S.3348 - Accountable Capitalism Act115th Congress (2017-2018)
Bill
Hide Overview| Sponsor: | Sen. Warren, Elizabeth [D-MA] (Introduced 08/15/2018) |
|---|---|
| Committees: | Senate - Commerce, Science, and Transportation |
| Latest Action: | Senate - 08/15/2018 Read twice and referred to the Committee on Commerce, Science, and Transportation. (All Actions) |
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This bill has the status Introduced
Here are the steps for Status of Legislation:
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Text: S.3348 — 115th Congress (2017-2018)All Information (Except Text)
Introduced in Senate (08/15/2018)
115th CONGRESS
2d Session |
S. 3348
To establish the obligations of certain large business entities in the United States, and for other
purposes.
IN THE SENATE OF THE UNITED STATES
August 15, 2018
Ms. Warren introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation
A BILL
To establish the obligations of certain large business entities in the United States, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
This Act may be cited as the “Accountable Capitalism Act”.
In this Act:
(1) DIRECTOR.—The term “Director” means the Director of the Office.
(i)
is organized under the laws of a State as a corporation, body
corporate, body politic, joint stock company, or limited liability
company;
(ii) engages in interstate commerce; and
(iii)
in a taxable year, according to information provided by the entity to
the Internal Revenue Service, has more than $1,000,000,000 in gross
receipts.
(B) AGGREGATION RULES.—All entities treated as a single employer under subsection (a) or (b) of section 52
of the Internal Revenue Code of 1986, or subsection (m) or (o) of
section 414 of such Code, shall be treated as 1 entity for the purposes
of subparagraph (A).
(3) OFFICE.—The term “Office” means the Office of United States Corporations established under section 3.
(A) the president of the United States corporation;
(B) the principal operating officer of the United States corporation;
(C)
the principal accounting officer of the United States corporation or,
if the United States corporation does not have such an accounting
officer, the controller of the United States corporation; and
(D) any vice president in charge of a principal business unit, division, or function of the United States corporation.
(A) each of the several States of the United States;
(B) the District of Columbia;
(C) the Commonwealth of Puerto Rico;
(D) Guam;
(E) the United States Virgin Islands;
(F) American Samoa; and
(G) the Commonwealth of the Northern Mariana Islands.
(6) UNITED STATES CORPORATION.—The
term “United States corporation” means a large entity with respect to
which the Office has granted a charter under section 3.
(a) Establishment.—There is established within the Department of Commerce the Office of United States Corporations.
(1) ESTABLISHMENT OF POSITION.—There is established the position of Director of the Office, who shall be the head of the Office.
(A) APPOINTMENT.—Except
as provided in subparagraph (E), the Director shall be appointed by the
President, by and with the advice and consent of the Senate, from among
individuals who are citizens of the United States.
(B) TERM.—The Director shall be appointed for a term of 4 years, unless removed before the end of that term by the President.
(C) VACANCY.—A
vacancy in the position of Director that occurs before the expiration
of the term for which a Director was appointed shall be filled in the
manner established under subparagraph (A), and the Director appointed to
fill that vacancy shall be appointed only for the remainder of that
term.
(D) SERVICE AFTER END OF TERM.—An
individual may serve as the Director after the expiration of the term
for which the individual was appointed until a successor has been
appointed.
(E) INITIAL DIRECTOR.—The
Secretary of Commerce shall appoint an individual to serve as the
Director until an individual is appointed to serve as the Director in
accordance with subparagraph (A).
(1) review and grant charter applications for large entities;
(2) monitor whether large entities have obtained a charter in accordance with this Act;
(3)
except as provided in paragraph (4)(B), refer any violation of this Act
to the appropriate Federal agency for enforcement with respect to that
violation; and
(A) rescind the charters of United States corporations under section 4(b);
(B) revoke the charters of United States corporations under sections 6(c)(2)(B)(ii), 8(c)(2), and 9; and
(C) issue rules to prevent entities from taking action to intentionally avoid qualifying as large entities.
(1) IN GENERAL.—Section 6103(m) of the Internal Revenue Code of 1986 is amended by adding at the end the following:
“(8) OFFICE OF UNITED STATES CORPORATIONS.—Upon
written request by the Director of the Office of United States
Corporations, the Secretary shall disclose taxpayer identity information
to officers and employees of the Office of United States Corporations
solely for purposes of identifying any taxpayer that satisfies the
requirement under section 2(2)(A)(iii) or 4(b) of the Accountable
Capitalism Act for the most recent taxable year for which information is
available.”.
(2) EFFECTIVE DATE.—The amendment made by this subsection shall take effect on the date of enactment of this Act.
(1) IN GENERAL.—An
entity that is organized as a corporation, body corporate, body
politic, joint stock company, or limited liability company in a State
shall obtain a charter from the Office as follows:
(A)
If the entity is a large entity with respect to the most recently
completed taxable year of the entity before the date of enactment of
this Act, the entity shall obtain the charter not later than 2 years
after the date of enactment of this Act.
(B)
If the entity is a large entity with respect to any taxable year of the
entity that begins after the date of enactment of this Act, the entity
shall obtain the charter not later than 1 year after the last day of
that taxable year.
(2) FAILURE TO OBTAIN CHARTER.—An
entity to which paragraph (1) applies and that fails to obtain a
charter from the Office as required under that paragraph shall not be
treated as a corporation, body corporate, body politic, joint-stock
company, or limited liability company, as applicable, for the purposes
of Federal law during the period beginning on the date on which the
entity is required to obtain a charter under that paragraph and ending
on the date on which the entity obtains the charter.
(1) IN GENERAL.—An
entity that has obtained a charter as a United States corporation and,
with respect to a subsequent taxable year of the entity, is not a large
entity may file a petition with the Office to rescind the charter of the
United States corporation.
(2) DETERMINATION.—Not
later than 180 days after the date on which the Office receives a
petition that an entity files under paragraph (1), the Office shall
grant the petition if the Office determines that the entity, with
respect to the most recently completed taxable year of the entity
preceding the date on which the petition was filed, was not a large
entity.
(1) GENERAL PUBLIC BENEFIT.—The
term “general public benefit” means a material positive impact on
society resulting from the business and operations of a United States
corporation, when taken as a whole.
(2) SUBSIDIARY.—The
term “subsidiary” means, with respect to a person, an entity in which
the person owns beneficially or of record not less than 50 percent of
the outstanding equity interests of the entity, calculated as if all
outstanding rights to acquire equity interests in the entity had been
exercised.
(1) IN GENERAL.—The charter of a large entity that is filed with the Office shall state that the entity is a United States corporation.
(2) CORPORATE PURPOSES.—A United States corporation shall have the purpose of creating a general public benefit, which shall be—
(A) identified in the charter of the United States corporation; and
(B)
in addition to the purpose of the United States corporation under the
articles of incorporation in the State in which the United States
corporation is incorporated, if applicable.
(1) CONSIDERATION OF INTERESTS.—In
discharging the duties of their respective positions, and in
considering the best interests of a United States corporation, the board
of directors, committees of the board of directors, and individual
directors of a United States corporation—
(A) shall manage or direct the business and affairs of the United States corporation in a manner that—
(i) seeks to create a general public benefit; and
(ii)
balances the pecuniary interests of the shareholders of the United
States corporation with the best interests of persons that are
materially affected by the conduct of the United States corporation; and
(I) the shareholders of the United States corporation;
(aa) the United States corporation;
(bb) the subsidiaries of the United States corporation; and
(cc) the suppliers of the United States corporation;
(III)
the interests of customers and subsidiaries of the United States
corporation as beneficiaries of the general public benefit purpose of
the United States corporation;
(IV)
community and societal factors, including those of each community in
which offices or facilities of the United States corporation,
subsidiaries of the United States corporation, or suppliers of the
United States corporation are located;
(V) the local and global environment;
(aa) benefits that may accrue to the United States corporation from the long-term plans of the United States corporation; and
(bb) the possibility that those interests may be best served by the continued independence of the United States corporation; and
(VII)
the ability of the United States corporation to accomplish the general
public benefit purpose of the United States corporation;
(I) other pertinent factors; or
(II)
the interests of any other group that are identified in the articles of
incorporation in the State in which the United States corporation is
incorporated, if applicable; and
(iii)
shall not be required to give priority to a particular interest or
factor described in clause (i) or (ii) over any other interest or
factor.
(2) STANDARD OF CONDUCT FOR OFFICERS.—Each
officer of a United States corporation shall balance and consider the
interests and factors described in paragraph (1)(B)(i) in the manner
described in paragraph (1)(B)(iii) if—
(A) the officer has discretion to act with respect to a matter; and
(B)
it reasonably appears to the officer that the matter may have a
material effect on the creation by the United States corporation of a
general public benefit identified in the charter of the United States
corporation.
(3) EXONERATION FROM PERSONAL LIABILITY.—Except
as provided in the charter of a United States corporation, neither a
director nor an officer of a United States corporation may be held
personally liable for monetary damages for—
(A)
any action or inaction in the course of performing the duties of a
director under paragraph (1) or an officer under paragraph (2), as
applicable, if the director or officer was not interested with respect
to the action or inaction; or
(B) the failure of the United States corporation to pursue or create a general public benefit.
(4) LIMITATION ON STANDING.—Neither
a director nor an officer of a United States corporation shall have any
duty to a person that is a beneficiary of the general public benefit
purpose of the United States corporation because of the status of the
person as such a beneficiary.
(5) BUSINESS JUDGMENTS.—A
director or an officer of a United States corporation who makes a
business judgment in good faith shall be deemed to have fulfilled the
duty of the director under paragraph (1) or the officer under paragraph
(2), as applicable, if the director or officer—
(A) is not interested in the subject of the business judgment;
(B)
is informed with respect to the subject of the business judgment to an
extent that the director reasonably believes to be appropriate under the
circumstances; and
(C) rationally believes that the business judgment is in the best interests of the United States corporation.
(1) LIMITATION ON LIABILITY OF CORPORATION.—A
United States corporation shall not be liable for monetary damages
under this section for any failure of the United States corporation to
pursue or create a general public benefit.
(2) STANDING.—A proceeding to enforce the requirements of this section may be commenced or maintained only—
(A) directly by the United States corporation to which the proceeding applies; or
(B)
derivatively, under the laws of the State in which the United States
corporation is organized, by a person, or a group of persons, that own—
(i)
beneficially or of record not less than 2 percent of the total number
of shares of a class or series outstanding at the time of the act or
omission that is the subject of the proceeding; or
(ii)
beneficially or of record not less than 5 percent of the outstanding
equity interests in an entity of which the United States corporation is a
subsidiary at the time of the act or omission that is the subject of
the proceeding.
(3) RULE OF CONSTRUCTION REGARDING BENEFICIAL OWNERSHIP.—For
the purposes of this subsection, a person shall be construed to be the
beneficial owner of shares or equity interests if the shares or equity
interests are held in a voting trust or by a nominee on behalf of the
person.
(1) RULE OF CONSTRUCTION REGARDING GENERAL CORPORATE LAW.—Nothing
in this section may be construed to affect any provision of law that is
applicable to a corporation, body corporate, body politic, joint stock
company, or limited liability company, as applicable, that is not a
United States corporation.
(A) STATE LAW.—Except
as otherwise provided in this section, the law of the State in which a
United States corporation is organized shall apply with respect to the
United States corporation.
(B) FEDERAL LAW.—If
any provision of Federal law is inconsistent with the requirements of
this section with respect to a United States corporation, the
requirements of this section shall supersede that provision.
(3) ORGANIC RECORDS.—A
provision of the articles of incorporation in the State in which a
United States corporation is incorporated, if applicable, or in the
bylaws of a United States corporation may not limit, be inconsistent
with, or supersede a provision of this section.
(a) Rulemaking.—Not
later than 1 year after the date of enactment of this Act, the
Securities and Exchange Commission, in consultation with the National
Labor Relations Board, shall issue rules to ensure that director
elections at United States corporations are fair and democratic.
(1) IN GENERAL.—Not less than 2⁄5
of the directors of a United States corporation shall be elected by the
employees of the United States corporation using an election process
that complies with the requirements of the rules issued under subsection
(a).
(2) EFFECTIVE DATE.—Paragraph
(1) shall take effect on the date that is 1 year after the date on
which the Securities and Exchange Commission issues the rules required
under subsection (a).
(1) SECURITIES AND EXCHANGE COMMISSION.—The
Securities and Exchange Commission, in consultation with the National
Labor Relations Board, shall ensure that the elections described in
subsection (b)(1) comply with the requirements of the rules issued by
the Commission under subsection (a).
(A) IN GENERAL.—The
Secretary of Labor shall coordinate with the Office to ensure that the
representation of the boards of directors of United States corporations
comply with the requirements under subsection (b).
(B) PENALTIES.—If
the representation with respect to the board of directors of a United
States corporation fails to comply with the requirements under
subsection (b) for a period that is not less than 180 consecutive days—
(I)
shall assess a civil money penalty against the United States
corporation in an amount that is not less than $50,000 and not more than
$100,000 for each day that such representation is not in compliance
with those requirements, including for each day during that 180-day
period; and
(II)
may collect the penalty described in subclause (I) beginning on the day
after the date on which that 180-day period ends; and
(ii) the Office may revoke the charter of the United States corporation.
(1) COVERED PERSON.—The term “covered person” means an officer or a director of a United States corporation.
(2) EQUITY SECURITY.—The term “equity security” has the meaning given the term in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).
(3) RULE 10B–18 PURCHASE.—The
term “Rule 10b–18 purchase” has the meaning given the term in section
240.10b–18(a) of title 17, Code of Federal Regulations, as in effect on
the date of enactment of this Act.
(A) equity security of a United States corporation; or
(B)
security, the value of which is derived from, or that otherwise relates
to, an equity security described in subparagraph (A).
(1) PROHIBITIONS.—Subject to paragraph (2), no covered person with respect to a United States corporation may—
(A)
during the 5-year period that begins on the date on which the covered
person first owns or beneficially owns a subject security with respect
to that United States corporation (or an affiliate of that United States
corporation), sell, transfer, pledge, assign, alienate, or hypothecate,
in exchange for value, that subject security, other than—
(i) in connection with the sale of the United States corporation or the affiliate, as applicable; or
(I) a will; or
(II) the laws of descent or distribution; or
(B)
during the 3-year period that begins on the date on which that United
States corporation, or an affiliate of that United States corporation,
effects a Rule 10b–18 purchase, sell any subject security with respect
to that United States corporation.
(2) APPLICATION.—The
prohibition under paragraph (1) shall not apply with respect to any
subject security that a covered person owns or beneficially owns on the
day before the date of enactment of this Act.
(c) Enforcement.—The
Securities and Exchange Commission may impose on any covered person
that violates subsection (b) a civil penalty in an amount that is—
(1)
not less than the fair market value of the subject securities of which
the covered person disposes in violation of that subsection, as measured
on the date on which the covered person makes the disposition; and
(2)
not more than the amount that is 3 times the fair market value of the
subject securities of which the covered person disposes in violation of
that subsection, as measured on the date on which the covered person
makes the disposition.
(d) Rule of construction.—For the purposes of this section, a subject security is beneficially owned by a covered person if—
(1) the subject security is held in the name of a bank, broker, or nominee for the account of the covered person;
(2)
the subject security is held as a joint tenant, tenant in common, or
tenant by the entirety or as community property by the covered person;
or
(3)
the covered person has a pecuniary interest, by reason of any contract,
understanding, or relationship, including an immediate family
relationship or arrangement, in subject securities held in the name of
another person.
(1) ELECTIONEERING COMMUNICATION.—The
term “electioneering communication” has the meaning given the term in
section 304(f)(3) of the Federal Election Campaign Act of 1971 (52 U.S.C. 30104(f)(3)),
except that the term “any public communication” shall be substituted
for “any broadcast, cable, or satellite communication” in the matter
preceding subclause (I) of subparagraph (A)(i) of such section
304(f)(3).
(2) INDEPENDENT EXPENDITURE.—The
term “independent expenditure” means an expenditure, as that term is
defined in section 301 of the Federal Election Campaign Act of 1971 (52 U.S.C. 30101),
by a person that expressly advocates the election or defeat of a
clearly identified candidate, or is the functional equivalent of express
advocacy because, when taken as a whole, the expenditure can be
interpreted by a reasonable person only as advocating the election or
defeat of a candidate, taking into account whether the communication
involved—
(A) mentions a candidacy, a political party, or a challenger to a candidate; or
(B) takes a position on character, qualifications, or fitness for office of a candidate.
(3) POLITICAL EXPENDITURE IN SUPPORT OF OR IN OPPOSITION TO ANY CANDIDATE FOR FEDERAL, STATE, OR LOCAL
PUBLIC OFFICE.—The term “political expenditure in support of or
in opposition to any candidate for Federal, State, or local public
office” means an expenditure or series of expenditures totaling more
than $10,000 for any single candidate during any single election that—
(ii)
with respect to a candidate for State or local public office, would be
treated as an independent expenditure if the candidate were a candidate
for Federal public office;
(ii)
with respect to a candidate for State or local public office, would be
treated as an electioneering communication if the candidate were a
candidate for Federal public office; or
(i)
are, or could reasonably be anticipated to be, used or transferred to
another association or organization for the purposes described in
subparagraph (A) or (B); and
(ii)
are not investments or payments, disbursements, or transfers made in
commercial transactions in the ordinary course of any trade or business.
(b) Shareholder and director approval.—A
United States corporation may not make a political expenditure in
support of or in opposition to any candidate for Federal, State, or
local public office unless—
(1)
not less than 75 percent of the shareholders of the corporation and not
less than 75 percent of the directors of the corporation approve of the
expenditure; and
(A) before the date on which the expenditure is made or obligated; and
(B)
after the date on which the shareholders and directors described in
that paragraph have been informed regarding the precise nature of the
proposed expenditure, including—
(i) the amount of the proposed expenditure; and
(ii) the candidate and election to which the proposed expenditure relates.
(1) SHAREHOLDER SUIT.—A
shareholder of a United States corporation may bring a civil action in
an appropriate district court of the United States to enjoin a United
States corporation from making a political expenditure in support of or
in opposition to any candidate for Federal, State, or local public
office that violates the requirements under subsection (b).
(2) REVOCATION OF CHARTER.—The
Office may revoke the charter of a United States corporation that
knowingly or repeatedly violates the requirements under subsection (b).
(a) Filing of revocation petition.—The
attorney general of a State may file a petition with the Office to
revoke the charter of a United States corporation that is organized in
that State or that does business in that State.
(b) Timing of response and decision.—If a revocation petition is filed under subsection (a) with respect to a United States corporation—
(1)
not later than 180 days after the date on which the petition is filed,
the United States corporation may file a response that explains why
revoking the charter of the United States corporation is not justified
in consideration of the factors described in subsection (c)(2); and
(2)
the Director shall issue a ruling with respect to the petition not
later than 180 days after the earlier of the date that is—
(A) 180 days after the date on which the petition is filed; or
(B) the date on which the corporation files a response under paragraph (1).
(1) IN GENERAL.—The
Director, with the approval of the Secretary of Commerce, and after
consideration of the factors described in paragraph (2), may grant a
revocation petition that is filed under subsection (a).
(2) FACTORS.—In
determining whether to grant a revocation petition under paragraph (1)
with respect to a United States corporation, the Director shall consider
whether the United States corporation—
(i) the customers, employees, shareholders, or business partners of the United States corporation; or
(ii) the communities in which the United States corporation operates; and
(B)
has not undertaken measures to address the causes of the misconduct
described in subparagraph (A), such as terminating the employment of any
officer or executive of the United States corporation who oversaw that
misconduct.
(3) REVIEW OF GRANTING OF PETITION.—A decision by the Director to grant a revocation petition under this subsection—
(A) shall be subject to judicial review under section 706 of title 5, United States Code; and
(B) shall not be subject to the procedure for congressional disapproval under section 802 of title 5, United States Code.
(d) Revocation of charter.—If
the Director grants a revocation petition under subsection (c) with
respect to a United States corporation, the Office shall revoke the
charter of that corporation, which shall be effective beginning on the
date that is 1 year after the date on which the Director grants the
petition.
(e) Rulemaking.—The Director may issue any rules that are necessary to carry out this section.
If
any provision of this Act, or any application of that provision to any
person or circumstance, is held to be invalid, the remainder of the
provisions of this Act and the application of any such provision to any
other person or circumstance shall not be affected.
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