[Congressional Record Volume 167, Number 105 (Wednesday, June 16, 2021)]
[House]
[Pages H2830-H2855]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               ESG DISCLOSURE SIMPLIFICATION ACT OF 2021

  Ms. WATERS. Mr. Speaker, pursuant to House Resolution 473, I call up 
the bill (H.R. 1187) to provide for disclosure of additional material 
information about public companies and establish a Sustainable Finance 
Advisory Committee, and for other purposes, and ask for its immediate 
consideration in the House.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore (Mr. Cuellar). Pursuant to House Resolution 
473, in lieu of the amendment in the nature of a substitute recommended 
by the Committee on Financial Services printed in the bill, an 
amendment in the nature of a substitute consisting of the text of Rules 
Committee Print 117-5 is adopted and the bill, as amended, is 
considered read.
  The text of the bill, as amended, is as follows:

       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 ``Corporate Governance 
     Improvement and Investor Protection Act''.

                 TITLE I--ESG DISCLOSURE SIMPLIFICATION

     SEC. 101. SHORT TITLE.

       This title may be cited as the ``ESG Disclosure 
     Simplification Act of 2021''.

     SEC. 102. FINDINGS.

       Congress finds the following:
       (1) The Securities and Exchange Commission has broad 
     authority to require the disclosure of information if such 
     information is in the interest of, or is material to 
     investors.
       (2) The Commission does not require companies to disclose 
     information related to environmental, social, and governance 
     (``ESG'') matters, and does not require companies to adhere 
     to standards for disclosing such information.
       (3) Investors have reported that voluntary disclosures of 
     ESG metrics are inadequate.
       (4) A rule requiring reporting and standardization of ESG 
     disclosures is in the interest of investors.
       (5) ESG matters are material to investors, and the 
     Commission must establish standards for disclosure of such 
     matters.

     SEC. 103. ESG DISCLOSURES.

       (a) In General.--Section 14 of the Securities Exchange Act 
     of 1934 (15 U.S.C. 78n) is amended by adding at the end the 
     following:
       ``(k) ESG Disclosures.--
       ``(1) In general.--Each issuer the securities of which are 
     registered under section 12 or that is required to file 
     annual reports under section 15(d) shall disclose in any 
     proxy or consent solicitation material for an annual meeting 
     of the shareholders--
       ``(A) a clear description of the views of the issuer about 
     the link between ESG metrics and the long-term business 
     strategy of the issuer; and
       ``(B) a description of any process the issuer uses to 
     determine the impact of ESG metrics on the long-term business 
     strategy of the issuer.
       ``(2) ESG metrics defined.--In this subsection, the term 
     `ESG metrics' has the meaning given the term in part 210 of 
     title 17, Code of Federal Regulations as amended pursuant to 
     section 3(b) of the ESG Disclosure Simplification Act of 
     2021.''.
       (b) Rulemaking.--
       (1) In general.--The Securities and Exchange Commission (in 
     this Act referred to as the ``Commission'') shall amend part 
     210 of title 17, Code of Federal Regulations (or any 
     successor thereto) to--
       (A) require each issuer, in any filing of the issuer 
     described in such part that requires audited financial 
     statements, to disclose environmental, social, and governance 
     metrics (in this title referred to as ESG metrics); and
       (B) define ESG metrics.
       (2) Sustainable finance advisory committee.--The 
     Sustainable Finance Advisory Committee established pursuant 
     to section 4(k) of the Securities and Exchange Act of 1934 
     shall, not later than 180 days after the date of the first 
     meeting of such Committee, submit to the Commission 
     recommendations about what ESG metrics the Commission should 
     require issuers to disclose.
       (3) Materiality.--It is the sense of Congress that ESG 
     metrics, as such term is defined by the Commission pursuant 
     to paragraph (1), are de facto material for the purposes of 
     disclosures under the Securities Exchange Act of 1934 and the 
     Securities Act of 1933.
       (4) Incorporation of international standards.--When 
     amending part 210 of title 17, Code of Federal Regulations 
     (or any successor thereto) pursuant to paragraph (1), the 
     Commission may, as the Commission determines appropriate, 
     incorporate any internationally recognized, independent, 
     multi-stakeholder environmental, social, and governance 
     disclosure standards.
       (5) Location of disclosure.--Any disclosure required by 
     paragraph (1) may be included in a notes section of the 
     filing.
       (6) Delay for small issuers.--The Commission may use a 
     phased approach when applying any amendments made pursuant to 
     paragraph (1) to small issuers and may determine the criteria 
     by which an issuer qualifies as a small issuer for purposes 
     of such phased approach.

[[Page H2831]]

  


     SEC. 104. SUSTAINABLE FINANCE ADVISORY COMMITTEE.

       Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 
     78d) is amended by adding at the end the following:
       ``(k) Sustainable Finance Advisory Committee.--
       ``(1) Establishment.--The Commission shall establish a 
     permanent advisory committee to be called the `Sustainable 
     Finance Advisory Committee' (in this subsection referred to 
     as the `Committee').
       ``(2) Duties of committee.--The Committee shall--
       ``(A) submit a report to the Commission not later than 18 
     months after the date of the first meeting of the Committee 
     that--
       ``(i) identifies the challenges and opportunities for 
     investors associated with sustainable finance; and
       ``(ii) recommends policy changes to facilitate the flow of 
     capital towards sustainable investments, in particular 
     environmentally sustainable investments;
       ``(B) when solicited, advise the Commission on sustainable 
     finance; and
       ``(C) communicate with individuals and entities with an 
     interest in sustainable finance.
       ``(3) Membership.--
       ``(A) Members.--
       ``(i) In general.--The Committee shall consist of no more 
     than 20 members who shall each serve for one four-year term.
       ``(ii) Representation.--Each member shall represent 
     individuals and entities with an interest in sustainable 
     finance, such as--

       ``(I) experts on sustainable finance;
       ``(II) operators of financial infrastructure;
       ``(III) entities that provide analysis, data, or 
     methodologies that facilitate sustainable finance;
       ``(IV) insurance companies, pension funds, asset managers, 
     depository institutions, or credit unions; or
       ``(V) other financial institutions that intermediate 
     investments in sustainable finance or manage risks related to 
     sustainable development.

       ``(iii) Representation of interests.--A member may not 
     represent a single individual or entity and shall represent 
     types of individuals and entities with similar interests in 
     sustainable finance.
       ``(B) Selection.--
       ``(i) In general.--The Commission shall--

       ``(I) publish criteria for selection of members on the 
     website of the Commission and in the Federal Register; and
       ``(II) solicit applications for membership on the website 
     of the Commission and in the Federal Register.

       ``(ii) Equal share.--From the individuals who submit 
     applications for membership, each Commissioner of the 
     Commission shall select an equal number of the members of the 
     Committee.
       ``(C) Pay.--Members may not receive pay by reason of their 
     service on the Committee but may receive travel or 
     transportation expenses in accordance with applicable 
     provisions under subchapter I of chapter 57 of title 5, 
     United States Code.
       ``(D) Member transparency.--The name of each member and the 
     types of individuals and entities that such member represents 
     shall be published on the website of the Commission.
       ``(E) Staff.--The Committee shall be supported by staff 
     from the Office of the Investor Advocate of the Commission 
     that are dedicated to environmental, social and governance 
     (in this subsection referred to as `ESG') issues.
       ``(F) Authorization of appropriation.--There are authorized 
     to be appropriated such sums as are necessary to finance 
     costs associated with staff dedicated to ESG issues in the 
     Office of the Investor Advocate of the Commission.
       ``(4) Sustainable finance.--For the purposes of this 
     subsection, the term `sustainable finance' means the 
     provision of finance with respect to investments taking into 
     account environmental, social, and governance considerations.
       ``(5) SEC response.--The Commission shall, not later than 6 
     months after the date on which the Committee submits a report 
     to the Commission pursuant to paragraph (2)(A), publish a 
     response to such report.''.

              TITLE II--SHAREHOLDER POLITICAL TRANSPARENCY

     SEC. 201. SHORT TITLE.

       This title may be cited as the ``Shareholder Political 
     Transparency Act of 2021''.

     SEC. 202. FINDINGS.

       Congress finds that--
       (1) corporations make significant political contributions 
     and expenditures that directly or indirectly influence the 
     election of candidates and support or oppose political 
     causes;
       (2) decisions to use corporate funds for political 
     contributions and expenditures are usually made by corporate 
     boards and executives, rather than shareholders;
       (3) corporations, acting through boards and executives, are 
     obligated to conduct business for the best interests of their 
     owners, the shareholders;
       (4) historically, shareholders have not had a way to know, 
     or to influence, the political activities of corporations 
     they own;
       (5) shareholders and the public have a right to know how 
     corporate managers are spending company funds to make 
     political contributions and expenditures benefitting 
     candidates, political parties, and political causes; and
       (6) corporations should be accountable to shareholders in 
     making political contributions or expenditures affecting 
     Federal governance and public policy.

     SEC. 203. REPORTING REQUIREMENTS.

       Section 13 of the Securities Exchange Act of 1934 (15 
     U.S.C. 78m) is amended by adding at the end the following:
       ``(s) Reporting Requirements Relating to Certain Political 
     Expenditures.--
       ``(1) Definitions.--In this subsection:
       ``(A) Expenditure for political activities.--The term 
     `expenditure for political activities'--
       ``(i) means--

       ``(I) an independent expenditure (as defined in section 
     301(17) of the Federal Election Campaign Act of 1971 (52 
     U.S.C. 30101(17)));
       ``(II) an electioneering communication (as defined in 
     section 304(f)(3) of that Act (52 U.S.C. 30104(f)(3))) and 
     any other public communication (as defined in section 301(22) 
     of that Act (52 U.S.C. 30101(22))) that would be an 
     electioneering communication if it were a broadcast, cable, 
     or satellite communication; or
       ``(III) dues or other payments to trade associations or 
     organizations described in section 501(c) of the Internal 
     Revenue Code of 1986 and exempt from tax under section 501(a) 
     of that Code that are, or could reasonably be anticipated to 
     be, used or transferred to another association or 
     organization for the purposes described in subclause (I) or 
     (II); and

       ``(ii) does not include--

       ``(I) direct lobbying efforts through registered lobbyists 
     employed or hired by the issuer;
       ``(II) communications by an issuer to its shareholders and 
     executive or administrative personnel and their families; or
       ``(III) the establishment and administration of 
     contributions to a separate segregated fund to be utilized 
     for political purposes by a corporation.

       ``(B) Issuer.--The term `issuer' does not include an 
     investment company registered under section 8 of the 
     Investment Company Act of 1940 (15 U.S.C. 80a-8).
       ``(2) Quarterly reports.--
       ``(A) Reports required.--Not later than 180 days after the 
     date of enactment of this subsection, the Commission shall 
     amend the reporting rules under this section to require each 
     issuer with a class of equity securities registered under 
     section 12 of this title to submit to the Commission and the 
     shareholders of the issuer a quarterly report containing--
       ``(i) a description of any expenditure for political 
     activities made during the preceding quarter;
       ``(ii) the date of each expenditure for political 
     activities;
       ``(iii) the amount of each expenditure for political 
     activities;
       ``(iv) if the expenditure for political activities was made 
     in support of or in opposition to a candidate, the name of 
     the candidate and the office sought by, and the political 
     party affiliation of, the candidate; and
       ``(v) the name or identity of trade associations or 
     organizations described in section 501(c) of the Internal 
     Revenue Code of 1986 and exempt from tax under section 501(a) 
     of such Code which receive dues or other payments as 
     described in paragraph (1)(A)(i)(III).
       ``(B) Public availability.--The Commission shall ensure 
     that the quarterly reports required under this paragraph are 
     publicly available through the Internet website of the 
     Commission and through the EDGAR system in a manner that is 
     searchable, sortable, and downloadable, consistent with the 
     requirements under section 24.
       ``(3) Annual reports.--Not later than 180 days after the 
     date of enactment of this subsection, the Commission shall, 
     by rule, require each issuer to include in the annual report 
     of the issuer to shareholders--
       ``(A) a summary of each expenditure for political 
     activities made during the preceding year in excess of 
     $10,000, and each expenditure for political activities for a 
     particular election if the total amount of such expenditures 
     for that election is in excess of $10,000;
       ``(B) a description of the specific nature of any 
     expenditure for political activities the issuer intends to 
     make for the forthcoming fiscal year, to the extent the 
     specific nature is known to the issuer; and
       ``(C) the total amount of expenditures for political 
     activities intended to be made by the issuer for the 
     forthcoming fiscal year.''.

     SEC. 204. REPORTS.

       (a) Securities and Exchange Commission.--The Securities and 
     Exchange Commission shall--
       (1) conduct an annual assessment of the compliance of 
     issuers with section 13(s) of the Securities Exchange Act of 
     1934, as added by section 203; and
       (2) submit to Congress an annual report containing the 
     results of the assessment under paragraph (1).
       (b) Government Accountability Office.--The Comptroller 
     General of the United States shall periodically evaluate and 
     report to Congress on the effectiveness of the oversight by 
     the Securities and Exchange Commission of the reporting and 
     disclosure requirements under section 13(s) of the Securities 
     Exchange Act of 1934, as added by section 203.

                TITLE III--GREATER ACCOUNTABILITY IN PAY

     SEC. 301. SHORT TITLE.

       This title may be cited as the ``Greater Accountability in 
     Pay Act of 2021''.

     SEC. 302. PAY RAISE DISCLOSURES.

       Section 13 of the Securities Exchange Act of 1934 (15 
     U.S.C. 78m), as amended by section 203, is further amended by 
     adding at the end the following:
       ``(t) Pay Raise Disclosures.--An issuer required to file an 
     annual report under this section or section 15(d), that is 
     not an emerging growth company, shall include in such 
     report--
       ``(1) the percentage increase in the median of the annual 
     total compensation of all executive officers (as such term is 
     defined in section 240.3b-7 of title 17, Code of Federal 
     Regulations) of the issuer over the last completed fiscal 
     year;

[[Page H2832]]

       ``(2) the percentage increase in the median of the annual 
     total compensation of all employees of the issuer, excluding 
     executive officers, over the last completed fiscal year;
       ``(3) the ratio of the percentage described in paragraph 
     (1) to the percentage described in paragraph (2);
       ``(4) a comparison of the percentage described in paragraph 
     (1) to the percentage change over the same period in the 
     Consumer Price Index for All Urban Consumers published by the 
     Bureau of Labor Statistics of the Department of Labor; and
       ``(5) a comparison of the percentage described in paragraph 
     (2) to the percentage change over the same period in the 
     Consumer Price Index for All Urban Consumers published by the 
     Bureau of Labor Statistics of the Department of Labor.''.

                   TITLE IV--CLIMATE RISK DISCLOSURE

     SEC. 401. SHORT TITLE.

       This title may be cited as the ``Climate Risk Disclosure 
     Act of 2021''.

     SEC. 402. SENSE OF CONGRESS.

       It is the sense of Congress that--
       (1) climate change poses a significant and increasing 
     threat to the growth and stability of the economy of the 
     United States;
       (2) many sectors of the economy of the United States and 
     many American businesses are exposed to climate-related risk, 
     which may include exposure to--
       (A) the physical impacts of climate change, including the 
     rise of the average global temperature, accelerating sea-
     level rise, desertification, ocean acidification, 
     intensification of storms, increase in heavy precipitation, 
     more frequent and intense temperature extremes, more severe 
     droughts, and longer wildfire seasons;
       (B) the economic disruptions and security threats that 
     result from the physical impacts described in subparagraph 
     (A) including conflicts over scarce resources, conditions 
     conducive to violent extremism, the spread of infectious 
     diseases, and forced migration;
       (C) the transition impacts that result as the global 
     economy transitions to a clean and renewable energy, low-
     emissions economy, including financial impacts as climate 
     change fossil fuel assets becoming stranded and it becomes 
     uneconomic for companies to develop fossil fuel assets as 
     policymakers act to limit the worst impacts of climate change 
     by keeping the rise in average global temperature to 1.5 
     degrees Celsius above pre-industrial levels; and
       (D) actions by Federal, State, Tribal, territorial, and 
     local governments to limit the worst effects of climate 
     change by enacting policies that keep the global average 
     surface temperature rise to 1.5 degrees Celsius above pre-
     industrial levels;
       (3) assessing the potential impact of climate-related risks 
     on national and international financial systems is an urgent 
     concern;
       (4) companies have a duty to disclose financial risks that 
     climate change presents to their investors, lenders, and 
     insurers;
       (5) the Securities and Exchange Commission has a duty to 
     promote a risk-informed securities market that is worthy of 
     the trust of the public as families invest for their futures;
       (6) investors, lenders, and insurers are increasingly 
     demanding climate risk information that is consistent, 
     comparable, reliable, and clear;
       (7) including standardized, material climate change risk 
     and opportunity disclosure that is useful for decision makers 
     in annual reports to the Commission will increase 
     transparency with respect to risk accumulation and exposure 
     in financial markets;
       (8) requiring companies to disclose climate-related risk 
     exposure and risk management strategies will encourage a 
     smoother transition to a clean and renewable energy, low-
     emissions economy and guide capital allocation to mitigate, 
     and adapt to, the effects of climate change and limit damages 
     associated with climate-related events and disasters; and
       (9) a critical component in fighting climate change is a 
     transparent accounting of the risks that climate change 
     presents and the implications of continued inaction with 
     respect to climate change.

     SEC. 403. DISCLOSURES RELATING TO CLIMATE CHANGE.

       Section 13 of the Securities Exchange Act of 1934 (15 
     U.S.C. 78m), as amended by section 302, is further amended by 
     adding at the end the following:
       ``(u) Disclosures Relating to Climate Change.--
       ``(1) Definitions.--In this subsection:
       ``(A) 1.5 degree scenario.--The term `1.5 degree scenario' 
     means a scenario that aligns with greenhouse gas emissions 
     pathways that aim to limit global warming to 1.5 degrees 
     Celsius above pre-industrial levels.
       ``(B) Appropriate climate principals.--The term 
     `appropriate climate principals' means--
       ``(i) the Administrator of the Environmental Protection 
     Agency;
       ``(ii) the Administrator of the National Oceanic and 
     Atmospheric Administration;
       ``(iii) the Director of the Office of Management and 
     Budget;
       ``(iv) the Secretary of the Interior;
       ``(v) the Secretary of Energy; and
       ``(vi) the head of any other Federal agency, as determined 
     appropriate by the Commission.
       ``(C) Baseline scenario.--The term `baseline scenario' 
     means a widely-recognized analysis scenario in which levels 
     of greenhouse gas emissions, as of the date on which the 
     analysis is performed, continue to grow, resulting in an 
     increase in the global average temperature of 1.5 degrees 
     Celsius or more above pre-industrial levels.
       ``(D) Carbon dioxide equivalent.--The term `carbon dioxide 
     equivalent' means the number of metric tons of carbon dioxide 
     emissions with the same global warming potential as one 
     metric ton of another greenhouse gas, as determined under 
     table A-1 of subpart A of part 98 of title 40, Code of 
     Federal Regulations, as in effect on the date of enactment of 
     this subsection.
       ``(E) Climate change.--The term `climate change' means a 
     change of climate that is--
       ``(i) attributed directly or indirectly to human activity 
     that alters the composition of the global atmosphere; and
       ``(ii) in addition to natural climate variability observed 
     over comparable time periods.
       ``(F) Commercial development of fossil fuels.--The term 
     `commercial development of fossil fuels' includes--
       ``(i) exploration, extraction, processing, exporting, 
     transporting, refining, and any other significant action with 
     respect to oil, natural gas, coal, or any byproduct thereof 
     or any other solid or liquid hydrocarbons that are 
     commercially produced; and
       ``(ii) acquiring a license for any activity described in 
     clause (i).
       ``(G) Covered issuer.--The term `covered issuer' means an 
     issuer that is required to file an annual report under 
     subsection (a) or section 15(d).
       ``(H) Direct and indirect greenhouse gas emissions.--The 
     term `direct and indirect greenhouse gas emissions' includes, 
     with respect to a covered issuer--
       ``(i) all direct greenhouse gas emissions released by the 
     covered issuer;
       ``(ii) all indirect greenhouse gas emissions with respect 
     to electricity, heat, or steam purchased by the covered 
     issuer;
       ``(iii) significant indirect emissions, other than the 
     emissions described in clause (ii), emitted in the value 
     chain of the covered issuer; and
       ``(iv) all indirect greenhouse gas emissions that are 
     attributable to assets owned or managed, including assets 
     that are partially owned or managed, by the covered issuer.
       ``(I) Fossil fuel reserves.--The term `fossil fuel 
     reserves' has the meaning given the term `reserves' under the 
     final rule of the Commission titled `Modernization of Oil and 
     Gas Reporting' (74 Fed. Reg. 2158; published January 14, 
     2009).
       ``(J) Greenhouse gas.--The term `greenhouse gas'--
       ``(i) means carbon dioxide, hydrofluorocarbons, methane, 
     nitrous oxide, perfluorocarbons, sulfur hexafluoride, 
     nitrogen triflouride, and chlorofluorocarbons;
       ``(ii) includes any other anthropogenically-emitted gas 
     that the Administrator of the Environmental Protection Agency 
     determines, after notice and comment, to contribute to 
     climate change; and
       ``(iii) includes any other anthropogenically-emitted gas 
     that the Intergovernmental Panel on Climate Change determines 
     to contribute to climate change.
       ``(K) Greenhouse gas emissions.--The term `greenhouse gas 
     emissions' means the emissions of greenhouse gas, expressed 
     in terms of metric tons of carbon dioxide equivalent.
       ``(L) Physical risks.--The term `physical risks' means 
     financial risks to long-lived fixed assets, locations, 
     operations, or value chains that result from exposure to 
     physical climate-related effects, including--
       ``(i) increased average global temperatures and increased 
     frequency of temperature extremes;
       ``(ii) increased severity and frequency of extreme weather 
     events;
       ``(iii) increased flooding;
       ``(iv) sea level rise;
       ``(v) ocean acidification;
       ``(vi) increased frequency of wildfires;
       ``(vii) decreased arability of farmland;
       ``(viii) decreased availability of fresh water; and
       ``(ix) any other financial risks to long-lived fixed 
     assets, locations, operations, or value chains determined 
     appropriate by the Commission, in consultation with 
     appropriate climate principals.
       ``(M) Social cost of carbon.--The term `social cost of 
     carbon' means the social cost of carbon, as described in the 
     technical support document entitled `Technical Support 
     Document: Technical Update of the Social Cost of Carbon for 
     Regulatory Impact Analysis Under Executive Order 12866', 
     published by the Interagency Working Group on Social Cost of 
     Greenhouse Gases, United States Government, in August 2016 or 
     any successor or substantially related estimate of the 
     monetized damages associated with an incremental increase in 
     carbon dioxide emissions in a given year.
       ``(N) Transition risks.--The term `transition risks' means 
     financial risks that are attributable to climate change 
     mitigation and adaptation, including efforts to reduce 
     greenhouse gas emissions and strengthen resilience to the 
     impacts of climate change, including--
       ``(i) costs relating to--

       ``(I) international treaties and agreements;
       ``(II) Federal, State, and local policy;
       ``(III) new technologies;
       ``(IV) changing markets;
       ``(V) reputational impacts relevant to changing consumer 
     behavior; and
       ``(VI) litigation; and

       ``(ii) assets that may lose value or become stranded due to 
     any of the costs described in subclauses (I) through (VI) of 
     clause (i).
       ``(O) Value chain.--The term `value chain'--
       ``(i) means the total lifecycle of a product or service, 
     both before and after production of the product or service, 
     as applicable; and
       ``(ii) may include the sourcing of materials, production, 
     transportation, and disposal with respect to the product or 
     service described in clause (i).
       ``(2) Findings.--Congress finds that--
       ``(A) short-, medium-, and long-term financial and economic 
     risks and opportunities relating to climate change, and the 
     national and global reduction of greenhouse gas emissions, 
     constitute information that issuers--

[[Page H2833]]

       ``(i) may reasonably expect to affect shareholder decision 
     making; and
       ``(ii) should regularly identify, evaluate, and disclose; 
     and
       ``(B) the disclosure of information described in 
     subparagraph (A) should--
       ``(i) identify, and evaluate--

       ``(I) material physical and transition risks posed by 
     climate change; and
       ``(II) the potential financial impact of such risks;

       ``(ii) detail any implications such risks have on corporate 
     strategy;
       ``(iii) detail any board-level oversight of material 
     climate related risks and opportunities;
       ``(iv) allow for intra- and cross-industry comparison, to 
     the extent practicable, of climate-related risk exposure 
     through the inclusion of standardized industry-specific and 
     sector-specific disclosure metrics, as identified by the 
     Commission, in consultation with the appropriate climate 
     principals;
       ``(v) allow for tracking of performance over time with 
     respect to mitigating climate risk exposure; and
       ``(vi) incorporate a price on greenhouse gas emissions in 
     financial analyses that reflects, at minimum, the social cost 
     of carbon that is attributable to issuers.
       ``(3) Disclosure.--Each covered issuer, in any annual 
     report filed by the covered issuer under subsection (a) or 
     section 15(d), shall, in accordance with any rules issued by 
     the Commission pursuant to this subsection, include in each 
     such report information regarding--
       ``(A) the identification of, the evaluation of potential 
     financial impacts of, and any risk-management strategies 
     relating to--
       ``(i) physical risks posed to the covered issuer by climate 
     change; and
       ``(ii) transition risks posed to the covered issuer by 
     climate change;
       ``(B) a description of any established corporate governance 
     processes and structures to identify, assess, and manage 
     climate-related risks;
       ``(C) a description of specific actions that the covered 
     issuer is taking to mitigate identified risks;
       ``(D) a description of the resilience of any strategy the 
     covered issuer has for addressing climate risks when 
     differing climate scenarios are taken into consideration; and
       ``(E) a description of how climate risk is incorporated 
     into the overall risk management strategy of the covered 
     issuer.
       ``(4) Rule of construction.--Nothing in paragraph (3) may 
     be construed as precluding a covered issuer from including, 
     in an annual report submitted under subsection (a) or section 
     15(d), any information not explicitly referenced in such 
     paragraph.
       ``(5) Rulemaking.--The Commission, in consultation with the 
     appropriate climate principals, shall, not later than 2 years 
     after the date of the enactment of this subsection, issue 
     rules with respect to the information that a covered issuer 
     is required to disclose pursuant to this subsection and such 
     rules shall--
       ``(A) establish climate-related risk disclosure rules, 
     which shall--
       ``(i) be, to the extent practicable, specialized for 
     industries within specific sectors of the economy, which 
     shall include--

       ``(I) the sectors of finance, insurance, transportation, 
     electric power, mining, and non-renewable energy; and
       ``(II) any other sector determined appropriate by the 
     Commission, in consultation with the appropriate climate 
     principals;

       ``(ii) include reporting standards for estimating and 
     disclosing direct and indirect greenhouse gas emissions by a 
     covered issuer, and any affiliates of the covered issuer, 
     which shall--

       ``(I) disaggregate, to the extent practicable, total 
     emissions of each specified greenhouse gas by the covered 
     issuer; and
       ``(II) include greenhouse gas emissions by the covered 
     issuer during the period covered by the disclosure;

       ``(iii) include reporting standards for disclosing, with 
     respect to a covered issuer--

       ``(I) the total amount of fossil fuel-related assets owned 
     or managed by the covered issuer; and
       ``(II) the percentage of fossil fuel-related assets as a 
     percentage of total assets owned or managed by the covered 
     issuer;

       ``(iv) specify requirements for, and the disclosure of, 
     input parameters, assumptions, and analytical choices to be 
     used in climate scenario analyses required under subparagraph 
     (B)(i), including--

       ``(I) present value discount rates; and
       ``(II) time frames to consider, including 5, 10, and 20 
     year time frames; and

       ``(v) include reporting standards and guidance with respect 
     to the information required under subparagraph (B)(iii);
       ``(B) require that a covered issuer, with respect to a 
     disclosure required under this subsection--
       ``(i) incorporate into such disclosure--

       ``(I) quantitative analysis to support any qualitative 
     statement made by the covered issuer;
       ``(II) the rules established under subparagraph (A);
       ``(III) industry-specific metrics that comply with the 
     requirements under subparagraph (A)(i);
       ``(IV) specific risk management actions that the covered 
     issuer is taking to address identified risks;
       ``(V) a discussion of the short-, medium-, and long-term 
     resilience of any risk management strategy, and the evolution 
     of applicable risk metrics, of the covered issuer under each 
     scenario described in clause (ii); and
       ``(VI) the total cost attributable to the direct and 
     indirect greenhouse gas emissions of the covered issuer, 
     using, at minimum, the social cost of carbon;

       ``(ii) consider, when preparing any qualitative or 
     quantitative risk analysis statement contained in the 
     disclosure--

       ``(I) a baseline scenario that includes physical impacts of 
     climate change;
       ``(II) a 1.5 degrees scenario; and
       ``(III) any additional climate analysis scenario considered 
     appropriate by the Commission, in consultation with the 
     appropriate climate principals;

       ``(iii) if the covered issuer engages in the commercial 
     development of fossil fuels, include in the disclosure--

       ``(I) an estimate of the total and a disaggregated amount 
     of direct and indirect greenhouse gas emissions of the 
     covered issuer that are attributable to--

       ``(aa) combustion;
       ``(bb) flared hydrocarbons;
       ``(cc) process emissions;
       ``(dd) directly vented emissions;
       ``(ee) fugitive emissions or leaks; and
       ``(ff) land use changes;

       ``(II) a description of--

       ``(aa) the sensitivity of fossil fuel reserve levels to 
     future price projection scenarios that incorporate the social 
     cost of carbon;
       ``(bb) the percentage of the reserves of the covered issuer 
     that will be developed under the scenarios established in 
     clause (ii), as well as a forecast for the development 
     prospects of each reserve under the scenarios established in 
     clause (ii);
       ``(cc) the potential amount of direct and indirect 
     greenhouse gas emissions that are embedded in proved and 
     probable reserves, with each such calculation presented as a 
     total and in subdivided categories by the type of reserve;
       ``(dd) the methodology of the covered issuer for detecting 
     and mitigating fugitive methane emissions, which shall 
     include the frequency with which applicable assets of the 
     covered issuer are observed for methane leaks, the processes 
     and technology that the covered issuer uses to detect methane 
     leaks, the percentage of assets of the covered issuer that 
     the covered issuer inspects under that methodology, and 
     quantitative and time-bound reduction goals of the issuer 
     with respect to methane leaks;
       ``(ee) the amount of water that the covered issuer 
     withdraws from freshwater sources for use and consumption in 
     operations of the covered issuer; and
       ``(ff) the percentage of the water described in item (ee) 
     that comes from regions of water stress or that face 
     wastewater management challenges; and

       ``(III) any other information that the Commission 
     determines is--

       ``(aa) necessary;
       ``(bb) appropriate to safeguard the public interest; or
       ``(cc) directed at ensuring that investors are informed in 
     accordance with the findings described in paragraph (2);
       ``(C) with respect to a disclosure required under section 
     13(s) of the Securities Exchange Act of 1934, require that a 
     covered issuer include in such disclosure any other 
     information, or use any climate-related or greenhouse gas 
     emissions metric, that the Commission, in consultation with 
     the appropriate climate principals, determines is--
       ``(i) necessary;
       ``(ii) appropriate to safeguard the public interest; or
       ``(iii) directed at ensuring that investors are informed in 
     accordance with the findings described in paragraph (2); and
       ``(D) with respect to a disclosure required under section 
     13(s) of the Securities Exchange Act of 1934, establish how 
     and where the required disclosures shall be addressed in the 
     covered issuer's annual financial filing.
       ``(6) Formatting.--The Commission shall require issuers to 
     disclose information in an interactive data format and shall 
     develop standards for such format, which shall include 
     electronic tags for information that the Commission 
     determines is--
       ``(A) necessary;
       ``(B) appropriate to safeguard the public interest; or
       ``(C) directed at ensuring that investors are informed in 
     accordance with the findings described in paragraph (2).
       ``(7) Periodic update of rules.--The Commission shall 
     periodically update the rules issued under this subsection.
       ``(8) Compilation of information disclosed.--The Commission 
     shall, to the maximum extent practicable make a compilation 
     of the information disclosed by issuers under this subsection 
     publicly available on the website of the Commission and 
     update such compilation at least once each year.
       ``(9) Reports.--
       ``(A) Report to congress.--The Commission shall--
       ``(i) conduct an annual assessment regarding the compliance 
     of covered issuers with the requirements of this subsection;
       ``(ii) submit to the appropriate congressional committees a 
     report that contains the results of each assessment conducted 
     under clause (i); and
       ``(iii) make each report submitted under clause (ii) 
     accessible to the public.
       ``(B) GAO report.--The Comptroller General of the United 
     States shall periodically evaluate, and report to the 
     appropriate congressional committees on, the effectiveness of 
     the Commission in carrying out and enforcing this 
     subsection.''.

     SEC. 404. BACKSTOP.

       If, 2 years after the date of the enactment of this Act, 
     the Securities and Exchange Commission has not issued the 
     rules required under section 13(u) of the Securities Exchange 
     Act of 1934, and until such rules are issued, a covered

[[Page H2834]]

     issuer (as defined in such section 13(u)) shall be deemed in 
     compliance with such section 13(u) if disclosures set forth 
     in the annual report of such issuer satisfy the 
     recommendations of the Task Force on Climate-related 
     Financial Disclosures of the Financial Stability Board as 
     reported in June, 2017, or any successor report, and as 
     supplemented or adjusted by such rules, guidance, or other 
     comments from the Commission.

     SEC. 405. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to the Securities 
     and Exchange Commission such sums as may be necessary to 
     carry out this title and the amendments made by this title.

            TITLE V--DISCLOSURE OF TAX HAVENS AND OFFSHORING

     SEC. 501. SHORT TITLE.

       This title may be cited as the ``Disclosure of Tax Havens 
     and Offshoring Act''.

     SEC. 502. COUNTRY-BY-COUNTRY REPORTING.

       (a) Country-by-Country Reporting.--Section 13 of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78m), as amended 
     by section 403, is further amended by adding at the end the 
     following new subsection:
       ``(v) Disclosure of Financial Performance on a Country-by-
     Country Basis.--
       ``(1) Definitions.--In this subsection--
       ``(A) the term `constituent entity' means, with respect to 
     a covered issuer, any separate business entity of the covered 
     issuer;
       ``(B) the term `covered issuer' means an issuer who--
       ``(i) is a member of a multinational enterprise group; and
       ``(ii) the multinational enterprise group of which the 
     issuer is a member has annual revenue for the preceding 
     calendar year of not less than an amount determined by the 
     Commission to conform to United States or international 
     standards for country-by-country reporting; and
       ``(C) the term `tax jurisdiction'--
       ``(i) means a country or a jurisdiction that is not a 
     country but that has fiscal autonomy; and
       ``(ii) includes a territory or possession of the United 
     States that has fiscal autonomy.
       ``(2) Disclosure.--
       ``(A) In general.--Each covered issuer shall file a report 
     with the Commission that includes information described in 
     subparagraph (B), and any other information required by the 
     Commission, with respect to the reporting period described in 
     subparagraph (C).
       ``(B) Information required.--The information described in 
     this subparagraph is as follows:
       ``(i) Constituent entity information.--Information on the 
     constituent entity, including the following:

       ``(I) The complete legal name of the constituent entity.
       ``(II) The tax jurisdiction, if any, in which the 
     constituent entity is resident for tax purposes.
       ``(III) The tax jurisdiction in which the constituent 
     entity is organized or incorporated (if different from the 
     tax jurisdiction of residence).
       ``(IV) The tax identification number, if any, used for the 
     constituent entity by the tax administration of the 
     constituent entity's tax jurisdiction of residence.
       ``(V) The main business activity or activities of the 
     constituent entity.

       ``(ii) Tax jurisdiction.--Information on each tax 
     jurisdiction in which one or more constituent entities is 
     resident, presented as an aggregated or consolidated form of 
     the information for the constituent entities resident in each 
     tax jurisdiction, including the following:

       ``(I) Revenues generated from transactions with other 
     constituent entities.
       ``(II) Revenues not generated from transactions with other 
     constituent entities.
       ``(III) Profit or loss before income tax.
       ``(IV) Total income tax paid on a cash basis to all tax 
     jurisdictions.
       ``(V) Total accrued tax expense recorded on taxable profits 
     or losses.
       ``(VI) Stated capital.
       ``(VII) Total accumulated earnings.
       ``(VIII) Total number of employees on a full-time 
     equivalent basis.
       ``(IX) Net book value of tangible assets, which, for 
     purposes of this section, does not include cash or cash 
     equivalents, intangibles, or financial assets.

       ``(iii) Special rules.--The information listed in clause 
     (ii) shall be provided, in aggregated or consolidated form, 
     for any constituent entity or entities that have no tax 
     jurisdiction of residence. In addition, if a constituent 
     entity is an owner of a constituent entity that does not have 
     a jurisdiction of tax residence, then the owner's share of 
     such entity's revenues and profits will be aggregated or 
     consolidated with the information for the owner's tax 
     jurisdiction of residence.
       ``(C) Reporting period.--The reporting period covered by 
     this paragraph is the period of the covered entity's 
     applicable financial statement prepared for the 12-month 
     period that ends with or within the taxable year of the 
     covered issuer. If the covered issuer does not prepare an 
     annual applicable financial statement, then the reporting 
     period covered by this paragraph is the 12-month period that 
     ends on the last day of the taxable year of the covered 
     issuer.
       ``(D) Filing deadline.--Each covered issuer shall submit to 
     the Commission a report required under this section on or 
     before the due date (including extensions) for filing that 
     covered issuer's tax return in the tax jurisdiction in which 
     the covered issuer's multinational enterprise group is 
     resident.
       ``(E) Regulation.--The Commission shall, in consultation 
     with the Commissioner of the Internal Revenue Service and 
     Secretary of the Treasury--
       ``(i) promulgate regulations carrying out this subsection 
     that conform to United States or international standards for 
     country-by-country reporting, including regulations 
     promulgated by the Internal Revenue Service; and
       ``(ii) require disclosure of the accounting methods used in 
     calculating the information contained in each report filed 
     pursuant to this subsection.''.
       (b) Rulemaking.--
       (1) Deadlines.--The Securities and Exchange Commission (in 
     this section referred to as the ``Commission'') shall--
       (A) not later than 1 year after the date of enactment of 
     this Act, issue a proposed rule to carry out this section and 
     the amendment made by this section; and
       (B) not later than 18 months after the date of enactment of 
     this Act, issue a final rule to carry out this section and 
     the amendment made by this section.
       (2) Data format.--The information required to be provided 
     by this section shall be provided by the issuer in a report 
     in a machine readable format prescribed by the Commission, 
     and such report shall be made available to the public online, 
     in such machine readable format as the Commission shall 
     prescribe.
       (3) Effective date.--Subsection (v) of section 13 of the 
     Securities Exchange Act of 1934, as added by this section, 
     shall become effective 1 year after the date on which the 
     Commission issues a final rule under this section.

  The SPEAKER pro tempore. The bill, as amended, is debatable for 1 
hour equally divided and controlled by the chair and ranking minority 
member of the Committee on Financial Services.
  The gentlewoman from California (Ms. Waters) and the gentleman from 
Michigan (Mr. Huizenga) each will control 30 minutes.
  The Chair recognizes the gentlewoman from California.


                             General Leave

  Ms. WATERS. Mr. Speaker, I ask unanimous consent that all Member may 
have 5 legislative days within which to revise and extend their remarks 
on H.R. 1187 and to insert extraneous material thereon.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from California?
  There was no objection.
  Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in support of H.R. 1187, the Corporate Governance 
Improvement and Investor Protection Act.
  H.R. 1187 is a package of bills designed to strengthen investor 
protections and require companies to provide environmental, social, and 
governance disclosures, known as ESG. I thank my colleague, 
Representative Juan Vargas, for his leadership on this package.
  This bill provides investors with critical information on ESG matters 
by requiring public companies to disclose key information to 
shareholders regarding corporate political spending, worker pay, CEO 
compensation, climate risk, and country-by-country tax reporting; and 
provides issuers with clear, consistent standards to disclose this 
information.
  This is key information that investors have been demanding in order 
to make the best decisions on the short- and long-term viability of the 
companies they are investing in.
  It is surprising that, to this day, there are no explicit ESG 
requirements and investors are left to piece together the story of a 
company's material risk with insufficient information. This is 
unacceptable.
  So I am pleased that this package of bills will improve investor 
protections by holding public companies accountable and providing 
greater transparency.
  This package includes a number of bills authored by several 
hardworking members of the Financial Services Committee, specifically: 
Representative Juan Vargas, Representative Bill Foster, Representative 
Nydia Velazquez, Representative Sean Casten, and Representative Cindy 
Axne.
  Specifically, Mr. Vargas' bill, the ESG Disclosure Simplification 
Act, requires public companies to disclose certain ESG information to 
shareholders, as well as the impact of the ESG policies on their 
strategies.
  Mr. Foster's bill, the Shareholder Political Transparency Act, 
requires public companies to submit quarterly reports to the SEC on any 
and all political expenditures, including dark money.
  Ms. Velazquez's bill, the Greater Accountability in Pay Act, sheds 
light on pay disparities, helping to close the gender and racial pay 
gap.
  Ms. Axne's bill, the Disclosure of Tax Havens and Offshoring Act, 
requires disclosures that discourage companies'

[[Page H2835]]

use of tax havens and encourages repatriation of taxes to the United 
States.
  Mr. Casten's bill, the Climate Risk Disclosure Act, requires 
disclosures that encourages companies to plan for the impact of climate 
change on their company.
  Each of these bills passed the Financial Services Committee with 
unanimous Democratic support. I thank all these Members for their work 
on these bills, their contributions to the legislative package, and 
their leadership on these important reforms to protect investors and 
hold corporations accountable.
  This package is the right thing to do for investors and our markets. 
It is past time that Congress make ESG requirements explicit. For these 
reasons, I urge my colleagues to support the bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HUIZENGA. Mr. Speaker, I yield myself such time as I may consume.
  I am opposed to this bill, and I rise in opposition to H.R. 1187.
  Mr. Speaker, today, my Democrat colleagues, once again, are seeking 
to hijack our securities laws to push leftwing political and social 
agendas, despite dressing it up as investor protection.
  Make no mistake, this bill will increase costs on publicly owned 
companies, discourage private companies from going public; and, 
frankly, could encourage not only private companies to stay private, 
but even have and entice public companies to go back to being private 
companies.
  This is going to result in fewer investment opportunities for 
everyday American investors, also known as our constituents, who are 
saving for retirement, a college education or simply looking to just 
build a better life.
  In short, this bill will increase the number of government-directed, 
mandatory disclosure requirements on publicly traded companies, which 
will increase compliance costs on companies and divert company 
resources that could have been used to create more jobs.
  Now, to be fair, this is a job-creation bill. However, the only jobs 
created by this bill will be for a special tranche of attorneys, 
corporate compliance coordinators, and the occasional scientist; not 
exactly what an economist would call productive-types of jobs.
  Under this bill, public companies would be required to disclose:
  Environmental, social, and governance issues, as well as climate 
risk. These metrics would be set by the Securities and Exchange 
Commission, not Congress;
  Descriptions of any expenditure for political activities and 
donations to political candidates or trade organizations by executives, 
these are duplicative of existing requirements, for example;
  The ratio between the pay raise percentage of the company's 
executives and the pay raise percentage of the company's median 
employee. This is, in some ways, duplicative of the mandatory CEO pay 
ratio disclosure that Democrats put into the Dodd-Frank Act, which 
itself is an especially useless metric; country-by-country tax and 
financial reports from multinational enterprises. This will upend the 
current country-by-country tax reporting rules overseen by the IRS.

  Mr. Speaker, let's be clear. My friends across the aisle are using 
the Federal securities laws to implement their partisan wish list of 
social policy priorities. They are doing it through mandatory 
disclosure regimes that are, at best, tangentially related to actual 
investment decisions.
  To be clear, if information presents a material investment risk to a 
publicly traded company, the company is--wait for this--already 
required to disclose it. That information is out there for those 
companies that have material risk.
  Materiality has been, and continues to be, the touchstone of our 
public company disclosure regime for more than eight decades and has 
actually even been affirmed by the U.S. Supreme Court. It has held the 
test of time, and we simply cannot just discard it to appeal to the 
Democrats' progressive agenda.
  Our capital markets are the best in the world in no small part 
because materiality is the basis of our disclosure regime here in the 
United States, yet my Democrat friends, apparently, want to throw it 
all away for the sake of appealing to leftwing stakeholders.
  Additionally, H.R. 1187 will greatly expand the SEC's jurisdiction by 
requiring the SEC to promulgate disclosures on environmental, climate 
change, political spending, tax reporting, and foreign policy issues, 
among others.
  This is not the sweet spot for the SEC. It does not have the 
experience in any of these issues, and is not the appropriate entity 
for determining these metrics or industry standards, nor is the 
Securities and Exchange Commission the appropriate entity to review and 
enforce such disclosures.
  The SEC knows how to regulate materiality. That is their expertise. 
They are not climatologists or climate scientists. They are not 
election law experts. And they most certainly do not know international 
tax law. That is the purview of the EPA, NOAA, the FEC, and the IRS.
  Furthermore, smaller public companies will bear the burden of 
additional compliance costs. This bill fails to account for the impact 
it will have on smaller businesses and companies, especially those who 
are looking to go public. Or maybe I should say, were looking to go 
public. They certainly do not have the infrastructure or resources to 
spend on fixed costs of compliance like this.
  H.R. 1187 will result in fewer investment opportunities for American 
investors. It will discourage private companies from going public and 
encourage public companies to go private to avoid these burdensome new 
nonmaterial and useless disclosure requirements.
  Sadly, this will hurt the everyday investors, our constituents, that 
the Democrats claim they want to help. In other words, this bill stands 
to harm everyone saving for retirement, a college education, or just 
looking to build a better life.
  This is just a bad bill, and I urge a ``no'' vote on H.R. 1187.
  Mr. Speaker, I reserve the balance of my time.

                              {time}  1245

  Ms. WATERS. Mr. Speaker, I yield 3 minutes to the gentleman from 
California (Mr. Vargas), our leader and the real sponsor on this 
legislation.
  Mr. VARGAS. Mr. Speaker, I rise today to support the Corporate 
Governance Improvement and Investor Protection Act. I particularly 
thank Chairwoman Waters for her support of the environmental, social, 
and governance metrics. Her efforts have been heroic, and I appreciate 
it very, very much.
  Mr. Speaker, when we talk about investors, we are not only talking 
about large, wealthy institutions. We are talking about teachers. We 
are talking about people who are working hard for their money. We are 
also talking about nonprofessional investors who have found in the 
stock market a way to build their savings toward, for example, 
homeownership, college tuition, and retirement. When we are talking 
about investors, we are also talking about pension funds that hold many 
hardworking Americans' retirement savings.
  When a company engages in practices that put its business at risk, it 
also risks the funds these investors have entrusted with it.
  That is why the SEC requires public companies to disclose material 
information, meaning information that a reasonable investor needs in 
order to make a voting decision or decide whether to continue investing 
in that company. Mandated and standard disclosures of environmental, 
social, and governance, or ESG, metrics would provide improved insight 
into long-term business performance and areas of potential future 
risks.
  These metrics are material to investors and central to their 
protection. Together, I and my colleagues have worked to write 
legislation that would ensure such protection. My bill--the first in 
the package--requires the SEC to mandate standard ESG disclosures.
  My colleagues' bills require reporting on specific ESG metrics that 
investors have been advocating for over many years. I applaud 
Representatives Foster, Velazquez, Casten, and Axne for their 
legislation.
  Additionally, I thank Chair Gensler for his advocacy that investors' 
voices are central to materiality.

[[Page H2836]]

  I have to say, climate change is real, and we have to take it 
seriously. It is not a Member of this House or the other House taking a 
snowball, throwing it, and saying: See, there is no climate change.
  Climate change is real. Look at what happened in Texas this summer. 
They were begging for energy because they were not prepared because of 
climate change. They were melting snow in their bathtubs so they could 
flush their toilets.
  If you take a look at what is happening out in the West today: 
drought, the unfortunate reality that we face the risk of catastrophic 
fires.
  All of this is climate change, and it is about time that we take this 
very, very seriously as a country.
  Some companies already do this. They already disclose the ESG 
metrics. That is why it is important to have an equal playing field 
where all companies disclose.
  Again, I thank Chairwoman Waters for her heroic efforts here. I also 
thank my colleagues.
  I urge my colleagues on the other side: Take climate change for real. 
Accept that it is happening. It is real, and it is catastrophic. And we 
must take it seriously.
  Mr. HUIZENGA. Mr. Speaker, I yield 4 minutes to the gentleman from 
Arkansas (Mr. Hill), a leader on this issue.
  Mr. HILL. Mr. Speaker, I thank Ranking Member Huizenga for the time 
on the floor today.
  Mr. Speaker, I would say to my friends on the other side of the 
aisle: We are not debating climate change here. We are debating the 
proper way to financially disclose risks on financial statements of 
companies that may or may not experience impact from climate change.
  No one is over here denying about climate. We are here talking about 
what the right way is to do this. And H.R. 1187 is not the right way to 
do climate disclosure on behalf of taxpayers, shareholders, and 
employees of public companies.
  I have spent the better part of four decades in leadership in both 
public and private companies, and I have been engaged throughout those 
years in calling for quality corporate governance practices. I can say 
with absolute authority that mandating these disclosures as outlined in 
H.R. 1187 is not only not necessary but would be expensive and lead to 
increased litigation costs.
  As my colleagues have already said, the information is already to be 
disclosed if it meets the materiality standard. The idea of materiality 
has been refined over many decades, and it is what makes our capital 
markets the envy of the world.
  As Justice Marshall stated in the Supreme Court opinion from 1976: 
``Some information is of such dubious significance that insistence on 
its disclosure may accomplish more harm than good. . . . If the 
standard of materiality is unnecessarily low . . . management's fear of 
exposing itself to substantial liability may cause it simply to bury 
the shareholders in an avalanche of trivial information, a result that 
is hardly conducive to informed decisionmaking.''
  We articulated this in a letter to the SEC that my colleagues and I 
sent regarding their plans for financial disclosure. In that letter, 
signed by 22 of my Republican colleagues in the House, we outline our 
concerns about the SEC going far afield of its statutory mission to 
protect investors; maintain fair, orderly, and efficient markets; and 
facilitate capital formation.
  We also warn that the nature and scope of climate change disclosure 
rightfully depends on a particular company's business line and their 
carbon footprint. One-size-fits-all, uniform mandates would be deeply 
misguided for an issue as complex as the impact of the climate over 
many, many years on individual businesses.
  This rings more true here in Congress. Congress does not know what is 
best for a public company. These decisions are best left up to the 
board that already has a fiduciary obligation to its shareholders to 
manage this kind of issue.
  Our publicly traded companies are responsive to shareholder 
engagement. Over the last two decades, they have dramatically improved 
their governance practices by increasing diverse, independent directors 
and increasing their boards' attention to the business judgment rule 
and fiduciary duty of care.
  Look at Procter & Gamble as just one U.S. iconic company. In 2000, 
their annual proxy statement was 56 pages. Today, it is 111 pages.
  Like the vast majority of public companies in the S&P 500, P&G has 
significant disclosures of ESG initiatives, their political 
contributions, and their sales around the world.
  Let's not make it more difficult for public companies. As 
policymakers, we should be promoting policies that bolster investment 
options for Americans, not limit them. This bill limits that.
  Mr. Speaker, I encourage my colleagues to vote against the 
legislation.
  Ms. WATERS. Mr. Speaker, I yield 2 minutes to the gentleman from 
Illinois (Mr. Casten).
  Mr. CASTEN. Mr. Speaker, I rise in support of my legislation, the 
Climate Risk Disclosure Act, H.R. 1187.
  I would like us all to imagine for a moment that you had all of your 
wealth tied up in a single company, and you knew that that company was 
on track to lose nearly 20 percent of its value thanks to a known and 
avoidable threat. You call the CEO, and the CEO responded by saying: We 
have it taken care of, but I am not going to explain how.
  That is the reality that the climate crisis is creating for our 
global economy.
  Swiss Re recently found that global GDP will decrease by 4 percent if 
we meet the Paris climate accords, and if we stay with business as 
usual, 18 percent.
  Domestically, the CFTC has come to roughly the same conclusion, 
estimating that for every 1 degree Celsius rise in temperature, we can 
expect a 1.2 percent reduction in annual GDP growth.
  Mr. Speaker, I say to my friends that that is material. It is a big 
deal.
  Those economic losses are due to the wildfires, droughts, blackouts, 
and superstorms that have already caused $500 billion of damages in the 
past 4 years, and investors understand this.
  The fossil fuel industry has spent 10 years slashing prices. And do 
you know what? They are still losing market share to lower-cost 
renewables and efficiency.
  ExxonMobil didn't write down $20 billion because they are woke. They 
wrote down $20 billion because the free market is beating them.
  Investors want to know how to reallocate their capital in response to 
that risk. They want to know how to allocate it to more productive 
uses. That is why there were over 140 climate-related shareholder 
proposals at U.S. companies during the 2020 proxy season. But we, in 
this body, have not done our job to protect those investors.
  Let us be very clear. When we talk about investor protection, every 
company in the world would like to have asymmetry of information. Our 
job is to make sure that if you love free markets as much as I do, as 
much as those of us on this side of the aisle do, then you have to make 
sure that they have full transparency of information. Right now, public 
companies have no obligation to disclose their exposure to climate-
related risks, nor is there a consistent format for those disclosures. 
This bill would fix that.
  It directs the SEC to issue a rule requiring every public company to 
disclose its direct and indirect greenhouse gas emissions, the total 
amount of fossil fuel-related assets that it owns or manages, how its 
valuation would be affected if climate change continues at its current 
pace or if policymakers successfully restrict greenhouse gas emissions 
to meet the Paris goals, and its risk management strategies related to 
the physical and transitional risks of the climate crisis.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Ms. WATERS. Mr. Speaker, I yield an additional 30 seconds to the 
gentleman from Illinois.
  Mr. CASTEN. Mr. Speaker, I want to reassure my friend from Arkansas 
that the bill does direct the SEC to tailor those disclosure 
requirements to different industries to make sure that the burden is 
borne most heavily by those companies with the greatest contribution to 
that risk.
  When it comes to making this transition, markets are some of the most

[[Page H2837]]

powerful tools we have, but efficient markets depend on transparent 
information. It is on us to provide that efficiency, to unleash the 
power of our entrepreneurs and our capitalists to create jobs and 
economic growth, and to leave a better planet than the one we 
inherited--but only if we act.
  This is a win for capitalism, a win for consumers, and a win for the 
planet that we will pass on to our grandchildren.
  Mr. Speaker, I urge my colleagues to vote in support of this 
legislation.
  Mr. HUIZENGA. Mr. Speaker, I yield 4 minutes to the gentleman from 
Kentucky (Mr. Barr), who has been an outstanding voice on these 
particular issues.
  Mr. BARR. Mr. Speaker, I thank my friend from Michigan.
  Mr. Speaker, I rise today in opposition to H.R. 1187, with all due 
respect to my good friends from California and Illinois. We have 
enjoyed a robust discussion and debate on this, which I would argue is 
a very important topic.
  Mr. Speaker, the statutory mission of the Securities and Exchange 
Commission is to protect investors; maintain fair, orderly, and 
efficient markets; and facilitate capital formation. Its mission, 
though, is not to reduce carbon emissions. Its mission is not to solve 
climate change.
  Now, those may be laudable public policy objectives, but they are 
best handled by the Congress or other Federal agencies. This is simply 
not the job of the SEC.
  This bill is, unfortunately, the next episode in the Democrats' saga 
to weaponize financial regulation to achieve partisan social and 
environmental goals. Congressional Democrats and the Biden 
administration know that they cannot pass the Green New Deal and other 
extreme far-left policy priorities through a Democrat-majority 
Congress, so they are corrupting an independent Federal financial 
regulator to do their bidding.
  The majority claims that this bill is an effort to improve corporate 
governance when, in reality, it is a thinly veiled attempt to open a 
back door to achieve their socialist wish list and cut off financing to 
legal but politically unfashionable industries that they despise.
  The result will be higher energy costs for the American people, a 
regressive energy tax on the people in this country who can the least 
afford it.
  As always, the Democrats think that the government knows best and is 
better equipped than the private market to meet demand. They give no 
consideration to the impacts of significant cost increases, the bill's 
effect on retail investors, or the actual utility of the information 
they are requesting and its materiality for informing investment 
decisions.
  My friend from Arkansas (Mr. Hill) made this point. But the seminal 
Supreme Court case that defines the materiality standard was TSC 
Industries v. Northway. In that majority opinion, Justice Thurgood 
Marshall wrote, and it bears repeating: ``If the standard of 
materiality is unnecessarily low, not only may the corporation and its 
management be subjected to liability for insignificant omissions or 
misstatements, but also management's fear of exposing itself to 
substantial liability may cause it simply to bury the shareholders in 
an avalanche of trivial information, a result that is hardly conducive 
to informed decisionmaking.''
  So, this is not about investor protection. This is about weaponizing 
Federal securities law to discriminate against law-abiding American 
energy companies. This is an effort to pick winners and losers in the 
marketplace by the government. It is an effort for central planning of 
our economy. It is not about markets. This is about market distortion 
by the Federal Government.
  In committee, I tried to make a commonsense change to ensure the bill 
covers only material information so that investors aren't buried by 
that avalanche. The majority rejected my amendment. This shows they are 
more interested in naming and shaming companies than providing useful 
information to investors.

                              {time}  1300

  Mr. Speaker, my last point is this: the job of the SEC is to protect 
investors, but this bill would compromise investor returns by elevating 
nonpecuniary factors above and ahead of financial performance.
  How do we know this? Because fees of ESG funds are 43 percent higher 
than non-ESG funds. And many low-ranked ESG stocks not only 
outperformed top-ranked ESG stocks, they outperformed the market 
overall.
  We must not harm American investors. We must not harm American 
retirement savers by subordinating investor returns to promote 
nonpecuniary policy objectives like social justice, diversity quotas, 
and lower carbon emissions.
  Financial regulations should not be a tool for social change.
  Ms. WATERS. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
Iowa (Mrs. Axne).
  Mrs. AXNE. Mr. Speaker, I thank Chairwoman Waters for putting 
together such an important set of corporate governance reforms, one 
that absolutely supports investors in this country, like our teachers 
who are involved in institutional investment for their safety and a 
dignified retirement.
  Mr. Speaker, this package will absolutely give everyone more 
information about how companies are investing for the long term, and 
that includes my bill, the Disclosure of Tax Havens and Offshoring Act.
  Last year, 55 profitable U.S. corporations paid no Federal corporate 
income taxes. Let me repeat that. Last year, 55 profitable U.S. 
corporations paid no corporate income taxes--I can tell you, that is 
not what happened on Main Street back in my district in Iowa. They paid 
their taxes--and many more paid far below the statutory rate of 21 
percent.
  It is not hard to see why this happens. In 2018, U.S. multinationals 
booked hundreds of billions of dollars of tax havens where they 
basically paid no taxes, including $100 billion alone in Bermuda.
  This costs the U.S. more than $50 billion per year in taxes. And 
beyond the damage that that does, which is extensive, it hurts all of 
the businesses who are doing the right thing, those that are on Main 
Street in all of our communities, including many small businesses 
across this country who don't have a subsidiary in Barbados just to 
avoid taxes.
  That is why last weekend, seven of the world's largest economies 
agreed to end the race to the bottom and require a global minimum tax 
rate of 15 percent for our corporations. That is going to have a big 
impact on the corporations who have been using tax havens, but the 
investors and the public don't know which corporations are using these 
loopholes and where they are booking their profits.
  My bill will fix that, by requiring disclosure of very basic 
information about a company's operations on a country-by-country basis, 
including revenue, profit, taxes paid, and number of employees they 
have. This would take information large multinational corporations 
already have and give us much-needed transparency into the 
international tax avoidance strategies companies use if they are 
shipping jobs overseas. It gives us the information that we need, and I 
urge a ``yes'' vote.
  Mr. HUIZENGA. Mr. Speaker, I include in the Record the following 
letters, a June 14 letter from the National Association of 
Manufacturers, a June 15 letter from the U.S. Chamber of Commerce, and 
a June 16 letter from the American Securities Association, all in 
opposition to this bill.

                                           National Association of


                                                Manufacturers,

                                                     June 14, 2021
     House of Representatives, 
     Washington, DC.
       Dear Representative: On behalf of the National Association 
     of Manufacturers, I write to express opposition to H.R. 1187, 
     the Corporate Governance Improvement and Investor Protection 
     Act.
       Manufacturers are taking the lead in innovating solutions 
     to climate change, ensuring clean air and water, and 
     enhancing diversity and inclusion--and, importantly, in 
     providing information about this critical work to their 
     investors. Public company reporting related to climate change 
     and other environmental, social, and governance topics should 
     allow for principles-based disclosure of financially material 
     information relevant to these efforts. The NAM is concerned 
     that the ESG Disclosure Simplification Act, the Shareholder 
     Political Transparency Act, the Greater Accountability in Pay 
     Act, and the Climate Risk Disclosure Act would impose 
     disclosure mandates that focus on costly one-size-fits-all 
     metrics rather than material, decision-useful information for 
     investors.

[[Page H2838]]

       Similarly, the Disclosure of Tax Havens and Offshoring Act 
     would impose a significant compliance burden--while also 
     risking exposure of valuable and proprietary data--by 
     requiring public reporting of country-by-country tax 
     information by U.S. companies. The United States' support for 
     Action 13 of the OECD/G20's BEPS country-by-country reporting 
     initiative was based on the requirement that these reports, 
     which are exchanged between the IRS and other tax 
     authorities, would remain confidential.
       The NAM is engaging with the Securities and Exchange 
     Commission as it considers ways to enhance the comparability 
     of climate and ESG information disclosed by publicly traded 
     companies. Manufacturers are hopeful that any new climate or 
     ESG reporting framework will be flexible, principles-based, 
     and materiality-driven while providing clarity to publicly 
     traded companies and supporting their efforts to furnish 
     material information to investors in a comparable manner. We 
     encourage Congress to provide appropriate oversight of the 
     SEC's ongoing work without mandating a one-size-fits-all 
     approach.
           Sincerely,

                                                 Chris Netram,

                                          Vice President, Tax and 
     Domestic Economic Policy.
                                  ____



                                     U.S. Chamber of Commerce,

                                    Washington, DC, June 15, 2021.
       To the Members of the U.S. House of Representatives: The 
     U.S. Chamber of Commerce strongly opposes H.R. 1187, the 
     ``Corporate Governance Improvement and Investor Protection 
     Act.'' While some of the underlying goals of H.R. 1187 are 
     laudable, the bill would likely result in significant costs 
     for Main Street investors and it would fail to achieve its 
     stated objectives. The Chamber will consider including votes 
     on this legislation in our ``How They Voted'' scorecard.
       Over the last several years, the Chamber has worked closely 
     with stakeholders to promote a corporate disclosure framework 
     for environmental, social, and governance (ESG) factors. This 
     framework acknowledges the inherently complex nature of these 
     issues and allows companies to disclose industry specific 
     information. We believe this approach would help ensure 
     investors receive material, decision-useful information while 
     eliminating the cost of burdensome and impractical mandates.
       By contrast, H.R. 1187 would result in an unworkable, one-
     size-fits-all disclosure regime for public companies on ESG 
     issues including climate change, executive compensation, and 
     pay practices. This misguided approach would impose enormous 
     compliance costs on public companies. It would be especially 
     harmful to small issuers and emerging growth companies (EGCs) 
     without the same compliance resources as large companies. 
     H.R. 1187 would create yet another barrier to going public in 
     the United States, thus removing opportunities for retail 
     investors to build wealth and contribute to the economy.
       Pursuant to the Supreme Court's landmark decision on 
     materiality in 1976 (TSC Industries, Inc. v. Northway, Inc.), 
     companies today are already required to disclose material 
     information related to climate change and ESG. H.R. 1187 
     could veer away from this traditional standard for disclosure 
     that has served as a centerpiece of America's well-
     functioning capital markets for decades. In that decision, 
     the Court rejected the idea that a fact is material if it 
     ``might'' be important to an investor, and explained that in 
     formulating a materiality standard, it sought to avoid a 
     scenario in which investors would be overwhelmed ``in an 
     avalanche of trivial information--a result that is hardly 
     conducive to informed decision making.'' This legislation is 
     incompatible with Justice Marshall's opinion on materiality--
     a standard that is recognized by SEC Chair Gary Gensler.
       In addition, the Chamber has supported previous versions of 
     legislation introduced by Representative Gregory Meeks on 
     disclosure of corporate board diversity, which have garnered 
     bipartisan support. The Chamber believes this legislation 
     should be considered separately. It is regrettable that 
     Representative Meek's thoughtful legislation has been 
     included in this flawed H.R. 1187.
       The Chamber opposes H.R. 1187, the ``Corporate Governance 
     Improvement and Investor Protection Act,'' and urges you to 
     vote against this legislation.
           Sincerely,
     Jack Howard.
                                  ____



                              American Securities Association,

                                    Washington, DC, June 16, 2021.
     Re H.R. 1187, the Corporate Governance Improvement and 
         Investor Protection Act of 2021.

     Hon. Nancy Pelosi,
     Speaker, House of Representatives,
     Washington, DC.
     Hon. Kevin McCarthy,
     Minority Leader, House of Representatives,
     Washington, DC.
       Dear Speaker Pelosi, Leader McCarthy, and members of the 
     House of Representatives: The American Securities Association 
     (ASA) provides this letter regarding H.R. 1187, the 
     ``Corporate Governance Improvement and Investor Protection 
     Act of 2021,'' which is scheduled to be considered by the 
     House of Representatives this week. For multiple reasons set 
     forth below, ASA must oppose H.R. 1187 and we urge members to 
     vote against the bill.


                           Political Spending

       H.R. 1187 includes a section that would force corporations 
     to disclose their political activities. Moving forward with a 
     policy intended to stifle protected speech suggests this bill 
     is less about providing investors with useful information, 
     and more about silencing political opponents. Enacting 
     policies to erect barriers for companies to engage in the 
     political process on policy issues that are fundamental to 
     their business violates the First Amendment.
       The ASA strongly opposes this legislation.
       Given that companies are already required to disclose their 
     political contributions and lobbying activity, we fail to see 
     what value duplicative regulation in this instance would add. 
     We also question how the information required by this bill 
     could possibly meet the test of ``materiality'' when 
     comparing the actual dollar amounts associated with a public 
     company's political activities to the total revenue of the 
     company.
       We note that a study found the market's perception of a 
     company's value based on its stock prices is not related to a 
     corporation's decision to either engage in or refrain from 
     corporate political speech. Shareholders of public companies 
     also seem to understand this as large majorities have 
     consistently rejected activist shareholder proposals in this 
     area. In short, the owners of the company do not believe 
     management's political spending impacts a company's value or 
     its financial performance. While these facts may be 
     inconvenient, they should not be dismissed lightly.
       As important, this section of the bill seems to run afoul 
     of the First Amendment because some provisions could have a 
     chilling effect on free speech. Certain politicians have 
     already made it clear that this disclosure will be used to 
     target companies who engage in the political process or 
     choose to support certain organizations. This would allow the 
     securities laws to be used as a public relations tool to 
     silence political opposition. Congress should respect the 
     First Amendment rights of all Americans and vote this bill 
     down.


       Improving Corporate Governance Through Diversity Amendment

       The ASA appreciates that Congress will be considering, as 
     an amendment to H.R. 1187, this bipartisan legislation to 
     inform investors about the diversity of public company 
     directors. ASA members have long recognized the benefits of 
     workforce inclusion and have taken actionable steps to hire 
     and train individuals of all backgrounds. The boards and 
     workforce of ASA members reflect this view. We believe the 
     best way to build a sustainable economy is though inclusion.
       While ASA supports the Improving Corporate Governance 
     Through Diversity Act, in April we recommended a number of 
     changes to strengthen the bill prior to its markup by the 
     Financial Services Committee. We continue to believe the 
     diversity criteria should be expanded to include individuals 
     of diverse viewpoints and diverse professional/educational 
     backgrounds. The inclusion of individuals of different 
     genders, races, ethnicities, viewpoints, and experiences is 
     necessary to achieve the policy goals Congress rightly seeks 
     to achieve.
       Congress should refrain from adopting policies that would 
     promote boards composed of a club of individuals whose 
     experience tracks a certain managerial/educational path or 
     requires adherence to a particular point of view. Today, more 
     than ever, public companies need the benefit of hearing from 
     individuals with different experiences who will question and 
     engage with executives about the appropriate direction and 
     decision-making of public companies. Unfortunately, changes 
     to reflect this important priority have not been made to the 
     underlying legislation.


                     Rep. Hill Amendment--SEC Study

       The ASA supports the approach taken by Representative 
     Hill's amendment, which would require the SEC to study the 
     inconsistencies and differences between ESG reporting 
     frameworks prior to mandating new disclosures for public 
     companies.
       To date, the SEC has failed to conduct such a study. As a 
     result, the Commission has no way to know how current ESG 
     disclosure practices already inform investors, or what 
     specific areas could be improved upon to ensure companies 
     only disclose material information. This study would lead to 
     a more targeted approach that would mitigate unnecessary 
     compliance costs and protect investors from unworkable 
     mandates.


                       Mandatory ESG Disclosures

       The ASA letter to the Financial Services Committee in April 
     outlined a number of recommendations and concerns we had with 
     a series of ESG-related bills that were marked up by the 
     Committee. Unfortunately, none of those concerns or questions 
     have been answered.
       In that letter, we noted the following:
       ESG disclosure mandates would create an unequal and unfair 
     playing field for American businesses vis-a-vis Chinese 
     companies;
       Businesses would spend an enormous amount of time and 
     resources reorienting their compliance systems to comply with 
     ESG mandates at a time when policymakers should want 
     companies to be focused on hiring to help the American 
     economy recover;
       Company management should be permitted to determine what is 
     `material' to its business using its own business judgment--
     just as management is now permitted to do for other risks 
     that companies face;

[[Page H2839]]

       Judgements about material disclosure can be challenged by 
     investors or the SEC in court, which provides an important 
     check that incentivizes companies to provide accurate and 
     full disclosure. This process is not broken, and we see no 
     reason to change it in this instance;
       The costs of one-size-fits-all disclosure cannot be 
     justified;
       The beneficiaries of a prescriptive one-size-fits-all ESG 
     disclosure regime would be an entrenched professional class 
     on Wall Street of well-heeled corporate attorneys, auditors, 
     mega-asset managers, proxy advisors, index providers, 
     standard setters and investment banks. This begs the 
     question: why is Congress using climate change as a reason to 
     adopt policies that will transfer money from the public 
     companies owned by America's mom-and-pop investors directly 
     to the Wall Street-industrial-complex? Retirees, working 
     families, and those investing for a better future should have 
     an answer to that question before the bill moves forward;
       The bill imposes a significant cost burden on small 
     companies and undermines capital formation, which is one part 
     of the SEC's three-part mission. Imposing these costs on 
     small, emerging growth, and mid-sized companies will only 
     serve to further entrench the large and mega-cap companies in 
     our markets who can easily absorb them. We question why 
     Congress would adopt a policy that tips the scales in favor 
     of the same companies that many in this body believe are 
     using their market power to harm consumers and distort our 
     political economy; and
       An unintended loophole will exempt Chinese companies in 
     indexes from this disclosure. This will unfairly disadvantage 
     American companies and deprive mom-and-pop investors of 
     disclosure about Communist China's emission of greenhouse 
     gases, or whether any CCP-controlled Chinese company is 
     involved in commission of crimes against humanity and 
     genocide that Congress.


                               Conclusion

       While ASA opposes this bill, we will continue to engage 
     with members and the SEC to preserve our current disclosure 
     system which ensures investors are provided with material 
     information, including information that falls into the bucket 
     of ESG. H.R. 1187 frustrates this goal, and therefore, we 
     urge members to oppose it.
           Sincerely,

                                     Christopher A. Iacovella,

                                          Chief Executive Officer,
                                  American Securities Association.

  Mr. HUIZENGA. Mr. Speaker, I yield 2 minutes to the gentleman from 
Florida (Mr. Donalds), who is a new Member to this House Chamber and an 
outstanding Member.
  Mr. DONALDS. Mr. Speaker, full disclosure, I actually do not sit on 
the Financial Services Committee, but my career has actually been in 
financial services. I spent the last 17 years of my life working in 
banking, insurance, and financial services.
  I understand the importance of protecting investors and ensuring 
fairness in the market, which is part of the mission of the SEC. In 
fact, it was so important to me that during my time in the Florida 
legislature, I introduced legislation that was designed to protect 
vulnerable investors, and that legislation has actually become law in 
the State of Florida.
  H.R. 1187 is inconsistent with the mission of the SEC. It does not 
protect investors; it is not fair or efficient. It is the exact 
opposite. It is nothing more than a government-run litmus test that 
politicizes the SEC and contradicts the very important mission of the 
SEC.
  Mandating public companies to disclose details that are not 
financially relevant or material is an abuse of power. Not to mention, 
we see companies who are willing to disclose this information on their 
own, and they are taking steps to address some of the issues that my 
friends on the other side of the aisle might want to mandate. Just the 
other day, Ralph Lauren came out and they said they were going to 
publicly disclose this information. It is good for them to do, if they 
choose to do so, but this puts companies in a position to compete for 
capital based off of virtue signaling rather than the metrics that are 
relevant in capital markets.
  I ask my friends on the other side of the aisle: How does this move 
the needle for everyday Americans? Does disclosing diversity quotas and 
carbon emissions impacts, does that promote efficiency in the market? I 
know it does not. And it also doesn't promote capital formation in 
these markets.
  This mandate only promotes what we have seen from this Congress and 
the administration, an out-of-touch and misguided political agenda. 
This is nothing more than liberal fascism, yet another way to push a 
social agenda in our capital markets. This bill will essentially create 
good companies and bad companies, and have their future be based off 
the opinions of the mob and not their business success.
  Just last year, we saw a company like Goya Foods come under fire for 
its president's affiliation with the Republican Party.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. HUIZENGA. Mr. Speaker, I yield an additional 30 seconds to the 
gentleman from Florida (Mr. Donalds).
  Mr. DONALDS. Mr. Speaker, the attempt to cancel Goya Foods failed, 
but it exposed the underbelly of the left's attempt to coerce companies 
into bending the knee to the extremists in the court of public opinion.
  In short, Mr. Speaker, this is a bad bill. It does not promote 
efficient markets, it destroys them. And it sends our financial markets 
into a place where we should not go in the United States of America.
  Ms. WATERS. Mr. Speaker, I yield 1 minute to the gentleman from 
Connecticut (Mr. Himes).
  Mr. HIMES. Mr. Speaker, I thank my colleagues, Mr. Vargas and 
Chairwoman Waters, for leading on these important issues.
  Mr. Speaker, I rise in support of this bill and my amendment that we 
will be considering later today.
  My colleague from Florida just accused us of being out of touch. I 
wonder if he remembers that 2 weeks ago the Nation was out of gas. We 
were out of gas because of a successful cyberattack on Colonial 
Pipeline. And it is a daily thing, JBS Foods, ferry services, 
metropolitan transit authority, and the list goes on and on and on and 
on. So we were out of gas, not out of touch.
  And my amendment is simple, it just requires a straightforward, 
relatively moderate, disclosure of corporations. Do you have a board 
member that understands cybersecurity? And if you don't, tell us how 
you are thinking about it. Tell us what your plan is.
  I am hearing a lot about pecuniary interest. Let's ask Colonial 
Pipeline whether there was a pecuniary interest in not having what 
happened to them happen. If you care about addressing this problem, we 
are giving companies a choice, either tell us where your expertise lies 
or how you are going to deal with it.
  Mr. Speaker, if you care about it, vote in favor of this amendment 
and vote in favor of this legislation.
  Mr. HUIZENGA. Mr. Speaker, I include in the Record an article from 
The Wall Street Journal dated from 2018, ``California Public Employees 
Vote Against Pension-Fund Activism.''

             [From the Wall Street Journal, Oct. 18, 2018]

     California Public Employees Vote Against Pension-Fund Activism

                          (By Paul S. Atkins)

       Playing politics with other people's savings is never 
     popular.
       The California Public Employees' Retirement System this 
     month said no thank you to pension-fund activism. Government 
     workers unseated Priya Mathur, the sitting Calpers president. 
     She was defeated by Jason Perez, a police-union official who 
     criticized Ms. Mathur's focus on environmental, social and 
     governance investing, or ESG. Mr. Perez emphasizes the 
     agency's fiduciary duty to maximize investor returns.
       Calpers represents almost two million California public 
     employees, retirees and families. Yet it mostly makes 
     headlines for its activism, such as divestiture from the 
     tobacco industry. ``It's been used more as a political-action 
     committee than a retirement fund,'' said Mr. Perez. ``I think 
     the public agency [employees] are just sick of the 
     shenanigans.''
       Americans have always invested to achieve personal goals, 
     such as saving for a house or their kids' college tuition. 
     Some find that an ESG or issue-specific approach to investing 
     accords with their personal philosophies. There is nothing 
     wrong with people investing their own money however they 
     like. But Calpers has a fiduciary duty to California public 
     employees, who rely on it for retirement security.
       Hester Peirce, a commissioner of the Securities and 
     Exchange Commission, recently observed, ``When a pension-fund 
     manager is making the decision to pursue her moral goals at 
     the risk of financial return, the manager is putting other 
     people's retirements at risk.'' The danger for Calpers is 
     real: In 2016 a consultant found that the fund's 
     beneficiaries missed up to $3 billion in investment gains 
     from 2001-14. The reason? A divestiture from tobacco holdings 
     for political purposes.
       All this happens as Calpers remain underfunded. Worse, its 
     beneficiaries are stuck. They are locked into the system and 
     cannot vote with their feet.
       While Calpers beneficiaries are demanding a renewed focus 
     on returns, activists continue to work other channels to 
     impose

[[Page H2840]]

     agenda-driven requirements on public companies. Sen. 
     Elizabeth Warren last month unveiled a bill that would direct 
     the SEC to mandate that all public companies disclose fossil-
     fuel use and greenhouse-gas emissions. This month a petition 
     signed by 17 law professors and institutional investors, 
     including Calpers, asked the SEC to develop mandatory rules 
     for public companies to disclose ESG information.
       The petition argues that since there are already so many 
     requests to the SEC for issue-specific disclosures human-
     capital management, climate, tax, human rights, pay ratios by 
     sex, and political spending--the agency should impose a 
     broader ESG disclosure framework. The laundry list of 
     possible disclosures underscores the problem. Requiring 
     companies to account for an ever-changing list of hard-to-
     quantify social issues distracts from disclosure's real, 
     statutory purpose: giving the reasonable investor material 
     information he needs to make investing decisions.
       These proposals always tout purported benefits to 
     investors, but mandatory disclosure of additional immaterial 
     information would be harmful. In a 2013 speech, former SEC 
     Chairman Mary Jo White decried the ``information overload'' 
     in already bloated annual reports that obscures pertinent 
     disclosures for investors amid a sea of extraneous 
     information. She summarized: ``What some investors might want 
     may not be what reasonable investors need.'' Translation: 
     More information is not necessarily better information.
       Mandating politicized corporate disclosures doesn't align 
     with the SEC's mission to protect investors and facilitate 
     capital formation. Instead, it would divert resources away 
     from business operations and growth. It is simply an attempt 
     to shame public companies into compliance with activists' 
     demands.
       As Mr. Perez put it, criticizing a proposal to divest from 
     some gun retailers earlier this year: ``This is nothing more 
     than a political ploy.'' His push to prioritize performance 
     over politics clearly resonated with California public 
     employees; lawmakers and pension-fund managers should take 
     note.

  Mr. HUIZENGA. Mr. Speaker, I yield 3 minutes to the gentleman from 
Tennessee (Mr. Rose), and I thank him for his work on the Financial 
Services Committee.
  Mr. ROSE. Mr. Speaker, I rise in opposition to H.R. 1187. This 
legislation is just the latest attempt by my colleagues on the other 
side of the aisle to implement a far-left social agenda, this time 
through our securities laws.
  Contrary to the principles-based disclosure standard that is typical 
of most material risk disclosures, President Biden and the Democrat-led 
Securities and Exchange Commission have advocated for a separate 
standardized set of disclosure requirements related to climate risk and 
environmental, social, and governance or ESG, concerns. This 
legislation would impose disclosure mandates that focus on costly one-
size-fits-all metrics rather than material, decision-useful information 
for investors.
  During the markup process, several of my colleagues submitted 
commonsense amendments that would have added an important materiality 
standard. These amendments would have required disclosure of ESG, 
climate change, or compensation metrics where there is a substantial 
likelihood that a reasonable shareholder would consider such a 
disclosure important with respect to making an investment decision. 
However, my colleagues on the other side of the aisle refuse to support 
them, including this simple standard.
  By adding these additional disclosure requirements to the already 
substantial list of mandatory disclosures for public companies, H.R. 
1187 would also increase the cost of compliance for public companies, 
thereby discouraging private companies from going public.
  Further, I think it is important to point out that this legislation 
misses an opportunity to address China and its daily human rights 
atrocities. If we were serious about disclosure, not just a political 
agenda, we would be looking at security and democracy threats like 
those that the Chinese Communist Party and their state-owned 
enterprises pose.
  Bottom line, this legislation would add even more costly and 
confusing disclosure requirements, hurting everyday investors, and 
discouraging initial public offerings, all while failing to include 
important national security protections.
  Mr. Speaker, I urge a ``no'' vote on the legislation.
  Ms. WATERS. Mr. Speaker, I yield 1 minute to the gentlewoman from 
Illinois (Ms. Underwood).
  Ms. UNDERWOOD. Mr. Speaker, I rise in support of this legislation and 
my amendment with Representatives Frankel, Nadler, Speier, and Blunt 
Rochester, which would require public companies to report on workplace 
harassment settlements in their SEC filings.
  The amendment is pulled from the EMPOWER Act, a bipartisan bill I am 
proud to co-lead alongside Congresswoman Frankel and my Republican and 
Democratic colleagues.
  For too long, many employers have tolerated, and even encouraged, a 
culture of secrecy surrounding workplace harassment, writing 
settlements off as a cost of doing business.
  This amendment would shine a light on major employers that fail to 
protect their employees, improve transparency for shareholders, and 
encourage companies to ensure a safe, healthy, and productive 
workplace.
  This is an important bipartisan policy, and I urge my colleagues to 
vote ``yes'' on the amendment and the underlying bill.
  Mr. HUIZENGA. Mr. Speaker, could I inquire as to the remaining time 
on each side?
  The SPEAKER pro tempore. The gentleman from Michigan has 11\1/2\ 
minutes remaining. The gentlewoman from California has 16\1/2\ minutes 
remaining.
  Mr. HUIZENGA. Mr. Speaker, I yield 1 minute to the gentleman from 
Wisconsin (Mr. Fitzgerald).
  Mr. FITZGERALD. Mr. Speaker, I rise today in opposition to H.R. 1187. 
This legislation would impose unnecessary and expensive compliance 
costs on publicly traded companies.
  Publicly traded companies are already subject to extensive 
disclosures regarding various risk factors under Federal law. These 
existing disclosures must already reflect material climate change 
information, such as compliance with greenhouse gas emissions and 
carbon offsets.
  I am concerned this bill would do little to provide information on 
how climate change would affect a particular investment, but would 
instead be used by activist shareholders with no real duty to a company 
or its shareholders to impose progressive political views on that 
company.
  The burden of these costs would fall largely on smaller public 
companies with fewer resources. The burden of these costs would, again, 
I think, put this entire issue off in a different direction than where 
it should be.
  Mr. Speaker, I urge a ``no'' vote on the bill. It would only benefit 
large incumbent corporations while others may avoid going public 
altogether, limiting their growth.

                              {time}  1315

  Ms. WATERS. Mr. Speaker, I include in the Record letters from 
California Public Employees' Retirement System, Public Citizen, the 
North American Securities Administrators Association, and Principles 
for Responsible Investment.

         California Public Employees' Retirement System, Executive 
           Office,
                                                    June 14, 2021.
     Subject: H.R. 1187, The Corporate Governance Improvement and 
         Investor Protection Act.

     Hon. Nancy Pelosi
     Speaker, House of Representatives,
     Washington, DC.
     Hon. Kevin McCarthy,
     Minority Leader, House of Representatives,
     Washington, DC
       Dear Speaker Pelosi and Minority Leader McCarthy: On behalf 
     of the California Public Employees' Retirement System, I 
     write to express support for the overall direction of H.R. 
     1187, the ``Corporate Governance Improvement and Investor 
     Protection Act,'' which would require public companies to 
     disclose material information on the link between 
     environmental, social, and governance (ESG) metrics and their 
     long-term business strategy, as well as political 
     expenditures, compensation practices, climate-related risk 
     and tax expenditures, among other issues. This bill will 
     improve and enhance corporate disclosures essential to 
     maintaining the competitiveness of U.S. financial markets.
       As the largest public defined benefit pension fund in the 
     United States, we manage approximately $465 billion in global 
     assets on behalf of more than two million members. Our 
     fiduciary duty requires that we take a long-term view in 
     assessing whether the companies that we hold in our portfolio 
     are effectively managed and able to provide the sustainable, 
     risk-adjusted returns that allow us to meet our commitments 
     to pay benefits earned by these dedicated active and retired 
     public servants for decades to come.
       We fundamentally depend on the integrity and efficiency of 
     financial markets to meet these commitments and rely upon 
     financial reporting to provide transparent and relevant 
     information about the economic performance, conditions, and 
     operations of the

[[Page H2841]]

     companies in which we invest. We believe corporate disclosure 
     of material financial information is a precondition to 
     maintaining effective and consistent corporate accountability 
     and sustainable economic growth. As the Securities and 
     Exchange Commission (``SEC'') has said in the past:
       ``Only through the steady flow of timely, comprehensive, 
     and accurate information can people make sound investment 
     decisions. The result of this information flow is a far more 
     active, efficient, and transparent capital market that 
     facilitates the capital formation so important to our 
     nation's economy.''
       Critically, CalPERS and other pension funds are inhibited 
     from adequately exercising their fiduciary duty without such 
     disclosures. Disclosure of material financial information is 
     necessary to close the information gap that occurs when 
     management of a company is aware or should be aware of 
     certain risks, yet such information is not available to 
     shareowners. We believe H.R. 1187 will address critical areas 
     in which more high-quality, consistent, and comparable 
     disclosures by public issuers are necessary, and build a more 
     robust reporting regime that enhances shareowner value over 
     the long-term. We are pleased that the following measures, 
     which CalPERS has been on the record in supporting, are 
     included in the Corporate Governance Improvement and Investor 
     Protection Act:
       H.R. 1187, the ESG Disclosure Simplification Act, which 
     would, among other things, require issuers to disclose 
     certain ESG metrics to shareholders, the connection between 
     those metrics and the issuer's long-term business strategy, 
     and the method by which the issuer determines how ESG metrics 
     impact its long-term strategy. We believe the current quality 
     and quantity of relevant ESG reporting does not meet 
     investors' needs and support the SEC playing a prominent role 
     in standardizing and assuring the accuracy of ESG data 
     reporting, and that it is reflected in company financials.
       H.R. 1087, the Shareholder Political Transparency Act, 
     which would require public companies to disclose detailed 
     information about their political spending to the SEC and 
     shareholders in specified quarterly and annual reports. The 
     CalPERS Governance & Sustainability Principles call for 
     responsible board oversight, including disclosures of 
     corporate charitable and political activity to ensure 
     alignment with business strategy and to protect assets on 
     behalf of shareowners. As fiduciaries, we need to know how 
     our capital is being used, including if and when political 
     expenditures are made. SEC rulemaking would bring clarity and 
     consistency in the format and scope of disclosures and 
     provide a cost-effective alternative to private ordering. 
     Furthermore, political expenditure disclosure is consistent 
     with the SEC's requirement for public companies to disclose 
     meaningful financial information and would encourage prudent 
     use of corporate shareowner resources for political 
     activities.
       H.R. 2570, the Climate Risk Disclosure Act, which would 
     require public companies to report financial risks posed to 
     them by climate change, the processes they use to identify 
     those risks, and the actions they take to mitigate those 
     risks. Our investment strategy is to make sure our portfolio 
     is resilient to short-term and long-term risks, both of which 
     include some dimension of climate change. We seek to find the 
     investment opportunities that the energy transition brings, 
     and to bring down emissions that contribute to global 
     warming. We believe it is vital that companies identify, 
     manage, and disclose material environmental risks and 
     opportunities relevant to their short-term and long-term 
     success. We support the establishment of a uniform reporting 
     regime for climate change risk disclosures that would address 
     key issues that impact shareowner value, including minimizing 
     risk, maximizing returns, and ensuring accountability from 
     all those involved.
       H.R. 3007, the Disclosure of Tax Havens and Offshoring Act, 
     which would require public companies to annually disclose 
     information on their subsidiaries and specified country-by-
     country financial information including total pre-tax 
     profits, total amounts paid in State, Federal, and foreign 
     taxes, employees, and tangible assets. As an investor in many 
     of the largest public companies in the world, we are acutely 
     aware of the complexities of international taxes, and the 
     increasingly important role that taxes play in corporate 
     profitability. However, current tax disclosures in the United 
     States do not provide investors with sufficient tax-related 
     information to adequately assess companies' valuations and 
     risks. We believe increasing transparency and requiring the 
     disclosure of overly aggressive international tax planning 
     arrangements helps to reduce systemic risk that threatens 
     global markets and ensure stronger long-term outcomes.
       In addition, we are supportive of including additional 
     provisions in the Corporate Governance Improvement and 
     Investor Protection Act, such as the following disclosures 
     related to human capital management, board diversity, and 
     cybersecurity:
       H.R. 3471, the Workforce Investment Disclosure Act, which 
     would require public companies to disclose information about 
     their Human Capital Management (HCM) policies, practices, and 
     performance in their annual reports. CalPERS expects fair, 
     accurate, and timely reporting on how companies identify and 
     manage risks related to the three forms of capital: 
     financial, physical, and human. The fact that there are few 
     standards for measuring and reporting on human capital topics 
     makes it difficult for investors to truly understand related 
     risks and opportunities when assessing individual companies. 
     We believe that rules-based disclosures with numeric metrics 
     provide crucial information to long-term investors, like 
     CalPERS, who are concerned about sustainability over time. We 
     have made recommendations in our comment letter on the SEC's 
     proposed rulemaking under Regulation S-K for metrics that 
     should be disclosed by all registrants, including the number 
     of full-time, part-time, and contingent workers; employee 
     turnover rates; health and safety, employee engagement and 
     diversity statistics.
       H.R. 1277, the Improving Corporate Governance Through 
     Diversity Act, which would require public companies to 
     annually disclose the voluntary, self-identified racial, 
     ethnic, gender, and veteran status of their board of 
     directors, nominees, and senior executives, and establishes 
     an advisory group to recommend strategies to increase 
     diversity in these leadership positions. We support 
     initiatives that promote talent diversity--including a broad 
     range of education, experience, thoughts, perspectives, and 
     competencies--to help enable effective board leadership. We 
     view board diversity in terms of skill sets, sex, age, 
     nationality, race, sexual orientation, gender identity, 
     disability, and historically underrepresented groups, and 
     believe requiring public companies to annually disclose the 
     self-identified racial, ethnic, gender, and veteran status of 
     their board of directors, nominees, and senior executives is 
     an important step toward challenging ``group think'' in 
     corporate boardrooms and C-suites, which can severely limit 
     companies' ability to innovate and effectively engage with 
     shareowners and other stakeholders.
       H.R. __, the Cybersecurity Disclosure Act, which would 
     require companies to disclose in their annual reports to the 
     SEC, or in their annual proxy statements, whether any member 
     of their board of directors, or similar governing body, has 
     expertise or experience in cybersecurity and the nature of 
     such expertise or experience. If there are no members of a 
     company's governing body that have experience or expertise in 
     cybersecurity, it would require the company to describe what 
     other cybersecurity aspects were taken into account by 
     persons responsible for identifying and evaluating nominees 
     for the company's governing body. We believe requiring the 
     disclosure of cybersecurity expertise--or lack thereof--on 
     corporate boards will increase transparency for investors and 
     help to ensure that public companies are appropriately 
     prioritizing cybersecurity and data privacy matters. It 
     represents a reasonable and timely response to the increasing 
     prominence of cybersecurity threats in our financial markets 
     and the broader economy.
       In sum, CalPERS believes that clear, consistent, and 
     substantive disclosures of climate risk, charitable and 
     political expenditures, human capital management, and board 
     diversity are critical to the long-term success of capital 
     markets and, more critically, of investors. Disclosures of 
     such information will help investors allocate capital and 
     exercise stewardship at companies to ensure long term 
     sustainable value creation. Such disclosures will also 
     encourage corporations to be more mindful of these risks that 
     could impact their financial success over the long term, and 
     will provide for greater transparency regarding cash flow, 
     corporate expenditures, and public policy engagement.
       Thank you for considering our views. We look forward to 
     working with Congress to advance initiatives that will 
     improve corporate disclosures in both the public and private 
     markets. Please do not hesitate to contact me directly, or 
     your staff can contact Danny Brown, Chief of our Legislative 
     Affairs Division, if we can be of any assistance as this 
     measure proceeds.
           Sincerely,
                                                     Marcie Frost,
     Chief Executive Officer.
                                  ____



                                               Public Citizen,

                                  Washington, D.C., June 14, 2021.
     Re Public Citizen urges a YES vote on H.R.s 1187, 1087, 1188, 
         2570, 3007 and amendments.

     House of Representatives,
     Washington, DC.
       Dear Honorable Representatives, On behalf of more than 
     500,000 members and supporters of Public Citizen across the 
     country, we ask you to vote yes on a suite of bills designed 
     to improve corporate disclosures regarding climate, 
     compensation, political spending, taxes, human capital and 
     other important issues. These bills were approved by the 
     House Financial Services Committee and arc expected to come 
     before the full House shortly.


     H.R. 1087, the Shareholder Political Transparency Act (Foster)

       This bill requires firms that are traded on public 
     exchanges to disclose in quarterly public reports filed with 
     the Securities and Exchange Commission (SEC) the amount, 
     date, and nature of the company's expenditures for political 
     activities. Importantly, this includes indirect political 
     spending, or money given to trade associations or non-profits 
     that play in politics.
       In Citizens United v. the Federal Elections Commission in 
     2010, the U.S. Supreme Court found that political spending is 
     protected speech and therefore corporations, unions,

[[Page H2842]]

     and other groups are permitted to make unlimited political 
     expenditures, as long as they are not directly given to 
     candidates or parties. The Court assumed, however, that this 
     spending would be disclosed to investors so they could have 
     input. Not addressed by the Court, however, was the fact that 
     shareholders might not be aware of this spending or specific 
     details of where the money might be going. In response, a 
     bipartisan group of securities law experts filed a petition 
     with the SEC to require corporations to disclose their 
     political spending activities, and drew more than 1.2 million 
     comments, the most in SEC history. The SEC has not yet 
     addressed this decade-old petition, and passage of this 
     legislation would jumpstart the rulemaking.
       Public Citizen has long championed this important 
     disclosure requirement. Political spending exposes a company 
     to reputational risk when it involves itself controversial 
     issues. Many corporations recognize this problem. For 
     example, a number of companies ceased campaign contributions 
     to certain lawmakers associated with the January 6; 2021 
     insurrection at the Capitol and in connection to the voter 
     suppression bills moving through statehouses.
       While some corporate political spending is already 
     voluntarily disclosed, a considerable amount is funneled 
     through trade associations such as the U.S. Chamber of 
     Commerce, which deploys large numbers of agents to meet with 
     members of Congress. Often, the Chamber advances or promotes 
     policies that an individual company may find uncomfortable 
     were they associated with it openly, such as opposition to 
     climate reform or worker safety measures. If companies' 
     spending on backward issues became known to the public, it 
     could lead to material, reputational harm and ultimately 
     subtract from shareholder value.
       Public Citizen heartily endorses this measure.


      H.R. 1188, the Greater Accountability in Pay Act (Velazquez)

       This bill would require public companies, excluding 
     emerging growth companies, to disclose certain employee pay 
     raise information, comparing the CEO with the median-paid 
     employee at the firm. This measure builds on a reform in the 
     Dodd-Frank Wall Street Reform and Consumer Protection Act 
     that first required identification of the median-paid worker 
     at a firm. This requirement meant that firms were required to 
     add one more item regarding employees to the sole requirement 
     existing, namely, the number of employees.
       For a half-century, the fruits of productivity gains have 
     clotted in the C-suite, with average workers receiving little 
     or no increase in real compensation. This has led to income 
     and wealth inequality. During the pandemic, this played out 
     in the need for trillions of dollars in emergency relief, as 
     average people lacked the savings to survive a temporary loss 
     of employment. Disclosures of these pay gaps can help 
     lawmakers devise more ambitious reforms to address the 
     widening gap between those workers who truly drive the 
     economy and elites.
       Public Citizen urges you to support this bill.


H.R. 2570, the Climate Risk Disclosure Act (Casten) and H.R. 1187, the 
               ESG Disclosure Simplification Act (Vargas)

       Both of these bills deal with the increasing demand from 
     investors and the public for information related to 
     environmental, social and governance (ESG) issues. H.R. 2570 
     would require public companies to disclose in their annual 
     reports information relating to the financial and business 
     risks associated with climate change. The bill also requires 
     the SEC to establish, in consultation with other relevant 
     financial agencies, climate-related risk disclosure metrics 
     and guidance, which will be industry-specific, and will 
     require companies to make both quantitative and qualitative 
     disclosures. H.R. 1187 requires the SEC to define what ESG 
     metrics means and requires firms to disclose those metrics 
     along with how ESG metrics accord with a firm 's long-term 
     strategy. It also requires the SEC to establish a committee 
     that would provide advice to the commission on sustainable 
     finance issues.
       Given the physical and transition risks inherent to the 
     ongoing climate crisis and the shift away from fossil fuels 
     and carbon-intensive industry, investors need more 
     information about companies' growing climate financial risk, 
     their contribution to climate change, and their plans for 
     remaining viable in a low-carbon future economy. Requiring 
     the SEC to establish climate-related risk disclosure metrics 
     falls squarely within the agency's mission to protect 
     investors; ensure fair, orderly, and efficient markets; and 
     facilitate capital formation. Indeed, the agency has 
     expressed its intention to explore a climate disclosure rule. 
     Adopting this legislation would explicitly clarify the 
     SEC's authority to adopt such a rule in the face of 
     potential legal challenges from issuers and ideological 
     opponents alike.
       At the same time, it is important to remember that climate 
     change is not just an environmental crisis, but one of social 
     justice, wealth distribution, equity and human rights. It is 
     vitally important that disclosures from issuers include 
     elements of environmental and climate justice, as well as 
     other ESG issues like political spending; tax; lobbying; 
     diversity, equity, and inclusion; and human capital 
     management practices to allow investors to make a holistic 
     assessment of an issuer's overall sustainability and make 
     more informed investment decisions.
       Despite many firms reporting some ESG data, the available 
     information has not satisfied the needs of investors because 
     it essentially allows firms to self-determine and report 
     which climate risks are material. Many firms provide only 
     vague, boilerplate disclosures or do not address climate risk 
     at all. Management is often overly optimistic about a firm's 
     climate resilience, may not fully understand what investors 
     actually believe is material or want to know, and may have an 
     interest in obscuring parts of the picture, leading to 
     drastic under-reporting of risks. The provisions in this bill 
     represent a major step forward in terms of the quality of 
     information that would be available to investors.
       We strongly encourage you to support these bills.


   H.R. 3007, the Disclosure of Tax Havens and Offshoring Act (Axne)

       This bill would require public companies to disclose their 
     total pre-tax profits, and total amounts paid in state, 
     federal, and foreign taxes on a country-by-country basis. The 
     bill would also require companies to disclose a number of 
     specific tax-related items for each of its subsidiaries, as 
     well as on a consolidated basis, such as total accrued tax 
     expenses, stated capital, and total accumulated earnings. 
     This legislation would ensure investors and the public at 
     large are provided with enough information to discern if the 
     companies they are invested in are participating in risky 
     behavior like corporate tax avoidance. Many U.S. 
     multinational companies use accounting maneuvers to book 
     their profits in low- or no-tax jurisdictions, or ``tax 
     havens.'' This legislation to mandate public country-by-
     country reporting would indeed aim to discourage and curb the 
     trend of corporations' profit shifting to tax havens as these 
     public reports would shed light on corporations that 
     aggressively use avoidance practices to shirk their tax 
     responsibilities, which creates both reputational and 
     financial risk.
       We urge you to approve this bill.
       We also ask your support for amendments expected to be 
     offered to this suite of bills, including:
       H.R. 3471, the Workforce Investment Disclosure Act (Axne): 
     this bill would require the SEC to implement petitioned 
     rulemaking that would require public companies to disclose 
     human capital management policies, practices, and 
     performance. While corporations often claim that employees 
     are their most valuable asset, shareholders know too little 
     about investments in these assets.
       H.R. 1277, the Improving Corporate Governance Through 
     Diversity Act (Meeks): This bill would require public 
     companies to annually disclose the voluntarily, self-
     identified gender, race, ethnicity and veteran status of 
     their board directors. This measure helps corporations better 
     identify how they are promoting diversity in the highest 
     ranks.
       H.R. __, the Cybersecurity Disclosure Act (Himes): This 
     bill would require the SEC to issue rules to require 
     companies in their annual reports to the SEC or in their 
     annual proxy statements to disclose whether any member of 
     their board of directors, or similar governing body, has 
     expertise or experience in cybersecurity and the nature of 
     such expertise or experience. If there are no members of a 
     company's governing body that have experience or expertise in 
     cybersecurity, the bill would require the company to describe 
     what other cybersecurity aspects were taken into account by 
     persons responsible for identifying and evaluating nominees 
     for the company's governing body.
       With high-level hacks recently grinding important companies 
     to a halt and cybersecurity affecting all walks of life, 
     investors should be aware of how well corporations are 
     prepared to defend themselves against attack.
       Public Citizen strongly urges you to vote yes on these 
     important pieces of legislation and amendments to provide 
     greater information to investors, watchdog organizations, and 
     the public at large.
       For questions, please contact Bartlett Naylor.
           Sincerely,
     Public Citizen.
                                  ____

                                         North American Securities


                             Administrators Association, Inc.,

                                    Washington, DC, June 15, 2021.
     Re H.R. 1187, the Corporate Governance and Investor 
         Protection Act of 2021.

     Hon. Nancy Pelosi,
     Speaker, House of Representatives,
     Washington, DC.
     Hon. Kevin McCarthy,
     Minority Leader, House of Representatives,
     Washington, DC.
       Dear Speaker Pelosi and Leader McCarthy: On behalf of the 
     North American Securities Administrators Association, Inc. 
     (``NASAA''), I am writing to express NASAA's support for 
     several provisions of H.R. 1187, the Corporate Governance and 
     Investor Protection Act, which the House is scheduled to 
     consider this week, as amended and favorably reported by the 
     House Committee on Rules on June 14, 2020. As further 
     detailed below, NASAA also strongly supports two amendments 
     to H.R. 1187 that were made in order by the Committee on 
     Rules. The first such amendment addresses disclosure of 
     information related to the diversity on the boards of 
     directors of U.S. public companies, while the second 
     amendment addresses disclosure of cybersecurity expertise at 
     the leadership level of such companies. I sincerely 
     appreciate your attention to NASAA's views.

[[Page H2843]]

  



          (1) The ESG Disclosure Simplification Act (Title I)

       Increasingly, investors view a company's environmental, 
     social, and governance, or ``ESG'' practices, as a material 
     metric for determining whether to invest. To date, however, 
     there are no uniform standards for the reporting of 
     environmental and certain other ESG factors in the United 
     States. In the absence of such standards, public companies 
     lack clarity when making disclosures relating to ESG 
     considerations. In some cases, they may have incentives to 
     make selective or potentially misleading disclosures about 
     the benefits of their practices, products, or services. Title 
     I of H.R. 1187, the Corporate Governance and Investor Protect 
     Act, seeks to remedy that problem.
       The ESG Disclosure Simplification Act, as embodied in Title 
     I, would require public companies to disclose in filings with 
     the U.S. Securities and Exchange Commission (``SEC'') and any 
     proxy or solicitation materials that describe the ``views of 
     the issuer regarding links between ESG metrics and the long-
     term strategy of the issuer'' and any process the issuer uses 
     to determine the long-term business strategy of the issuer. 
     Further, the bill would express the nonbinding ``Sense of 
     Congress'' that ``environmental, social, and governance [ESG] 
     metrics'' are ``de-facto material'' for the purposes of 
     disclosure under the Securities Exchange Act of 1934. The 
     bill would also create a new permanent ``Sustainable Finance 
     Advisory Committee'' within the SEC, that would, within 18 
     months of its first meeting, be required to submit 
     ``recommendations about what ESG metrics'' the SEC should 
     require to be disclosed.
       The time has come to provide investors seeking to 
     understand factors relating to a company's ESG profile with 
     the ability to accurately understand and weigh ESG risks in 
     their investment decisions, and Congress can play an 
     important role in this regard. NASAA has previously called 
     for Congress to enact legislation that would direct the SEC 
     to develop a uniform standard for ESG reporting by public 
     companies so that investors can understand companies' real 
     practices and impact, and ``make `head-to-head' comparisons 
     between competing investments.'' NASAA has also urged that 
     Congress consider legislation that would direct the SEC to 
     establish a task force to consolidate, to the extent 
     possible, themes from existing reporting frameworks and 
     standards in order to catalyze faster progress toward 
     standardization.'' Title I of H.R. 1187 marks an opportunity 
     to ``move the ball forward'' on both of these 
     recommendations; therefore, NASAA is pleased to support its 
     passage.


          (2) The Cybersecurity Disclosure Act (Amendment #1)

       The Cybersecurity Disclosure Act, as filed as an amendment 
     to H.R. 1187, is identical to stand-alone legislation 
     recently introduced in the Senate as S. 808. NASAA was 
     pleased to support this important legislation at the time of 
     its introduction, and we are pleased to support its inclusion 
     in H.R. 1187.
       The Cybersecurity Disclosure Act would require publicly 
     traded companies to include in their annual disclosure 
     filings with the SEC information detailing whether any member 
     of their governing body, such as their board of directors or 
     general partner, possesses expertise or experience in 
     cybersecurity. If no member has such expertise or experience, 
     companies would be required to detail what, if any, other 
     cybersecurity considerations were considered by the persons 
     responsible for identifying and evaluating nominees for the 
     governing body.
       For nearly a decade, the list of public companies and 
     financial institutions targeted by organized cyber-attacks 
     has continued to grow with ever-increasing frequency. Over 
     the past year, moreover, this threat has accelerated further 
     due in part to the COVID-19 pandemic. Because many millions 
     of Americans are conducting much or most of their lives 
     online--and because an unprecedented number of U.S. employees 
     arc working remotely--cybercriminals and scammers have an 
     abundance of opportunities to infiltrate business security 
     networks to install malware, steal personally identifiable 
     information (``PII'') of customers and clients, and create 
     other problems.
       Incentivizing publicly traded companies to consider whether 
     they have appropriate cybersecurity expertise on their 
     governing body is a common-sense way to promote greater 
     attention to cybersecurity risk by public corporations. 
     Investors and customers are well-served by policies that 
     encourage companies to consider such risks proactively, as 
     opposed to after a data breach has already occurred when 
     investors and customers have already been harmed. 
     Importantly, the Cybersecurity Disclosure Act does not 
     require companies to do anything beyond disclosing 
     information; the bill encourages companies to act in their 
     own best interests by creating an incentive for them to 
     prioritize cybcrsecurity expertise at the senior levels of 
     leadership.
       NASAA shares Congress's interest in addressing the threat 
     cybersecurity risk has on public companies and investors. We 
     are pleased to support Amendment #1, and we urge its passage.


(3) The Improving Corporate Governance Through Diversity Act (Amendment 
                                  #11)

       The Improving Corporate Governance Through Diversity Act, 
     as filed as an amendment to H.R. 1187, is identical to stand-
     alone legislation entitled H.R. 1277, the Improving Corporate 
     Governance Through Diversity Act. NASAA was pleased to 
     support H.R. 1277 was it was considered and approved by the 
     House Financial Services Committee in April 2020 and is 
     pleased to again support the bill as an amendment to H.R. 
     1187.
       The Improving Corporate Governance Through Diversity Act 
     would require public companies to disclose annual information 
     on the voluntary self-identified racial, ethnic, gender, and 
     veteran composition of their boards of directors and 
     executive officers. The bill would also require that such 
     companies disclose whether their boards of directors have 
     adopted any ``policy, plan or strategy'' to promote diversity 
     among these bodies, and would instruct the SEC's Office of 
     Minority and Women Inclusion to develop and publish ``best 
     practices,'' in order to help public companies comply with 
     the new diversity reporting requirements. In addition, the 
     Act would establish a new ``Diversity Advisory Group'' within 
     the SEC, which would be exempt from the Federal Advisory 
     Committee Act, and be comprised of representatives from the 
     Federal government, state and local governments, academia, 
     and the private sector. Under the Act, the Advisory Group 
     would be tasked with identifying strategies to ``increase 
     gender, racial and ethnic diversity among members of the 
     board of directors of the issuer,'' and be required to report 
     periodically to Congress and the public.
       NASAA has repeatedly called for Congress to examine the 
     current state of corporate board composition with an eye 
     toward encouraging greater diversity. In doing so, NASAA has 
     noted that leading research indicates that greater board 
     diversity correlates with sound corporate governance and 
     enhances the performance of public companies. We have also 
     noted evidence that shows that investors themselves 
     increasingly regard corporate board diversity to be an 
     indication of good governance, which improves both corporate 
     performance and investor relations. Most recently, in NASAA's 
     Legislative Agenda for the 117th Congress, state securities 
     regulators called for Congress to pass legislation ``to 
     require public companies to disclose information that 
     demonstrates the diversity on their boards, or the lack 
     thereof, as well as information regarding the diversity of 
     their corporate operations.''
       NASAA congratulates the House for its decision to consider 
     including the Improving Corporate Governance Through 
     Diversity Act as an amendment to H.R. 1187, and we urge its 
     passage.
       Thank you for your consideration of NASAA's views. If we 
     may be of further assistance, please do not hesitate to 
     contact me or Michael Canning, NASAA's Director of Policy and 
     Government Affairs.
           Sincerely,
     Lisa Hopkins,
       NASAA President, General Counsel and Senior Deputy 
     Commissioner of Securities, West Virginia.

  Ms. WATERS. Mr. Speaker, I have no further speakers, and I am 
prepared to close. I reserve the balance of my time until the gentleman 
from Michigan yields back.
  Mr. HUIZENGA. Mr. Speaker, just a point of information for the chair 
from California: We have one more speaker, and I will be prepared to 
close.
  Mr. Speaker, I yield 5 minutes to the gentleman from Kentucky (Mr. 
Barr).
  Mr. BARR. Mr. Speaker, I thank the gentleman for yielding.
  Mr. Speaker, once again, the bill we have been considering today is 
puzzling for Republicans, as it probably is for a large number of my 
Democratic friends as well.
  On the one hand, the far left seeks to blame so much of what is bad 
in the world on large public companies. But then they turn around and 
claim that these same companies will see the light and embrace extreme 
leftwing policies if only they disclose more of their activities in 
obscure SEC reports. Mind you, these are perfectly legal activities, 
too.
  But no serious Member of the House can believe the world works like 
this. The far left wants to claim they are heroes using the Securities 
and Exchange Commission to fight the scourges of our time, from foreign 
dictatorships to environmental degradation. But in reality, they are 
weaponizing financial regulation, and their support for this bill comes 
in the form of empty political rhetoric masquerading as sound corporate 
governance. Make no mistake, Mr. Speaker, this bill is about 
politicizing securities regulation.
  Far from this fantasy land live the majority of House Members who 
understand that there are actual urgent problems we can solve only if 
we work together to address them.
  Perhaps the gravest of these problems is represented by the goals of 
the Chinese Communist Party, which is perpetrating the great crime of 
our age against the Uighurs and other minorities in China. Beijing is 
also working to stamp out the vibrant democratic

[[Page H2844]]

culture in Hong Kong, hoping all the while that Congress will look the 
other way.
  If we are truly concerned by public companies that may be working 
with bad actors--particularly bad actors responsible for China's worst 
human rights abuses--then burying their names on the SEC's website will 
achieve absolutely nothing. We need to ensure that they are referred to 
the Treasury Department so that we can impose sanctions, and that is 
what my motion to recommit will do.
  Under this MTR, instead of reporting on malign Chinese companies to 
the SEC--an agency that has long acknowledged its lack of expertise 
and, frankly, its lack of capability and interest in pursuing foreign 
policy goals--we will instead make sure that entities in corporate 
supply chains are flagged for the Treasury when public companies have 
reason to believe they are involved in atrocities in Xinjiang, from 
mass surveillance to forced labor and other violations of basic human 
rights.
  Companies will also be able to sound the alarm on entities complicit 
in China's assault on Hong Kong's freedoms, allowing OFAC at the 
Treasury to determine whether it can impose new sanctions.
  We must cut off offenders from the global economy until China changes 
course. We must rely on appeals to their bottom line and not their 
conscience. That is the power of U.S. sanctions.
  Mr. Speaker, if we adopt the motion to recommit, we will instruct the 
Committee on Financial Services to consider my amendment to H.R. 1178. 
My amendment doesn't pretend we can fight genocide, authoritarianism, 
mass detentions, mass surveillance, and other human rights violations 
with meaningless rhetoric on corporate transparency, none of which 
keeps China's leaders up at night.
  There are over 1 million Uighurs detained in China and over 100 
facilities covering millions of square feet suspected as sites of 
forced labor. It is an insult to Beijing's victims to claim that 
disclosure tweaks from the SEC will stop this. Securities regulation 
will not stop this.
  Mr. Speaker, we can either pass half measures that we know won't work 
and then wring our hands later when the problem remains unresolved, or 
we can articulate what we want to target and take real action. The 
former is beneath the dignity of this House.
  Measly disclosures in securities filings, transforming 10-Ks from 100 
pages to thousands of pages, that is not going to solve the problem. 
The former is beneath the dignity of the House. The latter is embodied 
in my amendment: sanctions, OFAC using the power of the U.S. Department 
of the Treasury.
  Mr. Speaker, I ask unanimous consent to insert the text of my 
amendment in the Record immediately prior to the vote on the motion to 
recommit.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Kentucky?
  There was no objection.
  Mr. HUIZENGA. Mr. Speaker, I yield myself the balance of my time. I 
want to make sure we are clear not only with my colleagues but to those 
who may be listening and watching today.
  Our side of the aisle has a couple of problems with this legislation 
today. First and foremost is the structure; next is the content; and 
then third, we have to question motivation.
  What is the problem with the structure?
  My friend from Connecticut talked about an issue that we have a lot 
of agreement on, and I say to him: Amen, hallelujah, let's talk about 
cybersecurity. Let's talk about how corporations are going to be held 
responsible for that.
  However, my colleague from Iowa is talking about corporate tax law 
and country-by-country tax reporting. Now, that might be a good issue, 
but it is the wrong committee. I wondered to myself if Chairman 
Dingell, who chaired the Ways and Means Committee for a few decades, 
and my colleague from Michigan, would have allowed this committee 
mission creep. Actually, I don't wonder. I know exactly what he would 
have said: Hell, no. This is in my committee.

  This issue is in the wrong committee, and Financial Services is not 
the right and proper place to be doing that.
  Let's look at the content of these bills. We are not debating 
climate, and we are not debating these social issues that need to be 
addressed. We are debating who is responsible for enforcing these. We 
are not debating the failures and flaws of humans. We are questioning 
who should be the enforcer of these regulations and if they are 
equipped to do so.
  Now, not that long ago, before defunding the police was a popular 
item to discuss, the SEC was commonly called on all sides the cop on 
the beat. They were the cops on the beat who were the enforcers. They 
were the ones who were coming along and saying: We are going to make 
sure that there is no fraud as we protect investors; we are going to 
make sure that we have efficient markets; and we are going to make sure 
that we are building capital.
  Here is the problem: They are not prepared and equipped to do so.
  Don't take my word for it. Let's look at President Obama's head of 
the Securities and Exchange Commission, Mary Jo White, who said: ``When 
disclosure gets to be too much or strays from its core purposes, it can 
lead to `information overload,' a phenomenon in which ever-increasing 
amounts of disclosure make it difficult for investors to focus on the 
information that is material and most relevant to their decisionmaking 
as investors in our financial markets. To safeguard the benefits of 
this `signature mandate,' the SEC needs to maintain the ability to 
exercise its own independent judgment and expertise when deciding 
whether and how best to impose new disclosure requirements.''
  She also said at one point that the Securities and Exchange 
Commission was not prepared to do enforcement on areas that they had no 
expertise. She was referring to conflict minerals. That was also part 
of the Dodd-Frank Act.
  So, we have a number of issues that are in this content. Earlier, my 
colleague, the chair from California, submitted a letter from CalPERS 
in support of this. Earlier, just prior to that, I had submitted an 
article from The Wall Street Journal where CalPERS had actually had a 
massive regime change--this was in 2018--regarding this pension fund 
activism.
  At the time, Mr. Perez, who was elected as the president of CalPERS, 
said:

       CalPERS has been used more as a political action committee 
     than a retirement fund. I think the public agency employees 
     are just sick of the shenanigans.

  Hester Peirce, a Commissioner with the Securities and Exchange 
Commission, recently observed: ``When a pension fund manager is making 
the decision to pursue her moral goals at the risk of financial return, 
the manager is putting other people's retirements at risk.''
  She was referring to the person whom Mr. Perez had beaten in that 
election.
  The danger is real. In 2016, a consultant found that the CalPERS fund 
beneficiaries missed up to $3 billion in investment gains from 2001 to 
2014. The reason? A divestiture of tobacco holdings for political 
purposes.
  I wonder if this might be why some of the motivation for those on the 
other side, that they want to cover themselves. They want to make sure 
they are not open to the liability of retirees or others with a 
fiduciary being held responsible for bad decisionmaking when they use 
these amorphous, nondefined issues to make political statements rather 
than investment choices.
  Madam Speaker, at the end of the day, what we have here is a problem 
not just of the issues but of the enforcement. I believe that if we are 
asking the ``cop on the beat,'' the Securities and Exchange Commission, 
to do a job that is up to the streets and maintenance department, then 
no one could expect that they are prepared for that. How can we expect 
that they are going to be able to do this?
  With that, and including my opening statement where we looked at the 
disincentive to make sure there are more investment opportunities for 
everyday investors--our constituents--I must remain opposed to H.R. 
1187.
  Madam Speaker, I yield back the balance of my time.
  Ms. WATERS. Madam Speaker, may I inquire as to how much time is 
remaining.

[[Page H2845]]

  The SPEAKER pro tempore (Mrs. McBath). The gentlewoman from 
California has 16\1/2\ minutes remaining.
  Ms. WATERS. Madam Speaker, I yield myself the balance of my time.
  Madam Speaker, this bill provides urgently needed investor 
protections by requiring the Securities and Exchange Commission to 
adopt clear, consistent standards for ESG metrics. Without the 
information requirements in this bill, investors are left with 
inconsistent information across companies and are ultimately unable to 
fully assess their investment decisions.
  Investors deserve to know the risks they are exposed to with relation 
to climate change, political expenditures, and other important factors. 
We must make this right and take action to bring accountability to 
public companies.
  Some or all of the provisions of this package have been supported by 
Public Citizen, AFL-CIO, SEIU, California Public Employees' Retirement 
System, Americans for Financial Reform, Council of Institutional 
Investors, United Nations Principles for Responsible Investment, 
Americans for Tax Fairness, North American Securities Administrators 
Association, FACT Coalition, Oxfam America, Ceres, and Sierra Club, 
among others.
  For years, investors and market participants have been demanding more 
and better disclosures regarding ESG matters, which research shows can 
have significant impacts on the short- and long-term values of 
companies.
  For example, a report issued by the BlackRock Investment Institute 
found that companies that score high on ESG measures are better able to 
adapt to environmental and societal changes, use resources more 
efficiently, have more productive employees, and tend to face lower 
risk of reputational damage and regulatory action.
  Matters related to climate risk, the ways companies invest in their 
workers and further diversity, spend their cash on political 
expenditures, their global human rights records, their tax avoidance 
strategies, and how they invest in crucial corporate infrastructure 
such as cybersecurity are all significant and material factors in 
companies' short- and long-term viability.
  Investors, who are the true owners of our Nation's public companies, 
recognize the importance of this information to their decisionmaking 
and have been demanding this information for years.
  For example, in 2018, a coalition of public pension funds asset 
managers and others representing over $5 trillion in assets petitioned 
the SEC for rulemaking on mandatory ESG disclosures. Over 2,300 
investment managers, asset managers, and service providers representing 
over $80 trillion in assets under management have become signatories to 
the United Nations Principles for Responsible Investment, which commits 
to incorporating ESG factors into their investment decisions.
  A group of 35 institutional investors representing over $6.6 trillion 
in assets form the Human Capital Management Coalition has petitioned 
the SEC to adopt rules to require issuers to disclose information 
related to their human capital management policies, practices, and 
performance.

                              {time}  1330

  When the SEC solicited comments on political spending disclosures in 
2011, it received over one million comments; by far more comments than 
any other SEC rulemaking petition, and the vast majority of which were 
overwhelmingly favorable. Yet the SEC's efforts were stymied because 
the Senate minority leader has personally insisted on statutorily 
prohibiting the SEC from even studying the issue.
  However, we are currently without clear, consistent standards for 
this information to be disclosed. Investors will continue to be left in 
the dark. It is time we give investors and markets the information they 
have been demanding for so long.
  And let me be absolutely clear about who we are fighting for. The 
other side has taken up the issue, as it tends to want to protect these 
big public corporations from disclosures.
  It is for the American workers, the retirees, who worked their whole 
lives to save for retirement, for the public pension funds investing on 
behalf of our Nation's teachers and our firefighters, and other 
frontliners. We are fighting to ensure they have been given the tools 
they need to protect what they have worked so hard for, to achieve the 
American Dream.
  So I would urge all of my colleagues who are concerned about not only 
the retail investors, but concerned about the institutional investors 
who are responsible for these teachers and these firefighters and these 
others that I have alluded to, and their ability to feel safe and 
comfortable that decisions are being made that are in the best interest 
of the people who are invested in them.
  So I would ask for an ``aye'' vote on this very, very comprehensive 
and serious legislation.
  Madam Speaker, I yield back the balance of my time.
  Ms. VELAZQUEZ. Madam Speaker, I rise in strong support of H.R. 1187. 
Importantly, this package contains language from my legislation, the 
Greater Accountability in Pay Act that requires public companies to 
disclose the pay raise percentage of its executives and the pay raise 
percentage of its median employees over the past year and compare each 
to the rate of inflation. It also requires these companies to disclose 
the ratio between the two pay raise percentages.
  This legislation is the next logical step of the CEO pay ratio 
disclosure requirement in the Dodd-Frank Act. The COVID-19 pandemic has 
left millions of working-class Americans feeling vulnerable and 
uncertain about their economic future--with many individuals and 
families facing reduced hours, furloughs, or outright dismissals.
  However, an article published by the New York Times in April 
demonstrates the extraordinarily successful year it's been, 
financially, for America's biggest CEOs--even at many of the companies 
hit hardest by the events of the pandemic. The Times highlights how 
companies like AT&T, Hilton, Boeing, and Norwegian Cruise Line all took 
billions of dollars in losses in 2020 but still managed to pay each of 
their CEOs more than $20 million.
  Unfortunately, excessive compensation packages received by many of 
America's CEOs is not a new or isolated event. The disparity between 
executive compensation and the average worker pay has been growing for 
decades. In August 2019, the Economic Policy Institute produce a report 
which highlights that, even before the pandemic, CEOs were earning far 
more than the typical worker, with CEO pay growing 940 percent between 
1978 and 2018 while the wages for the typical worker grew by just 11.9 
percent over that same period.
  Additional transparency on pay ratios will also benefit investors, as 
data is key to their decision-making process. A balanced pay ratio is 
an indicator of a company's strong long-term performance and further 
pay ratio disclosures would provide better insight on a company's 
strategy, its values, and long-term outlook.
  In order to get our economy back on track for everyone, we must 
increase worker pay and ensure that CEO pay ratios are in line with a 
corporation's fundamentals. I urge my colleagues to vote YES on bill.
  The SPEAKER pro tempore. All time for debate has expired.
  Each further amendment printed in House Report 117-59 not earlier 
considered as part of amendments en bloc pursuant to section 4 of House 
Resolution 473, shall be considered only in the order printed in the 
report, may be offered only by a Member designated in the report, shall 
be considered as read, shall be debatable for the time specified in the 
report equally divided and controlled by the proponent and an opponent, 
may be withdrawn by the proponent at any time before the question is 
put thereon, shall not be subject to amendment, and shall not be 
subject to a demand for division of the question.
  It shall be in order at any time after debate for the chair of the 
Committee on Financial Services or her designee to offer amendments en 
bloc consisting of further amendments printed in House Report 117-59, 
not earlier disposed of. Amendments en bloc shall be considered as 
read, shall be debatable for 20 minutes equally divided and controlled 
by the chair and ranking minority member of the Committee on Financial 
Services or their respective designees, shall not be subject to 
amendment, and shall not be subject to a demand for division of the 
question.


                 Amendment No. 1 Offered by Mr. Burgess

  The SPEAKER pro tempore. It is now in order to consider amendment No. 
1 printed in House Report 117-59.
  Mr. BURGESS. Madam 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 45, after line 19, insert the following:

[[Page H2846]]

       ``(3) Inclusion of notice with respect to federal corporate 
     tax increases.--With respect to each disclosure made by a 
     covered issuer pursuant to paragraph (2), if the Federal 
     corporate tax rate in effect during the reporting period is 
     higher than the Federal corporate tax rate applicable on June 
     1, 2021, the disclosure shall contain the following 
     additional information:
       ``(A) With respect to any disclosure of taxes paid to the 
     Federal Government, the disclosure shall include a 
     calculation of what such payment would have been had the 
     Federal corporate tax rate remained the same as it was on 
     June 1, 2021.
       ``(B) The following notice: `As a result of a change in 
     U.S. Federal corporate tax law enacted during the _____ 
     Administration(s), our company has ___ fewer dollars to pay 
     its workforce, invest in our business, or return capital to 
     its investors.'. (With the first blank filled in with the 
     name of each President since June 1, 2021, during whose term 
     legislation was enacted to raise the Federal corporate tax 
     rate, and with the second blank filled in with the difference 
     between the actual taxes paid by the covered issuer to the 
     Federal Government during the reporting period and what that 
     payment amount would have been had the Federal corporate tax 
     rate remained the same as it was on June 1, 2021.)''.
  The SPEAKER pro tempore. Pursuant to House Resolution 473, the 
gentleman from Texas (Mr. Burgess) and a Member opposed each will 
control 5 minutes.
  The Chair recognizes the gentleman from Texas.
  Mr. BURGESS. Madam Speaker, I yield myself such time as I may 
consume.
  This amendment is designed to highlight the impact that increased 
taxes have on companies and their workforce.
  Like many Members of this body, I owned my own business prior to 
being elected to Congress. I know firsthand what it takes to make a 
payroll, expand your business, keep the lights on. Running a business 
takes the owner's blood, sweat, and tears to succeed, but it also 
requires capital. Heavier taxes can have significant impacts on a 
company's operation, certainly a company's access to capital and their 
overall fiscal health.
  If we are to follow the premise of this bill, that investors need the 
Federal Government to mandate the disclosure of immaterial information, 
then the impact of tax hikes must be included. That is why I am 
offering this amendment.
  This amendment would require publicly traded companies that pay 
Federal taxes to disclose the effects of any future U.S. corporate tax 
increases. Specifically, the company must calculate and disclose the 
difference between the amount in taxes it would have paid under laws in 
effect on June 1, 2021, and the actual amount paid after the taxes were 
increased.
  Additionally, the company must acknowledge in writing which President 
signed the higher taxes into law.
  Finally, the company must specify the decreased amount of capital 
that it now has to pay its workforce, reinvest in the company, or 
return capital to shareholders.
  So I do want to be clear. I am opposed to Congress forcing disclosure 
of immaterial information, as H.R. 1187 would require. But if Congress 
is going to require companies to disclose other immaterial information, 
then it is only appropriate for Congress to require the disclosure of 
the effects of higher taxes. Requiring disclosures of certain tax-
related information will not provide the whole picture without also 
looking at the impact of tax hikes.
  If we are forcing disclosure of all this tax-related information that 
we have heard the Democrats propose, then why shouldn't investors know 
exactly and plainly how a President's tax increase bill impacts the 
bottom line of the companies, those same companies in which they have 
invested their life savings?
  As our economy continues to recover from the pandemic, the public 
deserves to know how these policies, good and bad, would impact 
economic growth and their livelihoods.
  Since Congressional Democrats are insistent in using this legislation 
to push their agenda on social changes and climate change, then I urge 
my colleagues to support this amendment, as it will tell investors a 
more complete story.
  Madam Speaker, I reserve the balance of my time.
  Ms. WATERS. Madam Speaker, I claim time in opposition to the 
amendment.
  The SPEAKER pro tempore. The gentlewoman from California is 
recognized for 5 minutes.
  Ms. WATERS. Madam Speaker, I strongly oppose Mr. Burgess' amendment. 
This amendment is interesting to me because Republicans have, without 
fail, consistently cited the materiality standard both here on the 
House floor and in the Financial Services Committee as a basis to 
oppose very important disclosures.
  Republicans have argued over and over again that we do not need to 
enact any new disclosures because companies are already required to 
disclose any and all material information. But, with this amendment, it 
seems their purported commitment to materiality has gone out the window 
so that they can bring attention to their massive tax cuts for the 
rich.
  In 2018, when the United States Government should have been focused 
on growing the real economy for American workers, the former President 
pushed forward the largest tax giveaway to our country's largest 
corporations and executives in history. This government handout 
provided corporations and executives with $2 trillion in tax cuts and 
giveaways, saddling the United States Government with debt.
  Make no mistake, these tax cuts did not go primarily to workers, but, 
instead, they went overwhelmingly to the top 1 percent. The year after 
the Trump tax cuts were implemented, public companies spent nearly $1 
trillion in stock buybacks, rather than investing in research and 
development, increasing worker wages, or shoring up their bottom lines 
to make sure they could weather times of crisis.
  According to the Center on Budget and Policy Priorities, Trump's tax 
plan gave the top 400 highest income taxpayers an additional $15 
million per year. Compare this to the $2.8 million the average college 
graduate will earn in their lifetime.
  This amendment absolutely and completely ignores the harm done to 
hardworking Americans and focuses on alleged harm to the large 
corporations. This amendment suggests our Nation's largest companies 
should not be paying their fair share, while American workers are 
forced to pay for Republicans' corporate handouts.
  Madam Speaker, I urge my colleagues to reject this amendment, and I 
reserve the balance of my time.
  Mr. BURGESS. Madam Speaker, I yield myself the balance of my time.
  Look, I am not enthusiastic about Congress forcing disclosure of 
immaterial information. But if we are going to do it, if we are going 
to do it, then, at the very least, we should be honest. And to the 
extent tax increases are going to harm the company's ability to invest 
in its workers and invest in itself, we should disclose that as well.
  Look, there was a time where corporate inversions were a big problem 
in this country. You haven't heard of corporate inversions since 
December of 2017, and the reason was because the Tax Cuts and Jobs Act 
made it unnecessary for companies to take their dollars and their jobs 
overseas. So now those dollars and those jobs stay for American 
workers.

  After the passage of the American Tax Cuts and Jobs Act, actual 
revenues to the Treasury rose. And had it not been for the imposition 
of the pandemic, those tax cuts would have been paid for because the 
Congressional Budget Office assigned a very anemic rate of growth to 
their projections when they cited the CBO score prior to that bill's 
passage.
  This is an important concept. If we are going to level immaterial 
information into a company's disclosures, let's disclose what happens 
when Congress applies additional tax rates to those companies as well. 
It is the right thing to do.
  I urge my colleagues to vote for this amendment. It is the only thing 
that can make the underlying bill perhaps make a little more sense.
  Madam Speaker, I yield back the balance of my time.
  Ms. WATERS. Madam Speaker, I yield myself the balance of my time.
  Mr. Burgess' amendment is a gimmick intended to distract from the 
important goals of this package. It insinuates that corporations should 
not be paying their fair share, while hardworking taxpayers foot the 
bill. So I urge my colleagues to join me in rejecting Mr. Burgess' 
amendment.
  Madam Speaker, I yield back the balance of my time.

[[Page H2847]]

  The SPEAKER pro tempore. Pursuant to House Resolution 473, the 
previous question is ordered on the amendment offered by the gentleman 
from Texas (Mr. Burgess).
  The question is on the amendment.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. BURGESS. Madam Speaker, on that I demand the yeas and nays.
  The SPEAKER pro tempore. Pursuant to section 3(s) of House Resolution 
8, the yeas and nays are ordered.
  Pursuant to clause 8 of rule XX, further proceedings on this question 
are postponed.


         Amendments En Bloc Offered by Ms. Waters of California

  Ms. WATERS. Madam Speaker, pursuant to section 4 of House Resolution 
473, I offer amendments en bloc.
  The SPEAKER pro tempore. The Clerk will designate the amendments en 
bloc.
  Amendments en bloc 1 consisting of amendment Nos. 2, 3, 5, 6, 7, and 
9 printed in House Report 117-59, offered by Ms. Waters of California:


              amendment no. 2 offered by mrs. axne of iowa

       Add at the end the following:

               TITLE VI--WORKFORCE INVESTMENT DISCLOSURE

     SEC. 601. SHORT TITLE.

       This title may be cited as the ``Workforce Investment 
     Disclosure Act of 2021''.

     SEC. 602. FINDINGS.

       Congress finds the following:
       (1) One of the keys to the 20th century post-war economic 
     success of the United States was the ability to prepare 
     workers over the course of their lives for success through 
     multiple sectors across society. Unfortunately, during the 
     several decades preceding the date of enactment of this Act, 
     there has been a shift in business norms and in society. 
     While Congress recognizes that the technology and job skills 
     required for some jobs has changed dramatically, the private 
     and public partnership to hire workers at different education 
     levels and invest in them for the long-term is broken.
       (2) Available data from the 10-year period preceding the 
     date of enactment of this Act suggests that businesses are 
     investing less in worker training during that time period, 
     not more.
       (3) In the wake of the 2008 global financial crisis, there 
     was a well-documented decline in overall business investment. 
     That decline coincides with the wage polarization of workers 
     and an increase in spending on share buybacks and dividends, 
     leading several researchers to conclude that companies are 
     de-emphasizing investment at the expense of increasing 
     returns for shareholders. The onset of a global pandemic may 
     make that trend worse, especially with respect to investments 
     in workers.
       (4) As part of the overall decline in investment described 
     in paragraph (3), publicly traded companies are being 
     provided with incentives to prioritize investments in 
     physical assets over investments in their workforces, meaning 
     that those companies are investing in robots instead of 
     individuals. In fact, there are already signs that automation 
     has increased during the COVID-19 pandemic.
       (5) More than ever, the Federal Government, through company 
     disclosure practices, needs to understand exactly how 
     companies are investing in their workers. Over the several 
     months preceding the date of enactment of this Act, companies 
     across the United States have taken extreme actions to adapt 
     and respond to evolving workforce challenges presented by 
     COVID-19.
       (6) JUST Capital has been tracking the responses of the 
     Standard and Poor's 100 largest public companies to their 
     workers and has found wide variation in the policies 
     implemented, as well as with respect to the disclosure of 
     those policies. Through different responses to their 
     workforces, from layoffs to workplace safety to paid leave, 
     the COVID-19 pandemic is exposing the myriad ways that 
     workforce management practices of companies pose operational 
     and reputational risks for short- and long-term financial 
     performance.
       (7) Even before the COVID-19 pandemic, there was a growing 
     body of research establishing a relationship between 
     measurable workforce management, which is the way that 
     companies manage their employees, and firm performance. In a 
     study of 2,000 large companies, Harvard Law School's Labor 
     and Work Life Program found that forward-thinking workforce 
     policies that prioritize workers, such as how companies 
     train, retain, and pay their workers, are correlated with 
     long-term financial performance.
       (8) Disclosure of workforce management policies should be 
     part of a Government-wide economic recovery strategy. Just as 
     a set of generally accepted accounting principles (commonly 
     known as ``GAAP'') was urgently adopted after the Great 
     Depression, standardized, comparable metrics of workforce 
     disclosure requirements in the context of the COVID-19 
     pandemic are critical for investors to accurately measure and 
     project company performance, both in the present and in the 
     future.
       (9) Because many companies already track workforce metrics 
     internally, moving towards a transparent disclosure regime 
     would allow investors to better judge whether companies are 
     managing risks and making the investments in their workforces 
     that are needed for long-term growth.
       (10) Businesses increasingly rely on workforce innovation 
     and intellectual capital for competitiveness. Workplace 
     benefits, particularly paid sick leave, medical leave, and 
     flexible work arrangements, critically support employee 
     mental and physical well-being.
       (11) Race- and gender-based workplace discrimination have 
     been tied to negative health outcomes, as well as lower 
     productivity, trust, morale, and satisfaction and higher 
     rates of absenteeism and turnover. Organizational reporting 
     on practices to reduce discrimination can increase employee 
     job satisfaction, performance, and engagement.
       (12) According to the Centers for Disease Control and 
     Prevention, work-related stress is the leading occupational 
     health risk and, per the American Institute of Stress, job 
     stress costs United States industry more than 
     $300,000,000,000 per year in accidents, absenteeism, employee 
     turnover, diminished productivity, and medical, legal, and 
     insurance costs.
       (13) Employee health and well-being is a key asset to 
     delivering long-term value, with 80 percent of public 
     companies that took concrete actions on health and well-being 
     having seen larger improvements in financial performance.
       (14) Organizational well-being interventions can create 
     cost savings of up to 10 dollars for every dollar invested. 
     Specifically, for every dollar that employers spend on 
     workplace disease prevention and well-being programs, there 
     is a $3.27 reduction in employee medical costs and a $2.73 
     reduction in absenteeism costs. Employers that implement 
     workplace health promotion programs have seen reductions in 
     sick leave, health plan costs, and workers' compensation and 
     disability insurance costs of approximately 25 percent.
       (15) The Centers for Disease Control and Prevention has 
     found that preventable chronic conditions are a major 
     contributor to insurance premium and employee medical claim 
     costs, which are at an all-time high, and a Milken Institute 
     study shows that employers paid $2,600,000,000,000 in 2016 
     for the indirect costs of employee chronic disease due to 
     work absences, lost wages, and reduced economic productivity.
       (16) The COVID-19 pandemic has severely impacted employee 
     physical, mental, and emotional well-being by increasing 
     stress, depression, burnout, and mortality rates of chronic 
     disease and by reducing work-life balance and financial 
     security, with these challenges likely to persist due to 
     uncertainty and instability even as employees return to work. 
     Before the COVID-19 pandemic, but especially in the face of 
     that pandemic, employers that advance policies and practices 
     that support workforce health, safety, and well-being are 
     likely to outperform competitors and benefit from lower 
     costs.

     SEC. 603. DISCLOSURES RELATING TO WORKFORCE MANAGEMENT.

       Section 13 of the Securities Exchange Act of 1934 (15 
     U.S.C. 78m), as amended by section 502, is further amended by 
     adding at the end the following:
       ``(w) Disclosures Relating to Workforce Management.--
       ``(1) Definition.--In this subsection, the term `contingent 
     worker' includes an individual performing work in the usual 
     course of business on a temporary basis (including through a 
     labor intermediary, including an individual or entity that 
     supplies an employer with workers to perform labor) or as an 
     independent contractor.
       ``(2) Regulations.--Not later than 2 years after the date 
     of enactment of this subsection, the Commission, in 
     consultation with the Secretary of Labor, the Secretary of 
     Commerce, the Secretary of Treasury, and the Attorney 
     General, shall promulgate regulations that require each 
     issuer required to file an annual report under subsection (a) 
     or section 15(d) to disclose in that report information 
     regarding workforce management policies, practices, and 
     performance with respect to the issuer.
       ``(3) Rules.--Consistent with the requirement under 
     paragraph (4), each annual report filed with the Commission 
     in accordance with the regulations promulgated under 
     paragraph (2) shall include disclosure of the following with 
     respect to the issuer filing the report for the year covered 
     by the report:
       ``(A) Workforce demographic information, including--
       ``(i) the number of full-time employees, the number of 
     part-time employees, and the number of contingent workers 
     (including temporary and contract workers) with respect to 
     the issuer, which shall include demographic information with 
     respect to those categories of individuals, including 
     information regarding race, ethnicity, and gender;
       ``(ii) any policies or practices of the issuer relating to 
     subcontracting, outsourcing, and insourcing individuals to 
     perform work for the issuer, which shall include demographic 
     information with respect to those individuals, including 
     information regarding race, ethnicity, and gender; and
       ``(iii) whether the percentage of contingent workers with 
     respect to the issuer has changed, including temporary and 
     contract

[[Page H2848]]

     workers, as compared with the previous annual report filed by 
     the issuer under this subsection.
       ``(B) Workforce stability information, including 
     information about the voluntary turnover or retention rate, 
     the involuntary turnover rate, the internal hiring rate, and 
     the internal promotion rate, as well as information about 
     workers who transition between employee and contingent 
     workers, and the horizontal job change rate by quintile and 
     demographic information.
       ``(C) Workforce composition, including--
       ``(i) data on diversity (including racial, ethnic, self-
     reported sexual orientation, and gender composition) for 
     senior executives and other individuals in the workforce; and
       ``(ii) any policies, audits, and programming expenditures 
     relating to diversity.
       ``(D) Workforce skills and capabilities, including--
       ``(i) information about training and cross-training of 
     employees and contingent workers by quintile and demographic 
     information, distinguishing between compliance training, 
     career development training, job performance or technical 
     training, and training tied to recognized postsecondary 
     credentials;
       ``(ii) average number of hours of training for each 
     employee and contingent worker;
       ``(iii) total spending on training for all employees and 
     contingent workers;
       ``(iv) average spending per employee or contingent worker;
       ``(v) training utilization rates; and
       ``(vi) whether completion of training opportunities 
     translates into value added benefit for workers, as 
     determined by wage increases or internal promotions.
       ``(E) Workforce health, safety, and well-being, including 
     information regarding--
       ``(i) the frequency, severity, and lost time due to 
     injuries, physical and mental illness, and fatalities;
       ``(ii) the scope, frequency, and total expenditure on 
     workplace health, safety, and well-being programs;
       ``(iii) the total dollar value of assessed fines under the 
     Occupational Safety and Health Act of 1970 (29 U.S.C. 651 et 
     seq.);
       ``(iv) the total number of actions brought under section 13 
     of the Occupational Safety and Health Act of 1970 (29 U.S.C. 
     662) to prevent imminent dangers;
       ``(v) the total number of actions brought against the 
     issuer under section 11(c) of the Occupational Safety and 
     Health Act of 1970 (29 U.S.C. 660(c));
       ``(vi) any findings of workplace harassment or workplace 
     discrimination during the 5 fiscal year period of the issuer 
     preceding the fiscal year in which the report is filed; and
       ``(vii) communication channels and grievance mechanisms in 
     place for employees and contingent workers.
       ``(F) Workforce compensation and incentives, including 
     information regarding--
       ``(i) total workforce costs, including salaries and wages, 
     health benefits, other ancillary benefit costs, and pension 
     costs;
       ``(ii) workforce benefits, including paid leave, health 
     care, child care, and retirement, including information 
     regarding benefits that are provided--

       ``(I) to full-time employees and not to part-time 
     employees; or
       ``(II) to employees and not to contingent workers;

       ``(iii) total contributions made to unemployment insurance 
     by the issuer, how many employees to whom those contributions 
     apply, and the total amount paid in unemployment compensation 
     to individuals who were laid off by the issuer;
       ``(iv) policies and practices regarding how performance, 
     productivity, equity, and sustainability are considered when 
     setting pay and making promotion decisions; and
       ``(v) policies and practices relating to any incentives and 
     bonuses provided to employees and any policies or practices 
     designed to counter any risks created by such incentives and 
     bonuses.
       ``(G) Workforce recruiting and needs, including--
       ``(i) the number of new jobs created, seeking to be filled, 
     and filled, disaggregated based on classification status;
       ``(ii) the share of new jobs that require a bachelor's 
     degree or higher;
       ``(iii) information regarding the quality of hire for jobs 
     described in clause (i); and
       ``(iv) the retention rate for individuals hired to fill the 
     jobs described in clause (i).
       ``(H) Workforce engagement and productivity, including 
     information regarding policies and practices of the issuer 
     relating to--
       ``(i) engagement, productivity, and mental well-being of 
     employees and contingent workers, as determined in 
     consultation with the Department of Labor; and
       ``(ii) freedom of association and work-life balance 
     initiatives, including flexibility and the ability of the 
     workforce to work remotely, as determined in consultation 
     with the Department of Labor.
       ``(4) Disaggregation of information.--To the maximum extent 
     feasible, the information described in paragraph (3) shall be 
     disaggregated by--
       ``(A) the workforce composition described in subparagraph 
     (C)(i) of that paragraph;
       ``(B) wage quintiles of the employees of the issuer for the 
     year covered by the applicable annual report; and
       ``(C) the employment status of individuals performing 
     services for the issuer, including whether those individuals 
     are full-time employees, part-time employees, or contingent 
     workers.
       ``(5) Treatment of emerging growth companies.--The 
     Commission may exempt emerging growth companies from any 
     disclosure required under subparagraph (D), (E), (F), (G), or 
     (H) of paragraph (3) if the Commission determines that such 
     an exemption is necessary or appropriate in the public 
     interest.
       ``(6) False or misleading statements.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     it shall be unlawful for any person, in any report or 
     document filed under this subsection, to make or cause to be 
     made any untrue statement of a material fact or omit to state 
     a material fact required to be stated in the report or 
     document or necessary to make the statement made, in the 
     light of the circumstances under which it is made, not 
     misleading.
       ``(B) Exception.--A person shall not be liable under 
     subparagraph (A) if the person shows that the person had, 
     after reasonable investigation, reasonable ground to believe, 
     and did believe, at the time the applicable statement was 
     made, that the statement was true and that there was no 
     omission to state a material fact necessary to make the 
     statement made, in the light of the circumstances under which 
     it is made, not misleading.
       ``(C) No private right of action.--Nothing in this 
     paragraph may be construed as creating a private right of 
     action.
       ``(7) Exemption.--This subsection shall not apply to an 
     investment company registered under section 8 of the 
     Investment Company Act of 1940 (15 U.S.C. 80a-8).''.

     SEC. 604. BACKSTOP.

       (a) Definitions.--In this section--
       (1) the term ``Commission'' means the Securities and 
     Exchange Commission;
       (2) the term ``covered issuer'' means an issuer that is 
     required to file an annual report under section 13(a) or 
     section 15(d) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78m(a), 78o(d)); and
       (3) the term ``issuer'' has the meaning given the term in 
     section 3(a) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78c(a)).
       (b) Compliance.--If, as of the date that is 2 years after 
     the date of enactment of this Act, the Commission has not 
     promulgated the regulations required under subsection (w) of 
     section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 
     78m), as added by section 603, a covered issuer, during the 
     period beginning on that date and ending on the date on which 
     the Commission promulgates those regulations, shall be deemed 
     to be in compliance with such subsection (w) if disclosures 
     set forth in the annual report of the covered issuer satisfy 
     the public disclosure standards of the International 
     Organization for Standardization's ISO 30414, or any 
     successor standards for external workforce reporting, as 
     supplemented or adjusted by rules, guidance, or other 
     comments from the Commission.

     SEC. 605. SEC STUDY.

       (a) Definitions.--In this section, the terms ``Commission'' 
     and ``issuer'' have the meanings given those terms in section 
     604(a).
       (b) Study.--The Commission shall conduct a study about the 
     value to investors of--
       (1) information about the human rights commitments of 
     issuers required to file annual reports under section 13(a) 
     of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a)), 
     including information about any principles used to evaluate 
     risk, constituency consultation processes, and supplier due 
     diligence; and
       (2) with respect to issuers required to file annual reports 
     under section 13(a) of the Securities Exchange Act of 1934 
     (15 U.S.C. 78m(a)), information about--
       (A) violations of the Fair Labor Standards Act of 1938 (29 
     U.S.C. 201 et seq.) by those issuers;
       (B) violations of worker misclassification by those 
     issuers;
       (C) surveys regarding employee satisfaction, well-being, 
     and engagement;
       (D) the number and overall percentage of quality jobs, as 
     determined by compensation above median wage and 
     comprehensive employer-provided benefits; and
       (E) information about workforce investment trends, as 
     determined by at least a 3-year time period.
       (c) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Commission shall submit to 
     Congress a report that contains the results of the study 
     required to be conducted under subsection (b), with 
     recommendations for additional disclosure regulations based 
     on the findings, and any actions the Commission plans to take 
     to enhance disclosures based on the findings.


         Amendment No. 3 offered by ms. lois frankel of florida

       Add at the end the following:

      TITLE VI--PREVENTING AND RESPONDING TO WORKPLACE HARASSMENT

     SEC. 601. SEC FILINGS AND MATERIAL DISCLOSURES AT PUBLIC 
                   COMPANIES.

       (a) Definitions.--In this section--
       (1) the term ``Form 10-K'' means the form described in 
     section 249.310 of title 17, Code of Federal Regulations, or 
     any successor regulation; and
       (2) the term ``issuer'' has the meaning given the term in 
     section 3(a) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78c(a)).
       (b) Findings.--Congress finds that--
       (1) shareholders and the public should know whether 
     corporations--
       (A) are expending company funds to resolve, settle, or 
     litigate claims of workplace harassment, including sexual 
     harassment; and

[[Page H2849]]

       (B) along with the executives and managers of those 
     corporations--
       (i) are complying with prohibitions against workplace 
     harassment, including sexual harassment; and
       (ii) facilitate a culture of silence, disrespect, 
     intimidation, and abuse that negatively impacts the health 
     and safety of the workers of those corporations and the value 
     of those corporations; and
       (2) the requirements of this section will--
       (A) establish necessary transparency and accountability; 
     and
       (B) provide an incentive for corporations to--
       (i) promptly address workplace harassment, including sexual 
     harassment, as that misconduct occurs; and
       (ii) foster a culture in which workplace harassment is not 
     protected and does not occur.
       (c) Information Required.--Not later than 1 year after the 
     date of enactment of this Act, the Securities and Exchange 
     Commission shall promulgate a regulation that requires any 
     issuer that is required to submit an annual report using Form 
     10-K to include in any such submission--
       (1) during the period covered by the submission--
       (A) with respect to workplace harassment, including sexual 
     harassment, and retaliation for reporting, resisting, 
     opposing, or assisting in the investigation of workplace 
     harassment--
       (i) the number of settlements reached by the issuer as a 
     signatory or when the issuer is a beneficiary of a release of 
     claims; and
       (ii) whether any judgments or awards (including awards 
     through arbitration or administrative proceedings) were 
     entered against the issuer in part or in whole, or any 
     payments made in connection with a release of claims; and
       (B) the total amount paid by the issuer or another party as 
     a result of--
       (i) the settlements described in subparagraph (A)(i); and
       (ii) the judgments described in subparagraph (A)(ii); and
       (2) information regarding whether, in the aggregate, 
     including the period covered by the submission, there have 
     been three or more settlements reached by, or judgments 
     against, the issuer with respect to workplace harassment, 
     including sexual harassment, or retaliation for reporting, 
     resisting, opposing, or assisting in the investigation of 
     workplace harassment that relate to a particular individual 
     employed by the issuer, without identifying that individual 
     by name.

          amendment no. 5 offered by mr. himes of connecticut

       Add at the end the following:

                   TITLE VI--CYBERSECURITY DISCLOSURE

     SEC. 601. SHORT TITLE.

       This title may be cited as the ``Cybersecurity Disclosure 
     Act of 2021''.

     SEC. 602. CYBERSECURITY TRANSPARENCY.

       The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 
     is amended by inserting after section 14B (15 U.S.C. 78n-2) 
     the following:

     ``SEC. 14C. CYBERSECURITY TRANSPARENCY.

       ``(a) Definitions.--In this section--
       ``(1) the term `cybersecurity' means any action, step, or 
     measure to detect, prevent, deter, mitigate, or address any 
     cybersecurity threat or any potential cybersecurity threat;
       ``(2) the term `cybersecurity threat'--
       ``(A) means an action, not protected by the First Amendment 
     to the Constitution of the United States, on or through an 
     information system that may result in an unauthorized effort 
     to adversely impact the security, availability, 
     confidentiality, or integrity of an information system or 
     information that is stored on, processed by, or transiting an 
     information system; and
       ``(B) does not include any action that solely involves a 
     violation of a consumer term of service or a consumer 
     licensing agreement;
       ``(3) the term `information system'--
       ``(A) has the meaning given the term in section 3502 of 
     title 44, United States Code; and
       ``(B) includes industrial control systems, such as 
     supervisory control and data acquisition systems, distributed 
     control systems, and programmable logic controllers;
       ``(4) the term `NIST' means the National Institute of 
     Standards and Technology; and
       ``(5) the term `reporting company' means any company that 
     is an issuer--
       ``(A) the securities of which are registered under section 
     12; or
       ``(B) that is required to file reports under section 15(d).
       ``(b) Requirement To Issue Rules.--Not later than 360 days 
     after the date of enactment of this section, the Commission 
     shall issue final rules to require each reporting company, in 
     the annual report of the reporting company submitted under 
     section 13 or section 15(d) or in the annual proxy statement 
     of the reporting company submitted under section 14(a)--
       ``(1) to disclose whether any member of the governing body, 
     such as the board of directors or general partner, of the 
     reporting company has expertise or experience in 
     cybersecurity and in such detail as necessary to fully 
     describe the nature of the expertise or experience; and
       ``(2) if no member of the governing body of the reporting 
     company has expertise or experience in cybersecurity, to 
     describe what other aspects of the reporting company's 
     cybersecurity were taken into account by any person, such as 
     an official serving on a nominating committee, that is 
     responsible for identifying and evaluating nominees for 
     membership to the governing body.
       ``(c) Cybersecurity Expertise or Experience.--For purposes 
     of subsection (b), the Commission, in consultation with NIST, 
     shall define what constitutes expertise or experience in 
     cybersecurity using commonly defined roles, specialties, 
     knowledge, skills, and abilities, such as those provided in 
     NIST Special Publication 800-181, entitled `National 
     Initiative for Cybersecurity Education (NICE) Cybersecurity 
     Workforce Framework', or any successor thereto.''.


            amendment no. 6 offered by mr. meeks of new york

       Add at the end the following:

            TITLE VI--DATA RELATING TO DIVERSITY DISCLOSURE

     SEC. 601. SHORT TITLE.

       This title may be cited as the ``Improving Corporate 
     Governance Through Diversity Act of 2021''.

     SEC. 602. SUBMISSION OF DATA RELATING TO DIVERSITY BY 
                   ISSUERS.

       Section 13 of the Securities Exchange Act of 1934 (15 
     U.S.C. 78m), as amended by section 502, is further amended by 
     adding at the end the following:
       ``(w) Submission of Data Relating to Diversity.--
       ``(1) Definitions.--In this subsection--
       ``(A) the term `executive officer' has the meaning given 
     the term in section 230.501(f) of title 17, Code of Federal 
     Regulations, as in effect on the date of enactment of this 
     subsection; and
       ``(B) the term `veteran' has the meaning given the term in 
     section 101 of title 38, United States Code.
       ``(2) Submission of disclosure.--Each issuer required to 
     file an annual report under subsection (a) shall disclose in 
     any proxy statement and any information statement relating to 
     the election of directors filed with the Commission the 
     following:
       ``(A) Demographic data, based on voluntary self-
     identification, on the racial, ethnic, gender identity, and 
     sexual orientation composition of--
       ``(i) the board of directors of the issuer;
       ``(ii) nominees for the board of directors of the issuer; 
     and
       ``(iii) the executive officers of the issuer.
       ``(B) The status of any member of the board of directors of 
     the issuer, any nominee for the board of directors of the 
     issuer, or any executive officer of the issuer, based on 
     voluntary self-identification, as a veteran.
       ``(C) Whether the board of directors of the issuer, or any 
     committee of that board of directors, has, as of the date on 
     which the issuer makes a disclosure under this paragraph, 
     adopted any policy, plan, or strategy to promote racial, 
     ethnic, and gender diversity among--
       ``(i) the board of directors of the issuer;
       ``(ii) nominees for the board of directors of the issuer; 
     or
       ``(iii) the executive officers of the issuer.
       ``(3) Alternative submission.--In any 1-year period in 
     which an issuer required to file an annual report under 
     subsection (a) does not file with the Commission a proxy 
     statement or an information statement relating to the 
     election of directors, the issuer shall disclose the 
     information required under paragraph (2) in the first annual 
     report of issuer that the issuer submits to the Commission 
     after the end of that 1-year period.
       ``(4) Annual report.--Not later than 18 months after the 
     date of enactment of this subsection, and annually 
     thereafter, the Commission shall submit to the Committee on 
     Banking, Housing, and Urban Affairs of the Senate and the 
     Committee on Financial Services of the House of 
     Representatives, and publish on the website of the 
     Commission, a report that analyzes the information disclosed 
     under paragraphs (2) and (3) and identifies any trends with 
     respect to such information.
       ``(5) Best practices.--
       ``(A) In general.--The Director of the Office of Minority 
     and Women Inclusion of the Commission shall, not later than 3 
     years after the date of enactment of this subsection, and 
     every 3 years thereafter, publish best practices for 
     compliance with this subsection.
       ``(B) Comments.--The Director of the Office of Minority and 
     Women Inclusion of the Commission may, pursuant to subchapter 
     II of chapter 5 of title 5, United States Code, solicit 
     public comments related to the best practices published under 
     subparagraph (A).''.

     SEC. 603. DIVERSITY ADVISORY GROUP.

       (a) Definitions.--For the purposes of this section:
       (1) Advisory group.--The term ``Advisory Group'' means the 
     Diversity Advisory Group established under subsection (b).
       (2) Commission.--The term ``Commission'' means the 
     Securities and Exchange Commission.
       (3) Issuer.--The term ``issuer'' has the meaning given the 
     term in section 3(a) of the Securities Exchange Act of 1934 
     (15 U.S.C. 78c(a)).
       (b) Establishment.--The Commission shall establish a 
     Diversity Advisory Group, which shall be composed of 
     representatives from--
       (1) the Federal Government and State and local governments;
       (2) academia; and
       (3) the private sector.
       (c) Study and Recommendations.--The Advisory Group shall--

[[Page H2850]]

       (1) carry out a study that identifies strategies that can 
     be used to increase gender identity, racial, ethnic, and 
     sexual orientation diversity among members of boards of 
     directors of issuers; and
       (2) not later than 270 days after the date on which the 
     Advisory Group is established, submit to the Commission, the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate, and the Committee on Financial Services of the House 
     of Representatives a report that--
       (A) describes any findings from the study conducted under 
     paragraph (1); and
       (B) makes recommendations regarding strategies that issuers 
     could use to increase gender identity, racial, ethnic, and 
     sexual orientation diversity among board members.
       (d) Annual Report.--Not later than 1 year after the date on 
     which the Advisory Group submits the report required under 
     subsection (c)(2), and annually thereafter, the Commission 
     shall submit to the Committee on Banking, Housing, and Urban 
     Affairs of the Senate and the Committee on Financial Services 
     of the House of Representatives a report that describes the 
     status of gender identity, racial, ethnic, and sexual 
     orientation diversity among members of the boards of 
     directors of issuers.
       (e) Public Availability of Reports.--The Commission shall 
     make all reports of the Advisory Group available to issuers 
     and the public, including on the website of the Commission.
       (f) Inapplicability of Federal Advisory Committee Act.--The 
     Federal Advisory Committee Act (5 U.S.C. App.) shall not 
     apply with respect to the Advisory Group or the activities of 
     the Advisory Group.


          Amendment No. 7 offered by Mr. Phillips of Minnesota

       Page 9, after line 10, insert the following:

     SEC. 105. STUDY ON SHAREHOLDER COLLECTIVE ACTION.

       Not later than 1 year after the date of the enactment of 
     this Act, the Securities and Exchange Commission shall--
       (1) conduct a study on--
       (A) the emergence, viability, and significance of 
     coalitions of shareholders who wish to preserve and promote 
     critical employment and ESG standards;
       (B) whether and to what extent shareholder collective 
     action--
       (i) occurs; and
       (ii) has implications with respect to filing requirements 
     under the Securities Exchange Act of 1934 (15 U.S.C. 78a et 
     seq.); and
       (C) any possible anticompetitive activities associated with 
     shareholder collective action; and
       (2) submit to Congress a report that includes--
       (A) the findings of the study conducted under paragraph 
     (1);
       (B) guidance, which may include an approved list, of 
     shareholder engagement activities that are not considered to 
     involve questions of corporate control; and
       (C) recommendations on regulatory safe harbors for 
     engagement with respect to sustainability guardrails and 
     similar restrictions on portfolio company conduct with a goal 
     of--
       (i) preserving economic justice, environmental systems, and 
     social institutions; and
       (ii) otherwise protecting the common interests of corporate 
     shareholders and stakeholders.


           Amendment No. 9 offered by Ms. Wexton of Virginia

       Add at the end the following:

                TITLE VI--UYGHUR FORCED LABOR DISCLOSURE

     SEC. 601. SHORT TITLE.

       This division may be cited as the ``Uyghur Forced Labor 
     Disclosure Act''.

     SEC. 602. DISCLOSURE OF CERTAIN ACTIVITIES RELATING TO THE 
                   XINJIANG UYGHUR AUTONOMOUS REGION.

       (a) In General.--Section 13 of the Securities Exchange Act 
     of 1934 (15 U.S.C. 78m), as amended by section 502, is 
     further amended by adding at the end the following:
       ``(w) Disclosure of Certain Activities Relating to the 
     Xinjiang Uyghur Autonomous Region.--
       ``(1) In general.--Not later than the end of the 180-day 
     period beginning on the date of enactment of this subsection, 
     the Commission shall issue rules to require each issuer 
     required to file an annual report under this section or 
     section 15(d) or a proxy statement under section 14 to 
     disclose in each such report or proxy statement whether, 
     during the period covered by the report or proxy statement--
       ``(A) the issuer or any affiliate of the issuer, directly 
     or indirectly, engaged with an entity or the affiliate of an 
     entity to import--
       ``(i) manufactured goods, including electronics, food 
     products, textiles, shoes, auto parts, polysilicon, and teas, 
     that are sourced from or through the XUAR;
       ``(ii) manufactured goods containing materials that are 
     sourced from or through the XUAR; or
       ``(iii) goods manufactured by an entity engaged in labor 
     transfers from the XUAR;
       ``(B) with respect to any goods or materials described 
     under subparagraph (A), whether the goods or material 
     originated in forced labor camps; and
       ``(C) with respect to each manufactured good or material 
     described under subparagraph (A)--
       ``(i) the nature and extent of the commercial activity 
     related to such good or material;
       ``(ii) the gross revenue and net profits, if any, 
     attributable to the good or material; and
       ``(iii) whether the issuer or the affiliate of the issuer 
     intends to continue with such importation.
       ``(2) Availability of information.--The Commission shall 
     make all information disclosed pursuant to this subsection 
     available to the public on the website of the Commission.
       ``(3) Reports.--
       ``(A) Annual report to congress.--The Commission shall--
       ``(i) conduct an annual assessment of the compliance of 
     issuers with the requirements of this subsection; and
       ``(ii) issue a report to Congress containing the results of 
     the assessment required under clause (i).
       ``(B) GAO report.--The Comptroller General of the United 
     States shall periodically evaluate and report to Congress on 
     the effectiveness of the oversight by the Commission of the 
     disclosure requirements under this subsection.
       ``(4) Definitions.--In this subsection:
       ``(A) Forced labor camp.--The term `forced labor camp' 
     means--
       ``(i) any entity engaged in the `mutual pairing assistance' 
     program which subsidizes the establishment of manufacturing 
     facilities in XUAR;
       ``(ii) any entity using convict labor, forced labor, or 
     indentured labor described under section 307 of the Tariff 
     Act of 1930 (19 U.S.C. 1307); and
       ``(iii) any other entity that the Commission determines is 
     appropriate.
       ``(B) XUAR.--The term `XUAR' means the Xinjiang Uyghur 
     Autonomous Region.''.
       (b) Repeal.--The amendment made by this section shall be 
     repealed on the earlier of--
       (1) the date that is 8 years after the date of the 
     enactment of this section; or
       (2) the date on which the President submits to Congress 
     (including the Office of the Law Revision Council) a 
     determination that the Government of the People's Republic of 
     China has ended mass internment, forced labor, and any other 
     gross violations of human rights experienced by Uyghurs, 
     Kazakhs, Kyrgyz, and members of other persecuted groups in 
     the Xinjiang Uyghur Autonomous Region.

  The SPEAKER pro tempore. Pursuant to House Resolution 473, the 
gentlewoman from California (Ms. Waters) and the gentleman from 
Michigan (Mr. Huizenga) each will control 10 minutes.
  The Chair recognizes the gentlewoman from California.

                              {time}  1345

  Ms. WATERS. Madam Speaker, I rise in support of the amendments en 
bloc, and I yield myself such time as I may consume.
  Madam Speaker, I rise in strong support of this en bloc package of 
Democratic amendments to H.R. 1187, the Corporate Governance 
Improvement and Investor Protection Act.
  These amendments include critical provisions offered by my 
colleagues, Representative Himes, Representative Axne, Representative 
Phillips, Representative Wexton, Representative Frankel, and 
Representative Meeks.
  These provisions strengthen H.R. 1187 by requiring public companies 
to disclose key information related to cybersecurity, corporate board 
diversity, human rights abuses, human capital management, and the ways 
companies are investing in and protecting their workforce.
  Investors, the true owners of public companies, need this information 
because of the significant effects they can have on the bottom lines 
and operations of the companies they are investing their hard-earned 
money in. Investors need this information to hold companies 
accountable.
  Madam Speaker, I urge my colleagues to support these important 
measures, and I reserve the balance of my time.
  Mr. HUIZENGA. Madam Speaker, I rise in opposition to the amendments 
en bloc, and I yield myself such time as I may consume.
  Madam Speaker, let's be honest. If the original bill wasn't bad 
enough, Democrats' en bloc amendments complete the picture. With this 
amendment, Democrats are packaging even more non-investment-relevant 
social priorities that only serve to feed protesters and dissidents 
with information to be used in naming and shaming companies.
  I had mentioned earlier that in some of the bills in this package, we 
have some potential impossibility of working with each other. There are 
others that don't belong in our committee.

[[Page H2851]]

Then there are other bills that don't make sense if we really, truly 
are trying to protect investors from fraud and trying to build capital 
in our country, which is the directive of the Securities and Exchange 
Commission.
  Let's look at some of the specific information companies would be 
required to disclose under these amendments and how it benefits 
everyday investors.
  Take the workforce and human capital management disclosure amendment, 
for example. How exactly is a company supposed to measure and disclose, 
in a comprehensible and comparable manner, ``employee engagement'' and 
``alignment with business strategy''?
  Additionally, how does disclosing the company's policies relating to 
``freedom of association and work-life balance initiatives'' help 
everyday investors evaluate the risks of investing in that company?
  My friends on the other side have been pretty adamantly opposed to 
Robinhood, but those who are looking to use Robinhood might actually 
like that work-life balance. That is kind of millennial type of 
language that is being used in here.
  This amendment might as well require companies to disclose their 
policy on dogs in the office and whether their canine coworkers are 
purebreds or mixed breed types of rescue dogs. This doesn't have 
relevance and materiality to investors.
  It is also worth highlighting an amendment that requires American 
companies to disclose whether the company or an affiliate of the 
company directly or indirectly engaged with an entity or the affiliate 
of an entity regarding the importation of not only goods from the 
Xinjiang Uighur Autonomous Region but also goods that have materials 
originally sourced from the XUAR.
  Well, this is a redo from last Congress, and now that Democrats have 
one-party control, their motives are clear. The bill requires companies 
to show if their affiliates are indirectly engaged with affiliates of 
certain companies.
  To put it simply, American companies would be required to disclose 
unknowable information and face securities fraud charges for any 
misstatements or omissions.
  Now, let's not have any doubt: This side of the aisle has been 
highlighting the Uighur situation for a very long time through bills, 
through amendments, through sanctions, advocating those and holding 
China and the CCP responsible.
  But, again, under this legislation, they will violate the law for 
trying to disclose unknowable information.
  Why would a company want to go public under that regime? And how does 
disclosing such indecipherable information help everyday investors make 
more informed investment decisions?
  Now, just to make sure my Democrat friends don't twist my words, like 
I said, I very much care about the Chinese Communist Party's human 
rights abuses. We need to be focused on that. I think many of the 
underlying concerns that motivate this legislation and amendment are 
important. But the public company disclosure regime is simply the wrong 
vehicle for addressing those concerns.
  The SEC's mission is to: one, protect investors from fraud; two, 
maintain fair, orderly, and efficient markets; and, three, facilitate 
capital formation. These packages of bills do not do that, and nothing 
in the SEC's mission looks remotely like enforcing foreign policy goals 
or labor law.
  Mary Jo White had pointed that out regarding the conflict minerals 
portion of the Dodd-Frank law. Once again, Democrats are more than 
comfortable with shoving the SEC into subject matter areas where they 
have zero expertise rather than getting the policy right.
  There are real downsides to this approach my colleagues are taking. 
Mandatory disclosure increases compliance costs. The more complicated 
and technical the information required to be reported in disclosures, 
the more specialized the attorneys and compliance experts a company 
needs to adhere to a law.
  If I need to spell that out for you, that is money that companies 
cannot spend on its workforce and investing in their business, in 
equipment, and in their wages, or returning money to everyday investors 
who have invested in those companies.

  Moreover, just to be clear, because my Democrat friends keep talking 
about how badly investors want this information, under the disclosure 
requirements in these amendments, everyday investors aren't the ones 
who benefit. Social activists, as well as compliance professionals--
that is, lawyers and accountants--are the ones who will reap the 
biggest reward under these amendments.
  We are helping the elite workforce with the bill and these 
amendments. Instead of helping investors participate in our capital 
markets and helping American workers, these amendments will leave 
everyday investors buried in disclosures that are, at most, 
tangentially related to investment.
  Meanwhile, smaller public companies with shoestring compliance 
budgets will have to delay raising wages for workers in order to 
reallocate that capital to hiring more lawyers.
  At its core, this amendment just heightens the key problem with the 
original bill. The additional disclosures will disincentivize private 
companies from going public, which will inhibit everyday investors, our 
constituents, from participating in our capital markets and will limit 
their choices of public companies to invest in.
  Let's not eliminate access and opportunities to everyday investors, 
especially when rich investors will still have access to investing in 
companies that have gone private or stayed private in response to these 
amendments.
  I think that is one of the things, Madam Speaker, that is getting 
lost in this. Those that have will continue to have those options. 
Those that are trying to build a future are going to get frozen out 
once again.
  For that reason, I oppose this amendment, and I reserve the balance 
of my time.
  Ms. WATERS. Madam Speaker, I yield 1 minute to the gentlewoman from 
Iowa (Mrs. Axne).
  Mrs. AXNE. Madam Speaker, in the last century, businesses have become 
much less reliant on physical assets and more reliant on their workers.
  In fact, virtually every business that I talk to says that the people 
are their most important asset. Yet, we have minimal information about 
the employees and what we are doing to invest in our workers.
  My amendment would address that by giving us more information from 
public companies about workforce training, pay, benefits, health and 
safety, and turnover and promotion rates. By the way, these are sets of 
data that are already being collected by most public companies.
  The pandemic, though, has only driven home how important it is for 
companies to make sure that their workers stay safe and healthy for 
their company's success. It is obvious that companies with workers who 
are more engaged and invested will do better, which is why investors 
want this information.
  My amendment would encourage better corporate practices by giving 
investors and the public the information they want about which 
companies are truly investing in their workers.
  Madam Speaker, I urge a ``yes'' vote.
  Mr. HUIZENGA. Madam Speaker, I am prepared to close, and I reserve 
the balance of my time.
  Ms. WATERS. Madam Speaker, I yield 1 minute to the gentleman from New 
York (Mr. Meeks).
  Mr. MEEKS. Madam Speaker, I thank Chairwoman Waters for her 
leadership on the Financial Services Committee.
  Today, I urge bipartisan support for H.R. 1187, including the passage 
of my amendment, the Improving Corporate Governance Through Diversity 
Act.
  As we continue these conversations about equity and closing the 
racial wealth gap, this amendment is a key component because it will 
empower investors with better data to drive diversity efforts in 
corporate America. This is precisely because investors recognize that 
profit, performance, and inclusive governance are logically 
intertwined.
  That is why my amendment, which I want to thank Representative 
Maloney and Representative Torres for working with me on, seeks to 
enhance the SEC's current diversity disclosure regime by requiring 
public companies to disclose race, ethnicity, gender identity, sexual 
orientation, and veteran

[[Page H2852]]

status on the boards and in the C-suites.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Ms. WATERS. Madam Speaker, I yield an additional 30 seconds to the 
gentleman from New York.
  Mr. MEEKS. Madam Speaker, the American economy cannot reach its full 
potential without fully redressing persistent barriers that have kept 
whole communities from being able to build wealth and share in 
opportunities of prosperity.
  Mr. HUIZENGA. Madam Speaker, I reserve the balance of my time.
  Ms. WATERS. Madam Speaker, I yield 1 minute to the gentlewoman from 
Florida (Ms. Lois Frankel).
  Ms. LOIS FRANKEL of Florida. Madam Speaker, I thank Representative 
Waters for her leadership on this issue.
  Madam Speaker, I want to highlight some language in this en bloc 
amendment that is very important to the working women of this country. 
The provision requires publicly traded companies to disclose the number 
and monetary amounts of settlements and judgments in connection with 
workplace harassment claims.
  This will not only improve transparency and accountability for public 
companies, but it will provide incentives for them to foster 
respectful, safe workplaces free from harassment and to make sure that 
there are consequences when workplace abuses occur.
  Here is the thing. Up to 80 percent of women have experienced some 
form of workplace harassment, and there are serious implications that 
often result: physical and mental health problems, career 
interruptions, and lower earnings. Enduring this kind of harassment at 
work can even discourage women from advancing their careers, which only 
makes the gender wage gap worse.
  All persons must have safe workplaces to reach their full potential, 
and investors should know more about the workplaces they are putting 
their money behind. Transparency should add motivation to employers to 
keep their employees safe, and that is good for everyone.

                              {time}  1400

  Mr. HUIZENGA. Madam Speaker, I yield myself such time as I may 
consume to close.
  Madam Speaker, this was claimed earlier by one of the authors that 
investors wanted this information, I believe was the quote.
  Well, I ask the question: If investors want this information, as 
claimed, then they can bring a vote to the shareholders to require 
these disclosures. Evidence, Madam Speaker, would dictate and show that 
precious few of these types of issues have actually been brought to 
shareholder meetings, where they are voted on. In the rare times that 
they have, even fewer have actually been approved.
  So, no, investors don't look at this information. They don't want 
this information, and they don't view it as material to the investment 
decisions that they are making.
  So you have to ask the question, then: Who is requiring or requesting 
this information? I suspect it is more about appeasing social 
activists. It is not about the workers and it is certainly not about 
the investors. This is about making sure that the virtue signaling that 
is required in today's corporate world--may I add, for large 
corporations, because there are plenty of small and medium-sized, even 
publicly traded companies that are bucking this.
  But for these large corporations who have massive, massive compliance 
departments that are chock-full of attorneys, chock-full of CPAs and 
others that are going to work through this, and they are going to hire 
their friends in the consulting world to make sure that they are 
dotting the I's and crossing the T's, that is who it is really about.
  Sadly, unfortunately, who ultimately ends up losing in that equation 
is the worker and the investor, our constituents.
  Madam Speaker, with that, I yield back the balance of my time.
  Ms. WATERS. Madam Speaker, I yield myself the balance of my time to 
close.
  I urge my colleagues to join me in standing up for our Nation's 
investors and workers to vote ``yes'' for these Democratic amendments.
  I do believe that Mr. Huizenga correctly described who they are 
working for. He just talked about how big these corporations are and 
how much they have to manage.
  Of course, prior to him, Mr. Burgess talked about, yes, the tax 
breaks that they receive, and they should receive more tax breaks. 
However, they are worried about these corporations and their ability to 
comply, despite the fact they have all of the accountants they need, 
they have all of the personnel they need, they have all of the 
management they need. They have everything that they need to be in 
compliance.
  We are simply saying it is time for them to disclose information that 
the investors have been asking and begging for.
  And, of course, they often refer to the retail investors. But the 
institutional investors must be included in this decision because they 
are the ones that are in control of the teachers and the firefighters 
and the workers on the front lines and all of that money that they are 
investing for them, and they have got to protect them. The way that you 
protect them is making sure that the investors understand how to make 
good decisions based on information.
  If the big corporations, with all that they have to be able to 
operate, do not give them this information, do not have this 
information, do not share this information, they are at a great 
disadvantage.
  And so I would simply ask my colleagues to understand whose side we 
are on. We are on the side of the retail investors and the 
institutional investors who are handling all of the money of our 
frontline workers who are investing for their retirement.
  I would ask for a ``yea'' vote on these en bloc amendments.
  Madam Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. Pursuant to House Resolution 473, the 
previous question is ordered on the amendments en bloc offered by the 
gentlewoman from California (Ms. Waters).
  The question is on the amendments en bloc.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Ms. WATERS. Madam Speaker, on that I demand the yeas and nays.
  The SPEAKER pro tempore. Pursuant to section 3(s) of House Resolution 
8, the yeas and nays are ordered.
  Pursuant to clause 8 of rule XX, further proceedings on this question 
are postponed.


                  Amendment No. 4 Offered by Mr. Hill

  The SPEAKER pro tempore (Mr. Blumenauer). It is now in order to 
consider amendment No. 4 printed in House Report 117-59.
  Mr. HILL. 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:
       Strike titles I through V and insert the following:

     SEC. 2. SEC STUDY ON ESG AND CLIMATE-RELATED DISCLOSURES.

       (a) Study.--
       (1) In general.--The Securities and Exchange Commission 
     shall carry out a study of all disclosure frameworks 
     described in paragraph (2) that any U.S.-listed public 
     company may use when making disclosures to investors, whether 
     voluntarily or pursuant to law.
       (2) Disclosure frameworks.--The disclosure frameworks 
     described in this paragraph are as follows:
       (A) Disclosure frameworks related to environmental, social, 
     and governance (``ESG'') metrics.
       (B) Disclosure frameworks related to the climate.
       (b) Report.--The Commission shall issue a report to the 
     Congress containing--
       (1) all findings and determinations made in carrying out 
     the study required under subsection (a)(1); and
       (2) a description of all inconsistencies between the 
     frameworks described under subsection (a)(2).
       (c) ESG and Climate Disclosure Rulemaking Contingent on 
     Study.--Issuers are not required to make any disclosures 
     related to ESG or the climate that were not required on the 
     date of enactment of this Act unless--
       (1) such disclosures are required by a rule of the 
     Commission; and
       (2) such rule is issued taking into account the finding and 
     determinations of the study required under subsection (a)(1).
  The SPEAKER pro tempore. Pursuant to House Resolution 473, the 
gentleman from Arkansas (Mr. Hill) and a

[[Page H2853]]

Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from Arkansas.
  Mr. HILL. Mr. Speaker, as I noted in our debate earlier today, I 
stand in opposition to the legislation en bloc offered by the majority, 
and that is why I am offering an amendment that replaces the entire 
underlying bill with a study to be conducted by the Securities and 
Exchange Commission.
  The amendment would require the SEC to summarize and describe any 
inconsistencies in the methodologies related to environmental, social, 
and governance metrics before--repeat, before--they mandate any type of 
disclosure from public companies.
  My amendment will provide us with much-needed information on the 
differences between the five or six standard setters, among many 
others, currently in the market. They all have different approaches and 
ways to measure climate and other ESG risks. This causes confusion, Mr. 
Speaker, and turmoil, both for the public companies trying to determine 
these metrics and issue their financials and for investors trying to 
understand what has been disclosed.
  As we have discussed during the general debate, H.R. 1187 is a 
compilation of five different bills. During this amendment debate, I 
want to focus particularly on the bills offered by the gentleman from 
California (Mr. Vargas) and the gentleman from Illinois (Mr. Casten).
  When we marked these bills up in the Financial Services Committee, I 
pointed out that even though Democrats believe these bills are in 
alignment, as they both address the need for climate-related 
disclosure, they are in tension with one another.
  For example, Congressman Vargas' bill suggests that a disclosure 
system is sufficient by providing an annual report describing the long-
term ESG strategy and ESG-related metrics, which presumably would 
include climate risk.
  On the other hand, Congressman Casten says that a disclosure should 
report the same metrics, but additionally needs to disclose the social 
and human impact of a company's actions, analyze how the company's 
reputation might be affected by climate, detail the board's oversight, 
and has a long list of statutory additions.
  The Democrats often say that we need to mandate measuring climate 
risk because this is science. But Deloitte & Touche reported that 
science has not agreed on the methodology for measuring climate risks, 
and even when companies try to measure these risks, the information 
isn't measured consistently, timely, and in a relevant way, increasing 
uncertainty.
  Mr. Speaker, I reserve the balance of my time.
  Ms. WATERS. Mr. Speaker, I claim time in opposition.
  The SPEAKER pro tempore. The gentlewoman from California is 
recognized for 5 minutes.
  Ms. WATERS. Mr. Speaker, I strongly oppose the amendment offered by 
Mr. Hill. This amendment would gut the entirety of H.R. 1187. 
Bizarrely, this amendment offered by my colleague has an odd focus on 
climate change, suggesting that we need more study about the financial 
risk of climate change. Let me be very clear: climate change is real. 
We cannot alter the Earth's orbit or the Moon's orbit or click our 
heels three times and wish for climate change to magically disappear.
  In fact, the impacts of climate change are already apparent and are 
affecting global financial markets. Unfortunately, studies show that 
market prices currently fail to factor in the risks of climate change 
to the tune of trillions of dollars.
  Mr. Hill's amendment would also allow companies to continue to engage 
in legally risky tax-avoidance schemes to funnel limitless amounts of 
corporate dark money into politics and to enrich CEOs while worker 
wages remain stagnant. This is precisely the information that investors 
want to know about the companies that they own.
  I urge my colleagues to reject this amendment. I reserve the balance 
of my time.
  Mr. HILL. Mr. Speaker, we are not in Kansas anymore, since we are 
using ``Wizard of Oz'' analogies. To put a finer point on it, we are 
not debating climate. We are debating the right way to disclose 
financial risk for climate, from climate.
  To put a finer point on it, a report released by the Governance & 
Accountability Institute features a breakdown of all the Standard & 
Poor's 500 publicly traded companies that are currently disclosing 
climate risk and which standard setter they are using.
  The outcome shows that 51 percent use one company, 14 percent use 
another, and 5 percent use another. Vastly different outcomes. And, in 
fact, the bill proposed by the majority dictates which one of those 
should be used, and it happens to be the one that only 5 percent of 
companies are currently using.

  So there are five or six of these different standard setters out 
there, and it is important for the commission to figure out which one 
of these makes the most sense before we mandate in a rulemaking.
  Bogging down these companies with additional, unclear, unwieldy 
disclosures just to prove a political point is not just unfair, it is 
expensive. It leads to increased litigation risk and hurts long-term 
capital formation. This is not how we should be operating as 
policymakers and precisely why I am offering this amendment to get the 
work done right up front before it turns into another government 
mandate.
  My amendment is simply good governance. It will replace the bill with 
a study of all disclosure frameworks related to the environment, social 
and governance metrics, as well as those particularly related to 
climate that any public company may use when making disclosures to our 
investors, whether voluntarily or pursuant to a statute. And it would 
analyze the differences and conflicting factors between the reporting 
frameworks. This information is what we need in Congress, and we should 
be able to review it before drafting, let alone voting on legislation 
that will lead to a mandated new disclosure framework.
  Mr. Speaker, my amendment is simply good governance that will replace 
the bill with a study, and I believe that is the right way to go. I 
urge my colleagues to support this.
  Mr. Speaker, I yield back the balance of my time.
  Ms. WATERS. Mr. Speaker, I yield myself the balance of my time to 
close.
  Mr. Hill's amendment would completely gut H.R. 1187 and would prevent 
investors from accessing critical environmental, social, and governance 
information that they need to make the best investment decisions 
possible and hold the companies they own accountable.
  I urge my colleagues to vote ``no'' on Mr. Hill's amendment, and I 
yield back the balance of my time.
  The SPEAKER pro tempore. Pursuant to House Resolution 473, the 
previous question is ordered on the amendment offered by the gentleman 
from Arkansas (Mr. Hill).
  The question is on the amendment.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. HILL. Mr. Speaker, on that I demand the yeas and nays.
  The SPEAKER pro tempore. Pursuant to section 3(s) of House Resolution 
8, the yeas and nays are ordered.
  Pursuant to clause 8 of rule XX, further proceedings on this question 
are postponed.

                              {time}  1415


                 Amendment No. 8 Offered by Ms. Schrier

  The SPEAKER pro tempore. It is now in order to consider amendment No. 
8 printed in House Report 117-59.
  Ms. SCHRIER. Mr. Speaker, I have an amendment at the desk made in 
order by the rule.
  The SPEAKER pro tempore. The Clerk will designate the amendment.
  The text of the amendment is as follows:
       Add at the end the following:

                        TITLE VI--OTHER MATTERS

     SEC. 601. STUDY AND REPORT ON SMALL BUSINESSES AND ESG 
                   DISCLOSURES.

       (a) In General.--Not later than 1 year after the date of 
     the enactment of this Act, the Securities and Exchange 
     Commission, in coordination with the Director of the Office 
     of the Advocate for Small Business Capital Formation and the 
     Investor Advocate of the Office of the Investor Advocate, 
     shall--
       (1) conduct a study on the issues small businesses face 
     with respect to complying with disclosure requirements 
     related to environmental, social, and governance metrics; and
       (2) submit a report to Congress that includes--
       (A) the results of the study required under paragraph (1); 
     and

[[Page H2854]]

       (B) recommendations with respect to small business 
     compliance with such disclosure requirements.
       (b) Definition of Small Business.--In this section, the 
     term ``small business'' has the meaning given the term 
     ``small business concern'' under section 3 of the Small 
     Business Act (15 U.S.C. 632).

  The SPEAKER pro tempore. Pursuant to House Resolution 473, the 
gentlewoman from Washington (Ms. Schrier) and a Member opposed each 
will control 5 minutes.
  The Chair recognizes the gentlewoman from Washington.
  Ms. SCHRIER. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, my amendment to this bill is very simple. It would 
ensure that this important legislation does not place undue burden on 
small businesses.
  In so many areas throughout my district, our Main Street businesses 
are just now finally getting back on their feet. They have faced 
unprecedented challenges during this past pandemic year. In fact, one 
small business owner in Auburn almost didn't apply for any Federal 
financial assistance because she was so overwhelmed by the potential 
paperwork.
  Even before the pandemic, small businesses were bogged down with 
paperwork and administrative burdens, things that can be easily handled 
by a large corporation but that really are too much of a burden and can 
put a Main Street shop out of business.
  When we implement this legislation, we should also understand what 
effect it will have on small businesses and make it as easy as possible 
for them to disclose this important information.
  That is why my amendment requires the Sustainable Finance Advisory 
Commission to study issues small businesses may face when complying 
with requirements of this bill and order recommendations to ease 
regulatory burdens for these businesses.
  As we move forward in creating transparency for large corporations, 
it is important that we do so without creating burdens that could 
really hamper the recovery of small businesses.
  This is a commonsense amendment, and I urge my colleagues to support 
its adoption.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HUIZENGA. Mr. Speaker, I claim the time in opposition to this 
amendment, although I am not opposed to it.
  The SPEAKER pro tempore. Without objection, the gentleman from 
Michigan is recognized for 5 minutes.
  There was no objection.
  Mr. HUIZENGA. Mr. Speaker, I appreciate the goals of this amendment, 
and I applaud my colleague from Washington. We should be concerned 
about the effects of this bill and ESG reporting on small businesses, 
and I would say that this is a step in the right direction.
  However, I don't believe this amendment actually goes far enough. The 
ranking member of the full committee submitted an amendment to the 
Rules Committee that would have exempted small businesses from the 
onerous and unnecessary requirements of this bill, and, sadly, that 
amendment was not made in order. I think that may have achieved the 
same goal in a certainly much more clear manner for the author.
  This bill will be particularly burdensome on small businesses that 
don't have the resources to pay all the expenses associated with 
complying with these disclosures, such as lawyers, accountants, and 
other ESG consultants.
  I know the chairwoman had mentioned that somehow my statements 
earlier and the statements of my colleagues were supportive of large 
business and their support of this. It is actually the exact opposite. 
I could really care less what the Fortune 50 think about this.
  I am concerned about that bottom 50. I am worried about those up-and-
coming companies that are going to have those precious resources sucked 
into more compliance that, again, does not have relevance or 
materiality to investors, nor is it actually requested by investors.
  But this bill is a prime example of Wall Street versus Main Street, 
and I commend my colleague for fighting for Main Street with this 
amendment.
  I am prepared to accept this amendment because I hope it will help 
small businesses.
  Ms. SCHRIER. Mr. Speaker, I thank my colleague for his commendation 
on the amendment.
  Mr. Speaker, I yield 2 minutes to the gentlewoman from California 
(Ms. Waters), the chairwoman of the House Committee on Financial 
Services.
  Ms. WATERS. Mr. Speaker, this amendment offered by Representative 
Schrier requires the SEC to work with the Office of the Advocate for 
Small Business Capital Formation and the Office of the Investor 
Advocate to study the issues smaller public companies may face in 
reporting ESG disclosures, and to make recommendations for the SEC to 
consider.
  Disclosures of ESG-related matters are critical to investors in 
markets, and it is imperative that public companies provide investors, 
the true owners of these companies, with this important information. 
However, it is just as important for us to ensure that public companies 
of all sizes are able to comply with these disclosure requirements.
  To address this, my colleague, Representative Schrier, has introduced 
an amendment that requires the SEC to work with the Office of the 
Advocate for Small Business Capital Formation and the Office of the 
Investor Advocate to study the issues that smaller public companies 
face in disclosing ESG matters, and to make recommendations for the SEC 
to tailor these disclosure requirements to assist smaller public 
companies.
  Ms. Schrier's amendment, along with Mr. Vargas' provision in H.R. 
1187, will help smaller public companies by ensuring that the SEC is 
factoring in the unique issues that smaller public companies face while 
also creating clear, consistent regulatory standards that reduce 
regulatory uncertainty, all while providing investors and markets with 
this critical information.
  Mr. HUIZENGA. Mr. Speaker, I continue to support this amendment, and 
I am happy to accept it.
  Mr. Speaker, I yield back the balance of my time.
  Ms. SCHRIER. Mr. Speaker, I urge my colleagues to support this 
amendment that is a commonsense amendment to support our local small 
businesses.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. Pursuant to House Resolution 473, the 
previous question is ordered on the amendment offered by the 
gentlewoman from Washington (Ms. Schrier).
  The question is on the amendment.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appear to have it.
  Ms. WATERS. Mr. Speaker, on that I demand the yeas and nays. The 
SPEAKER pro tempore. Pursuant to section 3(s) of House Resolution 8, 
the yeas and nays are ordered.
  Pursuant to clause 8 of rule XX, further proceedings on this question 
are postponed.


               Amendment No. 10 Offered by Ms. Plaskett.

  The SPEAKER pro tempore. It is now in order to consider amendment No. 
10 printed in House Report 117-59.
  Ms. PLASKETT. 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 41, line 8, insert ``means'' after `` `tax 
     jurisdiction' ''.
       Page 41, line 9, strike ``means''.
       Page 41, beginning line 9, strike ``or a jurisdiction that 
     is not a country but that has fiscal autonomy; and'' and 
     insert ``; or''.
       Page 41, strike lines 12 through 14.
       Page 41, after line 11, insert the following:
       ``(ii) a jurisdiction that is not a country but that has 
     fiscal autonomy.''.

  The SPEAKER pro tempore. Pursuant to House Resolution 473, the 
gentlewoman from the Virgin Islands (Ms. Plaskett) and a Member opposed 
each will control 5 minutes.
  The Chair recognizes the gentlewoman from the Virgin Islands.
  Ms. PLASKETT. Mr. Speaker, I yield myself such time as I may consume.
  I rise in support of this amendment. This amendment proposes a 
technical change in title 5 of this bill, the Disclosure of Tax Havens 
and Offshoring Act, to simply clarify that a ``tax jurisdiction'' 
includes either a country or a jurisdiction that is not a country but 
has fiscal autonomy.
  My concern, as the bill presently states, is that certain words used 
in that part of the bill will be highly

[[Page H2855]]

problematic to U.S. territories, including my district, and our efforts 
to address very important tax policy issues that have arisen in the 
last few years.
  My amendment seeks to correct the bill's definition of a tax 
jurisdiction by removing its words explicitly analyzing U.S. 
territories without the United States. While these specific words 
separating the territories from the rest of the United States would be 
removed, the rest of the language would be left as it currently exists 
in the bill: A ``tax jurisdiction'' would mean either a country or a 
jurisdiction that is not a country but that has fiscal autonomy.
  My concern is with the language to explicitly distinguish U.S. 
territories from the sovereign United States in such a way.
  First, it would be inconsistent with the current structure of the 
Securities Exchange Act of 1934, which this bill seeks to amend. Under 
that law, each of the U.S. territories are defined and treated as 
States.
  Secondly, it would be contrary to the position that the United States 
has taken in its deliberations with the European Union and the OECD in 
response to blacklisting of U.S. territories in 2017 and 2018.
  A letter from the Secretary of Treasury to the Council of the 
European Union addressing this issue reads: ``The United States 
disagrees with the Council's decision to consider U.S. territories 
separately from the United States.''
  It would be more difficult for the United States to make this 
argument if legislation is adopted by Congress lending credence to the 
argument that U.S. territories should be treated as tax jurisdictions 
without the United States as a whole.
  Importantly, treating the U.S. territories as separate tax 
jurisdictions distinct from the sovereign United States would also be 
inconsistent with efforts that U.S. territories have been making for 
relief from tax increases intended for foreign tax jurisdictions that 
were unfairly imposed on U.S. territories by the Tax Cuts and Jobs Act.
  Lastly, I have concerns about the language at issue categorizing U.S. 
territories as fiscally autonomous. They are, in fact, legally 
possessions of the United States under the tax code to this day. One of 
the U.S. territories is currently in a state of bankruptcy. The U.S. 
Virgin Islands has no control over its income taxes and cannot sever 
itself from the mirror code tax system of the United States, and has 
extensive and longstanding written agreements in place with the IRS 
requiring exchange of tax information.
  Thus, all I have requested with this technical amendment is that the 
bill language be slightly adjusted to remove words explicitly 
referencing U.S. territories as tax jurisdictions distinct from the 
sovereign United States. I believe this would be more fair to the 
sponsors of this measure because it would in no way impede the effect 
of its policy; the meaning of tax jurisdiction would remain as either a 
country or ``a jurisdiction that is not a country but has fiscal 
autonomy.''
  Mr. Speaker, at this time I yield 1 minute to the gentlewoman from 
California (Ms. Waters), the chairwoman of the Financial Services 
Committee.
  Ms. WATERS. Mr. Speaker, I understand that my friend and colleague, 
Ms. Plaskett, has raised some concerns about the treatment of 
territories in this bill, and I want to assure her that the staff has 
done everything possible in the bill text to ensure that territories 
are included in this bill and not treated disparately.
  The language in this bill is consistent with regulations promulgated 
under the Obama administration regarding country-by-country tax 
reporting, which were carefully written to ensure territories were not 
excluded.
  I want to make clear that nothing in this bill should be intended to 
suggest that territories are tax havens. In fact, I have worked with my 
colleague, Mr. San Nicolas, on this bill text. We believe that the 
enhanced disclosures in this bill, which will include territories, 
should help encourage investment in the territories and hold 
corporations accountable for lack of investment in territories.
  I want to ensure Ms. Plaskett that I take her concerns seriously, and 
I intend to work with her to make sure that what she is identifying as 
perhaps incorrectly being defined as tax havens is an issue that I will 
deal with.

                              {time}  1430

  Ms. PLASKETT. Mr. Speaker, since I have assurances from both the 
chairwoman and the committee that they will continue to work with us to 
ensure that U.S. territories are not treated as tax havens but that we 
are, in fact, individuals who intend and continue to intend, through 
our governments, to pay our taxes to the Internal Revenue Service and 
continue to be treated equitably as part of the United States, at this 
time, I yield back the balance of my time and I withdraw my amendment.
  The SPEAKER pro tempore. The amendment is withdrawn.
  Pursuant to clause 1(c) of rule XIX, further consideration of H.R. 
1187 is postponed.

                          ____________________