Shareholder Political Transparency Act of 2021

IB Union Calendar No. 36 117TH CONGRESS 1ST SESSION H. R. 1087 [Report No. 117–53] To amend the Securities Exchange Act of 1934 to require reporting of certain expenditures for political activities, and for other purposes. IN THE HOUSE OF REPRESENTATIVES FEBRUARY 18, 2021 Mr. FOSTER (for himself, Ms. SCHAKOWSKY, Mr. PHILLIPS, Mr. DEFAZIO, Ms. NORTON, Ms. VELA´ZQUEZ, Mr. RASKIN, Mr. CROW, Mr. WELCH, Mr. CARBAJAL, and Ms. MENG) introduced the following bill; which was re- ferred to the Committee on Financial Services JUNE 8, 2021 Additional sponsor: Mr. GARCI´A of Illinois JUNE 8, 2021 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed [Strike out all after the enacting clause and insert the part printed in italic] [For text of introduced bill, see copy of bill as introduced on February 18, 2021] VerDate Sep 11 2014 19:48 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H1087.RH H1087 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 1087 RH A BILL To amend the Securities Exchange Act of 1934 to require reporting of certain expenditures for political activities, and for other purposes. VerDate Sep 11 2014 19:48 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6652 E:\BILLS\H1087.RH H1087 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 1087 RH Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Shareholder Political 4 Transparency Act of 2021’’. 5 SEC. 2. FINDINGS. 6 Congress finds that— 7 (1) corporations make significant political con- 8 tributions and expenditures that directly or indirectly 9 influence the election of candidates and support or 10 oppose political causes; 11 (2) decisions to use corporate funds for political 12 contributions and expenditures are usually made by 13 corporate boards and executives, rather than share- 14 holders; 15 (3) corporations, acting through boards and ex- 16 ecutives, are obligated to conduct business for the best 17 interests of their owners, the shareholders; 18 (4) historically, shareholders have not had a way 19 to know, or to influence, the political activities of cor- 20 porations they own; 21 (5) shareholders and the public have a right to 22 know how corporate managers are spending company 23 funds to make political contributions and expendi- 24 VerDate Sep 11 2014 19:48 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6203 E:\BILLS\H1087.RH H1087 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 1087 RH tures benefitting candidates, political parties, and po- 1 litical causes; and 2 (6) corporations should be accountable to share- 3 holders in making political contributions or expendi- 4 tures affecting Federal governance and public policy. 5 SEC. 3. REPORTING REQUIREMENTS. 6 Section 13 of the Securities Exchange Act of 1934 (15 7 U.S.C. 78m) is amended by adding at the end the following: 8 ‘‘(s) REPORTING REQUIREMENTS RELATING TO CER- 9 TAIN POLITICAL EXPENDITURES.— 10 ‘‘(1) DEFINITIONS.—In this subsection: 11 ‘‘(A) EXPENDITURE FOR POLITICAL ACTIVI- 12 TIES.—The term ‘expenditure for political activi- 13 ties’— 14 ‘‘(i) means— 15 ‘‘(I) an independent expenditure 16 (as defined in section 301(17) of the 17 Federal Election Campaign Act of 18 1971 (52 U.S.C. 30101(17))); 19 ‘‘(II) an electioneering commu- 20 nication (as defined in section 21 304(f)(3) of that Act (52 U.S.C. 22 30104(f)(3))) and any other public 23 communication (as defined in section 24 301(22) of that Act (52 U.S.C. 25 VerDate Sep 11 2014 19:48 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6203 E:\BILLS\H1087.RH H1087 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 1087 RH 30101(22))) that would be an election- 1 eering communication if it were a 2 broadcast, cable, or satellite commu- 3 nication; or 4 ‘‘(III) dues or other payments to 5 trade associations or organizations de- 6 scribed in section 501(c) of the Internal 7 Revenue Code of 1986 and exempt from 8 tax under section 501(a) of that Code 9 that are, or could reasonably be antici- 10 pated to be, used or transferred to an- 11 other association or organization for 12 the purposes described in subclause (I) 13 or (II); and 14 ‘‘(ii) does not include— 15 ‘‘(I) direct lobbying efforts 16 through registered lobbyists employed 17 or hired by the issuer; 18 ‘‘(II) communications by an 19 issuer to its shareholders and executive 20 or administrative personnel and their 21 families; or 22 ‘‘(III) the establishment and ad- 23 ministration of contributions to a sep- 24 VerDate Sep 11 2014 19:48 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6203 E:\BILLS\H1087.RH H1087 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 1087 RH arate segregated fund to be utilized for 1 political purposes by a corporation. 2 ‘‘(B) ISSUER.—The term ‘issuer’ does not 3 include an investment company registered under 4 section 8 of the Investment Company Act of 1940 5 (15 U.S.C. 80a–8). 6 ‘‘(2) QUARTERLY REPORTS.— 7 ‘‘(A) REPORTS REQUIRED.—Not later than 8 180 days after the date of enactment of this sub- 9 section, the Commission shall amend the report- 10 ing rules under this section to require each issuer 11 with a class of equity securities registered under 12 section 12 of this title to submit to the Commis- 13 sion and the shareholders of the issuer a quar- 14 terly report containing— 15 ‘‘(i) a description of any expenditure 16 for political activities made during the pre- 17 ceding quarter; 18 ‘‘(ii) the date of each expenditure for 19 political activities; 20 ‘‘(iii) the amount of each expenditure 21 for political activities; 22 ‘‘(iv) if the expenditure for political ac- 23 tivities was made in support of or in oppo- 24 sition to a candidate, the name of the can- 25 VerDate Sep 11 2014 19:48 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6203 E:\BILLS\H1087.RH H1087 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 1087 RH didate and the office sought by, and the po- 1 litical party affiliation of, the candidate; 2 and 3 ‘‘(v) the name or identity of trade asso- 4 ciations or organizations described in sec- 5 tion 501(c) of the Internal Revenue Code of 6 1986 and exempt from tax under section 7 501(a) of such Code which receive dues or 8 other payments as described in paragraph 9 (1)(A)(i)(III). 10 ‘‘(B) PUBLIC AVAILABILITY.—The Commis- 11 sion shall ensure that the quarterly reports re- 12 quired under this paragraph are publicly avail- 13 able through the Internet website of the Commis- 14 sion and through the EDGAR system in a man- 15 ner that is searchable, sortable, and 16 downloadable, consistent with the requirements 17 under section 24. 18 ‘‘(3) ANNUAL REPORTS.—Not later than 180 19 days after the date of enactment of this subsection, the 20 Commission shall, by rule, require each issuer to in- 21 clude in the annual report of the issuer to share- 22 holders— 23 ‘‘(A) a summary of each expenditure for po- 24 litical activities made during the preceding year 25 VerDate Sep 11 2014 19:48 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6203 E:\BILLS\H1087.RH H1087 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 1087 RH in excess of $10,000, and each expenditure for 1 political activities for a particular election if the 2 total amount of such expenditures for that elec- 3 tion is in excess of $10,000; 4 ‘‘(B) a description of the specific nature of 5 any expenditure for political activities the issuer 6 intends to make for the forthcoming fiscal year, 7 to the extent the specific nature is known to the 8 issuer; and 9 ‘‘(C) the total amount of expenditures for 10 political activities intended to be made by the 11 issuer for the forthcoming fiscal year.’’. 12 SEC. 4. REPORTS. 13 (a) SECURITIES AND EXCHANGE COMMISSION.—The 14 Securities and Exchange Commission shall— 15 (1) conduct an annual assessment of the compli- 16 ance of issuers with section 13(s) of the Securities Ex- 17 change Act of 1934, as added by section 3; and 18 (2) submit to Congress an annual report con- 19 taining the results of the assessment under paragraph 20 (1). 21 (b) GOVERNMENT ACCOUNTABILITY OFFICE.—The 22 Comptroller General of the United States shall periodically 23 evaluate and report to Congress on the effectiveness of the 24 oversight by the Securities and Exchange Commission of the 25 VerDate Sep 11 2014 19:48 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6203 E:\BILLS\H1087.RH H1087 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 1087 RH reporting and disclosure requirements under section 13(s) 1 of the Securities Exchange Act of 1934, as added by section 2 3. 3 VerDate Sep 11 2014 19:48 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6203 E:\BILLS\H1087.RH H1087 pamtmann on DSKBC07HB2PROD with BILLS Union Calendar No. 36 117TH CONGRESS 1ST SESSION H. R. 1087 [Report No. 117–53] A BILL To amend the Securities Exchange Act of 1934 to require reporting of certain expenditures for po- litical activities, and for other purposes. JUNE 8, 2021 Reported with an amendment, committed to the Com- mittee of the Whole House on the State of the Union, and ordered to be printed VerDate Sep 11 2014 19:48 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6651 Sfmt 6651 E:\BILLS\H1087.RH H1087 pamtmann on DSKBC07HB2PROD with BILLS