Transparency in Chinese Government Investment Act of 2020

I 116TH CONGRESS 2D SESSION H. R. 7924 To amend the Securities Exchange Act of 1934 to require issuers to disclose certain financial support from the Government of China, and for other purposes. IN THE HOUSE OF REPRESENTATIVES AUGUST 4, 2020 Mr. BARR (for himself, Mr. MCCAUL, and Mr. RIGGLEMAN) introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend the Securities Exchange Act of 1934 to require issuers to disclose certain financial support from the Government of China, and for other purposes. 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 ‘‘Transparency in Chi- 4 nese Government Investment Act of 2020’’. 5 VerDate Sep 11 2014 03:55 Aug 21, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H7924.IH H7924 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 7924 IH SEC. 2. DISCLOSURE OF CERTAIN FINANCIAL SUPPORT 1 FROM THE GOVERNMENT OF CHINA. 2 Section 13 of the Securities Exchange Act of 1934 3 (15 U.S.C. 78m) is amended by adding at the end the 4 following: 5 ‘‘(s) DISCLOSURE OF CERTAIN FINANCIAL SUPPORT 6 FROM THE GOVERNMENT OF CHINA.—Each issuer shall, 7 in any annual report required under this section and in 8 any prospectus in connection with an initial public offer- 9 ing, disclose the following: 10 ‘‘(1) Any participation by such issuer in any in- 11 dustrial policy or development plan of the Govern- 12 ment of China, including— 13 ‘‘(A) Made in China 2025; 14 ‘‘(B) Military-Civil Fusion; 15 ‘‘(C) Internet Plus; 16 ‘‘(D) Guidelines to Promote the National 17 Integrated Circuit Foundry Development Plan; 18 ‘‘(E) the China Integrated Circuit Invest- 19 ment Industry Fund (or any similar fund at the 20 provincial or local level); 21 ‘‘(F) Strategic Emerging Industries Initia- 22 tive; and 23 ‘‘(G) New Generation Artificial Intelligence 24 Development plan. 25 VerDate Sep 11 2014 03:55 Aug 21, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7924.IH H7924 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 7924 IH ‘‘(2) Any financial support such issuer received 1 from the Government of China through the partici- 2 pation described in paragraph (1), including— 3 ‘‘(A) direct subsidies, grants, loans, or loan 4 guarantees; 5 ‘‘(B) reduction of taxes or tax exemptions; 6 ‘‘(C) preferential treatment under the Gov- 7 ernment of China procurement policies; 8 ‘‘(D) participation in domestic or inter- 9 national standard-setting organizations; 10 ‘‘(E) prosecution or enforcement of Gov- 11 ernment of China intellectual property; 12 ‘‘(F) access to research and development; 13 and 14 ‘‘(G) reduced prices for key inputs, includ- 15 ing land, power, and water. 16 ‘‘(3) Any other financial support such issuer re- 17 ceived from the Government of China, including— 18 ‘‘(A) direct subsidies, grants, loans, or loan 19 guarantees; 20 ‘‘(B) reduction of taxes or tax exemptions; 21 and 22 ‘‘(C) preferential treatment under the Gov- 23 ernment of China procurement policies. 24 VerDate Sep 11 2014 03:55 Aug 21, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7924.IH H7924 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 7924 IH ‘‘(4) Any conditions under which the financial 1 support described in paragraphs (2) and (3) was 2 provided, including— 3 ‘‘(A) export performance; 4 ‘‘(B) input purchases manufactured in 5 China from specific producers or through the 6 use of Government of China intellectual prop- 7 erty; and 8 ‘‘(C) the assignment of Chinese Com- 9 munist Party personnel or Government of 10 China personnel in corporate positions of the 11 issuer. 12 ‘‘(5) Any Chinese Communist Party committee 13 established by such issuer, including— 14 ‘‘(A) the standing of each such committee; 15 and 16 ‘‘(B) which personnel of the issuer form 17 each such committee and the role of such per- 18 sonnel. 19 ‘‘(6) The name, position, and location of each 20 officer, director, and beneficiary of the issuer who at 21 the time of such report holds or formerly held a po- 22 sition with— 23 ‘‘(A) the Chinese Communist Party; 24 ‘‘(B) the Government of China; 25 VerDate Sep 11 2014 03:55 Aug 21, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H7924.IH H7924 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 7924 IH ‘‘(C) the Central Committee of the Com- 1 munist Party of China; 2 ‘‘(D) the Central Military Commission of 3 China; 4 ‘‘(E) the Chinese People’s Political Con- 5 sultative Conference; 6 ‘‘(F) the National People’s Congress of 7 China; or 8 ‘‘(G) a State Council in China. 9 ‘‘(7) In the case of any prospectus in connec- 10 tion with an initial public offering in which an issuer 11 makes a disclosure under paragraphs (1) through 12 (6), whether such issuer offers more than one class 13 of voting security.’’. 14 Æ VerDate Sep 11 2014 03:55 Aug 21, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\H7924.IH H7924 kjohnson on DSK79L0C42PROD with BILLS