House Bill 1046 By: Representatives Frye of the 122nd, Roberts of the 52nd, Gisler of the 121st, Sanchez of the 42nd, Bell of the 75th, and others A BILL TO BE ENTITLED AN ACT To amend Title 14 of the Official Code of Georgia Annotated, relating to corporations, partnerships, and associations, so as to restrict the powers of business corporations, nonprofit corporations, partnerships, limited partnerships, and limited liability companies to only the powers the General Assembly expressly grants; to prohibit business corporations, nonprofit corporations, partnerships, limited partnerships, and limited liability companies from engaging in ballot issue activity and election activity; to provide for civil enforcement and enforcement by the Attorney General; to provide for equitable remedies; to provide for definitions; to provide for related matters; to provide for an effective date and applicability; to repeal conflicting laws; and for other purposes. BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA: SECTION 1. Title 14 of the Official Code of Georgia Annotated, relating to corporations, partnerships, and associations, is amended in Chapter 2, relating to business corporations, by revising Code Section 14-2-302, relating to general powers, as follows: "14-2-302. (a) As used in this Code section, the term: (1) 'Ballot issue activity' means paying, contributing, or expending money or anything of value to support or oppose a ballot question or initiative. (2) 'Election activity' means paying, contributing, or expending money or anything of value to support or oppose a candidate, political party, or political committee. (b) Every corporation has perpetual duration and succession in its corporate name, unless its articles of incorporation adopted on or after April 1, 1969, or an amendment thereto adopted on or after April 1, 1969, provides otherwise. Unless its articles of incorporation provide otherwise, every corporation has the same powers as an individual to do all things necessary or convenient to carry out its business and affairs, A corporation only has the powers expressly prescribed to it by the General Assembly, including to without limitation power: (1) To sue Sue, be sued, complain, and defend in its corporate name; (2) To have Have a corporate seal which may be altered at will, and to use it, or a facsimile of it, by impressing or affixing it or in any other manner reproducing it; (3) To make Make and amend bylaws, not inconsistent with its articles of incorporation or with the laws of this state, for managing the business and regulating the affairs of the corporation; (4) To purchase Purchase, receive, lease, or otherwise acquire, own, hold, improve, use, and otherwise deal with real or personal property or any legal or equitable interest in property, wherever located; (5) To sell Sell, convey, mortgage, pledge, lease, exchange, and otherwise dispose of all or any part of its property; (6) To purchase Purchase, receive, subscribe for, or otherwise acquire, own, hold, vote, use, sell, mortgage, lend, pledge, or otherwise dispose of, and deal in and with shares or other interests in, or obligations of, any other entity; (7) To make Make contracts and guarantees, incur liabilities, borrow money, issue its notes, bonds, and other obligations (which may be convertible into or include the option to purchase other securities of the corporation), and secure any of its obligations by mortgage or pledge of any of its property, franchises, or income; (8) To lend Lend money, invest and reinvest its funds, and receive and hold real and personal property as security for repayment; (9) To be Be a promoter, partner, member, associate, or manager of any partnership, joint venture, trust, or other entity; (10) To conduct Conduct its business, locate offices, and exercise the powers granted by this chapter within or without this state; (11) To elect Elect directors and appoint officers, employees, and agents of the corporation, define their duties, fix their compensation, and lend them money and credit; (12) To pay Pay pensions and establish pension plans, pension trusts, profit sharing plans, share bonus plans, share option plans, and benefit or incentive plans for any or all of its current or former directors, officers, employees, and agents; (13) To make Make donations for the public welfare or for charitable, scientific, or educational purposes; (14) To transact Transact any lawful business that will aid governmental policy; (15) To provide Provide insurance for its benefit on the life or physical or mental ability of any of its directors, officers, or employees or any other person whose death or physical or mental disability might cause financial loss to the corporation; or, pursuant to any contractual arrangement with any shareholder concerning the reacquisition of shares owned by him at his death or disability, on the life or physical or mental ability of that shareholder, for the purpose of carrying out such contractual arrangement; or, pursuant to any contract obligating the corporation, as part of compensation arrangements, or pursuant to any contract obligating the corporation as guarantor or surety, on the life of the principal obligor, and for these purposes the corporation is deemed to have an insurable interest in such persons; and (16) To make Make payments or donations or do any other act not inconsistent with law that furthers the business and affairs of the corporation. (c) A corporation shall not have the power to conduct ballot issue activity or election activity. (d) Ballot issue activity and election activity do not include any bona fide news story, commentary, or editorial distributed through the facilities of any broadcasting station or of any print, online, or digital newspaper, magazine, blog, or any other periodical publication, unless such broadcasting, print, online, or digital facilities are owned or controlled by a political party, political committee, or candidate." SECTION 2. Said title is further amended in said chapter by adding a new subsection to Code Section 14-2-304, relating to ultra vires, to read as follows: "(d) Any ballot issue activity or election activity, as defined in Code Section 14-2-302, conducted by a corporation is ultra vires and void. Such activities shall be subject to civil action by a member, shareholder, or the Attorney General for injunctive relief or revocation of the corporate charter." SECTION 3. Said title is further amended in Chapter 3, relating to nonprofit corporations, by revising and adding new subsections to Code Section 14-3-302, relating to duration and powers of corporation, as follows: "14-3-302. (a) As used in this Code section, the term: (1) 'Ballot issue activity' means paying, contributing, or expending money or anything of value to support or oppose a ballot question or initiative. (2) 'Election activity' means paying, contributing, or expending money or anything of value to support or oppose a candidate, political party, or political committee. (b) Every corporation has perpetual duration and succession in its corporate name, unless its articles of incorporation adopted on or after April 1, 1969, or in the case of a corporation existing prior to or on April 1, 1969, an amendment thereto adopted on or after April 1, 1969, provides otherwise. Unless its articles of incorporation provide otherwise, every corporation has the same powers as an individual to do all things necessary or convenient to carry out its business and affairs, A corporation only has the powers expressly prescribed to it by the General Assembly, including to without limitation power: (1) To sue Sue, be sued, complain, and defend in its corporate name; (2) To have Have a corporate seal, which may be altered at will, and to use it, or a facsimile of it, by impressing or affixing or in any other manner reproducing it; (3) To make Make and amend bylaws, not inconsistent with its articles of incorporation or with the laws of this state, for regulating and managing the affairs of the corporation; (4) To purchase Purchase, receive, lease, or otherwise acquire, own, hold, improve, use, and otherwise deal with real or personal property or any legal or equitable interest in property, wherever located; (5) To sell Sell, convey, mortgage, pledge, lease, exchange, and otherwise dispose of all or any part of its property; (6) To purchase Purchase, receive, subscribe for, or otherwise acquire, own, hold, vote, use, sell, mortgage, lend, pledge, or otherwise dispose of, and deal in and with shares or other interests in, or obligations of, any entity; (7) To make Make contracts and guaranties; incur liabilities; borrow money; issue notes, bonds, and other obligations; and secure any of its obligations by mortgage or pledge of any of its property, franchises, or income; (8) To lend Lend money, invest and reinvest its funds, and receive and hold real and personal property as security for repayment, except as limited by Code Sections 14-3-860 through 14-3-864; (9) To be Be a promoter, fiduciary, shareholder, partner, member, associate, or manager of any partnership, joint venture, trust, or other entity; (10) To conduct Conduct its activities, locate offices, and exercise the powers granted by this chapter within or without this state; (11) To elect Elect or appoint directors, officers, delegates, employees, and agents of the corporation; define their duties; fix their compensation; and lend them money and credit; (12) To pay Pay pensions and establish pension plans, pension trusts, and other benefit and incentive plans for any or all of its current or former directors, officers, employees, and agents; (13) To make Make donations not inconsistent with law for the public welfare or for charitable, religious, scientific, or educational purposes and for other purposes that further the corporate interest; (14) To impose Impose dues, assessments, admission fees, and transfer fees upon its members; (15) To provide Provide insurance for its benefit on the life or physical or mental ability of any of its directors, officers, or employees or any other person whose death or physical or mental disability might cause financial loss to the corporation; or, pursuant to any contract obligating the corporation, as part of compensation arrangements, or pursuant to any contract obligating the corporation as guarantor or surety, on the life of the principal obligor, and for these purposes the corporation is deemed to have an insurable interest in such persons; (16) To establish Establish conditions for admission of members, admit members, and issue memberships; (17) To carry Carry on a business; and (18) To do Do all things necessary or convenient, not inconsistent with law, to further the activities and affairs of the corporation. (c) A corporation shall not have the power to conduct ballot issue activity or election activity. (d) Ballot issue activity and election activity do not include any bona fide news story, commentary, or editorial distributed through the facilities of any broadcasting station or of any print, online, or digital newspaper, magazine, blog, or any other periodical publication, unless such broadcasting, print, online, or digital facilities are owned or controlled by a political party, political committee, or candidate." SECTION 4. Said title is further amended in said chapter by adding a new subsection to Code Section 14-3-304, relating to ultra vires, to read as follows: "(d) Any ballot issue activity or election activity, as defined in Code Section 14-3-302, conducted by a corporation is ultra vires and void. Such activities shall be subject to civil action by a member, shareholder, or the Attorney General for injunctive relief or revocation of the corporate charter." SECTION 5. Said title is further amended in Chapter 8, relating to partnerships, by adding a new Code section to read as follows: "14-8-65. (a) As used in this Code section, the term: (1) 'Ballot issue activity' means paying, contributing, or expending money or anything of value to support or oppose a ballot question or initiative. (2) 'Election activity' means paying, contributing, or expending money or anything of value to support or oppose a candidate, political party, or political committee. (b) A partnership only has the powers expressly prescribed to it by the General Assembly. (c) A partnership shall not have the power to conduct ballot issue activity or election activity. (d) Ballot issue activity and election activity do not include any bona fide news story, commentary, or editorial distributed through the facilities of any broadcasting station or of any print, online, or digital newspaper, magazine, blog, or any other periodical publication, unless such broadcasting, print, online, or digital facilities are owned or controlled by a political party, political committee, or candidate. (e) Any ballot issue activity or election activity conducted by a partnership is void. Such activities shall be subject to civil action by any partner or the Attorney General for injunctive relief or dissolution of such partnership." SECTION 6. Said title is further amended in Chapter 9, the "Georgia Revised Uniform Limited Partnership Act," by adding a new Code section to read as follows: "14-9-110. (a) As used in this Code section, the term: (1) 'Ballot issue activity' means paying, contributing, or expending money or anything of value to support or oppose a ballot question or initiative. (2) 'Election activity' means paying, contributing, or expending money or anything of value to support or oppose a candidate, political party, or political committee. (b) A limited partnership only has the powers expressly prescribed to it by the General Assembly. (c) A limited partnership shall not have the power to conduct ballot issue activity or election activity. (d) Ballot issue activity and election activity do not include any bona fide news story, commentary, or editorial distributed through the facilities of any broadcasting station or of any print, online, or digital newspaper, magazine, blog, or any other periodical publication, unless such broadcasting, print, online, or digital facilities are owned or controlled by a political party, political committee, or candidate. (e) Any ballot issue activity or election activity conducted by a limited partnership is void. Such activities shall be subject to civil action by any general partner or the Attorney General for injunctive relief or dissolution of such partnership." SECTION 7. Said title is further amended in Chapter 9A, related to limited partnerships, by adding a new Code section to read as follows: "14-9A-6. (a) As used in this Code section, the term: (1) 'Ballot issue activity' means paying, contributing, or expending money or anything of value to support or oppose a ballot question or initiative. (2) 'Election activity' means paying, contributing, or expending money or anything of value to support or oppose a candidate, political party, or political committee. (b) A limited partnership only has the powers expressly prescribed to it by the General Assembly. (c) A limited partnership shall not have the power to conduct ballot issue activity or election activity. (d) Ballot issue activity and election activity do not include any bona fide news story, commentary, or editorial distributed through the facilities of any broadcasting station or of any print, online, or digital newspaper, magazine, blog, or any other periodical publication, unless such broadcasting, print, online, or digital facilities are owned or controlled by a political party, political committee, or candidate. (e) Any ballot issue activity or election activity conducted by a limited partnership is void. Such activities shall be subject to civil action by any general partner or the Attorney General for injunctive relief or dissolution of such partnership." SECTION 8. Said title is further amended in Chapter 11, relating to limited liability companies, by revising Code Section 14-11-202, relating to powers of limited liability companies, as follows: "14-11-202. (a) As used in this Code section, the term: (1) 'Ballot issue activity' means paying, contributing, or expending money or anything of value to support or oppose a ballot question or initiative. (2) 'Election activity' means paying, contributing, or expending money or anything of value to support or oppose a candidate, political party, or political committee. (b) Each limited liability company formed in this state shall have only the powers expressly prescribed to it by the General Assembly same powers as any person has to do all things necessary to carry out its purpose, business, and affairs. (c) A limited liability corporation shall not have the power to conduct ballot issue activity or election activity. (d) Ballot issue activity and election activity do not include any bona fide news story, commentary, or editorial distributed through the facilities of any broadcasting station or of any print, online, or digital newspaper, magazine, blog, or any other periodical publication, unless such broadcasting, print, online, or digital facilities are owned or controlled by a political party, political committee, or candidate. (e) Any ballot issue activity or election activity conducted by a limited liability company is void. Such activities shall be subject to civil action by a member, shareholder, or the Attorney General for injunctive relief or dissolution." SECTION 9. This Act shall become effective upon its approval by the Governor or upon its becoming law without such approval and shall be applicable to ballot issue activity and election activity carried out on or after such date. SECTION 10. All laws and parts of laws in conflict with this Act are repealed.