Senate Study Bill 1214 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON STATE GOVERNMENT BILL BY CHAIRPERSON DANIELSON) A BILL FOR An Act relating to corporate shareholders by requiring 1 shareholder authorization of political expenditures by 2 corporations, requiring related shareholder statements and 3 notices, and including penalty provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 1080XC (2) 86 aw/sc

S.F. _____ Section 1. NEW SECTION . 490.1620A Political expenditure 1 approval —— statements for shareholders. 2 1. As used in this section, “political expenditure” means a 3 contribution, gift, transfer, disbursement, or promise of money 4 or a thing of value to promote or assist in the promotion of the 5 success or defeat of a candidate, political party, or ballot 6 issue in any state or federal election. 7 2. A corporation shall not use any money or other property 8 of the corporation in connection with a political expenditure 9 unless the shareholders of the corporation, by the affirmative 10 vote of a majority of all votes entitled to be cast, do all of 11 the following: 12 a. Authorize in advance the total amount of money or 13 property that may be used for all political expenditures during 14 a specified fiscal year of the corporation. 15 b. Direct that the money or property be contributed to any 16 of the following: 17 (1) A specified candidate or specified candidates. 18 (2) Candidates of a specified political party or parties. 19 (3) A specified political party or specified political 20 parties. 21 (4) A specified committee or specified committees. 22 (5) A specified entity or specified entities exempt from 23 taxation under section 501(c)(4) or (6) of the Internal Revenue 24 Code. 25 (6) A specified ballot issue or specified ballot issues. 26 3. Shareholder consideration of political expenditures 27 shall occur at an annual or special meeting of the 28 shareholders. 29 4. a. Within forty-eight hours after making a political 30 expenditure, the corporation shall: 31 (1) Give notice of the political expenditure by electronic 32 transmission to each shareholder that has requested notice. 33 (2) If the corporation maintains an internet site, post 34 notice of the political expenditure on the internet site. 35 -1- LSB 1080XC (2) 86 aw/sc 1/ 3

S.F. _____ b. A notice provided pursuant to this subsection shall 1 state the amount, recipient, date, and purpose of the political 2 expenditure. 3 5. The corporation shall prepare and make available to its 4 shareholders an annual political expenditure statement. The 5 annual political expenditure statement shall list all political 6 expenditures made by the corporation during the prior year, 7 including the amount, recipient, date, and purpose of each 8 political expenditure. 9 6. Whenever it appears to the attorney general that any 10 person has engaged in any act or practice constituting a 11 violation of any provision of this section, the attorney 12 general may bring an action to obtain any one or more of the 13 following remedies: 14 a. A temporary restraining order. 15 b. A temporary or permanent injunction. 16 c. A civil penalty not exceeding either of the following: 17 (1) For a violation of subsection 2, three times the amount 18 of the political expenditure made. 19 (2) Five thousand dollars for any other violation of this 20 section. 21 d. A declaratory judgment. 22 e. Recision. 23 f. Restitution. 24 g. Any other appropriate relief. 25 Sec. 2. EFFECTIVE DATE. This Act takes effect October 1, 26 2015. 27 EXPLANATION 28 The inclusion of this explanation does not constitute agreement with 29 the explanation’s substance by the members of the general assembly. 30 This bill relates to corporate shareholders by requiring 31 shareholder authorization of political expenditures by 32 corporations, by requiring corporations to provide to 33 shareholders statements and notices relating to political 34 expenditures, and including penalty provisions. 35 -2- LSB 1080XC (2) 86 aw/sc 2/ 3

S.F. _____ The bill prohibits a corporation from using any money 1 or other property of the corporation in connection with a 2 political expenditure, as defined in the bill, unless the 3 stockholders have authorized in advance the amount of money 4 or property to be used and have directed that the money 5 or property be used for specified purposes. The bill also 6 requires notices and reporting about corporate political 7 expenditures and authorizes the attorney general to bring a 8 civil action to obtain specified remedies for a violation of 9 the bill. 10 The bill takes effect October 1, 2015. 11 -3- LSB 1080XC (2) 86 aw/sc 3/ 3