[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4790 Reported in House (RH)]

<DOC>





                                                 Union Calendar No. 275
118th CONGRESS
  1st Session
                                H. R. 4790

                          [Report No. 118-336]

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

                           December 22, 2023

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
 [For text of introduced bill, see copy of bill as introduced on July 
                               20, 2023]


_______________________________________________________________________

                                 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--
                            ``(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; or
                    ``(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.--
                    ``(A) In general.--Each member of the Committee 
                appointed under paragraph (1) shall serve for a term of 
                4 years.
                    ``(B) Vacancies.--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.
                    ``(C) 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.
            ``(4) 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.
            ``(5) 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 Chair 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.
                                                 Union Calendar No. 275

118th CONGRESS

  1st Session

                               H. R. 4790

                          [Report No. 118-336]

_______________________________________________________________________

                                 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.

_______________________________________________________________________

                           December 22, 2023

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed