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SENATE BILL NO. 510
INTRODUCED BY E. FRANKLIN
A BILL FOR AN ACT ENTITLED: "AN ACT PROHIBITING A PUBLICLY TRADED CORPORATION FROM USING FUNDS THAT WOULD OTHERWISE BE PAID TO STOCKHOLDERS AS DIVIDENDS FOR THE PURPOSES OF POLITICAL ACTIVITY WITHOUT THE PRIOR WRITTEN CONSENT OF THE STOCKHOLDER; CREATING A CAUSE OF ACTION FOR STOCKHOLDERS WHOSE DIVIDENDS ARE USED FOR POLITICAL ACTIVITY WITHOUT THE PRIOR WRITTEN CONSENT OF THE STOCKHOLDER; PROVIDING A DEFINITION; AND PROVIDING AN APPLICABILITY DATE."
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
NEW SECTION. Section 1. Prohibiting involuntary use of funds for political activity -- civil action authorized -- definitions. (1) A publicly traded business corporation incorporated or authorized to do business in Montana may not, except by a prior, written, voluntary authorization signed by a stockholder, use any corporate funds that would otherwise be paid to that stockholder, in the form of a dividend, for the purposes of political activity. If the stockholder chooses not to authorize the use of corporate funds for political activity, the stockholder's share of funds that would otherwise have been used for political activity must be paid to the stockholder. This subsection does not prevent a corporation from paying to a stockholder as a dividend appropriate to the class of stock owned by the stockholder any funds subsequently used by the stockholder for political activity.
(2) A corporation subject to subsection (1) shall inform each stockholder annually of the requirements of this section and may at that time provide that stockholder with the opportunity to authorize the use of corporate funds for political activity that would otherwise be paid to the stockholder. If the corporation provides the stockholder with a form on which to make the authorization required by subsection (1), the form must be sent to the stockholder in a single mailing unaccompanied by other material concerning the business of the corporation except that concerning this section.
(3) (a) A stockholder of a corporation that violates a requirement of subsection (1) may bring a civil action in the district court of the county in which the stockholder resides for:
(i) injunctive relief;
(ii) damages in the amount of money used by the corporation for political activity without the consent of the stockholder; or
(iii) other relief as the court determines to be appropriate.
(b) A stockholder prevailing in an action brought pursuant to subsection (3)(a) must also be awarded costs and reasonable attorney fees by the court.
(c) In any action brought pursuant to subsection (3)(a), the burden is upon the corporation to prove by a preponderance of the evidence that the corporation did not violate the provisions of that subsection.
(4) As used in this section, "political activity" means any activity carried out by an officer, director, employee, agent, or other person at the request of the corporation for the purposes of influencing in a local, state, or federal election the consideration or outcome of any legislation, regulation, rule, or ballot measure or the election of any candidate for a public office.
NEW SECTION. Section 2. Applicability. [This act] applies to the use of funds for political activity, as defined in [section 1], occurring after October 1, 1999.
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Latest Version of SB 510 (SB0510.01)
Processed for the Web on February 17, 1999 (5:07PM)
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