[Congressional Record Volume 163, Number 58 (Tuesday, April 4, 2017)]
[House]
[Pages H2667-H2678]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ENCOURAGING EMPLOYEE OWNERSHIP ACT OF 2017
Mr. HENSARLING. Mr. Speaker, pursuant to House Resolution 240, I call
up the bill (H.R. 1343) to direct the Securities and Exchange
Commission to revise its rules so as to increase the threshold amount
for requiring issuers to provide certain disclosures relating to
compensatory benefit plans, and ask for its immediate consideration in
the House.
The Clerk read the title of the bill.
The SPEAKER pro tempore. Pursuant to House Resolution 240, an
amendment in the nature of a substitute consisting of the text of Rules
Committee Print 115-11 is adopted and the bill, as amended, is
considered read.
The text of the bill, as amended, is as follows:
H.R. 1343
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Encouraging Employee
Ownership Act of 2017''.
SEC. 2. INCREASED THRESHOLD FOR DISCLOSURES RELATING TO
COMPENSATORY BENEFIT PLANS.
Not later than 60 days after the date of the enactment of
this Act, the Securities and Exchange Commission shall revise
section 230.701(e) of title 17, Code of Federal Regulations,
so as to increase from $5,000,000 to $10,000,000 the
aggregate sales price or amount of securities sold during any
consecutive 12-month period in excess of which the issuer is
required under such section to deliver an additional
disclosure to investors. The Commission shall index for
inflation such aggregate sales price or amount every 5 years
to reflect the change in the Consumer Price Index for All
Urban Consumers published by the Bureau of Labor Statistics,
rounding to the nearest $1,000,000.
The SPEAKER pro tempore. The bill shall be debatable for 1 hour
equally divided and controlled by the chair and ranking minority member
of the Committee on Financial Services.
After 1 hour of debate, it shall be in order to consider the
amendment printed in House Report 115-75, if offered by the Member
designated in the report, which shall be considered read, shall be
separately debatable for the time specified in the report equally
divided and controlled by the proponent and an opponent.
The gentleman from Texas (Mr. Hensarling) and the gentleman from
Michigan (Mr. Kildee) each will control 30 minutes.
The Chair recognizes the gentleman from Texas.
General Leave
Mr. HENSARLING. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days in which to revise and extend their remarks
and submit extraneous materials on the bill under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Mr. HENSARLING. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I rise in support of H.R. 1343, the Encouraging Employee
Ownership Act. I also want to commend the Republican and Democrat
sponsors of this important bill: Mr. Hultgren of Illinois, Mr. Delaney
of Maryland, Mr. Higgins of New York, Mr. MacArthur of New Jersey, Ms.
Sinema of Arizona, and Mr. Stivers of Ohio.
Their bipartisan efforts resulted in a bipartisan bill that will help
small businesses, including startups, to successfully reward their
hardworking employees; and, while doing so, this bill will allow small
businesses to effectively deploy their capital to grow and to create
jobs on Main Streets all across our country.
We all know, Mr. Speaker, that small businesses are the heart and
soul of the American economy. In fact, they helped create more than 60
percent of the Nation's net new jobs over the past two decades. So if
our Nation is to have a healthier economy that offers more opportunity
to more Americans, then we must encourage small-business growth and
small-business startups, and this starts with ensuring they have access
to the capital and credit they need to grow.
Yet as we have heard from countless witnesses who have appeared
before the House Financial Services Committee, community banks and
credit unions in particular--the primary source of our small-business
loans--are simply drowning, Mr. Speaker, in a sea of complicated and
costly regulations. The same occurs with the maze of burdensome
securities regulations that are written with the largest public
companies in mind but end up hurting smaller companies.
Although small companies are at the forefront of innovation and job
creation, they often face significant obstacles in obtaining funding in
our capital markets. These obstacles often result from the
proportionately larger burden that securities regulations place on
small companies when they seek to access capital both in the public and
private markets.
These small companies also face difficult challenges on how best they
can deploy their limited resources and capital--to grow and thrive or
to be able to sufficiently compensate their workforce, which is a
critical component of their success.
Currently, the SEC allows private companies to offer their own
securities to employees as part of written compensation agreements
without having to comply with burdensome Federal securities
registration requirements under what is called SEC rule 701. Now,
unfortunately, one of the rule's thresholds has not been adjusted in
two decades. What the bipartisan supporters of this bill are proposing
is simply to modernize this SEC rule with a modest increase in that
threshold.
Increasing the rule 701 threshold gives private companies more
flexibility to reward and retain employees and permits private
companies to keep valuable, skilled employees without having to use
other methods such as borrowing money or selling securities. Updating
this rule can encourage more companies to offer more incentives to more
employees.
As one witness who testified before Congress said, this bill ``would
support a valuable compensation practice that allows small businesses
to hire the most highly skilled workers'' and better enable small,
emerging growth companies that are at a competitive disadvantage with
bigger businesses to attract and retain employees.
Allowing employees to become owners in the company also benefits
those employees. As startups and small companies reach success, we all
want their employees to also reap the benefits of that success. That is
what is happening with companies that are able to offer stock options
as part of their employee compensation plans.
For example, when Google was in its early stages, it hired someone to
be an in-house, part-time masseuse and compensated her with both cash
and stock options. That masseuse is now worth millions today. Another
example is from an ad-tech company, MoPub. Thirty-six of its 100
employees became millionaires when the company was acquired by Twitter
because MoPub's CEO set his employees up for success by offering them
performance-based stock-option grants.
So, Mr. Speaker, shouldn't we want more American workers to have the
opportunities like at Google and MoPub? Don't we want more Americans to
have an opportunity to obtain an ownership stake in the places that
they work? That way the workers can earn the large financial upside
that comes when the company performs well, and the company benefits by
being able to attract talented workers.
Unfortunately, again, Mr. Speaker, too many companies right now shy
away from offering employees greater ownership opportunities because an
expensive, bureaucratic, burdensome, top-down regulation in Washington
hasn't been updated in nearly 20 years. Mr. Speaker, we can fix that
today. We can fix that by passing this commonsense, bipartisan bill,
the Encouraging Employee Ownership Act.
We can provide American workers with more opportunities to share in
the successes and profits of companies they work for. We can help to
foster capital formation so more Americans can go back to work, have
good careers, pay their mortgages, plan for a secure retirement, and
ultimately give their families a better life.
Mr. Speaker, I urge all my colleagues to join me in supporting this
commonsense bipartisan legislation, and I reserve the balance of my
time.
[[Page H2668]]
{time} 1515
Mr. KILDEE. Mr. Speaker, I yield myself such time as I may consume.
H.R. 1343, Encouraging Employee Ownership Act of 2017, eliminates
important disclosures that private companies must provide to their
employees in the event they are compensating those employees with
stock.
This bill would limit transparency. If companies want to pay their
employees in stocks, they should have to simply disclose to their
workers the risks associated with those investments.
Currently, private companies can provide up to $5 million worth of
stock compensation annually to their employees and are not required to
provide any financial disclosure. This bill would lift that cap to $10
million.
If companies choose to provide an employee with stock compensation,
they should be required to inform that employee of the appropriate
financial information, benefits, and the risks associated with that
investment, including 2 years of company financial statements. All of
this information is commonly available to typical investors.
Let's be clear: this stock is compensation for their work. Employees
deserve to understand the value of their compensation prior to
accepting it. They deserve the same protections that other investors
would get.
I agree with Professor Mercer Bullard, who is a professor of law at
the University of Mississippi School of Law, who testified before the
Capital Markets, Securities, and Investments Subcommittee voicing his
concerns about the bill. In his testimony, he noted that to take
advantage of the terms of this legislation, an issuer would have to
have at least $34 million in total assets. Surely, such minimal
disclosures are not too burdensome for those sort of companies.
I do also understand that some proponents of this legislation argue
that such an exemption is needed because disclosure of company
information to employees runs the risk that confidential information
could be leaked to competitors.
Employees with access to such information could simply be subject to
nondisclosure agreements, which are typical today. Indeed,
nondisclosure agreements are a simple solution that protects the
company, but does not deny the employees the right to understand the
worth of, or the risks associated with, the compensation they are
receiving. Unfortunately, this bill would limit that transparency and
those protections.
Mr. Speaker, I oppose this legislation, and I reserve the balance of
my time.
Mr. HENSARLING. Mr. Speaker, I yield the balance of my time to the
gentleman from Michigan (Mr. Huizenga), and I ask unanimous consent
that he may control that time.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Mr. HUIZENGA. Mr. Speaker, I yield myself such time as I may consume,
and I thank the chairman for his leadership on this particular issue.
Mr. Speaker, small businesses and entrepreneurs are what drive the
American economy. I meet with them in my district, the Second District
of Michigan, all the time. I know my colleagues do as well back in
their districts.
We see them firsthand. We see firsthand the benefits that their
dreams, their innovations, their inspiration, and their hard work
provide to our communities.
These innovators, entrepreneurs, and risk-takers are critical for our
country's economic growth and prosperity. In fact, small businesses are
responsible for 60 percent of the Nation's net new jobs over the past
two decades. Not 2 years, not 10 years, but over the last 20 years, the
last two decades.
If our Nation is going to have an economy that provides opportunity
for every American, then we must promote and encourage success and
growth in our small businesses and our startups. It is this notion that
brings us this legislation we are discussing today.
H.R. 1343, Encouraging Employee Ownership Act, would simply level the
playing field for small companies by updating Federal rules that allow
small businesses to better compensate their employees with ownership in
their own businesses.
Currently, Securities and Exchange Commission rule 701 permits
private companies to offer their securities as part of written
compensation agreements to employees, directors, general partners,
trustees, officers, or certain consultants without having to comply
with rigid Federal securities registration requirements. SEC rule 701,
therefore, allows small companies to reward its employees.
Despite the SEC having the authority to increase the $5 million
threshold disclosure via rulemaking, the SEC has once again chosen to
prioritize highly politicized regulatory undertakings instead of
focusing on its core mission. That mission includes facilitating
capital formation. If the SEC cannot or will not focus its priorities,
Congress will.
It is imperative that small businesses in west Michigan, all of
Michigan, and across America have the ability to compete. A critical
element of competition and success is for those small businesses to be
able to offer compensation packages that attract and retain top-tier
talent.
In today's world, that includes rewarding employees in stock options.
To me, this just makes common sense. Small-business employees have a
clear and vested interest in the success of their employer.
By increasing the rule 701 threshold to $10 million, it will give
private companies more flexibility to attract, reward, and retain those
highly valuable employees. This simple change will allow companies to
offer twice as much stock to their employers annually, as they
currently can, without having to trigger additional disclosure
information to investors about compensation packages that include these
security offerings.
By reforming this regulatory burden, startups, small businesses, and
emerging growth companies will be better equipped to attract highly
talented individuals from companies that are better capitalized and
able to maybe provide some additional cash compensation.
By incentivizing employees with stock options, small businesses will
now be able to compete on a more level playing field with older,
larger, and maybe more established companies. They are going to be able
to retain their invaluable employees as well.
This bill is an example of the positive bipartisan results that can
be achieved when Republicans and Democrats reach across the aisle. I
commend the sponsors of the bill, Representatives Hultgren, Delaney,
Higgins, MacArthur, Sinema, and Stivers for their leadership on this
issue. I encourage my colleagues to support H.R. 1343.
Mr. Speaker, I reserve the balance of my time.
Mr. KILDEE. Mr. Speaker, I yield 6 minutes to the gentleman from
Minnesota (Mr. Ellison), a member of the Financial Services Committee.
Mr. ELLISON. Mr. Speaker, the value of companies doesn't always go
up. It is not true that the stock market always goes up and only goes
up. It would be nice if Methuselahs at Google and every other company
in America could get stock options and end up millionaires, but the
truth is the world doesn't work that way. That is why disclosure is
very important. That is why there is nothing wrong and no one objects
to employees being compensated with stock options, but those employees
ought to at least know the value of those stock options.
If you give me a check and it has a monetary value, I can read it and
I know how much it is. If you give me stock options and you don't tell
me because you don't have to disclose how much they are worth, then
that is not fair, and that is what we object to.
This bill simply allows companies to avoid disclosure to employees of
what those stock options are worth. That is wrong, and that is why we
oppose it.
Let me just start in terms of the context, Mr. Speaker. Today we
consider yet another bill in favor of the moneyed interests. Today we
consider another bill that basically helps out people who have a lot
while so many Americans are struggling to get by and problems abound
almost everywhere.
I have got to wonder, of all the things the American public want, why
is a revision to the SEC's rule--section 701, to be precise--the
priority for this week?
We have been here for about 3 months now. The Republicans have set
[[Page H2669]]
the agenda. They are in the majority. They get to decide which bills
come up. Why do they keep on bringing up bills that only the moneyed
interests want?
Mr. Speaker, in the past few months, congressional Republicans--I
almost called them corporate Republicans--who decide which bills are
the priority, have brought forth a hodgepodge of pieces of legislation.
I will just review a few.
Republicans made it easier to drug test people receiving unemployment
compensation.
Do you think the unemployed want that?
I doubt it.
Republicans have passed and the President even signed a law to
protect corporate firms from having to disclose labor violations like
wage theft before winning government contracts. I have got a feeling
the employees were not calling for that.
House and Senate Republicans passed laws that allow internet service
providers to sell your browser history. I don't think most folks on the
internet today were clamoring for that gem, which I was proud to vote
``no'' on.
Republicans enacted a new law making it easier to dump coal debris
near rivers and streams.
Republicans stopped efforts to help governments around the world
avoid corruption.
H.J. Res. 41 removed the requirement that corporations disclose
resource payments to foreign governments, which is a crushing blow to
democracy activists working in fragile nations.
Mr. Speaker, this particular piece of legislation comes within a
certain kind of context--a context where we are not talking about
increase in pay, making people safer, making water cleaner, making
foreign governments more honest. It is quite the opposite.
In the 3 months that we have been back in Congress, these laws
removing competition, removing disclosure, and removing consumer
privacy are all priorities of Republicans, who set the agenda.
Mr. Speaker, people who might be clued into this broadcast today need
to know what the majority has been up to. It has not been up to
business.
These are all multinational corporate interests that don't punish
people for polluting, allow them to sell your internet browser's
history, allow them to make money off of testing laid-off workers
receiving employment compensation that is due them, and don't make
corporate interests disclose payments to foreign governments when they
drill for oil and minerals.
I just want the American people and Members to understand what is
going on here, what is the larger context of this piece of legislation
that we look at today.
When I talk to my constituents, they don't bring up any of this
stuff. Mr. Speaker, they want to know: Where is the jobs bill? When are
we going to get back to work? Somebody said we were going to work on
real infrastructure, real fair trade. When is that going to happen?
Well, the people who are in charge around here, I guess they are
going to get around to it at some point.
My constituents say: Can't we raise the minimum wage from something
higher than $7.25 an hour, which is the Federal minimum wage? When is
that bill coming up? Or, what about reconstructing our roads and our
bridges and allowing us to raise a gas tax to invest in our Nation's
infrastructure?
They say they want to increase skills. Let's invest in preschool,
Pell grants, and community college. Let's put the people, not the
corporate wish list, first.
Today we are asked to vote on a bill that basically makes it easier
for private companies to provide options, like stocks, rather than
compensation to their employees. As I have said, fundamentally, this
may not be a bad thing if disclosure is made. This bill makes it not
required. This bill makes it easier for firms to offload some of their
options to employees without disclosing financial information to them.
While I am glad to see employers reward employees with stock and
other compensation in addition to salaries, workers should be told the
value of the compensation they receive. I don't think that is asking
too much, Mr. Speaker.
With this bill, H.R. 1343, it is possible that employees would be
promised stock options which could be worth less than promised or even
completely worthless.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. KILDEE. Mr. Speaker, I yield an additional 2 minutes to the
gentleman from Minnesota.
Mr. ELLISON. Employees could decide to forego a salary increase and
accept lower pay in order to receive more stock options; yet, those
stock options could be worth way less than they expected.
Why should employees receive less information than any other minority
shareholder?
If an employee is trusted enough to run day-to-day aspects of the
business, they should be trusted enough to receive full disclosure
about the stock. Employees should be able to receive information on the
financial position of the company so they can make an educated
decision.
It is not difficult to allow participating employees to sign
nondisclosure agreements, and it can't be because these disclosures are
an additional burden on the firm. These firms prepare these types of
disclosures to receive rule 701 exemption from the SEC in the first
place.
{time} 1530
So I am also concerned about the mismatch of power between
corporations and their employees, and I am very concerned that
employees can be susceptible to pressure. Let me do a quick example.
George Maddox was one of 21,000 people who worked for Enron. After
working at Enron for 30 years, he had 14,000 shares of company stock
valued at $1.3 million. When Enron collapsed, he had literally nothing,
Mr. Speaker. All of his retirement was Enron stocks. If you haven't
watched the movie ``Enron: The Smartest Guys in the Room'' recently, I
would urge you to watch it again. You could also read Bethany McLean's
book by the same name.
One image consistently stuck with me: a staff rally where leaders
extolled the virtues of the firm. Just as we heard on the other side of
the aisle a moment ago, leaders whipped employees into a frenzy to buy
Enron stock, even as leaders knew it was worthless. In fact, corporate
leaders had already sold their stock while urging employees to buy.
Enron had a strategy of buying companies and then pressuring new
employees to buy Enron stock to keep the stock price inflated. Since
Enron usually fired 10 percent of the workers every year, workers felt
pressured to buy stock to show commitment to the firm.
I can't just support a bill that gives employees fewer protections
than investors. I can't support a bill that encourages employees to
possibly forgo cash in their paychecks in exchange for some unverified
investment option. It is not right.
Mr. Speaker, I see you reaching for the gavel. I will include the
rest of my comments in the Record. I urge a ``no'' vote on this
particular piece of legislation until it allows for disclosures.
Today we consider another bill requested by corporations.
But, I got to wonder, of all the things the American public want, why
is a revision to the Securities and Exchange Commission rules--Section
701 to be precise--the priority for this week?
We've been here for three months now.
House Republicans set the agenda.
They lead this governing body.
Why do they keep bringing us bills that corporate America wants?
In the past few months, Congressional Republicans, who decide which
bills are priorities have brought forward a hodgepodge of corporate
requests.
Here are some of the bills that are now law.
Republicans made it easier to drug test people receiving unemployment
compensation (H.J. Res. 42).
Republicans passed--and the President signed--a law to protect
corporate firms from having to disclose labor violations--like wage
theft--before winning government contracts (H.J. Res. 37).
House and Senate Republicans passed laws that allow internet services
providers to sell your browser history.
Republicans enacted a new law making it easier to dump coal debris
near rivers and streams (H.J. Res. 38).
Republicans stopped efforts to help governments around the world
avoid corruption.
H.J. Res. 41 removed the requirement that corporations disclose
resource payments to foreign governments.
[[Page H2670]]
Which is a crushing blow to democracy activists working in fragile
nations.
And, a law preventing State governments from setting up retirement
plans for residents who do not have a work-based plan.
So, in the three months we've been back, these laws--removing
competition, disclosure, and consumer privacy--are the priorities of
Republicans who set the agenda.
These are all asks of corporate America--don't punish us for
polluting streams; let us sell your internet browser history; let us
make money drug testing laid off workers receiving unemployment due
them, and; don't make us disclose our payments to foreign governments
when we drill for oil or minerals.
When I talk to my constituents, they don't ask for any of these.
They say, ``Where's the jobs bill?''
My constituents say, can't we raise the minimum wage from $7.25 an
hour?
They say, our roads and bridges need work. Let's raise the gas tax a
skoch and invest in infrastructure?
They say, we want to increase our skills; let's invest in pre-school,
Pell grants and community colleges.
Let's put people, not corporate wish lists--first.
But, nope, today we are asked to vote on a bill that makes it easier
for private companies to provide options--like stocks--rather than
compensation to their employees.
This bill makes it easier for firms to offload some of their options
to their employees without disclosing financial information to them.
While I'm glad to see companies reward employees with stock and other
compensation in addition to salaries, workers should be told the value
of the compensation they receive.
With this bill--H.R. 1343--it is possible that employees would be
promised stock options which could be worth less than promised, or
even, completely worthless.
So, employees could decide to forego a salary increase--or accept
lower pay--in order to receive more stock options, yet, those stock
options could be worth way less than expected.
Why should employees receive less information than that of any other
minority shareholder?
If an employee is trusted enough to run the day-to-day aspects of the
business, they should be trusted enough to receive full disclosure
about the stock.
Employees should be able to receive information on the financial
position of the company so they can make an educated decision.
It's not difficult to allow participating employees to sign non-
disclosure agreements.
And it can't be because these disclosures are an additional burden on
the firm.
Because these companies prepared these types of disclosures to
receive the Rule 701 exemption from the SEC in the first place.
I'm also concerned about the mismatch in power between the
corporations and their employees.
I am very concerned that employees can be more susceptible to
pressure to take options instead of salary increases.
For example, we could ask George Maddox.
George was one of the 21,000 people who worked at ENRON.
After working at ENRON for 30 years, he had 14,000 shares of company
stock. It was valued at $1.3 million.
Then ENRON collapsed, and he had literally nothing.
All his retirement was in ENRON stocks.
If you haven't watched the movie ENRON: The Smartest Guys in the Room
recently, I'd urge you to watch it again.
You could also read Bethany McLean's book by the same name.
One image has consistently stuck with me.
A staff rally where leadership extolled the virtues of the firm.
Leaders whipped employees into a frenzy to buy ENRON stock even as
the leaders knew it was worthless.
In fact, corporate leaders had already sold their stock while urging
employees to buy.
ENRON had a strategy of buying companies and then pressuring the new
employees to buy ENRON stock to keep the stock price inflated.
And since ENRON usually fired 10% of workers every year, workers felt
pressured to buy stock to show a commitment to the firm.
I just can't support a bill that gives employees fewer protections
than investors.
I can't support a bill that encourages employees to possibly forego
cash in their paychecks in exchange for some unverified investment
option.
I don't think the supporters of this bill are doing this for
nefarious reasons.
I'm sure they find my reference to Enron hyperbolic.
They might also say that it's irrelevant since Enron was a public
company and we are talking about private companies.
So, let's talk about Palantir Technologies.
This $20 billion company convinced top-tier engineers to accept
below-market salaries by promising them generous stock options.
But some employees who accepted this bargain, hoping to make money on
selling their shares, cannot sell them.
The only buyer of their stocks is Palantir Technologies themselves--
or a buyer approved by Palantir Technologies.
Palantir is not a small firm.
Palantir is the third biggest American tech startup, behind only Uber
and AIR B-N-B.
It was also founded in 2004, which makes Palantir as old as
Facebook--which is a long time to wait to cash in your options.
Pushing employees to own more of employer's stock exposes workers--
like George Maddox--to put all their retirement eggs in one basket--
what we call ``concentration risk.''
I ask this Congress to stop doing the bidding of corporate America
until we address the priorities of American families and workers.
We should increase wages and access to affordable housing, provide
clean air and clean water, and protect our privacy.
We should not make it easier for employers to pressure workers to
choose options over salary without adequate disclosures. Vote no on
H.R. 1343.
Mr. HUIZENGA. Mr. Speaker, I yield 2 minutes to the gentleman from
Missouri (Mr. Luetkemeyer), my fellow subcommittee chairman.
Mr. LUETKEMEYER. Mr. Speaker, I thank the gentleman for yielding me
this time. I also want to thank the distinguished gentleman from
Illinois (Mr. Hultgren) for his work on this legislation and, more
broadly, issues surrounding American entrepreneurship. He has been a
tireless advocate.
Mr. Speaker, over the last 2 weeks, the Subcommittee on Financial
Institutions and Consumer Credit, which I chair, has held hearings to
examine the impact regulations have had on financial institutions,
small businesses, and American consumers. What we have seen is that the
burdens stemming from Dodd-Frank and associated Obama era policies
continue to harm consumers and small businesses.
We have what some have referred to as a two-speed economy. Large
banks and their large customers are thriving, but the story isn't as
bright for small businesses. That is why H.R. 1343 is so important.
Small businesses and startups don't necessarily have the same
opportunities to access the capital markets as their larger
competitors, but from a regulatory standpoint, the small guys are
treated the same as the big guys.
Mr. Hultgren's legislation takes an important step in addressing some
of the disparities that exist. H.R. 1343 will allow small businesses to
attract and retain employees through incentives similar to those that
may be offered by large businesses. Unlike the gentleman who just got
done speaking, this is not about Enrons. It is about small businesses
that we are talking about.
It will also ease some of the reporting burden on small and emerging
businesses. The bill does so simply by increasing the SEC rule 701
threshold, taking the existing rule and simply expanding it, a figure
that hasn't been touched since 1999.
It is essential that Washington take steps to level the playing field
for small businesses and eliminate this two-speed economy. The bill the
House will consider today is another step toward job creation and a
more reasonable regulatory environment.
I again want to thank and commend Mr. Hultgren for his leadership and
ask that my colleagues join me in supporting H.R. 1343.
Mr. KILDEE. Mr. Speaker, I yield 4 minutes to the gentleman from
Maryland (Mr. Delaney), a member of the Committee on Financial
Services, my classmate, and a cosponsor of this legislation.
Mr. DELANEY. Mr. Speaker, I want to thank my good friend from
Michigan for yielding me this time, the vice ranking member of our
committee, and the gentleman from Illinois (Mr. Hultgren), my good
friend, for cosponsoring this legislation with me.
I do rise in support of H.R. 1343, Mr. Speaker, and I think it is a
very simple piece of legislation. The chairman of the committee said it
was a simple piece of legislation. It is very straightforward. It
simply raises the threshold as to the amount of stock a private
corporation can give its employees, from $5 million to $10 million,
without triggering additional disclosure.
What this bill is not about is rolling back disclosure because, as a
practical matter, it simply defines the threshold as to when additional
disclosure is required. That threshold was originally
[[Page H2671]]
established in 1988 at $5 million. Five million dollars was good in
1988; it is no longer good in 2017. We have simply escalated that
amount by inflation, and we have come up with the number $10 million,
which is proposed in the legislation.
One of the reasons this legislation does not roll back disclosures,
which is a myth that I intend to debunk here this afternoon, is
because, as a practical matter, what corporations will do is, in fact,
not give additional stock to their employees if, in fact, it triggers
additional disclosures. That is what actually happens in the private
market is this threshold defines the amount of stock that a company
will, in fact, give to its employees in any given year; and, if we
don't raise the cap from $5 million to $10 million, we are effectively
preventing companies from allowing their employees to share in stock
ownership.
Private companies make decisions, Mr. Speaker, to stay private for
many reasons: either because they are too small and they don't want to
go public; or they don't want to, in fact, disclose their confidential
information; or they don't want the costs or burdens of being a public
company; or because they don't want to give up control. Whatever reason
they have, it is a very important decision for a private company to
stay private and not go public. The current threshold of $5 million
effectively forces a company to make the kind of disclosures it would
have to make as a public company if it elects to give more than $5
million of stock to its employees.
We, as policymakers, should encourage more employee ownership in the
markets because it is good for both the corporations and the employees.
It is good for the corporations because it creates a better culture. It
allows the management team and the employees of the company to have a
more long-term perspective, and it reduces turnover, which is one of
the highest costs that companies have. So it is very good for the
companies.
But, in fact, Mr. Speaker, it is even better for the employees. The
data suggest that companies that have high employee ownership are much
less likely to lay off their employees during a recession. So it
creates, effectively, better retention, which is obviously in the
interest of employees.
But the other thing it does--and I think this is the most important
point--is it encourages kind of an inclusive capitalism whereby workers
actually own more of the U.S. economy. This is something, as Democrats,
we should care about, in particular, because we have talked for many
years about how the growth in the U.S. economy and the increases in
productivity have disproportionately gone to capital and not to
workers.
We believe there are many reasons this has occurred, but one of the
things we should be advocating for, strongly, is increasing workers'
ownership of capital. It will inevitably lead to more savings among
workers, and it will start balancing out the distribution of profits in
society. One of the ways we do that is to eliminate the barriers for
companies to issue stock to their employees, which is effectively what
this bill does.
So if we care about this concept of inclusive capitalism, if we
believe American workers should own a greater percentage of the economy
and, therefore, benefit from the productivity enhancements that are
occurring in the economy and the economic growth that is occurring in
the economy, we should put policies in place specifically to make it
easier for corporations to engage in shared employee ownership, which
is exactly what this bill does.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. KILDEE. Mr. Speaker, I yield an additional 1 minute to the
gentleman from Maryland.
Mr. DELANEY. I had firsthand experience with this prior to coming to
Congress. I started two businesses as private companies, and they both
became publicly traded companies. I shared ownership in those companies
broadly with my team. It was very good for my business, and it was very
good for hundreds of them when those initial public offerings occurred.
So I have firsthand experience with this. I do think it is good
public policy across the long term, and I encourage my colleagues to
support H.R. 1343.
Mr. HUIZENGA. Mr. Speaker, I yield such time as he may consume to the
gentleman from Illinois (Mr. Hultgren), the author of this legislation.
Mr. HULTGREN. Mr. Speaker, I thank the chairman.
I do want to thank my colleagues for being here. I think this is a
really important discussion that we are having today. It is such an
honor to serve with all of my colleagues.
I do think some who have spoken opposed to this legislation really
don't understand the impact. There is nothing in this legislation that
takes away any disclosures. Disclosures still remain. The same
disclosures that have been in place for 30 years remain exactly there.
This does not have anything to do with Enron, a publicly traded
company. It is completely different. This is private sector. This is
opening up opportunity. I think, by arguing against this, ultimately,
it is taking away opportunity from employees to benefit.
It is such a privilege to serve with people like the gentleman from
Maryland (Mr. Delaney), who was part of this, opening up opportunities
to hundreds of families. Congressman MacArthur, similarly, opened up
opportunities that changed lives, as well as Congressman Trott, who is
going to be speaking as well. They opened up opportunities to people
who would never have had opportunity to own a company, to own that and
to have it completely change their family and their future.
I rise to support H.R. 1343, the Encouraging Employee Ownership Act
of 2017.
My legislation is based on a simple principle: Employees who own a
stake in the company they work for every day want to see it do well and
will do their best to make sure that that business succeeds. Their
sense of ownership over details, large and small, makes a real
difference to the bottom line and, just as importantly, to the quality
of life of the employers and employees. When the company succeeds, the
employee succeeds. The business, in turn, receives a large boost in
productivity, enabling it to expand its reach and invest in new
technology and equipment.
EEOA would make it easier for companies in Illinois and nationwide to
let hardworking employees own a stake in the business they pour their
sweat into every single day. This benefit also helps companies attract
top talent, even if the company is just starting out.
Warren Ribley of the Illinois Biotechnology Industry Organization,
which represents companies that employ thousands of residents in the
14th Congressional District, believes: `` . . . offering an ownership
stake to employees is a critical tool in recruiting top talent to job-
generating companies. And there is no doubt that an equity stake
encourages employees to drive hard for success of that enterprise.''
Unfortunately, some companies are shying away from offering employee
ownership because of regulations that limit how much ownership they can
safely offer. SEC rule 701 mandates various disclosures for certain
privately held companies that use more than $5 million worth of
securities for employee compensation per year.
This threshold was arbitrarily set by the SEC in 1999. For businesses
that want to offer more stock to more employees, this rule forces those
businesses to make confidential disclosures that could greatly damage
future innovation if they fell into the wrong hands; this includes
business-sensitive information, including the financials and
corresponding materials like future plans and capital expenditures. The
SEC's original rulemaking acknowledged these concerns.
And these disclosures aren't just risky, they are costly. As the
Chamber of Commerce has explained, the Encouraging Employee Ownership
Act would instead ``help give employees of American businesses a
greater chance to participate in the success of their company.''
EEOA builds off the JOBS Act reform to rule 12(g), which increased
the number of shareholders of record that a company could have without
SEC registration from 500 to 2,000 and exempted employee compensation
securities from the registration requirements. This idea championed in
the JOBS Act,
[[Page H2672]]
that the law should treat employee compensation securities differently
than traditional securities, has not been extended to the SEC rule 701.
My bill is simple. It is a bipartisan fix. EEOA raises the outdated
threshold for enhanced disclosure from $5 million to $10 million,
keeping pace with inflation every 5 years. We are taking something that
is already working and making it available for even more companies and,
more importantly, more employees.
To be clear, issuers who are exempt from enhanced disclosure would
still have to comply with all pertinent antifraud civil liability
requirements. Furthermore, the employees purchasing these securities
observe the business they work for every day and have a closer
perspective on its operation that is not available to the traditional
investor, thus negating the need for additional disclosure. We should
applaud the employee ownership from the board room to the shop floor.
I thank the bipartisan cosponsors of this EEOA legislation,
especially Congressman Delaney for his hard work and Congressmen
Stivers, Sinema, Higgins of New York, MacArthur, Gottheimer, and Trott.
I thank Speaker Ryan and Chairman Hensarling for their support in
advancing this critical legislation.
Mr. KILDEE. Mr. Speaker, I yield myself such time as I may consume.
I appreciate the comments of my colleague and friend. I do, however,
disagree that the question here derives from a lack of understanding of
the legislation. I think it is entirely possible--in fact, I would
suggest that it is likely--that members of a body such as this, from
435 distinct districts and different experiences, can look at the same
information, fully understand it, and come to different conclusions as
to what sort of policy ought to be in place, and that is where I have
landed on this particular subject. I fully understand.
{time} 1545
I also think it is important to note that we can't on one hand say
that this is not about disclosure and on the other hand mention that
these disclosure requirements could have a negative impact and
encourage or discourage companies from engaging in the practice of
awarding employees with stock as a part of their compensation.
It is a question of disclosure. This legislation is about the
disclosure requirements that should be applied in this case. That is
really what we have heard from both sides of this argument: where
should that disclosure requirement be, and at what level should it be
incurred?
What I would say is--and I think this is important to note, speaking
for myself--I know many other members of the Financial Services
Committee and Members of this body that may oppose this legislation
feel strongly that the direction toward awarding employees with stock
ownership is a positive direction. It is something that my friend, Mr.
Delaney, has not only advocated for, but has practiced in his own
private sector experience. It is a positive thing for a company and it
is a positive thing for the employees.
The only point that I continue to drive home and that others have
reiterated is that it is important that employees understand the nature
of the stock that is being awarded to them and that the disclosure
requirements make clear employees are aware of the compensation and its
true value. That is really the point of my objection.
Mr. Speaker, I include in the Record a letter I received from Public
Citizen, which articulates some of these same arguments.
PUBLIC CITIZEN,
Washington, DC, March 8, 2017.
Member,
House Committee on Financial Services,
Washington, DC.
Dear Representative: On behalf of more than 400,000 members
and supporters of Public Citizen, we offer the following
comments on bills facing a committee vote March 9, 2017.
In securities lawmaking, we believe the committee's compass
should always point to investor protection. Well informed
investors who can trust disclosures form the bedrock of
capital formation. We are concerned that a few of these
measures point in a different direction.
HR 910: The ``Fair Access to Investor Research Act of
2017'' directs the SEC to eliminate restrictions on research
reports that cover Exchange Traded Funds (ETEs). The result
of this measure means that firms promoting ETFs can
simultaneously publish reports that appear to be impartial
analysis. This may lead investors to take unwarranted comfort
in the security. In the last decade, ETFs have grown from
about 100 funds with $100 billion in assets to more than 1300
funds with $1.8 trillion in assets,That makes the playing
field for mischief immense.
Puffery parading as research led to the dot-com bubble in
the late 1990s, where analysts disregarded fundamental
metrics such as a revenue and income when recommending the
purchase of new internet-based firms. This measure improves
on a previous iteration of the legislation by allowing
fundamental fraud oversight by the SEC. But the bill ignores
the basic hazard that a firm's motivation in funding research
may be sales promotion and not bona fide education for its
clients. We also note that ETFs represent the securities of
active firms. That is, an ETF holds assets such as stocks or
bonds. That means this has little to do with capital
formation. Now, research reports insulated from government
scrutiny may too often serve to promote more turnover and
commissions, not sound guidance. For these reasons, we oppose
this bill and encourage members to vote no.
HR 1343: The ``Encouraging Employee Ownership Act of 2017''
increases from $5 million to $10 million the amount of
securities a firm may sell annually to its employees without
providing certain basic financial information. We believe
this is misguided for a number of reasons. First, defenders
of this measure reference the potential for leakage of
propriety information. There's little evidence of this
problem. It's simply not in the self-interest of an employee-
owner to divulge critical information to a rival, especially
if it would undermine the value of the stock. Second,
employees who are compensated in stock (instead of additional
cash) should be entitled to be informed about the financial
condition of their company, the same as any other investor.
Other company creditors, such as the firm's bank or major
supplier, receive this information, however this measure
reduces stock-compensated employees to a class below these
other creditors. Young firms may be struggling with cash-flow
problems and choose to use stock rather than cash for
compensation. But those employees should be informed about
such risks. Third, the basic thrust of this measure is to
lead employees to hold a greater share of their savings in
the firm. An employee invested in his or her own firm may be
more productive and lead to greater profits at the firm that
the employee then shares; but there is a point beyond which
this dynamic dissipates. Any prudent investor should
diversify. Overconcentration in one asset, especially where
the firm's prospects are less than stellar, compounds the
employee-investor's risk. We oppose this bill, and encourage
members to do the same.
HR 1366: The ``U.S. Territories Investor Protection Act''
extends basic U.S. securities law oversight to investment
firms operating in Puerto Rico and other U.S. territories. To
date, these firms have escaped oversight, disclosure and
conflict-of-interest requirements that mainland firms face.
We support this common sense reform.
Sincerely
Bartlett Naylor,
Public Citizen.
Mr. KILDEE. Mr. Speaker, I reserve the balance of my time.
Mr. HUIZENGA. Mr. Speaker, I yield such time as he may consume to the
distinguished gentleman from Arkansas (Mr. Hill).
Mr. HILL. Mr. Speaker, I thank my friend from Michigan, the
distinguished chairman of the Capital Markets, Securities, and
Investments Subcommittee, for yielding the time.
Mr. Speaker, what we are here talking about today is opportunity. We
are not talking about the money interests. We are not talking about
waving the bloody shirt of the Enron debacle. What we are talking about
here today, Mr. Speaker, is in the interest of innovators. It is in the
interest of talented Millennials who have huge student loans, who have
a great idea to benefit themselves, their community, their economy. We
are here to be in the interest of hardworking workers who have no big
investment dollars, but have an abundance of sweat equity. We are here
in the interest, Mr. Speaker, of building businesses and growing this
economy. If we do that, we are growing jobs and opportunity for our
citizens. And we are in the interest, Mr. Speaker, again, not of the
money interest, but of efforts all over this country, led by people
like John Delaney of Maryland and Stephen Case of Virginia, to build
out venture capital and entrepreneurship in places other than Boston,
Massachusetts; Menlo Park; places like Detroit; Flint; Little Rock; St.
Louis; and Chicago. That is why we are here today. This bill is a
simple, commonsense, small step in that effort.
For many years, in my private sector life, I helped young companies
form and raise capital for them. In my own business, I extended stock
options and
[[Page H2673]]
opportunities to buy stock to those very people who did not have the
excess cash to invest. Many companies issue stock to compensate their
employees, but it is especially important to startup businesses and
private businesses. It is especially important to those businesses that
are trying to compete with big private enterprises that have a public
stock to offer as an incentive. And structuring competitive
compensation in private businesses is very challenging.
Further, for employees, this stock ownership is a huge source of
pride, allowing individuals to participate in the growth and prosperity
that their hard work and sweat equity have helped build.
Through rule 701, the SEC allows private companies to offer up to $5
million in their own securities without additional regulatory
bureaucracy. My friend from Illinois (Mr. Hultgren) and my friend from
Maryland (Mr. Delaney) have simply made a small change, Mr. Speaker;
and that is to raise that commensurate with inflation to $10 million to
reflect the world we live in today. This is not rocket science; this is
something we need to do for building our economy.
As we celebrate the fifth anniversary of the signing of the JOBS Act
by President Obama and the successes this legislation has yielded in
capital formation for small and emerging growth companies, I urge my
colleagues to support this effort by my friend from Illinois in this
bipartisan, commonsense job-creating proposal.
Mr. KILDEE. Mr. Speaker, I yield 2 minutes to the distinguished
gentleman from Colorado (Mr. Polis), a member of the Committee on Rules
and the Committee on Education and the Workforce.
Mr. POLIS. Mr. Speaker, I thank the gentleman for yielding the time.
Various measurements of the economy have shown economic growth and an
increase in the stock market. The frustration that I hear from so many
of my constituents is that: With all of this economic growth, why
haven't my prospects improved? Why has there been wage stagnation? Why
aren't my family and I earning any more than I was?
It is true, because a lot of the benefits of this economic growth
have gone to shareholders and consumers rather than workers. We are all
consumers, and we have all benefited from that. And do you know what?
We are all shareholders through pensions and through retirement
accounts, public and private. Many people also put food on their table
and pay their rent, wearing their hat as an employee or a worker.
One of the things that we can do not just by passing this bill, but
by passing a whole host of legal changes both in the tax framework and
in the regulatory framework to make it easier for employees to own
companies, is allow employees and workers to share in the value that is
being created on the shareholder side of the ledger. Then, and only
then, can we have an economy that works for more people rather than
just a few.
This bill is a small step in that direction. It can reduce the cost
and remove a detriment that small to midsize companies have from
aggressively pursuing employee stock ownership. But it is just a first
step.
There is a lot of work that we need to do to reorient the economy
around a shareholder economy that aligns the incentives of workers with
those of shareholders. It is good for sustainable profits, it is good
for long-term economic growth, it is good for stability. It is a better
way to make sure that of this vast value that is being created, we all
can partake in it on both sides of the ledger, as shareholders and as
workers.
That is why I rise today in support of the bill, and that is why I
call upon my colleagues on both sides of the aisle to see this as but a
modest first step towards a shareholder economy that works for every
worker.
Mr. HUIZENGA. Mr. Speaker, may I inquire as to the balance of time
remaining on each side?
The SPEAKER pro tempore. The gentleman from Michigan (Mr. Huizenga)
has 10 minutes remaining. The gentleman from Michigan (Mr. Kildee) has
10 minutes remaining.
Mr. HUIZENGA. Mr. Speaker, I yield 3 minutes to the gentleman from
Georgia (Mr. Loudermilk).
Mr. LOUDERMILK. Mr. Speaker, I thank the gentleman from Michigan for
yielding the time.
Mr. Speaker, over the last 8 years, our Nation has experienced
sluggish economic growth. Americans have suffered through stagnant
paychecks and a lack of new opportunities. Last year, the economy grew
at a meager 1.6 percent, which is half of the historic average.
However, there has been one job filled that has grown at a faster
rate than any other; and that job is those who specialize in regulatory
compliance. This is a testament to the crushing onslaught of new
regulations under the previous administration, where compliance with
regulation and red tape was emphasized more than growing businesses and
creating jobs.
We in Congress must do our part to foster economic growth and relieve
our job creators of the excessive burden of complying with unnecessary
regulation. The bill before us today will do exactly that.
Currently, businesses that offer more than $5 million in stock to
their own employees are required by law to comply with costly financial
disclosures. This number was set nearly 20 years ago. It is time to
update the law and raise this threshold to encourage small-business
startups and give them the resources they need to expand and create
jobs.
The Encouraging Employee Ownership Act would raise this threshold to
$10 million and give private businesses more flexibility to reward
their employees with ownership of a company. This bill passed the
Financial Services Committee last month with strong bipartisan support.
This is just one of the many steps that we must take to foster
innovation and encourage capital formation, to provide every American
with opportunities that they deserve. We must build an economy that is
open and accessible to every single American, not one that is closed
off to those who can't afford to comply with the high cost of
bureaucratic red tape and endless government paperwork.
As a former small-business owner for 20 years, I know the employees
benefit tremendously from any opportunity to participate in a company's
success. I support this bill because I know from personal experience
this model works and helps startup companies to retain their best
employees over the long term.
Americans are not satisfied with the stagnant economy that has become
the new norm in our Nation. It is unacceptable for government to stand
in the way of prosperity and make it harder for Americans to succeed.
Small businesses employ half of U.S. workers, and we must promote, not
hinder, small business growth.
This bill, Mr. Speaker, empowers Main Street, not Wall Street. I
encourage all of my colleagues to support this bill.
Mr. KILDEE. Mr. Speaker, I yield myself such time as I may consume.
I would just point out again that the position many of us are taking
does not contradict the principles that are being articulated. In fact,
the law does not preclude any company from awarding stock as
compensation at any level. It simply requires that information be
provided so that those individuals who are receiving that compensation
have the information and have the resources to understand the value of
that compensation. I just want to reiterate that because it is
important that the position not be mischaracterized as one that wants
to dampen the ability of companies to reward their employees with stock
or use that as a form of compensation. It is just important that they
have transparency in that process so people who are receiving that
compensation understand its true value.
Mr. Speaker, I reserve the balance of my time.
Mr. HUIZENGA. Mr. Speaker, I yield 2 minutes to the gentleman from
Michigan (Mr. Trott), my fellow Michiganian.
Mr. TROTT. Mr. Speaker, I rise in support of H.R. 1343, the
Encouraging Employee Ownership Act.
I want to thank my colleagues, Mr. Hultgren and Mr. Delaney, for
their thoughtful and bipartisan work on this issue.
This is a commonsense, simple bill that makes it easier for employees
to obtain ownership in the companies
[[Page H2674]]
they work for. When I was in the private sector, I gave dozens of
employees an ownership interest. It worked out great for them, it
worked out great for the company, and it worked out great for our
customers. Ownership interest gave them an upside that could not be
realized through a salary. The stock instilled loyalty and dedication.
More importantly, it created a family atmosphere. We were all in it
together. Our opportunities would rise and fall, depending on our
collective success.
To have a career where someday, through your hard work, you can end
up owning a piece of action is what the American Dream is all about.
The outdated cap is keeping this dream, for no good reason, from many
Americans.
I suspect that those who oppose the bill, while they may understand
the legislation, probably have never worked in the private sector and
have no clue how meaningful incentives and opportunities, such as stock
ownership, are to individuals. I found it was the best way to motivate
and reward employees. In fact, it worked so well, no one ever left the
company except to retire.
My friends from Michigan and Minnesota oppose the bill because of a
lack of transparency. The argument is flawed because it assumes stock
ownership opportunities comprise all or a significant portion of the
individual's compensation. This is not correct. A stock ownership
benefit is typically over and above salary and bonuses.
To require the owner of a small business or a startup to make
disclosures will cause many employers not to give employees this
opportunity. Implicit in their argument is an assumption, like in so
many other areas of life, that individuals cannot be trusted to make
decisions on their own, that they need the help of all of the smart
politicians and bureaucrats in Washington, D.C., to tell them what to
do and what they need to see, and, of course, we cannot trust people to
make decisions and discern for themselves whether stock ownership is a
fair opportunity.
This bill had the support of a bipartisan group in our committee. I
urge all of my colleagues to support H.R. 1343.
{time} 1600
Mr. KILDEE. Mr. Speaker, I reserve the balance of my time.
Mr. HUIZENGA. Mr. Speaker, I yield 2 minutes to the gentleman from
New York (Mr. Zeldin).
Mr. ZELDIN. Mr. Speaker, I rise today in strong support of H.R. 1343,
the Encouraging Employee Ownership Act of 2017. This is bipartisan
legislation that will remove outdated barriers to capital formation and
job creation imposed on the small businesses and startups that are
driving America's innovation economy.
The SEC still hasn't updated a rule from 17 years ago that imposed an
undue burden on entrepreneurs when they want to attract and retain
talent through employee compensation plans. Startup ventures, by
offering their employees a stake in the company through equity and
other forms of deferred compensation, can reward hardworking employees
by giving them direct ownership while their business continues to grow.
SEC rules governing these compensation plans haven't been updated
since 1999, and they are imposing burdensome compliance and reporting
requirements on the very entrepreneurs we should be encouraging to
expand and create more good-paying, private sector jobs. We see the
effects of this compliance tax placing a drain on our economy because
it diverts the resources and human capital of entrepreneurs away from
expansion and job creation.
In my district on Long Island and nationwide, entrepreneurs who have
the next great invention or idea are struggling to gain access to
capital. By regulating small startup ventures as if they are large,
publicly traded companies, the SEC is imposing an unnecessary mound of
paperwork on startups. A large corporation may have the lawyers and
accountants to fill out the mountain of paperwork imposed on them by
the SEC, but a small business can't compete, and that is why they need
relief.
This Congress we have an opportunity through bipartisan reforms like
this legislation to reverse that troubling trend by removing the
regulatory burdens that harm the economy, consumers, and prospects for
job growth.
In closing, Mr. Speaker, I want to thank my colleague from the
Committee on Financial Services, Randy Hultgren, for his leadership on
this issue.
I urge adoption of this commonsense bipartisan bill.
Mr. KILDEE. Mr. Speaker, I continue to reserve the balance of my
time.
Mr. HUIZENGA. Mr. Speaker, may I inquire as to the balance of time
remaining on each side?
The SPEAKER pro tempore (Mr. Shimkus). The gentleman from Michigan
(Mr. Huizenga) has 3\1/2\ minutes remaining. The gentleman from
Michigan (Mr. Kildee) has 9 minutes remaining.
Mr. HUIZENGA. Mr. Speaker, I yield 2 minutes to the gentlewoman from
New York (Ms. Tenney).
Ms. TENNEY. Mr. Speaker, I rise today in support of H.R. 1343, which
passed the Committee on Financial Services by a very large bipartisan
vote of 48-11. I thank the gentleman from Illinois (Mr. Hultgren) and
the gentleman from Maryland (Mr. Delaney) for introducing this
essential piece of legislation.
As the coowner of a small manufacturing business in New York, this
legislation would help companies in New York and across our Nation to
grow stronger while allowing hardworking employees to have a stake in a
business' future through ownership.
Company leaders across America understand that greater employee
investment through ownership will develop a stronger workplace culture
and increase productivity by giving private companies more flexibility
in retaining and rewarding employees, the people we so vitally need to
grow our businesses.
I want to thank the sponsors of this bill, and I urge my colleagues
to support this legislation.
Mr. KILDEE. Mr. Speaker, I yield myself the balance of my time to
close.
I have heard a number of my colleagues point to the red tape and the
unnecessary burdens that are placed on a company that wishes to provide
stock compensation.
Let me be clear about what it is that we would require. This is what
is required for a company that exceeds the threshold: That they provide
a copy of the compensation plan or a contract, if they disclose that; a
copy of a summary plan description, if it is an ERISA retirement plan
or, if not, a summary of the plan's material terms; risk factors
associated with the stock; and the company's most recent financial
statements from the last 2 years, which don't need to be audited.
This is important information for anyone receiving stock as
compensation in order to understand the value of that stock and not a
burdensome requirement on a company, particularly a company of the size
that would be required under the increased threshold that is being
proposed by this law.
If there is any aspect of this debate which is common sense, it is
common sense that a person receiving compensation ought to have
information that tells them the value of that compensation.
Mr. Speaker, I think this is an important debate and discussion. It
is one that this body is well-served by taking on.
I do agree, as I said, that this is an important direction for us to
take as a nation. And it certainly makes sense that, in order for us to
fully all participate in the economy, employee ownership is a value. It
creates more productive companies, more competitive companies. It
provides better compensation, and, as has been pointed out, it creates
more stable organizations less likely to lay people off, more likely to
be sustainable companies. That is all good, and that is important.
It comes down to the question of transparency. Employees deserve to
know the state of their employer's finances, if they are to accept
stock in lieu of monetary compensation. They deserve no less protection
than other investors in the company.
We shouldn't fear that kind of transparency. A company that wants its
employees to accept stock instead of monetary compensation should
embrace this sort of compensation. If they want to empower those
employees and they want to make them a part of the company, they should
provide them with
[[Page H2675]]
the information that helps them understand the value of that ownership.
Transparency is important for individuals to make informed choices,
not informed choices coming from a dictate from Washington but
information that they have the right to have. It empowers them with
knowledge that allows them to make choices about the form of
compensation that they would accept.
That is what this legislation really is about, and that is why I
oppose the legislation and encourage my colleagues to join me in that.
I yield back the balance of my time.
Mr. HUIZENGA. Mr. Speaker, I yield myself the balance of my time to
close.
My colleague on the other side is trying to maybe split some hairs.
We heard some rhetoric earlier on the floor here which, I think, shows
why many on both sides of the aisle scratch their heads in opposition
to this bill. We heard about monied interests. We heard about corporate
wish lists. We heard about Enron which is, by the way, a publicly
traded company which has absolutely nothing to do with this bill. Now,
that all might play really well on a leftwing political base, but that
is detached from the realities of what our economy is about.
As we have talked, 60 percent of all new job creation happens in
small businesses. These are not corporations. These are LLCs, limited
liability corporations. These are subchapter S sole proprietorships.
These are small entrepreneurs and innovators.
By the way, I looked up the definition of innovator. It is a person
who introduces new methods, ideas, or products. Those are the kind of
dynamic elements that we are seeing here. And I think this confusion
between corporations and Enron and what we are trying to do here is
really a disservice to the American people.
This is about making sure that we update basically an inflation
escalator from 1988. We update a rule that the SEC could have the power
to do, which it has not done, that benefits employees and benefits
those owner-employer's workers who oftentimes, more often than not,
work alongside their employees. So they are the ones who are seeing
this on a daily basis.
I can just say to you that, as was pointed out by my colleague from
across the aisle from Maryland, if we don't do this, what most of those
small businesses are going to do is say: You know what, it is just not
worth the effort; I am not going to do it. And we will see that lack of
upside going to those employees.
As was pointed out by my fellow colleague from Michigan, this is
beyond their salary, this is beyond bonuses. This is an additional way
to make sure that those relationships get cemented in.
So, at a minimum, all you would be doing is voting to confirm the
inflation escalator from 1988. It is not a radical change to the law.
This is a commonsense, I believe, innovative way of trying to make sure
that this next generation of workers has the ability to really reap the
benefits of success here in the United States.
I yield back the balance of my time.
The SPEAKER pro tempore. All time for debate has expired.
Amendment No. 1 Offered by Mr. Polis
The SPEAKER pro tempore. It is now in order to consider amendment No.
1 printed in House Report 115-75.
Mr. POLIS. Mr. Speaker, I have an amendment at the desk.
The SPEAKER pro tempore. The Clerk will designate the amendment.
The text of the amendment is as follows:
Page 2, after line 2, insert the following:
SEC. 3. GAO REPORT ON IMPACT ON EMPLOYEE OWNERSHIP.
Not later than 1 year after the date of the enactment of
this Act, the Comptroller General of the United States shall
submit to Congress a report on the impact on employee
ownership of the revisions required by section 2, including
the impact on--
(1) the number of employees participating in compensatory
benefit plans; and
(2) diversification of the securities held by employee
pension benefit plans subject to title I of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1001 et
seq.).
The SPEAKER pro tempore. Pursuant to House Resolution 240, the
gentleman from Colorado (Mr. Polis) and a Member opposed each will
control 5 minutes.
The Chair recognizes the gentleman from Colorado.
Mr. POLIS. I yield myself such time as I may consume.
Mr. Speaker, my amendment would require GAO to do a study on the
impact of this legislation on employee ownership. When employees are
offered the opportunity to have an ownership stake in the place they
work, there are benefits for both workers and businesses in our entire
economy.
Many studies have shown that employee ownership increases
productivity, promotes employee retention and stability, and has long-
term growth benefits for the business. I believe that the underlying
legislation is an important first step to increase employee ownership
opportunities, but we should want to make sure that opportunities for
participation are widely available to employees at different income
levels.
The amendment also requests the GAO to see the effect of this
legislation on the diversification of securities held in ERISA-governed
retirement plans. As we all know, diversification in any type of
financial portfolio can help weather dramatic fluctuations in the
economy and limit financial risk for retirees.
By requesting the GAO study, we will be able to understand this
legislation's full impact on employee ownership and make necessary
changes and improvements in the future.
I yield to the gentleman from Illinois (Mr. Hultgren) for the purpose
of a colloquy.
Mr. HULTGREN. Mr. Speaker, I thank the gentleman from Colorado (Mr.
Polis) for offering this important amendment to study the impact of
this legislation on employee ownership.
I believe that employee ownership opportunities should be made widely
available to all employees of a company, from the boardroom to the shop
floor.
As the gentleman from Colorado (Mr. Polis) stated, this legislation
is an important step forward to increasing ownership opportunities and
gives companies more flexibility to make those opportunities available.
We should understand how this legislation would help increase
participation for employees at all key levels. A study will help us
understand what we can do in the future to incentivize employee
ownership and increase employee ownership participation.
If the gentleman would withdraw his amendment, I would like to work
with him in requesting GAO to carry out this study.
Mr. POLIS. Mr. Speaker, I thank the gentleman from Illinois (Mr.
Hultgren), and I take the gentleman at his word. I look forward to
working with him on this important issue in coordination with GAO.
Mr. Speaker, I ask unanimous consent to withdraw my amendment.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Colorado?
There was no objection.
The SPEAKER pro tempore. The amendment is withdrawn.
Pursuant to the rule, the previous question is ordered on the bill,
as amended.
The question is on the engrossment and third reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
Motion to Recommit
Mr. SWALWELL of California. Mr. Speaker, I have a motion to recommit
at the desk.
The SPEAKER pro tempore. Is the gentleman opposed to the bill?
Mr. SWALWELL of California. I am opposed in its current form.
The SPEAKER pro tempore. The Clerk will report the motion to
recommit.
The Clerk read as follows:
Mr. Swalwell of California moves to recommit the bill H.R.
1343 to the Committee on Financial Services with instructions
to report the same back to the House forthwith with the
following amendment:
Add at the end the following:
SEC. 3. PROHIBITION.
Any exemption, safe harbor, or other authority provided by
this Act or a regulation issued pursuant to this Act shall
not apply to an issuer if the issuer or a director, officer,
or affiliate of the issuer has withheld information from
Congress relevant to its investigation of any collusion
between persons associated with the Russian Government and
persons associated with the presidential campaign of Donald
J. Trump to influence the outcome of the 2016 United States
presidential election.
[[Page H2676]]
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
California (Mr. Swalwell) is recognized for 5 minutes in support of his
motion.
Mr. SWALWELL of California. Mr. Speaker, this is the final amendment
to the bill. It will not kill the bill or send it back to committee. If
adopted, the bill will immediately proceed to final passage, as
amended.
Russia attacked our democracy this past Presidential election. This
motion asks Members of this House: Do you want to do something about
it? Do you want to do all you can to make sure it doesn't happen again?
{time} 1615
If you do, support this amendment. If you don't, vote against it, and
watch Russia and other adversaries of ours with similar cyber
capabilities carry out similar attacks, and the very democracy that we
treasure will erode before our eyes. But I believe we are a better body
than one that would let another country attack us and then divide us.
What does this motion to recommit do? It requires any company--
particularly, I am concerned about financial institutions--to cooperate
with all investigations into collusion between President Trump, his
campaign, his family, his businesses, and anyone on his team and
Russia's interference campaign during the 2016 election.
The evidence is overwhelming. In the 2016 election, Russia ran a
multifaceted electronic interference campaign against our democracy.
They used paid social media trolls. They hacked Democratic emails and
disseminated the information in those emails through cutouts like
WikiLeaks and Guccifer 2.0. They had a clear preference for Donald
Trump as their candidate. It was ordered by their own President,
Vladimir Putin.
And most concerning for every person in this House--should be--they
are sharpening their knives, and they intend to do it again. That was
the final finding in the intelligence report. They are sharpening their
knives and intend to do it again not just to the United States, but to
our allies like France and Germany, who are a part of the best check on
Russia, the NATO alliance.
Why are we concerned about finances and companies cooperating with
the United States in this investigation? Well, we know from the
Kremlin's playbook that they use financial entanglements as a means to
recruit individuals or to peddle influence.
Why are we concerned about financial ties among Donald Trump and his
team? Because unlike any Presidential candidate in the history of our
Presidential elections, there are an unprecedented amount of personal,
political, and financial ties to a foreign adversary. They include, but
are not limited to:
Paul Manafort, where it is alleged he was paid by pro-Russian Ukraine
Government individuals and also paid up to $10 million a year by
Vladimir Putin's associates;
Former national security adviser Michael Flynn, who should have known
better as the former Director of the Defense Intelligence Agency,
should have known about Russia's playbook and their ability to
influence people, but after leaving the DIA, went over to Moscow, sat
next to Vladimir Putin, and was paid by Russia's propaganda tool,
Russia Today, also known as RT, who General Flynn would have known is
an arm of Russia's intelligence services;
Donald J. Trump, Jr., who said in 2008, in terms of high-end product
influx into the United States, Russians make up a pretty
disproportionate cross section of a lot of our assets. In Dubai, and
certainly with our project in SoHo, and anywhere in New York, we see a
lot of money pouring in from Russia;
President Trump, who has invested in the past in Russia: over half a
dozen trademarks granted to him in Russia, a vodka brand he tried to
peddle in Russia, a Miss Universe contest that he held in Moscow in
2013, and Russia has invested in our President. There are Russian
businessowners who have bought condos in his Trump Tower building.
There are loans from banks that have paid fines for laundering money
through Russia. There is a home sale in 2008 where the President reaped
129 percent in profit. He bought a home in 2004 in West Palm Beach for
$40 million; sold it in 2008, as the real estate market was collapsing,
for over $90 million; sold it to a Russian businessman known as the
fertilizer king. No one else in that ZIP Code reaped a profit of 129
percent.
So why are banks particularly relevant for this motion? We know they
are used by Russia to move money and extend influence. Their
cooperation will be crucial to understanding how Russia finances its
interference campaign.
Mr. Speaker, I urge my colleagues to support this motion to recommit
and get to the bottom of exactly what happened with Russia.
Mr. Speaker, I yield back the balance of my time.
Mr. HUIZENGA. Mr. Speaker, I claim the time in opposition to the
motion.
The SPEAKER pro tempore. The gentleman from Michigan is recognized
for 5 minutes.
Mr. HUIZENGA. Mr. Speaker, I just want to point out a couple of
things.
The Senate Banking Committee has moved an identical bill forward,
unanimously, recently.
Regarding the subject matter that the gentleman from California was
throwing out, this bill is not about anything other than providing
hardworking Americans an opportunity to succeed. It is not about
relitigating the last election or even about Susan Rice illegally
unmasking American citizens. This is about an underlying bill that will
help American citizens.
I urge my colleagues to vote ``no'' on this motion to recommit, and I
urge them to vote ``yes'' on the underlying bill.
Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. Without objection, the previous question is
ordered on the motion to recommit.
There was no objection.
The SPEAKER pro tempore. The question is on the motion to recommit.
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Mr. SWALWELL of California. Mr. Speaker, on that I demand the yeas
and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 9 of rule XX, the Chair
will reduce to 5 minutes the minimum time for any electronic vote on
the question of passage of the bill.
The vote was taken by electronic device, and there were--yeas 185,
nays 228, not voting 16, as follows:
[Roll No. 215]
YEAS--185
Adams
Aguilar
Barragan
Bass
Beatty
Bera
Beyer
Bishop (GA)
Blumenauer
Blunt Rochester
Bonamici
Boyle, Brendan F.
Brady (PA)
Brown (MD)
Brownley (CA)
Bustos
Butterfield
Capuano
Carbajal
Cardenas
Carson (IN)
Cartwright
Castor (FL)
Castro (TX)
Chu, Judy
Cicilline
Clark (MA)
Clarke (NY)
Clay
Cleaver
Clyburn
Cohen
Connolly
Conyers
Cooper
Correa
Costa
Courtney
Crist
Crowley
Cuellar
Cummings
Davis (CA)
DeFazio
DeGette
Delaney
DeLauro
DelBene
Demings
DeSaulnier
Deutch
Dingell
Doggett
Doyle, Michael F.
Ellison
Engel
Eshoo
Espaillat
Esty
Evans
Foster
Fudge
Gabbard
Gallego
Garamendi
Gonzalez (TX)
Gottheimer
Green, Al
Green, Gene
Grijalva
Gutierrez
Hanabusa
Hastings
Heck
Higgins (NY)
Himes
Hoyer
Huffman
Jackson Lee
Jayapal
Jeffries
Johnson (GA)
Johnson, E. B.
Kaptur
Keating
Kelly (IL)
Kennedy
Khanna
Kihuen
Kildee
Kilmer
Kind
Krishnamoorthi
Kuster (NH)
Langevin
Larsen (WA)
Lawrence
Lawson (FL)
Lee
Levin
Lewis (GA)
Lieu, Ted
Lipinski
Loebsack
Lofgren
Lowenthal
Lowey
Lujan Grisham, M.
Lujan, Ben Ray
Lynch
Maloney, Carolyn B.
Maloney, Sean
Matsui
McCollum
McGovern
McNerney
Meeks
Meng
Moore
Moulton
Nadler
Napolitano
Neal
Nolan
Norcross
O'Halleran
O'Rourke
Pallone
Panetta
Pascrell
Payne
Pelosi
Perlmutter
Peters
Peterson
Pingree
Pocan
Polis
Price (NC)
Quigley
Raskin
Rice (NY)
Richmond
Rosen
Roybal-Allard
Ruiz
Ruppersberger
Rush
Ryan (OH)
Sanchez
Sarbanes
Schakowsky
Schiff
Schneider
Schrader
Scott (VA)
Scott, David
Serrano
Sewell (AL)
Shea-Porter
Sherman
Sinema
Sires
Smith (WA)
Soto
Speier
Swalwell (CA)
Takano
Thompson (CA)
Thompson (MS)
Titus
Tonko
Torres
Tsongas
Vargas
Veasey
Vela
Velazquez
Walz
[[Page H2677]]
Wasserman Schultz
Waters, Maxine
Watson Coleman
Welch
Wilson (FL)
Yarmuth
NAYS--228
Abraham
Aderholt
Allen
Amash
Amodei
Arrington
Babin
Bacon
Banks (IN)
Barletta
Barr
Barton
Bergman
Biggs
Bilirakis
Bishop (MI)
Black
Blackburn
Blum
Bost
Brady (TX)
Brat
Brooks (AL)
Brooks (IN)
Buchanan
Buck
Bucshon
Budd
Burgess
Byrne
Calvert
Carter (GA)
Carter (TX)
Chabot
Chaffetz
Cheney
Coffman
Cole
Collins (GA)
Collins (NY)
Comer
Comstock
Conaway
Cook
Costello (PA)
Cramer
Crawford
Culberson
Curbelo (FL)
Davidson
Davis, Rodney
Denham
Dent
DeSantis
DesJarlais
Diaz-Balart
Donovan
Duffy
Duncan (SC)
Duncan (TN)
Dunn
Emmer
Farenthold
Faso
Ferguson
Fitzpatrick
Fleischmann
Flores
Fortenberry
Foxx
Franks (AZ)
Frelinghuysen
Gaetz
Gallagher
Garrett
Gibbs
Gohmert
Goodlatte
Gosar
Gowdy
Granger
Graves (GA)
Graves (LA)
Graves (MO)
Griffith
Guthrie
Harper
Harris
Hartzler
Hensarling
Herrera Beutler
Hice, Jody B.
Higgins (LA)
Hill
Holding
Hollingsworth
Hudson
Huizenga
Hultgren
Hunter
Hurd
Issa
Jenkins (KS)
Jenkins (WV)
Johnson (LA)
Johnson (OH)
Johnson, Sam
Jordan
Joyce (OH)
Katko
Kelly (MS)
Kelly (PA)
King (IA)
King (NY)
Kinzinger
Knight
Kustoff (TN)
Labrador
LaHood
LaMalfa
Lance
Latta
Lewis (MN)
LoBiondo
Long
Loudermilk
Love
Lucas
Luetkemeyer
MacArthur
Marchant
Marino
Marshall
Massie
Mast
McCarthy
McCaul
McClintock
McHenry
McKinley
McMorris Rodgers
McSally
Meadows
Meehan
Messer
Mitchell
Moolenaar
Mooney (WV)
Mullin
Murphy (PA)
Newhouse
Noem
Nunes
Olson
Palazzo
Palmer
Paulsen
Pearce
Perry
Pittenger
Poliquin
Posey
Ratcliffe
Reed
Reichert
Renacci
Rice (SC)
Roby
Roe (TN)
Rogers (KY)
Rokita
Rooney, Francis
Rooney, Thomas J.
Ros-Lehtinen
Roskam
Ross
Rothfus
Rouzer
Royce (CA)
Russell
Rutherford
Sanford
Scalise
Schweikert
Scott, Austin
Sensenbrenner
Sessions
Shimkus
Shuster
Simpson
Smith (MO)
Smith (NE)
Smith (NJ)
Smith (TX)
Smucker
Stefanik
Stewart
Stivers
Taylor
Tenney
Thompson (PA)
Thornberry
Tiberi
Tipton
Trott
Turner
Upton
Valadao
Wagner
Walberg
Walden
Walker
Walorski
Walters, Mimi
Weber (TX)
Webster (FL)
Wenstrup
Westerman
Williams
Wilson (SC)
Wittman
Womack
Woodall
Yoder
Yoho
Young (AK)
Young (IA)
Zeldin
NOT VOTING--16
Bishop (UT)
Bridenstine
Davis, Danny
Frankel (FL)
Grothman
Jones
Lamborn
Larson (CT)
McEachin
Murphy (FL)
Poe (TX)
Rogers (AL)
Rohrabacher
Slaughter
Suozzi
Visclosky
{time} 1644
Messrs. NEWHOUSE, KINZINGER, WEBSTER of Florida, Mrs. BLACKBURN,
Messrs. CULBERSON, COLLINS of Georgia, LOUDERMILK, HUDSON, THOMAS J.
ROONEY of Florida, WALKER, COOK, MULLIN, BANKS of Indiana, GRAVES of
Georgia, and ROKITA changed their vote from ``yea'' to ``nay.''
Messrs. DOGGETT and CARDENAS changed their vote from ``nay'' to
``yea.''
So the motion to recommit was rejected.
The result of the vote was announced as above recorded.
Stated for:
Ms. FRANKEL of Florida. Mr. Speaker, I was unavoidably detained. Had
I been present, I would have voted ``yea'' on rollcall No. 215.
Mr. SUOZZI. Mr. Speaker, I was unavoidably detained. Had I been
present, I would have voted ``yea'' on rollcall No. 215.
Stated against:
Mr. LAMBORN. Mr. Speaker, had I been present, I would have voted
``nay'' on rollcall No. 215.
The SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. HUIZENGA. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. This is a 5-minute vote.
The vote was taken by electronic device, and there were--yeas 331,
nays 87, not voting 11, as follows:
[Roll No. 216]
YEAS--331
Abraham
Aderholt
Aguilar
Allen
Amash
Amodei
Arrington
Babin
Bacon
Banks (IN)
Barletta
Barr
Barton
Bera
Bergman
Beyer
Biggs
Bilirakis
Bishop (GA)
Bishop (MI)
Bishop (UT)
Black
Blackburn
Blum
Blumenauer
Blunt Rochester
Bost
Boyle, Brendan F.
Brady (TX)
Brat
Brooks (AL)
Brooks (IN)
Brown (MD)
Brownley (CA)
Buchanan
Buck
Bucshon
Budd
Burgess
Bustos
Byrne
Calvert
Carbajal
Cardenas
Carter (GA)
Carter (TX)
Cartwright
Castor (FL)
Chabot
Chaffetz
Cheney
Clay
Cleaver
Coffman
Cohen
Cole
Collins (GA)
Collins (NY)
Comer
Comstock
Conaway
Connolly
Cook
Cooper
Correa
Costa
Costello (PA)
Courtney
Cramer
Crawford
Crowley
Cuellar
Culberson
Curbelo (FL)
Davidson
Davis (CA)
Davis, Rodney
DeGette
Delaney
DeLauro
DelBene
Denham
Dent
DeSantis
DesJarlais
Deutch
Diaz-Balart
Donovan
Duffy
Duncan (SC)
Duncan (TN)
Dunn
Emmer
Engel
Eshoo
Esty
Farenthold
Faso
Ferguson
Fitzpatrick
Fleischmann
Flores
Fortenberry
Foster
Foxx
Franks (AZ)
Frelinghuysen
Gaetz
Gallagher
Garrett
Gibbs
Gohmert
Gonzalez (TX)
Goodlatte
Gosar
Gottheimer
Gowdy
Granger
Graves (GA)
Graves (LA)
Graves (MO)
Green, Gene
Griffith
Guthrie
Harper
Harris
Hartzler
Hastings
Heck
Hensarling
Herrera Beutler
Hice, Jody B.
Higgins (LA)
Higgins (NY)
Hill
Himes
Holding
Hollingsworth
Hoyer
Hudson
Huffman
Huizenga
Hultgren
Hunter
Hurd
Issa
Jenkins (KS)
Jenkins (WV)
Johnson (LA)
Johnson (OH)
Johnson, Sam
Jordan
Joyce (OH)
Katko
Keating
Kelly (MS)
Kelly (PA)
Kennedy
Kihuen
Kilmer
Kind
King (IA)
King (NY)
Kinzinger
Knight
Krishnamoorthi
Kuster (NH)
Kustoff (TN)
Labrador
LaHood
LaMalfa
Lamborn
Lance
Larsen (WA)
Larson (CT)
Latta
Lawson (FL)
Lewis (MN)
Lieu, Ted
Lipinski
LoBiondo
Loebsack
Lofgren
Long
Loudermilk
Love
Lucas
Luetkemeyer
MacArthur
Maloney, Carolyn B.
Maloney, Sean
Marchant
Marino
Marshall
Massie
Mast
Matsui
McCarthy
McCaul
McClintock
McHenry
McKinley
McMorris Rodgers
McNerney
McSally
Meadows
Meehan
Meeks
Messer
Mitchell
Moolenaar
Mooney (WV)
Moulton
Mullin
Murphy (PA)
Neal
Newhouse
Noem
Nolan
Norcross
Nunes
O'Halleran
O'Rourke
Olson
Palazzo
Palmer
Panetta
Pascrell
Paulsen
Pearce
Pelosi
Perlmutter
Perry
Peters
Peterson
Pittenger
Poliquin
Polis
Posey
Price (NC)
Quigley
Ratcliffe
Reed
Reichert
Renacci
Rice (NY)
Roby
Roe (TN)
Rogers (KY)
Rokita
Rooney, Francis
Rooney, Thomas J.
Ros-Lehtinen
Rosen
Roskam
Ross
Rothfus
Rouzer
Royce (CA)
Ruiz
Ruppersberger
Russell
Rutherford
Ryan (OH)
Sanford
Scalise
Schneider
Schrader
Schweikert
Scott, Austin
Scott, David
Sensenbrenner
Sessions
Shea-Porter
Sherman
Shimkus
Shuster
Simpson
Sinema
Smith (MO)
Smith (NE)
Smith (NJ)
Smith (TX)
Smucker
Soto
Speier
Stefanik
Stewart
Stivers
Suozzi
Swalwell (CA)
Taylor
Tenney
Thompson (CA)
Thompson (PA)
Thornberry
Tiberi
Tipton
Titus
Torres
Trott
Tsongas
Turner
Upton
Valadao
Vargas
Veasey
Vela
Wagner
Walberg
Walden
Walker
Walorski
Walters, Mimi
Walz
Wasserman Schultz
Weber (TX)
Webster (FL)
Wenstrup
Westerman
Williams
Wilson (SC)
Wittman
Womack
Woodall
Yarmuth
Yoder
Yoho
Young (AK)
Young (IA)
Zeldin
NAYS--87
Adams
Barragan
Bass
Beatty
Bonamici
Brady (PA)
Butterfield
Capuano
Carson (IN)
Castro (TX)
Chu, Judy
Cicilline
Clark (MA)
Clarke (NY)
Clyburn
Conyers
Crist
Cummings
DeFazio
Demings
DeSaulnier
Dingell
Doggett
Doyle, Michael F.
Ellison
Espaillat
Evans
Frankel (FL)
Fudge
Gabbard
Gallego
Garamendi
Green, Al
Grijalva
Gutierrez
Hanabusa
Jackson Lee
Jayapal
Jeffries
Johnson (GA)
Johnson, E. B.
Jones
Kaptur
Kelly (IL)
Khanna
Kildee
Langevin
Lawrence
Lee
Levin
Lewis (GA)
Lowenthal
Lowey
Lujan Grisham, M.
Lujan, Ben Ray
Lynch
McCollum
McGovern
Meng
Moore
Nadler
Napolitano
Pallone
Payne
Pingree
Pocan
Raskin
Richmond
Roybal-Allard
Rush
Sanchez
Sarbanes
Schakowsky
Schiff
Scott (VA)
Serrano
Sewell (AL)
Sires
Smith (WA)
Takano
Thompson (MS)
Tonko
Velazquez
Waters, Maxine
Watson Coleman
Welch
Wilson (FL)
NOT VOTING--11
Bridenstine
Davis, Danny
Grothman
McEachin
Murphy (FL)
Poe (TX)
Rice (SC)
Rogers (AL)
Rohrabacher
Slaughter
Visclosky
[[Page H2678]]
{time} 1657
Mr. DeFAZIO changed his vote from ``yea'' to ``nay.''
Ms. ESTY and Mr. RYAN of Ohio changed their vote from ``nay'' to
``yea.''
So the bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
____________________