SENATE BILL No. 115

 

 

February 14, 2019, Introduced by Senator SANTANA and referred to the Committee on Economic Development and Small Business Development.

 

 

 

     A bill to amend 1972 PA 284, entitled

 

"Business corporation act,"

 

by amending section 1002 (MCL 450.2002), as amended by 2008 PA 402,

 

and by adding section 505a.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 505a. (1) Beginning January 1, 2021, a publicly held

 

domestic corporation or foreign corporation whose principal

 

executive offices, according to the corporation's SEC 10-K form,

 

are located in this state must have a minimum of 1 female director

 

on its board. A corporation may increase the number of directors on

 

its board to comply with this section.

 

     (2) Beginning January 1, 2023, a publicly held domestic

 

corporation or foreign corporation whose principal executive

 

offices, according to the corporation's SEC 10-K form, are located

 

in this state must comply with 1 of the following, as applicable:

 


     (a) If its number of directors is 6 or more, the corporation

 

must have at least 3 female directors.

 

     (b) If its number of directors is 5, the corporation must have

 

at least 2 female directors.

 

     (c) If its number of directors is 4 or fewer, the corporation

 

must have at least 1 female director.

 

     (3) By July 1, 2020, the administrator shall publish a report

 

on its public internet website that documents the number of

 

domestic corporations and foreign corporations whose principal

 

executive offices, according to the corporation's SEC 10-K form,

 

are located in this state and that have at least 1 female director.

 

     (4) By March 1, 2021, and by March 1 of each subsequent year,

 

the administrator shall publish a report on its public internet

 

website that concerns, at a minimum, all of the following:

 

     (a) The number of corporations subject to this section that

 

were in compliance with the requirements of this section during at

 

least 1 point during the preceding calendar year.

 

     (b) The number of publicly held corporations that moved their

 

United States headquarters to this state from another state or out

 

of this state into another state during the preceding calendar

 

year.

 

     (c) The number of publicly held corporations that were subject

 

to this section during the preceding year, but are no longer

 

publicly traded.

 

     (5) A corporation that violates this section, or that fails to

 

timely file board member information with the administrator under a

 

rule promulgated under subsection (6), is subject to an


administrative fine of not more than $100,000.00 for a first

 

violation, or a fine of not more than $300,000.00 for a second or

 

subsequent violation. All of the following apply for purposes of

 

this subsection:

 

     (a) Each director seat that is required under this section to

 

be held by a female, and that is not held by a female during at

 

least a portion of a calendar year, is a separate violation of this

 

section.

 

     (b) If a female director has held a director seat that is

 

required under this section to be held by a female for at least a

 

portion of a calendar year, it is not a violation of this section.

 

     (c) Administrative fines collected under this section shall be

 

available, upon appropriation by the legislature, for use by the

 

administrator to offset the cost of administering this section.

 

     (6) The administrator may promulgate rules to implement this

 

section.

 

     (7) As used in this section:

 

     (a) "Female" means an individual who self-identifies her

 

gender as a woman, without regard to the individual's designated

 

sex at birth.

 

     (b) "Publicly held corporation" means a corporation that has

 

outstanding shares listed on a major United States stock exchange.

 

     Sec. 1002. (1) A foreign corporation that receives a

 

certificate of authority under this act, until a certificate of

 

revocation or of withdrawal is issued under this act, has the same

 

rights and privileges as a domestic corporation organized for the

 

purposes set forth in the application pursuant to which the


certificate of authority is issued. Except as otherwise provided in

 

this act, the corporation is subject to the same duties,

 

restrictions, penalties, and liabilities of a similar domestic

 

corporation.

 

     (2) This Except as provided in subsection (3), this act does

 

not authorize this state to regulate the organization or internal

 

affairs of a foreign corporation authorized to transact business in

 

this state.

 

     (3) Section 505a applies to a foreign corporation that is a

 

publicly held corporation to the exclusion of the law of the

 

jurisdiction in which the foreign corporation is incorporated. As

 

used in this subsection, "publicly held corporation" means a

 

foreign corporation that has outstanding shares listed on a major

 

United States stock exchange.

 

     Enacting section 1. This amendatory act takes effect 90 days

 

after the date it is enacted into law.