The House Financial Services Committee approved the Shareholder Protection Act, H.R. 4790. The bill requires shareholder approval of a corporation's political spending for federal races. The Securities and Exchange Commission would have to issue rules requiring corporations to disclose any materials for political activities created with or purchased using company money. The bill was introduced by Rep. Michael Capuano (D-MA) in March, and is another effort by House Democrats to try and mitigate the effects of the Citizens United decision.

According to CQ, the "bill would allow shareholders to vote on the total amount of proposed political expenditures for that fiscal year. It would require corporations to include in its bylaws a requirement for a shareholder vote on political expenditures in excess of $50,000 or any expenditure that would make the total amount spent by the corporation more than $50,000. A majority vote would be required for approval."

The legislation is strongly opposed by the U.S. Chamber of Commerce, which sent a letter to the committee urging their rejection of the bill, as "an assault on First Amendment rights."

BNA Money and Politics ($$) reports that Financial Services Chairman Barney Frank (D-MA) said during mark up that the bill, "simply clarifies that the right actually belongs to a corporation's owners, i.e., its shareholders. In Frank's view, the bill and the court's [Citizens United] decision work hand-in-hand." Frank asserted it, "would simply require companies to add an additional item to their annual proxy materials and, as such, would not impose new costs."

An amendment offered by Rep. Michael Castle (R-DE) would have allowed states to opt out of compliance. The majority of large U.S. companies are incorporated in Delaware. The amendment did not pass. Rep. Jeb Hensarling (R-TX) proposed another failed amendment, which would have prohibited the bill from taking effect until Congress enacts another bill he sponsors, H.R. 5860. Hensarling's bill, the Union Member Protection Act, would require labor unions to obtain approval for political expenditures and disclose those activities to its members.

The Shareholder Protection Act now moves to the full House, and may be considered in September. The Senate is unlikely to act.