Analysis: HR 5129 – Ban Corporate PACs Act

Bill Analysis: H.R. 5129 – Ban Corporate PACs Act

An analysis prepared for members of NABPAC by Jan Baran of Wiley Rein, LLP

On November 15, 2019, Reps. Josh Harder (D-CA-10) and Max Rose (D-NY-11) introduced H.R. 5129, legislation that would ban all corporate political action committees (PACs) and would dissolve existing corporate PACs one year after enactment of the bill. H.R. 5129 is co-sponsored by Reps. Antonio Delgado (D-NY-19) and Joe Kennedy (D-MA-04) and has been endorsed by End Citizens United.

NABPAC Legal Counsel Jan Baran from Wiley Rein, LLP has reviewed the legislation and offered the following analysis to NABPAC members:

1. The bill would eliminate the current legal right of business corporations to form a separate segregated fund. Corporate employee PACs, if formed, would have to be self-sustaining. Any PAC administrative costs may not be paid by a corporation. The use of any company resources would have to be paid in advance by the PAC.

2. Union PACs would be left unaffected and would be allowed to continue operating under longstanding PAC rules.

3. Not-for-profit corporations exempt from federal tax law (other than 501c3 organizations) would be allowed to have a PAC going forward. This includes trade associations and membership organization (other than c3 charitable/educational organizations.) Those PACs may operate with payment of administrative expenses by the sponsoring connected organizations. They may only solicit executive or administrative personnel. 

4. Not-for-profit corporations that have a PAC would not be allowed to solicit stockholders. This provision would affect trade associations and membership organizations that have corporate members. The stockholders of such member corporations would not be able to be solicited although member company executive or administrative personnel would qualify for solicitation. 

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