[Congressional Record Volume 162, Number 145 (Monday, September 26, 2016)]
[Extensions of Remarks]
[Page E1355]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            EMPOWERING EMPLOYEES THROUGH STOCK OWNERSHIP ACT

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                               speech of

                            HON. JARED POLIS

                              of colorado

                    in the house of representatives

                      Thursday, September 22, 2016

  Mr. POLIS. Mr. Speaker, I want to thank Rep. Paulsen and Rep. Crowley 
for bringing H.R. 5719, the Empowering Employees through Stock 
Ownership Act, to the floor. This is important legislation that will 
help start-ups attract and retain employees by allowing employees to 
obtain an ownership stake in those companies without facing cost-
prohibitive tax bills.
  Often, privately held start-ups provide employees stock ownership 
options as part of their compensation package. Under current law, 
employees that receive company shares as part of their compensation 
package must pay the taxes on the value of those shares taxes 
immediately, long before the employees realize the economic benefit of 
those shares.
  This bill would allow employees to defer the tax on stock shares that 
companies provide employees as part of their compensation package for 
seven years or until the company can sell their stock on publically 
traded exchanges. Additionally, it would increase access to company 
equity for lower-wage earners.
  Studies have shown that closely held companies that combine employee 
ownership with employee workplace participation programs have a 
positive impact on employee productivity and improve overall company 
performance.
  Employees working for businesses in my district such as Neighborland 
and hobbyDB--both located in Boulder--have expressed their support for 
this bill and will be able to take advantage of its tax benefits.
  Other types of employee-ownership models have helped businesses have 
a higher growth rate and stay in business. Employee-ownership models 
are good for the company, the employees, and the community.
  In Colorado, there are approximately 118 businesses that use 
employee-owned businesses that promote employee ownership through stock 
option plans or ESOPs.
  A good example of a successful ESOP is Fire Safety Services. The 
owner, Jeff wanted to be able to offer his employees a stake in the 
business and converted his business to an ESOP. This allowed him to 
create a succession plan so the business can remain locally owned. Jeff 
noted that after the conversion, employee morale was up and sales were 
up.
  The New Belgium Brewery, located in Ft. Collins is also an ESOP. From 
the perspective of the employees, New Belgium has a culture of personal 
and collective growth--the employees are concerned about the 
professional growth of their colleagues and also have a vested stake in 
the management and economic health of the company.
  The bill before us will make it easier for employees in other 
privately-held companies to participate in the growth of their company.

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