribe the powers and duties of certain retirement systems,state departments,public officials,and public employees. History: 1991,Act 46,Imd.Efl.June 27,199E The People of the State of Michigan enact: 38.1701 Short title. Sec. 1.This act shall be known and may be cited as the"eligible domestic relations order act". History: 1991,Act 46,Imd.Eft.June 27,1991. 38.1702 Definitions. Sec.2.As used in this act: (a) "Alternate payee" means a spouse of a participant under a judgment of separate maintenance, or a former spouse,child,or dependent of a participant,who is named in an eligible domestic relations order. (b) "Benefit" means an annuity, a pension, a retirement allowance, or an optional benefit accrued or accruing to a participant under a retirement system or a postretirement subsidy payable to a participant under a retirement system. (c)"Domestic relations order"means a judgment,decree,or,order of a court made pursuant to the domestic relations law of this state and relating to the provision of alimony payments,child support,or marital property rights to a spouse of a participant under a judgment of separate maintenance, or to a former spouse, child,or dependent of a participant. (d) "Earliest retirement date" means the earliest date on which a participant meets all of the requirements for retirement under a retirement system except for termination of employment. (e) "Eligible domestic relations order" or"EDRO" means a domestic relations order that is considered an eligible domestic relations order under section 11 or that meets all of the following requirements: (i)The domestic relations order states the names and last known addresses of the participant and alternate payee. (it) The domestic relations order refers to the attachment to the domestic relations order described in subparagraph(ix). (iii)The domestic relations order states the amount or percentage of the benefit to be paid to an alternate payee, or the manner under which the retirement system is to determine the amount or percentage of the benefit to be paid to an alternate payee. (iv) The domestic relations order states that it applies to the retirement system and that the retirement system shall make payments to the alternate payee as required under the eligible domestic relations order and this act. (v)The domestic relations order does not require the retirement system to provide a type or form of benefit not provided by the retirement system or a form of payment not provided by this act. (vi) The domestic relations order does not require the retirement system to provide an increased benefit determined on the basis of actuarial value. (vii)The domestic relations order does not require the payment of a benefit to an alternate payee that is required to be paid to another alternate payee under a previously filed eligible domestic relations order. (viii)The domestic relations order is filed before the participant's retirement allowance effective date. (ix) The domestic relations order requires that the social security numbers of the participant and the alternate payee be sent to the retirement system in an attachment to the order. The attachment shall not be filed with the court, but shall be attached to the domestic relations order when it is sent to the plan administrator for approval. (f) "Participant" means a member, deferred member, vested former member, deceased former member,or retirant under the retirement system. (g)"Postretirement subsidy"includes,but is not limited to,all of the following: (i)A supplemental annuity. (h)A supplemental payment to a participant. (iii)A percentage increase to a benefit payable to a participant. (iv) Any other payment to a participant or increase to a benefit payable to a participant, excluding health benefits. Rendered Wednesday,May 27,2009 Page 1 Michigan Compilod Laws Complete Through PA 31 of 2009 ©Legislative Council,State of Michigan Courtesy of www.legislature.mi.gov (h) "Retirement system" means a public employee retirement system created and established by this state or any political subdivision of this state. History:1991,Act 46,lmd.Eff.June 27,1991,•--Am.2008,Act 348,lmd.Eff,Dec.23.2008, 38.1703 Right of alternate payee to share of benefit payable to participant; payment of benefit pursuant to EDRO. Sec. 3. Subject to the requirements of this act, an alternate payee is entitled to an actual interest in a share of a benefit that is or will become payable to a participant, if so provided in an EDRO filed with the retirement system.The retirement system shall administer the payment of a benefit pursuant to the EDRO and this section. History: 1991,Act 46,Inid.Eff.June 27,1991. 38.1704 Payment of benefit to alternate payee under EDRO; effective date;form. Sec. 4. Except as otherwise provided in this act, the payment of a benefit to an alternate payee under an EDRO and this act shall begin on the retirement allowance effective date of the participant.The payment of a benefit under an EDRO and this act shall be paid in 1 of the following forms,as applicable: (a)A single life annuity that is equal to the actuarial equivalent of the alternate payee's share of the benefit payable throughout the life of the alternate payee.If the participant is entitled to the payment of a benefit that is not reduced due to early retirement under the retirement system, the alternate payee's single life annuity shall be calculated using the participant's unreduced benefit. If the participant is only entitled to the payment of a benefit that is reduced due to early retirement under the retirement system,the alternate payee's single life annuity shall be calculated using the participant's reduced benefit. (b) If a retirement system offers a participant an optional form of payment of a benefit at retirement, a reduced benefit that is equal to the actuarial equivalent of the total benefit being divided under the SDRO payable throughout the lives of the participant and the alternate payee.The reduced benefit shall be payable in the manner provided under the optional form of payment under the retirement system. The EDRO shall specify the percentage or amount of the reduced benefit that is payable under this subdivision to the participant and to the alternate payee while both are alive. If the participant predeceases the alternate payee while a reduced benefit is being paid to the participant and the alternate payee under this subdivision, the survivor portion of the reduced benefit shall be payable to the alternate payee, If the alternate payee predeceases the participant while a reduced benefit is being paid to the participant and the alternate payee under this subdivision, the alternate payee's percentage or amount of the reduced benefit shall revert to and become payable to the participant. (c)A single life annuity that is equal to the alternate payee's share of the benefit payable throughout the life of the participant. History:1991,Act 46,lmd.Eff.June 27,1991. 38,1705 Election by alternate payee to receive interest in benefit after participant's earliest retirement date, but before termination of employment date; recalculation of benefit if participant retires before age 60. Sec. 5. (1)An EDRO may provide for the payment of a benefit to an alternate payee beginning on or after the participant's earliest retirement date but before the participant terminates employment as provided in this section.An alternate payee shall begin to receive the payment of a benefit under this section effective the first day of the month immediately following the month in which the alternate payee notifies the retirement system of his or her election to begin to receive payment of his or her interest in the benefit of a participant. (2) If an alternate payee elects to receive his or her interest in the benefit of a participant after the participant's earliest retirement date but before the participant's termination of employment, the alternate payee is only entitled to the actuarial equivalent of the alternate payee's share of the participant's benefit that would be payable when the participant reaches age 60. If the participant retires before age 60,the retirement system shall recalculate the benefit payable to the alternate payee so that the recalculated benefit payable to the alternate payee plus the benefit previously paid to the alternate payee are the actuarial equivalent of the alternate payee's share of the benefit payable to the participant. If the recalculated benefit is more than the benefit the alternate payee is receiving,the retirement system shall begin paying the recalculated benefit to the alternate payee effective the first day of the month immediately following the month in which the participant retires. History: 1991,Act 46,lmd.Eff.June 27,1991. 38.1706 Spouse under judgment of separate maintenance or former spouse considered in Rendered Wednesday,May 27,2009 Page 2 Michigan Compiled Laws Complete Through PA 31 of 2009 C Legislative Council, State of Michigan Courtesy of www.legislat'ure.mi.gov EDRO as surviving spouse for purpose of receiving retirement benefit; benefit amount. Sec.6.An EDRO may provide that a spouse under a judgment of separate maintenance or a former spouse is considered the spouse of a participant for the purpose of receiving a benefit as a surviving spouse under the retirement system. The benefit payable to a spouse under a judgment of separate maintenance or a former spouse as a surviving spouse under this section shall be computed as provided in the EDRO and the retirement system. If the amount or percentage of the benefit to be paid to a spouse under a judgment of separate maintenance or a former spouse as the surviving spouse of the participant under this section is less than the entire amount payable under the retirement system, the surviving spouse or other beneficiary of the participant, as determined under the retirement system, is entitled to receive the portion of the benefit not payable to a spouse under a judgment of separate maintenance or a former spouse under this section. History:1991,Act 46,Imd,Eff.June 27, 199E 38.1707 Death of alternate payee before interest in benefit paid; reversion. See. 7, If an alternate payee under this act dies before receiving any payment of his or her interest in a benefit pursuant to this act and an EDRO,that interest reverts to the participant. History: 1991,Act 46,Imd.Eff.June 27,1991. 38.1708 Creation, assignment, or recognition of alternate payee's right to interest in benefit share not prohibited assignment under retirement system. Sec, 8. The creation, assignment, or recognition of a right of an alternate payee to an actual interest in a share of a benefit that is or will become payable to a participant pursuant to an EDRO under this act is not a prohibited assignment under a retirement system. History: 1991,Act 46,Imd.Eff.June 27,1991. 38.1700 Determination by retirement system whether domestic relations order is EDRO; procedure; notice. Sec. 9. Each retirement system shall establish a reasonable procedure to determine if a domestic relations order is an EDRO under this act. The retirement system shall promptly notify the participant and alternate payee named in a domestic relations order that the retirement system has received the domestic relations order.The notice shall include a description of the procedure by which the retirement system determines if the domestic relations order is an EDRO under this act, History:1991,Act 46,Imd.Eff,June 27,1991. 38.1710 Determination by retirement system whether domestic relations order is EDRO; notice;filing amended domestic relations order with retirement system. See. 10. The retirement system shall, within a reasonable period of time after receiving a domestic relations order, determine if the domestic relations order is an EDRO under this act. If the retirement system determines that the domestic relations order is an EDRO under this act,the retirement system shall promptly notify the participant and alternate payee named in the EDRO that the domestic relations order is an EDRO. The retirement system shall begin the payment of a benefit under this act pursuant to the EDRO and this act on the first day of the month following the month in which the domestic relations order was determined to be an EDRO or the first day of the month following the month in which a benefit is payable under the EDRO and this act, whichever is later. If the retirement system determines that the domestic relations order is not an EDRO under this act,the retirement system shall promptly notify the participant and alternate payee named in the domestic relations order that the domestic relations order is not an EDRO. The retirement system shall specify in the notice why the retirement system determined that the domestic relations order is not an EDRO under this act.A determination by the retirement system that a domestic relations order is not an EDRO under this act does not prohibit a participant, alternate payee, or court from filing an amended domestic relations order with the retirement system under this act. History:1991,Act 46,Imd.Eff.June 27,199). 38.1711 Status of domestic relations order filed with retirement system before effective date of act. Sec. 11. A domestic relations order Sled with the retirement system before the effective date of this act is considered an EDRO under this act if the retirement system is making payments under the domestic relations order on the effective date of this act or to the extent a domestic relations order is consistent with the provisions of this act. This section does not prohibit a participant, alternate payee, or court from filing an amended domestic relations order under this act. Rendered Wednesday,May 27,2009 Page 3 Michigan Complled Laws Complete Through PA 31 of 2009 0 Legislative Council, State of Michigan Courtesy ofwww.legislafure.mi.gov History:I991,Act 46,Imd.Eff.June 27, 1991, Rendered Wednesday,May 27,2009 Pago 4 Michigan Compiled Laws Complete Through PA 31 of 2009 ©Legislative Council,State of Michigan Courtesy of WWW.leglslature.mi.gov TAB 7 Freedom of Information Act 1976 PA 442 , as amended; MCL 15 .231 et seq FREEDOM OF INFORMATION ACT Act 442 of 1976 AN ACT to provide for public access to certain public records of public bodies; to permit certain fees; to prescribe the powers and duties of certain public officers and public bodies; to provide remedies and penalties;and to repeal certain acts and parts of acts. History: 1976,Act 442,Eff.Apr. 13, 1977. Popular name:Act 442 Popular name:F01A The People of the State of Michigan enact: 15.231 Short title; public policy. Sec. 1.(1)This act shall be known and may be cited as the"freedom of information act". (2)It is the public policy of this state that all persons, except those persons incarcerated in state or local correctional facilities, are entitled to frill and complete information regarding the affairs of government and the official acts of those who represent them as public officials and public employees,consistent with this act. The people shall be informed so that they may fully participate in the democratic process. History: 1976,Act 442,Eff.Apr.13, 1977;---Am. 1994,Act 131,trod.Eff.May 19,1994;Am, 1996,Act 553,Eff.Mar.31,1997; —Am.1997,Act 6,Imd.Eff.May 16, 1997. Popular name:Act 442 Popular name:F01A 15.232 Definitions. Sec. 2.As used in this act: (a) "Field name" means the label or identification of an element of a computer data base that contains a specific item of information,and includes but is not limited to a subject heading such as a column header,data dictionary,or record layout. (b),"FOiA coordinator"mcaru%either of the following: (i)An individual who is a public body. (11)An individual designated by a public body in accordance with section 6 to accept and process requests forpublic records under thus act. partnership, firm, organization, (c)"Person" means an individual, corporation, limited liability company, p p, b association, governmental entity, or other legal entity. Person does not include an individual serving a sentence of imprisonment in a state or county correctional facility in this state or any other state, or in a federal correctional facility. (d)"Public body"means any of the following: (i)A state officer,employee, agency,department,division, bureau,board,commission,council,authority, or other body in the executive brwrch of the state government,but does not include the governor or lieutenant governor,the executive office of the governor or lieutenant governor,or employees thereof. (ii)An agency,board,commission,or council in the legislative branch of thestate goverunent: (W) A county, city, township, village, intercounty, intercity, or regional governing body, council, school district, special district, or municipal corporation. or a board, department, commission, council, or agency thereof, (iv)Any other body which is created by state or local authority or which is primarily funded by or through state or local authority. (%,) The judiciary, including the office of the county clerk and employees thereof when acting in the capacity of clerk to the circuit court,is not included in the definition of public body. (e) "Public record" means a writing prepared, owned, used, in the possession of, or retained by a public body in the performance of an official function, from the time it is created. Public record does not include computer software.'rhis act separates public records into the following 2 classes: (O't'hose that are exempt lion disclosure under section 13. (H) All public records that arc not exempt from disclosure under section 13 and which are subject to disclosure under this act. (f) "Software" means a set of statements or instructions that when incorporated in a machine usable medium is capable of causing a machine or device having information processing capabilities to indicate, perform, or achieve a particular function, task, or result. Software does not include computer-stored Page, is":.ichi9an Cornp led Laws Com h plote Trough PA 1 of 2007 Rendered Thursday,March OB,2007 yo!r wiv. .rni.gov :�Legislative Council, State of Michigan �vurleslerlrlattir information or data,or a field name if disclosure of that field name does not violate a software license. (g) "Unusual circumstances" mcans any 1 or a combination of the following, but only to the extent necessary for the proper processing or a requcst: (a? The need la search for, collect, or appropriately examine or review a voluminous amount of separate and distinct public records pursuant to a single request. (fl) The need to collect the requested public records from numerous field offices, facilities, or other establishments which are located apart from the particular office receiving of-processing the request, (11) "Writing" mcans bandwriling, typewriting, printing, photostating, photographing„ photocopying, and every other means of recording, and includes letter's, words, pictures, sounds, or symbols, or combinations thereof, and papers, maps, magnetic of paper tapes, photographic films or prints, microfilm, nticroficlle, magnetic or punched cards,discs,drums,or other means of recording or retaining meaningful content. (i) "Written request" means a writing that asks for information, and includes a writing transmitted by facsimile,electronic mail,or other electronic means. History: 1976,Act 442,liff.Apr.13, 1977;—Am. 1994,Act 131,Itnd.Eff,May 19,1994-Am.1996,Act 553,Eff.Mar.31, 1997. Popular name:Act 442 Popular name:F01A 15.233 Public records; right to inspect, copy, or receive; subscriptions; forwarding requests; file; inspection and examination; memoranda or abstracts; rules; crimpiiation„summary, or report of Information; creation of new public record; certified copies. See. 3, (1) Except as expressly provided in section 13, upon providing a public body's FOiA coordinator with a written request that describes a public record sufficiently to eatable the public body to find the public record, a person has a right to inspect, copy, or receive copies of the requested public record of the public body. A person has a right it) subscrihc to future issuances of public records (fiat are created, issued, or disseminated on a regular basis. A subscription shall be valid for up to 6 months, at the request of the subscriber,and shall be renewable.An employee of it public body who receives a request for a public record shall promptly forward that request to die freedom.of information act coordinator. (2)A freedom of information act coordinator shall keep a copy of all written requests for public records on file for no less than 1 year. (3) A public body shall furnish a requesting person a reasonable opportunity for inspection and examination of its public records, and shall furnish reasonable fitcilities for making memoranda or abstracts from its public records during the usual business hours. A public body may make reasonable rules necessary to protect its public records and to prevent excessive and unreasonable interference with the discharge of its functions. A public body shall protect public records from loss, unauthorized alteration, mutilation, or destruction. (4) "I'his act does not require a Public body to make a compilation, summary, or report of information, ekeept as required in section 11. (s)This act does not require a public body to create a new public record,except as required in section 11, and to the Went required by this act for the furnishing of copies,or edited copies pursuant to section 14(1),of an already existing public record. (6) The custodian of a public record shall, upon written request, furnish a requesting person a certified copy of a public record. History: 1976,Act 442,Eff.Apr, 13, 1977;Am. 1996,Act 553,Eff,Mar.31,1997. Popular name:Act 442 Popular name:FOIA 15.234 Fee; waiver or reduction; affidavit; deposit; calculation of costs; limitation; provisions Inapplicable to certain public records. `sec, 4, (1) A public body naay charge a fec fot'a public record scorch, the necessary copying of a public record for instieCliou, or for providing n copy of a public record. Subject to subsections (3) and (4), the fee shall be limited to actual mailing costs, and to the actual incremented cost of duplicfltioli or publication including labor, the cost of search, examination, review, and the deletion and separation of exempt from nonexcrnpt information as provided in section 14. A search for a public record may be conducted or copies of public; records may be furnished without charge or at a reduced charge if the public body determines Ihat a waiver or reduction of the 11%is in the public interest bccause searching for or furnishing copies of'the public record can be considered as primilrily bent.-Mint the general public. A public record search shall be made anti it Copy of,t public record :;lull l be furnitiflcd without charge far the first$20.00 of the fee for each request to an Rendered Thursday,Maich 08,2007 Page 2 Michigan Complied Laws Complelo Through PA t of 2007 C Legislative Council, State of Michigan Courtesy of www.legislature,rnigov individual who is entitled to information under this act and who submits an affidavit stating that the individual is then receiving public assistance or, if not receiving public assistance, stating facts showing inability to pay the cost beeausc of indigency. (2)A public body may require at the time a request is made a good With deposit from the person requesting tic public record or series of public records, if the fee authorized under this section exceeds $50.00. The deposit shall not exceed 1/2 ofthe total fee. (3)In calculating the cost of labor incurred in duplication and mailing and the cost of examination, review, separation,and deletion under subsection(1),a public body may not charge more than the hourly wage of the lowest paid public holy employee capable of retrieving the information necessary to comply with a request undo this act. i cos shall be unifornt and not dependent upon the identity of the requesting person. A public body shall utilize the most economical means available for making copies of public records.A roc stall not be charged for the cost of search, examination, review, and the deietion and separation' of exempt from nonexempt information as provided in section 14 unless failure to charge a lee would result in unreasonably high costs to the public body because of the nature of the request in the particular instance, anti the piublic body specifically identifies the nature of these unreasonably high costs. A public body shall establish and publish procedures and guidelines to implement this subsection. (4)This section does not apply to public records prepared under an act or statute specifically authorizing the sale of those public records to the public, or if the amount of the fee for providing a copy of the public record is otherwise specifically provided by an act or statute. History: 1976,Act 442,Eff.Apr,13,1977,--Am.1988,Act 99,lmd.GiC Apr.11,1988;—Am. 1996,Act 553,liff.Mar,31,1997. Conatitulionallty:The disclosure of public records under the freedom of information act impartially to the general public for the incremental cost of creating the record is not a gnarling or credit by the state in aid of private persons and does not justify nondisclosure on the theory that the information is proprietary infomtation bolonging to a public body.Keslenbaum v.Michigan State:University,414 Mich.510,417 N.W.2d 1102(1982). Popular name:Act 442 Popular name:FOIA 15.235 Request to inspect or receive copy of public record; response to request; failure to respond; damages; contents of notice denying request; signing notice of denial; notice extending period of response; action by requesting person. Sec.5.(1)Except as provided in section 3,a person desiring to inspect or receive a copy of a public record shall make a written request for the public record to the FOIA coordinator of a public body.A written request made by facsimile, electronic mail, or other electronic transmission is not received by a public body's FOIA coordinator until I business day after the electronic transmission is made. (2)Unless otherwise agreed to in writing by the person making the request,a public body shall respond to a request for it public record within 5 business days after the public body receives the request by doing I of the following: (a)Granting the request. (b)Issuing a written notice to the requesting person denying the request. (c) Granting the request in part and issuing a written notice to the requesting person denying the request in part. (d)Issuing a notice extending for not more than 10 business days the period during which the public body shall respond to the request. A public body shall not issue more than 1 notice of extension for a particular request. (3)li,ailurc to respond to a request pursuant to subsection(2)constitutes a public body's final determination to deny the request, 111 a circuit court action to compel a public body's disclosure of a public record under section 10, the circuit coup shall assess damages against the public body pursuant to section 10(8) if the circuit court has done:both of the following: (a)Determined that thc public bo+ly has not complied with subsection(2). (b)Ordered the public body to eliWlose or provide copies of all or a portion of the public record. (4) A written notice denying a request for a public record in whole or in part is a public body's final determination to (icily the request or portion of that request,The written notice shall contain; (a)An explanation of the basis under this act or other statute for lice determination that the public record,or portion of that public record, is exempt from disclosure:;if that is the reason for denying all or a portion of the request. (b) A certificate that the public record does not exist under the name given by the requester or by another name reasonably known to the public body, if that is the reason for denying the request or a portion of the request. Rendered Thursday,March Ca,2007 Page 3 Michigan Compiled Laws Complete Through PA 1 of 2007 0 Legislative Council, State of Michigan Courtesy of www legislalure.mi.gov (c)A description of-1 public record or information on a public record that is separated or deleted pursuant to section 14,i fa separation or deletion is made. (d)A full explanation of the requesting person's right to do either of the following: (i) Submit to the head of the public body It written appeal that specifically states the word "appeal" and identifies the reason or reasons for reversal of the disclosure denial. (H)Seek judicial review of the denial under section 10; (c) Notice of the right to receive attorneys' fees and.darnages as provided in section 10 if, after judicial review, the circuit court determines that the public body has not complied with this section and orders disclosure of all or it portion of it public record. (5)The individual designated in section 6 as responsible`for the denial of the request shall sign the written notice of denial. (6) If a public body issues a notice extending the period for a response to the request, the notice shall specify the reasons for the extension and the date by which the public body will do 1 of the following: (it)Grant the request. (b)Issue a written notice to the requesting person denying the request. (c)Grant the request in part and issue a written notice to the requesting person denying the request in part. (7)if it public body makes a final detenninatiou to deny in whole or in part a request to inspect or receive a copy of a public record or portion of that public record,the requesting person may do either of the following: (it)Appeal the denial to the head of the public body pursuant to section 10. (b)Coinnnence an action in circuit court,pursuant to section 10. History: 1976,Acl 442,Eff.Apr. 13, 1977;Am. 1978,Act 329,Imd,Eff,July 11,1978; Am. 1996,Act 553,Eff,Mar.31, 1997. Compiler's note:In subsection(3),the reference to"section 10(8)"evidently should be a reference to"section 10(7)." Popular name:Act 442 Popular name:FOiA 15.236 FOiA coordinator. Sec.6. (1)A public body that is a city, village,township,county,or state department,or under line control of a city, village, township, county, or state department, shall designate an individual as the public body's FOIA coordinator.The TOIA coordinator shall be responsible for accepting and processing requests for the public body's public records under this act and shall be responsible for approving a denial under section 5(4) and (5). In a county not having an executive form of government, the chairperson of the county board of commissioners is designated the FOIA coordinator for that county. (2)For all other public bodies,the chief administrative officer of the respective public body is designated the public body's FOIA coordinator. (3) An 'FOIA coordinator may designate another individual to act on his or her behalf in accepting and processing requests lot•the public body's public records,and in approving a denial under section 5(4)and(5), History: 1976,Act 442,Eff,Apr. 13, 1977;--Am.1996,Act 553,Eff.Mar,31,1997. Popular name:Act 442 popular name:FOIA 15.240 Options by requesting person; appeal; orders; venue; de novo proceeding; burden of proof; private view of public record; contempt; assignment of action or appeal for hearing, trial, or argument; attorneys' fees, costs, and disbursements; assessment of award; damages. See. 1(), (1) if is public body makes a final determination to deny all or a portion of a request, the requesting person may do I of the following lit his or her option, (a) Submit to the head of the public body n written appeal that specifically states the word "appeal" and idcnli tics the reason or reasons for reversal of the denial. (b) Commence an action in the circuit court to compel the public body's disclosure of the public records within Igo drys al`Icr a public body's final determination to deny a request. (2)Within 10 bays after receiving a written appeal pursuant to subsection(1)(a), the head of a public body shall do I of the following: (a)Reverse the disclosure denial, (b)Issue a written notice to the requesting person upholding the disclosure denial. (c) Reverse the disclosure denial in part and issue a written notice to the requesting person upholding the disclosure denial in part Rendered Thursday,tA4arch 08,2007 Page 4 Michigan Compiled Laws Complele Through PA 1 of 2007 O Legislative Council, State of Michigan Courtesy of www,iegislali ire,mi.gov (d)Under unusual circumstances, issue a notice extending for not more than to business days the period during which tire head of the public body shall respond to the written appeal.The head of a public body shall not issue more than I notice of extension for a particular written appeal. (3) A board or commission that is the head of a public body is not considered to have received a written appeal under subsection(2)until the first regularly scheduled meeting of that board or commission following submission of the written appeal under subsection 0)(a). If the head of the public body fails to respond to a written appeal pursuant to subsection (2), or if the head of the public body upholds all or a portion of the disclosure denial that is the subject of the written appeal, the requesting person may seek judicial review of the nondisclosure by commencing an action in circuit court under subsection (4) In in action commenced under subsection (1)(b),a court that determines a public record is not exempt from disclosure shall order the public body to cease withholding or to produce all or a portion of a public record wrongfully withheld,regardless of the location of the public record. The circuit court for the county in which the complainant resides or has his or her principal place of business, or the circuit court for the county in which the public record or an office of the public body is located has venue over the action.The court shall determine the matter de novo and the burden is on the public body to sustain its denial.The court,on its own motion, may view the public record in controversy in private before reaching a decision. Failure to comply with an order of the court may be punished as contempt of court. (5)An action commenced under this section and an appeal from an action commenced under this section shall be assigned for hearing and trial or for argument at the earliest practicable date and expedited in every way. (6)if a person asserting the right to inspect,copy,or receive a copy of all or a portion of a public record prevails in an action commenced under this section, the court shall award reasonable attorneys' fees, costs, and disbursements. If the person or public body prevails in part,the court may, in its discretion,award all or an appropriate portion of reasonable attorneys' fees, costs, and disbursements. The award shall be assessed against the public body liable for damages under subsection(7). (7) If the circuit court determines in an action commenced under this section that the public body has arbitrarily and capriciously violated this act by refusal or delay in disclosing or providing copies of a public record, the court shall award, in addition to any actual or compensatory damages, punitive damages in the amount of$50o.00 to the person seeking the right to inspect or receive a copy of it public record. The damages shall not be assessed against an individual,but shall be assessed against the next succeeding public body that is not an individual and lhnt kept or maintained the public record as hart of its public function. History; 1976,Act 442,Eff.Apr. 13,1977=Am.1978,Act 329,Imd.Eff.July 11,1978;--Am.1996,Act 553,Eft Mar.31, 1997. Popular name;Act 442 Popular name:FOIA 15.241 Matters required to be published and made available by state agencies; form of publications; effect on person of matter not published and made available; exception; action to compel compliance by state agency; order; attorneys' fees, costs, and disbursements;jurisdiction; definitions. Sec. 11.(1)A state agency shall publish and make available to the public all of the following: (a)Final orders or decisions in contested cases and the records on which they were made. (b)Promulgated miles. (c)Other written statements which implement or interpret laws, rules, or policy, including but not limited to guidelines, manuals, and forms with instructions, adopted or used by the agency in the discharge of its functions. (2) Publications may be in pamphlet, loose-leaf, or other appropriate form in printed, mimeographed, or other written matter. (3)Except to the extent that a person has actual and ti.nciy notice of the terms thereof,a person shall not in resort to, or be adversely a any manner be required to ffected by, a matter required to be published and made availnl)lc,if the matter is not so published and made available. O)This section does not apply to public records which are exempt from disclosure under section 13. (5) A person may commence an action in the circuit court to compel a state agency to comply with this section. II'the court determines that the state agency has failed to comply, the court shall order the state trgency to comply and shall award rensonable attorneys' fees, costs, and disbursements to the person conuncncilig tluc action, The circuit court for the county in which tine ,-title agency is located shall have Jurisdiction to issue the order, Page 5 Michigan Compiled Laws Complete Through PA t of 2007 Rendered Thursday,March DE3,200' Courtesy of mi.g0v co Legislative Council,state of Michigan wwt�✓.;egislalure. (6) As used in this section, "state agency", "contested case", and "rules" shall have the same meanings as ascribed to those terns in Act No, 306 of the Public Acts of 1969, as amended, being sections 24.201 to 24.315 of the Michigan Compiled Laws. history: 1976,Act 442,Eff.Apr, 13, 1977. Popular uamc:Act 442 Popular name:POIA 15.243 Exemptions from disclosure; public body as school district or public school academy; withholding of information required by law or in possession of executive office. Sec. 13, (1) A public body may exempt from disclosure as a public record under this act any of the following: (a) Information of it personal nature if public disclosure of the information would constitute a clearly unwarranted invasion of an individual's privacy. (b)Investigating records compiled for law enforcement purposes,but only to the extent that disclosure as a public record would do any of the following: (i)Interfere with law enforcement proceedings. (H)Deprive a person of the right to a fair trial or impartial administrative adjudication. ('Til)Conclitute an unwarranted invasion of personal privacy. (iv) Disclose the identity of a confidential source,or if the record is compiled by a law enforcement agency ill the course of a criminal investigation, disclose confidential information furnished only by a confidential source. (v)Disclose law enforcement investigative techniques or procedures. (vi)Endanger the life or physical safety of law enforcement personnel. (c) A public record that if disclosed would prejudice a public body's ability to maintain the physical security of custodial or penal institutions occupied by persons arrested or convicted of a crime or admitted because of n mental disability, unless the public interest in disclosure under this act outweighs the public interest in nondisclosure. (d)[records or information specifically described and exempted from disclosure by statute. (e)A public record or information described in this section that is furnished by the public body originally compiling,preparing, or receiving the record or information to a public officer or public body in connection with tine performance of the ditties of that public officer or public body, if the considerations originally living rise to the exempt nature of the public record retrain applicable. (f) Trade secrets or commercial or financial information voluntarily provided to an agency for use in developing governnlenlal policy if: (i)The information is submitted upon a promise of confidentiality by the public body. (io'rhe promise of confidentiality is authorized by the chief administrative officer of the public body or by an elected official at the time the promise is made. (iii) A description of the information is recorded by the public body within a reasonable time after it has been submitted, maintained in a central place within the public body, and wade available to a person upon request. `,'his subdivision does not apply to information submitted as required by law or as a condition of receiving a governmental contract,license,or other benefit. (g)Information or records subject to the attorney-client privilege. (h) illfonmation or records subject to the physician-patient privilege,the psychologist-patient privilege, the minister, priest,or Christian Science practitioner privilege, or other privilege recognized by statute or court rule. (i)A bid or proposal by a person to enter into a contract or agreement,until the time for the public opening of bids or proposals,or if a public opening is not to be conducted,until the deadline for submission of bids or proposals has expired. 6)Appraisals of l'cal property to be acquired by the public body until either of the following occurs: (r)An agreement is entered into. (ti)'Three years have elapsed since the making of tine appraisal, unless litigation relative to the acquisition has not yet terminated. (k)'I'cst questions and answers,scoring keys,and other examination instruments or data used to administer a license,public employment,or academic examinnliutr,unless the public interest in disclosure under this act outweighs the public interest in nondisclosure. (1) Medical,counseling,, or psychological facts or evaluations concerning an individual if the individual's iLlentity would be revealed by 11 disclosure of those facts or evaluation,including protected health information, as defined in 45 UIR 160.103. I2r>i�+lt:lhd Pwrsdny,march Oil,.2i30% Page(i Michigan Compllod Laws Complete Through PA t of 2007 J Legislative Council,State of Michigan Courtesy of wwtv.leg;slature.,,w.gov (nt)Communications and notes within it public body or between public bodies of an advisory nature to the extent that they cover other than purely ['actual materials and tire preliminary to a final agency determination of policy or action.'['his exemption does not apply unless the public body shows that in the particular instance the public interest in encouraging frank communication between officials and employees of public bodies clearly outweighs the public interest in disclosure. This exemption does not constitute an exemption under stale law for purposes of section 8(h) of the open meetings act, 1976 PA 267, MCL 15.268. As used in this subdivision, "determination of policy or action" includes a determination relating to collective bargaining, unless the public record is otherwise required to be made available under 1947 PA 336, MCL 423.201 to 423,217. (n) Records of law enforcement communication codes, or plans for deployment of .law enforcetne it personnel, that if disclosed would prejudice it public body's ability to protect the public safety unless the public interest in disclosure under this tact outweighs the public interest in nondisclosure in the particular instance. (o)Information that would reveal the exact location of archaeological sites.The department of history,arts, and libraries may promulgate rules in accordance with the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328, to provide for the disclosure of the location of archaeological sites for purposes relating to the preservation or scientific examination of sites. (p) Testing data developed by it public body in detertriining whether bidders' products meet the specifications for purchase of those products by the public body, if disclosure of the data would reveal that only 1 bidder has met the specifications. This subdivision does not apply after 1 year has elapsed from the time the public body completes the testing. (q)Academic transcripts of an institution of higher education established under section 5, 6, or 7 of article Mill of the stale constitution of 1963,if the transcript pertains to a student who is delinquent in the payment of financial obligations to the institution. (r) Records of a campaign committee including a committee that receives money from a state campaign fund. (s) Unless the public interest in disclosure outweighs the public interest in nondisclosure in the particular instance,public records of a law enforcement agency,the release of which would do any of the following: (i)identify or provide it means of identifying an informant. (n) Identify or provide a means of identifying a law enforcement undercover officer or agent or a plain clothes officer as a law enforcement officer or agent. (W) Disclose the personal address or telephone number of active or retired law enforcement officers or agents or a special skill that they may have. (iv)Disclose Itte name,address,or telephone numbers of family members,relatives, children, or parents of active or retired law enforcement officers or agents. (v)Disclose operational instructions 1'or law enforcement officers or agents. (vl)Reveal the contents of staff manuals provided for law enforcement officers or agents, (vii)irndanger the life or safety or law enforcement officers or agents or their families, relatives, children, parents,or those who furnish information to law enforcement departments or agencies. (Milt)Identify or provide a means of identifyinga person.as a law enforcement officer,agent,or informant. (k)Disclose personnel records of law enforcernentagencies. (.v) Identify or Provide a means of identifying`residences that law enforcement agencies are requested to check in the absence of their owners or tenants. (t) Except as otherwise provided in this subdivision,records and information pertaining to an investigation or a compliance conference conducted by the department under article 15 of the public health code, 1978 PA 36H, MCL 333.16101 to 333.18838, before a complaint is issued.This subdivision does not apply to records or information pertaining to 1 or more of the following: (;)The fact that tin allegation has been received and an investigation is being conducted, and the date the allegation was received. (ii)nic fact dial an allegation was received by the department;the fact that the department did not issue a complaint for the allegation;turd the fact that tlae"llegulioai was dismissed. (u) 12ccords of a public body's security measures, including security plans, security codes and cotrubinatiuns, passwords, passes, keys, and security procedures, to the extent that the records relate to the nngoiuig security of the public body. (v) Records or information relating to a civil action in which the requesting party and tlae public body are parties. (w)hirarmaliou or records that would disclose the social security number of an individual, (x) F,xcept as otherwise provided in this subdivision, an application for the position of president of an Page 7 Michigan Compiled taws Complete Through PA i of 2007 Rerdurod Thursday,Match Oa,2007 Courtesy of www.legislature.m:gov (0 Legislative Council, state of Michigan in::titulion of higher education established under section 4, 5, or 6 of article Vill of the state constitution of ll)(i3, materials submitted with such an application, letters of recommendation or references concerning an applicant,and records or information relating to the process of searching for and selecting an individual for a position described in this subdivision, if the records or information could be used to identify a candidate for the position. however,after I or more individuals have been identified as finalists for it position described in this subdivision, this subdivision does not apply to a public record described in this subdivision, except a letter of recommendation or reference,to the extent that the public record relates to an individual identified as a finalist for the position. (y) Records or information of measures designed to protect the security or safety of persons or property, whether public or private, including, but not limited to, building, public works, and publio water supply designs to the extent that those designs relate to the ongoing security measures or., public body,capabilities and plans for responding to a violation of the Michigan anti-terrorism act, chapter LXXXIII-A of the Michigan penal code, 1931 PA 328, MCL 750.543a to 750.543z, emergency response plans, risk planning documents, threat assessments, and domestic preparedness strategies, unless disclosure would nut impair a public body's ability to protect the security or safety of persons or property or unless the public interest in disclosure outweighs the public interest in nondisclosure in the particular instance. (2) A public body shall exempt from disclosure information that, if released, would prevent tine public body from complying with20 USC 1232g,commonly referred to as the family educational rights and privacy act of 1974. A public body that is a local or intermediate school district or a public school academy shall exempt from disclosure directory information, as defined by 20 USC 1232g, commonly referred to as the family educational rights and privacy act of 1974, requested for the purpose of surveys, marketing, or solicitation,unless that public body determines that tile use is consistent with the educational mission of the public body and beneficial to the affected students,A public body that is alocal or intermediate school district or a ,public school academy may take steps to ensure that directory information disclosed under this subsection shall not be used, rented, or sold for the.purpose of surveys, marketing, or solicitation. Before disclosing the directory information, a public body that is a local or intermediate school district or a public school academy may require the requester to execute an affidavit stating that directory information provided under this subsection shall not be used,rented,or sold for the purpose of surveys,marketing,or solicitation. (3) This act does not authorize the withholding of information otherwise required by law to be made available to the public or to a party in a contested case tinder the administrative procedures act of 1969, 1969 PA 306,MCL 24.201 to 24.328. (4) Except as otherwise exempt under subsection (1), this act does not authorize the withholding of it public record in the possession of the executive office of the governor or lieutenant governor, or an employee of either executive office, if the public record is transferred to the executive office of the governor or lieutenant governor, or art employee of either executive office,after a request for the public record has been received by a state officer, employee, agency, department, division, bureau, board, commission, council, authority,or other body in the executive branch of government that is subject to this act. History.1976,Act 442,F.ff,Apr, 13, 1977,'--Am. 1978,Act 329,Imd.Eff.July 11, 1978;Am. 1993,Act 82,Eff.Apr. 1,1994;- Am.1996,Act 553,Eff.Mar.31,1997,•-Am.2000,Act 88,lmd.Eff.May 1,2000;Am.2001,Act 74,lmd.Eff,July 24,2001;Am. 2002,Act 130,Eff.May 1,2002;--Am.2002,Act 437,Eff,Aug. 1,2002;--Am.2006,Act 4822 Imd.Eff.Dec.22,2006. Popular name:Act 442 Popular name:FUTA 15.243a Salary records of employee or other official of institution of higher education, school district,intermediate school district,or community college available to public on request. Sec. 13a.Notwithstanding section 13,an institution of higher education established under section 5,6,or 7 of article 8 of the slate constitution of 1963; a school district as defined in section 6 of Act No. 451 ul'the Public Acts of 1976, being section 380.6 of the Michigan Compiled Laws; nn intermediate school district as defined in section 4 of Act No.451 of the Public Acts of 1976,being section 380A of the. Michigan Compiled Laws;or a community college established under Act No. 331 of the.Public Acts of 196t>, ac amended,being sections 389.1 to 389.195 of the Michigan Compiled Laws shall upon request make available to the public the salary records of all employee or other official of the institution of higher education, school district, intermediate school district,or community college, History;Add.1979,Act 130,lmd.Eff.Oct.26,19 79. popular unmc:Act 442 Popular name;FOIA Rendered Thursday,March 08,2007 Page 8 Michigan Compiled Laws complete-through PA 1 of 2007 G Legislative Council, State of Michigan Courlesy of www,legislature,mi.go v 15.244 Separation of exempt and nonexempt material; design of public record; description of material exempted. Sec. 14. (1)if a public record contains material which is not exempt under section 13, as well as material which is exempt from disclosure under section 13, the public body shall separate the exempt and nonexempt material and make the nonexempt material available for examination and copying. (2)When designing a public record,a public body shall, to the extent practicable, facilitate a separation of exempt from nonexempt infonnation. if the separation is readily apparent to a person requesting to inspect or receive copies of the form, the public body shall generally civscribe the material exempted unless that description would reveal the contents of the exempt information and thus defeat the purpose of the exemption. History: 1976,Act 442,Eff.APT. 13,1977. Popular name:Act 442 Popular name:FOIA 15.245 Repeal of§§24.221, 24.222, and 24.223. Sec. 15. Sections 21, 22 and 23 of Act No. 306 of the Public Acts of 1969, as amended, being sections 24.221,24,222 and 24,223 of the Michigan Compiled Laws, are repealed. History: 1976,Act 442,Eff.Apr.13, 1977. Popular name:Act 442 Popular name:FOIA 15.246 Effective date. Sec. 16.This act shall take effect 90 days after being signed by the governor. History:1976,Act 442,Fff,Apr.13,1977. Popular name:Act 442 Popular name:FOIA Rendered Thursday,March 08,2007 Page 9 Michigan Compiled Laws Complete Through PA 1 of 2007 0 Legislative Council, State of Michigan Courtesyo;wwwlegislalure.mLgov TAB 8 Open Meetings Act 1976 PA 267, as amended ; MCL 15 .261 et seq OPEN MEETINGS ACT Act 267 of 1976 AN ACT to require certain meetings of certain public bodies to be open to the public; to require notice and the keeping of minutes of meetings; to provide for enforcement; to provide for invalidation of governmental decisions under certain circumstances;to provide penalties; and to repeal certain acts and parts of acts. History; 1976,Act 267,Eff.Mar,31,1977, The People of the State of Michigan enact: 15.261 Short title; effect of act on certain chatter provisions, ordinances, or resolutions. Sec. 1,(1)This act shall be known and may be cited as the"Open meetings act". (2) This act shall supersede all local charter provisions, ordinances, or resolutions which relate to requirements for meetings of local public bodies to be open to the public. (3) After the effective date of this act, nothing in this act shall prohibit a public body from adopting an ordinance,resolution,role,or charter provision which would require a greater degree of openness relative to meetings of public bodies than the standards provided for in this act. History: 1976,Act 267,Eff.Mar,31, 1977. 15.262 Definitions. Sec,2.As used in this act: (a) "Public body"means any state or local legislative or governing body, including a board, commission, committee, subcommittee, authority, or council, that is empowered by state constitution, statute, charter, ordinance,resolution, or rule to exercise governmental or proprietary authority or perform a governmental or proprietary function; a lessee of such a body performing an essential public purpose and function pursuant to the lease agreement; or the board of a nonprofit corporation formed by a city under section 4o of the home rule city act, 1909 PA 279,MCL 117.40. (b) "Meeting" means the convening of a public body at which a quorum is present for the purpose of deliberating toward or rendering a decision on a public policy, or any meeting of the board of a nonprofit corporation formed by a city tinder section 4o of the home rule city act, 1909 PA 279,MCL 117.4o. (c)"Closed session'means a meeting or part of a meeting of a public body that is closed to the public. (d) "Decision' means a determination, action, vote, or disposition upon a motion, proposal, recommendation,resolution,order,ordinance,bill,or measure on which a vote by members of a public body is required and by which a public body effectuates or formulates public policy. History:1976,Act 267,Eff.Mar.31,1977;—Am.2001,Act 38,lmd,Eff,July 11,200E 15.263 Meetings, decisions, and deliberations of public body; requirements; attending or addressing meeting of public body; tape-recording, videotaping, broadcasting, and telecasting proceedings; rules and regulations; exclusion from meeting; exemptions. Sec, 3. (1) All meetings of a public body shall be open to the public and shall be held in a place available to the general public.All persons shall be permitted to attend any meeting except as otherwise provided in this act. The right of a person to attend a meeting of a public body includes the right to tape-record,to videotape, to broadcast live on radio, and to telecast live on television the proceedings of a public body at a public meeting. The exercise of this right shall not be dependent upon the prior approval of the public body. However,a public body may establish reasonable riles and regulations in order to minimize the possibility of disrupting the meeting. (2)All decisions of a public body shall be made at a meeting open to the public. (3)All deliberations of a public body constituting a quorum of its members shall take place at a meeting open to the public except as provided in this section and sections 7 and $, (4)A person shall not be required as a condition of attendance at a meeting of a public body to register or otherwise provide his or her name or other information or otherwise to fulfill a condition precedent to attendance. (5)A person sluill be permitted to address a meeting of a public body under roles established and recorded by the public body. The legislature or a house of the legislature may provide by rule that the right to address may be limited to prescribed times at hearings and committee meetings only. (6)A person shall not lie excluded from 11 meeting otherwise open to the public except for a breach of the peace actually committed at the meeting. Rendered Thursday,March 08,2Do7 Page 1 Mlchlgan Complied Laws Cornplste Through PA 1 of 2007 ©Legislative Council, State of Michigan Couriesy n,'hiv✓w.ie_grsla(ure,mi.gav (7)This act does not apply to the following public bodies only when deliberating the merits of a case: (a) The worker's compensation appeal board created under the worker's disability compensation act of 1969, Act No. 317 of the Public Acts of t969, as amended, being sections 419,101 to 418.941 of the Michigan Compiled Laws. (b) The employment security board of review created under the Michigan employment security act, Act No. 1 of the Public Acts of the Extra Session of 1936, as amended, being sections 42L] to 421.73 of the Michigan Compiled Laws. (c) 'file state tenure commission created under Act No. 4 of the Public Acts of the Extra Session of 1937, as amended, being sections 38.71 to 38.191 of the Michigan Compiled Laws, when acting as a board of review from the decision of n controlling board. (d) An arbitrator or arbitration panel appointed by the employment relations commission under the authority given the commission by Act No. 176 of the Public Acts of 1939,as amended, being sections 423.1 to 423.30 of the Michigan Compiled Laws. (et) An arbitration panel selected under chapter 50A of the revised judicature act of 1961, Act No. 236 of the Public Acts of 1961,being sections 600,5040 to 600.5065 of the Michigan Compiled Laws. (f) The Michigan public service commiVion created under Act No. 3 of the Public Acts of 1939, being sections 460.1 to 460.8 of the Michigan Compiled.Laws, (8)This act does not apply to an association of insurers created under the insurance code of 1956, Act No. 218 of the Public Acts of 1956,being sections 500.100 to 500,8302 of the Michigan Compiled Laws,or other association or fucility formed under Act No. 218 of the Public Acts of 1956 as a nonprofit organization of insurer members. (9)This act does not apply to a committee of a public body which adopts a nonpolicymaking resolution of tribute or memorial which resolution is not adopted at a meeting. (10)This act floes not apply to a meeting which is a social or chance gathering or conference not designed to avoid this act. (I 1)This act shall not apply to the Michigan veterans' mist fund board of trustees or a county or district committee created under Act No.9 of the Public Acts of the first extra session of 1946,being sections 35.601 to 35.610 of the Michigan Compiled Laws, when the board of trustees or county or district committee is deliberating the merits of an emergent need. A decision of the board of trustees or county or district committce made under this subsection shall be reconsidered by the board or committee at its next regular or special meeting consistent with the requirements of this act. "Emergent need" means a situation which the board of trustees, by rules promulgated under the administrative procedures act of 1969, Act No. 306 of the Public Acts of 1969, as amended, being sections 24.201 to 24.328 of the Michigan Compiled Laws, determines requires immediate action. History: 1976,Act 267,Eff,Mar.31, 1977;-Am, 1981,Act 161,find,Eff.Nov.30, 1981; Atn. 1986,Act 269,lmd.Eff.Dec. 19, 1986;-Am.1988,Act 158,lord.Eff.June 14, 1988;-Am, 1998,Act 278,lmd.Eff.July 27,1988, Administrative rules:R 35.621 of the Michigan Administrative Code, 15.264 Public notice of meetings generally; contents; places of posting. Sec.4.The following provisions.shall apply with respect to public notice of meetings: (a) A public notice shall always contain the name of the public body to which the notice applies, its telephone number if one exists,and its address. (b)A public notice for a public body shall always be posted at its principal office and any other locations considered appropriate by the public body. Cable television may also be utilized for purposes of posting public notice. (c) If a public body is a part of a state department. part of the legislative or judicial branch of state government, part of an institution of higher education, or part of a political subdivision or school district,u Public notiec.:shall also be posted in the respective principal office of the state departruont, the institution of higher education, clerk of the house of representatives, secretary of the state senate, clerk of the supreme court,or political subdivision or school district. (d)if a public body does not have it principal office, the required public notice for a local public body shall be posted in the office of the county clerk in which the public body serves and the required public notice for a state public body shall be posted in lie oft ice of the secretary of state. History: 1976,Act 267,Eff,Mar.31,1977;Am. 1984,Act 87,lmd.Eff.Apr.19,1984. 15.265 Public notice of regular meetings, change in schedule of regular meetings, rescheduled regular meetings, or special meetings; time for posting; statement of date, time, and place; applicability of subsection (4); recess or adjournment; emergency Rendered Thursday,March 013,2007 Page 2 Michigan Compiled Laws Complete Through PA 1 of 2007 Legislative Council, State of Michigan Courtesy of wwiA1./egrslature.mi.gov sessions; meeting in residential dwelling; notice. Sec. S. (1) A meeting of a public body shall not be held unless public notice is given as provided in this section by a person designated by the public body. (2)For regular meetings of a public body,there shall be posted within 10 days after the first meeting of the public body in each calendar or fiscal year a public notice stating the dates, times, and places of its regular meetings. (3)If there is a change in the schedule of regular meetings of a public body, there shall be posted within 3 days after the meeting at which the change is made, a public notice stating the new dates,times,and places of its regular meetings. (4) Except as provided in this subsection or in subsection (6), for a rescheduled regular or a special meeting of a public body,a public notice stating the date, time, and place of the meeting shall be posted at least 18 hours before the meeting. The requirement of 18-hour notice shall not apply to special meetings of subcommittees of a public body or conference committees of the state legislature. A conference committee shall give a 6-hour notice.A second conference committee shall give a I-hour notice. Notice of a conference committee meeting shall include written notice to each member of the conference committee and the majority and minority leader of each house indicating time and place of the meeting.This subsection does not apply to a public meeting held pursuant to section 4(2) to(5)of Act No. 239 of the Public Acts of 1955, as amended, being section 200.304 of the Michigan Compiled Laws. (5) A meeting of a public body which it; recessed for more than 36 hours shall be reconvened only after public notice,which is equivalent to that required tinder subsection(4),has been posted.If either house of the state legislature is adjourned or recessed for less than 18 hours, the notice provisions of subsection (4)are not applicable.Nothing in this section shall bar a public body from meeting in emergency session in the event of it severe and imminent threat to the health, safety, or welfare of the public when 2/3 of the members serving on the body decide that delay would be detrimental to efforts to lessen or respond to the threat. (6) A meeting of a public body may only take place in a residential dwelling if a nonresidential building within the boundary of tile local governmental unit or school system is not available without cost to the public body: For a meeting of a public body which is held in a residential dwelling, notice of the meeting shall be published its a display advertisement in a newspaper of general circulation in the city or township in which the meeting is to be held.The notice shall be published not less than 2 days before the day on which the meeting is held,and shall state the date,time,slid place of the meeting. The notice,which shall be at the bottom of the display advertisement and which shall be set off in a conspicuous manner, shall include the following language:"This meeting is open to all members of the public under Michigan's open meetings act". History: 1976,Act 267,Eff Mar.31, 1977;-Am. 1978,Act 256,Imd.HE June 21, 1978,-Am.1982,Act 134,Imd.Eff.Apr.22, 1982,--Am.1984,Act 167,1nid.Eff.June 29,1984. 15.266 Providing copies of public notice on written request; fee. Sec. 6. (1) Upon the written request of an individual, organization, firm, or corporation, and upon the requesting patty's payment of a yearly fee of not more than the reasonable estimated cost for printing and postage of such notices, a public body shall send to the requesting party by first class mail a copy of any notice required to be posted pursuant to section 5(2)to(5). (2) Upon written request,it public body,at the same time a public notice of a meeting is posted pursuant to section 5,shall provide a copy of the public notice of that meeting to any newspaper published in the state and to any radio and television station located in the state,free of charge. History: 1976,Act 267,Eff.Mar.31, 1977. 15.267 Closed sessions; roll call vote; separate set of minutes. Sec. 7. (1) A 2/3 roll call vote of members elected or appointed and serving is required to call a closed session, except for the closed sessions permitted under section 8(a), (b), (c), (g), (i), and 0). The roll call vote and the purpose or purposes for calling the closed session shall be entered into the minutes of the meeting at which the vote is taken. (2) A separate set of minutes shall be taken by the clerk or the designated secretary of the public body at the closed session. These minutes shall be retained by the clerk of the public body, are not available to the public, and shall only be disclosed if required by a civil action filed under section 10, 11, or 13. These minutes may be destroyed 1 year and I day after approval of the minutes of the regular meeting at which the closed session was approved. History: 1976,Act 267,Eff.Mar.31, 1977-,-Am. 1993,Act 81,Eff.Apr. I, 1994;--Am. 1996,Act 464,Imd,Eff.Dec.26, 1996. Rendered Thursday,March 08,2007 Page 3 Michigan Compiled Laws Complete Through PA 1 of 2007 v Legislative Council,Stale of Michigan Courtesy of www.logisiature.mi.gov 15.268 Closed sessions; permissible purposes. ;nee. 8.A public body may meet in a closed session only tinr the Iollowing purposes: (a) To consider the dismissal, tiusperision, or disciplining of. or to hear complaints or charges brought against, or to consider a periodic personnel evaluation of, a pul.nlic officer, employee, staff member, or individual agent, if the named person requests a closed hearing. A person requesting a closed hearing may rescind the request at ally time, in which ease the matter at issue shall be considered after the rescission only in open sessions. (b) To consider the dismissal, suspension, or disciplining of a student if the public body is part of the school district, intermediate school district,or institution of higher education that(lie student is attending,and if the student or the student's parent or guardian requests a closed hearing. (c) For strategy and negotiation sessions connected with the negotiation of a collective bargaining agreement if either negotiating party requests a closed hearing. (d)To consider the purchase or lease of real property up to the time an option to purchase or lease that real property is obtained. (e)To consult with its attorney regarding trial or settlement strategy in connection with specific pending litigation,but only if an open meeting would have a detrimental financial effect on the litigating or settlement position of the public body. (f)To review and consider the Contents of all application for employment or appointment to a public office if the candidate requests that the application remain confidential. However, except as otherwise provided in this subdivision, all interviews by a public body I'or employment or appointment to a public office shall be held in an open meeting pursuant to this act. This subdivision does not apply to a public office described in subdivision 0). (g)Partisan caucuses of members of the state legislature. (h)To consider material cxerhlpt from discussion or disclosure by state or federal statute, (i) For a compliance conference conducted by the department of commerce under section 16231 of the public health code, Act No. 368 of the Public Acts of 1978, being section 333.16231 of the Michigan Compiled Laws,before a complaint is issued. 0)In the process of'searching for and selecting a president of an institution of higher education established under section 4, 5, or 6 of article V111 of the state constitution of 1963, to review the specific contents of an application, to conduct an interview with it candidate,or to discuss the specific qualifications of a candidate if the particular process of searching for and selecting a president of an institution of higher education meets all of the following requirements: (i)The search committee in the process,appointed by the governing board,consists of at least 1 student of the institution, 1 faculty member of the institution, i administrator of the institution, I alumnus of the institution, and t representative of the general public. The search committee also may include 1 or more members of the governing board of the institution, but the number shall not constitute a quorum of the governing board. However, the search committee shall not be constituted in such a way that any 1 of the groups described in this subparagraph constitutes a majority of the search committee. (ii) Alter the search committee recommends the 5 final candidates, the governing board does not take a vote on a final selection for the president until at least 30 days after the 5 final candidates have been publicly identified by the search committee. (iii) 'Tile deliberations and vote of the governing board of the institution on selecting the president take place in an open session of the governing board. History: 1976,Act 267,Eff.Mar.31, 1977,—Am. 1984,Act 202,Lnd.Eff.July 3, 1984;Am. 1993,Act 81,Eff,Apr. 1, 1994;— Am.1996,Act 464,lmd.Eff.Dec.26, 1996. 15.269 Minutes. Sec. 9. (1)ljaclh public body shall keep minutes of each meeting showing the date, time, place, members present,members u►bscnt,any decisions made at a meeting open to the public,and the purpose or purposes for which a closed session is held. The minutes shall include all roll call votes taken at the meeting. The public body shall make any corrections in the minutes at the next meeting after the meeting to which the minutes refer.The public body shall make corrected minutes available at or before the next subsequent meeting after correction.The corrected minutes shall show both the original entry and the correction. (2) Minutes are public records open to public inspection, and a public body shall make the minutes .available at the address designated oil posted public notices pursuant to section 4.'T'hc public body shall make copies of the minutes available to the public at the reasonable estimated cost for printing and copying. (3)A public body shall make proposed minutes available for public inspection within 8 business days after the meeting to which the minutes refer. ']'be public body shall make approved minutes available for public Rendered Thursday,March 08,2007 Page 4 Michigan Compiled Laws Complete Through PA 1 of 2007 ©Legislative Council, State of Michigan CourlesV of wwww.leg slalure.rnl.gov inspection within 5 business days after the meeting at which the minutes are approved by the public body. (4) A public body shall not include in or with its minutes any personally identifiable information that, if released,would prevent the public body from complying with section 444 of subpart 4 of part C of the general education provisions act, 20 USC 1232g, commonly referred to as the family educational rights and privacy act of 1974. History: 1976,Act 267,Eff.Mar.31, 1977;—Am. 1982,Act 130,Imd.Eff Apr.20, 1982;--Am,2004,Act 305,]rid,Eff.Aug. 11, 2004. 15.270 Decisions of public body; presumption; civil action to invalidate; jurisdiction; venue; reenactment of disputed decision. See. 10, (1) Decisions of a public body shall be presumed to have been adopted in compliance with the requirements of this act.The attorney general,the prosecuting attorney of the county in which the public body serves, or any person may commence a civil action in the circuit court to challenge the validity of a decision of a public body made in violation of this act, (2) A decision made by a public body may be invalidated if the public body has not complied with the requirements of section 3(1),(2),and(3) in making the decision or if failure to give notice in accordance with section 5 has interfered with substantial compliance with section 3(l),(2), and (3)and the court finds that the noncompliance or failure has impaired the rights of the public under this act. (3)The circuit court shall not have jurisdiction to invalidate a decision of a public body for a violation of this act unless an action is commenced pursuant to this section within the following specified period of time: (a)Within 60 days after the approved minutes are made available to the public by the public body except as otherwise provided in subdivision(b). (b) If the decision involves the approval of contracts, the receipt or acceptance of bids, the making of assessments, the procedures pertaining to the issuance of bonds or other evidences of indebtedness, or the submission of a borrowing proposal to the electors, within 30 days after the approved minutes are made available to the public pursuant to that decision. (4)Venue for an action under this section shall be any county in which a local public body serves or, if the decision of a state public body is at issue,in Ingham county, (5)In any case where an action has been initiated to invalidate a decision of a public body on the ground that it was not taken in conformity with the requirements of this act, die public body may, without being deemed to make any admission contrary to its interest, reenact the disputed decision in conformity with this act. A decision reenacted in this manner shall be effective from the date of reenactment and shall not be declared invalid by reason of a deficiency in the procedure used for its initial enactment. History: 1976,Act 267,Eff.Mar.31, 1977. 15.271 Civil action to compel compliance or enjoin noncompliance; commencement; venue; security not required; commencement of action for mandamus; court costs and attorney fees. Sec. 11. (1) If a public body is not complying with this act, the attorney general, prosecuting attorney of the county in which the public body serves, or a person may commence a civil action to compel compliance or to enjoin further noncompliance with this act. (2)An action ror injunctive relief agrdnst a local public body shall be commenced in the circuit court, and venue is proper in any county in which the public body serves. An action for an injunction against a state public body shall be commenced in the circuit court and venue is proper in any county in which the public body has its principal office,or in Inghain county. If a person commences an action for injunctive relief, that person shall not be required to post security as a condition for obtaining a preliminary injunction or a temporary restraining order, (3) An action for mandamus against a public body under this act shall be commenced in the court of appeals. (4) if a public body is not complying with this act, and a person commences a civil action against the public body for injunctive relief to compel compliance or to enjoin further noncompliance with the act and succeeds in obtaining relief in the action, the person shall recover court costs and actual attorney fees for the action. History:1976,Act 267,Eff.Mar.31, 1977. 15.272 Violation as misdemeanor; penalty. Sec. 12, (1)A public official who intentionally violates this act is guilty of a misdemeanor punishable by a fine of not more than$1,000.00. Rendered Thursday,March 08,2007 Page 5 Michigan Compiled Laws Complete Through PA 1 of 2007 CO Legislative Council, State of Michigan Courtesy of wwtv.legislalure.mr.gov (2) A public official who is convicted of intentionally violating a provision of this act for a second time within the same term shall be guilty of a misdemeanor and shall be fined not more than $2,000,00, or imprisoned for not more than 1 year,or both. History: 1976,Act 267,Eff.Mar.31, 1977, 15.273 Violation; liability. Sec. 13. (1) A public official who intentionally violates this act shall be personally liable in a civil action for actual and exemplary damages of not more than$500.00 total,plus court costs and actual attorney fees to a person or group of persons bringing the action. (2)Not more than 1 action under this section shall be brought against a public official for a single meeting. An action under this section shall be commenced within 180 days after the date of the violation which gives rise to the cause of action, (3) An action for damages under this section may be joined with an action for injunctive or exemplary relief under section 1 I, History:1976,Act 267,Eff.Mar,31, 1977. 15.273a Selection of president by governing board of higher education institution; violation; civil fine. Sec. 13a,If the governing board of an institution of higher education established under section 4,5, or 6 of article VIII of the state constitution of 1963 violates this act with respect to the process of selecting a president of the institution at any time after the recommendation of final candidates to the governing board,as described in section 80), the institution is responsible for the payment of a civil fine of not more than $500,000,00. This civil fine is in addition to any other remedy or penalty under this act. To the extent possible,any payment of fines imposed under this section shall be paid from funds allocated by the institution of higher education to pay for the travel and expenses of the members of the governing board. History:Add,1996,Act 464,lmd.Eff.Dec.26,1996. 15.274 Repeal of§§ 15.251 to 15.253. Sec. 14.Act No. 261 of the Public Acts of 1968,being sections 15,251 to 15.253 of the Compiled Laws of 1970,is repealed. History: 1976,Act 267,Eff.Mar,31, 1977. 15,275 Effective date. Sec. 15.This act shall take effect January 1, 1977. History: 1976,Act 267,Eff.Mar.31, 1977. Rendered Thursday,March Oft,2007 Page 6 Michigan Compiled Laws Complete Through PA 1 of 2007 U Legislative Council,State of Michigan Courtesy of www.legislalure.ml.gov History:Add. 1987,Act 145,Ind.Eff,Oct.26, 1987. Popular name:Act 345 38.557 "An act of duty,""municipality" and "transitional public employment program" defined. Sec. 7.As used in this act: (a) "An act of duty" means an act performed by a fire fighter or police officer arising out of and in the course of employment, or the performance of an act pertinent or incidental to the work of a fire fighter or police officer,regardless of time or place. (b)"Municipality"includes a county,township,charter township,city,or incorporated village. (c) "Transitional public employment program"means a public service employment program in the area of environmental quality, health care, education, public safety, crime prevention and control, prison rehabilitation, transportation, recreation,maintenance of parks, streets and other public facilities, solid waste removal, pollution control, housing and neighborhood improvements, rural development, conservation, beautification,veterans'outreach,or any other area of human betterment and community improvement as part of a program of comprehensive manpower services authorized, undertaken, and finnrieed pursuant to the comprehensive employment and training act of 1973,29 U.S.C. 801 to 992. History: 1937,Act 345,Eff.Oct,29, 1937;:4m, 1945,Act 256,Eff, Sept.6, 1945;-CL 1948,38.557;--Am, 1951,Act 16,Imd, Eff,Mar.30,1951;--Am.1968,Act 210,Imd,Eff,June 24,1968;-Am. 1978,Act 421,Imd,Eff.Sept.30, 1978. Popular name:Act 345 38.558 Refunds of salary contributions. Sec, 8.Refunds of salary contributions: (1)If a fire fighter or police officer dies before being placed on pension,the total amount of the mcmbces salary deductions,with interest as the board may determine,but not to exceed 2%per annual,shall be payable to the person or persons that the member nominated by written designation duly executed and filed with the board. If there is no designated person or persons surviving, then the total of the mennber's salary deductions shall be paid to the member's legal representative or estate. (2) if a fire fighter or police officer becomes separated from the service before being eligible for retirement, the member shall be paid the total of the member's contributions together with interest as the board may determine,but not to exceed 2%per antrum credited to the member upon his or her written request for a refund. If the person again becomes employed by the city,village,or municipality as a police officer or fire fighter, he or she shall, within I year following his or her reemploymlent,repay to the retirement system the amount previously withdrawn together with interest at 2%per year. History:1937,Act 345,Eff.Oct.29,1937;--Am.1939,Act 210,Eff.Sept.29,1939;-Am. 1947,Act 229,Imd,Eff.June 17, 1947; ---CL 1948,38,558;-Am. 1951,Act 16,Imd.Eff.Mar,30, 1951;-Am. 1957,Act 52,Eff,Sept.27, 1957;-Am. 1989,Act 7,Imd,Eff, May 3,1989, Popular name:Act 345 38.559 Contributions of member; rate; deduction from salary; appropriations to maintain actuarially determined reserves; payment of deductions and appropriations into retirement system; prorating pensions and other benefits; expenses; pensions as obligations of retirement system. Sec. 9. (1)The contributions of a member to the retirement system shall be 5% of the salary paid to the member by the municipality. The officer responsible for making up the payroll shall cause the contributions provided for in this subsection to be deducted from the salary of each member om each payroll f'or each payroll period so long as he or she remains an active member in the employ of"the municipality.The announts deducted shall be paid into the fEnds of the retirement system, The members' coniributiovs provided for in this act shall be made notwithstanding that the minimulm salary provided for by law is changed by the members' contributions, Every member shall be considered to consent and to agree to the deductions made and provided for in this act and shall receipt for his or her full salary and payment of his or her salary less the deduction, which is a full and complete discharge and acquittance of all claims and demands for the services rendered by the member during the period covered by the payment, except as to benefits provided by this retirement system. (2) For the purpose of creating and maintaining a fund for the payment of the pensions and other benefits payable as provided in this act, the municipality, subject to the provisions of this act,shull appropriate,at Ilia end of such regular intervals as may be adopted, quarterly, semiannually,or annually,an amount suf7icienl to maintain actuarially determined reserves covering pensions payable or that might be poytible on account of Rondered Thursday,Parch 08,2007 Page 6 Mlehlgait Complied Laws Complete Through PA 1 of 2007 ©Legislative Council, Stale of Michigan Courlesyo!;vww,logislature.mi. lov service performed and to be performed by active members, and pensions being paid to retired members and beneficiaries. The appropriations to be trade by the municipality in any fiscal year shall be sufficient to pay all pensions due and payable in that fiscal year to all retired members and beneficiaries. The amount of die .appropriation in it fiscal year shall not he less than 10%of the aggregate pay received during that fiscal year by members of the retirement system unless, by actuarial determination, it is satisfactorily established that a lesser percentage is needed. All deductions auct npproprintions shall be payable to the treasurer of the municipality and he or she shall pay the deductions and appropriations into the retirement system. Except in municipalities that are subject to the 15 mill lax limitation as provided by section 6 of article IX of the state constitution of 1963,the amount required by taxation to meet the appropriations to be made by municipalities under this act shall be in addition to any tax limitation imposed upon tax rates in those municipalities by charter provisions or by state law subject to section 25 of article IX of the slate constitution of 1963. (3) If, at the beginning or during any fiscal year, it has been satisfactorily determined by the retirement board that the accumulated funds of the retirement system plus the municipality's contribution of 10%of the aggregate pay received during that fiscal year by members of the retirement system plus members' contributions of 5%of payroll,are insufficient to pay all pensions and other benefits due and payable in that year out of funds of the retirement system, then all pensions and other benefits payable shall be prorated for the remainder of the fiscal year by the retirement board. (4) Any clerical, legal, actuarial, or medical expenses required by the retirement board, or any other necessary expense for the operation of the retirement system, shall be provided for by the municipality or shall be paid from the investment income of the retirement system, as determined by the governing body of tiie municipality. The retirement board shall submit expenses periodically to the governing body of the municipality. if use of investment income to pay these expenses causes an actuarial insufficiency in the assets of the retirement systern used to pay pensions,the insufficiency shall be made up by the municipality. (5) All pensions allowed and payable to retired members and beneficiaries under this act shall become obligations of and be payable from the funds of the retirement system. (0 The right of a person to a pension, to the return of member contributions,to any optional benefits, or any other right accrued or accruing to a member or beneficiary under this act and the money belonging to the retirement system issuhject to the public employee retirement benefit protection act. History: 1937,Act 345,Eff.Oct.29, 1937;-Ain. 1939,Act 210,Eff. Sept, 29, 1939;--Am, 1945,Act 256,Eff.Sept. 6, 1945;- Am. 1947,Act 229,Imd.Eff.June 17, 1947;--CL 1948,38.559;--Am. 1951,Act 16,Imd.Eff.Mar.30,1951;-Am. 1985,Act 36,►md. Eff.June 13, 1985;Am. 1987,Act 145,Imd.Eff.Oct.26, 1987;-Am, 1991,Act 54,Imd. Eff'.June 27, 1991;-Am.2002,Act 98, Imd.Eff.Mar,27,2002. Popular name:Act 345 38.560 Investments; transfer and disposition of certain assets. Sec. 10. Any and all cash assets and funds on hand not necessary for immediate payment of pensions or benefits under this act shall be invested subject to all the terms, conditions, limitations, and restrictions imposed by the statutes of this state upon life insurance companies in making and disposing of their investments, and as provided by law relating to investment authority of public employee retirement systems under Act No. 314 of the Public Acts of 1965, being sections 38.1132 to 38.1140i of the Michigan Compiled Laws, and any and all assets of every description of the pension or retirement fund created by any city, village, or municipality under this act shall be transferred and deposited to the credit of the newly created retirement system under this act. Histury: 1937,Act 345,Eff,Oct.29, 1937;--Am. 1947,Act 229,Imd.BE June 17, 1947;--CL 1948,38.560;Am. 1965,Act 33, Eff.Mar.31,1966;-Am. 1989,Act 7,Imd.Eff.May 3,1989. Popular name:Act 345 38.561 Referendum;township or charter township. Sec, 11. At any time alter this act shall become effective,any city,village or municipality having a paid or part paid fire or police department, may come under the provisions of this act and create a pension board hurcunder by submitting the same to the electors of any such city, village or municipality at any regular or special election for adoption, in the manner provided by law for amending charters: Provided, That this act shall not become effective until tie beginning of the next succeeding fiscal year alter such adoption of the provisions of this act by any city, village or municipality: Provided fiurther,'Chat where no provision is made in the charter of the city, village or municipality for amending said charters, this act may be submitted ror adoption in accordance will) any law authorizing the amending of the charters orcitics: Provided further,'['flat in case of a township or charter township,this act shall he submitted to the qualilied electors of such township or townships by the township board on the filing of a petition requesting the submission, signed by 10 per Rendered Thursday,March 08,2007 Page 9 Michigan Compiled Laws Complete Through PA 1 of 2007 ©Legislative Council, State of Michigan Courtesy of www legisialure.mi.gov cent of the registered and qualified electors in such township or charter township, at any general election or special election called for that purpose by the township board, in accordance with the laws of this state, and this act shall be in force and effect in any such township or charter township if a majority of the electors voting on such proposition, as determined by the canvass of votes cast,shall vote in favor thereof. History: 1937,Act 34.5,:Eff;Oct.29, 1937;--Am. 1939,Act 210,Eff.Sept.29, 1939;---Am. 1945,Act 256,Eff.Sept,6, 1945;---Cl, 1948,38,561;--Am. 1951,Act 16,lmd,Eff.Mar.30, 1951. Popular name:Act 345 38.561a Violation of§§ 168.1 to 168.992 applicable to petitions; penalties. Sec, l la. A petition under section 11, including the circulation and signing of the petition, is subject to section 488 of the Michigan election law, 1954 PA 116, MCL 168.488. A person who violates a provision of the Michigan election law, 1954 PA 116, MCL 168.1 to 168.992, applicable to a petition described in this section is subject to the penalties prescribed for that violation in the Michigan election law, 1954 PA 116, MCL 168,1 to 168.992. History:Add,1998,Act 200,Eff.Mar.23,1999, Popular name:Act 345 38.562 Membership of retirement system. Sec. 12. (1)The membership of the retirement system created by a municipality affected by this act shall include each police officer and fire fighter employed by a municipality.A police officer or fire fighter,who is a member of the retirement system and who is transferred from the classification of a police officer or fire fighter to a civilian position within the police or fire department or who is transferred from the police or fire department of the municipality to another department of the municipality by an officer or body of the municipality authorized to make the transfer, shall continue as a member of this retirement system covering the police officers and fire fighters, and shall be subject to the provisions of the retirement system, if the officers and employees of the department to which the person is transferred are covered by an annuity pension or retirement system to which the municipality makes contributions and the person transferred becomes entitled to membership in that system, the person shall cease to be a member of this police officer and fire fighter retirement system. (2) The membership of the retirement system shall not include a volunteer fire fighter, a privately employed police officer or fire fighter, a person temporarily employed during an emergency, a civilian employee of a police and fire department, or a person participating in a transitional public employment program,except as provided in subsection(1)and section 6c. History: 1937,Act 345,Eff,Oct.29, 1937;Am. 1939,Act 210,Eff.Sept.29, 1939;-Am, 1947,Act 229,Imd.Eff,June 17, 1947; ---CL 1948,38.562;Am. 1951,Act 16,Imd.Eff.Mar.30,1951;-Am.1978,Act 421,Imd.Eff,Sept.30,1978, Popular name:Act 345 Rendorod Thursday,March 08,2007 Page 10 Michigan Compiled Laws Complete Through PA 1 of 2007 ©Legislative Council, State of Michigan Courtesy of www/egislalure.mr:gov TAB 9 FIRE FIGHTERS AND POLICE OFFICER RETIREMENT ACT 1937 PA 345 , as amended through November 8 , 1994 FIRE FIGHTERS AND POLICE OFFICERS RETIREMENT ACT Act 345 of 1937 AN ACT to provide for the establishment, maintenance, and administration of a system of pensions and retirements for the benefit of the personnel of fire and police departments employed by cities, villages, or municipalities having full paid members in the departments, and for the spouses and children of the members; to provide for the creation of a board of trustees to manage and operate the system; to authorize appropriations and deductions from salaries;to prescribe penalties and provide remedies; and to repeal all acts and parts of acts inconsistent therewith. History: 1937,Act 345,Eff,Oct.29, 1937;-Am. 1951,Act 16,lmd.Eff.Mar.30, 1951;-Am. 19R9,Act 7,lmd.Eff.May 3,1989; -Am.1999,Act 200,Eff.Mar.23,1999, Popular name:Act 345 The People of the State oj'Michigan enact, 38.551 lire and police department pension and retirement system; retirement board, members, election, appointment, terms. See. 1. The retirement board, also referred to in this act as the pension board, created hereunder shall be known as "The retirement board"and shall be a corporate body, consisting of 5 members,which shall consist of; (1)The treasurer of the city,village or municipality,so affected hereby. (2)Two additional members, 1 of whom shall be an active member of and elected by a majority vote of the members of the fire department, and 1 of whom shall be an active member of and elected by a majority vote of the members of the police department under such piles and regulations as the retirement board shall adopt to govern such election.Each such member shall serve for a tertn of 4 years, except that in the first instance, the member elected by the police department shall serve for a term of 2 years. If in the first instance only the fire department or only the police department is included in the retirement plan, the 2 additional members shall be elected from that department and the candidate receiving the highest number of votes shall be elected for the 4-year term and the candidate receiving the second highest number of votes shall be elected for the 2-year term. (3) Two additional members shall be appointed by the legislative body or another person or body authorized by the city or village charter to appoint administrative officials in any city or village affected by the provisions of this act. History: 1937,Act 345,Eff.Oct.29, 1937;-Am. 1945,Act 256,Eff.Sept.6,1945,•-Am. 1947,Act 229,Lnd.Eff.June 17, 1947; --CL 1948,38.551;--Am.1951,Act 16,lmd.Eff.Mar,30,1951;Am. 1959,Act 105,Eff.Mar. 19,1960. Popular name:Act 345 38.551a Short title. Sec. la.This act shall be known and may be cited as the"fire fighters and police officers retirement act". History:Add. 1989,Act 7,Imd.Eff.May 3, 1989. Popular name:Act 345 38.552 Retirement board; powers and duties. Sec.2.The retirement board created under this act shall perform the following: (1)Make rules and regulations necessary to the proper conduct of the business of the retirement system. (2)Retain legal, medical, actuarial, clerical, or other services as may be necessary for the conduct of the affairs of the retirement system and make compensations for the services retained, (3) Cause amounts as established by law to be deducted from the salaries of active members of the retirement system and be paid into the treasury of the retirement system. (4) Certify to the governing body of the city, village, or municipality the amount to be contributed by the city,village, or municipality as provided in this act. (5) Cause the examination of each disability pensioner or beneficiary less than 55 years of age to be made at least once a year for the first 5 years following the pensioner's retirement, and at least once each 3 years after the 5 year period,until the pensioner has reached 55 years of age. (6)Keep records of its meetings and proceedings.The board shall hold meetings at least once each month, The business which the retirement board may perform shall be conducted at a public meeting of the board held in compliance with Act No. 267 of the Public Acts of 1976, being sections 15.261 to 15.275 of the Michigan Compiled Laws. Public notice of the time, date, and place of the meeting shall be given in the Rendered Thursday,March 08,2007 Page 1 Michigan Compiled Laws Complete Through PA 1 of 2007 ©Legislative Council, State of Michigan Courtesy of www.tegisiature.rni:gov manner required by Act No. 267 of the Public Acts of 1976. A writing prepared, owned, used, in the possession of, or retained by the board in the performance of an official function shall be inade available to the public in compliance with Act No. 442 of the Public Acts of 1976,being sections 15.231 to 15.246 of the Michigan Compiled Laws. (7)The board shall annually elect a president and secretary from aniong its members. (8)Disburse the pensions and other benefits payable under this ncl. (9)A member of the board shall not receive additional compouaation for services as a board member. History: 1937,Act 345,Eff.Oct.29, 1937;-Aui. 1945,Act 256,W.Sept.6, 1945;--Am. 1947,Act 229,Imd.Eff.June 17, 1947; --CL 1948,38.552; Ani. 1951,Act 16,Imd,Eff,Mar.30,1951;Am.1977,Act 209.load.Eff Nov. 17, 1977. Constitutionality: The authority delegated to the retirement board by § 38,552 of the Michigan Compiled Laws does not constitutionally abrogate the taxation,budgeting, and legislative responsibilities of the township.Retirement Bd. v, Shelby Twp.,438 Mich.247,475 N.W.2d 249(1991). Popular name:Act 345 38.553 Retirement system funds; treasurer as custodian; bond; disbursement of funds; execution of voucher or warrant; authorization. Sea 3. The treasurer of' the city, village, or municipality shall be the custudian of :all funds of the retirement system and shall be required to give a good and sufficient bond to the retirement board for the faithful performance of his or her duties and the safekeeping of all money collected under this act,The bond stall be paid by the city, village, or municipality. The treasurer shall issue warrants for the disbursement of the funds of the retirement system upon the receipt of a voucher signed by at least 2 members of the retirement board other than the treasurer. The treasurer.shall not execute a voucher or warrant unless the voucher or warrant has been previously authorized by resolution adopted by the board. History:1937,Act 345,Eff.Oct.29, 1937;-Am. 1945,Act 256,Eff.Sept.6, 1945;--Am. 1947,Act 229,Imd.Eff.June 17, 1947; -CL 1948,38.553;Am. 1989,Act 7,Imd,Eff,May 3, 1989. Popular name:Act 345 38.554 Credit for prior service. Sec. 4. All service performed by members prior to the enactment of this act by any city, village or township, including service performed for predecessor townships, shall be computed to the credit of each member so affected. History:1937,Act 345,Eff.Oct.29, 1937;Am. 1939,Act 210,Eff.Sept.29,1939;-Am. 1947,Act 229,Imd,Eff.June 17, 1947; --CL 1948,33.554,--Am. 1957,Act 52,Eff,Sept.27, 1957;-Ani. 1958,Act 159,Eff.Sept.13, 1958. Popular names Act 345 38.555 Retirement board; quasi-judicial body; review of actions by writ of certiorari. Sec. 5. The board shall be a quasi-judicial body, and its actions shall be reviewable by writ of certiorari only. History: 1937,Act 345,Eff.Oct.29,1937;---CL 1948,38.555. Popular name:Act 345 38.556 Age and service retirement benefits. See.6, (1)Age and service retirement benefits payable under this act are as follows: (at) A number who is 55 years of age or older and who has 25 or more years of service as a police officer or fire fighter in the employ of the municipality affected by this act may retire from service upon written application to the. retirement board stating a date, not less than 30 days or more than 90 days after the execution and tiling ul'llle application,on which the member desires to be retired.The retirement board shall grant the bellcfits to which the member is entitled under this act,unless the member continues employment. if the member continues employment, the membees,pension shall be deferred with service years of credit until actual retirement.Upon the approval of the legislative body or the electors of a municipality under this act,a member under 50 years of age who has 25 or snore years of service,or without the necessity for approval,a member 50 years of age or more who has 25 or more years of service, may (cave service and receive the full retirement benefits payable throughout the member's life as provided in subdivision(e). (b) A member who is 60 years of age or older shall be retired by the retirement board upon than written application of the legislative body,or board or official provided in the charter of the municipality as head of the dleparlulcnt iti which the member is employed. Upon retirement, the retlr'cinunt board shall grant the henef(ts to which (lie member is entitled under this net, unless the naernber continues employment, If the member continues employment, the member's pension shall be deferred with service years of credit until Rendered Thursday,March 08.2007 Page 2 Michigan Complied Laws Complete Through PA 1 of 2007 (q)Legislative Council, State of Michigan Courtesy of tF✓ww.legi31a1ure.rnL90V actual retirement. (c)A member who is 65 years of age shall be retired by the retirement board on the first day of the month following attainment of 65 years of age. (d) A me.n'ber who has 10 or more years of service shall have vested retirement benefits that are not subject to forfeiturc on account of disciplinary ac'dion, charges, or complaints. If the member leaves etnploytncnt before the date the member would have first become eligible to retire as provided in subdivision (a) for any reason except the members retirement or death, the member is entitled to a pension that shall begin the fist clay of the calendar month immediately after the month in which the mernber's written application for the pension is filed with the retirement board that is on or after the date the member would have been eligible to retire had the member continued in employment. The retirement board shall grant the member the benefits to which the member is entitled under this act, unless the member resumes service. If the member resumes service, the member's pension shall be further deferred with service years of credit until the member actually retires. (e) Upon retirement from service as provided in this subsection, a member shall receive it regular retirement pension payable throughout the member's life of 2%of the member's average final compensation multiplied by the first 25 years of service credited to the member, plus 1% of the member's average final compensation multiplied by the number of years,and firaction of a year,of service rendered by the member in excess of 25 years.A municipality under(his act, upon approval of the legislative body or the electors of the municipality, may increase the percentage of the payment from 2%up to a maximum of 2.5%. If an increase is approved, the increase shall not be reduced for members under the system at the time of the increase. The legislative body may also increase the percentage of employee:contributions. If a retired member dies before the total of regular pension payments received by the member equals the total of the member's contributions mate to the retirement system, the difference between the member's total contributions and the total of the member's regular retirement pension payments received shall be paid in a single sum to the person or persons the member nominates by written designation duly executed and filed with the retirement board. If there is not a person or persons surviving the retired member, the difference, if any, shall be paid to the retired member's legal representative or estate. (f) As used in this section, "average final compensation" mean,,; the average of the highest annual compensation received by a member during a period of 5 consecutive years of service contained within the members 10 years of service immediately preceding the m&mbc's retirement or leaving service.However,if so provided in a collective bargaining agreement entered into l5dweeri a municipality under this act and the appropriate recognized bargaining agent,average final compensation may mean the average of the 3 years of highest annual compensation received by a member during the member's 10 years of service immediately preceding the tnembees retirement or leaving service. If the member has less than 5 years of service, average final compensation means:the annual average compensation received by the member during his or her total years of service. (g) A member shall be given service credit for time spent in the military, naval, marine, or other armed service of the United States government during time of war, or other national emergency recognized by the board, if the member was employed by the municipality at the time of entry into the armed service,and is or was reemployed by the municipality as a police officer or fire fighter within 6 months after the date of termination of his or her required enlistment or assignment in the armed service, A municipality by a 3/5 vote of its governing body or by a majority vote of the qualified electors may provide service credit for not more than 6 years of active military service to the United States government to a member who is employed subsequent to this military service upon payment to the retirement system of 5%of the membees full-time or equated full-lime compensation f'or the fiscal year in which payment is made multiplied by the years of service that the member elects to purchase up to the maximum. Service is not creditable if it is or would be creditable under any other federal, state, or local publicly supported retirement system. However, this restriction does not apply to those persons who have or will have acquired retirement eligibility under the federal government for service in the reserve.A member shall be given service credit for the time the member is absent from active service without full pay on account of sickness or injury. If the absence from active service is due to nonservice connected sickness or injury, not more than 60 days of the absence shall be credited as service in any 1 calendar year,its determined by tine retirement board. (11) 13efore the effective date of the member's rctirvinent as provided in this subsection, but not after the eili�ctivc date orthe rncmber's retirement, a member may elect to receive his or her benefit in a pension payable throughout the mcmber's life,called it regular retirement pension,or the member may elect to receive the actuarial equivalent, computed as of tine effective date of retirement,of the member's regular retirement pension in it reduced retirement pension payable throughout the member's life, and nominate a survivor benefteiary,under an option provided in Ibis subdivision, 1Jpon the death of a retirant who retires on or after rlurxiered TrHHnday,W0148.2007 Pape 3 Mlchlgan Complied Laws Complete Through PA 1 of 2007 Legislative Council,State of Michigan Courtesy of www.logislafure.n7igov July 1, 1975, and who is receiving a regular retirement pension, his or her spouse, if living, shall receive a pension equal to 60% of the regular retirement pension the deceased retirant was receiving. Benefits shall not be paid under this subdivision on account of the death of a retirant if the member elected to receive his or her pension under an option provided in this subdivision. As used in this subsection,"spouse"means the person to whom the retirant was legally married on both the effective date of retirement and the date of death.Except as otherwise provided in this act, if a member fails to elect an option before(lie effective date of'retirement,then the pension shall be paid as a regular retirement pension. A member may elect 1 of the following options: (i) Option I. Upon the death of a retired member, his or her reduced retirement pension shall be continued throughout the life of and paid to the person,having an insurable interest in the retired member's life,that the member nominated by written designation executed and filed with the retirement board before the effective date of the member's retirement. (it) Option Il. Upon the death of a retired member, 1/2 of his or her reduced retirement pension shall be continued throughout the life of and paid to the person, having an insurable interest in the retired member's life, that the member nominated by written designation executed and filed with the retirement board before the effective date of the member's retirement. (i) If a member continues in service on or after the date of acquiring 20 years of service credit, does not have an option I election provided for in subdivision 0) in force, and dies while in service of the municipality before the effective date of the member's retirement, leaving a surviving spouse, the spouse shall receive a pension computed in the same manner as if the member had retired effective the day preceding the date of the member's death, elected option I provided for in subdivision (h), and nominated the spouse as survivor beneficiary.Upon the death of the spouse the pension shall terminate. A pension shall not be paid under this subdivision on account of the death of a member if benefits are paid under subsection (2) on account of the member's death. 0)A member who continues in service on or after the date of acquiring 25 years of service credit may, at any time before the effective date of the member's retirement, by written declaration executed and filed with the board in the manner and form prescribed by the board, elect option I provided for in subdivision (h) and nominate a survivor beneficiary whom the board finds to be dependent upon the member for at least 50% of the beneficiary's support. If a member who has an option I election provided for in this subdivision in force dies while in service before the effective date of the member's retirement, the member's survivor beneficiary shall immediately receive the same pension that the survivor beneficiary would have been entitled to receive under option I if the member had retired pursuant to this act effective the day preceding the date of the member's death, notwithstanding that the member may not have attained 55 years of age. If a member who has an option I election provided for in this subdivision in force subsequently retires pursuant to this act,the member, within 90 days immediately preceding the effective date of the member's retirement, but not after the effective date of the member's retirement,may elect an option provided for in subdivision(h). The option election is effective as of the effective date of the member's retirement. A pension shall not be paid under this subdivision on account of the death of a member if benefits are paid under subsection (2) on account of the member's death. (k)If a retirant receiving a reduced retirement pension under subdivision(h)(i) or(if) is divorced from the spouse who had been named the retirant's survivor beneficiary under subdivision (h)(i) or(H),the election of a reduced retirement pension payment option shall be considered void by the retirement system if the judgment of divorce or award or order of the court, or an amended judgment of divorce or award or order of the court, described in section 9 and dated after June 27, 1991 provides that the election of a reduced retirement pension payment option under subdivision (h)(i) or (ii) is to be considered void by the retirement system and the retirant provides a certified copy of the judgment of divorce or award or order of the court, or an amended judgment of divorce or award or order of the court, to the retirement system. If the election of a reduced retirement pension payment option under subdivision (h)(i) or (H) is considered void by the retirement system under this subsection, the retirant's retirement pension shall revert to a regular retirement pension,including postretirement adjustments,if any,subject to au award or order of the court as described in the public employee retirement benefit protection act. The retirement pension shall revert to a regular retirement pension under this subdivision effective the first day of the month after the date the retirement system receives a certified copy of the judgment of divorce or award or order of the court. This subdivision does not supersede a judgment of divorce or award or order of the court in effect on June 27, 1991. This subdivision does not require the retirement system to distribute or pay retirement assets on behalf of a retirant in an amount that exceeds the actuarially determined amount that would otherwise become payable if a judgment of divorce had not been rendered. (2)Disability and service connected death benefits payable tinder this act are as follows: Rendered Thursday,March 00,2007 Page 4 Michigan Complied Laws Complete Through PA 1 of 2007 C Legislative Council,State of Michigan Courtesy of www legislature.mi.gov (a)To a surviving spouse, a duty death pension of the salve amount each week as that which has been paid the surviving spouse under the worker's disability compensation act of 1969, 1969 PA 317, MCL 418.101 to 418,941, to become due and payable on the termination of the payments to the surviving spouse by a municipality under the worker's disability compensation act of 1969, 1969 PA 317,MCL 418.101 to 418.941, and to continue for the surviving spouse's life. (b)If death results to a member in the line of duty,and the member leaves surviving children,the children shall be paid a pension of the same amount as that which has been paid to them as a weekly benefit under the worker's disability compensation act of 1969, 1969 PA 317, MCL 418.101 to 418.941, to become due and payable upon termination of the payments under the worker's disability compensation act of 1969, 1969 PA 317, MCL 418,101 to 418.941, and to continue to each surviving child until he or she attains 18 years of age, or until his or her marriage or death before attaining 18 years of age. (c) If death results to a member in the line of duty and the member leaves other surviving dependents, the dependents shall receive a pension of the same amount as that which has been paid to them as a weekly benefit under the worker's disability compensation act of 1969, 1969 PA 317, MCL 418,101 to 418.941, to become due and payable upon termination of the payments under the worker's disability compensation act of 1969, 1969 PA 317,MCL 418.101 to 418.941,and to continue until the time the retirement board determines that the need for a pension no longer exists. (d) Upon the application of a member or the member's department head, a member who becomes totally incapacitated for duty by reason of a personal injury or disease occurring as the natural and proximate result of causes arising out of and in the course of the member's employment by the municipality shall be retired by the retirement board. The member shall be given a medical examination by a medical committee consisting of it physician named by the retirement board,a physician named by the member claiming benefits, and a third physician designated by the first 2 physicians named. The medical committee, if determined by a majority opinion, shall certify in writing that the member is mentally or physically incapacitated for the further performance of duty as a police officer or fire fighter in the service of the municipality;that the incapacity is likely to be permanent; and that the member should be retired. Upon retirement for disability as provided in this subdivision, a member who has not attained 55 years of age shall receive a disability retirement pension of 50°% of the member's average final compensation, which shall be determined according to subsection (1)(f), and shall be payable until the member becomes 55 years of age. Upon becoming 55 years of age, the disabled member shall receive a disability retirement pension computed according to subsection (1)(e). In computing the disability retirement pension,the member shall be given service credit for the period of receipt of a disability retirement pension.before attainment of 55 years of age. If a member retired after attaining 55 years of age on account of disability, as provided in this subdivision, Ore member shall receive a disability retirement pension computed according to subsection (1)(e), notwithstanding that the member may not have 25 years of service credit. The disability retirement pension provided for in this subdivision is subject to subdivisions(f)and(g). (e)Upon the application of a member or the member's department head,a member in service who has 5 or more years of service credit and who becomes totally and permanently incapacitated for duty,by reason of a personal injury or disease occurring as the result of causes arising outside the course of the member's employment by the municipality may be retired by the retirement board. The member shall be given a medical examination by a medical committee consisting of a physician named by the retirement board, a physician named by the member c aiming benefits, and a third physician designated by the first 2 physicians named. The medical committee,lif_deternrined-by-a•ivajcuity-Dpinion, shall certify in writing that the member is mentally or physically incapacitated for the further performance of duty as a police officer or fire fighter in the service of the municipality, that the incapacity is likely to be permanent, and that the member should be retired. Upon retirement for disability, as provided in this subdivision, a member who has not attained 55 years of age shall receive a disability retirement pension until the member becomes 55 years of age,recovers, or dies,whichever occurs first,of 1,5% of the member's average final compensation multiplied by the number of years of service credited to the member. Upon becoming 55 years of age, the member's disability retirement pension shall be increased to 2% of the member's average final compensation multiplied by the number of years of service credited to the member at the time of his or her retirement. Upon retirement for disability as provided in this subdivision, a member who is 55 years of age or older shall receive a disability retirement pension computed according to subsection (1)(e). This subdivision is subject to subdivisions (f) and(g). (f) At least once each year during the first 5 years after the retirement of a member with a disability retirement pension and at least once in every 3-year period after disability retirement, the retirement board may,and upon the retired membees application shall, require a retired member who has not ntlaincd 55 years of age to undergo a medical examination. The medical examination shnll be.given by or under the direction of Rendered Thursday,March 08,2007 Page 5 Michigan Conipaod laws Connilulu TWNvti PA 1 of 2007 © Legislative Council, State of Michigan Ceurfesyofwww.legislature.mi.gov a physician,designated by the retirement board, at the place of'residence of the retired member or other place mutually agreed upon. If a retired member who has nul attained 55 years of age refuses to submit to the medical examination in the period, the member's disability retirement pension may be discontinued by the retirement board.If the member's refusal continues for l year,all the member's rights to his or her disability retirement pension may be revoked by the retirement board. if upon a medical examination of the retired member the physician reports to the retirement board that the retired member is physically capable of resuming employment in the classification held by the member at the time of retirement,the member shall be restored to active service in the employ of the municipality and payment of the disability retirement pension shall cease if the report of the physician is concurred in by the retirement board, A retired member restored to active service shall again become a member of the retirement system from the date of return to service. The member shall contribute to the retirement system after restoration to active service in the some manner as before the member's disability retirement, Service credited to the member at the time of disability retirement shall be restored to full effect. The member shall be given service credit for the period the member was receiving a duty disability retirement pension provided for in subdivision (d), but shall not be given service credit for the period the member was receiving a nonduty disability retirement pension provided for in subdivision (e). Amounts paid under the worker's disability compensation act of 1969, 1969 PA 317, MCL 418,101 to 418.941, to a retired member shall be offset against and payable in place of benefits provided under this act. If the benefits under the worker's disability compensation act of 1969, 1969 PA 317, MCL 418.101 to 418.941,are less than the benefits payable under this act, the amount to be paid out of the funds of the retirement system shall be the difference between the benefits provided under the worker's disability compensation act of 1969, 1969 PA 317, MCL 418.101 to 418.941, and the benefits provided in this act. Upon the termination of benefits under the worker's disability compensation act of 1969, 1969 PA 317,MCL 418.101 to 418,941,the benefits shall be paid pursuant to this act. (g) Within 60 days before a member becomes 55 years of age, or before retirement from service if retirement occurs after the member becomes 55 years of age, a disabled member who is retired as provided in subdivision (d) or(e) may elect to continue to receive a disability retirement pension as a benefit terminating at death, to be known as a regular disability pension, or may elect to receive the actuarial equivalent, at that time, of a regular disability pension in a reduced disability pension payable throughout life pursuant to an option provided in subsection (1)(h). If a disabled member fails to elect an option, as provided in this subdivision, before becoming 55 years of age or before retirement, the member's retirement pension shall be paid to the member as a regular disability pension terminating at death. If a disabled member who has not elected an option provided in subsection(1)(h)dies before the total of the member's regular disability pension payments received equals or exceeds the total of the member's contributions r ade to the retirement system, the remainder, if any, shall be paid in a single sum to the person or persons nominated by the member by written designation duly executed and filed with the board. If there is not a designated person or persons surviving,then the remainder,if any,shall be paid to the retired member's legal representative or estate. History: 1937, Act 345,Eff.Oct, 29, 1937;-Am. 1939,Act 210,Eff'. Sept, 29, 1939;-Am, 1945,Act 256,Eff.Sept.6, 1945;- Am. 1947,Act 229,Imd.Eff.June 17,1947;--CL 1948,38.556;--Am, 1951,Act 16,lmd.Eff.Mar.30,1951;--Arn.1954,Act 173,Eff. Aug. 13,1954;-Am. 1955,Act 263,Imd.Eff.June 29, 1955; Am. 1956,Act 169,Imd.Eff.Apr. 16, 1956;Am, 1959,Act 224,Eff. Mar. 19,1960;-Am.1961,Act 201,Eff.ScpL 8, 1961; Am. 1965,Act 137,lmd.Eff.July 12, 1965;--Am.1967,Act 256,Eff.Nov,2, 1967;-Am, 1970,Act 230,Imd.Eff,Nov.25, 1970,•-Am. 1975,Act 147,lmd.Eff.July 9, 1975;-Am. 1976,Act 118,lmd.Eff,May 14, 1976,-Ant. 1976,Act 321,Eff.Mar.31, 1977,•---Am. 198%Act 7,lmd.Eff.May 3, 1989,Am. 1991,Act 54,lmd,Eff.June 27, 1991;--Am.2002,Act 98,lmd,Eff.Mar,27,2002;-Am,2003,Act 8,lmd.Eff.May 20,2003, Popular name:Act 345 38.556a Municipality having population of 80,000 or more; applicability of § 38.556(1)(h) to certain members. Sec. 6a.In a municipality having a population of 80,000 or more, section 6(1)(h)shall be applicable to any member who continues in service on or after the date he or she acquires 15 years of service credit. History:Add, 1963,Act 57,Eff.Sept.6, 1963;Am. 1982,Act 145,]md.Eff.Apr.28, 1982;--•Am,2003,Act 8,lmd,Eff.May 20, 2003. Popular name:Act 345 38.556b Remarriage of surviving spouse; applicability of subsection (1)to municipality. Sec. 6b. (1) Notwithstanding section 6 or any predecessor to section 6, the remarriage of a surviving spouse shall not render the surviving spouse ineligible to receive a pension described in section 6(I)(i) or a duty death pension described in section 6(2)(a). A surviving spouse whose pension described u1 section 6(1)(i) or duty death pension described in section 6(2)(a) wns terminated due to the surviving spouse's Rendered Thursday,March 08,2007 Page,0 Michigan Complied Laws Complete Through PA 1 of 2007 ©Legislative Council, State of Michigan Courtesy of www.regisialare.mi,gov remarriage shall be eligible to receive that pension or duty death pension beginning on the first day of the month following the month in which written application for reinstatement is filed with the board,but shall not be eligible to receive the pension or duty death pension attributable to any month beginning before the month of reinstatement under this section. (2) Beginning on the effective date of the amendatory act that amended this subsection, the provisions of subsection(1)that apply to it surviving spouse who is eligible to receive a pension described in section 6(1)(i) shall apply to it municipality upon approval by resolution of the governing body of the municipality. (3)Beginning on the effective date of the amendatory act that added this subsection, a surviving spouse who is eligible to receive a duty death pension described in section 6(2)(a) and who remarries after the effective date of the amendatory net that added this subsection shall not be denied a duty death pension described in section 6(2)(a)by a municipality because of the remarriage of the surviving spouse. History:Add. 1996,Act 30,lmd.tiff.Mar. 10,1986;—Am,2003,Act 8,Imd.Eff.May 20,2003, Compiler's note:Former MCL 38.556b,pertaining to vested rights in pensions and benefits,was repealed by Act 321 of 1976. Popular name:Act 345 38.556c Service credit for employment in transitional public employment program; payment of contributions and regular interest; payroll deduction; amount in reserve; payment of contributions by current employer; accident,disability, or other benefits. Sec. 6c, (1)if a person who participated in a transitional public employment program becomes a member of a retirement system established tinder this act within 12 months after the date of termination as a participant in a transitional public employment program, service credit shall be given for employment in the transitional public employment program for purposes of determining a retirement allowance upon the payinent by the person and the person's employer under the transitional public employment program from funds provided tinder the comprehensive employment and training act,29 U.S.C. 801 to 992,as funds permit, to the retirement system of the contributions, plus regular interest, the person and the employer would have paid had the employment been rendered in a position covered by this act,During the person's employment in the transitional public employment program, the person's employer shall provide an opportunity by payroll deduction for the person to make his or her employee contribution to the applicable pension system. To provide for the eventual payment of the employer's contribution,the person's employer shall during this some period place in reserve a reasonable but not necessarily an actuarially determined amount equal to the contributions which the employer would have paid to the retirement system for those employees in the transitional public employment program as if they were members under this act,but only for that number of employees which the employer determine(] would transfer from the transitional public employment program into positions covered by this act. If the funds provided under the comprehensive employment and training act arc insufficient,the remainder of the employer contributions shall be paid by the person's current employer. (2) The provisions of subsection (1) shall not exclude the participant in a transitional public employment program from the accident, disability or other benefits available to members of the retirement system covered by this act. History:Add,1978,Act 421,lmd.Eff.Sept.30,1978. Popular name:Act 345 38.556d Postretirement adjustments increasing retirement benefits. Sec. 6d.A municipality, by ordinance or in another manner provided by law, may adopt from time to time benefit programs providing for postretirement ndjustlnents increasing retirement benefits. Such benefit progri uis may provide for 1-lime postretirement percentage increases in retirement benefits; annual or other periodic postretirement percentage increnms in retirement benefits; lump sum postretirement distributions;or any other method considered appropriate by the municipality.The retirement benefit payable alter making an adjustment pursuant to the benefit program adopted shall he the new retirement benefit payable until the next adjustment,if any,is made. History:Add.1987,Act 145,Imd.Eff.Oct.26, 1987, Popular name:Act 345 38.556e Mandatory subjects of bargaining. Sec. 6e. Notwithstanding any other provisions of this act, any matter relating to the retirement system provided by this llet, including, but not limited to, postretirement adjustment increases, applicable to current employees represented by a collective bargaining agent is a mandatory subject of bargaining under the public employment relations act,Act No. 336 of the Public Acts of 1947, being sections 423.201 to 423,216 of the Michigan Compiled Laws. Rendored Thursday,March 08,2007 Page 7 Michigan Compiled Laws Complete 1 hrough PA 1 of 2007 ©Legislative Council, State of Michigan Courtesy of www.legislature.mi.gov CITY CHARTER