SB-1528, As Passed Senate, November 10, 2010
SUBSTITUTE FOR
SENATE BILL NO. 1528
A bill to amend 1975 PA 169, entitled
"Charitable organizations and solicitations act,"
by amending the title and sections 2, 3, 5, 7, 11, 13, 16, 18, 20,
21, and 23 (MCL 400.272, 400.273, 400.275, 400.277, 400.281,
400.283, 400.286, 400.288, 400.290, 400.291, and 400.293), section
2 as amended by 2010 PA 196, section 3 as amended by 2008 PA 424,
and section 13 as amended by 1992 PA 299, and by adding sections
17a, 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; to require registration,
disclosure
of information and licensing before solicitation of on
behalf of charitable organizations, and certain other persons
involved in the solicitation of contributions to charitable
organizations; to require certain charitable organizations and
certain professional solicitors to register and disclose certain
information before soliciting contributions; to require certain
professional fund raisers to obtain a license and disclose certain
information before soliciting contributions; to provide for
reporting of financial and other information by those licensed or
registered and those claiming exemption from licensing or
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 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 that solicits or obtains contributions solicited from the
public
for charitable purposes. A The
term includes a chapter,
branch, area office, or similar affiliate or person soliciting
contributions within the state for a charitable organization that
has
its principal place of business outside the state. is a
charitable
organization. The term does not
include a any of the
following:
(i) A duly constituted religious organization or a group
affiliated with and forming an integral part of a religious
organization if none of its net income inures to the direct benefit
of any individual and if it has received a declaration of current
tax exempt status from the United States if it is a religious
organization or it or its parent or principal organization has
obtained
tax exempt status if it is an affiliated group. Charitable
organization
does not include a
(ii) A candidate or a committee as those terms are defined in
section 3 of the Michigan campaign finance act, 1976 PA 388, MCL
169.203. ,
or a
(iii) A political party qualified to be on the general election
ballot under section 560a of the Michigan election law, 1954 PA
116, MCL 168.560a.
(b) "Clothing donation box" means a receptacle in which a
person may place clothing or other items of personal property he or
she intends to donate to a charitable organization and that has a
capacity of at least 27 cubic feet.
(c) "Contribution" means a promise, grant, or payment of money
or property of any kind or value, including a 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.
(d) "Person" means an individual, organization, group,
association, partnership, corporation, limited liability company,
trust, any other legal entity, or any combination of legal
entities.
(e) "Professional fund raiser" means a person who 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 in exchange for
compensation or other consideration; or who engages in the business
of or holds himself or herself out as independently engaged in the
business of soliciting contributions for those purposes. The term
does not include a bona fide officer or employee of a charitable
organization unless his or her salary or other compensation is
computed on the basis of funds to be raised or actually raised. The
term includes a person that is not a charitable organization and
that owns or operates a clothing donation box if any of the
following are met:
(i) The person represents or implies to any person that
personal property placed in the clothing donation box or the
proceeds of that property will be donated to 1 or more charitable
organizations.
(ii) The person represents or implies to any person that he or
she is using the clothing donation box to solicit contributions on
behalf of 1 or more charitable organizations.
(iii) The clothing donation box or any sign near the clothing
donation box is marked with the name, logo, trademark, or service
mark of 1 or more charitable organizations or is otherwise marked
in any manner that represents or implies that personal property
placed in the donation box or the proceeds of that property will be
donated to 1 or more charitable organizations.
(f) "Professional solicitor" means a person who is employed or
retained for compensation by a professional fund raiser to solicit
contributions for charitable purposes.
(g) "Prohibited transaction" is any dealing, activity,
conduct, administration, or management of a charitable organization
or by any of its officers, trustees, personnel, or related persons
that 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,
professional solicitor, or solicitor.
(h) "Soliciting material" means printed or similar material
used to solicit money from the public, including, but not limited
to, any labels, posters, television scripts, radio scripts, or
recordings used for that purpose.
(i) "Solicitor" means a person who solicits on behalf of a
charitable organization.
Sec. 3. (1) Unless the charitable organization is an
exempt
organization
that is exempt from licensing registration and
reporting under section 13, a charitable organization that solicits
or intends to solicit or receives or intends to receive
contributions
from persons by any means shall file an application
for
a license under this act register
with the attorney general ,
on
forms prescribed by him or her as
provided in this act.
(2)
An application for a license under this act shall include
the
following information A
charitable organization described in
subsection (1) shall register under this act by submitting a
registration statement in the form prescribed by the attorney
general. To register, a charitable organization must include all of
the following information about the charitable organization in the
registration form:
(a) The name of the organization and any name it uses or
intends to use to solicit contributions.
(b) The principal address of the organization and the address
of
any each office in this state. If the organization does not
maintain a principal office, the organization shall include the
name and address of the person that has custody of its financial
records in the registration statement.
(c) The names and addresses of the officers, directors,
trustees, chief executive officer, and state agent of the
organization.
(d) Where and when the organization was legally established,
the form of its organization, and its tax exempt status.
(e) The purpose for which the organization is organized and
the purposes for which contributions to be solicited will be used.
(f)
The fiscal year date of the organization.
(g) Whether the organization is or has ever been enjoined from
soliciting contributions.
(h) All methods by which solicitations will be made.
(i)
Copies of contracts between charitable organizations the
organization and any professional fund raisers relating to
financial compensation or profit to be derived by the professional
fund raisers. If a contract described in this subdivision is
executed
after filing of the application registration
statement,
the organization shall file a copy of the contract with the
attorney
general within 10 days of after
the date of execution.
(j)
Other information as required by rule.
(j) (3)
If a the charitable
organization received
contributions in its immediately preceding tax year, as reported on
the charitable organization's internal revenue service form 990,
990-EZ, 990-PF, or other 990-series return, in the amount of
$500,000.00
or more, the charitable organization shall include
financial
statements with its application for license under this
section,
prepared according to generally
accepted accounting
principles and audited by an independent certified public
accountant.
If a the charitable organization received contributions
in its immediately preceding tax year, as reported on the
charitable organization's internal revenue service form 990, 990-
EZ, 990-PF, or other 990-series return, in the amount of
$250,000.00 or more, but less than $500,000.00, the charitable
organization
shall include financial statements with its
application
for license under this section that
are either reviewed
or audited by an independent certified public accountant. The
attorney general may waive this requirement 1 time for a charitable
organization.
(k) The charitable organization's internal revenue service
form 990, 990-EZ, 990-PF, or other 990-series return for the
preceding tax year.
(l) Any other information the attorney general requires by
rule.
(3)
(4) Both of the following apply for purposes of
subsection
(3)
(2)(j):
(a)
For license applications registration
statements submitted
under this section on or after January 1, 2015 and before January
1,
2020, the dollar amounts of contributions in subsection (3)
(2)(j) at which reviewed financial statements and at which audited
financial
statements are required with the application registration
statement are increased by $25,000.00. Those dollar amounts are
increased by an additional $25,000.00 for every subsequent 5-year
period, beginning on January 1, 2020.
(b) "Contributions" means all contributions and support
reported on a charitable organization's form 990, 990-EZ, 990-PF,
or other 990-series return. The term includes special fund-raising
event receipts, net of direct expenses, but does not include
contributions or grants received from governmental agencies.
Sec.
5. (1) An application The attorney
general shall examine
the registration statement of a charitable organization that is
submitted in proper form and is supported by material information
required
shall be examined by the attorney general under this act.
If
the application registration
statement and supporting material
information
conforms to the requirements of this
act and the any
rules promulgated under this act, the attorney general shall issue
a
license to the charitable organization within 30 days, except
where
register the charitable
organization, unless the organization
has materially misrepresented or omitted information required or
the organization has acted or is acting in violation of this act or
rules promulgated hereunder. If registered, the effective date of
the registration is the date the registration statement was
received by the attorney general.
(2)
The license Registration
of a charitable organization
shall
be without charge and issued to the charitable organization ,
or
its agents and representatives for if the
purpose of
registration is soliciting and receiving contributions and
donations
or to sell selling memberships or otherwise raise moneys
raising money from the public for the specified charitable purpose.
(3)
A license issued to a professional fund raiser,
professional
solicitor, or a charitable organization, its agents
and
representatives may be suspended or revoked by the attorney
general
for violation of this act or rules promulgated hereunder,
after
reasonable notice and opportunity to be heard. The attorney
general
may suspend on an emergency basis, without hearing, any
license
issued to a professional fund raiser, professional
solicitor,
or a charitable organization when the attorney general
specifies
in the notice of emergency suspension the reasons and
grounds
indicating a violation of this act or any rule which
constitutes
the emergency. The notice shall set forth that within
48
hours, at a designated time and place, a hearing shall be held
on
whether the license should be permanently suspended or revoked.
The
professional fund raiser, professional solicitor, or charitable
organization
may show compliance with the requirements of this act
or
the rules and shall have the burden of adducing the evidence.
Sec.
7. The license registration
of a charitable organization
shall
expire 1 year and 7 months after the end
date of issuance the
financial
statement provided under section 5(2). A
To renew a
registration,
a charitable organization desiring
renewal of a
license
shall file with the attorney
general a renewal application
registration statement and supporting information on or before 30
days
prior to before the expiration date of the current
registration.
Sec.
11. (1) An application for a license shall not be
accepted
The attorney general shall
not accept a registration
statement 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.
(2)
A charitable organization, person, professional fund
raiser,
or professional solicitor, or
other person soliciting
contributions
in this state but not maintaining having an office
within
the in this state shall be is subject to service of
process
as follows:
(a)
By service on its registered agent within the in this
state, or
if there is no registered agent
in this state, then upon
on
the person who has been designated
in the application
registration statement, license application, or registration
application as having custody of its books and records within this
state.
When service is effected upon the If a person designated in
the
a registration statement, license application, or registration
application is served under this subdivision, a copy of the process
shall be mailed to the charitable organization at its last known
address.
(b)
When a charitable organization By
service made as
otherwise provided by law or court rules if any of the following
apply:
(i) If the person has solicited contributions in this state,
but
in this state does not maintain an office, within
the state,
have
has a registered agent, within this state and
have has a
designated
person having that has custody of its books and records.
within
the state, or when
(ii) If a registered agent or
person having that has custody of
its
the person's books and records within the in this state
cannot
be found, as shown by the return of the sheriff of the county in
which
the registered agent or person having that has custody of
books and records has been represented by the charitable
organization
as maintaining an office. , service may be made as
otherwise
provided by law or court rules.
(3)
Solicitation of a contribution within in this state, by
any means, is considered the agreement of the charitable
organization,
person, professional fund raiser, or professional
solicitor,
or other person that any process against it or him which
that person that is served in accordance with this section is of
the same legal force and effect as if served personally.
Sec.
13. The licensing and financial statement A charitable
organization's
registration and reporting requirements
of under
this act do not apply to any of the following:
(a)
A person who that 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 that 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 of more
than $25,000.00 during any 12-month
period if all of its fund-raising functions are carried on by
persons
who that 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 its most recent
fiscal year. If the gross contributions received during any 12-
month
period exceed $8,000.00 $25,000.00, the person shall file an
application
for license with required supporting information as
provided
in section 3 register under
this act within 30 days after
the
date it has received its total contributions in excess of
$8,000.00
that fiscal year 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 As used in
this subdivision, "immediate
family" 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.
(e) A veterans' organization incorporated under federal law.
(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 under a provision of the United States
internal revenue code other than section 501(c)(3), 26 USC
501(c)(3), whose principal purpose is not charitable, but that
solicits from time to time funds for a charitable purpose by
members
of the organization who that
are not paid for the
solicitation.
The funds shall Funds
solicited under this
subdivision shall be wholly used for the charitable purposes for
which
they were solicited, and the organization shall must file
with
the attorney general a federal form 990 or 990 AR 990-EZ.
(i)
A nonprofit corporation, whose if its stock is wholly
owned by a religious or fraternal society that owns and operates
facilities
for the aged and chronically ill in which and no part of
the
its net income from the operation of the corporation facility
inures to the benefit of a person other than the residents.
(j)
Charitable organizations A
charitable organization
licensed
by the department of social human
services that serve
serves children and families.
(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 attorney general may continue under impose
conditions
on the license of an organization, professional fund
raiser,
or professional solicitor which registration
of a
charitable organization 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. 17a. (1) After notice and an opportunity to be heard, the
attorney general may suspend or revoke the license of a
professional fund raiser or the registration of a professional
solicitor that has violated or is violating this act or rules
promulgated under this act.
(2) The attorney general may suspend the license of a
professional fund raiser or the registration of a professional
solicitor, 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 conduct in violation of this act or a
rule promulgated under this act that constitutes the emergency.
(b) A statement that the professional fund raiser or
professional solicitor 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 attorney general and the professional fund raiser or
professional solicitor, on whether the license or registration
should be permanently suspended or revoked. At a hearing held under
this subdivision, the professional fund raiser or professional
solicitor shall have a reasonable opportunity to show its
compliance with this act or the rules promulgated under this act
and has the burden of proof of establishing that compliance.
(3) In addition to his or her authority to suspend or revoke a
license or registration under this section, the attorney general
may impose conditions on the license of a professional fund raiser
or the registration of a professional solicitor that fails to
comply with this act 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 person
subject to this act, or an employee or
agent of a person subject to this act, 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 license; 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 fictitious or false name, 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 or licensure
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
professional fund raiser, or professional solicitor, except in
compliance with 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
complies with this act.
(r) Fail to file any information or reports required under
this act.
(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 licensed under
this act.
(x) For a professional fund raiser, fail to provide
verification of current licensing status and inform any charitable
organization with which it has contracted for fund-raising services
of any changes affecting its licensing or bonding, in writing,
within 14 days of the change.
(y) For a charitable organization, submit financial
statements, including IRS form 990, 990-EZ, 990-PF, or other 990
series internal revenue service return, or 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.
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 for each violation of this
act against a person that is subject to this act; against an
officer, director, shareholder, or controlling member of a person
subject to this act; against 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 may order an injunction under this subsection if
it finds that a violation of this act has occurred, or finds that
an injunction would promote the public interest, without a finding
of irreparable harm.
(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 person that 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
that operates under the guise or pretense of being an a
charitable
organization or other person
exempted by that is exempt
from
this act and is not in fact an a charitable organization or
person
entitled to such an that exemption.
(4) 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 that violates 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.
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 any person that is subject
to this act. 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 under subsection (1), 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.
Sec.
23. (1) A person who that 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) 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 the person knows is not registered
under this act.
(2) A person that 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 if 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 under this section and
provide the attorney general with a copy of the final judgment in
that action.
Enacting section 1. Sections 12 and 14 of the charitable
organizations and solicitations act, 1975 PA 169, MCL 400.282 and
400.284, are repealed.