[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4790 Introduced in House (IH)]
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118th CONGRESS
1st Session
H. R. 4790
To amend the Federal securities laws with respect to the materiality of
disclosure requirements, to establish the Public Company Advisory
Committee, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 20, 2023
Mr. Huizenga (for himself, Mr. Meuser, Mr. Lucas, and Mr. Mooney)
introduced the following bill; which was referred to the Committee on
Financial Services
_______________________________________________________________________
A BILL
To amend the Federal securities laws with respect to the materiality of
disclosure requirements, to establish the Public Company Advisory
Committee, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Guiding Uniform
and Responsible Disclosure Requirements and Information Limits Act of
2023'' or the ``GUARDRAIL Act of 2023''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; Table of contents.
TITLE I--MANDATORY MATERIALITY REQUIREMENT
Sec. 101. Limitation on disclosure requirements.
TITLE II--SEC JUSTIFICATION OF NON-MATERIAL DISCLOSURE MANDATES
Sec. 201. SEC justification of non-material disclosure mandates.
TITLE III--PUBLIC COMPANY ADVISORY COMMITTEE
Sec. 301. Public Company Advisory Committee.
TITLE IV--PROTECTING U.S. BUSINESS SOVEREIGNTY
Sec. 401. Study on detrimental impact of the Directive on Corporate
Sustainability Due Diligence and Corporate
Sustainability Reporting Directive.
TITLE I--MANDATORY MATERIALITY REQUIREMENT
SEC. 101. LIMITATION ON DISCLOSURE REQUIREMENTS.
(a) Securities Act of 1933.--Section 2(b) of the Securities Act of
1933 (15 U.S.C. 77b(b)) is amended--
(1) in the subsection heading, by inserting ``; Limitation
on Disclosure Requirements'' after ``Formation'';
(2) by striking ``Whenever'' and inserting the following:
``(1) In general.--Whenever''; and
(3) by adding at the end the following:
``(2) Limitation.--
``(A) In general.--Whenever pursuant to this title
the Commission is engaged in rulemaking regarding
disclosure obligations of issuers, the Commission shall
expressly provide that an issuer is only required to
disclose information in response to such disclosure
obligations to the extent the issuer has determined
that such information is material with respect to a
voting or investment decision regarding the securities
of such issuer.
``(B) Applicability.--Subparagraph (A) shall not
apply with respect to the removal of any disclosure
requirement with respect to an issuer.
``(C) Rule of construction.--For the purposes of
this paragraph, information is considered material with
respect to a voting or investment decision regarding
the securities of an issuer if there is a substantial
likelihood that a reasonable investor would view the
failure to disclose that information as having
significantly altered the total mix of information made
available to the investor.''.
(b) Securities Exchange Act of 1934.--Section 3(f) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(f)) is amended--
(1) in the subsection heading, by inserting ``; Limitation
on Disclosure Requirements'' after ``Formation'';
(2) by striking ``Whenever'' and inserting the following:
``(1) In general.--Whenever''; and
(3) by adding at the end the following:
``(2) Limitation.--
``(A) In general.--Whenever pursuant to this title
the Commission is engaged in rulemaking regarding
disclosure obligations of issuers, the Commission shall
expressly provide that an issuer is only required to
disclose information in response to such disclosure
obligations to the extent the issuer has determined
that such information is material with respect to a
voting or investment decision regarding the securities
of such issuer.
``(B) Applicability.--Subparagraph (A) shall not
apply with respect to the removal of any disclosure
requirement with respect to an issuer.
``(C) Rule of construction.--For the purposes of
this paragraph, information is considered material with
respect to a voting or investment decision regarding
the securities of an issuer if there is a substantial
likelihood that a reasonable investor would view the
failure to disclose that information as having
significantly altered the total mix of information made
available to the investor.''.
TITLE II--SEC JUSTIFICATION OF NON-MATERIAL DISCLOSURE MANDATES
SEC. 201. SEC JUSTIFICATION OF NON-MATERIAL DISCLOSURE MANDATES.
Section 23 of the Securities Exchange Act of 1934 (15 U.S.C. 78w)
is amended by adding at the end the following:
``(e) Non-Material Disclosure Mandates.--
``(1) Disclosure.--The Commission shall maintain a list on
the website of the Commission that contains--
``(A) each mandate under the Federal securities
laws and regulations that requires the disclosure of
non-material information; and
``(B) for each such disclosure mandate, an
explanation of why the mandate is required.
``(2) Study and report.--The Commission shall, every 5
years, issue a report to the Congress justifying each
disclosure contained on the list required under paragraph (1).
``(3) No private liability for failing to make a non-
material disclosure.--A person who fails to disclose non-
material information required to be disclosed under the Federal
securities laws or regulations shall not be liable for such
failure in any private action.''.
TITLE III--PUBLIC COMPANY ADVISORY COMMITTEE
SEC. 301. PUBLIC COMPANY ADVISORY COMMITTEE.
The Securities Exchange Act of 1934 is amended by inserting after
section 40 (15 U.S.C. 78qq) the following:
``SEC. 40A. PUBLIC COMPANY ADVISORY COMMITTEE.
``(a) Establishment and Purpose.--
``(1) Establishment.--There is established within the
Commission the Public Company Advisory Committee (referred to
in this section as the `Committee').
``(2) Purpose.--The Committee shall--
``(A) provide the Commission with advice on its
rules, regulations, and policies with regard to its
mission of protecting investors, maintaining fair,
orderly, and efficient markets, and facilitating
capital formation, as they relate to the following:
``(i) ``existing and emerging regulatory
priorities of the Commission;
``(ii) issues relating to the public
reporting and corporate governance of public
companies;
``(iii) issues relating to the proxy
process for shareholder meetings held by public
companies;
``(iv) issues relating to trading in the
securities of public companies; and
``(v) issues relating to capital formation;
and
``(B) submit to the Commission such findings and
recommendations as the Committee determines are
appropriate, including recommendations for proposed
regulatory and legislative changes.
``(b) Membership.--
``(1) In general.--The membership of the Committee shall be
not fewer than 10, and not more than 20, members appointed by
the Commission from among individuals who--
``(A) are officers, directors, or senior officials
of public companies registered with the Commission
under the Securities Act or 1933 and this Act, except
for those public companies that own asset management,
fixed income, investment advisory, broker-dealer, or
proxy services businesses;
``(B) are executives or other individuals with
senior managerial responsibility in business,
professional, trade, and industry associations that
represent the interests of such public companies; and
``(C) are professional advisers and service
providers to such public companies (including
attorneys, accountants, investment bankers, and
financial advisers).
``(2) Qualifications.-- At least 50 percent of the
Committee membership shall be drawn from individuals who would
qualify for membership under paragraph (1)(A).
``(3) Term.--Each member of the Committee appointed under
paragraph (1) shall serve for a term of four years. Vacancies
among the members, whether caused by the resignation, death,
removal, expiration of a term, or otherwise, will be filled
consistent with the Commission's procedures then in effect.
``(4) Staggered terms.--The members of the Committee shall
serve staggered terms, with one-third of the initial members of
the Committee each serving for 1, 2, or 3 years.
``(5) Members not on other advisory committees.--Public
companies and other organizations that are currently
represented on any other Commission Advisory Committee are not
eligible to have representatives also serve on the Public
Company Advisory Committee.
``(6) Members not commission employees.-- Members appointed
under paragraph (1) shall not be considered to be employees or
agents of the Commission solely because of membership on the
Committee.
``(c) Chair; Vice Chair; Secretary; Assistant Secretary.--
``(1) In general.--The members of the Committee shall
elect, from among the members of the Committee--
``(A) a Chair;
``(B) a Vice Chair;
``(C) a Secretary; and
``(D) an Assistant Secretary.
``(2) Term.--Each member elected under paragraph (1) shall
serve for a term of two years in the capacity the member was
elected under paragraph (1).
``(3) Subcommittees.--The Chair may create subcommittees
that hold public or non-public meetings and provide
recommendations to the full Committee.
``(d) Meetings.--
``(1) Frequency of meetings.--The Committee shall meet--
``(A) not less frequently than twice annually, at
the call of the chair of the Committee; and
``(B) from time to time, at the call of the
Commission.
``(2) Notice.--The Chair of the Committee shall give the
members of the Committee written notice of each meeting, not
later than two weeks before the date of the meeting.
``(e) Compensation and Travel Expenses.--Each member of the
Committee who is not a full-time employee of the United States shall--
``(1) be entitled to receive compensation at a rate not to
exceed the daily equivalent of the annual rate of basic pay in
effect for a position at level V of the Executive Schedule
under section 5316 of title 5, United States Code, for each day
during which the members is engaged in the actual performance
of the duties of the Committee; and
``(2) while away from the home or regular place of business
of the member in the performance of services for the Committee,
be allowed travel expenses, including per diem in lieu of
subsistence, in the same manner as persons employed
intermittently in the Government service are allowed expenses
under section 5703(b) of title 5, United States Code.
``(f) Staff.--The Commission shall make available to the Committee
such staff as the chairman of the Committee determines are necessary to
carry out this section.
``(g) Review by Commission.--The Commission shall--
``(1) review the findings and recommendations of the
Committee; and
``(2) each time the Committee submits a finding or
recommendation to the Commission, promptly issue a public
statement--
``(A) assessing the finding or recommendation of
the Committee; and
``(B) disclosing the action, if any, the Commission
intends to take with respect to the finding or
recommendation.
``(h) Committee Findings.--Nothing in this section shall require
the Commission to agree to or act upon any finding or recommendation of
the Committee.
``(i) Nonapplicability of FACA.--Chapter 10 of part I of title 5,
United States Code, shall not apply to the Committee and its
activities.''.
TITLE IV--PROTECTING U.S. BUSINESS SOVEREIGNTY
SEC. 401. STUDY ON DETRIMENTAL IMPACT OF THE DIRECTIVE ON CORPORATE
SUSTAINABILITY DUE DILIGENCE AND CORPORATE SUSTAINABILITY
REPORTING DIRECTIVE.
(a) Study.--The Securities and Exchange Commission shall conduct a
study to examine and evaluate--
(1) the detrimental impact and potential detrimental impact
of each of the Directives on--
(A) United States companies, consumers, and
investors; and
(B) the economy of the United States;
(2) the extent to which each of the Directives aligns with
international conventions and declarations on human rights and
environmental obligations; and
(3) the legal basis for the extraterritorial reach of each
of the Directives.
(b) Report.--Not later than 1 year after the date of the enactment
of this Act, the Securities and Exchange Commission shall submit to the
Committee on Banking, Housing, and Urban Affairs of the Senate, the
Committee on Financial Services of the House of Representatives, the
Secretary of State, the Secretary of Commerce, and the United States
Trade Representative a report that includes--
(1) the results of the study conducted under this section;
and
(2) recommendations for policymakers and relevant
stakeholders on potential mitigating measures, alternative
approaches, or modifications to each of the Directives that
would address any concerns identified in the study.
(c) Access to Information.--The Securities and Exchange Commission
may request from private entities such relevant data and information as
the Securities and Exchange Commission determines necessary to carry
out the study required under this section and such private entities
shall provide such requested data and information to the Securities and
Exchange Commission.
(d) Directives Defined.--In this section the term ``Directives''
means--
(1) the proposed directive entitled ``Corporate
Sustainability Due Diligence'' adopted by the European
Commission on February 23, 2022; and
(2) the Corporate Sustainability Reporting Directive of the
European Commission effective January 5, 2023.
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