S.Amdt. 1984

SA 1984. Mr. RUBIO submitted an amendment intended to be proposed to
amendment SA 1502 proposed by Mr. Schumer to the bill S. 1260, to
establish a new Directorate for Technology and Innovation in the
National Science Foundation, to establish a regional technology hub
program, to require a strategy and report on economic security,
science, research, innovation, manufacturing, and job creation, to
establish a critical supply chain resiliency program, and for other
purposes; which was ordered to lie on the table; as follows:

At the appropriate place in title II of division E, insert
the following:

SEC. 52__. SHAREHOLDER NATIONAL SECURITY AWARENESS.

(a) Short Title.--This section may be cited as the
``Shareholder National Security Awareness Act of 2021''.
(b) Findings.--Congress finds the following:
(1) The national security of the United States is a
necessary condition for the advancement of the national
public interest, the general welfare, and the volume of
credit available for trade, industry, and transportation,
which form the bases for the necessity of the regulation of
transactions in securities, as described in section 2 of the
Securities Exchange Act of 1934 (15 U.S.C. 78b).
(2) Transactions in securities may adversely affect the
national security of the United States in a manner that is
analogous to the circumstances described in paragraphs (3)
and (4) of section 2 of the Securities Exchange Act of 1934
(15 U.S.C. 78b), which state that the unreasonable expansion
and contraction of the volume of credit is caused by the
susceptibility of the prices of securities to manipulation
and control, excessive speculation, and sudden and
unreasonable fluctuations.
(3) In the case of the national security of the United
States, the susceptibility of the prices of securities to
manipulation and control, excessive speculation, and sudden
and unreasonable fluctuations may create business financing
conditions that prevent, erode, or cause the abandonment of
long-term investment that is necessary for the formation,
development, and maintenance of capital assets that perform
functions that are essential to the national security of the
United States by--
(A) undervaluing those capital assets relative to their
necessity to the United States; and
(B) overvaluing transactions that would reduce, downsize,
outsource, or offshore the operation of those capital assets.
(4) In the report to Congress required under section 2504
of title 10, United States Code, with respect to fiscal year
2020, the Department of Defense stated that ``a U.S. business
climate that has favored short-term shareholder earnings . .
. [has] severely damaged America's ability to arm itself
today and in the future''.
(5) The susceptibility of the prices of securities to
manipulation and control, excessive speculation, and sudden
and unreasonable fluctuations establishes, with respect to
capital assets that are essential to the national

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security of the United States, a justification for providing
shareholders with greater information regarding the possible
adverse effects of certain transactions on the national
security of the United States in order to improve the
stability, quality, and informational efficiency of the
market for those capital assets.
(c) Definitions.--In this section:
(1) Cause.--The term ``cause'' means to directly or
indirectly cause.
(2) Commission.--The term ``Commission'' means the
Securities and Exchange Commission.
(3) Committee.--The term ``Committee'' means the Committee
for the Assessment of National Security in Corporate
Governance established under subsection (g).
(4) Covered provision.--The term ``covered provision''
means subparagraph (F) of section 13(d)(1) of the Securities
Exchange Act of 1934 (15 U.S.C. 78m(d)(1)), as added by
subsection (d)(1) of this section.
(5) Issuer.--The term ``issuer'' means an issuer with a
class of securities registered pursuant to section 12 of the
Securities Exchange Act of 1934 (15 U.S.C. 78l).
(6) National security asset.--The term ``national security
asset''--
(A) means an asset, the material reduction in the
operation, the impairment, or the loss of which would harm
the national security of the United States; and
(B) includes--
(i) any critical component, critical infrastructure,
critical technology, critical technology item, and industrial
resources, as those terms are defined in section 702 of the
Defense Production Act of 1950 (50 U.S.C. 4552);
(ii) critical infrastructure and critical technologies, as
those terms are defined in paragraphs (5) and (6) of section
721(a) of the Defense Production Act of 1950 (50 U.S.C.
4565(a)), respectively;
(iii) any intellectual property, or asset developed using
intellectual property, that is developed through any program
that has received funding, or that is authorized, under this
Act; and
(iv) any facility or equipment developed through the
program established under section 9902 of the William M.
(Mac) Thornberry National Defense Authorization Act for
Fiscal Year 2021 (Public Law 116-283).
(7) Shareholder proposal.--The term ``shareholder
proposal'' means a proposal by a shareholder that the
applicable issuer is required to include in the proxy
statement of the issuer under section 240.14a-8 of title 17,
Code of Federal Regulations, as in effect on the date of
enactment of this Act.
(8) Within the united states.--The term ``within the United
States'' means within the United States or any territory or
possession of the United States.
(d) Disclosure of Share Ownership With Respect to Plans or
Proposals Affecting National Security Assets.--
(1) In general.--Section 13(d) of the Securities Exchange
Act of 1934 (15 U.S.C. 78m(d)) is amended--
(A) in paragraph (1)--
(i) in the matter preceding subparagraph (A), by striking
``Any person who'' and inserting ``Subject to paragraph (7),
any person who'';
(ii) in subparagraph (D), by striking ``and'' at the end;
(iii) in subparagraph (E), by striking the period at the
end and inserting ``; and''; and
(iv) by adding at the end the following:
``(F) whether such person has any plan or proposal that
would be reasonably expected to, if implemented, cause a
material reduction to the operation by the issuer of a
national security asset, as all such applicable terms are
defined in subsection (c) of the Shareholder National
Security Awareness Act of 2021, within the United States or
any territory or possession of the United States.'';
(B) in paragraph (6)(D), by inserting ``, except that this
subparagraph shall not apply with respect to an acquisition
or proposed acquisition to which paragraph (1)(F) applies''
after ``purposes of this subsection''; and
(C) by adding at the end the following:
``(7) With respect to a person that has a plan or proposal
described in paragraph (1)(F), this subsection shall be
applied by substituting `2.5 per centum' for `5 per centum'
each place that term appears.''.
(2) Rulemaking.--Not later than 1 year after the date of
enactment of this Act, the Commission shall amend section
240.13d-101 of title 17, Code of Federal Regulations, or any
successor regulation, to ensure that such section is
consistent with the covered provision.
(e) Rulemakings Regarding Review of the Effect of Proxy
Solicitations and Proposals on National Security Assets.--Not
later than 2 years after the date of enactment of this Act,
the Commission shall--
(1) amend section 240.14a-2(b)(1)(vi) of title 17, Code of
Federal Regulations, or any successor regulation, to provide
that a person that is required to file a statement described
in the covered provision is included as a person described in
such section 240.14a-2(b)(1)(vi); and
(2) issue rules that permit an issuer to exclude from any
proxy statement supplied by the issuer any shareholder
proposal that would be reasonably expected to, if
implemented, cause a material reduction to the operation by
the issuer of a national security asset.
(f) Referral to Committee.--With respect to any material
reviewed, or determination required to be made, by the
Commission under a rule issued or amended under subsection
(d)(2) or (e), the Commission may refer the matter to the
Committee, which shall review the matter in a manner that is
consistent with the requirements of subsection (g).
(g) Committee for the Assessment of National Security in
Corporate Governance.--
(1) Establishment.--There is established the Committee for
the Assessment of National Security in Corporate Governance,
the primary objective of which shall be to assist the
Commission in the review by the Commission of matters
relating to national security, including the covered
provision and matters relating to any rule issued or amended
under subsection (d)(2) or (e).
(2) Composition.--The Committee shall be composed of the
following members:
(A) The Secretary of Defense.
(B) The Attorney General.
(C) The Secretary of Homeland Security.
(D) The Secretary of Commerce.
(E) The United States Trade Representative.
(F) The Secretary of State.
(3) Chair.--
(A) In general.--The Attorney General shall serve as Chair
of the Committee.
(B) Duties of the chair.--The Chair shall--
(i) except as otherwise provided by this section, or the
amendments made by this section, have the exclusive authority
to act, or to authorize other members of the Committee to
act, on behalf of the Committee, including communicating with
the Commission and with persons subject to the reviews
authorized under paragraph (4); and
(ii) in acting on behalf of the Committee--

(I) keep the Committee fully informed of the activities of
the Chair; and
(II) consult with the Committee before taking any material
actions under paragraph (4).

(4) Duties.--
(A) Review of share ownership disclosure and shareholder
proposals.--Not later than 45 days after the date on which
the Commission refers a matter to the Committee under
subsection (f), the Committee shall--
(i) conduct a review to determine, based on a written,
risk-based analysis, whether the plan or proposal that is the
subject of the referred matter would be reasonably expected
to, if implemented, cause a material reduction to the
operation by the applicable issuer of a national security
asset within the United States; and
(ii) communicate to the Commission any determination made
by the Committee under clause (i).
(B) Communication.--The Committee may--
(i) communicate directly with any person that is the
subject of a review under this paragraph; and
(ii) submit to any person described in clause (i) any
questions or requests for information to establish facts
necessary to conduct a review described in that clause.
(C) Totality of the circumstances.--In making any
determination under this paragraph regarding whether a plan
or proposal would reasonably be expected to, if implemented,
cause a material reduction to the operation by the issuer of
a national security asset, the Committee may consider any of
the following:
(i) The totality of the circumstances with respect to the
plan or proposal, including--

(I) consideration of whether, in taking a separate action,
the person to which the determination applies is--

(aa) planning or proposing a material increase with respect
to the operation of the applicable national security asset or
any other national security asset; or
(bb) creating or developing any new asset relating to the
national security of the United States that would offset the
material reduction with respect to the operation of the
national security asset; and

(II) whether that material reduction is caused by--

(aa) any sale of, or other disposition of (whether in a
single transaction or a series of transactions) assets or
capital stock;
(bb) any merger, consolidation, joint venture, partnership,
spin-off, reverse spin-off, dissolution, restructuring,
recapitalization, liquidation, or any other business
combination or strategic transaction; or
(cc) any other transaction or event the Committee
determines appropriate.
(ii) The totality of the circumstances with respect to the
operation of the national security asset, including--

(I) the amount of time in operation of the applicable
asset;
(II) the number, amount, or quality of inputs, whether from
labor, energy, or other sources, contributing to the
operation of the applicable asset;
(III) the number, amount, or quality of outputs, whether in
the form of labor, components, or end-use products, that
result from the operation of the applicable asset; and
(IV) any other measurement with respect to the operation
that the Committee determines appropriate.

(D) Presumption of material reduction.--With respect to any
review conducted by the Committee under this paragraph, there
shall be a presumption, which may be rebutted through any
information received by the Committee through communication
permitted under subparagraph (B), that the

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plan or proposal that is the subject of the review would be
reasonably expected to, if implemented, cause a material
reduction to the operation by the applicable issuer of a
national security asset if that plan or proposal would, if
implemented, cause--
(i) in a fiscal year, distributions , including capital
distributions, with respect to the common stock of the issuer
to exceed the net income of the issuer with respect to any of
the 3 most recently completed fiscal years of the issuer;
(ii) the sale of any material line of business of the
issuer with respect to which the issuer has, or had in any of
the 3 most recently completed fiscal years of the issuer, a
contract with the Federal Government; or
(iii) a reduction in expenditures on research and
development by the issuer in an amount that is more than 50
percent, as compared with the amount of those expenditures in
any of the 3 most recently completed fiscal years of the
issuer.
(5) Consensus.--
(A) In general.--The Committee shall attempt to reach
consensus with respect to determinations made under paragraph
(4).
(B) Inability to reach consensus.--If the Committee is
unable to reach consensus, as described in subparagraph (A)--
(i) the Chair shall present the issue to the Committee,
which shall make a determination by majority vote; and
(ii) if the vote of the Committee under clause (i) is a
tie, the Chair shall make the final decision regarding the
applicable determination.
(C) Publicly available version of determination.--The
Committee shall publish publicly a version of any
determination made under paragraph (4) that provides the
reasoning for the determination, which may have removed
classified or other sensitive information from the
determination or any analysis from the determination.
(D) Implementation.--
(i) Department of justice.--The Attorney General shall
provide such funding and administrative support for the
Committee as the Committee may require.
(ii) Other departments and agencies.--The heads of
executive departments and agencies shall provide, as
appropriate and to the extent permitted by law, such
resources, information, and assistance as required to
implement the reviews required by paragraph (4) within their
respective agencies, including the assignment of staff to
perform the duties described in this subsection.
(6) Inapplicability of federal advisory committee act.--The
Federal Advisory Committee Act (5 U.S.C. App.) shall not
apply with respect to the Committee or the activities of the
Committee.
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