text: 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. Corporate boards 
          and executives that use corporation funds to support and oppose 
          political candidates, parties, and causes in opposition to the 
          interests of their shareholders are not acting for the best 
          interests of the corporation.
              (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 prior to making political contributions or 
          expenditures affecting local, State or 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 adding after 
  section 14 the following new section:
  
  ``SEC. 14A. SHAREHOLDER APPROVAL OF CERTAIN POLITICAL EXPENDITURES.
  
      ``(a) Affirmative Authorization.--No issuer may make any 
  expenditure for political activities in excess of $10,000 in any fiscal 
  year without first obtaining the written affirmative authorization for 
  such expenditure by a majority of all shareholders.
      ``(b) Nature of Decisions.--A decision to make a contribution or 
  expenditure for political activities in excess of $10,000 shall not be 
  considered a routine matter of the corporation under rules and 
  guidelines established by any national securities exchange or by the 
  Commission.
      ``(c) Fiduciary Duty; Liability.--A violation of subsection (a) 
  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 shareholder or class of shareholders for the amount of such 
  expenditure.
      ``(d) Exemption for Certain Media.--The provisions of this section 
  shall not apply to an issuer whose sole business is the publication or 
  broadcasting of news, commentary, literature, music, entertainment, 
  artistic expression, scientific, historical or academic works, or other 
  forms of information. The Commission shall issue such guidance as it 
  determines necessary or appropriate regarding the extent of the 
  exemption provided by this subsection.
      ``(e) Definitions.--As used in this section the following 
  definitions apply:
              ``(1) Affirmative authorization.--The term `affirmative 
          authorization' means the full, free, and written consent of a 
          shareholder, obtained without intimidation or fear of reprisal, 
          and shall not include votes made by a broker or any other 
          representative.
              ``(2) Issue advocacy campaign.--The term `issue advocacy 
          campaign' means any expenditure for any communication to the 
          general public intended to encourage the public to contact a 
          State or Federal Government official regarding pending 
          legislation, public policy or government rule or regulation, 
          but does not include contributions or expenditures for 
          registered lobbyists employed by the corporation to lobby State 
          or Federal Government officials directly.
              ``(3) Majority of all shareholders.--The term `majority of 
          all shareholders' means number of shareholders that combined 
          own more than 50 percent of all outstanding shares. 
          Shareholders not casting votes shall not count toward such a 
          majority.
              ``(4) Expenditure for political activities.--
                      ``(A) The term `expenditure for political 
                  activities' means--
                              ``(i) expenditures in support of, or 
                          opposition to, any Federal, State, or local 
                          candidate;
                              ``(ii) contributions to or expenditures in 
                          support of any political party, committee, 
                          electioneering communication, voter 
                          registration campaign, ballot measure campaign, 
                          or an issue advocacy campaign; and
                              ``(iii) dues or other payments to trade 
                          associations or other tax exempt organizations 
                          that are, or could reasonably be anticipated to 
                          be, used for the purposes described in 
                          subparagraphs (A) and (B).
                      ``(B) Such term shall not include--
                              ``(i) direct lobbying efforts through 
                          registered lobbyists employed or hired by the 
                          corporation;
                              ``(ii) communications by a corporation to 
                          its stockholders and executive or 
                          administrative personnel and their families;
                              ``(iii) nonpartisan registration and get-
                          out-the-vote campaigns by a corporation aimed 
                          at its stockholders and executive or 
                          administrative personnel and their families; or
                              ``(iv) the establishment, administration 
                          and solicitation of contributions to a separate 
                          segregated fund to be utilized for political 
                          purposes by a corporation.''.
  
  SEC. 4. 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:
      ``(m) Reporting Requirements Relating to Certain Political 
  Expenditures.--
              ``(1) In general.--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 14A(e)(4)) made during the 
          preceding quarter. Such a report shall be filed with the 
          Commission and provided to shareholders and shall include--
                      ``(A) the date of the contributions or 
                  expenditures;
                      ``(B) the amount of the contributions or 
                  expenditures;
                      ``(C) the name or identity of the candidate, 
                  political party, committee, electioneering 
                  communication, voter registration campaign, ballot 
                  measure campaign or issue advocacy campaign;
                      ``(D) if the expenditures were made for or against 
                  a candidate, including an electioneering communication, 
                  the office sought by the candidate and the political 
                  party affiliation of the candidate;
                      ``(E) if the contributions or expenditures were 
                  made for or against a ballot measure, the purpose of 
                  the measure and whether the contributions or 
                  expenditures were made in support or opposition to the 
                  ballot measure; and
                      ``(F) if the contributions or expenditures were 
                  made for or against an issue advocacy campaign, the 
                  nature of the political issue and whether the 
                  contributions were made in support or opposition to the 
                  political issue.
              ``(2) 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 in a manner that is searchable, sortable and 
          downloadable, consistent with the requirements of section 
          24.''.
  
  SEC. 5. REPORT.
  
      On an annual basis, the Office of Management and Budget shall 
  conduct an audit on the compliance or noncompliance with the 
  requirements of this Act by public corporations, their management and 
  shareholders, as well as the effectiveness of the Securities and 
  Exchange Commission in meeting the reporting and disclosure 
  requirements of this Act. Not later than April 1 of each year, the 
  Office of Management and Budget shall submit to the President a report 
  on the audit activities required under this Act.
target: Shareholder Protection Act of 2010 - Amends the Securities Exchange Act of 1934 to prohibit an issuer from making any expenditure for political activities in excess of $10,000 in any fiscal year without first obtaining the written affirmative authorization for such expenditure by a majority of all shareholders.
  
  Deems a violation of this requirement to be a breach of the fiduciary duty of the officers and directors who authorized such expenditure.
  
  Subjects to joint and several liability to any shareholder or class of shareholders for the amount of such expenditure the officers and directors who authorize it without prior shareholder authorization.
  
  Prohibits rules and guidelines established by any national securities exchange or by the Securities and Exchange Commission (SEC) from considering as a routine corporate matter a decision to make a contribution or expenditure for political activities in excess of $10,000.
  
  Exempts from the shareholder prior approval requirement an issuer whose sole business is the publication or broadcasting of news, commentary, literature, music, entertainment, artistic expression, scientific, historical or academic works, or other forms of information.
  
  Directs the SEC to require issuers to disclose quarterly any expenditure for political activities made during the preceding quarter. Requires such report to be filed with the SEC, provided to shareholders, and be made publicly available through the SEC website.
feat_title: To amend the Securities Exchange Act of 1934 to require the express authorization of a majority of shareholders of a public company for certain political expenditures by that company, and for other purposes.