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The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us)



Opinion No. 5882

April 22, 1981


Contribution of corporate funds on ballot question


Contributions to nonprofit corporation


Contributions on ballot question

The Michigan Municipal League, a nonprofit corporation, may, subject to the requirements of 1976 PA 388, expend funds of the corporation in connection with the passage or defeat of a ballot question.

Honorable Jerome T. Hart

State Senator

The Capitol

Lansing, Michigan

You have requested my opinion on the following question:

'Were state laws compiled with, by the use of tax dollars via dues from various cities by the Michigan Municipal League promoting their position on Proposal D on the 1980 General Election ballot?'

In the absence of authority, public funds may not be expended to influence the outcome of an election. See Mosier v Wayne Co Bd of Auditors, 295 Mich 27; 294 NW 85 (1940); OAG, 1965-1966, No 4291, p 1 (January 4, 1965); OAG, 1965-1966, No 4421, p 36 (March 15, 1965); and OAG, 1979-1980, No 5597, p 482 (November 28, 1979).

Your question refers to the use of funds by the Michigan Municipal League to influence the outcome of the election on the elector-initiated amendment to Const 1963, art 9. It further suggests the source of such funds to be from dues (1) paid the Michigan Municipal League by Michigan cities holding membership in that organization.

To answer your question, consideration first must be given to (1) the authority of Michigan cities to expend funds for dues to the Michigan Municipal League, and (2) the power of the Michigan Municipal League to expend its funds to publicize its views concerning ballot questions. These questions are considered together.

The answer to the first question has been definitively resolved by the Michigan Supreme Court in Hays v City of Kalamazoo, 316 Mich 443, 458; 25 NW2d 787 (1947), where the Court upheld the expenditure of local public funds for membership in the Michigan Municipal League, and stated:

'. . . [T]he city of Kalamazoo had the right to join the Michigan Municipal League, to avail itself of the services rendered thereby, and to expend money out of public funds in payment therefor. The record fully justifies the conclusion that the welfare of the city was thereby served and, hence, that the purpose was a city public purpose.'

It should be noted that the Michigan Municipal League was granted intervention as a party Defendant in Hays, supra. The Court traced its history as first a voluntary association and then a nonprofit corporation, its purposes and its financing by means of assessment of fees on its member cities and villages, based upon population. In describing the nature of the Michigan Municipal League, and the services provided cities and villages, the Court in Hays, supra, at pp 449-450, found that the services provided involved public purposes for which the public funds might lawfully be appropriated:

"The improvement (2) of municipal government and administration through co-operative effort; and this purpose shall be advanced by the maintenance of a central bureau of information and research; by the holding of annual conventions, schools and short courses; by the publication of an official magazine; by the encouraging of legislation beneficial to the municipalities of Michigan and the citizens thereof; by the rendering of such special and general services as may be deemed advisable; and by the fostering of municipal education and a greater civic consciousness among the citizens of the municipalities of Michigan.'

'The general character of the services rendered by the Michigan Municipal League to its constituent members is set forth in paragraph 11 of its answer, which reads:

'That the Michigan Municipal League exists for the purpose of perpetuating and organizing an agency for the co-operation of Michigan cities in the practical study of matters pertaining to municipal government, and the establishment and maintenance of a central bureau of information for use in collection, compilation and dissemination of statistics, reports and all kinds of information relative to municipal government; that this information and service, among other things, includes taxation problems, utility regulations, construction and engineering, garbage disposal, zoning, civil service, extension of city limits, streets, paving, housing, law enforcement and ordinances, public welfare, liquor control, research, labor problems, pension, compensation, directories, licensing, police and fire protection, legal assistance, transient merchants, floods, stream pollution, accounting, purchasing, public health, parks and play-grounds, post-war planning, information on proposed legislation, drafting charters, and many other services which are essential to the efficient management of the different municipalities constituting its membership.'

Mosier, supra was distinguished in Hays, supra, in that the object in Mosier of reapportioning the legislature was found to be lacking as a county public purpose.

In Advisory Opinion on Constitutionality of 1975 PA 227, 396, Mich 465, 494, 495; 242 NW2d 3 (1976), 1975 PA 227, Sec. 95; MCLA 169.95; MSA 4.1701(95) which prohibited corporations from making contributions or expenditures for the purpose of influencing the qualification, passage or defeat of a ballot question was declared by a majority of the Court to be an unconstitutional infringement on the right to freedom of expression guaranteed by Const 1963, art 1, Sec. 5:

'. . . Political expression must be afforded the broadest protection in order 'to assure the unfrettered interchange of ideas for the bringing about of political and social changes desired by the people.' That our discussion involves corporations and not individuals does not render inapplicable our society's 'profound national commitment to the principle that debate on public issues should be uninhibited, robust, and wide-open.'

'Contributions or expenditures by corporations to communicate their positions or opinions concerning ballot questions serve to enlighten the public and encourage an informed decision-making process. Such contributions or expenditures create no danger of incurring obligations from an elected official to a major contributor. The right of the public to be informed is a paramount consideration in seeking to preserve the free exchange of ideas in the market place.

'A ballot question may affect the assets, the conduct, or, indeed, the very existence of a corporation. Especially in such cases, the corporation is deserving of a public forum to express its position or opinion, much the same as the public has a right to hear those same matters.

'It is our opinion that insofar as Sec. 95 interferes with the right of the public to hear divergent views of public importance by prohibiting corporations from making contributions or expenditures for the purpose of communicating its opinion concerning ballot questions, it is violative of Const 1963, art 1, Sec. 5 . . ..'

Thereafter, the legislature enacted 1976 PA 388, as amended; MCLA 169.201 et seq; MSA 4.1703(1) et seq, authorizing corporations to make contributions not in excess of $40,000 to each ballot committee for the qualification, passage or defeat of a particular ballot question [Section 54(3) and (4)].

Under 1976 PA 388, supra, Sec. 15, compliance is monitored, in the first instance, by the Secretary of State, with referrals to be made by the Secretary of State to the Attorney General of possible violations for enforcement.

It is, therefore, my opinion that the Michigan Municipal League, as a nonprofit corporation, may, subject to the requirements of 1976 PA 388, supra, expend funds of the corporation in connection with the passage or defeat of a ballot question.

Frank J. Kelley

Attorney General

(1) Special fund raising, not within the scope of ordinary dues or fees, to be used for or against a specific ballot proposal, is not suggested by your question and is not dealt with in this opinion.

(2) The purposes quoted in this paragraph by the Court in Hays, supra, are from the articles of association of the Michigan Municipal League which continues to provide for such purposes.


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