Gino DiCaro

Bill to curb corporations political activities fails vote

By Gino DiCaro, VP, Communications

Capitol Update, June 18, 2010 Share this on FacebookTweet thisEmail this to a friend

On June 16th of this week, the Senate Banking, Finance and Insurance Committee failed to pass of a bill aimed at curbing corporate involvement in the political process. The bill, AB 919, authored by Assemblymember Pedro Nava (D-Santa Barbara) would require corporations to deliver an annual report to shareholders detailing the company's political activities and expenditures and would further allow shareholders to “opt out” of having their money used for those expenditures and instead be reimbursed with a dividend. The bill would apply to shareholders who are residents of California and corporations that are either based or operate in the state.

AB 919 was introduced largely in response to a recent U.S. Supreme Court decision that reaffirms that political speech by corporations falls squarely within the protections of the First Amendment. By creating significant administrative requirements on a business that could be subject to a civil cause of action, businesses would have found that the costs to implement the bill and the associated liability would have made it prohibitive to participate in the political process.

Fortunately, the Committee agreed that limiting access to the political process is not an appropriate direction for the state to take. The bill failed to garner the required five votes for passage, however reconsideration was granted.

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