Plain English Breakdown
The bill text mentions existing federal case law (Citizens United) but does not resolve potential conflicts between state and federal rulings.
AB-1984: Limits on Corporate Political Spending
This law redefines corporate powers to exclude political spending, declares acts beyond these limits void, and requires corporations that break the rules to give back money used for such activities before regaining their legal powers.
What This Bill Does
- Redefines the powers of corporations organized under the Corporations Code to specify they do not include political spending power.
- Revokes all previously granted corporate powers, privileges, and capacities unless specifically listed in the Corporations Code.
- Declares any act taken by a corporation beyond its allowed powers to be void and invalid.
- Requires corporations that break these rules to forfeit their legal powers until they return money used for political spending activities.
- Authorizes the Secretary of State to create rules about how corporations can regain their lost powers.
Who It Names or Affects
- Corporations and artificial persons organized under the state Corporations Code.
- The Secretary of State, who must process filings and adopt new rules regarding reinstatement of powers.
- The Attorney General, who is given authority to enforce these provisions.
Terms To Know
- Political spending power
- The ability to spend money on election activity or ballot issue campaigns, which this bill says corporations do not have.
- Disgorgement
- Giving back all money that was used for political activities in violation of the law as a condition to regain corporate powers.
- Void act
- An action taken by a corporation that has no legal effect because it went beyond its allowed powers under this bill.
Limits and Unknowns
- The official text does not state an effective date for when these rules begin.
- The bill notes existing federal court cases on free speech but does not explain how this law interacts with them if challenged in court.
- Specific details about the new rules from the Secretary of State are not included because they have not been written yet.