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A01783 Summary:

BILL NOA01783
 
SAME ASNo Same As
 
SPONSORColton
 
COSPNSRCook
 
MLTSPNSR
 
Add §631, BC L
 
Requires shareholders to approve corporate political expenditures.
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A01783 Actions:

BILL NOA01783
 
01/20/2023referred to election law
01/03/2024referred to election law
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A01783 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A1783
 
SPONSOR: Colton
  TITLE OF BILL: An act to amend the business corporation law, in relation to requiring shareholders to approve corporate political expenditures   PURPOSE OR GENERAL IDEA OF BILL: To require shareholders to approve of corporate political expenditures and to create transparency between corporate political activities and shareholders   SUMMARY OF SPECIFIC PROVISIONS: Section 1. The business corporation law is amended by adding a new section 631. Section 1. Paragraph (a)of section 631 of the business corporation law defines political expenditure. Section 1. Paragraph (b) of sections 631 of the business corporation law defines the method by which shareholders would approve political expend- itures by corporations.   JUSTIFICATION: In 2010 The United States Supreme Court opened the gates in allowing corporations and unions the ability to spend unlimited amounts of money on campaign ads and other political tools. By doing this, the Supreme Court gave special interest groups and lobbyists greater power, which only further undermines the influence of the average American voter. In writing the majority ruling in the decision of Citizen United, Supreme Court Justice Anthony M. Kennedy invited the idea of creating a shareholder solution to the ruling of the court. This piece of legis- lation would do just that and give power to corporation shareholders to have a greater influence in how corporations conduct their political activities. Justice Kennedy stated that while the government cannot block corporate political spending, corporations shouldn't be able to block citizen-shareholders' money on political campaigns without their consent. By enabling shareholders to hold the authority on how corpo- rations conduct political activities, the issue of the Citizens united ruling can be fixed to some extent, through "corporate democracy." This legislation would create a sense of transparency between the actions of corporate managers and shareholders with regards to political activities, and give shareholders a greater role in how companies oper- ate. At the same time, it would limit corporations, whose shares are owned by entities that cannot take political positions, from making political expenditures, essentially ensuring that these entities remain politically objective. Such entities consist of public pension funds, universities, etc. This legislation is modeled after part 3 of the "Shareholders United Act", introduced by Maryland State Senator Jamin B. Raskin.   PRIOR LEGISLATIVE HISTORY:   FISCAL IMPLICATIONS: To be determined   EFFECTIVE DATE: This act shall take effect on the ninetieth day after it shall have become a law.
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A01783 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          1783
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 20, 2023
                                       ___________
 
        Introduced  by  M.  of  A. COLTON, COOK -- read once and referred to the
          Committee on Election Law
 
        AN ACT to amend the business corporation law, in relation  to  requiring
          shareholders to approve corporate political expenditures
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. The business corporation law is amended  by  adding  a  new
     2  section 631 to read as follows:
     3  § 631. Shareholder approval of political expenditures.
     4    (a) "Political expenditure" shall mean a contribution, gift, transfer,
     5  disbursement,  or  promise  of  money  or a thing of value to promote or
     6  assist in the promotion of the success or defeat of a  candidate,  poli-
     7  tical party, or question in any state or federal election.
     8    (b)  A  corporation  may  not  use  any money or other property of the
     9  corporation in connection with a political expenditure unless the share-
    10  holders of the corporation, by the affirmative vote of a majority of all
    11  votes entitled to be cast, have:
    12    (1) Authorized in advance the total amount of money or  property  that
    13  may be used for all political expenditures during a specific fiscal year
    14  of the corporation; and
    15    (2) Directed that the money or property can be used for:
    16    A. A specified candidate or candidates;
    17    B. Candidates of a specified political party or parties;
    18    C. A specified political party or parties;
    19    D. A specified political committee or committees;
    20    E.  A  specified entity or entities exempt from taxation under section
    21  501(c)(4) or (6) of the internal revenue code; or
    22    F. A specified question or questions.
    23    (c) Shareholder consideration of political expenditures shall occur at
    24  an annual or special meeting of the shareholders.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD05660-01-3

        A. 1783                             2
 
     1    (d) Within forty-eight hours after making a political expenditure, the
     2  corporation shall:
     3    (1)  Give  notice  of  the  political expenditure by electronic trans-
     4  mission to each shareholder that has requested notice; and
     5    (2) If the corporation maintains a website, post notice of  the  poli-
     6  tical expenditure on the website.
     7    (3)  When  providing  notice  pursuant to subparagraphs one and two of
     8  this paragraph, the notice shall state the amount, recipient, date,  and
     9  purpose of the political expenditure.
    10    (e)  The  annual report of the corporation shall contain a list of all
    11  political expenditures made by  the  corporation  during  the  reporting
    12  period, including the amount, recipient, date, and purpose of each poli-
    13  tical expenditure.
    14    (f) If a shareholder disagrees with a political expenditure made under
    15  this  section, he or she may receive from the corporation upon request a
    16  pro rata rebate in an amount of the percentage of the political expendi-
    17  ture equal to the percentage of ownership the  shareholder  has  in  the
    18  corporation.
    19    (g)  If  a  majority  of a corporation's shares are owned by those who
    20  cannot take political positions, including but not limited to state  and
    21  local  pension  funds,  mutual  funds, insurance companies, foundations,
    22  churches and universities, then the corporation shall not make political
    23  expenditures.
    24    § 2. This act shall take effect on the ninetieth day  after  it  shall
    25  have become a law.
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