SENATE BILL No. 507

 

 

May 16, 2007, Introduced by Senators GEORGE, KUIPERS, BARCIA, BIRKHOLZ, OLSHOVE, PAPPAGEORGE, JANSEN, KAHN, CROPSEY, CASSIS and RICHARDVILLE and referred to the Committee on Economic Development and Regulatory Reform.

 

 

 

     A bill to amend 1975 PA 169, entitled

 

"Charitable organizations and solicitations act,"

 

by amending the title and sections 2, 3, 4, 6, 7, 8, 9, 10, 11, 13,

 

16, 18, 20, 21, and 23 (MCL 400.272, 400.273, 400.274, 400.276,

 

400.277, 400.278, 400.279, 400.280, 400.281, 400.283, 400.286,

 

400.288, 400.290, 400.291, and 400.293), section 13 as amended by

 

1992 PA 299, and by adding sections 3a, 3b, 5a, 19, 19a, 22a, 23a,

 

and 23b; and to repeal acts and parts of acts.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

TITLE

 

     An act to regulate charitable organizations, and professional

 

fund-raisers and other persons soliciting or collecting

 

contributions for charitable purposes on behalf of charitable

 


organizations, and certain other persons involved in the

 

solicitation of contributions to charitable organizations; to

 

require registration , and disclosure of information and licensing

 

by charitable organizations and professional fund-raisers before

 

solicitation of contributions; to provide for reporting of

 

financial and other information by those licensed or registered and

 

those claiming exemption from registration; to prescribe standards

 

of conduct and administration, and to prohibit certain actions, in

 

connection with charitable solicitations; to provide for

 

enforcement, investigation, and promulgation of rules by the powers

 

and duties of the attorney general and county prosecuting

 

attorneys; to preempt local regulation; to provide remedies and

 

penalties for violations; and to repeal certain acts and parts of

 

acts.

 

     Sec. 2. As used in this act:

 

     (a) "Charitable organization" means a benevolent, educational,

 

philanthropic, humane, patriotic, or eleemosynary organization of

 

persons which solicits or obtains contributions solicited from the

 

public for charitable purposes. A chapter, branch, area office, or

 

similar affiliate or person soliciting contributions within the

 

state for a charitable organization which has its principal place

 

of business outside the state is a charitable organization. This

 

definition does not include duly constituted religious

 

organizations or a group affiliated with and forming an integral

 

part of a religious organization no part of the net income of which

 

inures to the direct benefit of any individual if it has received a

 

declaration of current tax exempt status from the United States.

 


The affiliated group shall not be required to obtain a declaration

 

if the parent or principal organization has obtained tax exempt

 

status. Charitable organization does not include a candidate or

 

committee as defined in section 901 of Act No. 116 of the Public

 

Acts of 1954, being section 168.901 of the Michigan Compiled Laws,

 

or a political party qualified to be on the general election ballot

 

pursuant to section 560a of Act No. 116 of the Public Acts of 1954,

 

as added, being section 168.560a of the Michigan Compiled Laws. tax

 

exempt organization under section 501(c)(3) of the internal revenue

 

code, 26 USC 501, or a person whose purposes, structure, or

 

activities are exclusively those that are described in section

 

501(c)(3) of the internal revenue code, 26 USC 501. The term does

 

not include any of the following:

 

     (i) A federal, state, or local unit of government or a

 

subdivision, agency, or instrumentality of federal, state, or local

 

government.

 

     (ii) A religious organization.

 

     (b) "Charitable purpose" means a purpose described in section

 

501(c)(3) of the internal revenue code, 26 USC 501.

 

     (c) "Charitable sales promotion" means an advertising or sales

 

campaign representing that proceeds from the sale or use of the

 

goods or services offered will benefit, in whole or in part, a

 

charitable organization or charitable purpose, or that the seller,

 

commercial coventurer, or vendor will make a payment to a

 

charitable organization or for a charitable purpose.

 

     (d) "Commercial coventurer" means a person other than a

 

charitable organization or professional fund-raiser who conducts

 


charitable sales promotions or a person who enters into a licensing

 

arrangement in which a charitable organization allows the person to

 

use the charitable organization's name for a fee.

 

     (e) (b) "Contribution" means the promise, grant, or payment of

 

money or property of any kind or value, including promises the

 

promise to pay. , except payments by members of an organization for

 

membership fees, dues, fines, or assessments, or for services

 

rendered to individual members, if membership in the organization

 

confers a bona fide right, privilege, professional standing, honor,

 

or other direct benefit, other than the right to vote, elect

 

officers, or hold offices, and except money or property received

 

from a governmental authority or foundation restricted as to use.

 

Contribution includes that portion of membership fees, dues, or

 

assessments that exceed the monetary value of membership benefits

 

available to a dues payer whether or not the membership benefits

 

are used, and membership fees, dues, or assessments that are paid

 

primarily to support the charitable organization's activities.

 

Contribution does not include any of the following:

 

     (i) A grant or contract from any governmental agency.

 

     (ii) Any portion of membership dues, fees, or assessments paid

 

to a labor organization or bargaining representative. As used in

 

this subparagraph:

 

     (A) "Bargaining representative" means that term as defined in

 

section 1 of 1947 PA 336, MCL 423.201.

 

     (B) "Labor organization" means that term as defined in section

 

2 of 1939 PA 176, MCL 423.2, or section 2 of the national labor

 

relations act, 29 USC 152.

 


     (f) "Misrepresentation" includes an affirmative

 

misrepresentation; a false statement; or an omission of or failure

 

to disclose a material fact that is not obvious to the person to

 

whom a statement or representation is made, if the omission or

 

failure to disclose tends to mislead that person.

 

     (g) (c) "Person" means an individual, an organization, a

 

group, an association, partnership, corporation, limited liability

 

company, trust, or any combination of them other legal entity.

 

     (h) "Private foundation" means that term as defined in section

 

509(a) of the internal revenue code, 26 USC 509.

 

     (i) "Professional fund-raiser" means a person, including a

 

subcontractor, who for compensation or other consideration

 

conducts, manages, or carries out a plan, drive, or campaign to

 

solicit contributions for or on behalf of a charitable organization

 

or religious organization; a person, including a subcontractor, who

 

engages in the business of or holds himself or herself out as

 

independently engaged in the business of soliciting contributions

 

for charitable purposes; or a bona fide officer or employee of a

 

charitable organization if his or her salary or other compensation

 

is based or computed on the amount of money he or she raises or is

 

expected to raise. A person whose service to a charitable

 

organization or religious organization is limited to providing

 

training, advice, research, preparation of grant proposals, or

 

design, writing, or production of soliciting materials is not a

 

professional fund-raiser if all of the following are met:

 

     (i) Any proposals, documents, or materials written or produced

 

by or on behalf of the professional fund-raiser for the charitable

 


organization or religious organization are subject to review and

 

acceptance or rejection by the charitable organization or religious

 

organization.

 

     (ii) Any proposals for funding submitted to a grantor or donor

 

are submitted to the grantor or donor by the charitable

 

organization or religious organization.

 

     (iii) The person does not directly solicit any grantors or

 

donors for the charitable organization or religious organization.

 

     (iv) The person's compensation is not directly or indirectly

 

based or computed on the amount of money the charitable

 

organization or religious organization raises or intends to raise.

 

     (j) "Religious organization" means any of the following:

 

     (i) A church, integrated auxiliary of a church, or convention

 

or association of churches described in section 6033(a)(2)(A)(i) of

 

the internal revenue code, 26 USC 6033.

 

     (ii) A religious order described in section 6033(a)(2)(A)(iii) of

 

the internal revenue code, 26 USC 6033, engaged solely in

 

exclusively religious activities.

 

     (k) "Solicit" and "solicitation" mean the following:

 

     (i) A direct or indirect request for a contribution based on

 

the representation that the contribution will or may be used for a

 

charitable purpose or to benefit a charitable organization, whether

 

or not the person making the solicitation receives a contribution.

 

The term includes, but is not limited to, any of the following

 

methods of requesting contributions:

 

     (A) Making an oral or written request.

 

     (B) Distributing, circulating, mailing, posting, or publishing

 


a handbill, written advertisement, or other communication that

 

directly or by implication seeks to obtain a contribution.

 

     (C) Making an announcement to the news media, or by radio,

 

television, telephone, telegraph, facsimile, electronic mail, or

 

any other communication device, or on the internet, concerning an

 

appeal or campaign for a charitable organization or purpose.

 

     (D) Selling, attempting to sell, or offering to sell an

 

advertisement, advertising space, a book, a coupon, a magazine, a

 

membership, merchandise, a subscription, a ticket, or other item in

 

connection with a request for a charitable organization or purpose.

 

     (E) Utilizing receptacles such as honor boxes, vending

 

machines, wishing wells, or contribution boxes for contributions,

 

if a charitable purpose or a charitable organization's name is

 

used, referred to, or implied as an inducement to make a

 

contribution or purchase.

 

     (ii) Knowingly receiving contributions that are solicited from

 

the public by a person other than a charitable organization and

 

transferred to that charitable organization.

 

     (iii) Receiving money from a community chest, united fund, or

 

similar organization or from a combined solicitation by 2 or more

 

charitable organizations.

 

     (l) (d) "Soliciting material" means printed or similar

 

material, any document or other object used to communicate or as a

 

communication aid in a solicitation, including, but not limited to,

 

labels, posters, television scripts, radio scripts, or other text

 

or recordings used in soliciting funds from the public.

 

     (m) (e) "Solicitor" means a person an individual who solicits

 


on behalf of a charitable organization.

 

     (f) "Professional fund raiser" means a person who for

 

compensation or other consideration plans, conducts, manages, or

 

carries on a drive or campaign of soliciting contributions for or

 

on behalf of a charitable organization, religious organization, or

 

any other person; or who engages in the business of or holds

 

himself out as independently engaged in the business of soliciting

 

contributions for such purposes. A bona fide officer or employee of

 

a charitable organization is not a professional fund raiser unless

 

his salary or other compensation is computed on the basis of funds

 

to be raised or actually raised.

 

     (g) "Professional solicitor" means a person who is employed or

 

retained for compensation by a professional fund raiser to solicit

 

contributions for charitable purposes.

 

     (h) "Prohibited transaction" is that dealing, activity,

 

conduct, administration, or management of the charitable

 

organization or by any of its officers, trustees, personnel, or

 

related persons which may be prohibited as constituting activity

 

contrary to proper administration of the charitable organization or

 

conduct of a fund raising campaign or solicitation by a

 

professional fund raiser or solicitor.

 

     (n) "Vendor" means a person other than a charitable

 

organization or professional fund-raiser who conducts charitable

 

sales promotions or solicitation campaigns through vending

 

machines, honor boxes, novelty machines, or similar devices, that

 

represents that it benefits a charitable organization or a

 

charitable purpose through a portion of the proceeds, a fixed

 


dollar amount, or any other manner.

 

     Sec. 3. (1) Before a solicitation, a Unless the charitable

 

organization which is not an exempt organization and which is not

 

described in from registration and reporting under section 13,

 

which a charitable organization that solicits or intends to solicit

 

or receives or intends to receive contributions from persons by any

 

means whatsoever, shall file with the attorney general upon forms

 

prescribed by him, an application for a license. It register with

 

the attorney general as provided in this act.

 

     (2) A charitable organization registering under this act shall

 

register in writing on forms prescribed by the attorney general and

 

shall include all of the following information about the charitable

 

organization in the registration form:

 

     (a) The name of the organization and the any name under which

 

it intends used by that organization to solicit contributions.

 

     (b) The principal address and telephone number of the

 

principal office of the organization and the address of any office

 

in this state. If the organization does not maintain a principal

 

office, the organization shall include the name, and address, and

 

telephone number of the person having custody of its financial

 

records in the registration form.

 

     (c) The names and addresses of the officers, directors,

 

trustees, chief executive officer, and state agent.

 

     (c) (d) Where and when the organization was legally

 

established , and the form of its organization. , and its tax

 

exempt status.

 

     (d) The organization's federal tax exempt status.

 


     (e) The A statement of the organization's purpose for which it

 

is organized and the purposes for which contributions to be

 

solicited will be used.

 

     (f) The fiscal year date of the organization methods the

 

organization will use to solicit contributions.

 

     (g) Whether the organization is or has ever been enjoined from

 

soliciting contributions The names and addresses of all

 

professional fund-raisers with which the organization has

 

contracted.

 

     (h) All methods by which solicitations will be made A list of

 

the names and addresses of the organization's board of directors,

 

officers, and trustees.

 

     (i) Copies of contracts between charitable organizations and

 

professional fund raisers relating to financial compensation or

 

profit to be derived by the professional fund raisers. When the

 

contract is executed after filing of application statement, a copy

 

shall be filed within 10 days of the date of execution.

 

     (j) Other information as required by rule.

 

     (i) Whether the organization or any officer, trustee, or

 

director of the organization meets any of the following:

 

     (i) Is a party to or subject of a pending court action or

 

administrative proceeding concerning a solicitation in any state or

 

country.

 

     (ii) As a result of a court action or administrative

 

proceeding, whether by agreement, order, or judgment, was ever

 

enjoined, fined, convicted, or subjected to any other sanction or

 

penalty in connection with a solicitation in any state or country.

 


     (iii) Within the 10-year period preceding the date of the

 

application, was convicted in any state or country of any crime

 

involving dishonesty or false statement.

 

     (iv) Within the 10-year period preceding the date of the

 

application, was convicted in any state or country of any felony

 

involving theft.

 

     (j) Whether an officer, director, or employee of the

 

charitable organization owns any interest in a professional fund-

 

raiser, or is an agent or contractor for a professional fund-

 

raiser, during a period of time when the professional fund-raiser

 

is under contract with the charitable organization to solicit

 

funds.

 

     (3) A charitable organization shall provide copies of all of

 

the following registration materials with a registration form

 

described in subsection (2):

 

     (a) If the charitable organization is tax exempt, a copy of

 

its internal revenue service determination letter with its initial

 

registration form.

 

     (b) Subject to subsection (5), 1 of the following:

 

     (i) A copy of its fully and properly completed internal revenue

 

service form 990, 990-EZ, or 990-PF, or any successor internal

 

revenue form for the immediately preceding tax year. The charitable

 

organization must include all schedules, attachments, and exhibits

 

it filed with the internal revenue service, except that a

 

charitable organization that is not a private foundation may omit

 

its schedule of contributors. If a charitable organization is

 

filing its initial registration form and at the time of filing it

 


has not completed its federal tax return for the immediately

 

preceding tax year or it has received a filing extension from the

 

internal revenue service for that tax year, the charitable

 

organization may satisfy this subparagraph by providing a copy of

 

its most recently filed internal revenue service form 990, 990-EZ,

 

or 990-PF.

 

     (ii) If a charitable organization does not file an internal

 

revenue service form 990, 990-EZ, or 990-PF, it shall prepare a pro

 

forma form 990, 990-EZ, or 990-PF return and provide it with the

 

registration form. A charitable organization shall complete a pro

 

forma return fully and properly pursuant to internal revenue

 

service instructions and shall include all required information,

 

attachments, schedules, and exhibits.

 

     (c) Financial statements prepared according to generally

 

accepted accounting principles that have been audited by an

 

independent certified public accountant if the amount of

 

contributions received by the charitable organization during its

 

immediately preceding tax year reported on its federal tax return

 

is $500,000.00 or more. If the amount of contributions as reported

 

on the charitable organization's internal revenue service form 990,

 

990-EZ, or 990-PF is $250,000.00 or more, but less than

 

$500,000.00, the charitable organization shall provide financial

 

statements either reviewed or audited by an independent certified

 

public accountant. The amount of contributions received by the

 

organization includes direct and indirect public support as shown

 

on the internal revenue service form 990, 990-EZ, or 990-PF, plus

 

net special fund-raising events revenue. The attorney general may

 


waive this requirement 1 time for a charitable organization.

 

Effective for all tax years beginning on or after January 1, 2010

 

and before January 1, 2015, the dollar amounts of contributions at

 

which reviewed financial statements and at which audited financial

 

statements are required shall be increased by $25,000.00.

 

Additional $25,000.00 increases in the dollar amounts of

 

contributions shall be made every 5 tax years beginning with each

 

fiscal year beginning on or after January 1, 2015.

 

     (4) The chief executive officer, chief financial officer, or

 

the highest ranking officer of a charitable organization, or, if

 

the organization is a trust, a trustee of the organization, shall

 

sign a registration form or a renewal of registration form

 

delivered to the attorney general under this section and shall

 

certify under penalties for perjury that the statements made in the

 

registration form and registration materials are true, complete,

 

and correct.

 

     (5) The attorney general may waive the requirements of

 

subsection (3)(b) for a newly created charitable organization that

 

has not completed its initial accounting period or whose internal

 

revenue service form 990, 990-EZ, or 990-PF for its initial

 

accounting period has not yet been prepared.

 

     Sec. 3a. (1) A professional fund-raiser shall not solicit or

 

receive donations for a charitable purpose or on behalf of a

 

charitable organization or religious organization before

 

registering with the attorney general under this section and paying

 

a registration fee under section 5a, or after the expiration,

 

suspension, revocation, or denial of its registration.

 


     (2) A professional fund-raiser registering under this act

 

shall register in writing on forms prescribed by the attorney

 

general and shall include all of the following information about

 

the professional fund-raiser in the registration form:

 

     (a) The name of the professional fund-raiser and any other

 

names previously or currently used by the professional fund-raiser.

 

     (b) The address and telephone number of the principal office

 

of the professional fund-raiser and of each office it maintains in

 

this state.

 

     (c) Where and when the professional fund-raiser was legally

 

established and the form of its organization.

 

     (d) If the professional fund-raiser is a corporation, the name

 

and business or home address of each officer, director,

 

stockholder, or member.

 

     (e) If the professional fund-raiser is a sole proprietorship,

 

the name and business or home address of the owner.

 

     (f) If the professional fund-raiser is a limited liability

 

company, the name and business address of each member and manager.

 

     (g) If the professional fund-raiser is a partnership, the name

 

and business address of each partner.

 

     (h) The names and addresses of each business that also

 

provides services or products to charitable organizations and that

 

is related to or associated or affiliated with the professional

 

fund-raiser or any of the professional fund-raiser's officers,

 

directors, members, managers, or persons with any ownership

 

interest in the professional fund-raiser. The professional fund-

 

raiser shall also describe the services or products provided by

 


that business and the nature of the relationship, association, or

 

affiliation between that business and the professional fund-raiser.

 

     (i) The name, address, and telephone number of each agent or

 

employee of the professional fund-raiser who has direct

 

responsibility for solicitation activity in this state.

 

     (j) Whether the professional fund-raiser or any officer,

 

director, or principal of the professional fund-raiser meets any of

 

the following:

 

     (i) Is a party to or subject of a pending court action or

 

administrative proceeding concerning a solicitation in any state or

 

country.

 

     (ii) As a result of a court action or administrative

 

proceeding, whether by agreement, order, or judgment, was ever

 

enjoined, fined, convicted, or subjected to any other sanction or

 

penalty in connection with a solicitation in any state or country.

 

     (iii) Within the 10-year period preceding the date of the

 

application, was convicted in any state or country of any crime

 

involving dishonesty or false statement.

 

     (iv) Within the 10-year period preceding the date of the

 

application, was convicted in any state or country of any felony

 

involving theft.

 

     (k) A concise description of the principal methods by which

 

the professional fund-raiser is or will be soliciting

 

contributions.

 

     (l) The name, address, and telephone number of any charitable

 

organization for which the professional fund-raiser has agreed to

 

solicit funds or provide services as a professional fund-raiser on

 


any campaign in this state.

 

     (m) Whether an officer, director, or employee of a charitable

 

organization owns any interest in the professional fund-raiser, or

 

is an agent or contractor for the professional fund-raiser, during

 

a period of time when the professional fund-raiser is under

 

contract with that charitable organization to solicit funds, and

 

whether that information has been fully disclosed to the board of

 

directors or other governing body of the charitable organization.

 

     (n) The signature of an officer, owner, manager, or partner of

 

the professional fund-raiser certifying under penalties of perjury

 

that the statements made in the registration form and registration

 

materials are true, correct, and complete.

 

     (3) A professional fund-raiser shall provide copies of all of

 

the following registration materials with a registration form

 

described in subsection (2):

 

     (a) A complete copy of any agreement between the professional

 

fund-raiser and a charitable organization.

 

     (b) A complete copy of any subcontract agreement between the

 

professional fund-raiser and a person that will act as a

 

professional fund-raiser on behalf of a charitable organization,

 

religious organization, or any other person soliciting for a

 

charitable purpose.

 

     (4) Except as otherwise provided in subsection (5), a

 

professional fund-raiser that receives, has custody of, or has

 

access to funds solicited in this state for a charitable

 

organization shall include with its registration form a $25,000.00

 

bond that meets all of the following:

 


     (a) The professional fund-raiser is the principal obligor.

 

     (b) The bond runs to the benefit of the people of this state

 

and to any charitable organization or other person that may have a

 

cause of action against the professional fund-raiser as a result of

 

the professional fund-raiser's conduct of any activity subject to

 

this act.

 

     (c) The bond is obtained and submitted in the form prescribed

 

by the attorney general.

 

     (d) A company authorized to engage in insurance activity in

 

this state issues the bond.

 

     (e) The term of the bond does not expire until at least 1 year

 

after the professional fund-raiser's registration expires.

 

     (5) The attorney general may accept an irrevocable letter of

 

credit in lieu of a bond required under subsection (4) if the

 

irrevocable letter of credit is issued by a financial institution

 

that is authorized to transact business in this state and the

 

irrevocable letter of credit is insured by the federal deposit

 

insurance corporation, the federal savings and loan insurance

 

corporation, or the national credit union association. An

 

irrevocable letter of credit shall be submitted in the form

 

prescribed by the attorney general and shall expire not less than 1

 

year after the professional fund-raiser's registration expires.

 

     (6) Within 90 days after a solicitation campaign is completed,

 

or on the anniversary of the commencement of a solicitation

 

campaign lasting more than 1 year, a professional fund-raiser that

 

solicited contributions in this state on behalf of a charitable

 

organization shall file with the attorney general a financial

 


report for the campaign, including gross receipts and an

 

itemization of all expenses incurred on behalf of the charitable

 

organization. The professional fund-raiser shall submit the report

 

on a form prescribed by the attorney general. An authorized

 

official of the professional fund-raiser and an authorized official

 

of the charitable organization shall sign the report, and each

 

shall certify, under oath, that the report is true to the best of

 

his or her knowledge.

 

     (7) A registration under this section expires on the last day

 

of the twelfth full calendar month after the registration is

 

effective.

 

     Sec. 3b. (1) The registration of a charitable organization

 

under section 3 or a professional fund-raiser under section 3a is

 

effective immediately when the attorney general receives its

 

registration form, its complete and accurate registration

 

materials, and its registration fee under section 5a.

 

     (2) Within 60 days after the attorney general receives a

 

registration form, the registration materials, and a registration

 

fee under subsection (1), the attorney general shall do 1 of the

 

following:

 

     (a) Notify the charitable organization or professional fund-

 

raiser that its registration is effective and of its registration

 

date under subsection (1).

 

     (b) If the charitable organization or professional fund-raiser

 

made a misrepresentation or omitted required information in its

 

registration form or registration materials, or the charitable

 

organization or professional fund-raiser has violated or is

 


violating this act or rules promulgated under this act, notify the

 

charitable organization or professional fund-raiser of the

 

misrepresentation, omission, or violation.

 

     (3) After notice and an opportunity to be heard, the attorney

 

general shall deny or revoke the registration of a charitable

 

organization if either of the following is met:

 

     (a) The charitable organization has fewer than 3 directors or

 

trustees at the time the organization submits its registration

 

materials or the charitable organization is a trust with a single,

 

corporate trustee.

 

     (b) The number of directors or trustees of the charitable

 

organization falls below 3 during the organization's registration

 

period and the organization fails to properly elect or appoint a

 

sufficient number of directors or trustees to bring the total to 3

 

or more within 30 days.

 

     (4) After notice and an opportunity to be heard, the attorney

 

general may deny, suspend, or revoke the registration of a

 

charitable organization or professional fund-raiser who meets any

 

of the following:

 

     (a) Has violated or is violating this act or rules promulgated

 

under this act.

 

     (b) Made a misrepresentation to or omitted information

 

required by the attorney general under this act.

 

     (c) Is or has been enjoined from soliciting in any state or

 

country in connection with actions or omissions that would violate

 

this act.

 

     (d) For a charitable organization, the internal revenue

 


service has revoked its federal tax-exempt status.

 

     (5) The attorney general may suspend the registration of a

 

charitable organization or professional fund-raiser, on an

 

emergency basis without a hearing, if the attorney general issues a

 

notice of emergency suspension containing both of the following:

 

     (a) A description of the alleged violation of this act or a

 

rule promulgated under this act or other conduct that constitutes

 

the emergency.

 

     (b) A statement that the charitable organization or

 

professional fund-raiser has an opportunity for a hearing at a

 

designated time, date, and place, within 48 hours after the notice

 

of emergency suspension is issued, or at a later time agreed to in

 

writing by the charitable organization or professional fund-raiser,

 

on whether the emergency suspension should continue pending a

 

hearing held under subsection (6).

 

     (6) All of the following apply to a notice given or a hearing

 

held under this section:

 

     (a) The administrative procedures act of 1969, 1969 PA 306,

 

MCL 24.201 to 24.328, applies to the notice and hearing.

 

     (b) At a hearing held under subsection (3) or (4), the

 

charitable organization or professional fund-raiser shall have a

 

reasonable opportunity to rebut the attorney general's allegations

 

and to produce evidence to show compliance with this act or the

 

rules promulgated under this act.

 

     (c) At a hearing held under subsection (5), the attorney

 

general has the burden of proof in establishing noncompliance with

 

this act or a rule promulgated under this act and establishing that

 


the public health, safety, or welfare requires the emergency

 

suspension to continue pending a hearing held under subsection (3)

 

or (4).

 

     Sec. 4. (1) True A true and correct copies copy of the

 

contracts of any contract between a charitable organization and a

 

professional fund raisers fund-raiser shall be kept on file

 

retained in the offices of the charitable organization and the

 

professional fund raiser fund-raiser during the term of employment

 

the contract and for 6 years subsequent to the date after the

 

solicitation of contributions provided for therein in the contract

 

actually terminates.

 

     (2) Copies of all soliciting materials shall be suppliedupon

 

request of the attorney general.

 

     (2) A charitable organization, professional fund-raiser,

 

vendor, or commercial coventurer shall provide copies of any

 

contracts and any soliciting materials to the attorney general upon

 

request.

 

     (3) A charitable organization shall retain in its records

 

proof of the registration of any professional fund-raiser with

 

which it has contracted to perform services as a professional fund-

 

raiser for any solicitation campaign conducted in this state for a

 

period of 3 years after the campaign has ended.

 

     Sec. 5a. (1) A charitable organization shall pay a

 

registration fee to the attorney general with its application for

 

registration or renewal registration in 1 of the following amounts:

 

     (a) If the charitable organization received contributions of

 

less than $100,000.00 in the immediately preceding tax year,

 


$35.00.

 

     (b) If the charitable organization received contributions of

 

$100,000.00 or more and less than $500,000.00 in the immediately

 

preceding tax year, $75.00.

 

     (c) If the charitable organization received contributions of

 

$500,000.00 or more and less than $1,000,000.00 in the immediately

 

preceding tax year, $125.00.

 

     (d) If the charitable organization received contributions of

 

$1,000,000.00 or more and less than $5,000,000.00 in the

 

immediately preceding tax year, $200.00.

 

     (e) If the charitable organization received contributions of

 

$5,000,000.00 or more in the immediately preceding tax year,

 

$250.00.

 

     (2) A professional fund-raiser shall pay a registration fee to

 

the attorney general with its application for registration or

 

renewal registration in the amount of $300.00.

 

     Sec. 6. (1) A charitable organization shall notify the

 

attorney general in writing within 30 days of any change in the

 

information required to be furnished under section 3 3(2)(a), (b),

 

(d), (e), (f), (g), (i), or (j) or section 3(3). A report shall be

 

filed and signed by the president or other authorized officer and

 

the chief fiscal officer of the organization.

 

     (2) A professional fund-raiser shall notify the attorney

 

general in writing within 30 days of any change in the information

 

the professional fund-raiser is required to provide under section

 

3a(2).

 

     Sec. 7. (1) The license of a charitable organization shall

 


expire 1 year after the date of issuance. A charitable organization

 

desiring renewal of a license shall file with the attorney general

 

a renewal application and supporting information on or before 30

 

days prior to the expiration date. A registered charitable

 

organization shall report on its most recent fiscal year and renew

 

its registration within 6 months after the close of that fiscal

 

year. A registered charitable organization shall renew its

 

registration in writing on forms prescribed by the attorney general

 

under section 3(2) and shall include with the renewal registration

 

form the registration materials required to register under section

 

3(3) and the registration fee required under section 5a.

 

     (2) A charitable organization's registration shall expire if

 

the charitable organization's renewal registration form under

 

section 3(2), registration materials required under section 3(3),

 

and registration fee under section 5a are not received within 18

 

months after the end of the fiscal year reported on the

 

organization's most recently filed registration form unless the

 

attorney general has extended the registration under subsection

 

(4). If the attorney general has suspended the requirement that a

 

charitable organization provide a copy of its internal revenue

 

service form 990 under section 3(5), the organization's

 

registration shall expire 6 months after the end of its initial

 

accounting period unless the attorney general extends the

 

registration under subsection (4).

 

     (3) A charitable organization previously registered under this

 

act that is no longer subject to the registration requirements of

 

this act shall file a financial report within 6 months of the close

 


of the most recently completed fiscal year in which the

 

organization solicited in this state unless the attorney general

 

has extended the period of time for filing the report under

 

subsection (4). The report shall include the organization's

 

internal revenue service form or financial statement that would be

 

required to renew the organization's registration and any reports

 

on solicitation campaigns conducted by the charitable organization

 

through a professional fund-raiser required under section 3a(6).

 

     (4) The attorney general may extend a charitable

 

organization's registration, or the organization's time for filing

 

the report required under subsection (3), for 3 months. If a

 

charitable organization receives an extension of time to file the

 

charitable organization's internal revenue service form 990, 990-

 

EZ, or 990-PF, the attorney general shall extend the charitable

 

organization's registration, or extend its time for filing the

 

report required under subsection (3), for a similar period of time.

 

     Sec. 8. (1) Documents required to be filed with the attorney

 

general shall be open to public inspection. Persons subject to this

 

act shall maintain accurate and detailed books and records at the

 

office of the resident agent or the principal office which shall be

 

open to inspection at all reasonable times by the attorney general

 

or his authorized representative. A registration form or

 

registration materials submitted with a registration form, an

 

annual report, or any other information a person is required to

 

provide to or file with the attorney general under this act is a

 

public record subject to the freedom of information act, 1976 PA

 

442, MCL 15.231 to 15.246. However, a schedule of contributors or

 


other list of donors to a charitable organization that is not a

 

private foundation is exempt from disclosure pursuant to section

 

13(1)(d) of the freedom of information act, 1976 PA 442, MCL

 

15.243.

 

     (2) For at least 3 years after the date the records are

 

prepared, a charitable organization or professional fund-raiser

 

shall maintain accurate and detailed records that include all of

 

the information required under this act. All records are open to

 

inspection at all reasonable times by the attorney general and

 

copies of the records shall be provided to the attorney general

 

upon request.

 

     (3) A charitable organization, vendor, commercial coventurer,

 

professional fund-raiser, person described in section 23a, or other

 

person that solicits contributions, raises funds, or conducts sales

 

promotions for a charitable purpose shall maintain at the place

 

designated in its registration or, if not a charitable

 

organization, at its principal place of business, the original

 

records or true copies of the records pertaining to all money or

 

other property collected from residents of this state and to the

 

disbursement of that money or property. The records shall be

 

preserved for at least 3 years after the date prepared.

 

     (4) A file in the office of the attorney general regarding a

 

closed enforcement action or a settlement in a civil case under

 

this act is open to public inspection and copying. A requirement of

 

confidentiality or sealing of records as a condition of an

 

assurance of discontinuance or settlement of an enforcement or

 

civil action under this act is prohibited unless it is limited to

 


protecting information about a donor or other private individual

 

that is exempt from disclosure under subsection (1) or that a

 

public body may exempt from disclosure under section 13 of the

 

freedom of information act, 1976 PA 442, MCL 15.243.

 

     Sec. 9. If a local, county, or area division of a charitable

 

organization is directly supervised and controlled by a superior or

 

parent organization , which that is incorporated , or qualified to

 

do business in this state, or is doing business within in this

 

state, the local, county, or area division of that charitable

 

organization is not required to register under section 3 if the

 

superior or parent organization files an application statement

 

registers on behalf of the local, county, or area division in

 

addition to or as part of its application statement. When an

 

application statement has been filed the superior or parent

 

organization's registration. If a registration described in this

 

subsection is made by a superior or parent organization, it shall

 

file the annual report required under sections 14 and 16 this act

 

on behalf of the local, county, or area division in such the detail

 

as required by the rules attorney general.

 

     Sec. 10. The attorney general may promulgate rules necessary

 

for the administration of this act in accordance with and subject

 

to Act No. 306 of the Public Acts of 1969, as amended, being

 

sections 24.201 to 24.315 of the Michigan Compiled Laws under the

 

administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

 

24.328. Emergency However, the attorney general may not promulgate

 

emergency rules may not be promulgated pursuant to this act.

 

     Sec. 11. (1) An application for a license shall not be

 


accepted from a charitable organization located in another state or

 

country unless it first designates a resident agent in this state

 

for the acceptance of process issued by any court.

 

     (1) (2) A charitable organization, person, vendor, or

 

professional fund raiser, or professional solicitor, soliciting

 

contributions in this state but not maintaining an office within

 

the state shall be fund-raiser, commercial coventurer, vendor, or

 

other person subject to this act is subject to service of process

 

as follows:

 

     (a) By service on its registered resident agent within the

 

this state, or if there is no registered resident agent, then upon

 

the person who has been designated in the application statement

 

registration as having custody of books and records within this

 

state, or upon an officer of the organization at its principal

 

office. When If service is effected upon the person designated in

 

the registration, statement a copy of the process shall be mailed

 

to the charitable organization, person, or professional fund-raiser

 

at its last known address.

 

     (b) When a charitable organization has solicited contributions

 

in this state but does not maintain an office within the state,

 

have a registered agent within this state and have a designated

 

person having custody of its books and records within the state, or

 

when a registered agent or person having custody of its books and

 

records within the state cannot be found as shown by the return of

 

the sheriff of the county in which the registered agent or person

 

having custody of books and records has been represented by the

 

charitable organization as maintaining an office, If service cannot

 


be effected as provided by this section, service may be made as

 

otherwise provided by law or court rules.

 

     (2) (3) Solicitation of a contribution within this state by

 

any means , is the agreement of the a charitable organization,

 

person, professional fund raiser, or professional solicitor, fund-

 

raiser, commercial coventurer, vendor, or other person that any

 

service of process against it or him which is served in accordance

 

with under this section is of the same legal force and effect as if

 

served personally.

 

     Sec. 13. The licensing and financial statement registration

 

and reporting requirements of this act do not apply to any of the

 

following:

 

     (a) A person who requests a contribution for the relief or

 

benefit of an individual, specified by name at the time of the

 

solicitation, if the contributions collected are turned over to the

 

named beneficiary after deducting reasonable expenses for costs of

 

solicitation, if any, and if all fund-raising functions are carried

 

on by persons who are unpaid, directly or indirectly, for their

 

services.

 

     (b) A person who charitable organization that does not intend

 

to solicit and receive and does not actually receive contributions

 

in excess of $8,000.00 during any 12-month period if all of its

 

fund raising functions are carried on by persons who are unpaid for

 

their services and if the organization makes available to its

 

members and the public a financial statement of its activities for

 

the most recent fiscal year. If the gross contributions received

 

during any 12-month period exceed $8,000.00, the person shall file

 


an application for license with required supporting information as

 

provided in section 3 within 30 days after the date it has received

 

total contributions in excess of $8,000.00. of more than $25,000.00

 

in its current fiscal year if all of the charitable organization's

 

fund-raising functions are carried on by persons who are not paid

 

for their services. However, if a charitable organization otherwise

 

exempt under this subdivision receives actual total contributions

 

in that fiscal year of more than $25,000.00, the charitable

 

organization must register under this act within 30 days after the

 

date its total contributions in that fiscal year first exceed

 

$25,000.00.

 

     (c) An A charitable organization that does not invite the

 

general public to become a member of the organization and confines

 

solicitation activities to solicitation drives solely among its

 

members, and the members' directors, trustees, or their immediate

 

families. , if the drives are not held more frequently than

 

quarterly. "Immediate family" for purposes of this subdivision

 

means the grandparents, parents, spouse, brothers, sisters,

 

children, and grandchildren of a member, director, or trustee.

 

     (d) An educational institution certified by the state board of

 

education A private foundation that did not receive contributions

 

from more than 25 persons during its most recent fiscal year.

 

     (e) A veterans' organization incorporated under federal law

 

chartered by congress.

 

     (f) An organization that receives funds from a charitable

 

organization licensed registered under this act that does not

 

solicit or intend to solicit or receive or intend to receive

 


contributions from persons other than a the registered charitable

 

organization, if the organization makes available to its members

 

and the public a financial statement of its activities for the its

 

most recent fiscal year.

 

     (g) A licensed hospital, hospital based foundation, and or

 

hospital auxiliary that solicit solicits funds solely for 1 or more

 

licensed hospitals.

 

     (h) A nonprofit service organization that is exempt from

 

taxation pursuant to a provision of the United States internal

 

revenue code other than section 501(c)(3), whose principal purpose

 

is not charitable, but solicits from time to time funds for a

 

charitable purpose by members of the organization who are not paid

 

for the solicitation. The funds shall be wholly used for the

 

charitable purposes for which they were solicited, and the

 

organization shall file with the attorney general a federal form

 

990 or 990 AR. A booster group or a parent-teacher organization

 

that is recognized by the public school, nonpublic school, or

 

school district that it is organized to support.

 

     (i) A nonprofit corporation whose stock is wholly owned by a

 

religious or fraternal society that owns and operates facilities

 

for the aged and chronically ill in which no part of the net income

 

from the operation of the corporation inures to the benefit of a

 

person other than the residents. A public school, nonpublic school,

 

preschool, or institution of higher education organized,

 

incorporated, or formed under the laws of this state.

 

      (j) Charitable organizations licensed by the department of

 

social services that serve children and families.

 


     (j) (k) A person registered under and complying with the

 

requirements of the public safety solicitation act, 1992 PA 298,

 

MCL 14.301 to 14.327.

 

     Sec. 16. The In addition to the remedies available under

 

section 3b, the attorney general may continue under conditions the

 

license impose conditions on the registration of an a charitable

 

organization , or professional fund raiser, or professional

 

solicitor which fund-raiser that fails to comply with this act

 

including failure to comply with the rules regarding prohibited

 

transactions, standards of solicitation, conduct, or administration

 

or rules promulgated under this act.

 

     Sec. 18. (1) A person shall not use for the purpose of

 

soliciting contributions the name of another person, except that of

 

an officer, director, or trustee of the charitable organization by

 

or for which contributions are solicited, without the consent of

 

such other person. A charitable organization, professional fund-

 

raiser, person described in section 23a, commercial coventurer, or

 

vendor or an employee or agent of a charitable organization,

 

professional fund-raiser, person described in section 23a,

 

commercial coventurer, or vendor, shall not do any of the

 

following:

 

     (a) Engage in a method, act, or practice in violation of this

 

act or a rule promulgated under this act; any restriction,

 

condition, or limitation placed on a registration; or any order

 

issued under this act.

 

     (b) Represent or imply that a person soliciting contributions

 

or other funds for a charitable organization has a sponsorship,

 


approval, status, affiliation, or other connection with a

 

charitable organization or charitable purpose that the person does

 

not have.

 

     (c) Represent or imply that a contribution is for or on behalf

 

of a charitable organization, or using an emblem, device, or

 

printed material belonging to or associated with a charitable

 

organization, without first obtaining written authorization from

 

that charitable organization.

 

     (d) Use a name, symbol, or statement so closely related or

 

similar to a name, symbol, or statement used by another charitable

 

organization or governmental agency that use of that name, symbol,

 

or statement would tend to confuse or mislead a solicited person.

 

     (e) Use a bogus, fictitious, or nonexistent organization,

 

address, or telephone number in any solicitation.

 

     (f) Make a misrepresentation to a person by any manner that

 

would lead that person to believe that another person, on whose

 

behalf a solicitation effort is conducted, is a charitable

 

organization or that all or any part of the proceeds of a

 

solicitation effort are for charitable purposes.

 

     (g) Make a misrepresentation to a person by any manner that

 

would lead that person to believe that another person sponsors,

 

endorses, or approves a solicitation effort if that other person

 

has not given written consent to the use of his or her name for

 

that purpose.

 

     (h) Make a misrepresentation to a person by any manner that

 

would lead that person to believe that registration under this act

 

constitutes endorsement or approval by a department or agency of

 


any state or the federal government.

 

     (i) Represent or imply that the amount or percentage of a

 

contribution that a charitable organization will receive for a

 

charitable program after costs of solicitation are paid is greater

 

than the amount or percentage of a contribution the charitable

 

organization will actually receive.

 

     (j) Divert or misdirect contributions to a purpose or

 

organization other than that for which the funds were contributed

 

or solicited.

 

     (k) Falsely represent or imply that a donor will receive

 

special benefits or treatment or that failure to make a

 

contribution will result in unfavorable treatment.

 

     (l) Make a misrepresentation to a person by any manner that

 

would lead that person to believe that a contribution is eligible

 

for tax advantages unless that contribution qualifies for those tax

 

advantages and all disclosures required by law are made.

 

     (m) Falsely represent or imply that a person being solicited

 

or a family member or associate of a person being solicited has

 

previously made or agreed to make a contribution.

 

     (n) Employ any device, scheme, or artifice to defraud or

 

obtain money or property from a person by means of a false,

 

deceptive, or misleading pretense, representation, or promise.

 

     (o) Represent that funds solicited will be used for a

 

particular charitable purpose if those funds are not used for the

 

represented purpose.

 

     (p) Solicit contributions, conduct a sales promotion, or

 

otherwise operate in this state as a charitable organization or

 


professional fund-raiser, except in compliance with all of the

 

requirements of this act.

 

     (q) Aid, abet, or otherwise permit a person to solicit

 

contributions or conduct a sales promotion in this state unless the

 

person soliciting contributions or conducting the sales promotion

 

has complied with the requirements of this act.

 

     (r) Fail to file the information and reports required under

 

this act or fail to provide any information requested by the

 

attorney general in a timely manner.

 

     (s) Fail to comply with a person's request to remove, or not

 

to share, the person's personal information, including, but not

 

limited to, the person's name, address, telephone number, or

 

financial account information, from any list utilized by a

 

charitable organization or professional fund-raiser for

 

solicitation purposes; or selling, leasing, licensing, sharing, or

 

otherwise allowing any third-party access to any of the person's

 

personal information, except as specifically required by law or

 

court order.

 

     (t) Solicit or receive a contribution or conduct a charitable

 

sales promotion for, or sell memberships in, a charitable

 

organization subject to this act if that charitable organization is

 

not registered under this act.

 

     (u) Submit any of the following to the attorney general:

 

     (i) A document or statement that purports to be signed,

 

certified, attested to, approved by, or endorsed by a person if

 

that signature, certification, attestation, approval, or

 

endorsement is not genuine or was not given by that person.

 


     (ii) A document containing any materially false statement.

 

     (v) Violate the terms of an assurance of discontinuance or

 

similar agreement accepted by the attorney general and filed with

 

the court under this act.

 

     (w) For a charitable organization, fail to verify that all

 

professional fund-raisers with which the organization has

 

contracted for fund-raising services are currently registered under

 

this act.

 

     (x) For a professional fund-raiser, fail to provide

 

verification of current registration status and inform any

 

charitable organization with which it has contracted for fund-

 

raising services of any changes affecting its registration or

 

bonding, in writing, within 14 days of the change.

 

     (y) Submit financial statements, including IRS form 990 and

 

any other financial report required under this act, that contain

 

any misrepresentation with respect to the organization's

 

activities, operations, or use of charitable assets.

 

     (z) Wear a law enforcement or public safety uniform or

 

clothing similar to a law enforcement or public safety uniform when

 

making a face-to-face solicitation or collection of contributions.

 

     (2) A person has used the name of another person for the

 

purpose of soliciting contributions if the latter person's name is

 

listed on stationery, an advertisement, brochure, or in

 

correspondence by which a contribution is solicited by or on behalf

 

of a charitable organization or the name is listed or referred to

 

in connection with a request for a contribution as one who has

 

contributed to, sponsored, or indorsed the organization or its

 


activities.

 

     (2) (3) This section does not prevent the publication of names

 

of contributors without their written consent in an annual or other

 

periodic report issued by a charitable organization for the purpose

 

of reporting on its operations and affairs to its membership or for

 

the purpose of reporting contributions to contributors.

 

     (4) A charitable organization or professional fund raiser

 

soliciting contributions shall not use a name, symbol, or statement

 

so closely related or similar to that used by another charitable

 

organization or governmental agency that would tend to confuse or

 

mislead the public.

 

     (3) (5) A charitable organization, whether or not exempt or

 

not from this act, shall supply to each solicitor and each

 

solicitor shall have in his or her immediate possession

 

identification which that sets forth the name of the solicitor and

 

the name of the charitable organization on whose behalf the

 

solicitation is conducted.

 

     Sec. 19. (1) A vendor shall not conduct a charitable sales

 

promotion or solicitation campaign in which it uses the name of a

 

charitable organization that is not registered in this state.

 

     (2) A vendor shall prominently display the following

 

information on each vending machine, honor box, novelty machine, or

 

similar device through which that vendor conducts a charitable

 

sales promotion or solicitation campaign:

 

     (a) The name of the vendor and the fact that the vendor owns

 

the vending machine, honor box, novelty machine, or similar device.

 

     (b) The percentage of sales, if any, that a charitable

 


organization will receive.

 

     (c) The amount that a charitable organization will receive

 

regardless of sales, if any.

 

     Sec. 19a. (1) Before making an oral request for a contribution

 

and contemporaneously with a written request for a contribution, a

 

charitable organization, professional fund-raiser, or vendor

 

soliciting the contribution shall disclose the name and location by

 

city and state of each charitable organization on behalf of which

 

the solicitation is made. If a solicitation is made by direct

 

personal contact, the information required under this section shall

 

also be disclosed prominently on any written document exhibited to

 

the person solicited. If a solicitation is made by radio,

 

television, letter, telephone, or any other means not involving

 

personal contact, the information required under this section shall

 

be disclosed prominently in the solicitation. The information

 

required under this section shall also be disclosed prominently on

 

any invoices, bills, fulfillment requests, letters, pamphlets, or

 

brochures used to obtain payment of a pledge or promise to make a

 

contribution.

 

     (2) In addition to the information required under subsection

 

(1), a professional fund-raiser that orally solicits contributions

 

in this state shall also disclose the professional fund-raiser's

 

name as filed with the attorney general and a statement that the

 

solicitation is being conducted by a professional fund-raiser. The

 

information required under this subsection shall be provided in the

 

same manner as the information required under subsection (1).

 

     Sec. 20. (1) The attorney general may institute In addition to

 


any other action authorized by law, the attorney general may bring

 

an action in any circuit court to enjoin preliminarily or

 

permanently a charitable organization, professional fund raiser,

 

solicitor, or other person who: (a) Engages in a method, act, or

 

practice in violation of this act or any of the rules promulgated

 

hereunder. (b) Employs or uses in a solicitation or collection of

 

contributions for a charitable organization on behalf of any other

 

person for a charitable purpose a device, scheme, or artifice to

 

defraud, or for obtaining money or property by means of any false

 

pretense, deception, representation, or promise. an act or practice

 

prohibited under this act. After finding that a person has engaged

 

in or is engaging in a prohibited act or practice, a court may

 

enter any appropriate order or judgment, including, but not limited

 

to, an injunction, an order of restitution, or an award of

 

reasonable attorney fees and costs. A court may award to this state

 

a civil fine of not more than $10,000.00 or less for each violation

 

of this act against a professional fund-raiser, charitable

 

organization, against an officer, director, shareholder,

 

controlling member, or any other person that directly engaged in,

 

authorized, or was otherwise legally responsible for the prohibited

 

act or practice, or against any combination of those persons. A

 

court is not required to find irreparable harm to enter an

 

injunction, but need only find a violation of this act or find that

 

an injunction would promote the public interest.

 

     (2) In addition to any relief afforded under this section, the

 

attorney general may exercise the authority to suspend or revoke a

 

license issued pursuant to this act. In addition to any other

 


remedy, a charitable organization, professional fund-raiser, or any

 

other person who violates an injunction or other order entered

 

under subsection (1) shall pay to this state a civil fine of not

 

more than $10,000.00 for each violation, which may be recovered in

 

a civil action brought by the attorney general.

 

     (3) The attorney general may exercise the authority granted in

 

this section against a charitable organization or person which or

 

who operates under the guise or pretense of being an organization

 

or person exempted by this act and is not in fact an organization

 

or person entitled to such an exemption. In addition to any other

 

action authorized by law, the attorney general may issue a cease

 

and desist order, issue a notice of intended action, or take other

 

action in the public interest. The attorney general may accept an

 

assurance of discontinuance of any method, act, or practice in

 

violation of this act from any person alleged to be engaged in or

 

to have been engaged in that method, act, or practice. An assurance

 

of discontinuance may include a stipulation for the voluntary

 

payment of the costs of investigation, for an amount to be held in

 

escrow pending the outcome of an action or as restitution to an

 

aggrieved person, or for the voluntary payment to another person if

 

in the public interest. An assurance of discontinuance shall be in

 

writing and shall be filed with the circuit court for Ingham

 

county. An action resolved by an assurance of discontinuance may be

 

reopened by the attorney general at any time for enforcement by a

 

court or for further proceedings in the public interest. Evidence

 

of a violation of an assurance of discontinuance is prima facie

 

evidence of a violation of this act in any subsequent proceeding

 


brought by the attorney general.

 

     (4) A person who has violated section 18 is subject to 1 or

 

more of the following penalties:

 

     (a) Placement of a restriction or condition on the person's

 

registration.

 

     (b) Denial, suspension, or revocation of a registration.

 

     (c) A civil fine of not more than $10,000.00. Money collected

 

under this subdivision shall be forwarded to the state treasurer

 

for deposit in the general fund of the state.

 

     (d) A requirement to take some type of affirmative action,

 

including the payment of restitution.

 

     (5) The attorney general shall, before suspending or revoking

 

a registration, provide the person against whom the penalty is to

 

be imposed an opportunity for a hearing in accordance with the

 

administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

 

24.328.

 

     Sec. 21. (1) The attorney general may investigate the

 

operations or conduct of charitable organizations, professional

 

fund raisers, or professional solicitors subject to this act. He

 

may require a person, corporation, institution, or association, and

 

the officers, members, and employees and agents thereof, to appear

 

at a named time and place in the county designated by the attorney

 

general or where the person resides or is found, to give

 

information under oath and to produce books, memoranda, papers,

 

records, documents of title, evidence of assets, liabilities,

 

receipts, or disbursements in the possession or control of the

 

person ordered to appear. a complaint from any person in whatever

 


manner the attorney general considers appropriate and may

 

investigate on his or her own initiative a charitable organization,

 

professional fund-raiser, vendor, commercial coventurer, or person

 

described in section 23a. The attorney general may require a person

 

or an officer, member, employee, or agent of a person to appear at

 

a time and place specified by the attorney general to give

 

information under oath and to produce books, memoranda, papers,

 

records, documents, or evidence of assets, liabilities, receipts,

 

or disbursements in the possession of the person ordered to appear.

 

     (2) When requiring the attendance of a person or the

 

production of documents, the attorney general requires the

 

attendance of a person, he shall issue an order setting forth the

 

time when and the place where attendance or production is required

 

and shall cause the same to be served serve the order upon the

 

person in the manner provided for service of process in civil cases

 

at least 5 days before the date fixed for attendance or production.

 

The order shall have the same force and effect as a subpoena and,

 

upon application of the attorney general, obedience to the order

 

may be enforced by a court having jurisdiction over the person , or

 

the circuit court for the county of Ingham , or for the county

 

where the person receiving it the order resides or is found, in the

 

same manner as though the notice were a subpoena. In case of

 

contumacy If a person fails or refusal refuses to obey the order

 

issued by the attorney general, the court may issue an order

 

requiring the person to appear before the court, or to produce

 

documentary evidence, if so ordered, or to give evidence touching

 

testimony concerning the matter in question. Failure to obey the

 


order of the court shall be punished is punishable by that court as

 

a contempt. The investigation may be made conducted by or before an

 

assistant attorney general or other person designated in writing by

 

the attorney general. to conduct the investigation. The attorney

 

general or the assistant attorney general acting in his behalf

 

other designated person may administer the necessary oath or

 

affirmation to witnesses.

 

     (3) This act does not limit or restrict the powers or duties

 

of the attorney general that are authorized under any other

 

provision of law.

 

     Sec. 22a. If an oral pledge or promise to make a contribution

 

follows a telephone or door-to-door solicitation, that pledge or

 

promise to make a contribution is unenforceable. This section does

 

not affect any existing rights or remedies regarding oral pledges

 

or promises not preceded by a telephone or door-to-door

 

solicitation.

 

     Sec. 23. (1) A person who does any of the following is guilty

 

of a misdemeanor punishable by imprisonment for not more than 6

 

months or a fine of not more than $500.00, or imprisonment for not

 

more than 6 months $5,000.00, or both, for each violation:

 

     (a) Violates this act.

 

     (b) Solicits and receives public donations, or sells

 

memberships in this state for and on behalf of any organization,

 

institution, or association subject to the provisions of this act

 

and which is not duly licensed pursuant to this act.

 

     (c) Solicits funds under a license and thereafter diverts the

 

same to purposes other than that for which the funds were

 


contributed.

 

     (a) Knowingly misrepresents or misleads any person in any

 

manner to believe that a person on whose behalf a solicitation

 

effort is conducted is a charitable organization or that the

 

proceeds of a solicitation effort are for charitable purposes.

 

     (b) Knowingly diverts or misdirects contributions to a purpose

 

or organization other than for which the funds were contributed or

 

solicited.

 

     (c) Knowingly misrepresents that funds solicited or

 

contributed will be used for a specific charitable purpose.

 

     (d) Knowingly misrepresents that a donor will receive special

 

benefits or treatment or that failure to make a contribution will

 

result in unfavorable treatment.

 

     (e) Employs any device, scheme, or artifice to defraud or

 

obtain money or property from a person by means of a false,

 

deceptive, or misleading pretense, representation, or promise.

 

     (f) Knowingly fails to file any materials, information, or

 

report required under this act.

 

     (g) Engages in any of the following practices and wrongfully

 

obtains more than $1,000.00 and less than $5,000.00, in the

 

aggregate, as a result of the practice or practices:

 

     (i) Knowingly misrepresents that a person soliciting

 

contributions or other funds for a charitable organization has a

 

sponsorship, approval, status, affiliation, or other connection

 

with a charitable organization or charitable purpose that the

 

person does not have.

 

     (ii) Knowingly uses a name, symbol, or statement so closely

 


related or similar to a name, symbol, or statement used by another

 

charitable organization or governmental agency that use of that

 

name, symbol, or statement is confusing or misleading.

 

     (iii) Knowingly uses a bogus, fictitious, or nonexistent

 

organization, address, or telephone number in any solicitation.

 

     (iv) Knowingly misrepresents or misleads any person in any

 

manner to believe that a person or governmental agency sponsors,

 

endorses, or approves a solicitation effort if that person or

 

agency has not given written consent to the use of the person's or

 

agency's name for that purpose.

 

     (v) Knowingly misrepresents that the amount or percentage of a

 

contribution that a charitable organization will receive for a

 

charitable program after costs of solicitation are paid is greater

 

than the amount or percentage of the contribution the charitable

 

organization will actually receive.

 

     (vi) Knowingly solicits contributions, conducts a sales

 

promotion, or otherwise operates in this state as a charitable

 

organization or professional fund-raiser unless the information

 

required under this act is filed with the attorney general as

 

required under this act.

 

     (vii) Aids, abets, or otherwise permits a person to solicit

 

contributions or conduct a sales promotion in this state unless the

 

person soliciting contributions or conducting the sales promotion

 

has complied with the requirements of this act.

 

     (viii) Knowingly solicits or receives a contribution, conducts a

 

charitable sales promotion, or sells memberships in this state for

 

or on behalf of any charitable organization subject to the

 


provisions of this act that is not registered under this act.

 

     (2) A person who does any of the following is guilty of a

 

felony punishable by imprisonment for not more than 5 years or a

 

fine of not more than $20,000.00, or both, for each violation:

 

     (a) Engages in any practice or practices described in

 

subsection (1)(a), (b), (c), (d), or (e) if the amount of money

 

fraudulently collected or wrongfully diverted from the charitable

 

purpose for which the money was solicited exceeds, in the

 

aggregate, $1,000.00.

 

     (b) Engages in any practice or practices described in

 

subsection (1)(g) and wrongfully obtains more than $5,000.00, in

 

the aggregate, as a result of the practice or practices.

 

     (c) Knowingly submits any of the following in materials or

 

statements required under this act or requested by the attorney

 

general:

 

     (i) Any document or statement purporting to have been signed,

 

certified, attested to, approved by, or endorsed by a person when

 

the signature, certification, attestation, approval, or endorsement

 

is not genuine or has not been given by that person.

 

     (ii) Any document containing any materially false statement.

 

     (3) For purposes of this section, a person is presumed to have

 

committed a violation knowingly if the attorney general provided

 

written notice identifying alleged violations to the person before

 

the acts or omissions in violation of subsection (1) or (2)

 

occurred.

 

     (4) In addition to pursuing a criminal action under this

 

section, the attorney general may bring a civil action for damages

 


or equitable relief to enforce the provisions of this act.

 

     (5) (2) This section shall does not be construed to limit or

 

restrict prosecution under the general criminal statutes of the

 

this state.

 

     Sec. 23a. (1) A person that is not a charitable organization,

 

a professional fund-raiser, or a volunteer supervised by a

 

charitable organization, but that solicits contributions, conducts

 

a fund-raising event, or conducts a sales promotion or campaign for

 

a charitable purpose is subject to this act.

 

     (2) A person subject to this act under subsection (1) is not

 

required to register or file reports required under this act.

 

     Sec. 23b. The prosecuting attorney for a county may prosecute

 

a person subject to this act in the same manner as the attorney

 

general. A county prosecuting attorney shall notify the attorney

 

general when he or she begins a prosecution pursuant to this

 

section and provide the attorney general with a copy of the final

 

judgment in that action.

 

     Enacting section 1. Sections 5, 12, 14, 17, and 22 of the

 

charitable organizations and solicitations act, 1975 PA 169, MCL

 

400.275, 400.282, 400.284, 400.287, and 400.292, are repealed.