By ASAE's Inroads

The House Financial Services Committee has approved H.R. 4790, The Shareholder Protection Act of 2010, by a vote of 35 to 28. The legislation is a second response by the Democratic leadership to the Citizens United v. FEC case, which the Supreme Court decided earlier this year. No Republicans supported the bill, and they were joined by three Democrats in opposition.

The bill would require shareholders of corporations to vote on the total political expenditures the corporation would make in the upcoming fiscal year. All corporations would have to include in their bylaws language requiring a majority vote of approval on political expenditures in excess of $50,000. ASAE is concerned that the bill includes under the definition of political expenditures "dues or other payments to trade associations" and if this would require dues to associations that engage in political activity to be subject to shareholder votes.

The bill, introduced by Rep. Michael Capuano (D-MA), is roundly opposed by Republicans who argue it interferes with free speech rights guaranteed to corporations under the First Amendment. H.R. 4790 is expected to be passed by the House as another attempt to undo key provisions of the Citizens United case. The first legislative attempt, the DISCLOSE Act, failed to pass the Senate last week because it lacked the necessary 60 votes for cloture.