I 
115TH CONGRESS 
1ST SESSION 
H. R. 376 
To amend the Securities Exchange Act of 1934 to require shareholder author-
ization before a public company may make certain political expenditures, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 9, 2017 
Mr. CAPUANO (for himself, Mr. BRENDAN F. BOYLE of Pennsylvania, Mr. 
CONNOLLY, Mr. CONYERS, Mr. CUMMINGS, Mr. DEUTCH, Mr. ELLISON, 
Ms. LOFGREN, Mrs. CAROLYN B. MALONEY of New York, Mr. MCGOV-
ERN, Ms. MOORE, Ms. NORTON, Ms. PINGREE, Mr. SARBANES, Ms. 
SCHAKOWSKY, Ms. SLAUGHTER, Ms. TITUS, Ms. TSONGAS, Mr. YAR-
MUTH, Mr. QUIGLEY, Mr. KEATING, Ms. CASTOR of Florida, and Ms. 
ESHOO) introduced the following bill; which was referred to the Com-
mittee on Financial Services 
A BILL 
To amend the Securities Exchange Act of 1934 to require 
shareholder authorization before a public company may 
make certain political expenditures, and for other pur-
poses. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Shareholder Protection 
Act of 2017’’. 
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(7) requiring a corporation to obtain the ex-
press approval of shareholders prior to making polit-
ical contributions or expenditures will establish nec-
essary accountability. 
SEC. 3. SHAREHOLDER APPROVAL OF CORPORATE POLIT-
ICAL ACTIVITY. 
The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.) is amended by inserting after section 14B (15 
U.S.C. 78n–2) the following: 
‘‘SEC. 14C. SHAREHOLDER APPROVAL OF CERTAIN POLIT-
ICAL EXPENDITURES AND DISCLOSURE OF 
VOTES OF INSTITUTIONAL INVESTORS. 
‘‘(a) DEFINITIONS.—In this section— 
‘‘(1) the term ‘expenditure for political activi-
ties’— 
‘‘(A) means— 
‘‘(i) an independent expenditure (as 
defined in section 301(17) of the Federal 
Election Campaign Act of 1971 (52 U.S.C. 
30101(17))); 
‘‘(ii) an electioneering communication 
(as defined in section 304(f)(3) of that Act 
(52 U.S.C. 30104(f)(3))) and any other 
public communication (as defined in sec-
tion 301(22) of that Act (52 U.S.C. 
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30101(22))) that would be an election-
eering communication if it were a broad-
cast, cable, or satellite communication; or 
‘‘(iii) dues or other payments to trade 
associations or organizations described in 
section 501(c) of the Internal Revenue 
Code of 1986 and exempt from tax under 
section 501(a) of that Code that are, or 
could reasonably be anticipated to be, used 
or transferred to another association or or-
ganization for the purposes described in 
clauses (i) or (ii); and 
‘‘(B) does not include— 
‘‘(i) direct lobbying efforts through 
registered lobbyists employed or hired by 
the issuer; 
‘‘(ii) communications by an issuer to 
its shareholders and executive or adminis-
trative personnel and their families; or 
‘‘(iii) the establishment and adminis-
tration of contributions to a separate seg-
regated fund to be utilized for political 
purposes by a corporation; and 
‘‘(2) the term ‘issuer’ does not include an in-
vestment company registered under section 8 of the 
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Investment Company Act of 1940 (15 U.S.C. 80a– 
8). 
‘‘(b) SHAREHOLDER AUTHORIZATION
FOR POLIT-
ICAL EXPENDITURES.—Each solicitation of proxy, con-
sent, or authorization by an issuer with a class of equity 
securities registered under section 12 of this title shall— 
‘‘(1) contain— 
‘‘(A) a description of the specific nature of 
any expenditure for political activities proposed 
to be made by the issuer for the forthcoming 
fiscal year that has not been authorized by a 
vote of the shareholders of the issuer, to the ex-
tent the specific nature is known to the issuer; 
and 
‘‘(B) the total amount of expenditures for 
political activities proposed to be made by the 
issuer for the forthcoming fiscal year; and 
‘‘(2) provide for a separate vote of the share-
holders of the issuer to authorize such expenditures 
for political activities in the total amount described 
in paragraph (1). 
‘‘(c) VOTE REQUIRED TO MAKE EXPENDITURES.— 
No issuer shall make an expenditure for political activities 
in any fiscal year unless such expenditure— 
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‘‘(1) is of the nature of those proposed by the 
issuer in subsection (b)(1); and 
‘‘(2) has been authorized by a vote of the ma-
jority of the outstanding shares of the issuer in ac-
cordance with subsection (b)(2). 
‘‘(d) FIDUCIARY DUTY; LIABILITY.— 
‘‘(1) FIDUCIARY
DUTY.—A violation of sub-
section (c) shall be considered a breach of a fidu-
ciary duty of the officers and directors who author-
ized the expenditure for political activities. 
‘‘(2) LIABILITY.—An officer or director of an 
issuer who authorizes an expenditure for political ac-
tivities in violation of subsection (c) shall be jointly 
and severally liable in any action brought in a court 
of competent jurisdiction to any person or class of 
persons who held shares at the time the expenditure 
for political activities was made for an amount equal 
to 3 times the amount of the expenditure for polit-
ical activities. 
‘‘(e) DISCLOSURE OF VOTES.— 
‘‘(1) DISCLOSURE
REQUIRED.—Each institu-
tional investment manager subject to section 13(f) 
shall disclose not less frequently than annually how 
the institutional investment manager voted on any 
shareholder vote under subsection (a), unless the 
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vote is otherwise required by rule of the Commission 
to be reported publicly. 
‘‘(2) RULES.—Not later than 6 months after 
the date of enactment of this section, the Commis-
sion shall issue rules to carry out this subsection 
that require that a disclosure required under para-
graph (1)— 
‘‘(A) be made not later than 30 days after 
a vote described in paragraph (1); and 
‘‘(B) be made available to the public 
through the EDGAR system as soon as prac-
ticable. 
‘‘(f) SAFE HARBOR FOR CERTAIN DIVESTMENT DE-
CISIONS.—Notwithstanding any other provision of Federal 
or State law, if an institutional investment manager makes 
the disclosures required under subsection (e), no person 
may bring any civil, criminal, or administrative action 
against the institutional investment manager, or any em-
ployee, officer, or director thereof, based solely upon a de-
cision of the investment manager to divest from, or not 
to invest in, securities of an issuer due to an expenditure 
for political activities made by the issuer.’’. 
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SEC. 4. REQUIRED BOARD VOTE ON CORPORATE EXPENDI-
TURES FOR POLITICAL ACTIVITIES. 
The Securities Exchange Act of 1934 (15 U.S.C. 78 
et seq.) is amended by adding after section 16 (15 U.S.C. 
78p) the following: 
‘‘SEC. 16A. REQUIRED BOARD VOTE ON CORPORATE EX-
PENDITURES FOR POLITICAL ACTIVITIES. 
‘‘(a) DEFINITIONS.—In this section, the terms ‘ex-
penditure for political activities’ and ‘issuer’ have the 
meaning given the terms in section 14C. 
‘‘(b) LISTING ON EXCHANGES.—Not later than 180 
days after the date of enactment of this section, the Com-
mission shall, by rule, direct the national securities ex-
changes 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 (c). 
‘‘(c) REQUIREMENT FOR VOTE IN CORPORATE BY-
LAWS.— 
‘‘(1) VOTE
REQUIRED.—The bylaws of an 
issuer shall expressly provide for a vote of the board 
of directors of the issuer on— 
‘‘(A) any expenditure for political activities 
in excess of $50,000; and 
‘‘(B) any expenditure for political activities 
that would result in the total amount spent by 
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