89–006 

111TH CONGRESS REPT. 111–620 " ! HOUSE OF REPRESENTATIVES 2d Session Part 1 

SHAREHOLDER PROTECTION ACT OF 2010 

SEPTEMBER 22, 2010.—Committed to the Committee of the Whole House on the 

State of the Union and ordered to be printed 

Mr. FRANK of Massachusetts, from the Committee on Financial 

Services, submitted the following 

R E P O R T 

together with 

DISSENTING VIEWS 

[To accompany H.R. 4790] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Financial Services, to whom was referred the 

bill (H.R. 4790) to amend the Securities Exchange Act of 1934 to 

require shareholder authorization before a public company may 

make certain political expenditures, and for other purposes, having 

considered the same, report favorably thereon with an amendment 

and recommend that the bill as amended do pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 4 

Background and Need for Legislation .................................................................... 5 

Hearings ................................................................................................................... 6 

Committee Consideration ........................................................................................ 6 

Committee Votes ...................................................................................................... 7 

Committee Oversight Findings ............................................................................... 13 

Performance Goals and Objectives ......................................................................... 13 

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 14 

Committee Cost Estimate ....................................................................................... 14 

Congressional Budget Office Estimate ................................................................... 14 

Federal Mandates Statement ................................................................................. 15 

Advisory Committee Statement .............................................................................. 15 

Constitutional Authority Statement ...................................................................... 15 

Applicability to Legislative Branch ........................................................................ 15 

Earmark Identification ............................................................................................ 15 

Section-by-Section Analysis of the Legislation ...................................................... 16 

Changes in Existing Law Made by the Bill, as Reported ..................................... 17 


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Dissenting Views ..................................................................................................... 21 

AMENDMENT

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Shareholder Protection Act of 2010’’. 

SEC. 2. FINDINGS. 

Congress finds the following: 

(1) Corporations make significant political contributions and expenditures 

that directly or indirectly influence the election of candidates and support or oppose political causes. Decisions to use corporate funds for political contributions 

and expenditures are usually made by corporate boards and executives, rather 

than shareholders. 

(2) Corporations, acting through their boards and executives, are obligated to 

conduct business for the best interests of their owners, the shareholders. 

(3) Historically, shareholders have not had a way to know, or to influence, the 

political activities of corporations they own. Shareholders and the public have 

a right to know how corporations are spending their funds to make political contributions or expenditures benefitting candidates, political parties, and political 

causes. (4) Corporations should be accountable to their shareholders in making political contributions or expenditures affecting Federal governance and public policy. Requiring the express approval of a corporation’s shareholders prior to making political contributions or expenditures will establish necessary accountability. 

SEC. 3. SHAREHOLDER APPROVAL OF CORPORATE POLITICAL ACTIVITY. 

The Securities Exchange Act of 1934 is amended by inserting after section 14B 

the following new section: 

‘‘SEC. 14C. SHAREHOLDER APPROVAL OF CERTAIN POLITICAL EXPENDITURES AND DISCLOSURE OF VOTES OF INSTITUTIONAL INVESTORS. 

‘‘(a) SHAREHOLDER AUTHORIZATION FOR POLITICAL EXPENDITURES.—Any solicitation of any proxy or consent or authorization in respect of any security of an issuer 

shall— 

‘‘(1) contain a description of the specific nature of any expenditures for political activities proposed to be made by the issuer for the forthcoming fiscal year 

not previously approved, to the extent the specific nature is known to the issuer 

and including the total amount of such proposed expenditures; and 

‘‘(2) provide for a separate shareholder vote to authorize such proposed expenditures in such amount. 

‘‘(b) REQUIREMENTS FOR EXPENDITURES.—No issuer shall make any expenditure 

for political activities in any fiscal year unless— 

‘‘(1) such expenditure is of the nature of those proposed by the issuer pursuant to subsection (a)(1); and 

‘‘(2) authorization for such expenditures has been granted by votes representing a majority of outstanding shares pursuant to subsection (a)(2). 

‘‘(c) FIDUCIARY DUTY; LIABILITY.—A violation of subsection (b) shall be considered 

a breach of a fiduciary duty of the officers and directors who authorized such an 

expenditure. The officers and directors who authorize such an expenditure without 

first obtaining such authorization of shareholders shall be jointly and severally liable in any action brought in any court of competent jurisdiction to any individual 

or class of individuals who held shares at the time such expenditure was made for 

an amount equal to 3 times the amount of such expenditure. 

‘‘(d) DEFINITION OF EXPENDITURE FOR POLITICAL ACTIVITIES.—As used in this section: 

‘‘(1) The term ‘expenditure for political activities’ means— 

‘‘(A) an independent expenditure, as such term is defined in section 

301(17) of the Federal Election Campaign Act of 1971 (2 U.S.C. 431(17)); 

‘‘(B) an electioneering communication, as such term is defined in section 

304(f)(3) of such Act (2 U.S.C. 434(f)(3)) and any other public communication (as such term is defined in section 301(22) of such Act (2 U.S.C. 

431(22))) that would be an electioneering communication if it were a broadcast, cable, or satellite communication; or 

‘‘(C) dues or other payments to trade associations or other tax exempt organizations that are, or could reasonably be anticipated to be, used or 


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transferred to another association or organization for the purposes described in subparagraph (A) or (B). 

‘‘(2) Such term shall not include— 

‘‘(A) direct lobbying efforts through registered lobbyists employed or hired 

by the issuer; 

‘‘(B) communications by an issuer to its shareholders and executive or administrative personnel and their families; or 

‘‘(C) the establishment and administration of contributions to a separate 

segregated fund to be utilized for political purposes by a corporation. 

‘‘(e) DISCLOSURE OF VOTES.—Every institutional investment manager subject to 

section 13(f) shall report at least annually how it voted on any shareholder vote pursuant to subsection (a), unless such vote is otherwise required to be reported publicly by rule or regulation of the Commission. Not later than 6 months after the date 

of enactment of this section, the Commission shall issue rules and regulations to implement this subsection. Such rules shall require that such report be made not later 

than 30 days after such a vote and be made available to the public through the 

EDGAR system as soon as practicable. 

‘‘(f) SAFE HARBOR FOR CERTAIN DIVESTMENT DECISIONS.—Notwithstanding any 

other provision of Federal or State law, no person may bring any civil, criminal, or 

administrative action against any institutional investment manager, or any employee, officer, or director thereof, based solely upon a decision of the investment 

manager to divest from, or not to invest in, securities of an issuer because of expenditures for political activities made by that issuer. This subsection shall not 

apply to any institutional investment manager, or any employee, officer, or director 

thereof, unless the institutional investment manager makes disclosures in accordance with regulations prescribed by the Commission.’’. 

SEC. 4. REQUIRED BOARD VOTE ON CORPORATE EXPENDITURES FOR POLITICAL ACTIVITIES. 

(a) REQUIRED VOTE.—The Securities Exchange Act of 1934 is amended by adding 

after section 16 the following new section: 

‘‘SEC. 16A. REQUIRED BOARD VOTE ON CORPORATE EXPENDITURES FOR POLITICAL ACTIVITIES. 

‘‘(a) LISTING ON EXCHANGES.—Effective not later than 180 days after the date of 

enactment of this section, the Commission shall, by rule, 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 (b). 

‘‘(b) REQUIREMENT FOR VOTE IN CORPORATE BYLAWS.—The corporate bylaws of an 

issuer shall expressly provide for a vote of the directors of the issuer on any individual expenditure for political activities (as such term is defined in section 

14C(d)(1)) in excess of $50,000, or any expenditure that makes the total amount 

spent by the issuer for the particular election (as such term is defined in section 

301(1) of the Federal Election Campaign Act of 1971 (2 U.S.C. 431(1))) $50,000 or 

more. An issuer shall make publicly available the individual votes of the directors 

required by the preceding sentence within 48 hours of the vote, including in a clear 

and conspicuous location on the Internet website of the issuer.’’. 

(b) NO EFFECT ON DETERMINATION OF COORDINATION WITH CANDIDATES OR CAMPAIGNS.—For purposes of determining whether an expenditure for political activities 

by an issuer under the Securities Exchange Act of 1934 is an independent expenditure under the Federal Election Campaign Act of 1971, the expenditure may not be 

treated as made in concert or cooperation with, or at the request or suggestion of, 

any candidate or committee solely on the grounds that any director of the issuer 

voted on the expenditure as required under section 16A(b) of the Securities Exchange Act of 1934 (as added by subsection (a)). 

SEC. 5. REPORTING REQUIREMENTS. 

Section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m) is amended 

by adding at the end the following: 

‘‘(r) REPORTING REQUIREMENTS RELATING TO CERTAIN POLITICAL EXPENDITURES.— 

‘‘(1) QUARTERLY REPORTS.—Not later than 180 days after the date of enactment of this subsection, the Commission shall modify its reporting rules under 

this section to require issuers to disclose quarterly any expenditure for political 

activities (as such term is defined in section 14C(d)(1)) made during the preceding quarter and the individual votes by board members authorizing such expenditures as required under section 16A(b). Such a report shall be filed with 

the Commission and provided to shareholders and shall include— 

‘‘(A) the date of each expenditure; 

‘‘(B) the amount of each expenditure; 


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1 Available at http://www.supremecourtus.gov/opinions/09pdf/08-205.pdf. 

‘‘(C) if the expenditure was made for or against a candidate, the name 

of the candidate, the office sought by and the political party affiliation of 

the candidate; and 

‘‘(D) the name or identity of trade associations or other tax-exempt organizations which receive dues or other payments as described in section 

14C(d)(1)(B). 

‘‘(2) ANNUAL REPORTS.—Not later than 180 days after the date of enactment 

of this subsection, the Commission shall, by rule, require each issuer to include 

in its annual report to shareholders an annual summary of all expenditures for 

political activities (as such term is defined in section 14C(d)(1)) made during the 

preceding year in excess of $10,000. 

‘‘(3) DISCLOSURE OF MATERIALS PURCHASED BY POLITICAL EXPENDITURES.—The 

Commission shall, by rule, require each issuer to obtain and disclose in the reports required under this section, any materials created with or purchased by 

any expenditure for political activities (as such term is defined in section 

14C(d)) made by the issuer. Such rule shall also require that each issuer disclose such materials in a clear and conspicuous location on the Internet website 

of the issuer within 48 hours of obtaining the materials. 

‘‘(4) PUBLIC AVAILABILITY.—The Commission shall ensure that, to the greatest 

extent practicable, the quarterly reports required by this subsection are publicly 

available through the Commission website and through the EDGAR system in 

a manner that is searchable, sortable, and downloadable, consistent with the requirements of section 24.’’. 

SEC. 6. REPORTS. 

The Securities and Exchange Commission shall annually assess the compliance of 

public corporations and their management with the requirements of the amendments made by this Act, and shall transmit to Congress an annual report of its findings. The Comptroller General of the United States shall periodically evaluate and 

report to Congress on the effectiveness of the Securities and Exchange Commission’s 

oversight of the reporting and disclosure requirements of the amendments made by 

this Act. 

SEC. 7. SEVERABILITY. 

If any provision of this Act, an amendment made by this Act, or the application 

of such provision or amendment to any person or circumstance is held to be unconstitutional, the remainder of this Act, the amendments made by this Act, and the 

application of such provision or amendment to any person or circumstance shall not 

be affected thereby. 

PURPOSE AND SUMMARY

The Shareholder Protection Act of 2010 (H.R. 4790) is a response 

to the U.S. Supreme Court’s decision in Citizens United v. Federal 

Election Commission, 558 U.S. 50 (2010).1 In Citizens United, the 

Court held that corporations have a First Amendment right to 

spend unlimited amounts of general treasury funds on political expenditures and electioneering communications. The ruling invalidated longstanding provisions in U.S. election laws and raised 

fresh concerns about corporate influence in our political process. 

To address those concerns, the Shareholder Protection Act gives 

shareholders of public companies the right to vote on the company’s 

annual budget for political expenditures. The bill makes that right 

enforceable through actions for breach of fiduciary duty against officers and directors who authorize political expenditures that are 

not in the nature of those set forth in the annual budget. The bill 

also requires a board vote on certain individual political expenditures, including those exceeding $50,000. The bill enhances transparency by requiring public companies to make quarterly and annual reports regarding their political expenditures, and by requiring institutional investment managers to publicly report their 

proxy votes on political expenditures within 30 days. 


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2For example, see Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (2000), and 

McConnell v. Federal Election Commission, 540 U.S. 93 (2003). 3Prepared Testimony of Laurence H. Tribe, House Judiciary Committee, February 2, 2010, 

available at http://judiciary.house.gov/hearings/pdf/Tribe100203.pdf 

BACKGROUND AND NEED FOR LEGISLATION

U.S. election laws have long prohibited corporations from using 

general treasury funds to pay for independent expenditures that 

advocate the election or defeat of political candidates. On January 

21, 2010, the U.S. Supreme Court invalidated those provisions in 

Citizens United. In its 5–to–4 decision, the Court held in effect that 

corporations have a First Amendment right to spend unlimited 

amounts of money from their general treasuries to influence Federal elections through independent expenditures and electioneering 

communications. In arriving at its decision, the Court overturned 

precedents that had limited corporate influence in politics for decades.2

The case arose when Citizens United, a non-profit corporation, 

sought injunctive and declaratory relief against enforcement of the 

Bipartisan Campaign Reform Act (BCRA). BCRA prohibited corporations and labor unions from using general treasury funds—as 

opposed to funds segregated in political action committees or 

PACs—either for ‘‘electioneering communications’’ or for express 

advocacy in favor of or in opposition to a candidate. Citizens United 

had produced a 90-minute film entitled Hillary: The Movie, which 

was critical of presidential candidate Hillary Clinton. Citizens 

United wanted to advertise and broadcast the film on cable television, but feared that doing so would subject it to civil and criminal penalties under BCRA. It therefore sought judicial protection. 

The Supreme Court sided with Citizens United, struck down the 

statutory provisions at issue, and established the broad principle 

that, under the First Amendment, independent corporate expenditures on political advocacy may not be prohibited. 

The decision generated significant controversy. Many criticized it 

as a major setback in the effort to ensure that corporations do not 

unduly influence the electoral process. Some commentators suggested that short of public financing of political campaigns or a 

constitutional amendment, little could be done legislatively to undo 

Citizens United. In testimony before the House Judiciary Committee, however, Professor Laurence Tribe observed that ‘‘despite 

the blow they [the majority of justices] struck against the interests 

of ordinary citizens and genuine self-government, they did not entirely foreclose meaningful avenues of legislative relief short of constitutional amendment.’’ 3

In keeping with Professor Tribe’s comment, Members of the 

House and Senate introduced a number of bills that through various means sought to mitigate the impact of Citizens United on political campaigns and to curb the influence of corporations on our 

elections. Among them is H.R. 4790. 

H.R. 4790 has two goals: (1) it gives shareholders of public companies more control over a company’s political expenditures, and 

(2) it subjects those expenditures to greater transparency. In terms 

of shareholder control, H.R. 4790 requires a public company’s proxy 

solicitations to include a description of the nature and amount of 

political expenditures planned for the ensuing fiscal year. The bill 


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prohibits companies from making any political expenditures unless 

they are consistent with the types of expenditures described in the 

proxy materials and unless they have been approved by a majority 

shareholder vote. The bill makes officers and directors jointly and 

severally liable for breach of fiduciary duty if they authorize political expenditures without shareholder approval, and it provides for 

treble damages. 

The bill also requires a board vote on any individual political expenditure exceeding $50,000, or any expenditure causing the total 

amount spent in an election to exceed $50,000. Those votes must 

be posted on the issuer’s website within 48 hours. 

H.R. 4790 promotes transparency in several ways. The bill requires public companies to make quarterly public disclosure of all 

expenditures for political activities during the preceding quarter, 

along with the individual votes of board members authorizing such 

expenditures. Those reports must include copies of any materials 

created or purchased with political expenditures, and must be posted on the company’s website within 48 hours. In addition, public 

companies will be required to include in their annual reports a 

summary of all political expenditures over $10,000. 

The bill requires institutional investment managers to report at 

least annually on how they voted on a public company’s proposed 

political expenditures. Those reports must be made within 30 days 

and placed on the EDGAR system as soon as practicable. 

The bill defines ‘‘political expenditures’’ as independent expenditures, electioneering and other public communications, and payments to trade associations to fund political activity. Direct lobbying, communications by issuers to shareholders, and establishment of political action committees are excluded from the definition. 

HEARINGS

The Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing entitled ‘‘Corporate 

Governance After Citizens United’’ on March 11, 2010. At the hearing, the following witnesses testified: 

• Professor John C. Coffee, Jr., Adolf A. Berle Professor of 

Law, Columbia Law School 

• Mr. Karl Sandstrom, Of Counsel, Perkins Cole 

• Ms. Ann Yerger, Executive Director, Council of Institutional Investors 

• Professor J.W. Verret, Assistant Professor of Law, George 

Mason University School of Law 

• Ms. Nell Minow, Editor and Co-Founder, The Corporate 

Library 

• Professor Michael Klausner, Nancy and Charles Munger 

Professor of Business and Professor of Law, Stanford Law 

School 

• Mr. Jan Baran, Partner, Wiley Rein LLP 

COMMITTEE CONSIDERATION

The Committee on Financial Services met in open session on 

July 28, 2010, and on July 29, 2010, ordered H.R. 4790, the ShareVerDate Mar 15 2010 02:46 Sep 24, 2010 Jkt 089006 PO 00000 Frm 00006 Fmt 6659 Sfmt 6602 E:\HR\OC\HR620P1.XXX HR620P1

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holder Protection Act of 2010, as amended, favorably reported to 

the House by a record vote of 35 yeas and 28 nays. 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. A motion by Mr. 

Frank to report the bill, as amended, to the House with a favorable 

recommendation was agreed to by a record vote of 35 yeas and 28 

nays (Record vote no. FC–143). The names of Members voting for 

and against follow: 

RECORD VOTE NO. FC–143 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. X ........... ............. Mr. Bachus ........................... ........... X .............

Mr. Kanjorski ......................... X ........... ............. Mr. Castle ............................ ........... X .............

Ms. Waters ............................ X ........... ............. Mr. King (NY) ....................... ........... ........... .............

Mrs. Maloney ......................... X ........... ............. Mr. Royce ............................. ........... X .............

Mr. Gutierrez ......................... X ........... ............. Mr. Lucas ............................. ........... X .............

Ms. Vela ́zquez ....................... ........... ........... ............. Mr. Paul ............................... ........... X .............

Mr. Watt ................................ X ........... ............. Mr. Manzullo ........................ ........... X .............

Mr. Ackerman ........................ X ........... ............. Mr. Jones .............................. ........... ........... .............

Mr. Sherman ......................... X ........... ............. Mrs. Biggert ......................... ........... X .............

Mr. Meeks ............................. X ........... ............. Mr. Miller (CA) ..................... ........... X .............

Mr. Moore (KS) ...................... X ........... ............. Mrs. Capito .......................... ........... X .............

Mr. Capuano ......................... X ........... ............. Mr. Hensarling ..................... ........... X .............

Mr. Hinojosa .......................... ........... ........... ............. Mr. Garrett (NJ) .................... ........... X .............

Mr. Clay ................................ ........... ........... ............. Mr. Barrett (SC) ................... ........... ........... .............

Mrs. McCarthy ....................... X ........... ............. Mr. Gerlach .......................... ........... X .............

Mr. Baca ............................... X ........... ............. Mr. Neugebauer .................... ........... X .............

Mr. Lynch .............................. ........... ........... ............. Mr. Price (GA) ...................... ........... X .............

Mr. Miller (NC) ...................... X ........... ............. Mr. McHenry ......................... ........... X .............

Mr. Scott ............................... X ........... ............. Mr. Campbell ....................... ........... X .............

Mr. Green .............................. X ........... ............. Mr. Putnam .......................... ........... X .............

Mr. Cleaver ........................... X ........... ............. Mrs. Bachmann .................... ........... X .............

Ms. Bean ............................... X ........... ............. Mr. Marchant ....................... ........... ........... .............

Ms. Moore (WI) ...................... X ........... ............. Mr. McCotter ........................ ........... X .............

Mr. Hodes .............................. X ........... ............. Mr. McCarthy ........................ ........... X .............

Mr. Ellison ............................. X ........... ............. Mr. Posey .............................. ........... X .............

Mr. Klein ............................... X ........... ............. Ms. Jenkins .......................... ........... X .............

Mr. Wilson ............................. X ........... ............. Mr. Lee ................................. ........... X .............

Mr. Perlmutter ....................... X ........... ............. Mr. Paulsen .......................... ........... X .............

Mr. Donnelly .......................... ........... X ............. Mr. Lance ............................. ........... X .............

Mr. Foster .............................. X ........... .............

Mr. Carson ............................ X ........... .............

Ms. Speier ............................. X ........... .............

Mr. Childers .......................... ........... X .............

Mr. Minnick ........................... ........... X .............

Mr. Adler ............................... X ........... .............

Ms. Kilroy .............................. X ........... .............

Mr. Driehaus ......................... X ........... .............

Ms. Kosmas .......................... X ........... .............

Mr. Grayson ........................... X ........... .............

Mr. Himes ............................. X ........... .............

Mr. Peters ............................. X ........... .............

Mr. Maffei ............................. X ........... .............

During consideration of the bill, the following amendments were 

disposed of by record votes. The names of Members voting for and 

against follow: 

An amendment by Mr. Grayson (and Mr. Capuano), no. 1a, to the 

amendment offered by Mr. Capuano, no. 1, a manager’s amendVerDate Mar 15 2010 02:46 Sep 24, 2010 Jkt 089006 PO 00000 Frm 00007 Fmt 6659 Sfmt 6602 E:\HR\OC\HR620P1.XXX HR620P1

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ment, was agreed to by a record vote of 34 yeas and 25 nays (FC– 

136): 

RECORD VOTE NO. FC–136 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. X ........... ............. Mr. Bachus ........................... ........... X .............

Mr. Kanjorski ......................... X ........... ............. Mr. Castle ............................ ........... X .............

Ms. Waters ............................ X ........... ............. Mr. King (NY) ....................... ........... ........... .............

Mrs. Maloney ......................... X ........... ............. Mr. Royce ............................. ........... X .............

Mr. Gutierrez ......................... X ........... ............. Mr. Lucas ............................. ........... X .............

Ms. Vela ́zquez ....................... ........... ........... ............. Mr. Paul ............................... ........... X .............

Mr. Watt ................................ X ........... ............. Mr. Manzullo ........................ ........... ........... .............

Mr. Ackerman ........................ X ........... ............. Mr. Jones .............................. ........... ........... .............

Mr. Sherman ......................... X ........... ............. Mrs. Biggert ......................... ........... X .............

Mr. Meeks ............................. X ........... ............. Mr. Miller (CA) ..................... ........... X .............

Mr. Moore (KS) ...................... X ........... ............. Mrs. Capito .......................... ........... X .............

Mr. Capuano ......................... X ........... ............. Mr. Hensarling ..................... ........... X .............

Mr. Hinojosa .......................... ........... ........... ............. Mr. Garrett (NJ) .................... ........... X .............

Mr. Clay ................................ ........... ........... ............. Mr. Barrett (SC) ................... ........... ........... .............

Mrs. McCarthy ....................... X ........... ............. Mr. Gerlach .......................... ........... X .............

Mr. Baca ............................... X ........... ............. Mr. Neugebauer .................... ........... X .............

Mr. Lynch .............................. ........... ........... ............. Mr. Price (GA) ...................... ........... X .............

Mr. Miller (NC) ...................... X ........... ............. Mr. McHenry ......................... ........... X .............

Mr. Scott ............................... X ........... ............. Mr. Campbell ....................... ........... ........... .............

Mr. Green .............................. X ........... ............. Mr. Putnam .......................... ........... X .............

Mr. Cleaver ........................... X ........... ............. Mrs. Bachmann .................... ........... X .............

Ms. Bean ............................... X ........... ............. Mr. Marchant ....................... ........... ........... .............

Ms. Moore (WI) ...................... ........... ........... ............. Mr. McCotter ........................ ........... X .............

Mr. Hodes .............................. X ........... ............. Mr. McCarthy ........................ ........... X .............

Mr. Ellison ............................. X ........... ............. Mr. Posey .............................. ........... ........... .............

Mr. Klein ............................... X ........... ............. Ms. Jenkins .......................... ........... X .............

Mr. Wilson ............................. X ........... ............. Mr. Lee ................................. ........... X .............

Mr. Perlmutter ....................... X ........... ............. Mr. Paulsen .......................... ........... X .............

Mr. Donnelly .......................... ........... X ............. Mr. Lance ............................. ........... X .............

Mr. Foster .............................. X ........... .............

Mr. Carson ............................ X ........... .............

Ms. Speier ............................. X ........... .............

Mr. Childers .......................... ........... X .............

Mr. Minnick ........................... ........... X .............

Mr. Adler ............................... X ........... .............

Ms. Kilroy .............................. X ........... .............

Mr. Driehaus ......................... X ........... .............

Ms. Kosmas .......................... X ........... .............

Mr. Grayson ........................... X ........... .............

Mr. Himes ............................. X ........... .............

Mr. Peters ............................. X ........... .............

Mr. Maffei ............................. X ........... .............

An amendment by Ms. Jenkins, no. 2, striking section 14A(d)(C) 

(relating to the definition of ‘expenditure for political activities’) 

was not agreed to by a record vote of 25 yeas and 37 nays (Record 

vote no. FC–137): 

RECORD VOTE NO. FC–137 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. ........... X ............. Mr. Bachus ........................... X ........... .............

Mr. Kanjorski ......................... ........... X ............. Mr. Castle ............................ X ........... .............

Ms. Waters ............................ ........... X ............. Mr. King (NY) ....................... ........... ........... .............

Mrs. Maloney ......................... ........... X ............. Mr. Royce ............................. X ........... .............

Mr. Gutierrez ......................... ........... X ............. Mr. Lucas ............................. X ........... .............

Ms. Vela ́zquez ....................... ........... ........... ............. Mr. Paul ............................... X ........... .............

Mr. Watt ................................ ........... X ............. Mr. Manzullo ........................ ........... ........... .............

Mr. Ackerman ........................ ........... X ............. Mr. Jones .............................. ........... ........... .............

Mr. Sherman ......................... ........... X ............. Mrs. Biggert ......................... X ........... .............


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RECORD VOTE NO. FC–137—Continued 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Meeks ............................. ........... X ............. Mr. Miller (CA) ..................... X ........... .............

Mr. Moore (KS) ...................... ........... X ............. Mrs. Capito .......................... X ........... .............

Mr. Capuano ......................... ........... X ............. Mr. Hensarling ..................... X ........... .............

Mr. Hinojosa .......................... ........... ........... ............. Mr. Garrett (NJ) .................... X ........... .............

Mr. Clay ................................ ........... ........... ............. Mr. Barrett (SC) ................... ........... ........... .............

Mrs. McCarthy ....................... ........... X ............. Mr. Gerlach .......................... X ........... .............

Mr. Baca ............................... ........... X ............. Mr. Neugebauer .................... X ........... .............

Mr. Lynch .............................. ........... ........... ............. Mr. Price (GA) ...................... X ........... .............

Mr. Miller (NC) ...................... ........... X ............. Mr. McHenry ......................... X ........... .............

Mr. Scott ............................... ........... X ............. Mr. Campbell ....................... X ........... .............

Mr. Green .............................. ........... X ............. Mr. Putnam .......................... X ........... .............

Mr. Cleaver ........................... ........... X ............. Mrs. Bachmann .................... X ........... .............

Ms. Bean ............................... ........... X ............. Mr. Marchant ....................... ........... ........... .............

Ms. Moore (WI) ...................... ........... X ............. Mr. McCotter ........................ X ........... .............

Mr. Hodes .............................. ........... X ............. Mr. McCarthy ........................ X ........... .............

Mr. Ellison ............................. ........... X ............. Mr. Posey .............................. X ........... .............

Mr. Klein ............................... ........... X ............. Ms. Jenkins .......................... X ........... .............

Mr. Wilson ............................. ........... X ............. Mr. Lee ................................. X ........... .............

Mr. Perlmutter ....................... ........... X ............. Mr. Paulsen .......................... X ........... .............

Mr. Donnelly .......................... ........... X ............. Mr. Lance ............................. X ........... .............

Mr. Foster .............................. ........... X .............

Mr. Carson ............................ ........... X .............

Ms. Speier ............................. ........... X .............

Mr. Childers .......................... ........... X .............

Mr. Minnick ........................... X ........... .............

Mr. Adler ............................... ........... X .............

Ms. Kilroy .............................. ........... X .............

Mr. Driehaus ......................... ........... X .............

Ms. Kosmas .......................... ........... X .............

Mr. Grayson ........................... ........... X .............

Mr. Himes ............................. ........... X .............

Mr. Peters ............................. ........... X .............

Mr. Maffei ............................. ........... X .............

An amendment by Mr. Carson, no. 5, regarding liability amount 

equal to 3 times expenditure, was agreed to by a record vote of 33 

yeas and 30 nays (Record vote no. FC–138): 

RECORD VOTE NO. FC–138 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. X ........... ............. Mr. Bachus ........................... ........... x .............

Mr. Kanjorski ......................... X ........... ............. Mr. Castle ............................ ........... X .............

Ms. Waters ............................ X ........... ............. Mr. King (NY) ....................... ........... ........... .............

Mrs. Maloney ......................... X ........... ............. Mr. Royce ............................. ........... X .............

Mr. Gutierrez ......................... X ........... ............. Mr. Lucas ............................. ........... X .............

Ms. Vela ́zquez ....................... ........... ........... ............. Mr. Paul ............................... ........... X .............

Mr. Watt ................................ X ........... ............. Mr. Manzullo ........................ ........... X .............

Mr. Ackerman ........................ X ........... ............. Mr. Jones .............................. ........... ........... .............

Mr. Sherman ......................... X ........... ............. Mrs. Biggert ......................... ........... X .............

Mr. Meeks ............................. X ........... ............. Mr. Miller (CA) ..................... ........... X .............

Mr. Moore (KS) ...................... X ........... ............. Mrs. Capito .......................... ........... X .............

Mr. Capuano ......................... X ........... ............. Mr. Hensarling ..................... ........... X .............

Mr. Hinojosa .......................... ........... ........... ............. Mr. Garrett (NJ) .................... ........... X .............

Mr. Clay ................................ ........... ........... ............. Mr. Barrett (SC) ................... ........... ........... .............

Mrs. McCarthy ....................... X ........... ............. Mr. Gerlach .......................... ........... X .............

Mr. Baca ............................... X ........... ............. Mr. Neugebauer .................... ........... X .............

Mr. Lynch .............................. ........... ........... ............. Mr. Price (GA) ...................... ........... X .............

Mr. Miller (NC) ...................... X ........... ............. Mr. McHenry ......................... ........... X .............

Mr. Scott ............................... X ........... ............. Mr. Campbell ....................... ........... X .............

Mr. Green .............................. X ........... ............. Mr. Putnam .......................... ........... X .............

Mr. Cleaver ........................... X ........... ............. Mrs. Bachmann .................... ........... X .............

Ms. Bean ............................... X ........... ............. Mr. Marchant ....................... ........... ........... .............


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10 

RECORD VOTE NO. FC–138—Continued 

Representative Aye Nay Present Representative Aye Nay Present 

Ms. Moore (WI) ...................... X ........... ............. Mr. McCotter ........................ ........... X .............

Mr. Hodes .............................. X ........... ............. Mr. McCarthy ........................ ........... X .............

Mr. Ellison ............................. X ........... ............. Mr. Posey .............................. ........... X .............

Mr. Klein ............................... X ........... ............. Ms. Jenkins .......................... ........... X .............

Mr. Wilson ............................. X ........... ............. Mr. Lee ................................. ........... X .............

Mr. Perlmutter ....................... ........... X ............. Mr. Paulsen .......................... ........... X .............

Mr. Donnelly .......................... ........... X ............. Mr. Lance ............................. ........... X .............

Mr. Foster .............................. ........... X .............

Mr. Carson ............................ X ........... .............

Ms. Speier ............................. X ........... .............

Mr. Childers .......................... ........... X .............

Mr. Minnick ........................... ........... X .............

Mr. Adler ............................... X ........... .............

Ms. Kilroy .............................. X ........... .............

Mr. Driehaus ......................... X ........... .............

Ms. Kosmas .......................... X ........... .............

Mr. Grayson ........................... X ........... .............

Mr. Himes ............................. X ........... .............

Mr. Peters ............................. X ........... .............

Mr. Maffei ............................. X ........... .............

An amendment by Mr. Castle, no. 6, relating to exemption under 

state law, was not agreed to by a record vote of 25 yeas and 38 

nays (Record vote no. FC–139): 

RECORD VOTE NO. FC–139 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. ........... X ............. Mr. Bachus ........................... X ........... .............

Mr. Kanjorski ......................... ........... X ............. Mr. Castle ............................ X ........... .............

Ms. Waters ............................ ........... X ............. Mr. King (NY) ....................... ........... ........... .............

Mrs. Maloney ......................... ........... X ............. Mr. Royce ............................. X ........... .............

Mr. Gutierrez ......................... ........... X ............. Mr. Lucas ............................. X ........... .............

Ms. Vela ́zquez ....................... ........... ........... ............. Mr. Paul ............................... X ........... .............

Mr. Watt ................................ ........... X ............. Mr. Manzullo ........................ X ........... .............

Mr. Ackerman ........................ ........... X ............. Mr. Jones .............................. ........... ........... .............

Mr. Sherman ......................... ........... X ............. Mrs. Biggert ......................... X ........... .............

Mr. Meeks ............................. ........... X ............. Mr. Miller (CA) ..................... X ........... .............

Mr. Moore (KS) ...................... ........... X ............. Mrs. Capito .......................... X ........... .............

Mr. Capuano ......................... ........... X ............. Mr. Hensarling ..................... X ........... .............

Mr. Hinojosa .......................... ........... ........... ............. Mr. Garrett (NJ) .................... X ........... .............

Mr. Clay ................................ ........... ........... ............. Mr. Barrett (SC) ................... ........... ........... .............

Mrs. McCarthy ....................... ........... X ............. Mr. Gerlach .......................... X ........... .............

Mr. Baca ............................... ........... X ............. Mr. Neugebauer .................... X ........... .............

Mr. Lynch .............................. ........... ........... ............. Mr. Price (GA) ...................... X ........... .............

Mr. Miller (NC) ...................... ........... X ............. Mr. McHenry ......................... X ........... .............

Mr. Scott ............................... ........... X ............. Mr. Campbell ....................... X ........... .............

Mr. Green .............................. ........... X ............. Mr. Putnam .......................... X ........... .............

Mr. Cleaver ........................... ........... X ............. Mrs. Bachmann .................... X ........... .............

Ms. Bean ............................... ........... X ............. Mr. Marchant ....................... ........... ........... .............

Ms. Moore (WI) ...................... ........... X ............. Mr. McCotter ........................ X ........... .............

Mr. Hodes .............................. ........... X ............. Mr. McCarthy ........................ X ........... .............

Mr. Ellison ............................. ........... X ............. Mr. Posey .............................. X ........... .............

Mr. Klein ............................... ........... X ............. Ms. Jenkins .......................... X ........... .............

Mr. Wilson ............................. ........... X ............. Mr. Lee ................................. X ........... .............

Mr. Perlmutter ....................... ........... X ............. Mr. Paulsen .......................... X ........... .............

Mr. Donnelly .......................... ........... X ............. Mr. Lance ............................. X ........... .............

Mr. Foster .............................. ........... X .............

Mr. Carson ............................ ........... X .............

Ms. Speier ............................. ........... X .............

Mr. Childers .......................... ........... X .............

Mr. Minnick ........................... ........... X .............

Mr. Adler ............................... ........... X .............


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11 

RECORD VOTE NO. FC–139—Continued 

Representative Aye Nay Present Representative Aye Nay Present 

Ms. Kilroy .............................. ........... X .............

Mr. Driehaus ......................... ........... X .............

Ms. Kosmas .......................... ........... X .............

Mr. Grayson ........................... ........... X .............

Mr. Himes ............................. ........... X .............

Mr. Peters ............................. ........... X .............

Mr. Maffei ............................. ........... X .............

An amendment by Mr. Hensarling, no. 8, relating to the effective 

date, was not agreed to by a record vote of 26 yeas and 37 nays 

(Record vote no. FC–140): 

RECORD VOTE NO. FC–140 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. ........... X ............. Mr. Bachus ........................... X ........... .............

Mr. Kanjorski ......................... ........... X ............. Mr. Castle ............................ X ........... .............

Ms. Waters ............................ ........... X ............. Mr. King (NY) ....................... ........... ........... .............

Mrs. Maloney ......................... ........... X ............. Mr. Royce ............................. X ........... .............

Mr. Gutierrez ......................... ........... X ............. Mr. Lucas ............................. X ........... .............

Ms. Vela ́zquez ....................... ........... ........... ............. Mr. Paul ............................... X ........... .............

Mr. Watt ................................ ........... X ............. Mr. Manzullo ........................ X ........... .............

Mr. Ackerman ........................ ........... X ............. Mr. Jones .............................. ........... ........... .............

Mr. Sherman ......................... ........... X ............. Mrs. Biggert ......................... X ........... .............

Mr. Meeks ............................. ........... X ............. Mr. Miller (CA) ..................... X ........... .............

Mr. Moore (KS) ...................... ........... X ............. Mrs. Capito .......................... X ........... .............

Mr. Capuano ......................... ........... X ............. Mr. Hensarling ..................... X ........... .............

Mr. Hinojosa .......................... ........... ........... ............. Mr. Garrett (NJ) .................... X ........... .............

Mr. Clay ................................ ........... ........... ............. Mr. Barrett (SC) ................... ........... ........... .............

Mrs. McCarthy ....................... ........... X ............. Mr. Gerlach .......................... X ........... .............

Mr. Baca ............................... ........... X ............. Mr. Neugebauer .................... X ........... .............

Mr. Lynch .............................. ........... ........... ............. Mr. Price (GA) ...................... X ........... .............

Mr. Miller (NC) ...................... ........... X ............. Mr. McHenry ......................... X ........... .............

Mr. Scott ............................... ........... X ............. Mr. Campbell ....................... X ........... .............

Mr. Green .............................. ........... X ............. Mr. Putnam .......................... X ........... .............

Mr. Cleaver ........................... ........... X ............. Mrs. Bachmann .................... X ........... .............

Ms. Bean ............................... ........... X ............. Mr. Marchant ....................... ........... ........... .............

Ms. Moore (WI) ...................... ........... X ............. Mr. McCotter ........................ X ........... .............

Mr. Hodes .............................. ........... X ............. Mr. McCarthy ........................ X ........... .............

Mr. Ellison ............................. ........... X ............. Mr. Posey .............................. X ........... .............

Mr. Klein ............................... ........... X ............. Ms. Jenkins .......................... X ........... .............

Mr. Wilson ............................. ........... X ............. Mr. Lee ................................. X ........... .............

Mr. Perlmutter ....................... ........... X ............. Mr. Paulsen .......................... X ........... .............

Mr. Donnelly .......................... ........... X ............. Mr. Lance ............................. X ........... .............

Mr. Foster .............................. ........... X .............

Mr. Carson ............................ ........... X .............

Ms. Speier ............................. ........... X .............

Mr. Childers .......................... ........... X .............

Mr. Minnick ........................... X ........... .............

Mr. Adler ............................... ........... X .............

Ms. Kilroy .............................. ........... X .............

Mr. Driehaus ......................... ........... X .............

Ms. Kosmas .......................... ........... X .............

Mr. Grayson ........................... ........... X .............

Mr. Himes ............................. ........... X .............

Mr. Peters ............................. ........... X .............

Mr. Maffei ............................. ........... X .............

An amendment in the nature of a substitute by Mr. Castle, no. 

9, was not agreed to by a record vote of 25 yeas and 38 nays 

(Record vote no. FC–141): 


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12 

RECORD VOTE NO. FC–141 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. ........... X ............. Mr. Bachus ........................... X ........... .............

Mr. Kanjorski ......................... ........... X ............. Mr. Castle ............................ X ........... .............

Ms. Waters ............................ ........... X ............. Mr. King (NY) ....................... ........... ........... .............

Mrs. Maloney ......................... ........... X ............. Mr. Royce ............................. X ........... .............

Mr. Gutierrez ......................... ........... X ............. Mr. Lucas ............................. X ........... .............

Ms. Vela ́zquez ....................... ........... ........... ............. Mr. Paul ............................... X ........... .............

Mr. Watt ................................ ........... X ............. Mr. Manzullo ........................ X ........... .............

Mr. Ackerman ........................ ........... X ............. Mr. Jones .............................. ........... ........... .............

Mr. Sherman ......................... ........... X ............. Mrs. Biggert ......................... X ........... .............

Mr. Meeks ............................. ........... X ............. Mr. Miller (CA) ..................... X ........... .............

Mr. Moore (KS) ...................... ........... X ............. Mrs. Capito .......................... X ........... .............

Mr. Capuano ......................... ........... X ............. Mr. Hensarling ..................... X ........... .............

Mr. Hinojosa .......................... ........... ........... ............. Mr. Garrett (NJ) .................... X ........... .............

Mr. Clay ................................ ........... ........... ............. Mr. Barrett (SC) ................... ........... ........... .............

Mrs. McCarthy ....................... ........... X ............. Mr. Gerlach .......................... X ........... .............

Mr. Baca ............................... ........... X ............. Mr. Neugebauer .................... X ........... .............

Mr. Lynch .............................. ........... ........... ............. Mr. Price (GA) ...................... X ........... .............

Mr. Miller (NC) ...................... ........... X ............. Mr. McHenry ......................... X ........... .............

Mr. Scott ............................... ........... X ............. Mr. Campbell ....................... X ........... .............

Mr. Green .............................. ........... X ............. Mr. Putnam .......................... X ........... .............

Mr. Cleaver ........................... ........... X ............. Mrs. Bachmann .................... X ........... .............

Ms. Bean ............................... ........... X ............. Mr. Marchant ....................... ........... ........... .............

Ms. Moore (WI) ...................... ........... X ............. Mr. McCotter ........................ X ........... .............

Mr. Hodes .............................. ........... X ............. Mr. McCarthy ........................ X ........... .............

Mr. Ellison ............................. ........... X ............. Mr. Posey .............................. X ........... .............

Mr. Klein ............................... ........... X ............. Ms. Jenkins .......................... X ........... .............

Mr. Wilson ............................. ........... X ............. Mr. Lee ................................. X ........... .............

Mr. Perlmutter ....................... ........... X ............. Mr. Paulsen .......................... X ........... .............

Mr. Donnelly .......................... ........... X ............. Mr. Lance ............................. X ........... .............

Mr. Foster .............................. ........... X .............

Mr. Carson ............................ ........... X .............

Ms. Speier ............................. ........... X .............

Mr. Childers .......................... ........... X .............

Mr. Minnick ........................... ........... X .............

Mr. Adler ............................... ........... X .............

Ms. Kilroy .............................. ........... X .............

Mr. Driehaus ......................... ........... X .............

Ms. Kosmas .......................... ........... X .............

Mr. Grayson ........................... ........... X .............

Mr. Himes ............................. ........... X .............

Mr. Peters ............................. ........... X .............

Mr. Maffei ............................. ........... X .............

An amendment by Mr. Garrett, no. 10, relating to public plan 

transparency, was not agreed to by a record vote of 25 yeas and 

38 nays (Record vote no. FC–142): 

RECORD VOTE NO. FC–142 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. ........... X ............. Mr. Bachus ........................... X ........... .............

Mr. Kanjorski ......................... ........... X ............. Mr. Castle ............................ X ........... .............

Ms. Waters ............................ ........... X ............. Mr. King (NY) ....................... ........... ........... .............

Mrs. Maloney ......................... ........... X ............. Mr. Royce ............................. X ........... .............

Mr. Gutierrez ......................... ........... X ............. Mr. Lucas ............................. X ........... .............

Ms. Vela ́zquez ....................... ........... ........... ............. Mr. Paul ............................... X ........... .............

Mr. Watt ................................ ........... X ............. Mr. Manzullo ........................ X ........... .............

Mr. Ackerman ........................ ........... X ............. Mr. Jones .............................. ........... ........... .............

Mr. Sherman ......................... ........... X ............. Mrs. Biggert ......................... X ........... .............

Mr. Meeks ............................. ........... X ............. Mr. Miller (CA) ..................... X ........... .............

Mr. Moore (KS) ...................... ........... X ............. Mrs. Capito .......................... X ........... .............

Mr. Capuano ......................... ........... X ............. Mr. Hensarling ..................... X ........... .............

Mr. Hinojosa .......................... ........... ........... ............. Mr. Garrett (NJ) .................... X ........... .............


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13 

RECORD VOTE NO. FC–142 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Clay ................................ ........... ........... ............. Mr. Barrett (SC) ................... ........... ........... .............

Mrs. McCarthy ....................... ........... X ............. Mr. Gerlach .......................... X ........... .............

Mr. Baca ............................... ........... X ............. Mr. Neugebauer .................... X ........... .............

Mr. Lynch .............................. ........... ........... ............. Mr. Price (GA) ...................... X ........... .............

Mr. Miller (NC) ...................... ........... X ............. Mr. McHenry ......................... X ........... .............

Mr. Scott ............................... ........... X ............. Mr. Campbell ....................... X ........... .............

Mr. Green .............................. ........... X ............. Mr. Putnam .......................... X ........... .............

Mr. Cleaver ........................... ........... X ............. Mrs. Bachmann .................... X ........... .............

Ms. Bean ............................... ........... X ............. Mr. Marchant ....................... ........... ........... .............

Ms. Moore (WI) ...................... ........... X ............. Mr. McCotter ........................ X ........... .............

Mr. Hodes .............................. ........... X ............. Mr. McCarthy ........................ X ........... .............

Mr. Ellison ............................. ........... X ............. Mr. Posey .............................. X ........... .............

Mr. Klein ............................... ........... X ............. Ms. Jenkins .......................... X ........... .............

Mr. Wilson ............................. ........... X ............. Mr. Lee ................................. X ........... .............

Mr. Perlmutter ....................... ........... X ............. Mr. Paulsen .......................... X ........... .............

Mr. Donnelly .......................... ........... X ............. Mr. Lance ............................. X ........... .............

Mr. Foster .............................. ........... X .............

Mr. Carson ............................ ........... X .............

Ms. Speier ............................. ........... X .............

Mr. Childers .......................... ........... X .............

Mr. Minnick ........................... ........... X .............

Mr. Adler ............................... ........... X .............

Ms. Kilroy .............................. ........... X .............

Mr. Driehaus ......................... ........... X .............

Ms. Kosmas .......................... ........... X .............

Mr. Grayson ........................... ........... X .............

Mr. Himes ............................. ........... X .............

Mr. Peters ............................. ........... X .............

Mr. Maffei ............................. ........... X .............

The following other amendments were also considered: 

An amendment by Mr. Capuano, no. 1, a manager’s amendment, 

as amended by the Grayson amendment, no. 1a, was agreed to by 

a voice vote. 

An amendment by Mr. Grayson (and Mr. Capuano), no. 3, relating to disclosure of materials purchased by political expenditures, 

was agreed to by a voice vote. 

An amendment in the nature of a substitute by Mrs. Biggert, no. 

4, was not agreed to by a voice vote. 

An amendment by Mr. Capuano, no. 7, relating to the annual nature of the proxy requirement, as modified, was agreed to by a 

voice vote. 

COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee held a hearing and made findings that are reflected in this report. 

PERFORMANCE GOALS AND OBJECTIVES

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the House 

of Representatives, the Committee establishes the following performance related goals and objectives for this legislation: 

H.R. 4790 is a response to the decision of the U.S. Supreme 

Court in the Citizens United case and has two goals: (1) giving 

shareholders of public companies more control over a company’s political expenditures, and (2) subjecting those expenditures to greater transparency. 


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14 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee adopts as its own the estimate of new budget authority, entitlement authority, or tax expenditures or revenues contained in the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974: 

SEPTEMBER 14, 2010. 

Hon. BARNEY FRANK, 

Chairman, Committee on Financial Services, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 4790, the Shareholder 

Protection Act of 2010. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Susan Willie. 

Sincerely, 

DOUGLAS W. ELMENDORF. 

Enclosure. 

H.R. 4790—Shareholder Protection Act of 2010 

H.R. 4790 would require corporations that are registered with 

the Securities and Exchange Commission (SEC) to provide shareholders an opportunity to vote on the corporation’s proposed expenditures for certain political activities for the upcoming year. 

Further, the bill would prohibit security exchanges from listing 

stocks of corporations that do not require the board of directors to 

approve political expenditures over $50,000 or any expenditure 

that would cause the amount spent on political activities to exceed 

$50,000 in a fiscal year. The SEC would be required to develop regulations to enforce the new requirements and to prepare an annual 

report that assesses compliance. 

Based on information from the SEC, CBO estimates that developing and enforcing the new requirements in H.R. 4790 would not 

significantly increase spending subject to appropriation. Enacting 

H.R. 4790 could increase collections of civil and criminal penalties, 

thus increasing federal revenues and direct spending; therefore, 

pay-as-you-go procedures apply. However, CBO estimates that such 

collections and spending would not be significant in any year. 


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The requirements on corporations would impose intergovernmental and private-sector mandates, as defined in the Unfunded 

Mandates Reform Act (UMRA). In addition, the bill would impose 

reporting requirements on investment managers and preempt state 

securities laws. Based on information from the SEC, CBO estimates that the costs of complying with those mandates would be 

small. 

H.R. 4790 also would prevent public or private investors from 

seeking damages from investment managers on grounds that the 

manager made investment decisions based on a corporation’s political activities. Because of uncertainty about the number of such 

claims that would be filed, CBO cannot estimate the cost of that 

mandate and, consequently, cannot determine whether the aggregate costs of intergovernmental or private-sector mandates in the 

bill would exceed the annual thresholds established in UMRA ($70 

million and $141 million, respectively, in 2010, adjusted annually 

for inflation). 

The CBO staff contacts for this estimate are Susan Willie (for 

federal costs) and Elizabeth Cove Delisle and Brian Prest (for the 

intergovernmental and private-sector impact). The estimate was 

approved by Theresa Gullo, Deputy Assistant Director for Budget 

Analysis. 

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office 

pursuant to section 423 of the Unfunded Mandates Reform Act. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds that the Constitutional 

Authority of Congress to enact this legislation is provided by Article 1, section 8, clause 1 (relating to the general welfare of the 

United States) and clause 3 (relating to the power to regulate interstate commerce). 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act. 

EARMARK IDENTIFICATION

H.R. 4790 does not contain any congressional earmarks, limited 

tax benefits, or limited tariff benefits as defined in clause 9 of rule 

XXI. 


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SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Sec. 1. Short title 

This section designates the short title of the bill as the ‘‘Shareholder Protection Act of 2010.’’ 

Sec. 2. Findings 

This section sets forth several findings that support giving shareholders the right to vote on corporate political expenditures and 

making those expenditures more transparent. 

Sec. 3. Shareholder approval of corporate political activity 

This section amends the Securities Exchange Act of 1934 (Exchange Act) to require a separate shareholder vote on political expenditures by public companies. Proxy solicitations must include a 

description of the specific nature and the total amount of the proposed expenditures for political activities to be made for the upcoming fiscal year, except for previously approved expenditures. Public 

companies may not make political expenditures unless they are in 

the nature of those described in the shareholder proxy and authorized by votes representing a majority of outstanding shares. 

This section makes officers and directors jointly and severally liable for breach of fiduciary duty if they authorize expenditures in 

violation of the section. This liability is for three times the amount 

of any unauthorized expenditure and is owed to any shareholders 

who held shares at the time the unauthorized expenditures were 

made. 

In addition, this section defines the term ‘‘expenditure for political activities’’ to include independent expenditures as defined by 

the Federal Election Campaign Act (FECA); ‘‘electioneering communications’’ and other ‘‘public communications’’ (such as printed 

materials) as defined by FECA; and dues or other payments to 

trade associations or other tax-exempt organizations that ‘‘are, or 

could reasonably be anticipated to be,’’ used or transferred to another association or organization for independent expenditures or 

electioneering communications. The term, however, excludes direct 

lobbying efforts through registered lobbyists; communications to 

shareholders, executives, and administrative personnel and their 

families; and funding related to the establishment and administration of political action committees. 

This section of the bill also amends the Exchange Act to require 

institutional investment managers to disclose at least annually 

how they voted on corporate political expenditures. Those reports 

must be made within 30 days after the votes are taken and made 

available through the EDGAR system as soon as practicable. The 

U.S. Securities and Exchange Commission (SEC) must issue rules 

within six months of enactment to implement this disclosure requirement. 

This section also creates a safe harbor from any civil, criminal, 

or administrative action against any institutional investment manager based solely upon the investment manager’s decision to divest 

from, or not to invest in, securities of a company because of political expenditures made by that company. The safe harbor is unavailable, however, unless the investment manager complies with 

any disclosure obligations applicable under the SEC’s rules. 


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Sec. 4. Required board vote on corporate expenditures for political 

activities 

This section amends the Exchange Act to require the SEC, within 180 days of enactment, to issue rules directing national securities exchanges and associations to prohibit the listing of any securities of companies that do not expressly provide for a board of directors vote on certain political expenditures. Board votes are required 

on any individual expenditure for political activities in excess of 

$50,000, or on any expenditure causing the total amount spent in 

an election to exceed $50,000. Companies must make the individual 

votes of the directors publicly available within 48 hours, and must 

post the votes clearly on the company’s website. 

This section also clarifies that a director’s vote on a political expenditure does not affect whether or not the expenditure is deemed 

to be an independent expenditure within the meaning of FECA. 

Sec. 5. Reporting requirements 

This section requires the SEC, within 180 days of enactment, to 

amend its reporting rules so that public companies must disclose 

to shareholders, on a quarterly basis, any political expenditures 

made during the preceding quarter and the individual votes of 

board members authorizing such expenditures. These reports must 

include the date and amount of each expenditure; the name, party, 

and office of any candidate who was the subject of an expenditure; 

and the identity of any trade association or other organization that 

received dues or other payments. 

The SEC must ensure that the quarterly reports are publicly 

available through the SEC’s website and through the EDGAR system. Companies must include in those reports any materials created or purchased with political expenditures, and must post those 

materials on their websites within 48 hours. 

Section 5 also requires the SEC to issue rules obligating public 

companies to include in their annual reports a summary of all political expenditures over $10,000. 

Sec. 6. Reports 

This section requires the SEC to make an annual assessment of 

compliance with the Act by public companies and their managements, and to report its findings to Congress. It also requires the 

Comptroller General to periodically evaluate and report to Congress on the SEC’s oversight of the reporting and disclosure requirements in the Act. 

Sec. 7. Severability 

This section clarifies that if any provision of the bill is held to 

be unconstitutional, then the remainder of the bill is not affected. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (new matter is printed in italic 

and existing law in which no change is proposed is shown in 

roman): 


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SECURITIES EXCHANGE ACT OF 1934 

TITLE I—REGULATION OF SECURITIES EXCHANGES 

* * * * * * * 

PERIODICAL AND OTHER REPORTS

SEC. 13. (a) * * * 

* * * * * * * 

(r) REPORTING REQUIREMENTS RELATING TO CERTAIN POLITICAL

EXPENDITURES.— 

(1) QUARTERLY REPORTS.—Not later than 180 days after the 

date of enactment of this subsection, the Commission shall modify its reporting rules under this section to require issuers to 

disclose quarterly any expenditure for political activities (as 

such term is defined in section 14C(d)(1)) made during the preceding quarter and the individual votes by board members authorizing such expenditures as required under section 16A(b). 

Such a report shall be filed with the Commission and provided 

to shareholders and shall include— 

(A) the date of each expenditure; 

(B) the amount of each expenditure; 

(C) if the expenditure was made for or against a candidate, the name of the candidate, the office sought by and 

the political party affiliation of the candidate; and 

(D) the name or identity of trade associations or other 

tax-exempt organizations which receive dues or other payments as described in section 14C(d)(1)(B). 

(2) ANNUAL REPORTS.—Not later than 180 days after the date 

of enactment of this subsection, the Commission shall, by rule, 

require each issuer to include in its annual report to shareholders an annual summary of all expenditures for political activities (as such term is defined in section 14C(d)(1)) made during the preceding year in excess of $10,000. 

(3) DISCLOSURE OF MATERIALS PURCHASED BY POLITICAL EXPENDITURES.—The Commission shall, by rule, require each 

issuer to obtain and disclose in the reports required under this 

section, any materials created with or purchased by any expenditure for political activities (as such term is defined in section 

14C(d)) made by the issuer. Such rule shall also require that 

each issuer disclose such materials in a clear and conspicuous 

location on the Internet website of the issuer within 48 hours 

of obtaining the materials. 

(4) PUBLIC AVAILABILITY.—The Commission shall ensure that, 

to the greatest extent practicable, the quarterly reports required 

by this subsection are publicly available through the Commission website and through the EDGAR system in a manner that 

is searchable, sortable, and downloadable, consistent with the 

requirements of section 24. 

* * * * * * * 


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SEC. 14C. SHAREHOLDER APPROVAL OF CERTAIN POLITICAL EXPENDITURES AND DISCLOSURE OF VOTES OF INSTITUTIONAL 

INVESTORS. 

(a) SHAREHOLDER AUTHORIZATION FOR POLITICAL EXPENDI- TURES.—Any solicitation of any proxy or consent or authorization in 

respect of any security of an issuer shall— 

(1) contain a description of the specific nature of any expenditures for political activities proposed to be made by the issuer 

for the forthcoming fiscal year not previously approved, to the 

extent the specific nature is known to the issuer and including 

the total amount of such proposed expenditures; and 

(2) provide for a separate shareholder vote to authorize such 

proposed expenditures in such amount. 

(b) REQUIREMENTS FOR EXPENDITURES.—No issuer shall make 

any expenditure for political activities in any fiscal year unless— 

(1) such expenditure is of the nature of those proposed by the 

issuer pursuant to subsection (a)(1); and 

(2) authorization for such expenditures has been granted by 

votes representing a majority of outstanding shares pursuant to 

subsection (a)(2). 

(c) FIDUCIARY DUTY; LIABILITY.—A violation of subsection (b) 

shall be considered a breach of a fiduciary duty of the officers and 

directors who authorized such an expenditure. The officers and directors who authorize such an expenditure without first obtaining 

such authorization of shareholders shall be jointly and severally liable in any action brought in any court of competent jurisdiction to 

any individual or class of individuals who held shares at the time 

such expenditure was made for an amount equal to 3 times the 

amount of such expenditure. 

(d) DEFINITION OF EXPENDITURE FOR POLITICAL ACTIVITIES.—As 

used in this section: 

(1) The term ‘‘expenditure for political activities’’ means— 

(A) an independent expenditure, as such term is defined 

in section 301(17) of the Federal Election Campaign Act of 

1971 (2 U.S.C. 431(17)); 

(B) an electioneering communication, as such term is defined in section 304(f)(3) of such Act (2 U.S.C. 434(f)(3)) 

and any other public communication (as such term is defined in section 301(22) of such Act (2 U.S.C. 431(22))) that 

would be an electioneering communication if it were a 

broadcast, cable, or satellite communication; or 

(C) dues or other payments to trade associations or other 

tax exempt organizations that are, or could reasonably be 

anticipated to be, used or transferred to another association 

or organization for the purposes described in subparagraph 

(A) or (B). 

(2) Such term shall not include— 

(A) direct lobbying efforts through registered lobbyists 

employed or hired by the issuer; 

(B) communications by an issuer to its shareholders and 

executive or administrative personnel and their families; or 

(C) the establishment and administration of contributions to a separate segregated fund to be utilized for political purposes by a corporation. 

(e) DISCLOSURE OF VOTES.—Every institutional investment manager subject to section 13(f) shall report at least annually how it 


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voted on any shareholder vote pursuant to subsection (a), unless 

such vote is otherwise required to be reported publicly by rule or 

regulation of the Commission. Not later than 6 months after the 

date of enactment of this section, the Commission shall issue rules 

and regulations to implement this subsection. Such rules shall require that such report be made not later than 30 days after such 

a vote and be made available to the public through the EDGAR system as soon as practicable. 

(f) SAFE HARBOR FOR CERTAIN DIVESTMENT DECISIONS.—Notwithstanding any other provision of Federal or State law, no person 

may bring any civil, criminal, or administrative action against any 

institutional investment manager, or any employee, officer, or director thereof, based solely upon a decision of the investment manager 

to divest from, or not to invest in, securities of an issuer because of 

expenditures for political activities made by that issuer. This subsection shall not apply to any institutional investment manager, or 

any employee, officer, or director thereof, unless the institutional investment manager makes disclosures in accordance with regulations 

prescribed by the Commission. 

* * * * * * * 

SEC. 16A. REQUIRED BOARD VOTE ON CORPORATE EXPENDITURES 

FOR POLITICAL ACTIVITIES. 

(a) LISTING ON EXCHANGES.—Effective not later than 180 days 

after the date of enactment of this section, the Commission shall, by 

rule, 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 (b). 

(b) REQUIREMENT FOR VOTE IN CORPORATE BYLAWS.—The corporate bylaws of an issuer shall expressly provide for a vote of the 

directors of the issuer on any individual expenditure for political activities (as such term is defined in section 14C(d)(1)) in excess of 

$50,000, or any expenditure that makes the total amount spent by 

the issuer for the particular election (as such term is defined in section 301(1) of the Federal Election Campaign Act of 1971 (2 U.S.C. 

431(1))) $50,000 or more. An issuer shall make publicly available 

the individual votes of the directors required by the preceding sentence within 48 hours of the vote, including in a clear and conspicuous location on the Internet website of the issuer. 

* * * * * * * 


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DISSENTING VIEWS 

The following represents the views of the Republican Members of 

the Committee on the following issues, consistent with H.R. 4790, 

Shareholder Protection Act of 2010. 

The Majority’s designation of H.R. 4790 as the ‘‘Shareholder Protection Act’’ is a misnomer. The bill, conceived of as a legislative 

response to the January 21, 2010 Supreme Court decision in Citizens United v. Federal Election Commission, 558 U.S. 50 (2010), is 

less about protecting shareholders and more about favoring the free 

speech rights of some groups (labor unions) over others (corporations). Under the legislation, public companies would have to prepare political expenditure plans, present the plan to and seek approval from the board, prepare the proxy, and schedule a shareholder vote well in advance of the end of each fiscal year. H.R. 

4790 would deny public corporations the flexibility to engage in the 

political process, and prejudice their ability to advocate for or 

against legislative or regulatory initiatives while still allowing 

unions to freely engage in these activities. 

Corporate boards and management have fiduciary duties to the 

company and to the shareholders, yet H.R. 4790 would hamstring 

these obligations and weaken corporations. If H.R. 4790 is enacted, 

public corporations will be forced to predict all political expenditures for an upcoming fiscal year many months in advance to ensure that shareholders approve of the plan before the end of the 

company’s fiscal year. This will severely limit the free speech of all 

corporations by prohibiting them from reacting to new or unexpected issues that impact their business, ultimately eroding shareholder value. 

The Majority confidently asserts that H.R. 4790 would not impose additional costs on public companies because corporations 

would simply add another line to their annual proxy statement. 

However, to properly align this new shareholder vote with the political calendar, a corporation would need to schedule this vote at 

the end of its fiscal year, not, as the Majority suggests, at its annual meeting, which is typically held during the first quarter of 

each year. Corporations would then have to prepare and distribute 

a separate proxy statement for shareholders to express their approval or disapproval of the proposed political expenditures. It is an 

open question whether the U.S. Securities and Exchange Commission (SEC) has the requisite expertise to provide guidance to 

issuers as to what are ‘‘expenditures for political activities.’’ It is 

unclear how a corporation would go about proposing the ‘‘specific 

nature’’ of political expenditures to satisfy the requirements of this 

bill, especially given the fluidity of the political and electoral process. 

By giving shareholders veto power over all political expenditures, 

this legislation also undermines the longstanding ‘‘business judgVerDate Mar 15 2010 02:46 Sep 24, 2010 Jkt 089006 PO 00000 Frm 00021 Fmt 6604 Sfmt 6604 E:\HR\OC\HR620P1.XXX HR620P1

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ment rule,’’ which insulates the decisions of a corporation’s board 

of directors from legal second-guessing as long as the board has engaged in a ‘‘rational or good faith effort to advance corporate interest.’’ The bill could open the door to requiring shareholder approval 

of other matters historically entrusted to corporate boards’ discretion, such as charitable donations or advertising expenses. Moreover, H.R. 4790 would preempt state corporate law and make expenditures which shareholders have not approved a violation of the 

corporation’s fiduciary duty to its shareholders. This is a serious 

departure from the long-established primacy of state corporate law. 

As former Supreme Court Justice Lewis Powell wrote in CTS Corp. 

v. Dynamics Corp. of America, 481 U.S. 69 (1987), ‘‘no principle of 

corporation law and practice is more firmly established than a 

State’s authority to regulate domestic corporations, including the 

authority to define the voting rights of shareholders.’’ 

Section 4 of H.R. 4790 creates a new provision in the Securities 

Exchange Act of 1934 to require all issuers to disclose the votes of 

individual directors and force the U.S. equity exchanges to delist 

public companies that do not disclose their board votes. Such a requirement is not found in any state corporate law for any board decision. Board roll call votes are not required to declare bankruptcy, 

sell the corporation or its assets, accept a buyout, or oppose a takeover, which are all more significant events for any publicly traded 

company than whether to make a specific political expenditure. 

As troubling is a provision added during the Committee markup 

that would award triple damages to a shareholder if an officer or 

director authorizes a political expenditure without first obtaining 

the approval of a majority of shareholders. The damages awarded 

would be triple the amount of the political expenditure. In effect, 

these damages are exemplary and punitive. This provision is therefore inconsistent with the original intent of the Securities Exchange Act of 1934, which makes no mention of exemplary or treble 

damages. Neither statute nor case law supports any instance in 

which a shareholder has been allowed to recover treble damages as 

a result of the actions of a director or officer, and there is no historical support for awarding treble damages in the context of authorizing expenditures for advertisements. While treble damages are 

awarded in antitrust and RICO cases, those cases are aimed at 

punishing criminal behavior. As noted above, awarding treble damages in this context goes against the original intent of the ’34 Act, 

and inappropriately penalizes conduct when the wrong alleged is a 

civil injury, not a crime or misdemeanor. 

The ‘‘Shareholder Protection Act’’ applies to corporations, but notably, it does not apply to unions. There is no provision in Federal 

law that allows union members to vote to either approve or disapprove their union’s political expenditures. Unions are the single 

largest contributor to political campaigns in the country. Unions 

and their political action committees claim to have spent nearly 

$450 million in the 2008 presidential race, and have accounted for 

approximately 40% of campaign-related spending this year, as opposed to corporations, which account for less than 15%. Unions reportedly ‘‘plan an enormous spending spree to help ensure Democratic control of Congress’’ after this fall’s elections. On June 26, 

2010 Larry Scanlon, political director for the American Federation 


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of State, County, and Municipal Employees (‘‘AFSCME’’), acknowledged the benefits conferred by the Citizens United decision on organizations like his when he said that ‘‘the Citizens United case 

has taken the lid off, and so we can use our soft money for express 

advocacy directly.’’ Three unions alone—AFSCME, the AFL-CIO, 

and the Service Employees International Union—expect to spend 

more than $150 million in the 2010 mid-term elections. 

To provide union members with the ability to decide whether 

their union dues should be used for political purposes or not, Republicans strongly supported Representative Hensarling’s amendment prohibiting H.R. 4790 from taking effect until H.R. 5860, the 

‘‘Union Member Protection Act,’’ is first enacted. H.R. 5860 applies 

the framework established in H.R. 4790 to unions, creating parity 

by giving actual union members (not just fee-paying nonmembers) 

a vote on their union’s political contributions. Unfortunately, the 

Majority voted almost entirely along party lines to reject this equitable application of the Citizens United decision to labor unions and 

publicly traded companies despite clear guidance from the Court 

that both were covered by its decision. 

The Committee ordered H.R. 4790 favorably reported without 

holding a single legislative hearing to examine its far-reaching impact on corporate governance and its chilling effect on political free 

speech. The ‘‘Shareholder Protection Act’’ is a flawed response in 

search of a problem that does not exist. Republicans believe that 

the House should reject this ill-considered legislation and send it 

back to the Committee on Financial Services for a more thorough 

review of its potential unintended consequences. 

SPENCER BACHUS. 

SCOTT GARRETT. 

KEVIN MCCARTHY. 

JEB HENSARLING. 

PETER KING. 

J. GRESHAM BARRETT. 

RANDY NEUGEBAUER. 

JUDY BIGGERT. 

TOM PRICE. 

LYNN JENKINS. 

RON PAUL. 

MIKE CASTLE. 

Æ 


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