Bill Text: NY S02952 | 2013-2014 | General Assembly | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Requires the authorization of certain political expenditures by the shareholders and the board of directors of public corporations; requires the comptroller to annually conduct a study on the compliance with the requirements of this act by public corporations and their management.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2014-04-07 - PRINT NUMBER 2952B [S02952 Detail]
Download: New_York-2013-S02952-Introduced.html
Bill Title: Requires the authorization of certain political expenditures by the shareholders and the board of directors of public corporations; requires the comptroller to annually conduct a study on the compliance with the requirements of this act by public corporations and their management.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2014-04-07 - PRINT NUMBER 2952B [S02952 Detail]
Download: New_York-2013-S02952-Introduced.html
S T A T E O F N E W Y O R K
________________________________________________________________________
2952
2013-2014 Regular Sessions
I N S E N A T E
January 25, 2013
___________
Introduced by Sen. HOYLMAN -- read twice and ordered printed, and when
printed to be committed to the Committee on Corporations, Authorities
and Commissions
AN ACT to amend the business corporation law, in relation to requiring
the authorization of certain political expenditures by the sharehold-
ers and the board of directors of public corporations; and to require
the comptroller to annually conduct a study on the compliance with the
requirements of this act by public corporations and their management
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. This act shall be known and may be cited as the "New York
2 shareholder protection act of 2013".
3 S 2. Legislative intent and purpose. The legislature hereby finds
4 that:
5 a. Corporations make significant political contributions and expendi-
6 tures that directly or indirectly influence the election of candidates
7 and support or oppose political causes. Decisions to use corporate funds
8 for political contributions and expenditures are usually made by corpo-
9 rate boards and executives, rather than shareholders.
10 b. Corporations, acting through their boards and executives, are obli-
11 gated to conduct business for the best interests of their owners, the
12 shareholders.
13 c. Historically, shareholders have not had a way to know, or to influ-
14 ence, the political activities of corporations they own. Shareholders
15 and the public have a right to know how corporations are spending their
16 funds to make political contributions or expenditures benefitting candi-
17 dates, political parties, and political causes.
18 d. Corporations should be accountable to their shareholders in making
19 political contributions or expenditures affecting Federal governance and
20 public policy. Requiring the express approval of a corporation's share-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08075-01-3
S. 2952 2
1 holders prior to making political contributions or expenditures will
2 establish necessary accountability.
3 S 3. The business corporation law is amended by adding two new
4 sections 609-a and 609-b to read as follows:
5 S 609-A. SHAREHOLDER APPROVAL OF CORPORATE EXPENDITURES FOR POLITICAL
6 ACTIVITIES.
7 (A) NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY, NO PUBLIC-
8 LY-HELD CORPORATION SUBJECT TO THE PROVISIONS OF THIS CHAPTER SHALL MAKE
9 ANY EXPENDITURE FOR OR TO FUND STATE, FEDERAL OR LOCAL POLITICAL ACTIV-
10 ITIES IN ANY FISCAL YEAR UNLESS SUCH EXPENDITURE IS APPROVED IN ADVANCE
11 BY A QUORUM OF SHAREHOLDERS OF ALL CLASSES AND SERIES OF SHARES OF THE
12 CORPORATION.
13 (B) ANY SOLICITATION OF ANY PROXY OR CONSENT OR AUTHORIZATION SEEKING
14 APPROVAL OF POLITICAL EXPENDITURES BY OR ON BEHALF OF A CORPORATION
15 SHALL BE SUBJECT TO ALL REQUIREMENTS OF SECTION SIX HUNDRED NINE OF THIS
16 ARTICLE AND SHALL:
17 (1) CONTAIN A DESCRIPTION OF THE SPECIFIC NATURE OF ANY EXPENDITURES
18 FOR POLITICAL ACTIVITIES PROPOSED TO BE MADE BY THE ISSUER FOR THE
19 FORTHCOMING FISCAL YEAR, TO THE EXTENT THE SPECIFIC NATURE IS KNOWN TO
20 THE ISSUER AND INCLUDING THE TOTAL AMOUNT OF SUCH PROPOSED EXPENDITURES;
21 AND
22 (2) PROVIDE FOR A SEPARATE SHAREHOLDER VOTE TO AUTHORIZE SUCH PROPOSED
23 EXPENDITURES IN SUCH AMOUNT.
24 (C) A VIOLATION OF THE PROVISIONS OF THIS SECTION SHALL BE CONSIDERED
25 A BREACH OF A FIDUCIARY DUTY OF THE OFFICERS AND DIRECTORS OF THE CORPO-
26 RATION WHO AUTHORIZED SUCH AN EXPENDITURE. THE OFFICERS AND DIRECTORS
27 WHO AUTHORIZE SUCH AN EXPENDITURE WITHOUT FIRST OBTAINING SUCH AUTHORI-
28 ZATION OF SHAREHOLDERS SHALL BE JOINTLY AND SEVERALLY LIABLE IN ANY
29 ACTION BROUGHT IN ANY COURT OF COMPETENT JURISDICTION TO ANY SHAREHOLDER
30 OR CLASS OF SHAREHOLDERS FOR THE AMOUNT OF SUCH EXPENDITURE.
31 (D) AS USED IN THIS SECTION:
32 (1) "EXPENDITURE FOR POLITICAL ACTIVITIES" MEANS:
33 (A) AN INDEPENDENT EXPENDITURE, AS SUCH TERM IS DEFINED IN SECTION
34 301(17) OF THE FEDERAL ELECTION CAMPAIGN ACT OF 1971 (2 U.S.C. 431(17));
35 (B) CONTRIBUTIONS TO ANY POLITICAL PARTY, COMMITTEE, OR ELECTIONEERING
36 COMMUNICATION, AS SUCH TERM IS DEFINED IN SECTION 304(F)(3)(A) OF THE
37 FEDERAL ELECTION CAMPAIGN ACT OF 1971 (2 U.S.C. 434(F)(3)(A)); AND
38 (C) DUES OR OTHER PAYMENTS TO TRADE ASSOCIATIONS OR OTHER TAX EXEMPT
39 ORGANIZATIONS THAT ARE, OR COULD REASONABLY BE ANTICIPATED TO BE, USED
40 FOR THE PURPOSES DESCRIBED IN CLAUSE (A) OF THIS SUBPARAGRAPH.
41 (2) SUCH TERM SHALL NOT INCLUDE:
42 (A) DIRECT LOBBYING EFFORTS THROUGH REGISTERED LOBBYISTS EMPLOYED OR
43 HIRED BY THE ISSUER;
44 (B) COMMUNICATIONS BY AN ISSUER TO ITS SHAREHOLDERS AND EXECUTIVE OR
45 ADMINISTRATIVE PERSONNEL AND THEIR FAMILIES; OR
46 (C) THE ESTABLISHMENT, ADMINISTRATION, AND SOLICITATION OF CONTRIB-
47 UTIONS TO A SEPARATE SEGREGATED FUND TO BE UTILIZED FOR POLITICAL
48 PURPOSES BY A CORPORATION.
49 (E) EACH INSTITUTIONAL INVESTMENT MANAGER SUBJECT TO THIS SECTION
50 SHALL, AT LEAST ANNUALLY, MAKE PUBLIC A STATEMENT OF HOW IT VOTED ON ANY
51 SHAREHOLDER VOTE PROVIDED FOR UNDER THIS SECTION THAT OCCURRED SINCE THE
52 MANAGER'S LAST SUCH STATEMENT, UNLESS SUCH VOTE IS OTHERWISE REQUIRED TO
53 BE REPORTED PUBLICLY BY RULE OR REGULATION OF THE SECRETARY OF STATE,
54 NOT LATER THAN ONE HUNDRED EIGHTY DAYS AFTER THE EFFECTIVE DATE OF THIS
55 SECTION.
S. 2952 3
1 (F) NOTWITHSTANDING ANY OTHER PROVISION OF FEDERAL OR STATE LAW, NO
2 PERSON MAY BRING ANY CIVIL, CRIMINAL, OR ADMINISTRATIVE ACTION AGAINST
3 ANY INSTITUTIONAL INVESTMENT MANAGER, OR ANY EMPLOYEE, OFFICER, OR
4 DIRECTOR THEREOF, BASED SOLELY UPON A DECISION OF THE INVESTMENT MANAGER
5 TO DIVEST FROM, OR NOT TO INVEST IN, SECURITIES OF A CORPORATION SUBJECT
6 TO THE PROVISIONS OF THIS SECTION BECAUSE OF EXPENDITURES FOR POLITICAL
7 ACTIVITIES MADE BY THAT CORPORATION.
8 (G) THE PROVISIONS OF SECTION SIX HUNDRED THIRTEEN OF THIS ARTICLE
9 SHALL NOT APPLY TO A VOTE OF THE SHAREHOLDERS AS PROVIDED IN THIS
10 SECTION.
11 S 609-B. BOARD APPROVAL OF CORPORATE EXPENDITURES FOR POLITICAL ACTIV-
12 ITIES.
13 (A) ANY INDIVIDUAL EXPENDITURE FOR POLITICAL ACTIVITIES, AS DEFINED IN
14 SECTION SIX HUNDRED NINE-A OF THIS ARTICLE, IN AN AMOUNT OF FIFTY THOU-
15 SAND DOLLARS OR MORE, BY A PUBLICLY-HELD CORPORATION SHALL BE APPROVED
16 IN ADVANCE OF THE MAKING OF THE EXPENDITURE BY A QUORUM, AS DEFINED IN
17 SECTION SEVEN HUNDRED SEVEN OF THIS CHAPTER, OF THE BOARD OF DIRECTORS
18 OF THE CORPORATION. THE CORPORATION SHALL MAKE PUBLICLY AVAILABLE THE
19 INDIVIDUAL VOTES OF THE DIRECTORS REQUIRED BY THIS PARAGRAPH WITHIN
20 FORTY-EIGHT HOURS OF THE VOTE BY THE BOARD OF DIRECTORS, INCLUDING POST-
21 ING SUCH RESULTS IN A CLEAR AND CONSPICUOUS LOCATION ON THE INTERNET
22 WEBSITE OF THE CORPORATION.
23 (B) FOR PURPOSES OF DETERMINING WHETHER AN EXPENDITURE FOR POLITICAL
24 ACTIVITIES BY AN ISSUER UNDER THE SECURITIES EXCHANGE ACT OF 1934 IS AN
25 INDEPENDENT EXPENDITURE UNDER THE FEDERAL ELECTION CAMPAIGN ACT OF 1971,
26 THE EXPENDITURE MAY NOT BE TREATED AS MADE IN CONCERT OR COOPERATION
27 WITH, OR AT THE REQUEST OR SUGGESTION OF, ANY CANDIDATE OR COMMITTEE
28 SOLELY ON THE GROUNDS THAT ANY DIRECTOR OF THE ISSUER VOTED ON THE
29 EXPENDITURE AS REQUIRED UNDER SECTION SIX HUNDRED NINE-A OF THIS ARTI-
30 CLE.
31 (C) NOTWITHSTANDING THE PROVISIONS OF SECTION SIX HUNDRED ONE OF THIS
32 ARTICLE, WITHIN ONE HUNDRED EIGHTY DAYS OF THE EFFECTIVE DATE OF THIS
33 SECTION, EVERY CORPORATION SUBJECT TO THE PROVISIONS OF THIS CHAPTER
34 SHALL AMEND ITS CORPORATE BY-LAWS TO EXPRESSLY PROVIDE FOR A VOTE OF THE
35 SHAREHOLDERS ON ANY EXPENDITURE FOR POLITICAL ACTIVITIES, AS PROVIDED IN
36 SECTION SIX HUNDRED NINE-A OF THIS ARTICLE, AND TO PROVIDE FOR A VOTE BY
37 THE DIRECTORS OF THE BOARD OF THE CORPORATION ISSUER ON ANY INDIVIDUAL
38 EXPENDITURE FOR POLITICAL ACTIVITIES IN EXCESS OF FIFTY THOUSAND DOLLARS
39 AS PROVIDED IN THIS SECTION. THE BY-LAWS OF EVERY NEW ENTITY INCORPO-
40 RATED IN THE STATE AFTER THE EFFECTIVE DATE OF THIS SECTION SHALL
41 INCLUDE SUCH PROVISIONS.
42 (D) A VIOLATION OF THE PROVISIONS OF THIS SECTION SHALL BE CONSIDERED
43 A BREACH OF A FIDUCIARY DUTY OF THE OFFICERS AND DIRECTORS OF THE CORPO-
44 RATION WHO AUTHORIZED SUCH AN EXPENDITURE. THE OFFICERS AND DIRECTORS
45 WHO AUTHORIZE SUCH AN EXPENDITURE WITHOUT FIRST OBTAINING SUCH AUTHORI-
46 ZATION OF SHAREHOLDERS SHALL BE JOINTLY AND SEVERALLY LIABLE IN ANY
47 ACTION BROUGHT IN ANY COURT OF COMPETENT JURISDICTION TO ANY SHAREHOLDER
48 OR CLASS OF SHAREHOLDERS FOR THE AMOUNT OF SUCH EXPENDITURE.
49 S 4. Not later than one hundred eighty days after the effective date
50 of this act, the secretary of state, or his or her designee, shall
51 implement rules and regulations to require corporations to disclose
52 quarterly any expenditure for political activities (as such term is
53 defined in section 609-a of the business corporation law) made during
54 the preceding quarter and the individual votes by board members author-
55 izing such expenditures. Such a report shall be filed with the secretary
56 of state and provided to shareholders and shall include:
S. 2952 4
1 1. the date of the expenditures;
2 2. the amount of the expenditures;
3 3. the name or identity of the candidate, political party, committee,
4 or electioneering communication, as such term is defined in section
5 304(f)(3)(A) of the Federal Election Campaign Act of 1971 (2 U.S.C.
6 434(f)(3)(A)); and
7 4. if the expenditures were made for or against a candidate, including
8 an electioneering communication, the office sought by the candidate and
9 the political party affiliation of the candidate.
10 The secretary of state, or his or her designee, shall ensure that, to
11 the greatest extent practicable, the reports required by this act are
12 publicly available through the secretary of state website in a manner
13 that is searchable, sortable, and downloadable.
14 S 5. The state comptroller shall annually conduct a study on the
15 compliance with the requirements of this act by public corporations and
16 their management. Not later than April 1 of each year, the state comp-
17 troller shall submit a report of such study to the governor, the tempo-
18 rary president of the senate and the speaker of the assembly.
19 S 6. If any provision of this act, an amendment made by this act, or
20 the application of such provision or amendment to any person or circum-
21 stance is held to be unconstitutional, the remainder of this act, the
22 amendments made by this act, and the application of such provision or
23 amendment to any person or circumstance shall not be affected thereby.
24 S 7. This act shall take effect on the first of January next succeed-
25 ing the date upon which this act shall have become a law.
