Corporate powers: political spending power.

Plain English Breakdown

The bill summary does not provide specific details on the exact rules the Secretary of State will make.

Corporate Political Spending Power

This law restricts corporations' ability to use their money for political activities by defining 'political spending power' and limiting corporate powers accordingly.

What This Bill Does

• Defines what 'political spending power' means for corporations.
• Revokes the right of corporations to engage in political spending, such as supporting or opposing candidates and ballot measures.
• Declares void any actions taken by a corporation beyond its allowed powers and requires forfeiture of all granted powers if these are violated.
• Authorizes the Secretary of State to make rules about reinstatement of forfeited corporate powers after disgorgement of money used in political spending.
• Gives the Attorney General authority to enforce these new rules.

Who It Names or Affects

• Corporations operating in the state
• The Secretary of State and the Attorney General

Terms To Know

Political Spending Power

Money used by corporations to influence political outcomes, such as funding campaigns or ballot initiatives.

Artificial Person

A legal entity created by law that has some of the same rights and responsibilities as a human being, like corporations.

Limits and Unknowns

• The bill does not specify how much money must be returned for reinstatement.
• It is unclear if this bill will face legal challenges based on existing case law.

Official Summary Text

AB 1984, as amended, Rogers.
Corporate
powers.
powers: political spending power.
Existing constitutional law establishes the First Amendment right of freedom of speech. Existing case law, including Citizens United v. Federal Election Commission (2010) 558 U.S. 310 and other judicial precedents, establishes that corporate entities have First Amendment rights to engage in political speech and places limits on the suppression of political speech.
Existing law regulates the formation and operation of various types of business and nonprofit entities, including corporations, nonprofit corporations, limited liability corporations, limited partnerships, limited liability partnerships, and unincorporated
associations.
associations and sets forth their powers and
duties.
Existing law requires the Secretary of State to receive and process corporate and nonprofit entity filings, maintain records of those filings, and perform related duties.
This bill would
establish
redefine
the powers of
corporations, as defined,
artificial persons, as defined,
organized under the Corporations
Code.
Code to specify that those powers do not include political spending power, as
defined.
The bill would revoke all powers, privileges, and capacities previously granted to corporations under state law and provide that a corporation operating under the jurisdiction of this state possesses only those powers, privileges, and capacities specifically granted in the Corporations Code.
The bill would grant a corporation perpetual duration and succession in its name and every power held by an individual to do all things necessary or convenient to carry out its business and affairs, except as specified. The bill would specify that these provisions do not grant any power to a corporation to engage in ballot issue activity or election activity. The bill would declare void any act undertaken by a corporation beyond the scope of its granted powers.
The bill would
declare void any act undertaken by a corporation beyond the scope of its granted powers, and would require that corporation to forfeit all granted powers. The bill would authorize reinstatement of granted powers after, among other things, disgorgement of all money used in the exercise of political spending power. The bill would authorize the Secretary of State to adopt rules regarding, among other things, reinstatement of forfeited powers. The bill would authorize the Attorney General with authority to enforce its provisions.
This bill would make its provisions severable and would further specify the intent and preference of the Legislature that corporations hold no powers at all, rather than be vested with
powers for election activity or ballot issue activity.
political
spending power. The bill would make related findings and declarations.

Current Bill Text

Download Bill PDF