Senate Bill 2834

AN ACT TO AMEND SECTION 79-11-509, MISSISSIPPI CODE OF 1972, TO ALLOW REGISTRATION OF CHARITABLE ORGANIZATIONS WHEN APPLICANT, REGISTRANT, OFFICERS, DIRECTORS OR PARTNERS OF THE APPLICANT OR REGISTRANT, OR THEIR AGENTS OR EMPLOYEES, HAVE BEEN CONVICTED OF ANY FELONY MORE THAN TEN YEARS AGO; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 79-11-509, Mississippi Code of 1972, is amended as follows:

79-11-509. (1) The Secretary of State shall deny, suspend or revoke a registration or an exemption for the following reasons:

(a) The application for registration or renewal is incomplete.

(b) The application or renewal fee (where applicable) has not been paid.

(c) A document filed with the Secretary of State contains one or more false or misleading statements or omits material facts.

(d) The charitable contributions have not been or are not being applied for the purpose or purposes stated in the documents filed with the Secretary of State.

(e) The applicant or registrant has violated or failed to comply with any provisions of this chapter or any rule or order thereunder.

(f) The applicant, registrant, officers, directors, or partners of the applicant or registrant, or their agents or employees, (i) have been convicted of a felony or of a misdemeanor where such felony or misdemeanor involved fraud, misrepresentation, misapplication or misuse of the money or property of another, or (ii) have been convicted of any felony within the past ten (10) years from the date of the application for registration, or (iii) have not completed the sentence associated with any felony conviction at the time of the application for registration.

(g) The applicant or registrant has engaged in the use or employment of dishonesty, fraud, deception, misrepresentation, false promise or false pretense.

(h) The applicant or registrant has had the authority to engage in charitable or fund-raising activities denied, revoked or suspended by the Secretary of State or any other state or jurisdiction.

(i) The applicant or registrant has been convicted of any criminal offense committed in connection with the performance of activities regulated under Sections 79-11-501 through 79-11-529 or any criminal offense involving untruthfulness or dishonesty or any criminal offense relating adversely to the registrant's or applicant's fitness to perform activities regulated by Sections 79-11-501 through 79-11-529. For the purposes of this paragraph, a plea of guilty, non vult, nolo contendere or any other similar disposition of alleged criminal activity shall be deemed a conviction.

(j) The applicant or registrant has engaged in other forms of misconduct as may be determined by the rules adopted by the Secretary of State.

(2) The Secretary of State shall notify the applicant or licensee of his intent to deny, suspend or revoke a license. The notification shall contain the reasons for the action and shall inform him of his right to request an administrative hearing within thirty (30) days of receipt of the notification. The denial, suspension or revocation shall become effective thirty (30) days after receipt of the notification unless a request for an administrative hearing is received by the Secretary of State before the expiration of the thirty (30) days. If a hearing is requested and the denial, suspension or revocation is upheld, the denial, suspension or revocation shall become effective upon the service of the final administrative decision on the applicant or licensee.

(3) Registration shall become effective no later than noon of the thirtieth day after a completed application is filed, if no denial order is in effect and no proceeding is pending under this chapter. The Secretary of State may, by rule or order, specify an earlier effective date, and the Secretary of State may, by order, defer the effective date until noon of the thirtieth day after the filing of any amendment.

(4) Whenever it appears to the Secretary of State that any person has engaged in or is about to engage in any act or practice constituting a violation of any provision of this chapter or any rule or order hereunder, he may, in his discretion, seek the following remedies in addition to other remedies authorized by law:

(a) Issue a cease and desist order, with or without a prior hearing against the person or persons engaged in the prohibited activities, directing them to cease and desist from further illegal activity; or

(b) Issue an order in the case of a registered charity, professional fund-raiser or solicitor, or other person who violated this chapter, imposing an administrative penalty up to a maximum of Twenty-five Thousand Dollars ($25,000.00) for each offense, each violation to be considered as a separate offense in a single proceeding or a series of related proceedings;

(c) For the purpose of determining the amount or extent of a sanction, if any, to be imposed under subparagraph (b) of this section, the Secretary of State shall consider, among other factors, the frequency, persistence and willfulness of the conduct constituting a violation of this chapter or a rule promulgated thereunder or an order of the Secretary of State, the number of persons adversely affected by the conduct, and the resources of the person committing the violation.

(5) Whenever it appears to the Attorney General that any person has engaged in or is about to engage in any act or practice constituting a violation of any provision of Sections 79-11-501 through 79-11-529 or any rule or order thereunder, he may, in his discretion, bring an action in chancery court to enjoin the acts or practices to enforce compliance with Sections 79-11-501 through 79-11-529 or any rule or order thereunder. Upon a proper showing a permanent or temporary injunction, restraining order or writ of mandamus shall be granted and a receiver or conservator may be appointed for the defendant or the defendant's assets. In addition, upon a proper showing by the Attorney General, the court may enter an order of rescission, restitution or disgorgement directed to any person who has engaged in any act constituting a violation of any provision of Sections 79-11-501 through 79-11-529 or any rule or order thereunder or the court may impose a civil penalty up to a maximum of Twenty-five Thousand Dollars ($25,000.00) for each offense, and each violation shall be considered as a separate offense in a single proceeding or a series of related proceedings. The court may not require the Attorney General to post a bond.

SECTION 2. This act shall take effect and be in force from and after July 1, 2006.