[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 3348 Introduced in Senate (IS)]

<DOC>






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,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Accountable Capitalism Act''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Director.--The term ``Director'' means the Director of 
        the Office.
            (2) Large entity.--
                    (A) In general.--The term ``large entity'' means an 
                entity that--
                            (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.
            (4) Officer.--The term ``officer'' means, with respect to a 
        United States corporation--
                    (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.
            (5) State.--The term ``State'' means--
                    (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.

SEC. 3. OFFICE OF UNITED STATES CORPORATIONS.

    (a) Establishment.--There is established within the Department of 
Commerce the Office of United States Corporations.
    (b) Director.--
            (1) Establishment of position.--There is established the 
        position of Director of the Office, who shall be the head of 
        the Office.
            (2) Appointment; term.--
                    (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).
    (c) Duties.--The Office shall--
            (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
            (4) when appropriate--
                    (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.
    (d) Disclosure of Taxpayer Identity Information for Use by 
Office.--
            (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.

SEC. 4. REQUIREMENT FOR LARGE ENTITIES TO OBTAIN CHARTERS.

    (a) Large Entities.--
            (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.
    (b) Rescissions.--
            (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.

SEC. 5. RESPONSIBILITIES OF UNITED STATES CORPORATIONS.

    (a) Definitions.--In this section:
            (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.
    (b) Charter Requirements.--
            (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.
    (c) Standard of Conduct for Directors and Officers.--
            (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
                    (B) in carrying out subparagraph (A)--
                            (i) shall consider the effects of any 
                        action or inaction on--
                                    (I) the shareholders of the United 
                                States corporation;
                                    (II) the employees and workforce 
                                of--
                                            (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;
                                    (VI) the short-term and long-term 
                                interests of the United States 
                                corporation, including--
                                            (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;
                            (ii) may consider--
                                    (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.
    (d) Right of Action.--
            (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.
    (e) Application.--
            (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.
            (2) Applicability of other laws.--
                    (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.

SEC. 6. BOARD REPRESENTATION.

    (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.
    (b) United States Corporation Elections.--
            (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).
    (c) Enforcement.--
            (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).
            (2) Department of labor.--
                    (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) the Secretary of Labor--
                                    (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.

SEC. 7. EXECUTIVE COMPENSATION.

    (a) Definitions.--In this section:
            (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.
            (4) Subject security.--The term ``subject security'' means 
        any--
                    (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).
    (b) Sale of Subject Securities.--
            (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
                            (ii) through--
                                    (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.

SEC. 8. POLITICAL SPENDING.

    (a) Definitions.--In this section:
            (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--
                    (A)(i) is an independent expenditure; or
                    (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;
                    (B)(i) is an electioneering communication; or
                    (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
                    (C) are dues or other payments, disbursements, or 
                transfers to any other person that--
                            (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
            (2) the approvals required under paragraph (1) occur--
                    (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.
    (c) Enforcement.--
            (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).

SEC. 9. PETITION FOR REVOCATION OF CHARTER.

    (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).
    (c) Granting Revocation Petition.--
            (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--
                    (A) has engaged in repeated, egregious, and illegal 
                misconduct that has caused significant harm to--
                            (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.

SEC. 10. SEVERABILITY.

    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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