S.Amdt. 691

SA 691. Mr. CORNYN submitted an amendment intended to be proposed by
him to the bill S. 2226, to authorize appropriations for fiscal year
2024 for military activities of the Department of Defense, for military
construction, and for defense activities of the Department of Energy,
to prescribe military personnel strengths for such fiscal year, and for
other purposes; which was ordered to lie on the table; as follows:

At the appropriate place, insert the following:

SEC. __. CHINA INVESTMENT RISK DISCLOSURE.

(a) Findings.--Congress finds the following:
(1) The People's Republic of China has vowed to seize
Taiwan, which the People's Republic of China considers to be
a renegade province.
(2) The people of Taiwan are concerned that the People's
Republic of China will launch an armed attack of Taiwan.
(3) The Chairman of the Joint Chiefs of Staff, in testimony
before Congress in April 2022, stated the following: ``The
People's Republic of China has and continues to develop
significant nuclear, space, cyber, land, air, and maritime
military capabilities, and they are working every day to
close the technology gap with the United States and our
allies. In short, they remain intent on fundamentally
revising the global international order in their favor by
midcentury, they intend to be a military peer of the U.S. by
2035, and they intend to develop the military capabilities to
seize Taiwan by 2027.''.
(4) Section 3(a) of the Taiwan Relations Act (22 U.S.C.
3302(a)) states that ``the United States will make available
to Taiwan such defense articles and defense services in such
quantity as may be necessary to enable Taiwan to maintain a
sufficient self-defense capability.''.
(5) An armed attack of Taiwan would likely materially
disrupt United States business relations with, and
investments in, the People's Republic of China, whether
directly or indirectly.
(6) The nature and risk of an armed attack of Taiwan by the
People's Republic of China is material to shareholders of
issuers that have a material presence in the People's
Republic of China.
(7) Issuers should be required to disclose to their
shareholders--
(A) any reliance that those issuers have on the operations
of those issuers in the People's Republic of China;
(B) the material risks posed to the business interests of
those issuers by an armed attack of Taiwan by the People's
Republic of China; and
(C) the commercial relationships that those issuers have
with the industrial base of the People's Liberation Army,
including with any entity on the list of Chinese military
companies maintained by the Secretary of Defense under
section 1260H of the William M. (Mac) Thornberry National
Defense Authorization Act for Fiscal Year 2021 (Public Law
116-283; 10 U.S.C. 113 note).
(b) Disclosure of Material Risks Associated With an Armed
Attack of Taiwan by the People's Republic of China.--Section
13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m) is
amended by adding at the end the following:
``(t) Disclosure of Material Risks Associated With an Armed
Attack of Taiwan by the People's Republic of China.--
``(1) Definition.--In this subsection, the term `covered
issuer'--
``(A) means an issuer that is required to file reports
under subsection (a) or section 15(d); and
``(B) includes any issuer that files the form described in
section 249.220f of title 17, Code of Federal Regulations, or
any successor regulation.
``(2) Regulations.--Not later than 270 days after the date
of enactment of this subsection, the Commission shall
promulgate regulations requiring each covered issuer to
disclose annually, beginning with the first full fiscal year
of the covered issuer that begins after the date on which the
Commission promulgates those regulations, information
regarding the following:
``(A) The direct or indirect exposure, including through
contract manufacturers and joint ventures, of the covered
issuer to the People's Republic of China through--
``(i) the operations of the covered issuer;
``(ii) the employee base of the covered issuer;
``(iii) investments made by the covered issuer in the
People's Republic of China (including the Hong Kong Special
Administrative Region); and
``(iv) securities traded by the covered issuer in the
People's Republic of China (including the Hong Kong Special
Administrative Region).
``(B) The legal or regulatory uncertainty associated with
the covered issuer operating in or exiting the People's
Republic of China after an armed attack of Taiwan by the
People's Republic of China.
``(C) The direct or indirect reliance of the covered issuer
on goods or services sourced in the People's Republic of
China.
``(D) The potential disruptions to the supply chain of the
covered issuer due to an armed attack of Taiwan by the
People's Republic of China.
``(E) The disruptions that an armed attack of Taiwan by the
People's Republic of China may cause to the following:
``(i) The business relationships of the covered issuer in
the People's Republic of China (including the Hong Kong
Special Administrative Region).
``(ii) Other connections between the covered issuer and the
People's Republic of China (including the Hong Kong Special
Administrative Region).
``(iii) Assets of the covered issuer that are in the
People's Republic of China (including the Hong Kong Special
Administrative Region).
``(F) The impact on the cash flow, liquidity, supply chain,
property, capital resources, cash requirements, or financial
position of the covered issuer, or on any plant or equipment
of the covered issuer located in the People's Republic of
China (including the Hong Kong Special Administrative
Region), that may be caused by an armed attack of Taiwan by
the People's Republic of China, including--
``(i) any impairment of financial assets or long-lived
assets of the covered issuer;
``(ii) any decline in--

``(I) the value of inventory or investments of the covered
issuer; or
``(II) the recoverability of deferred tax assets of the
covered issuer; and

``(iii) any impact on the collectability of consideration
relating to contracts that the covered issuer has with
customers.
``(G) The impact of any import or export ban that may
result from an armed attack of Taiwan by the People's
Republic of China on any product or commodity, including any
critical mineral from the People's Republic of China, used in
the course of business by the covered issuer or sold by the
covered issuer.
``(3) Information available to the public.--Each covered
issuer shall make available to the public on the internet
website of the covered issuer the information disclosed by
the covered issuer in accordance with the regulations
promulgated by the Commission under paragraph (2).''.
(c) Disclosure by Investment Advisers and Investment
Companies.--
(1) Definitions.--In this subsection:
(A) Commission.--The term ``Commission'' means the
Securities and Exchange Commission.
(B) Investment adviser.--The term ``investment adviser''
has the meaning given the term in section 202(a) of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)).
(C) Investment company.--The term ``investment company''
has the meaning given the term in section 3 of the Investment
Company Act of 1940 (15 U.S.C. 80a-3).
(2) Disclosures.--Not later than 270 days after the date of
enactment of this Act, the Commission shall promulgate
regulations that require each investment adviser and each
investment company to make an annual disclosure to the
Commission (to the extent material) with respect to the
issues described in paragraph (3).
(3) Issues described.--The issues described in this
paragraph with respect to an investment adviser or investment
company are the following:
(A) The exposure of the applicable entity to the People's
Republic of China through investments made by the entity in
the People's

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Republic of China (including the Hong Kong Special
Administrative Region).
(B) The potential loss in value of investments described in
subparagraph (A) that may be caused by an armed attack of
Taiwan by the People's Republic of China, including any
sanctions imposed by the United States in response to such an
armed attack.
(4) Applicability.--The regulations promulgated under
paragraph (2) shall apply beginning with the first full
fiscal year of an investment adviser or investment company,
as applicable, that begins after the date on which the
Commission promulgates those regulations.
______