Source: http://www.legis.state.wv.us/Bill_Status/bills_text.cfm?billdoc=hb2050%20intr.htm&yr=2016&sesstype=RS&i=2050
Timestamp: 2017-10-18 00:55:36
Document Index: 800925347

Matched Legal Cases: ['§31', '§31', '§31', '§31', '§31', '§31', '§31', '§31', '§31', '§31', '§31', '§31', '§527', '§431', '§441', '§31']

A BILL to amend and reenact §31D-1-150 of the Code of West Virginia, 1931, as amended; to amend said code by adding thereto two new sections, designated §31D-7-740 and §31D-7-741; to amend said code by adding thereto a new section, designated §31D-8-834; to amend said code by adding thereto a new section, designated §31D-15-1540; and to amend said code by adding thereto a new section, designated §31D-16-1621, all relating generally to the accountability of a corporation=s political activities; defining additional terms; requiring annual authorization and approval by a majority of shareholders for corporations spending a yearly aggregate of $10,000 or more for political activities in this state and notice of such expenditures on corporate website; prohibiting political expenditures by corporations if a majority of shareholders are institutional investors prohibited from taking political positions; providing for director liability for spending without proper authorization; requiring disclosure of corporate political activities to shareholders and the public; authorizing shareholders to seek prorata rebates for their portion of investments spent by the corporation on any political expenditure or contribution the shareholder does not agree with; and applying these new requirements to foreign corporations.
That §31D-1-150 of the Code of West Virginia, 1931, as amended, be amended and reenacted; that said code be amended by adding thereto two new sections, designated §31D-7-740 and §31D-7-741; that said code be amended by adding thereto a new section, designated §31D-8-834; that said code be amended by adding thereto a new section, designated §31D-15-1540; and that said code be amended by adding thereto a new section, designated §31D-16-1621, all to read as follows:
(4) AContribution or expenditure@ means any monetary and nonmonetary political contributions and expenditures not deductible under Section 162 (e)(1)(B) of the Internal Revenue Code, including, but not limited to, contributions to or expenditures on behalf of political candidates, political parties, political committees and other political entities organized and operating under 26 U.S.C. §527 of the Internal Revenue Code and any portion of any dues or similar payments made to any tax exempt organization that is used for an expenditure or contribution if made directly by the corporation would not be deductible under Section 162 (e)(1)(B) of the Internal Revenue Code, any contribution or expenditure, as those terms are defined in 2 U.S.C. §431, as well as any contribution or expenditure defined under section two-a, article eight, chapter three of this code, and also includes any direct or indirect payment, distribution, loan, advance, deposit or gift of money, any services or anything of value (except a loan of money by a national or state bank made in accordance with the applicable banking laws and regulations and in the ordinary course of business) to any candidate, campaign committee or political party or organization, in connection with any election to any office. The term Acontribution or expenditure@ does not include:
(C) The establishment, administration and solicitation of contributions to a separate segregated fund to be utilized for political purposes by a corporation.
(13) AGeneral treasury funds@ means those moneys in possession of a corporation incorporated under the laws of the state in the normal course of business. General treasury funds may include, among others, funds from sales, accounts payable, loans, investments, bonds or debt instruments.
(16) AIssue advocacy campaign@ means contributions or expenditures for any communication to the general public intended to encourage the public to contact a government official regarding pending legislation, public policy or a government rule or regulation. Issue advocacy campaign does not include contributions or expenditures for registered lobbyists or other persons employed by the corporation to lobby directly state or federal government officials.
(17) AKnown at the time of the authorization vote@ means that, at the time the corporation seeks authorization from shareholders to spend corporate funds for political activities in this state: (A) The corporation=s officers, directors or employees have identified a specific political activity for the corporation to support or oppose; (B) corporate officers, directors or employees have taken steps to obligate funds to a political activity; or (C) the corporation has a regularly scheduled payment to a trade association or other entity to pay for a political activity in the next twelve months.
(18) AMajority of all shareholders@ means fifty percent plus one of all outstanding voting securities, as provided in section seven hundred twenty-one, article seven of this chapter. Shareholders not casting votes shall not count toward affirmative authorization under this chapter.
(20) APolitical activities@ means any contributions or expenditures made directly or indirectly to, or in support of or opposition to, any candidate, political party, committee, electioneering communication, ballot measure campaign, or an issue advocacy campaign. Political activities do not include activities defined as lobbying under any local, state or federal law.
(27) ASeparate segregated fund@ means a political action committee formed by a corporation for the purpose of making contributions to candidates for office or to political parties. A Aseparate segregated fund@ which supports federal candidates has the same meaning as that found in 2 U.S.C. §441b.
(24) (31) "State" when referring to a part of the United States, includes a state and commonwealth and a territory and insular possession of the United States and their agencies and governmental subdivisions.
(a) A corporation spending in the aggregate $10,000 or more of corporate treasury funds on political activities in this state shall comply with the requirements of this section and section seven hundred forty-one of this article, including the posting a notice, within forty-eight hours of the expenditure, on the website of the corporation.
(c) Notwithstanding the requirement of subsection (b) of this section for an annual shareholder vote to authorize any spending of $10,000 or more by the corporation for political activity, a corporation may request authorization for spending on political activities in this state on a more frequent basis. Any authorization request by the corporation that is not made during an annual authorization shall be considered a special authorization.
(d) If the corporation spends less than an aggregate of $10,000 in a twelve-month period for political activities in this state, it does not have to seek shareholder authorization for the spending.
(b) If known at the time of the shareholder vote, the corporation shall articulate whether the corporate treasury funds so authorized are intended to benefit or defeat specific candidates, ballot measures or issue advocacy campaigns or whether it will be paid to specific nonprofits or trade associations for political activities in this state;
(c) To be effective, the authorization vote must garner support from a majority of the corporation=s shareholders;
(d) A vote by the shareholders to approve or disapprove any spending of $10,000 or more by a corporation for a political activity is binding on the corporation;
(f) If a majority of a corporation's shares is owned by institutional investors that are prohibited from taking political positions, such as state and local pension funds, insurance companies, foundations, churches, colleges and universities, the corporation may not make expenditures for political activities.
(g) Notwithstanding any provision of this article to the contrary, shareholders of a corporation may request a pro rata rebate for that portion of their investments spent by the corporation on any political expenditures and contributions with which the shareholders disagree.
(d) It is a defense to liability imposed by this section:
§31D-16-1621. Disclosure of corporate political activities to shareholders; short title; findings.
(a) This section may be cited as the AWest Virginia Corporate Political Accountability Act of 2015@. The Legislature finds that:
(1) Although corporations cannot vote, corporations make significant political contributions and expenditures that directly or indirectly influence the election of candidates and support or oppose political causes at the local and state level. Decisions to use corporate treasury funds for political contributions and expenditures are currently made by corporate boards and executives, often without the knowledge or consent of shareholders.
(2) Corporations acting through their boards and executives have a fiduciary duty to conduct business in the best interests of the shareholders. Corporate boards and executives that use corporate funds to support and oppose political candidates, political parties and political causes in opposition to the interests of many or all of their shareholders may not be acting in the best interests of the corporation.
(3) Historically, shareholders of corporations have not had a way to know of, or to influence, the political activities of corporations they own. Shareholders and the public have a right to know how these corporations are spending their funds to make political contributions or expenditures benefitting candidates, political parties, and political causes.
(4) Corporations should be accountable to their shareholders prior to making political contributions or expenditures affecting local and state governance and public policy. Requiring the express approval of a corporation=s shareholders prior to making political contributions or expenditures will help establish accountability.
(5) If corporations use corporate general treasury funds for political expenditures, then those funds should be clearly reported to shareholders and shareholders should be able to authorize the use of corporate general treasury funds for political expenditures.
(b) At least quarterly during each fiscal year, a corporation that makes contributions or expenditures for political activities in this state shall notify its shareholders, in writing, of the nature of all its political activities in this state, funded by either its separate segregated fund or through its general corporate treasury, including contributions or expenditures made directly or indirectly.
(c) A report made pursuant to this section shall include the following:
(d) (1) The quarterly reports of political activities in this state by a corporation are public records.
(2) A copy of the reports filed pursuant to subsection (a) shall be posted for at least one year on the corporation=s website, if any.
NOTE: The purpose of this bill is to create the AWest Virginia Corporate Political Accountability Act of 2015@ relating to the accountability of a corporation=s political activities. It defines additional terms and requires annual authorization and approval by a majority of shareholders for corporations spending a yearly aggregate of $10,000 or more for political activities in this state; requires a corporation to post notice of such expenditures on the corporate website within forty-eight hours of the expenditure; prohibits political expenditures by corporations if a majority of shareholders are institutional investors prohibited from taking political positions. It provides for director liability for spending without proper authorization, requires disclosure of corporate political activities to shareholders and the public and applies these new requirements to foreign corporations. And, the bill permits shareholders to seek pro rata rebates for their portion of investments spent by the corporation on any political expenditure or contribution the shareholder does not agree with.