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)
STATE OF MICHIGAN
JENNIFER M. GRANHOLM, ATTORNEY GENERAL
CAMPAIGN FINANCE ACT:
Michigan Municipal League's expenditure of funds, received as dues paid by its member municipalities, to support or oppose a ballot question
The Michigan Municipal League, a nonprofit corporation, may, consistent with the requirements of the Michigan Campaign Finance Act, spend its corporate funds to support or oppose a ballot question.
Opinion No. 7080
April 17, 2001
Honorable Candice S. Miller
Secretary of State
Treasury Building - First Floor
430 W. Allegan
Lansing, Michigan 48918-9900
You have asked if recent amendments to the Michigan Campaign Finance Act warrant changes to the conclusion in OAG, 1981-1982, No 5882, p 137 (April 22, 1981), that the Michigan Municipal League, a nonprofit corporation, may, consistent with the requirements of the Michigan Campaign Finance Act, spend its corporate funds to support or oppose a ballot question.
OAG, 1981-1982, No 5882, supra, p 137, concluded that municipalities had the authority to spend their funds by paying membership dues to the Michigan Municipal League (MML). This conclusion was based on Hays v Kalamazoo, 316 Mich 443; 25 NW2d 787 (1947), in which the Michigan Supreme Court held that municipalities could join the MML and spend their public funds to pay for the services provided to them by the MML, a nonprofit corporation. Hays, supra, p 458. The court also held that the MML could properly lobby the state Legislature with respect to proposed legislation that would affect its members. Id., at 466-467.1 OAG, 1981-1982, No 5882, supra, p 139, also concluded that the MML could spend its corporate funds in connection with the passage or defeat of a ballot question. That conclusion was based on Advisory Opinion on Constitutionality of 1975 PA 227, 396 Mich 465, 494-495; 242 NW2d 3 (1976), in which the Michigan Supreme Court held that under Const 1963, art 1, § 5, private corporations have a constitutionally protected right to express their views on ballot questions.
The Michigan Campaign Finance Act (MCFA), 1976 PA 388, MCL 169.201 et seq; MSA 4.1703(1) et seq, regulates campaign financing and restricts campaign contributions. It was enacted "to ensure the integrity of Michigan's political campaigns and offices, thereby protecting the interests of the public at large, individual citizens, and candidates for public office." Senate Legislative Analysis, SB 1570, December 17, 1976. Recent amendments to the MCFA include new sections 11(6) and 57, added and amended by 1995 PA 264 and 1996 PA 590. Section 57 prohibits public bodies from contributing to candidate and ballot question elections as follows:
A public body or an individual acting for a public body shall not use or authorize the use of funds, personnel, office space, property, stationery, postage, vehicles, equipment, supplies, or other public resources to make a contribution or expenditure or provide volunteer personal services that are excluded from the definition of contribution under section 4(3)(a). . . .
Section 6(1) of the MCFA defines "expenditure" as:
[A] payment, donation, loan or promise of payment of money or anything of ascertainable monetary value for goods, materials, services, or facilities in assistance of, or in opposition to, the nomination or election of a candidate, or the qualification, passage, or defeat of a ballot question. [Emphasis added.]
Both before and after OAG, 1981-1982, No 5822, supra, it was well established that "school districts and other public boards and commissions lack statutory authority to expend public funds to influence the electorate in support of or in opposition to a particular ballot proposal or candidate." OAG, 1987-1988, No 6423, p 33, 35 (February 24, 1987).2 The language in new section 57 of the MCFA reinforces this principle by expressly prohibiting public bodies from spending public funds or other resources for the passage or defeat of ballot questions.3
The answer to your question hinges on whether the MML constitutes a "public body or an individual acting for a public body" subject to the prohibition imposed by section 57 of the MCFA. Section 11(6) of the Act defines the term "public body" as follows:
(6) "Public body" means 1 or more of the following:
(a) A state agency, department, division, bureau, board, commission, council, authority, or other body in the executive branch of state government.
(b) The legislature or an agency, board, commission, or council in the legislative branch of state government.
(c) A county, city, township, village, intercounty, intercity, or regional governing body; a council, school district, special district, or municipal corporation; or a board, department, commission, or council or an agency of a board, department, commission, or council.
(d) Any other body that is created by state or local authority or is primarily funded by or through state or local authority, which body exercises governmental or proprietary authority or performs a governmental or proprietary function.
In construing legislation, the primary goal is to ascertain and effectuate the intent of the Legislature. The first step in ascertaining legislative intent is to examine the statutory language. If the language is clear, there is no room for judicial construction and the statute must be applied as written. State Defender Union Employees, UAW Local 412-Unit 64, v Legal Aid and Defender Ass'n of Detroit, 230 Mich App 426, 431; 584 NW2d 359 (1998). If the statute is not clear on its face, a court may "look to the language and interpretation of analogous statutes." Citizens for Pretrial Justice v Goldfarb, 415 Mich 255, 276; 327 NW2d 910 (1982).
The MML is a private corporation, not a "public body" as defined by the MCFA. It is not an agency within either the executive or legislative branch of state government, nor does it constitute any of the other entities enumerated in subsections 11(6)(a), (b), or (c) of the MCFA.
Nor, for two reasons, does the MML constitute a "public body" for purposes of subsection 11(6)(d). First, the MML is not created by state or local authority. Rather, the MML is a private nonprofit corporation established to provide advice, lobbying, and other services for cities and villages in Michigan. Hays, supra, p 449-550. OAG, 1989-1990, No 6563, p 27, 35 (January 26, 1989), which concluded "that the Freedom of Information Act does not apply to a private nonprofit corporation," observed that:
A private nonprofit corporation is not an instrumentality of either state or local government but, rather, a private entity organized on a membership basis whose members [may] include both public and private members. [OAG, 1989-1990, No 6563, supra, p 34.]
Second, the MML is not primarily funded by or through state or local authority. In State Defender Union Employees, supra, the Michigan Court of Appeals considered whether the Legal Aid and Defender Association of Detroit, a private, nonprofit corporation established to provide legal services to indigent persons, was a "public body" within the meaning of the Freedom of Information Act (FOIA), MCL 15.231 et seq; MSA 4.1801(1) et seq. FOIA employs the same definition of "public body" as the MCFA. Plaintiff alleged that the Defender Association received a large portion of its funding from government sources and, therefore, was a "public body" within the meaning of FOIA. The court addressed virtually the same issue presented here, whether an organization that receives payment from government sources in return for providing services is "funded by or through state or local authority." Interpreting "funded" to mean the receipt of a government grant or subsidy, the court held that "an otherwise private organization is not 'funded by or through state or local authority' merely because public monies paid in exchange for goods provided or services rendered comprise a certain percentage of the organization's revenue." Id., at 432-433.
Applying State Defender Union Employees to our facts, the MML receives money from its members, who are local governmental bodies. But the Michigan Supreme Court in Hays, supra, in considering the same MML, characterized this arrangement as "annual dues in return for services rendered." Id., at 459. Under State Defender Union Employees, the mere receipt of governmental money by a private organization does not constitute governmental "funding." Similar to the Legal Aid and Defender Association, the MML performs services in return for the revenue it receives from the local governmental bodies who are members. Under these circumstances and under Michigan case law, the MML is not "funded by or through state or local authority." Since the MML is not created by state or local authority and is not primarily funded by or through state or local authority, it is unnecessary to analyze the remaining elements in MCFA subsection 11(6)(d). See Herald Co v Bay City, 463 Mich 111, 129; 614 NW2d 873 (2000) (analyzing similar definition of "public body" in Open Meetings Act, MCL 15.261 et seq; MSA 4.1800(11) et seq).
Similarly, the MML does not constitute an "individual acting for a public body" for purposes of MCFA section 57(1). In this regard, it is significant to note that the Legislature chose to use the undefined term "individual" rather than the term "person" as defined in the MCFA. Section 11(1) of the MCFA defines "person" as a "business, individual, . . . corporation, association, committee, or any other organization or group of persons acting jointly." The term "individual" refers to a natural person, not a corporation. See e.g., Sentry Security Systems Inc v Detroit Automobile Inter-Insurance Exchange, 394 Mich 96, 97; 228 NW2d 779 (1975); See also, MCL 330.1800(c); MSA 14.800(800)(c) (individual means a minor or adult person); MCFA section 11(1). Had the Legislature intended the MML or any other corporation to fall within the ambit of the "individual acting for a public body" language, the Legislature would have used the broader and defined term "person" rather than "individual." See e.g., Herald Co v Bay City, supra, 130, n 11. Here, the Legislature has only expressed the intent that the term "individual" include natural persons. Accordingly, the MML is neither a "public body" nor an "individual acting for a public body."
Under Const 1963, art 1, § 5, private corporations have a constitutionally protected right to express their views on ballot questions. Advisory Opinion on Constitutionality of 1975 PA 227, supra, pp 494-495. Payments of public funds to the MML by municipalities are authorized by law. Hays, supra, p 458. Monies received by the MML from its member municipalities represent fees for services rendered. Id., at 458-459. Once a legal payment of public money has been made, "it ceases to be public money in the hands of the recipients." Krebs v Teachers' Retirement System Bd of Trustees, 410 ILL 435; 102 NE2d 321, 326 (1951). See also, State Defender Union Employees, supra, pp 432-433 (public funding does not include earned fees for services or goods rendered). Thus, once a municipality uses its public funds to pay an employee, vendor, or other party, the funds are no longer public funds. It follows that, once a municipality member pays the MML for services rendered, the funds belong to the MML, a private corporation, and thus lose their character as public funds. It was on this basis that OAG, 1981-1982, No 5882, supra, concluded that the MML may spend its funds in connection with the passage or defeat of a ballot question.
It is my opinion, therefore, that the Michigan Municipal League, a nonprofit corporation, may, consistent with the requirements of the Michigan Campaign Finance Act, spend its corporate funds to support or oppose a ballot question.
JENNIFER M. GRANHOLM
1 "In view of the present day problems confronting cities and villages, we cannot say that the expenditure of public funds for the purpose of giving to the legislature information with reference to the subject matter of proposed or anticipated legislation affecting such problems, is against public policy." Id., at 466-467.
2 See, for example, OAG, 1965-1966, No 4291, p 1 (January 4, 1965); OAG, 1965-1966, No 4421, p 36 (March 15, 1965); OAG, 1987-1988, No 6446, p 131 (June 12, 1987); OAG, 1987-1988, No 6531, p 367 (August 8, 1988).
3 Violation of section 57 is a misdemeanor punishable by imprisonment up to one year, or substantial fines, or both.