HOUSE BILL NO. 4446

April 10, 2019, Introduced by Rep. Calley and referred to the Committee on Elections and Ethics.

"Michigan campaign finance act,"

by amending sections 5, 9, 12, 21, 24, 34, 41, 51, 54, and 55 (MCL 169.205, 169.209, 169.212, 169.221, 169.224, 169.234, 169.241, 169.251, 169.254, and 169.255), sections 5 and 41 as amended by 1999 PA 237, sections 9, 24, 51, 54, and 55 as amended by 2017 PA 119, section 12 as amended by 2001 PA 250, section 21 as amended by 2015 PA 269, and section 34 as amended by 2012 PA 277.

the people of the state of michigan enact:

Sec. 5. (1) "Domestic dependent sovereign" means an Indian tribe that has been acknowledged, recognized, restored, or reaffirmed as an Indian tribe by the secretary of the interior pursuant to chapter 576, 48 Stat. 984, 25 U.S.C. 461 to 463, 464 to 465, 466 to 470, 471 to 472, 473, 474 to 475, 476 to 478, and 479, 25 USC 5101 to 5144, commonly referred to as the Indian reorganization act, or has otherwise been acknowledged by the United States government as an Indian tribe.

(2) "Election" means a primary, general, special, or millage election held in this state or a convention or caucus of a political party held in this state to nominate a candidate. Election includes a recall vote.

(3) "Election cycle" means 1 of the following:

(a) For a general election, the period beginning the day following the last general election in which the office appeared on the ballot and ending on the day of the general election in which the office next appears on the ballot.

(b) For a special election, the period beginning the day a special general election is called or the date the office becomes vacant, whichever is earlier, and ending on the day of the special general election.

(4) "Elective office" means a public office filled by an election. A person An individual who is appointed to fill a vacancy in a public office that is ordinarily elective holds an elective office. Elective office does not include the office of precinct delegate. Except for the purposes of sections 47, 54, and 55, elective office does not include a school board member in a school district that has a pupil membership of 2,400 or less enrolled on the most recent pupil membership count day. However, elective office includes a school board member in a school district that has a pupil membership of 2,400 or less, if a candidate committee of a candidate for the office of school board member in that school district receives an amount in excess of $1,000.00 or expends an amount in excess of $1,000.00. Elective office does not include a federal office except for the purposes of section 57.

Sec. 9. (1) "Incidental expense" means an expenditure that is an ordinary and necessary expense, paid or incurred in carrying out the business of an elective office. Incidental expense includes, but is not limited to, any of the following:

(a) A disbursement necessary to assist, serve, or communicate with a constituent.

(b) A disbursement for equipment, furnishings, or supplies for the office of the public official.

(d) A disbursement for the public official or his or her staff, or both, to attend a conference, meeting, reception, or other similar event.

(e) A disbursement to maintain a publicly owned residence or a temporary residence at the seat of government.

(f) An unreimbursed disbursement for travel, lodging, meals, or other expenses incurred by the public official, a member of the public official's immediate family, or a member of the public official's staff in carrying out the business of the elective office.

(g) A donation to a tax-exempt charitable organization, including, but not limited to, the purchase of tickets to charitable or civic events, as long as the candidate is not an officer or director of or does not receive compensation, either directly or indirectly, from that organization.

(h) A disbursement to a ballot question committee.

(i) A purchase of tickets for use by that public official and members of his or her immediate family and staff to a fund-raising event sponsored by a candidate committee, independent committee, political party committee, or a political committee that does not exceed $100.00 per committee in any calendar year.

(j) A disbursement for an educational course or seminar that maintains or improves skills employed by the public official in carrying out the business of the elective office.

(k) A purchase of advertisements in testimonials, program books, souvenir books, or other publications if the advertisement does not support or oppose the nomination or election of a candidate.

(l) A disbursement for consultation, research, polling, and photographic services not related to a campaign.

(m) A fee paid to a fraternal, veteran, or other service organization.

(n) A payment of a tax liability incurred as a result of authorized transactions by the candidate committee of the public official.

(o) A fee for accounting, professional, or administrative services for the candidate committee of the public official.

(p) A debt or obligation incurred by the candidate committee of a public official for a disbursement authorized by subdivisions (a) to (o), if the debt or obligation was reported in the candidate committee report filed for the year in which the debt or obligation arose.

(2) "Independent expenditure" means an expenditure by a person if the expenditure is not made in cooperation, consultation, or concert with, or at the request or suggestion of, a ballot question committee or a candidate, a candidate committee or its agents, or a political party committee or its agents, and if the expenditure is not a contribution to a committee.

(3) "Independent expenditure committee" means a committee formed under section 24b for the purpose of making independent expenditures pursuant to under this act.

(4) "In-kind contribution or expenditure" means a contribution or expenditure other than money.

(5) "Loan" means a transfer of money, property, or anything of ascertainable monetary value in exchange for an obligation, conditional or not, to repay in whole or in part.

(6) "Local ballot question" means a ballot question of a local unit of government to be voted upon in that local unit of government.

(7) "Local elective office" means an elective office at the local unit of government level. Local elective office also includes judge of the court of appeals, judge of the circuit court, judge of the district court, judge of the probate court, and judge of a municipal court.

(8) "Local unit of government" means a district, authority, county, city, village, township, board, school district, intermediate school district, or community college district.

Sec. 12. (1) "Qualifying contribution" means a contribution of money made by a written instrument, credit card, or debit card by an individual to the candidate committee of a candidate for the office of governor that is $100.00 or less and made after April 1 of the year preceding a year in which a governor is to be elected. Not more than $100.00 of an individual's total aggregate contribution may be used as a qualifying contribution in a calendar year. Qualifying contribution does not include a subscription, loan, advance, deposit of money, in-kind contribution or expenditure, or anything else of value except as prescribed in this act. Qualifying contribution does not include a contribution by an individual who resides outside of this state. For purposes of this subsection, an individual is considered to reside in this state if he or she is considered a resident of this state under the Michigan election law, 1954 PA 116, MCL 168.1 to 168.992.

(2) "Senate political party caucus committee" means an independent committee established by a political party caucus of the state senate under section 24a.

(3) "State elective office" means a statewide elective office or the office of state legislator.

(4) "Statewide elective office" means the office of governor, lieutenant governor, secretary of state, or attorney general, justice of the supreme court, member of the state board of education, regent of the university University of Michigan, member of the board of trustees of Michigan state university, State University, or member of the board of governors of Wayne state university.State University.

Sec. 21. (1) A candidate, within 10 days after becoming a candidate, shall form a candidate committee. A person An individual who is a candidate for more than 1 office shall form a candidate committee for each office for which the person individual is a candidate, if at least 1 of the offices is a state elective office. A candidate shall not form more than 1 candidate committee for each office for which the person individual is a candidate.

(2) A candidate committee shall must have a treasurer who is a qualified elector of this state. A candidate may appoint himself or herself as the candidate committee treasurer.

(3) A committee other than a candidate committee shall must have a treasurer who is a qualified elector of this state if the committee conducts business through an office or other facility located in this state.

(4) If a committee is not required to have as its treasurer an individual who is a qualified elector of this state, the committee may have as its treasurer an individual who is a resident of another state. A committee with a nonresident treasurer shall file, with its statement of organization, an irrevocable written stipulation, signed by the treasurer, agreeing that legal process affecting the committee, served on the secretary of state or an agent designated by the secretary of state, has the same effect as if personally served on the committee. This appointment remains in force as long as any liability of the committee remains outstanding within this state.

(5) If the secretary of state or designated agent of the secretary of state is served with legal process pursuant to under subsection (4), the secretary of state shall promptly notify the committee's treasurer by certified mail at the last known address of the committee shown on the committee's statement of organization.

(6) Except as provided by law, a candidate committee or a committee described in subsection (3) shall have 1 account in a financial institution in this state as an official depository for the purpose of depositing to deposit all contributions received by the committee in the form of or which are converted to money, checks, or other negotiable instruments and for the purpose of making to make all expenditures. The committee shall designate that financial institution as its official depository. The establishment of an account in a financial institution is not required until the committee receives a contribution or makes an expenditure. Secondary Candidate committees shall only use secondary depositories shall be used for the sole purpose of depositing to deposit contributions and promptly transferring transfer the deposits to the committee's official depository, or to deposit the proceeds of a joint fund-raiser under section 44(4) and transfer each committee's share of any receipts from the joint fund-raiser. A committee described in subsection (3) shall only use secondary depositories for any of the following:

(a) To deposit contributions and promptly transfer the deposits to the committee's official depository.

(b) To deposit the proceeds of a joint fund-raiser under section 44(4) and transfer each committee's share of any receipts from the joint fund-raiser.

(7) Except as provided by law, a committee described in subsection (4) shall have 1 account in a financial institution as its official depository for the purpose of depositing to deposit all contributions received by the committee in the form of or which are converted to money, checks, or other negotiable instruments and for the purpose of making to make all expenditures. The committee shall designate that financial institution as its official depository. The establishment of an account in a financial institution is not required until the committee receives a contribution or makes an expenditure. Secondary A committee described in subsection (4) shall only use secondary depositories shall be used only for the purposes of depositing for any of the following:

(a) To deposit contributions and promptly transferring transfer the deposits to the committee's official depository. , or depositing, dividing, and transferring

(b) To deposit the proceeds of a joint fund-raiser under section 44(4) and transfer each committee's share of any receipts from the joint fund-raiser.

(8) A committee shall not accept a contribution shall not be accepted and or make an expenditure shall not be made by a if that committee that does not have a treasurer. When the office of treasurer in a candidate committee is vacant, the candidate shall be is the treasurer until the candidate appoints a new treasurer.

(9) An A committee shall not make an expenditure shall not be made by a committee without the authorization of the treasurer or the treasurer's designee. The contributions received or expenditures made by a candidate or an agent of a candidate are considered received or made by the candidate committee.

(10) Contributions received by an individual acting in behalf of a committee shall must be reported promptly to the committee's treasurer not later than 5 days before the closing date of any campaign statement required to be filed by the committee, and shall must be reported to the committee treasurer immediately if the contribution is received less than 5 days before the closing date.

(11) A contribution is considered received by a committee when it is received by the committee treasurer or a designated agent of the committee treasurer although the contribution may not be deposited in the official depository by the reporting deadline.

(12) Contributions received by a committee shall must not be commingled with other funds of an agent of the committee or of any other person. Contributions are not considered to be commingled if that contribution is either of the following:

(a) A contribution received by a person for transmission to a separate segregated fund as described in section 55(7).

(b) A contribution made by 1 or more persons through a person if all of the following are met:

(i) The individual contribution or aggregated contribution is accompanied by or logically associated with all information required under section 26 for each individual contributor.

(ii) The person making the contribution is the original source of the contribution.

(iii) The contribution is not obtained through use of coercion or physical force, as a condition of employment or membership, or by using or threatening to use job discrimination or financial reprisals.

(iv) Only the person making the contribution exercises any control over the making of, or the amount or recipient of, the contribution.

(v) The contribution is not otherwise prohibited by this act.

(13) A person that violates this section is subject to a civil fine of not more than $1,000.00.

Sec. 24. (1) A committee shall file a statement of organization with the filing officials designated in section 36 to receive the committee's campaign statements. A committee shall file a statement of organization within 10 days after the committee is formed. A filing official shall maintain a statement of organization filed by a committee until 5 years after the official date of the committee's dissolution. A person who fails to file a statement of organization required by this subsection shall pay a late filing fee of $10.00 for each business day the statement remains not filed in violation of this subsection. The late filing fee must not exceed $300.00. A person who violates this subsection by failing to file for more than 30 days after a statement of organization is required to be filed is guilty of a misdemeanor punishable by a fine of not more than $1,000.00.

(2) The statement of organization required to be filed under subsection (1) must include the following information:

(a) The name, street address, and if available, the electronic mail address and telephone number of the committee, and the electronic mail address of the candidate. If a committee is a candidate committee, the committee name must include the first and last name of the candidate. A committee address may be the home address of the candidate or treasurer of the committee.

(b) The name, street address, and if available, the electronic mail address and telephone number of the treasurer or other individual designated as responsible for the committee's record keeping, report preparation, or report filing.

(c) The name and address of the financial institution in which the official committee depository is or is intended to be located, and the name and address of each financial institution in which a secondary depository is or is intended to be located.

(d) The full name of the office being sought by, including district number or jurisdiction, and the county residence of each candidate supported or opposed by the committee.

(e) A brief statement identifying the substance of each ballot question supported or opposed by the committee. If the ballot question supported or opposed by the committee is a local ballot question, the committee shall identify the county in which the greatest number of registered voters eligible to vote on the ballot question reside.

(f) Identification of the committee as a candidate committee, political party committee, independent committee, independent expenditure committee, political committee, or ballot question committee if it is identifiable as such a committee.

(3) An independent committee or political committee shall include in the name of the committee the name of the person or persons that sponsor the committee, if any, or with whom the committee is affiliated. A person, other than an individual or a committee, sponsors or is affiliated with an independent committee or political committee if that person establishes, directs, controls, or financially supports the administration of the committee. For the purposes of this subsection, a person does not financially support the administration of a committee by merely making a contribution to the committee.

(4) If any of the information required in a statement of organization is changed, the committee shall file an amendment when the next campaign statement is required to be filed.

(5) When filing a statement of organization, a committee, other than an independent committee, a political committee, or a political party committee, may indicate in a written statement signed by the treasurer of the committee that the committee does not expect for each election to receive an amount in excess of $1,000.00 or expend an amount in excess of $1,000.00. The treasurer of a committee of an incumbent judge or supreme court justice is considered to have made the statement required under this subsection following appointment or election of that judge or justice and is not required to file a written statement under this subsection indicating that the committee does not expect for each election to receive or expend an amount in excess of $1,000.00.

(6) When filing a statement of organization, an independent committee, an independent expenditure committee, a political committee, or a political party committee may indicate in a written statement signed by the treasurer of the committee that the committee does not expect in a calendar year to receive or expend an amount in excess of $1,000.00.

(7) Upon the dissolution of a committee, the committee shall file a statement indicating dissolution with the filing officials with whom the committee's statement of organization was filed. Dissolution of a committee must be accomplished pursuant to rules promulgated by the secretary of state under the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

(8) A candidate committee that files a written statement under subsection (5) or that is considered to have made a statement under subsection (5) is not required to file a dissolution statement under subsection (7) if the committee failed to receive or expend an amount in excess of $1,000.00 and 1 of the following applies:

(a) The candidate was defeated in an election and has no outstanding campaign debts or assets.

(b) The candidate vacates an elective office and has no outstanding campaign debts or assets.

(9) A political committee organized for the purpose of making independent expenditures formed before the effective date of the amendatory act that added this subsection December 31, 2019 is considered an independent expenditure committee. The secretary of state may amend the statement of organization for any committee affected by this subsection.

Sec. 34. (1) A ballot question committee shall file a campaign statement as required by this act according to the following schedule:

(a) A preelection campaign statement, the closing date of which shall be is the sixteenth day before the election, shall must not be filed later than the eleventh day before the election.

(b) A postelection campaign statement, the closing date of which shall be is the twentieth day following the election, shall must not be filed later than the thirtieth day following an election. If all liabilities of the committee are paid before the closing date and additional contributions are not expected, the campaign statement may be filed at any time after the election, but not later than the thirtieth day following the election.

(i) February 15 with a closing date of February 10 of that year.

(i) (ii) April 25 with a closing date of April 20 of that year.

(ii) (iii) July 25 with a closing date of July 20 of that year.

(d) In every odd numbered year, a campaign statement not later than October 25 with a closing date of October 20 of that year.

(2) A ballot question committee supporting or opposing a statewide ballot question shall file a campaign statement, of which the closing date shall be is the twenty-eighth day after the filing of the petition form, not later than 35 days after the petition form is filed under section 483a of the Michigan election law, 1954 PA 116, MCL 168.483a.

(3) If a ballot question committee supporting or opposing a statewide ballot question fails to file a preelection statement under this section, that committee or its treasurer shall pay a late filing fee for each business day the statement remains not filed in violation of this section, not to exceed $1,000.00, pursuant to the following schedule:

(a) First day--$25.00.

(b) Second day--$50.00.

(d) Fourth day and for each subsequent day that the statement remains unfiled--$100.00.

(4) If a treasurer or other individual designated as responsible for the record keeping, report preparation, or report filing of a ballot question committee supporting or opposing a statewide ballot question fails to file a statement, other than a preelection statement, under this section, that committee, treasurer, or other designated individual shall pay a late filing fee. If the committee has raised $10,000.00 or less during the previous 2 years, the late filing fee shall be is $25.00 for each business day the campaign statement remains unfiled, but not to exceed $1,000.00. If the committee has raised more than $10,000.00 during the previous 2 years, the late filing fee shall be is $50.00 for each business day the campaign statement remains unfiled, but not to exceed $2,000.00.

(5) If a treasurer or other individual designated as responsible for the record keeping, report preparation, or report filing of a ballot question committee supporting or opposing other than a statewide ballot question fails to file a statement under this section, that committee, treasurer, or other designated individual shall pay a late filing fee. If the committee has raised $10,000.00 or less during the previous 2 years, the late filing fee shall be is $25.00 for each business day the campaign statement remains unfiled, but not to exceed $1,000.00. If the committee has raised more than $10,000.00 during the previous 2 years, the late filing fee shall be is $50.00 for each business day the campaign statement remains unfiled, but not to exceed $2,000.00.

(6) If a treasurer or other individual designated as responsible for the record keeping, report preparation, or report filing of a ballot question committee fails to file a statement as required by subsection (1) or (2) for more than 7 days, that treasurer or other designated individual is guilty of a misdemeanor, punishable by a fine of not more than $1,000.00, or imprisonment for not more than 90 days, or both.

(7) If a treasurer or other individual designated as responsible for the record keeping, report preparation, or report filing of a ballot question committee knowingly files an incomplete or inaccurate statement or report required by this section, that treasurer or other designated individual is subject to a civil fine of not more than $1,000.00 or the amount of the undisclosed contribution, whichever is greater.

Sec. 41. (1) A person shall not make or accept a single contribution of more than $20.00 in cash or make or accept a single expenditure of more than $50.00 in cash. Contributions of more than $20.00 and expenditures of more than $50.00, other than an in-kind contribution or expenditure, shall must be made by written instrument, containing the names of the payor and the payee.credit card, or debit card.

(2) A person shall not accept or expend an anonymous contribution. An anonymous contribution received by a person shall must not be deposited but shall must be given to a tax exempt charitable organization. The charitable organization receiving the contribution shall provide the person with a receipt. The receipt shall must be retained by an appropriate committee pursuant to section 22.

(3) A contribution shall must not be made, directly or indirectly, by any person in a name other than the name by which that person is identified for legal purposes.

(4) A person who knowingly violates this section is guilty of a misdemeanor punishable, if the person is an individual, by a fine of not more than $1,000.00 or imprisonment for not more than 90 days, or both, or, if the person is other than an individual, by a fine of not more than $10,000.00.

Sec. 51. (1) A person, other than a committee, that makes an independent expenditure, advocating the election or defeat of a candidate or the qualification, passage, or defeat of a ballot question, in an amount of $100.01 or more in a calendar year shall file a report of the independent expenditure, within 10 days after making that independent expenditure, with the clerk of the county of residence of that person. If the independent expenditure advocates the election or defeat of a candidate for state elective office or for judicial office, or for the qualification, passage, or defeat of a statewide ballot question, or if the person making the independent expenditure is not a resident of this state, the person shall file the report with the secretary of state in lieu of filing with a clerk of a county. The report required under this section must be made on an independent expenditure report form provided by the secretary of state, include the date of the expenditure, a brief description of the nature of the expenditure, the amount, the name and address of the person to whom it was paid, the name and address of the person filing the report, together with the name, address, occupation, employer, and principal place of business of each person that contributed $100.01 or more to the expenditure, and identify the candidate or ballot question for or against which the independent expenditure was made. The filing official receiving the report shall forward copies, as required, to the appropriate filing officers as described in section 36.

(2) If a person fails to file a report as required under this section, that person shall pay a late filing fee. If the person has made independent expenditures totaling less than $10,000.00, the late filing fee is $25.00 for each business day the report remains unfiled, but not to exceed $1,000.00. If the person has made independent expenditures totaling $10,000.00 or more, the late filing fee is $50.00 for each business day the report remains unfiled, but not to exceed $5,000.00. A person that violates this subsection by failing to file a report required under this section for more than 30 days after the report is required to be filed is guilty of a misdemeanor punishable by imprisonment for not more than 90 days or a fine of not more than $1,000.00, or both.

Sec. 54. (1) Except as otherwise provided in this section and section 55, and except with respect to loans made in the ordinary course of business, a corporation, joint stock company, domestic dependent sovereign, or labor organization shall not make a contribution or expenditure or provide volunteer personal services that are excluded from the definition of a contribution under section 4(3)(a).

(2) An officer, director, stockholder, attorney, agent, or any other person acting for a labor organization, a domestic dependent sovereign, or a corporation or joint stock company, whether incorporated under the laws of this or any other state or foreign country, except corporations formed for political purposes, shall not make a contribution or expenditure or provide volunteer personal services that are excluded from the definition of a contribution under section 4(3)(a).

(3) Except for expenditures made by a corporation in the ordinary course of its business, an expenditure made by a corporation to provide for the collection and transfer of contributions to another a separate segregated fund not established by that corporation, or to a separate segregated fund not connected to a nonprofit corporation of which the corporation is a member, for which it is not a connected organization as provided in section 55 constitutes an in-kind contribution by the corporation and is prohibited under this section. Advanced payment or reimbursement to a corporation by a non-connected separate segregated fund not established by that corporation, or by a separate segregated fund not connected to a nonprofit corporation of which the corporation is a member, does not cure a use of corporate resources otherwise prohibited by this section.

(4) A corporation, joint stock company, domestic dependent sovereign, or labor organization may make a contribution to a ballot question committee or independent expenditure committee subject to this act. A corporation, joint stock company, domestic dependent sovereign, or labor organization may make an independent expenditure in any amount advocating for the election or defeat of a candidate, or the qualification, passage, or defeat of a ballot question and does not for this reason become a committee, unless it solicits or receives contributions in excess of $500.00 for the purpose of making the independent expenditure, but is subject to the independent expenditure reporting requirements of section 51.

(5) A person who knowingly violates this section is guilty of a felony punishable, if the person is an individual, by a fine of not more than $5,000.00 or imprisonment for not more than 3 years, or both, or, if the person is not an individual, by a fine of not more than $10,000.00.

Sec. 55. (1) A connected organization may make an expenditure for the establishment or administration of, and solicitation, collection, or transfer of contributions to, a separate segregated fund to be used for political purposes. A separate segregated fund established by a connected organization under this section shall must be organized as a political committee or an independent committee, and, in addition to any other disbursements not restricted or prohibited by law, shall only make contributions to, and expenditures on behalf of, candidate committees, ballot question committees, political party committees, political committees, independent expenditure committees, independent committees, and other separate segregated funds.

(2) Contributions for a separate segregated fund established by a corporation, organized on a for profit basis, or a joint stock company under this section may be solicited from any of the following persons or their spouses:

(a) Stockholders of the corporation or company.

(b) Officers and directors of the corporation or company.

(c) Employees of the corporation or company who have policy making, managerial, professional, supervisory, or administrative nonclerical responsibilities.

(3) Contributions for a separate segregated fund established under this section by a corporation organized on a nonprofit basis may be solicited from any of the following persons or their spouses:

(a) Members of the corporation who are individuals.

(b) Stockholders or members of members of the corporation.

(d) Employees of the members of the corporation who have policy making, managerial, professional, supervisory, or administrative nonclerical responsibilities.

(e) Employees of the corporation who have policy making, managerial, professional, supervisory, or administrative nonclerical responsibilities.

(4) Contributions for a separate segregated fund established under this section by a labor organization may be solicited from any of the following persons or their spouses:

(a) Members of the labor organization who are individuals.

(b) Officers or directors of the labor organization.

(c) Employees of the labor organization who have policy making, managerial, professional, supervisory, or administrative nonclerical responsibilities.

(5) Contributions for a separate segregated fund established under this section by a domestic dependent sovereign may be solicited from an individual who is a member of any domestic dependent sovereign.

(6) Contributions must not be obtained for a separate segregated fund established under this section by use of coercion or physical force, by making a contribution a condition of employment or membership, or by using or threatening to use job discrimination or financial reprisals. A connected organization shall not solicit or obtain contributions for a separate segregated fund established under this section from an individual described in subsection (2), (3), (4), or (5) on an automatic or passive basis including but not limited to a payroll deduction plan or reverse checkoff method. A connected organization may solicit or obtain contributions for a separate segregated fund established under this section from an individual described in subsection (2), (3), (4), or (5) on an automatic basis, including but not limited to a payroll deduction plan, only if the individual who is contributing to the fund affirmatively consents to the contribution. Affirmative consent expires upon revocation by the individual who provided the affirmative consent.

(7) A contribution by an individual to a separate segregated fund that is aggregated with a dues or other payment to the connected organization may be collected by or made payable first to the a connected organization of the separate segregated fund, for subsequent transfer to the separate segregated fund if all of the following occur:

(a) The For contributions that are aggregated with dues or other payments, the individual making the contribution does either of the following:

(i) Specifically indicates in a record or electronic record that the amount collected, or a specified portion of the total amount if remitted as part of a dues or other payment to the connected organization, is a contribution to the separate segregated fund.

(ii) Fails to return a record or electronic record described in subparagraph (i), but remits payment to the connected organization in response to a specifically requested amount that includes a solicited contribution, the solicitation for a contribution was clearly distinguishable from any dues or other fees requested as part of the total, and the connected organization maintains a record or electronic record of the solicitation that includes the amount of the solicited contribution and the amount of any dues or other fees charged in conjunction with the solicitation for each contributor.

(b) The connected organization transfers the entire specified amount of any designated contribution, individually or aggregated with other contributions, for deposit to the separate segregated fund electronically or by written instrument. Any transfer of designated contributions must be accompanied by or logically associated with a record or electronic record setting forth all information required under section 26 for each individual contributor whose contribution is transferred.

(c) The connected organization accounts for any contributions under this subsection in a manner that documents all of the following:

(i) The identity of the individual contributor.

(ii) The date, amount, and method of receipt for each individual contribution.

(iii) The date, amount, and method of all transfers to the separate segregated fund.reports all information required under section 26 for each individual contributor, and a transfer of contributions for deposit to the separate segregated fund by a connected organization described in subsection (12)(a)(ii) must be accompanied by or logically associated with a record or electronic record that sets forth all required information for each individual whose contribution is transferred.

(d) The connected organization and the separate segregated fund adopt have a written policy governing the handling, accounting, and transfer of any contribution under this subsection.

(e) In connection with an investigation or hearing under section 15 regarding any contributions under this subsection, the connected organization voluntarily agrees to make available to the secretary of state any records described in subdivisions (a) to (d) and provides those records at the request of the secretary of state.

(8) In addition to any other expenditures or disbursements allowed under subsection (1), a connected organization may pay costs for a prize, fund-raising event, or 1 or more items to be sold, as part of fund-raising activities for the separate segregated fund. Any payment of costs by the connected organization for a prize or fund-raising event, or per individual item to be sold, must not be disproportionately valuable related to the amount raised by that prize or fund-raising event, or the amount raised per individual item sold. If the connected organization makes a payment of costs under this subsection that is disproportionately valuable, reimbursement of at least the impermissible portion by the separate segregated fund to the connected organization, within 60 days of the payment or as directed by the secretary under section 15, cures a violation of this subsection. A payment of costs under this subsection is not disproportionately valuable if it is equal to or less than 10% of the total amount raised by the prize or fund-raising event, or if the payment of costs per item sold is equal to or less than 10% of the amount raised per individual item sold.

(9) (8) Except as otherwise provided in subsection (10), subsections (8) and (11), a person who knowingly violates this section is guilty of a felony punishable, if the person is an individual, by a fine of not more than $5,000.00 or imprisonment for not more than 3 years, or both, or, if the person is not an individual, by a fine of not more than $10,000.00.

(10) (9) If a connected organization that obtains contributions for a separate segregated fund from individuals described in subsection (2), (3), (4), or (5) pays to 1 or more of those individuals a bonus or other remuneration for the purpose of reimbursing those contributions, then that connected organization is subject to a civil fine of not more than 2 times the total contributions obtained from all individuals for the separate segregated fund during that calendar year.

(11) (10) If a violation of this section results solely from the failure of a connected organization to transfer 1 or more contributions, that connected organization is not guilty of a felony as described in subsection (8), (9), but shall notify the contributor of the failure to transfer the contribution and refund the full amount of the contribution to the contributor if requested. The penalties described in subsection (8) (9) apply to any other violation of this section, including use or diversion of any contributions by a connected organization before those contributions are transferred to the separate segregated fund under subsection (7).

(12) (11) As used in this section:

(a) "Connected organization" means either of the following:

(i) A corporation organized on a for-profit or nonprofit basis, a joint stock company, a domestic dependent sovereign, or a labor organization formed under the laws of this or another state or foreign country.

(ii) A member of any entity under subparagraph (i) that is not an individual and that does not maintain its own separate segregated fund, unless its separate segregated fund and the separate segregated fund of the entity of which it is a member are treated as a single independent committee as provided in section 52(10).

(b) "Record" and "electronic record" mean those terms as defined in section 2 of the uniform electronic transactions act, 2000 PA 305, MCL 450.832.

(c) "Written instrument" means a money order, or a check, cashier's check, or other negotiable instrument, as those terms are defined in section 3104 of the uniform commercial code, 1962 PA 174, MCL 440.3104, in the name of the connected organization and payable to the separate segregated fund.