Bill Text: MI HB6538 | 2009-2010 | 95th Legislature | Introduced

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Bill Title: Businesses; charitable organizations; charitable solicitation; require registration and make general revisions to charitable organizations and solicitations act. Amends title & secs. 3, 5, 7, 11, 13, 16, 18, 20, 21 & 23 of 1975 PA 169 (MCL 400.273 et seq.); adds secs. 17a, 23a & 23b & repeals secs. 12 & 14 of 1975 PA 169 (MCL 400.282 & 400.284).

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2010-10-20 - Reassign To Committee On New Economy And Quality Of Life 10/15/2010 [HB6538 Detail]

Download: Michigan-2009-HB6538-Introduced.html

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HOUSE BILL No. 6538

 

October 13, 2010, Introduced by Rep. Clemente and referred to the Committee on New Economy and Quality of Life.

 

     A bill to amend 1975 PA 169, entitled

 

"Charitable organizations and solicitations act,"

 

by amending the title and sections 3, 5, 7, 11, 13, 16, 18, 20, 21,

 

and 23 (MCL 400.273, 400.275, 400.277, 400.281, 400.283, 400.286,

 

400.288, 400.290, 400.291, and 400.293), 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. 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 To register under this act, a charitable

 

organization shall submit a registration statement to the attorney

 

general. The attorney general shall prescribe the form of a

 

registration statement. 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) 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 after the its effective date of issuance 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 person 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 may 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.

 

     (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) 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 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.