Source: http://www.wvlegislature.gov/Bill_Status/bills_text.cfm?billdoc=HB3098%20intr.htm&yr=2014&sesstype=RS&i=3098
Timestamp: 2018-03-19 23:19:29
Document Index: 300089552

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

(By Delegates Manchin, Poore, Hunt,
Wells, Pino, Caputo and Longstreth)
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 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; providing for director liability for spending without proper authorization; requiring disclosure of corporate political activities to shareholders and the public; 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) "Contribution 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, or 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 "contribution or expenditure" does not include:
_____(A) Communications by a corporation to its stockholders and executive or administrative personnel and their families on any subject;
_____(B) Nonpartisan registration and get-out-the-vote campaigns by
_____(C) The establishment, administration, and solicitation of contributions to a separate segregated fund to be utilized for political purposes by a corporation.
_____(4) (5) "Corporation" or "domestic corporation" means a corporation for profit, which is not a foreign corporation, incorporated under or subject to the provisions of this chapter.
_____(12) (14) "Governmental subdivision" includes, but is not limited to, authorities, counties, districts and municipalities.
_____(17) "Known 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) "Majority 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.
_____(14) (19) "Person" includes, but is not limited to, an individual and an entity.
_____(15) (21) "Principal office" means the office so designated in the return required pursuant to section three, article twelve-c, chapter eleven of this code where the principal executive offices of a domestic or foreign corporation are located.
_____(21) (28) "Shareholder" means the person in whose name shares are registered in the records of a corporation or the beneficial owner of shares to the extent of the rights granted by a nominee certificate on file with a corporation.
_____(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.
_____(b) Any proxy or consent or authorization for an annual meeting of the shareholders of a corporation held pursuant to section seven hundred one of this article, or a special meeting held pursuant to section seven hundred two of this article, shall provide for a separate resolution subject to shareholder vote to approve any spending of $10,000 or more by the corporation for any political activity.
_____(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 deemed 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 such spending.
_____(a) When seeking shareholder authorization for expenditures for political activities in this state, the corporation shall request the authority to spend a maximum dollar amount in the next twelve months;
_____(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 shall be binding on the corporation;
_____(e) Notwithstanding the requirement of subsection (b), section seven hundred forty of this article for an annual shareholder vote to authorize any spending of $10,000 or more by the corporation for any political activity, a corporation may request a special authorization for additional spending on political activities in this state, provided that:
_____(1) All spending on political activities in this state of $10,000 or more shall be authorized by a shareholder majority vote; and
_____(2) For any special authorization, the corporation shall articulate whether the corporate treasury funds so authorized are intended to benefit or defeat candidates, ballot measures or issue advocacy campaigns, or will be paid to specific nonprofits or trade associations for political activities in this state, at the time the special authorization is requested.
§31D-8-834. Directors' liability for unlawful political __ expenditures.___________
__(a) A director who votes for or assents to a expenditure or contribution without the authorization of shareholders pursuant to section seven hundred forty, article seven of this chapter, is personally liable to the corporation for:
__(1) The amount of the unauthorized expenditure or contribution;
__(2) Damages in respect of any loss or damage sustained by the corporation as a result of the unauthorized expenditure or contribution; and
__(3) Interest on the amount of the unauthorized expenditure or contribution for the period:
__(A) Beginning with the date when the expenditure or contribution was made or incurred; and
__(B) Ending with the date when that amount is repaid to the corporation.
__(b) Where two or more directors are subject to liability pursuant to this section, each director is jointly and severally liable.
__(c) Where only part of any expenditure or contribution was made or incurred in violation of the provisions of section seven hundred forty, article seven of this chapter, this section applies only to that portion made or incurred in violation of section seven hundred forty, article seven of this chapter._____
__(d) It shall be a defense to liability imposed by this section:
__(1) If the unauthorized expenditure or contribution has been repaid to the corporation, together with any interest on that amount due under subdivision (3), subsection (a) of this section;
__(2) That repayment has been approved by the shareholders; and
__(3) The notice to shareholders of the meeting during which full disclosure is made, the contents of the notice include:
__(A) The circumstances in which the unauthorized expenditure or contribution; and
__(B) The circumstances in which, and the person or persons by whom, the repayment was made.
§31D-15-1540. Applicability of provisions in this chapter related __to political activity to foreign corporations.
__Prior to engaging in any political activities in this state, a foreign corporation shall comply with the requirements of sections seven hundred forty and seven hundred forty-one, article seven of this chapter, section eight hundred thirty-four, article eight of this chapter, and section one thousand six hundred twenty- one, article sixteen of this chapter, inclusively.
§31D-16-1621. Disclosure of corporate political activities to __shareholders.
__(a) 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.
__(b) A report made pursuant to this section shall include the following:
__(1) The date of the contributions or expenditures;
__(2) The amount of the contributions or expenditures;
__(3) The identity of the candidate, political party, committee, electioneering communication, ballot measure campaign or issue advocacy campaign;
__(4) If the contributions or expenditures were made for or against a candidate, including an electioneering communication as defined in section one-a, article eight, chapter three of this code, the office sought by the candidate and the political party affiliation of the candidate;
__(5) If the contributions or expenditures were made for or against a ballot measure, the purpose of the measure and whether the contributions or expenditures were made in support or opposition to the ballot measure;
__(6) If the contributions or expenditures were made for or against an issue advocacy campaign, the nature of the political issue and whether the contributions were made in support or opposition to the political issue; and
__(7) All expenditures made by a separate segregated fund affiliated with the corporation.
__(c) (1) The quarterly reports of political activities in this state by a corporation shall be 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 the bill is to address the accountability of a corporation's political activities. The bill 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. The bill provides for director liability for spending without proper authorization. The bill requires disclosure of corporate political activities to shareholders and the public. The bill applies these new requirements to foreign corporations. The bill defines new terms.
§31D-7-740, §31D-7-741, §31D-8-834, §31D-15-1540 and §31D-16- 1621 are new; therefore, they have been completely underscored.