‘‘(b) TREATMENT OF SMALL CAPITALIZATION COM-
PANIES.—Subsection (a) shall not apply in the case of a 
small capitalization company (as defined by the Commis-
sion by regulation) if, by shareholder vote, the share-
holders elect for such subsection not to apply.’’. 
(b) CONFORMING AMENDMENT.—The Securities Ex-
change Act of 1934 is further amended by striking section 
14B. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply beginning on the date that is 2 
years after the date of the enactment of this Act. 
SEC. 503. EXTENSION OF CERTAIN REQUIREMENTS FOR DI-
RECTORS AND OFFICERS. 
(a) IN GENERAL.—Section 16 of the Securities Ex-
change Act of 1934 (15 U.S.C. 78p) is amended by adding 
at the end the following: 
‘‘(h) PERSONS CEASING TO BE DIRECTORS OR OFFI-
CERS.— 
‘‘(1) CONTINUED APPLICABILITY OF REQUIRE-
MENTS.—During the period beginning on the date 
on which a person ceases to be a director or officer 
described in subsection (a)(1) with respect to an 
issuer and ending on the date that is 1 year there-
after, such person shall continue to be subject to 
this section (except as provided in paragraph (2)) in 
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the same manner and to the same extent as if such 
person had not so ceased. 
‘‘(2) PROHIBITION ON SELLING MORE THAN 25 
PERCENT OF STOCK OF ISSUER.—If a person ceases 
to be a director or officer described in subsection 
(a)(1) with respect to an issuer, such person may 
not, during the period that begins on the first day 
of the last full fiscal quarter of the issuer in which 
such person is such a director or officer and ends on 
the date that is 1 year after the date on which such 
person so ceases, sell more than 25 percent of the 
equity securities of such issuer (other than an ex-
empted security) that such person owns on the first 
day of such period.’’. 
(b) CONFORMING AMENDMENT.—Section 16(d) of 
the Securities Exchange Act of 1934 (15 U.S.C. 78p(d)) 
is amended by striking ‘‘subsection (c)’’ and inserting 
‘‘subsections (c) and (h)(2)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to a person who ceases to be a 
director or officer described in section 16(a)(1) of the Se-
curities Exchange Act of 1934 after the date that is 1 
year after the date of the enactment of this Act. 
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TITLE VI—PREVENTION OF TAX-
PAYER DOLLARS BEING USED 
FOR LABOR BUSTING 
SEC. 601. LIMITATION ON THE ALLOWABILITY OF COSTS. 
(a) AMENDMENT.—Chapter 43 of division C of sub-
title I of title 41, United States Code, is amended by add-
ing at the end the following new section: 
‘‘§ 4311. Limitation on the allowability of costs 
‘‘(a) IN GENERAL.—Costs incurred by a contractor 
relating to any covered activity are not allowable as reim-
bursable costs under a contract entered into by an execu-
tive agency. Such unallowable costs shall be excluded from 
any billing, claim, proposal, or disbursement applicable to 
any such contract. 
‘‘(b) COVERED ACTIVITIES.—For purposes of sub-
section (a), a covered activity, with respect to a contract 
entered into by an executive agency, includes any activity 
undertaken to persuade employees of the contractor to ex-
ercise or not to exercise, or concerning the manner of exer-
cising, rights to organize and bargain collectively through 
representatives of the employees’ own choosing, and in-
cludes the following: 
‘‘(1) Preparing and distributing materials. 
‘‘(2) Hiring or consulting legal counsel or con-
sultants. 
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‘‘(3) Holding meetings (including paying the 
salaries of the attendees at meetings held for this 
purpose). 
‘‘(4) Planning or conducting activities by man-
agers, supervisors, or union representatives during 
work hours. 
‘‘(c) EXCEPTION.—The costs described in subsection 
(a) do not include costs of maintaining satisfactory rela-
tions between the contractor and its employees, including 
costs of labor-management committees, employee publica-
tions (other than those undertaken to persuade employees 
to exercise or not to exercise, or concerning the manner 
of exercising, the right to organize and bargain collec-
tively), and other related activities.’’. 
(b) TECHNICAL AND CONFORMING AMENDMENT.— 
The table of sections at the beginning of chapter 43 of 
division C of subtitle I of title 41, United States Code, 
is amended by adding after the item relating to section 
4310 the following new item: 
‘‘4311. Limitation on the allowability of costs.’’. 
(c) EXISTING FAR APPLICATION.—Section 31.205– 
21 of title 48, Code of Federal Regulations (relating to 
labor relations costs), shall be considered to implement the 
provisions of section 4311 of title 41, United States Code, 
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as added by subsection (a), and may be revised as nec-
essary. 
Æ 
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