,,ii #aacth ,,congress #ast ,session ,s4 #hbd ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,april #be1 #bjac ,mr4 ,menendez 7for himself1 ,mrs4 ,shaheen1 ,mr4 ,begich1 ,mr4 ,blumenthal1 ,mr4 ,brown1 ,mr4 ,lautenberg1 ,mr4 ,leahy1 ,mr4 ,merkley1 and ,mr4 ,udall of ,new ,mexico7 introduced the following bill2 which was read twice and referred to the ,committee on ,banking1 ,housing1 and ,urban ,affairs ,a ,,bill ,to amend the ,securities ,exchange ,act of #aicd to require shareholder authorization before a public company may make certain political expenditures1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,shareholder ,protection ,act of #bjac4 #b4 ,findings ,congress finds the following3 7#a7 ,corporations make significant political contributions and expenditures that directly or indirectly influence the election of candidates and support or oppose political causes4 ,decisions to use corporate funds for political contributions and expenditures are usually made by corporate boards and executives1 rather than shareholders4 7#b7 ,corporations1 acting through their boards and executives1 are obligated to conduct business for the best interests of their owners1 the shareholders4 7#c7 ,historically1 shareholders have not had a way to know1 or to influence1 the political activities of corporations they own4 ,shareholders and the public have a right to know how corporations are spending their funds to make political contributions and expenditures benefitting candidates1 political parties1 and political causes4 7#d7 ,corporations should be accountable to their shareholders in making political contributions or expenditures affecting ,federal governance and public policy4 ,requiring the express approval of a corporation's shareholders prior to making political contributions or expenditures will establish necessary accountability4 #c4 ,shareholder approval of corporate political activity ,the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;a et seq47 is amended by inserting after section #ad;,b 7#ae ,u4,s4,c4 #ghn-#b7 the following3 #ad;,c4 ,shareholder approval of certain political expenditures and disclosure of votes of institutional investors 7a7 ,definitions ,in this section-- 7#a7 the term expenditure for political activities-- 7,a7 means-- 7i7 an independent expenditure1 as such term is defined in section #cja7ag7 of the ,federal ,election ,campaign ,act of #aiga 7#b ,u4,s4,c4 #dca7ag772 7ii7 an electioneering communication1 as such term is defined in section #cjd7;f77#c7 of such ,act 7#b ,u4,s4,c4 #dcd7;f77#c77 and any other public communication 7as such term is defined in section #cja7bb7 of such ,act 7#b ,u4,s4,c4 #dca7bb777 that would be an electioneering communication if it were a broadcast1 cable1 or satellite communication2 or 7iii7 dues or other payments to trade associations or organizations described in section #eja7;c7 of the ,internal ,revenue ,code of #aihf and exempt from tax under section #eja7;a7 of such ,code that are1 or could reasonably be anticipated to be1 used or transferred to another association or organization for the purposes described in clauses 7i7 or 7ii72 and 7,b7 does not include-- 7i7 direct lobbying efforts through registered lobbyists employed or hired by the issuer2 7ii7 communications by an issuer to its shareholders and executive or administrative personnel and their families2 or 7iii7 the establishment and administration of contributions to a separate segregated fund to be utilized for political purposes by a corporation2 and 7#b7 the term issuer does not include an investment company registered under section #h of the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#h74 7b7 ,shareholder authorization for political expenditures ,each solicitation of proxy1 consent1 or authorization by an issuer with a class of equity securities registered under section #ab of this title shall-- 7#a7 contain-- 7,a7 a description of the specific nature of any expenditure for political activities proposed to be made by the issuer for the forthcoming fiscal year that has not been authorized by a vote of the shareholders of the issuer1 to the extent the specific nature is known to the issuer2 and 7,b7 the total amount of expenditures for political activities proposed to be made by the issuer for the forthcoming fiscal year2 and 7#b7 provide for a separate vote of the shareholders of the issuer to authorize such expenditures for political activities in the total amount described in paragraph 7#a74 7c7 ,vote required ,to make expenditures ,no issuer shall make an expenditure for political activities in any fiscal year unless such expenditure-- 7#a7 is of the nature of those proposed by the issuer in subsection 7b77#a72 and 7#b7 has been authorized by a vote of the majority of the outstanding shares of the issuer in accordance with subsection 7b77#b74 7d7 ,fiduciary duty2 liability 7#a7 ,fiduciary duty ,a violation of subsection 7c7 shall be considered a breach of a fiduciary duty of the officers and directors who authorized the expenditure for political activities4 7#b7 ,liability ,an officer or director of an issuer who authorizes an expenditure for political activities in violation of subsection 7c7 shall be jointly and severally liable in any action brought in a court of competent jurisdiction to any person or class of persons who held shares at the time the expenditure for political activities was made for an amount equal to #c times the amount of the expenditure for political activities4 7e7 ,disclosure of votes 7#a7 ,disclosure required ,each institutional investment manager subject to section #ac7;f7 shall disclose not less frequently than annually how it voted on any shareholder vote under subsection 7a71 unless the vote is otherwise required by rule of the ,commission to be reported publicly4 7#b7 ,rules ,not later than #f months after the date of enactment of this section1 the ,commission shall issue rules to carry out this subsection that require that a disclosure required under paragraph 7#a7-- 7,a7 be made not later than #cj days after a vote described in paragraph 7#a72 and 7,b7 be made available to the public through the ,,edgar system as soon as practicable4 7f7 ,safe harbor for certain divestment decisions ,notwithstanding any other provision of ,federal or ,state law1 if an institutional investment manager makes the disclosures required under subsection 7e71 no person may bring any civil1 criminal1 or administrative action against the institutional investment manager1 or any employee1 officer1 or director thereof1 based solely upon a decision of the investment manager to divest from1 or not to invest in1 securities of an issuer due to an expenditure for political activities made by the issuer4 4 #d4 ,required board vote on corporate expenditures for political activities ,the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh et seq47 is amended by adding after section #af 7#ae ,u4,s4,c4 #ghp7 the following3 #af;,a4 ,required board vote on corporate expenditures for political activities 7a7 ,definitions ,in this section1 the terms expenditure for political activities and issuer have the same meaning as in section #ad;,c4 7b7 ,listing on exchanges ,not later than #ahj days after the date of enactment of this section1 the ,commission shall1 by rule1 direct the national securities exchanges and national securities associations to prohibit the listing of any class of equity security of an issuer that is not in compliance with the requirements of any portion of subsection 7c74 7c7 ,requirement for vote in corporate bylaws 7#a7 ,vote required ,the bylaws of an issuer shall expressly provide for a vote of the board of directors of the issuer on-- 7,a7 any expenditure for political activities in excess of #ej1jjj2 and 7,b7 any expenditure for political activities that would result in the total amount spent by the issuer for a particular election 7as such term is defined in section #cja7a7 of the ,federal ,election ,campaign ,act of #aiga 7#b ,u4,s4,c4 #dca7a777 in excess of #ej1jjj4 7#b7 ,public availability ,an issuer shall make the votes of each member of the board of directors for a vote required under paragraph 7#a7 publicly available not later than #dh hours after the vote1 including in a clear and conspicuous location on the ,web site of the issuer4 7d7 ,no ,effect on ,determination of ,coordination ,with ,candidates or ,campaigns ,for purposes of the ,federal ,election ,campaign ,act of #aiga1 an expenditure for political activities by an issuer shall not be treated as made in concert or cooperation with1 or at the request or suggestion of1 any candidate or committee solely because a member of the board of directors of the issuer voted on the expenditure as required under this section4 4 #e4 ,reporting requirements ,section #ac of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #ghm7 is amended by adding at the end the following3 7s7 ,reporting requirements relating to certain political expenditures 7#a7 ,definitions ,in this subsection1 the terms expenditure for political activities and issuer have the same meaning as in section #ad;,c4 7#b7 ,quarterly reports 7,a7 ,reports required ,not later than #ahj days after the date of enactment of this subsection1 the ,commission shall amend the reporting rules under this section to require each issuer with a class of equity securities registered under section #ab of this title to submit to the ,commission and the shareholders of the issuer a quarterly report containing-- 7i7 a description of any expenditure for political activities made during the preceding quarter2 7ii7 the date of each expenditure for political activities2 7iii7 the amount of each expenditure for political activities2 7iv7 the votes of each member of the board of directors authorizing the expenditure for political activity1 as required under section #af;,a7c72 7v7 if the expenditure for political activities was made in support of or opposed to a candidate1 the name of the candidate and the office sought by1 and the political party affiliation of1 the candidate2 and 7vi7 the name or identity of trade associations or organizations described in section #eja7;c7 of the ,internal ,revenue ,code of #aihf and exempt from tax under section #eja7;a7 of such ,code which receive dues or other payments as described in section #ad;,c7a77#a77;,a77iii74 7,b7 ,public availability ,the ,commission shall ensure that1 to the greatest extent practicable1 the quarterly reports required under this paragraph are publicly available through the ,web site of the ,commission and through the ,,edgar system in a manner that is searchable1 sortable1 and downloadable1 consistent with the requirements under section #bd4 7#c7 ,annual reports ,not later than #ahj days after the date of enactment of this subsection1 the ,commission shall1 by rule1 require each issuer to include in the annual report of the issuer to shareholders a summary of each expenditure for political activities made during the preceding year in excess of #aj1jjj1 and each expenditure for political activities for a particular election if the total amount of such expenditures for that election is in excess of #aj1jjj4 4 #f4 ,reports 7a7 ,securities and ,exchange ,commission ,the ,securities and ,exchange ,commission shall-- 7#a7 conduct an annual assessment of the compliance of issuers and officers and members of the boards of directors of issuers with sections #ad;,c1 #af;,a1 and #ac7s7 of the ,securities ,exchange ,act1 as added by this ,act2 and 7#b7 submit to ,congress an annual report of containing the results of the assessment under paragraph 7#a74 7b7 ,government ,accountability ,office ,the ,comptroller ,general of the ,united ,states shall periodically evaluate and report to ,congress on the effectiveness of the oversight by the ,securities and ,exchange ,commission of the reporting and disclosure requirements under sections #ad;,c1 #af;,a1 and #ac7s7 of the ,securities ,exchange ,act1 as added by this ,act4 #g4 ,severability ,if any provision of this ,act1 an amendment made by this ,act1 or the application of such provision or amendment to any person or circumstance is held to be unconstitutional1 the remainder of this ,act1 the amendments made by this ,act1 and the application of such provision or amendment to any person or circumstance shall not be affected thereby4