SP0151, LD 383, item 1, An Act Requiring Corporations To Have Approval from a Majority of Their Shareholders before Making Political Contributions Valued at Greater Than $5,000

An Act Requiring Corporations To Have Approval from a Majority of Their Shareholders before Making Political Contributions Valued at Greater Than $5,000

Be it enacted by the People of the State of Maine as follows:

Sec. 1. 13-C MRSA §305 is enacted to read:

§ 305. Political contributions

1. Definitions. As used in this section, unless the context otherwise indicates, the following terms have the following meanings.

A. "Committee" has the same meaning as in Title 21-A, section 1052, subsection 2.

B. "Contribution" has the same meaning as in Title 21-A, section 1052, subsection 3.

C. "Expenditure" has the same meaning as in Title 21-A, section 1052, subsection 4.

2. Political contributions. A corporation shall obtain consent by an affirmative vote of a majority of all votes entitled to be cast at a properly held shareholder meeting before making a contribution or expenditure over the amount of $5,000 in a political campaign. The consent must:

A. Authorize the total amount of the contribution or expenditure; and

B. Direct that the contribution or expenditure be for a specific purpose, including for:

(1) A specific candidate or candidates;

(2) Candidates of a specific political party or parties;

(3) A specific political party or parties;

(4) A specific committee or committees;

(5) A specified entity or entities exempt from taxation under the United States Internal Revenue Code of 1986, Section 501(c)(4) or 501(c)(6) or successor provisions; or

(6) A specific ballot question or questions.

3. Notice. Within 48 hours after making a contribution or expenditure under this section, a corporation shall give notice of the contribution or expenditure by electronic transmission to each shareholder and, if the corporation has a website, post the notice on the website. A notice under this subsection must state the amount, recipient and purpose of the contribution or expenditure.

4. Violation. A director who makes or authorizes a contribution or expenditure by a corporation in violation of this section is personally liable to the corporation for the amount of the contribution or expenditure plus 6% interest per year.

summary

This bill requires a majority vote of shareholders in order for a Maine corporation to make a political contribution or expenditure of over $5,000 and requires that once the contribution or expenditure has been made the corporation send notice to its shareholders and post the notice on its website. This bill makes a director who makes a contribution in violation of these conditions personally liable to the corporation in the amount of the contribution or expenditure plus 6% interest per year.

SP0151 LD 383	Session - 127th Maine Legislature		LR 725 Item 1
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