SB600: SB600 "Georgia Corporate Power Reset Act"; enact

26 LC 62 0322 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, re lating to corporations,1 partnerships, and associations, so as to restrict the powers of business corporations, nonprofit2 corporations, partnerships, limited partnerships, and limited liability companies to only the3 powers the General Assembly expressly grants; to prohibit business corporations, nonprofit4 corporations, partnerships, limited partnerships, and limited l iability companies from5 engaging in ballot issue activity and election activity; to provide for civil enforcement and6 enforcement by the Attorney General; to provide for equitable r emedies; to provide for7 definitions; to provide for a short title; to provide for legis lative findings; to provide for8 purposes; to provide for related matters; to provide for an effective date and applicability; to9 repeal conflicting laws; and for other purposes.10 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:11 SECTION 1.12 This Act shall be known and may be cited as the "Georgia Corporate Power Reset Act."13 S. B. 600 - 1 - 26 LC 62 0322 SECTION 2.14 The General Assembly finds that:15 (1) All political power in this state is inherent in the people of this state;16 (2) A corporation or other artificial person is a creation of statute and only exists by virtue17 of the authority granted by the state. Such creation is a privilege, not a right;18 (3) Under the Constitution of Georgia and Code Section 14-2-102, the General Assembly19 has expressly reserved the power to amend or repeal the laws governing corporations and20 other artificial persons, and all such entities exist subject to that reservation of power;21 (4) Broad statutory grants of power to corporations and other natural persons, including22 provisions authorizing corporations and other artificial persons to have the same power as23 an individual to do all things necessary or convenient to carry out their purposes, have been24 construed to include powers to spend money or other things of value to influence elections25 and other ballot measures; and26 (5) Such political spending authority was never intended to be among the powers granted27 to corporations and other artificial entities organized or authorized under the laws of this28 state.29 SECTION 3.30 The purposes of this Act are to:31 (1) Revoke any prior grants of powers that may be construed to authorize election activity32 or ballot-issue activity;33 (2) Grant only those powers necessary or convenient to carry o ut lawful business,34 charitable, or professional purposes while expressly excluding political activity;35 (3) Apply a uniform rule across artificial persons governed by Title 14;36 (4) Preserve the constitutional rights of natural persons; and37 (5) Define the powers that apply to corporations and other natural persons and not regulate38 speech by natural persons.39 S. B. 600 - 2 - 26 LC 62 0322 SECTION 4.40 Title 14 of the Official Code of Georgia Annotated, relating to corporations, partnerships,41 and associations, is amended in Chapter 2, relating to business corporations, by revising42 Code Section 14-2-302, relating to general powers, as follows:43 "14-2-302.44 (a) As used in this Code section, the term:45 (1) 'Ballot issue activity' means paying, contributing, or expending money or anything46 of value to support or oppose the recall of a public officer ho lding elective office, any47 proposed constitutional amendment, a state-wide referendum, or a proposed question48 which is to appear on the ballot in any state, county, or municipal election.49 (2) 'Election activity' means paying, contributing, or expendi ng money or anything of50 value to support or oppose a candidate, political party or body , or political committee,51 whether established pursuant to federal or state law.52 (b) Every corporation has perpetual duration and succession in its corporate name, unless53 its articles of incorporation adopted on or after April 1, 1969 , or an amendment thereto54 adopted on or after April 1, 1969, provides otherwise. Unless its articles of incorporation55 provide otherwise, every corporation has the same powers as an individual to do all things56 necessary or convenient to carry out its business and affairs, A corporation only has the57 powers expressly prescribed to it by the General Assembly, including to without limitation58 power:59 (1) To sue Sue, be sued, complain, and defend in its corporate name;60 (2) To have Have a corporate seal which may be altered at will, and to use it, or a61 facsimile of it, by impressing or affixing it or in any other manner reproducing it;62 (3) To make Make and amend bylaws, not inconsistent with its articles of incorporation63 or with the laws of this state, for managing the business and regulating the affairs of the64 corporation;65 S. B. 600 - 3 - 26 LC 62 0322 (4) To purchase Purchase, receive, lease, or otherwise acquire, own, hold, improve, use,66 and otherwise deal with real or personal property or any legal or equitable interest in67 property, wherever located;68 (5) To sell Sell, convey, mortgage, pledge, lease, exchange, and otherwise dispose of all69 or any part of its property;70 (6) To purchase Purchase, receive, subscribe for, or otherwise acquire, own, hold, vote,71 use, sell, mortgage, lend, pledge, or otherwise dispose of, and deal in and with shares or72 other interests in, or obligations of, any other entity;73 (7) To make Make contracts and guarantees, incur liabilities, borrow money, iss ue its74 notes, bonds, and other obligations (which may be convertible into or include the option75 to purchase other securities of the corporation), and secure an y of its obligations by76 mortgage or pledge of any of its property, franchises, or income;77 (8) To lend Lend money, invest and reinvest its funds, and receive and hold rea l and78 personal property as security for repayment;79 (9) To be Be a promoter, partner, member, associate, or manager of any partnership, joint80 venture, trust, or other entity;81 (10) To conduct Conduct its business, locate offices, and exercise the powers granted by82 this chapter within or without this state;83 (11) To elect Elect directors and appoint officers, employees, and agents of the84 corporation, define their duties, fix their compensation, and lend them money and credit;85 (12) To pay Pay pensions and establish pension plans, pension trusts, profit s haring86 plans, share bonus plans, share option plans, and benefit or incentive plans for any or all87 of its current or former directors, officers, employees, and agents;88 (13) To make Make donations for the public welfare or for charitable, scientific , or89 educational purposes;90 (14) To transact Transact any lawful business that will aid governmental policy;91 S. B. 600 - 4 - 26 LC 62 0322 (15) To provide Provide insurance for its benefit on the life or physical or mental ability92 of any of its directors, officers, or employees or any other person whose death or physical93 or mental disability might cause financial loss to the corporat ion; or, pursuant to any94 contractual arrangement with any shareholder concerning the rea cquisition of shares95 owned by him at his death or disability, on the life or physica l or mental ability of that96 shareholder, for the purpose of carrying out such contractual arrangement; or, pursuant97 to any contract obligating the corporation, as part of compensa tion arrangements, or98 pursuant to any contract obligating the corporation as guarantor or surety, on the life of99 the principal obligor, and for these purposes the corporation i s deemed to have an100 insurable interest in such persons; and101 (16) To make Make payments or donations or do any other act not inconsistent with law102 that furthers the business and affairs of the corporation.103 (c) A corporation shall not have the power to conduct ballot i ssue activity or election104 activity.105 (d) Ballot issue activity and election ac tivity do not include any bona fide news story,106 commentary, or editorial distributed through the facilities of any broadcasting station or of107 any print, online, or digital newspaper, magazine, blog, or any other periodical publication,108 unless such broadcasting, print, online, or digital facilities are owned or controlled by a109 political party, political committee, or candidate."110 SECTION 5.111 Said title is further amended in said chapter by adding a new s ubsection to Code Section112 14-2-304, relating to ultra vires, to read as follows:113 "(d) Any ballot issue activity or election activity, as defined in Code Section 14-2-302,114 conducted by a corporation is ultra vires and void. Such activities shall be subject to civil115 action by a member or shareholder for injunctive relief, or the Attorney General for civil116 S. B. 600 - 5 - 26 LC 62 0322 penalties totaling the value of the ballot issue activity or election activity, injunctive relief,117 or revocation of the corporate charter."118 SECTION 6.119 Said title is further amended in Chapter 3, relating to nonprof it corporations, by revising120 Code Section 14-3-302, relating to duration and powers of corporation, as follows:121 "14-3-302.122 (a) As used in this Code section, the term:123 (1) 'Ballot issue activity' means paying, contributing, or expending money or anything124 of value to support or oppose the recall of a public officer ho lding elective office, any125 proposed constitutional amendment, a state-wide referendum, or a proposed question126 which is to appear on the ballot in any state, county, or municipal election.127 (2) 'Election activity' means paying, contributing, or expendi ng money or anything of128 value to support or oppose a candidate, political party or body , or political committee,129 whether established pursuant to federal or state law.130 (b) Every corporation has perpetual duration and succession in its corporate name, unless131 its articles of incorporation adopted on or after April 1, 1969, or in the case of a corporation132 existing prior to or on April 1, 1969, an amendment thereto ado pted on or after133 April 1, 1969, provides otherwise. Unless its articles of incorporation provide otherwise,134 every corporation has the same powers as an individual to do al l things necessary or135 convenient to carry out its business and affairs, A corporation only has the powers136 expressly prescribed to it by the General Assembly, including to without limitation power:137 (1) To sue Sue, be sued, complain, and defend in its corporate name;138 (2) To have Have a corporate seal, which may be altered at will, and to use it, or a139 facsimile of it, by impressing or affixing or in any other manner reproducing it;140 (3) To make Make and amend bylaws, not inconsistent with its articles of incorporation141 or with the laws of this state, for regulating and managing the affairs of the corporation;142 S. B. 600 - 6 - 26 LC 62 0322 (4) To purchase Purchase, receive, lease, or otherwise acquire, own, hold, improve, use,143 and otherwise deal with real or personal property or any legal or equitable interest in144 property, wherever located;145 (5) To sell Sell, convey, mortgage, pledge, lease, exchange, and otherwise dispose of all146 or any part of its property;147 (6) To purchase Purchase, receive, subscribe for, or otherwise acquire, own, hold, vote,148 use, sell, mortgage, lend, pledge, or otherwise dispose of, and deal in and with shares or149 other interests in, or obligations of, any entity;150 (7) To make Make contracts and guaranties; incur liabilities; borrow money; issue notes,151 bonds, and other obligations; and secure any of its obligations by mortgage or pledge of152 any of its property, franchises, or income;153 (8) To lend Lend money, invest and reinvest its funds, and receive and hold rea l and154 personal property as security for repayment, except as limited by Code Sections 14-3-860155 through 14-3-864;156 (9) To be Be a promoter, fiduciary, shareholder, partner, member, associate, or manager157 of any partnership, joint venture, trust, or other entity;158 (10) To conduct Conduct its activities, locate offices, and exercise the powers granted159 by this chapter within or without this state;160 (11) To elect Elect or appoint directors, officers, delegates, employees, and agents of the161 corporation; define their duties; fix their compensation; and lend them money and credit;162 (12) To pay Pay pensions and establish pension plans, pension trusts, and other benefit163 and incentive plans for any or all of its current or former directors, officers, employees,164 and agents;165 (13) To make Make donations not inconsistent with law for the public welfare or for166 charitable, religious, scientific, or educational purposes and for other purposes that further167 the corporate interest;168 S. B. 600 - 7 - 26 LC 62 0322 (14) To impose Impose dues, assessments, admission fees, and transfer fees upon its169 members;170 (15) To provide Provide insurance for its benefit on the life or physical or mental ability171 of any of its directors, officers, or employees or any other person whose death or physical172 or mental disability might cause financial loss to the corporat ion; or, pursuant to any173 contract obligating the corporation, as part of compensation ar rangements, or pursuant174 to any contract obligating the corporation as guarantor or sure ty, on the life of the175 principal obligor, and for these purposes the corporation is deemed to have an insurable176 interest in such persons;177 (16) To establish Establish conditions for admission of members, admit members, and178 issue memberships;179 (17) To carry Carry on a business; and180 (18) To do Do all things necessary or convenient, not inconsistent with law, to further181 the activities and affairs of the corporation.182 (c) A corporation shall not have the power to conduct ballot i ssue activity or election183 activity.184 (d) Ballot issue activity and election activity do not include any bona fide news story,185 commentary, or editorial distributed through the facilities of any broadcasting station or of186 any print, online, or digital newspaper, magazine, blog, or any other periodical publication,187 unless such broadcasting, print, online, or digital facilities are owned or controlled by a188 political party, political committee, or candidate."189 SECTION 7.190 Said title is further amended in said chapter by adding a new s ubsection to Code Section191 14-3-304, relating to ultra vires, to read as follows:192 "(d) Any ballot issue activity or election activity, as defined in Code Section 14-3-302,193 conducted by a corporation is ultra vires and void. Such activities shall be subject to civil194 S. B. 600 - 8 - 26 LC 62 0322 action by a member or shareholder for injunctive relief, or the Attorney General for civil195 penalties totaling the value of the ballot issue activity or election activity, injunctive relief,196 or revocation of the corporate charter."197 SECTION 8.198 Said title is further amended in Chapter 8, relating to partner ships, by adding a new Code199 section to read as follows:200 "14-8-65.201 (a) As used in this Code section, the term:202 (1) 'Ballot issue activity' means paying, contributing, or expending money or anything203 of value to support or oppose the recall of a public officer ho lding elective office, any204 proposed constitutional amendment, a state-wide referendum, or a proposed question205 which is to appear on the ballot in any state, county, or municipal election.206 (2) 'Election activity' means paying, contributing, or expendi ng money or anything of207 value to support or oppose a candidate, political party or body , or political committee,208 whether established pursuant to federal or state law.209 (b) A partnership only has the powers expressly prescribed to it by the General Assembly.210 (c) A partnership shall not have the power to conduct ballot i ssue activity or election211 activity.212 (d) Ballot issue activity and election activity do not include any bona fide news story,213 commentary, or editorial distributed through the facilities of any broadcasting station or of214 any print, online, or digital newspaper, magazine, blog, or any other periodical publication,215 unless such broadcasting, print, online, or digital facilities are owned or controlled by a216 political party, political committee, or candidate.217 (e) Any ballot issue activity or election activity conducted by a partnership is void. Such218 activities shall be subject to civil action by any partner for injunctive relief, or the Attorney219 S. B. 600 - 9 - 26 LC 62 0322 General for civil penalties totaling the value of the ballot issue activity or election activity,220 injunctive relief, or dissolution of such partnership."221 SECTION 9.222 Said title is further amended in Chapter 9, the "Georgia Revised Uniform Limited Partnership223 Act," by adding a new Code section to read as follows:224 "14-9-110.225 (a) As used in this Code section, the term:226 (1) 'Ballot issue activity' means paying, contributing, or expending money or anything227 of value to support or oppose the recall of a public officer ho lding elective office, any228 proposed constitutional amendment, a state-wide referendum, or a proposed question229 which is to appear on the ballot in any state, county, or municipal election.230 (2) 'Election activity' means paying, contributing, or expendi ng money or anything of231 value to support or oppose a candidate, political party or body , or political committee,232 whether established pursuant to federal or state law.233 (b) A limited partnership only has the powers expressly prescr ibed to it by the General234 Assembly.235 (c) A limited partnership shall not have the power to conduct ballot issue activity or236 election activity.237 (d) Ballot issue activity and election activity do not include any bona fide news story,238 commentary, or editorial distributed through the facilities of any broadcasting station or of239 any print, online, or digital newspaper, magazine, blog, or any other periodical publication,240 unless such broadcasting, print, online, or digital facilities are owned or controlled by a241 political party, political committee, or candidate.242 (e) Any ballot issue activity or election activity conducted by a limited partnership is void. 243 Such activities shall be subject to civil action by any general partner for injunctive relief,244 S. B. 600 - 10 - 26 LC 62 0322 or the Attorney General for civil penalties totaling the value of the ballot issue activity or245 election activity, injunctive relief, or dissolution of such partnership."246 SECTION 10.247 Said title is further amended in Chapter 9A, related to limited partnerships, by adding a new248 Code section to read as follows:249 "14-9A-6.250 (a) As used in this Code section, the term:251 (1) 'Ballot issue activity' means paying, contributing, or expending money or anything252 of value to support or oppose the recall of a public officer ho lding elective office, any253 proposed constitutional amendment, a state-wide referendum, or a proposed question254 which is to appear on the ballot in any state, county, or municipal election.255 (2) 'Election activity' means paying, contributing, or expendi ng money or anything of256 value to support or oppose a candidate, political party or body , or political committee,257 whether established pursuant to federal or state law.258 (b) A limited partnership only has the powers expressly prescr ibed to it by the General259 Assembly.260 (c) A limited partnership shall not have the power to conduct ballot issue activity or261 election activity.262 (d) Ballot issue activity and election activity do not include any bona fide news story,263 commentary, or editorial distributed through the facilities of any broadcasting station or of264 any print, online, or digital newspaper, magazine, blog, or any other periodical publication,265 unless such broadcasting, print, online, or digital facilities are owned or controlled by a266 political party, political committee, or candidate.267 (e) Any ballot issue activity or election activity conducted by a limited partnership is void. 268 Such activities shall be subject to civil action by any general partner or the Attorney269 General for injunctive relief or dissolution of such partnership."270 S. B. 600 - 11 - 26 LC 62 0322 SECTION 11.271 Said title is further amended in Chapter 11, relating to limite d liability companies, by272 revising Code Section 14-11-202, relating to powers of limited liability companies, as273 follows:274 "14-11-202.275 (a) As used in this Code section, the term:276 (1) 'Ballot issue activity' means paying, contributing, or expending money or anything277 of value to support or oppose the recall of a public officer ho lding elective office, any278 proposed constitutional amendment, a state-wide referendum, or a proposed question279 which is to appear on the ballot in any state, county, or municipal election.280 (2) 'Election activity' means paying, contributing, or expendi ng money or anything of281 value to support or oppose a candidate, political party or body , or political committee,282 whether established pursuant to federal or state law.283 (b) Each limited liability company formed in this state shall hav e only the powers284 expressly prescribed to it by the General Assembly same powers as any person has to do285 all things necessary to carry out its purpose, business, and affairs.286 (c) A limited liability corporation shall not have the power to conduct ballot issue activity287 or election activity.288 (d) Ballot issue activity and election activity do not include any bona fide news story,289 commentary, or editorial distributed through the facilities of any broadcasting station or of290 any print, online, or digital newspaper, magazine, blog, or any other periodical publication,291 unless such broadcasting, print, online, or digital facilities are owned or controlled by a292 political party, political committee, or candidate.293 (e) Any ballot issue activity or election activity conducted by a limited liability company294 is void. Such activities shall be subject to civil action by a member, shareholder for295 injunctive relief, or the Attorney General for civil penalties totaling the value of the ballot296 issue activity or election activity, injunctive relief, or dissolution."297 S. B. 600 - 12 - 26 LC 62 0322 SECTION 12.298 This Act shall become effective upon its approval by the Governor or upon its becoming law299 without such approval and shall be applicable to ballot issue a ctivity and election activity300 carried out on or after such date.301 SECTION 13.302 All laws and parts of laws in conflict with this Act are repealed.303 S. B. 600 - 13 -