,,ii #aagth ,,congress #ast ,session ,s4 #bhbi ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,september #bc1 #bjba,mr4 ,rubio 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 the ,securities and ,exchange ,commission to require the contractual provision by large issuers of procedural privileges with respect to certain shareholder claims relating to board and management accountability for woke social policy actions as a condition of listing on a national securities exchange1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,mind ,your ,own ,business ,act of #bjba4 #b4 ,findings ,congress finds the following3 7#a7 ,the fiduciary duties of boards of directors and other corporate actors to corporations and their stockholders are generally established by and enforceable under ,state law4 7#b7 ,state law generally permits corporations discretion with respect to altering the rights of stockholders1 including the process by which stockholders assert claims for breach of fiduciary duties by the board of directors or other corporate actors1 limited by ,state law governing these fiduciary duties4 7#c7 ,the regulation of corporations as issuers of securities authorized by ,congress in the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;a et seq47 generally regulates corporate behavior in connection with the issuance of securities1 including with respect to contractual arrangements between corporations and their stockholders via provisions in corporations' charters and bylaws1 and does not-- 7,a7 establish fiduciary duties of boards of directors or other corporate actors to corporations and their stockholders under ,federal law2 or 7,b7 regulate the fiduciary duties of boards of directors or other corporate actors to corporations and their stockholders under ,state law4 7#d7 ,the ,state law fiduciary duties of boards of directors and other corporate actors establish certain norms upon which the national market system for securities has historically relied1 including-- 7,a7 boards of directors and other corporate actors generally have fiduciary duties to their respective corporations and stockholders2 and 7,b7 the behavior of corporations as issuers of securities will generally conform to these fiduciary duties1 to the benefit of the protection of investors and the public interest4 7#e7 ,other norms related to the public interest have historically provided critical bases upon which the national market system for securities has historically relied1 including norms that large corporate issuers that are significant to the national economy-- 7,a7 generally invest corporate resources to increase the long-term value of the corporation as a business rather than as an agent of social change2 7,b7 do not use corporate resources to advance narrowly political or partisan agendas2 and 7,c7 do not use corporate resources to promote socialism1 ,marxism1 critical race theory1 or other un-,american ideologies among their workforces or customers4 7#f7 ,though these norms are not enforceable legal duties of boards of directors or other corporate actors under ,federal law1 they substantially contribute to the commercial purpose and nationwide availability of the national market system for securities1 which are recognized by section #b of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;b7 as principal bases for the regulation authorized by that ,act4 7#g7 ,certain large corporate issuers that are significant to the national economy have recently undertaken actions which facially violate these norms on account of apparent political bias4 ,examples of such actions include the use of corporate resources to-- 7,a7 deny goods and services to ,states and their political subdivisions1 and private entities within such ,states and their political subdivisions1 in response to the social policies proposed or enacted in such ,states and their political subdivisions1 including those related to election procedures1 restrictions on abortion1 protections for religious freedom1 and enforcement of immigration law2 7,b7 deny goods and services to industries and other classes of entities on the basis of characteristics of those industries and classes related to social policy1 including industries involved in the sale or manufacture of firearms1 operation of border security or criminal detention facilities1 and performance of services for the ,united ,states military1 and classes of entities based on religious belief or identity2 7,c7 promote race and sex stereotyping1 such as those described in section #b7;a7 of ,executive ,order #aciej 7#e ,u4,s4,c4 #dajc note2 relating to combating race and sex stereotyping71 which include such destructive concepts that the ,united ,states is fundamentally racist or sexist1 an individual should be discriminated against or receive adverse treatment solely or partly because of his or her race or sex1 and meritocracy or traits such as a hard work ethic are racist or sexist1 or were created by a particular race to oppress another race2 and 7,d7 openly coordinate with political actors to pursue such actions1 including-- 7i7 undertaking such actions upon the action 7or inaction7 of boards of directors and other corporate actors that are not sufficiently independent from conflicts of interest with political actors1 including elected officials1 political parties1 news media1 labor unions1 nonprofit or non-governmental organizations which advocate for changes political or social policy through issuers1 other activists affiliated with such actors1 and activist investors which advocate for changes in corporate policy primarily unrelated to the pecuniary interest of the issuer2 and 7ii7 conceding to the demands of such political actors without undertaking due care4 7#h7 ,the prominent1 open1 and public facial violation of these norms by large corporate issuers that are significant to the national economy undermine the commercial purpose and nationwide availability of the national market system for securities by spending corporate resources on non-commercial and divisive1 political and partisan causes4 7#i7 ,the threat these actions pose to the national market system for securities establishes a public interest in ensuring large corporate issuers that are significant to the national economy-- 7,a7 have adequate internal procedural mechanisms to ensure the accountability of boards of directors and other corporate actors with respect to their adherence with the norms described in this section2 and 7,b7 do not unduly burden the ability of stockholders to assert claims for breach of fiduciary duty under ,state law where the actions at issue in such claims facially violates those norms4 #c4 ,listing requirement relating to procedural privileges for certain shareholder claims ,the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;a et seq47 is amended by inserting after section #aj;,d 7#ae ,u4,s4,c4 #gh;j-#d7 the following3 #aj;,e4 ,procedural privileges for certain shareholder claims 7a7 ,definitions ,in this section3 7#a7 ,claimant ,the term claimant means-- 7,a7 a person that brings a covered claim2 or 7,b7 if a covered claim is brought as a class action1 the representative of the class in that action4 7#b7 ,controller ,the term controller means any person or entity that has control1 directly or indirectly1 by any means 7as those terms are defined under applicable ,state law71 over the board of directors of an issuer1 either-- 7,a7 generally2 or 7,b7 with respect to an action at issue in a covered claim4 7#c7 ,covered claim ,the term covered claim-- 7,a7 means any single cause of action that-- 7i7 asserts a claim for breach of fiduciary duty owed by any corporate defendant to the applicable issuer 7or the shareholders of the applicable issuer7 resulting from material action by any covered corporate actor with respect to the applicable issuer-- 7,i7 that is taken primarily in response to a law 7including a regulation7 that is enacted by a ,state1 or a bill that is introduced in the legislature of a ,state or policy otherwise publicly proposed by an elected official of a ,state1 which shall include if such action includes any prohibition of business within that ,state by an issuer1 whether with respect to business services or travel to1 or major events in1 that ,state1 that is facially unrelated to the pecuniary interest of the applicable issuer1 which shall presumptively include if the law bill1 or policy would modify1 establish1 or create a law relating to-- 7aa7 the manner in which elections are conducted in the ,state2 7bb7 protecting religious freedom2 or 7cc7 limiting the availability of services that include the abortion of unborn children2 7,,ii7 to prohibit the sale of goods or services by any covered corporate actor with respect to the applicable issuer to customers who operate in an industry with which the issuer engages in such business primarily on the basis of a characteristic of that industry that is facially unrelated to the pecuniary interest of the applicable issuer2 7,,iii7 to promote a covered divisive concept2 or 7,,iv7 for which the reasoning publicly presented by any covered corporate actor with respect to the applicable issuer as-- 7aa7 any basis for such action promotes a covered divisive concept2 or 7bb7 the primary basis for such action is facially unrelated to the pecuniary interest of the applicable issuer1 which shall presumptively include any reference to diversity1 equity1 or inclusion with respect to the composition of the workforce1 management1 or board of directors of the issuer or society in general2 and 7ii7 is brought by a covered shareholder as-- 7,i7 a direct action2 or 7,,ii7 a derivative action or proceeding brought on behalf of the applicable issuer2 and 7,b7 does not include a cause of action that asserts a claim for the breach of fiduciary duty owed by any corporate defendant to the applicable issuer 7or the shareholders of that issuer7 resulting from-- 7i7 a charitable contribution by any covered corporate actor with respect to the applicable issuer2 7ii7 the exercise of religion by any covered corporate actor with respect to the applicable issuer2 7iii7 business activity by any covered corporate actor in connection with the national security of the ,united ,states1 the ,armed ,forces1 or veterans of the ,armed ,forces2 or 7iv7 the limitation of business by any covered corporate actor with respect to the applicable issuer-- 7,i7 occurring in the jurisdiction of1 or with an agent of the ,people's ,republic of ,china1 the ,russian ,federation1 ,north ,korea1 ,iran1 ,syria1 ,sudan1 ,venezuela1 or ,cuba2 7,,ii7 in connection with preventing the abuse of internationally recognized worker rights1 as defined in section #ejg of the ,trade ,act of #aigd 7#ai ,u4,s4,c4 #bdfg72 7,,iii7 with any entity that derives directly or indirectly more than de minimis gross revenue through the sale of products or services1 or the presentation of any depictions or displays1 of a prurient sexual nature2 7,,iv7 with any entity that engages in a commerce- or investment-related boycott1 divestment1 or sanctions activity that targets ,israel2 or 7,v7 that is required under ,federal1 ,state1 or local law4 7#d7 ,covered company ,the term covered company means an issuer that has1 as calculated in accordance with section #bdj4ab;b-#b of title #ag1 ,code of ,federal ,regulations1 or any successor regulation-- 7,a7 a public float of more than #bj1jjj1jjj1jjj2 or 7,b7 annual revenues of more than #e1jjj1jjj1jjj4 7#e7 ,covered corporate actor ,the term covered corporate actor means-- 7,a7 an issuer2 7,b7 a director1 officer1 or affiliate of an issuer2 7,c7 a controller with respect to an issuer2 or 7,d7 any person acting in the capacity of an officer or agent of an issuer4 7#f7 ,corporate defendant ,the term corporate defendant means any individual who-- 7,a7 is a director1 officer1 affiliate of an issuer1 or controller2 and 7,b7 may be named as a defendant in a cause of action for breach of fiduciary duty under applicable ,state law4 7#g7 ,covered divisive concept ,the term covered divisive concept means any concept described in section #b7;a7 of ,executive ,order #aciej 7#e ,u4,s4,c4 #dajc note2 relating to combating race and sex stereotyping74 7#h7 ,covered shareholder 7,a7 ,in general ,the term covered shareholder means a shareholder that as of the date on which a covered claim with respect to the issuer is filed and at all times during which the covered claim described in subparagraph 7,a7 is pending have continuously owned not less than-- 7i7 #b1jjj in market value of the issuer's securities for at least three years2 7ii7 #ae1jjj in market value of the issuer's securities for at least two years2 or 7iii7 #be1jjj in market value of the issuer's securities for at least one year4 7#i7 ,director ,the term director means1 with respect to an issuer1 a member of the board of directors of the issuer4 7#aj7 ,investment adviser2 private fund ,the terms investment adviser and private fund have the meanings given the terms in section #bjb of the ,investment ,advisers ,act of #aidj 7#ae ,u4,s4,c4 #hj;b-#b74 7#aa7 ,investment company ,the term investment company has the meaning given the term in section #c of the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#c74 7#ab7 ,issuer ,the term issuer means an issuer with a class of securities registered pursuant to section #ab4 7#ac7 ,non-pecuniary investment entity ,the term non-pecuniary investment entity means-- 7,a7 any investment company or private fund that invests1 reinvests1 or trades1 or proposes to invest1 reinvest1 or trade in1 or that exercises any control right with respect to any security primarily on a basis that is facially unrelated to the pecuniary interest of any beneficiary of such company or fund for which such activity occurs with respect to such security2 7,b7 any investment advisor that provides any advice that is not a charitable contribution-- 7i7 that is for compensation2 and 7ii7 the basis for which is primarily unrelated to the pecuniary interest of the party receiving the advice2 7,c7 any entity that engages in activism with respect to issuers to which section #ad applies for which the primary basis of such activism is facially unrelated to the pecuniary interest of the issuers to which such activism is directed1 including-- 7i7 nominating candidates for election as directors of those issuers2 or 7ii7 making shareholder proposals pursuant to that section2 and 7,d7 any labor organization1 as defined in section #b of the ,national ,labor ,relations ,act 7#bi ,u4,s4,c4 #aeb71 or pension fund affiliated with a labor organization4 7b7 ,requirements 7#a7 ,rules ,not later than #a year after the date of enactment of the ,mind ,your ,own ,business ,act of #bjba1 the ,commission shall1 by rule1 direct the national securities exchanges and national securities associations to prohibit the listing of any security of any covered company that is not in compliance with the requirements of this section4 7#b7 ,issuer requirements ,the rules issued under paragraph 7#a7 shall require each issuer1 to the maximum extent permitted by ,state law1 in the articles of incorporation or bylaws of the issuer1 to provide1 with respect to any covered claim1 that any corporate defendant with respect to the issuer that is named as a defendant in the covered claim shall-- 7,a7 be bound by the presumptions established under subsection 7c7 with respect to any factual representation made in connection with the covered claim1 including any factual representation relating to whether a claim asserted is a covered claim2 7,b7 have the burden of proof with respect to any determination of independent business judgment2 7,c7 if the claimant obtains a judgment on the merits in the covered claim1 be jointly and severally liable for money damages to the claimant in an amount that is not less than the greater of-- 7i7 treble damages2 or 7ii7 #b times the total compensation paid by the issuer to all directors of the issuer for the year in which the primary action alleged in the covered claim substantially occurred1 which shall include the market value of all securities issued as compensation to those directors in that year2 7,d7 if the claimant obtains all or some of the relief sought in the covered claim1 whether by court order1 settlement1 voluntary change in the conduct of the defendant1 or otherwise1 reimburse the claimant for the greatest amount permitted by law with respect to all fees1 costs1 and expenses of every kind and description 7including all reasonable attorney's fees and other litigation expenses7 that the claimant may obtain in connection with the covered claim2 and 7,e7 not be indemnified by the issuer for any liability1 loss 7including attorney's fees1 judgments1 fines1 or amounts paid in settlement7 incurred or suffered in connection with the covered claim4 7c7 ,presumptions ,for the purposes of this section1 the following presumptions shall apply with respect to any covered claim1 including with respect to any factual representation relating to whether a claim asserted is a covered claim3 7#a7 ,pecuniary interest ,there shall be a presumption that the pecuniary interest of an issuer1 which shall include the best interest of the issuer to the extent that such interest is substantially similar to the pecuniary interest of the issuer1 does not include-- 7,a7 the morale of1 or ability of the issuer to hire or retain1 supervisory employees in general2 7,b7 the diversity of the board of directors1 management1 or workforce in general with respect to any characteristic protected by section #gjc of the ,civil ,rights ,act of #aifd 7#db #bjjj;e-#b72 7,c7 the public relations1 image1 value of marketing1 or coverage by the news media of the issuer2 or 7,d7 any financial benefit or reduction in cost1 including the cost of capital to the issuer1 to the extent the pecuniary benefit of or to such benefit or reduction in cost is caused by the-- 7i7 investment in the securities of the issuer by a non-pecuniary investment entity2 or 7ii7 inclusion of the securities of the issuer in indexes created by index providers that select those indexes on a primarily non-pecuniary basis or that include such securities in any index on a primarily non-pecuniary basis4 7#b7 ,demand excused ,for the purpose of determining whether demand is excused with respect to a covered claim1 there shall be a presumption that a director is not independent if the director is employed1 controlled1 or nominated by1 or otherwise has a history of affiliation with a non-pecuniary investment entity or any affiliate of a non-pecuniary investment entity4 7d7 ,rules of construction ,nothing in this section may be construed-- 7#a7 to limit the exercise of religion1 as defined in section #e of the ,religious ,freedom ,restoration ,act of #aiic 7#db ,u4,s4,c4 #bjjj;bb-#b7 of any issuer or any director1 officer1 or affiliate of an issuer2 or 7#b7 as establishing a fiduciary duty by any corporate defendant or corporate actor4 4