Senate Bill 600 By: Senators Parkes of the 7th, Orrock of the 36th, Parent of the 44th, Jones II of the 22nd, Merritt of the 9th 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 a short title; to provide for legislative findings; to provide for purposes; 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. This Act shall be known and may be cited as the "Georgia Corporate Power Reset Act." SECTION 2. The General Assembly finds that: (1) All political power in this state is inherent in the people of this state; (2) A corporation or other artificial person is a creation of statute and only exists by virtue of the authority granted by the state. Such creation is a privilege, not a right; (3) Under the Constitution of Georgia and Code Section 14-2-102, the General Assembly has expressly reserved the power to amend or repeal the laws governing corporations and other artificial persons, and all such entities exist subject to that reservation of power; (4) Broad statutory grants of power to corporations and other natural persons, including provisions authorizing corporations and other artificial persons to have the same power as an individual to do all things necessary or convenient to carry out their purposes, have been construed to include powers to spend money or other things of value to influence elections and other ballot measures; and (5) Such political spending authority was never intended to be among the powers granted to corporations and other artificial entities organized or authorized under the laws of this state. SECTION 3. The purposes of this Act are to: (1) Revoke any prior grants of powers that may be construed to authorize election activity or ballot-issue activity; (2) Grant only those powers necessary or convenient to carry out lawful business, charitable, or professional purposes while expressly excluding political activity; (3) Apply a uniform rule across artificial persons governed by Title 14; (4) Preserve the constitutional rights of natural persons; and (5) Define the powers that apply to corporations and other natural persons and not regulate speech by natural persons. SECTION 4. 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 the recall of a public officer holding elective office, any proposed constitutional amendment, a state-wide referendum, or a proposed question which is to appear on the ballot in any state, county, or municipal election. (2) 'Election activity' means paying, contributing, or expending money or anything of value to support or oppose a candidate, political party or body, or political committee, whether established pursuant to federal or state law. (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 5. 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 or shareholder for injunctive relief, or the Attorney General for civil penalties totaling the value of the ballot issue activity or election activity, injunctive relief, or revocation of the corporate charter." SECTION 6. Said title is further amended in Chapter 3, relating to nonprofit corporations, by revising 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 the recall of a public officer holding elective office, any proposed constitutional amendment, a state-wide referendum, or a proposed question which is to appear on the ballot in any state, county, or municipal election. (2) 'Election activity' means paying, contributing, or expending money or anything of value to support or oppose a candidate, political party or body, or political committee, whether established pursuant to federal or state law. (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 7. 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 or shareholder for injunctive relief, or the Attorney General for civil penalties totaling the value of the ballot issue activity or election activity, injunctive relief, or revocation of the corporate charter." SECTION 8. 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 the recall of a public officer holding elective office, any proposed constitutional amendment, a state-wide referendum, or a proposed question which is to appear on the ballot in any state, county, or municipal election. (2) 'Election activity' means paying, contributing, or expending money or anything of value to support or oppose a candidate, political party or body, or political committee, whether established pursuant to federal or state law. (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 for injunctive relief, or the Attorney General for civil penalties totaling the value of the ballot issue activity or election activity, injunctive relief, or dissolution of such partnership." SECTION 9. 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 the recall of a public officer holding elective office, any proposed constitutional amendment, a state-wide referendum, or a proposed question which is to appear on the ballot in any state, county, or municipal election. (2) 'Election activity' means paying, contributing, or expending money or anything of value to support or oppose a candidate, political party or body, or political committee, whether established pursuant to federal or state law. (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 for injunctive relief, or the Attorney General for civil penalties totaling the value of the ballot issue activity or election activity, injunctive relief, or dissolution of such partnership." SECTION 10. 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 the recall of a public officer holding elective office, any proposed constitutional amendment, a state-wide referendum, or a proposed question which is to appear on the ballot in any state, county, or municipal election. (2) 'Election activity' means paying, contributing, or expending money or anything of value to support or oppose a candidate, political party or body, or political committee, whether established pursuant to federal or state law. (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 11. 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 the recall of a public officer holding elective office, any proposed constitutional amendment, a state-wide referendum, or a proposed question which is to appear on the ballot in any state, county, or municipal election. (2) 'Election activity' means paying, contributing, or expending money or anything of value to support or oppose a candidate, political party or body, or political committee, whether established pursuant to federal or state law. (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 for injunctive relief, or the Attorney General for civil penalties totaling the value of the ballot issue activity or election activity, injunctive relief, or dissolution." SECTION 12. 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 13. All laws and parts of laws in conflict with this Act are repealed.