[Congressional Record (Bound Edition), Volume 163 (2017), Part 4]
[House]
[Pages 5286-5293]
[From the U.S. Government Publishing Office, www.gpo.gov]




    PROVIDING FOR CONSIDERATION OF H.R. 1343, ENCOURAGING EMPLOYEE 
                         OWNERSHIP ACT of 2017

  Mr. BUCK. Mr. Speaker, by direction of the Committee on Rules, I call 
up House Resolution 240 and ask for its immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 240

       Resolved, That upon adoption of this resolution it shall be 
     in order to consider in the House the bill (H.R. 1343) to 
     direct the Securities and Exchange Commission to revise its 
     rules so as to increase the threshold amount for requiring 
     issuers to provide certain disclosures relating to 
     compensatory benefit plans. All points of order against 
     consideration of the bill are waived. An amendment in the 
     nature of a substitute consisting of the text of Rules 
     Committee Print 115-11 shall be considered as adopted. The 
     bill, as amended, shall be considered as read. All points of 
     order against provisions in the bill, as amended, are waived. 
     The previous question shall be considered as ordered on the 
     bill, as amended, and on any further amendment thereto, to 
     final passage without intervening motion except: (1) one hour 
     of debate equally divided and controlled by the chair and 
     ranking minority member of the Committee on Financial 
     Services; (2) the further amendment printed in the report of 
     the Committee on Rules accompanying this resolution, if 
     offered by the Member designated in the report, which shall 
     be in order without intervention of any point of order, shall 
     be considered as read, shall be separately debatable for the 
     time specified in the report equally divided and controlled 
     by the proponent and an opponent, and shall not be subject to 
     a demand for a division of the question; and (3) one motion 
     to recommit with or without instructions.

  The SPEAKER pro tempore. The gentleman from Colorado is recognized 
for 1 hour.
  Mr. BUCK. Mr. Speaker, for the purpose of debate only, I yield the 
customary 30 minutes to the gentleman from Colorado (Mr. Polis), 
pending which I yield myself such time as I may consume. During 
consideration of this resolution, all time yielded is for the purpose 
of debate only.


                             General Leave

  Mr. BUCK. Mr. Speaker, I ask unanimous consent that all Members have 
5 legislative days to revise and extend their remarks.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Colorado?
  There was no objection.
  Mr. BUCK. Mr. Speaker, I rise today in support of the rule and the 
underlying legislation. Americans have always been a people known for 
taking ownership. We take ownership of our lives and livelihoods, 
working hard to provide for our families. We take ownership in our 
communities, setting standards of conduct. We take ownership in all our 
political process, voting for the right candidates. We have even taken 
ownership in our world, fighting evil actors and regimes to maintain 
peace.

[[Page 5287]]



                              {time}  1230

  H.R. 1343, the bill we are discussing today, allows employees to take 
ownership in their companies. This is the American way.
  Under SEC rule 701, private companies can offer their own securities 
to employees, enabling those employees to take a stake in the company. 
This is a great deal for both businessowners and employees. I doubt 
either side of the aisle would disagree.
  Rule 701 allows employers to better recruit talented employees and 
pay them without having to borrow money or sell securities. For some 
companies, especially younger ones, compensating employees through 
equity is vital for survival.
  These younger companies need the top talent but often can't pay the 
top salaries. Rule 701 allows them to offer potential recruits a 
tradeoff: accept a lower salary now for more equity in the company 
later.
  By giving the employees a stake in the company, businessowners reward 
the employees for their continued hard work and innovation. Workers 
have an opportunity to buy into the mission and future of the company. 
They have the opportunity to reap what they sow, making their work more 
meaningful and fulfilling.
  Mr. Speaker, H.R. 1343 simply raises the reporting threshold for 
companies who issue securities to their employees as compensatory 
benefits. Right now, any company that issues more than $5 million of 
securities in a yearlong period faces significant reporting 
requirements, including financial statements and disclosure of risk 
factors. These requirements cost small businesses time and money, 
making them less likely to issue stock as compensation for their 
employees. That is why this legislation moves the threshold up to $10 
million.
  The original $5 million threshold was added to rule 701 in 1999 and 
hasn't been updated since. By easing the threshold and indexing it to 
inflation every 5 years, we allow companies to increase the amount of 
stock they offer to employees. Additionally, raising the threshold will 
prevent private companies from having to disclose confidential 
financial information.
  America is known for taking ownership, but we are also known for 
innovation. Our technology industry, especially, has propelled our 
economy and quality of life forward. But so many great tech companies 
started as small startups, struggling along from month to month before 
the financial rewards of their hard work could be achieved.
  Thinking about the young companies right now that have grand 
innovative visions for improving our quality of life, this legislation 
will help them thrive. The employees already pour so much of their 
livelihoods into the venture. This bill will reward those workers with 
equity so that their perseverance and investment will pay off.
  Mr. Speaker, before I close, I would like to discuss the broad 
support for this bill. I indicated earlier that both sides of the aisle 
can support this legislation, and I want to highlight that bipartisan 
support for the bill.
  H.R. 1343 has equal numbers of Republican and Democratic sponsors. 
Further, the bill passed out of the Financial Services Committee 48-11. 
A majority of the Democrats on the committee supported the bill. A 
similar bill passed with a bipartisan vote last Congress, with more 
than two dozen Democrats joining Republicans to pass the bill. And in 
the Senate, this same basic proposal passed the Senate Banking 
Committee by a voice vote just a few weeks ago.
  Mr. Speaker, it is clear to see why this proposal is generating so 
much bipartisan support. With a higher threshold, companies can focus 
their time on innovating and creating jobs instead of filling out 
paperwork. Employees, meanwhile, can take a stake in their company and 
their own future. I urge my colleagues to vote for this important rule 
and the underlying legislation.
  Mr. Speaker, I reserve the balance of my time.
  Mr. POLIS. Mr. Speaker, I thank the gentleman for yielding me the 
customary 30 minutes, and I yield myself such time as I may consume.
  Mr. Speaker, I rise in opposition to the rule, one that provides for 
consideration of H.R. 1343, the Encouraging Employee Ownership Act.
  I strongly support the underlying legislation. I wish it had been 
brought forward to the floor under an open rule that allowed Democrats 
and Republicans to freely offer amendments that could be adopted by a 
simple majority vote.
  Before we get to the specifics of the bill, I want to talk about the 
importance of employee ownership. I join my friend and colleague from 
my neighboring district in Colorado in extolling the virtues of 
employee stock ownership, of ensuring that employees in the company are 
stakeholders and able to benefit from the value that is being created.
  You know, we have different stakeholders in our economy, and when you 
look at a company, you have different stakeholders that that company is 
responsible to and caters to: You have the shareholders, you have the 
employees, and you have the customers. In running a company, as I have 
done, it is always a constant balancing act to make sure that you are 
able to satisfy the legitimate demands of all those various 
stakeholders.
  Now, one of the things that has been out of whack in our economy the 
last few decades is that a disproportionate share of the value creation 
has gone to the shareholders and the customers, often to the detriment 
of the employees.
  Now, everybody has benefited as consumers and as customers with 
revolutions in prices and consumer technology. It is so exciting to see 
people, you know, where a flat screen television used to be out of 
reach, you now see them in nearly every home; and, in many cases, they 
cost less than a television would have cost that was significantly 
smaller 10 years ago--not to mention the remarkable mobile computing 
devices that middle class families and working families carry in their 
pockets with them that contains more processing power than a $3,000 
computer did just a decade ago.
  Consumers have benefited and shareholders have benefited. There has 
been an unprecedented increase in private equity markets, in stocks, a 
huge amount of value creation in the American economy, both on the 
balance sheet as well as in the market valuation of companies.
  Now, the issue is that, while all of this has happened, wages have 
largely stagnated. A lot of the increases in efficiency and economic 
growth have gone to benefit consumers and shareholders. Employees and 
workers have felt, legitimately so, that they haven't seen their share 
of value creation.
  Now, there are a number of reasons for that. One of those has been 
the weakening of the union movement that gave workers a collective 
voice. But if you look at what some of the remedies are, really none 
can make a bigger impact than employee stock ownership. This bill 
doesn't change the ball on that. It is a positive step.
  There are a lot of other ideas that I hope we can talk about in a 
bipartisan way. Fundamentally, we need to create an economy that works 
for everyone, one in which employees and workers can directly benefit 
from the increase in value of the firm that they helped create. And 
what better way to do that than employee stock ownership in a variety 
of models and options for that. This bill deals with one; but we have 
ESOPs, we have co-ops, we have employee stock option plans, to name a 
few.
  Companies find that it is in their interest to help improve morale 
and maintain a stable employee base to align the incentives of 
employees with shareholders and, of course, to help align the success 
of our economy with the success of all the stakeholders in our economy.
  H.R. 1343 is a bipartisan bill. It was passed last year; it will pass 
again overwhelmingly this year. It sends a strong statement that 
Democrats and Republicans in the House of Representatives want to make 
employee stock ownership easier. Hopefully, this is a starting point 
rather than an ending point.
  The two other bills the Chamber is considering are also bipartisan, 
and I am hopeful that they can move forward expeditiously.

[[Page 5288]]

  Now, that stands in stark contrast to some of the other actions of 
this Chamber, for instance, the 15 Congressional Review Act resolutions 
which simply sought to undo some of the positive steps that President 
Obama took rather than put forward a proactive agenda of where 
Republicans actually want to lead the Nation.
  We also spent countless hours debating healthcare legislation that, 
thankfully, didn't go anywhere because it would have left 24 million 
Americans without health insurance and increased premiums by 15 to 20 
percent for those who were lucky enough not to lose their insurance 
altogether.
  I am glad that we have been able to move past that towards a more 
bipartisan discussion here that will fundamentally help American 
innovators and entrepreneurs and help lead to a fair economy that works 
better for everybody, that shows that Democrats and Republicans can 
work together to create a real solution that addresses a real problem 
and takes a first step towards creating an economy that works for 
workers, consumers, and shareholders.
  I am hopeful that we can continue this trend after the district work 
period and move forward on bipartisan legislation that will simplify 
our complex Tax Code and realign incentives in a positive way, fix our 
broken immigration system, and make sure that we have the 
infrastructure we need for our country to succeed in the 21st century. 
I hope that my colleagues are encouraged by the strong bipartisan show 
of support for H.R. 1343 and we can work together to bring more 
bipartisan legislation to the floor instead of divisive bills that make 
problems even larger.
  This bill, very simply, updates an SEC rule from 1999 that will allow 
private companies to offer employees a greater stake in the place they 
work without requiring additional paperwork or regulation--a simple and 
good idea.
  Currently, a private company that offers over $5 million in 
securities through compensation for employees is required to provide 
additional disclosures which can, A, often serve as a detriment to 
going over the $5 million in compensatory stock for their employees, 
and, B, take up costs, administrative overhead, should they choose to 
proceed. H.R. 1343 simply raises that threshold from $5 million to $10 
million, and this legislation gives a private company more flexibility 
to reward and retain employees of all levels.
  Employee ownership of various structures has benefits to both the 
company, the employees, and the overall economy. It helps align the 
interests. It results in more productivity, higher employee retention. 
It can help make a business more profitable and more sustainable. It 
helps make the American economy and the amazing value that is created 
work for everybody rather than just one of the stakeholder groups.
  For many startups and small businesses, giving employees a stake in 
the business is a great way to provide an additional benefit, an 
incentive. It gives companies flexibility to attract new employees when 
they are starting up, to retain talent as a company grows and matures.
  Providing workers stakes in their company helps strengthen their 
retirement savings. Employee stock ownership plans, or ESOPs, are a 
type of retirement plan that offers employees an ownership stake 
without upfront costs. In Colorado, there are 118 businesses that use 
employee-owned ESOPs as a way to promote employee ownership.
  A good example of an ESOP is Fire Safety Services. The owner, Jeff, 
wanted to offer his employees a stake in the business. He converted his 
business to an ESOP, an employee-owned company, that allowed him to 
create a succession plan so the business can stay locally owned by the 
people who worked to create the value. Jeff noted that, after the 
conversion, employee morale was up and sales were up.
  One of our most famous examples of employee-owned companies is in my 
district in Fort Collins, Colorado: New Belgium Brewing. From the 
perspective of the employees, New Belgium has a very strong corporate 
culture of personal and collective growth. The employee owners are 
concerned about their own professional development and that of their 
colleagues. They have a vested stake in the management, economic 
health, and stability of the company.
  This bill is a commonsense approach and makes it easier for companies 
to give their employees ownership opportunities. It is a small first 
step towards encouraging an economy that works for everybody.
  Now, I want to make sure that this legislation helps employees at all 
income levels have access to ownership opportunities and that workers' 
retirement savings are not put in jeopardy by an overconcentration in 
company stock. That is why I offered an amendment requiring GAO to do a 
study on the impact of this legislation on employee participation and 
ownership and the effect this legislation has on securities held by 
retirement plans that are governed by ERISA.
  I very much look forward and am grateful that the rule has made in 
order my amendment. This study will give us important information on 
how these changes impacting employee ownership also affect retirement. 
It will give this body information that we need to move forward.
  The example of my amendment is an example of the many great ideas 
that Democrats and Republicans could have brought forward had this been 
brought forward under an open rule. What better bill to bring forward 
under an open rule than this kind of bipartisan bill where there is 
nobody in this body who is trying to undermine or sabotage this bill?
  There may be some Members who vote against it on both sides, I don't 
know, but the overwhelming majority are for it. I think there are 
Democrats and Republicans with great ideas who would love the 
opportunity to take 10 or 15 minutes--10 minutes as I am afforded under 
this rule. How many other Republicans and Democrats would love that 
same opportunity to offer amendments to improve this bill to make it 
even better?
  The good news is employee ownership is not a partisan issue. Employee 
ownership strengthens our economy, helps small and medium-sized and 
large businesses across our entire economic spectrum create and retain 
jobs, and promotes an increased retirement savings for the middle 
class. These companies are often anchor businesses in our communities 
that go beyond offering jobs but are involved with sponsoring Little 
League or being involved with community nonprofits by giving back, by 
helping local charities and helping support an ecosystem of 
entrepreneurship by helping other entrepreneurs get off the ground 
through mentorship networks and angel funding networks.
  I am a strong supporter of this bill and, of course, want to point 
out that it is simply a starting place. We have a long way to go with 
encouraging employee ownership in all of its forms--ESOPs, co-ops, 
stock options, outright stock grants--and any other ways that we can 
come up with or that the private sector can come up with that allow a 
stake in the company and in the value being created to reside with the 
employees, aligning their incentive, making our economy work for 
everybody, and ensuring that stakeholders have balanced benefits from 
our overall growth.
  I support this bill. I wish it had been brought to the floor under an 
open rule. I oppose the rule.
  Mr. Speaker, I reserve the balance of my time.

                              {time}  1245

  Mr. BUCK. Mr. Speaker, I just want to respond briefly to my friend 
from Colorado's comments about the nature of the rule. The Rules 
Committee did make in order every single germane rule that was offered 
to this bill.
  Mr. Speaker, I yield such time as he may consume to the gentleman 
from Illinois (Mr. Hultgren).
  Mr. HULTGREN. Mr. Speaker, I want to thank my friends, colleagues 
from Colorado for their work on this, for their support of this 
important legislation.
  I rise today to speak in support of the rule providing for 
consideration of H.R. 1343, the Encouraging Employee

[[Page 5289]]

Ownership Act of 2017. I am proud to be a sponsor of this legislation, 
and I am grateful for the consideration it has been given by the House, 
and I am encouraged by its strong record of bipartisan support. The 
bill has passed the House in prior Congresses as part of larger capital 
markets packages, but this is the first time the legislation will be 
considered on its own.
  We have had very constructive debate on the bill in the Financial 
Services Committee over the last few years. This debate has allowed us 
to build a strong consensus around this uniting principle: What is good 
for the company should also be good for the employee, and vice versa.
  We want it to be easy for companies to offer stock compensation to 
their employees. This is a company issue, and this is a jobs issue, but 
this is also a workforce issue. The title of this legislation does not 
betray its intent. We believe encouraging employee ownership is 
important.
  Agreement on the benefits of employee ownership has contributed to 
the strong bipartisan support enjoyed by this legislation. It has three 
Republican and three Democratic original cosponsors. Furthermore, the 
majority of Republicans and Democrats voted in favor of the Encouraging 
Employee Ownership Act when it was considered in the House Financial 
Services Committee just last month. We are simply expanding on 
something that is working.
  The Securities and Exchange Commission, the investor protection 
regulator, has never raised issue with reduced disclosures available 
under rule 701, so we are simply saying this tool should be made 
available to more companies and to their employees. We do this by 
adjusting for inflation the threshold for the amount of securities that 
can be issued each year under rule 701.
  Again, I want to thank my colleagues from Colorado. I want to thank 
all for the work in the Financial Services Committee, and I look 
forward to the House's consideration and, hopefully, passage of this 
important legislation.
  Mr. POLIS. Mr. Speaker, I yield myself such time as I may consume.
  You know, the beauty of an open rule, which we did see when the 
Democrats had the majority and we have not seen since the Republicans 
took the majority, is it allows the floor debate to inspire good ideas. 
It allows Democrats and Republicans to bring forward amendments, 
subject to germaneness, that can be considered and voted upon.
  Frankly, it seems like the Republicans didn't have much for us to do 
this week. This would have been a perfect week to try an open rule; and 
I know that Democrats and Republicans would have, consistent with the 
spirit of an open rule, brought forth good ideas and offered them. Good 
ideas would have been included in the bill.
  But most importantly, we could have set a precedent that open rules 
work and an open process that values our contributions as legislators 
and as representatives of 750,000 Americans who would be able to work 
to improve legislation. So I think that we need to move in that 
direction. Let the debate on the floor and the back-and-forth inspire 
new collaboration between Democrats and Republicans, new ideas, new 
ways of working together.
  Here you have a concept that Democrats and Republicans join together 
in support of. How can we reduce the costs or the red tape around 
administering employee ownership? We would love to remove barriers to 
employee ownership that exist across all forms of employee ownership.
  We would love to see an economy that works for everybody, one that 
values employees and workers as stakeholders that share in the economic 
growth that they helped create. That is a big part of the answer to the 
discrepancies in our economy and the simple fact--yes, fact--that the 
majority of the benefit of our economic growth has resided with a few 
and, generally, with shareholders and executives rather than workers.
  So at the same time we can continue to move forward with conveying 
value to consumers, I think we can also find a way to make sure that 
workers are able to participate in the value that is created in our 
economy. But to be able to do so, we should have an open process that 
allows Democrats and Republicans to bring forward germane amendments 
that improve the bill, to create an even better and more comprehensive 
effort to encourage employee ownership.
  Employee ownership ultimately touches a number of different 
committees. There are issues around employee ownership that affect 
government procurement. There are issues that would reside in the Ways 
and Means Committee under taxes. There are issues that reside in the 
Judiciary Committee, and, yes, Financial Services and regulator issues 
as well.
  I am hopeful that Democrats and Republicans can work together to 
create a comprehensive omnibus approach to improving access to employee 
ownership for firms across our country.
  Mr. Speaker, I reserve the balance of my time.
  Mr. BUCK. Mr. Speaker, I yield 4 minutes to the gentleman from 
Michigan (Mr. Huizenga).
  Mr. HUIZENGA. Mr. Speaker, small businesses and entrepreneurs are 
what drive the American economy. I meet with these folks all the time 
when I am back home in the Second District, as I know my colleagues do 
when they are back in their districts, and we see firsthand the 
benefits that these people's dreams, their innovations, their hard 
work, and as they provide to our communities that inspiration.
  These innovators, entrepreneurs, and risk-takers are critical to our 
country's economic growth and prosperity. In fact, small businesses are 
responsible for more than 60 percent of all of the net new jobs. Let me 
repeat that. Small businesses are responsible for more than 60 percent 
of all the net new jobs over the past two decades. This isn't just a 
one-time blip. This is over the last two decades.
  So if our Nation is going to have an economy that provides 
opportunities for every American, then we must promote and encourage 
success and growth for our small businesses, our startups, and our 
entrepreneurs. It is this notion that I think brings us to this 
legislation we are discussing here today.
  H.R. 1343, the Encouraging Employee Ownership Act, would simply level 
the playing field for small companies by updating Federal rules that 
allow small businesses to better compensate their employees with 
ownership in those businesses.
  Currently, the SEC rule 701 permits private companies to offer their 
own securities as part of written compensation agreements with 
employees, directors, general partners, trustees, officers, or other 
certain consultants without having to comply with rigid Federal 
securities registration requirements. The SEC rule 701, therefore, 
allows small companies to reward their employees.
  Despite the SEC having the authority to increase the $5 million 
threshold via a rulemaking, the SEC has once again chosen to prioritize 
what, I would argue, are highly politicized regulatory undertakings 
instead of focusing on its core mission, which includes the 
facilitation of capital formation. That is one of the key core jobs of 
the Securities and Exchange Commission. Well, if the SEC isn't going to 
focus its priorities, then Congress will help them do that. So that is 
why we are here today on this bill.
  I believe it is imperative that small businesses not only in West 
Michigan, but across America, have the ability to compete. A critical 
element of competition and success is, first, that small businesses be 
able to offer compensation packages that attract and retain top-tier 
talent in their fields. In today's world, that includes rewarding 
employees with stock options. To me, this is common sense. Small-
business employees have a clear and vested interest in the success of 
their employers, and oftentimes they are attracted to it.
  I know, having some younger children myself that are coming into 
adulthood, they are looking for that excitement. They are looking for 
that opportunity. They are looking to be builders themselves.
  Well, by increasing the rule 701 threshold to $10 million, it will 
give

[[Page 5290]]

these private companies more flexibility to attract, reward, and retain 
those employees. This simple change would allow companies to offer 
twice as much stock to their employees annually without having to 
trigger additional disclosure information to investors about those 
compensation packages that include securities offerings.
  By reforming this regulatory burden, Mr. Speaker, startups, small 
businesses, and emerging growth companies will be better equipped to 
attract highly talented individuals from companies that are better 
capitalized and able to provide cash compensation. By incentivizing 
employees with stock options, small businesses will now be able to 
compete on a more level playing field in order to retain those valuable 
employees rather than seeing them flee to cash, frankly.
  This bill is an example, I believe, of positive, bipartisan results 
that can be achieved when Republicans and Democrats reach across the 
aisle. I commend our sponsors of the bills, Representative Hultgren, 
who spoke a little earlier; Representatives Delaney, Higgins, 
MacArthur, Sinema, and Stivers, for their leadership on this issue; and 
my friend from Colorado, as well, and what he is doing.
  I encourage all my colleagues to support this rule and the underlying 
bill.
  Mr. POLIS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I have had the opportunity to convene several 
roundtables in my district featuring employee-owned businesses, and it 
has been great to hear their stories, whether it is New Belgium 
Brewing, talking to employee owners who are excited to spend their time 
building value for themselves and creating stability in their own job 
and bringing a wonderful craft brew product to people in all the States 
in which they distribute, or medical care companies and so many others 
that have different variations of employee ownership.
  As a private sector entrepreneur before I came to Congress, I founded 
several companies in the technology sector. My companies used stock 
options for every employee, ranging from entry-level front desk and 
telephone all the way to executive positions; and, frankly, Mr. 
Speaker, that has become the standard in the tech industry.
  So many venture-backed companies and technology companies provide 
stock options across the board such that people who participate in 
building that value are able to also participate in sharing the value 
that is created. That is one of the great aspects of the technology 
sector, in particular, and the startup sector that I hope can export to 
other sectors.
  On the margins, this bill will make it a little bit easier for small 
and mid-sized companies to provide equity compensation to employees. 
But again, we need to do a lot more. We need to do a lot more 
culturally to make this the norm. We need to do a lot more from a tax 
perspective and from a regulatory perspective to make it easier for 
companies to share ownership with employees so that employees can 
benefit from the value that is being created.
  It is considered the cultural norm and the best practice within the 
technology entrepreneurship sector, and I hope that that can carry 
across to other sectors as well. It is very important to have an 
economy that works for everybody, and employee ownership is a critical 
linchpin of that effort.
  Mr. Speaker, we are debating on a rule and a bill that makes it 
easier for companies to offer employee stock as part of their 
compensation; but, unfortunately, the backdrop to this discussion is 
that there continues to be an enduring wage gap in which women are 
simply not paid the same as men for doing the same job. Any efforts by 
us to strengthen compensation packages continue to remain hollow for 51 
percent of the country--women.
  Today is Equal Pay Day. I wish you, Mr. Speaker, a happy Equal Pay 
Day, and it is time that we do something to address pay and equity in 
our country.
  If we defeat the previous question, I will offer an amendment to the 
rule to bring up Representative DeLauro's Paycheck Fairness Act in 
addition to the legislation we have been debating, H.R. 1343. So what 
that means is I will still bring forward this legislation. I will just 
also bring forward the Paycheck Fairness Act, which I am a proud 
cosponsor of.
  Sometimes when we move the previous question, we bring forward a 
piece of legislation in lieu of the legislation that we bring to the 
floor under the rule. In this case, once we defeat the previous 
question, I will offer both of those bills: this employee stock 
ownership bill and the bill to address paycheck inequity, the Paycheck 
Fairness Act.
  Mr. Speaker, I ask unanimous consent to insert the text of my 
amendment in the Record, along with extraneous material, immediately 
prior to the vote on the previous question.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Colorado?
  There was no objection.
  Mr. POLIS. Mr. Speaker, the gentlewoman from Connecticut (Ms. 
DeLauro) may be joining us on the floor in a few minutes to talk about 
her proposal.
  I have an article written by Ms. DeLauro that I include in the 
Record.

                   [From Cosmopolitan, Apr. 4, 2017]

                  We Will Win the Fight for Equal Pay

                           (By Rosa DeLauro)

       Think about 20 cents. It doesn't feel very significant--
     there isn't much you could buy with it. But over a lifetime, 
     those 20 cents add up in a major way.
       Today, we have reached yet another Equal Pay Day--the day 
     on which the average woman's earnings finally catch up to 
     what the average man made last year. This year's Equal Pay 
     Day falls 94 days into 2017--94 days too late.
       Women are nearly half the workforce--yet they still only 
     earn about 80 cents on average, to a man's dollar. The gap 
     widens even further when you consider women of color--
     African-American women make 63 cents on the dollar, while 
     Latinas make only 54 cents on average, compared with what 
     white men earn. This is unacceptable.
       The National Women's Law Center found that based on today's 
     wage gap, a woman starting her career now will lose $418,800 
     over a 40-year career. For African-Americans, the losses are 
     $840,040. And for Latinas, the lifetime gap is over $1 
     million.
       These disparities exist at all levels of education and 
     occupation--even at the very top. The world champion U.S. 
     women's soccer team is fighting for pay equality, as are 
     Academy-Award winning actresses from Emma Stone to Viola 
     Davis and Patricia Arquette, who have used their platforms to 
     call for equal pay in Hollywood.
       Men and women in the same job should have the same pay. 
     Period. Wage discrimination takes place not just on the 
     soccer field or the silver screen, but in the board room, on 
     the factory floor, and in countless other workplaces across 
     the country. That is why I am fighting for equal pay--for all 
     women.
       I am fighting for AnnMarie in Massachusetts, who found out, 
     years into her job, that the university she worked for was 
     paying men more for the same work. I am fighting for Terri in 
     Tennessee, who only discovered she was making less than she 
     deserved because her husband held the exact same job and was 
     paid more! And I am fighting for ReShonda in Iowa, who 
     discovered that her own father was paying women less when she 
     went to work in the family business. Pay discrimination in 
     the workplace is real--and it is happening everywhere.
       Pay inequity does not just affect women--it affects 
     children, families, and our economy as a whole. That is 
     because women in this country are the sole or co-breadwinner 
     in half of families with children. The biggest problem facing 
     our country today is that families are not making enough to 
     live on--and closing the wage gap would help address that 
     problem.
       Over 50 years ago, Congress came together--in a bipartisan 
     fashion--to pass the Equal Pay Act and end what President 
     John F. Kennedy called ``the serious and endemic problem'' of 
     unequal wages. The Equal Pay Act made it illegal for 
     employers to pay men and women differently for substantially 
     equal work. Yet we still have so far to go to close the wage 
     gap.
       In 2009, we took a critical step forward with the passage 
     of the Lilly Ledbetter Fair Pay Act, which kept the 
     courthouse door open to sue for pay discrimination. But we 
     must continue the fight and finish the job by passing into 
     law the Paycheck Fairness Act.
       I first introduced the Paycheck Fairness Act on June 24, 
     1997--almost 20 years ago. The Paycheck Fairness Act will 
     mean real progress in the fight to eliminate the gender wage 
     gap and help families. The act ensures that employers who try 
     to justify paying a man more than a woman for the same job 
     must show the disparity is not sex-based, but job-related and 
     necessary. It prohibits employers from retaliating against 
     employees who discuss or disclose salary information with 
     their coworkers. The bill would also

[[Page 5291]]

     allow women to join together in class-action lawsuits where 
     there are allegations of sex-based pay discrimination.
       The bill actually passed the House twice, with bipartisan 
     support. Yet it has never made it to the president's desk--
     despite the fact that this is an issue that affects every 
     single state in this country. In the last session of 
     Congress, I was proud to have every single Democratic member 
     of Congress signed onto the Paycheck Fairness Act--and even 
     one Republican!
       But we need to keep fighting. When women raise their 
     voices, we get results. Take the recent victory for the U.S. 
     women's national hockey team who were able to negotiate a 
     historic new contract to address pay inequality. They spoke 
     up--even threatening to boycott the International Ice Hockey 
     Federation World Championship games--and their voices were 
     heard.
       In January, I attended the Women's March in Washington. The 
     organic energy--the real, tangible power of the people--was 
     unlike anything I have ever seen. It was a stark reminder of 
     what we can achieve together, when we speak with one voice 
     and demand what we deserve.
       When I looked out at the sea of pink hats and powerful, 
     handmade signs, I thought of my mother. When she was born, 
     women could not even vote. Yet today, her daughter is a 
     congresswoman. When we fight for equal pay for equal work, we 
     carry on the legacy of all the women who have fought before 
     us. And when we finally succeed, we will create a better 
     future for all the women who will follow us.
       Equal pay is an idea whose time has come--in fact, it is 
     long overdue. But we have the power. We have the momentum. 
     And I believe that we will win.

  Mr. POLIS. Mr. Speaker, Congresswoman DeLauro's article from 
Cosmopolitan magazine, dated April 4, 2017, today, talks about how, 
over a lifetime, the 20 cents that women are missing every paycheck on 
a dollar earned by men adds up. In fact, the National Women's Law 
Center found that a woman starting her career now will lose over 
$400,000 over a 40-year career. That could be a house. That could be 
college for two kids or three kids. That could be a family vacation 
every year. That means a lot, which is why we need to defeat the 
previous question and move forward on both of these worthy bills.
  Mr. Speaker, I reserve the balance of my time.

                              {time}  1300

  Mr. BUCK. Mr. Speaker, I have no other speakers, and I reserve the 
balance of my time.
  Mr. POLIS. Mr. Speaker, I yield myself such time as I may consume, 
and say to the gentleman that I do have one other speaker on the way.
  Mr. Speaker, this bill under consideration is a small but significant 
step to help companies increase worker ownership to help improve the 
overall equity of our economy. I hope that this bill, along with the 
other two coming to the floor later this week, are the start of 
something. I hope they are a sign that this body will actually consider 
meaningful, bipartisan, practical, and commonsense legislation to 
address the issues the American people sent us to Washington to fix: 
creating jobs, growing our economy, reforming our Tax Code, and fixing 
our broken immigration system.
  I hope my colleagues support the underlying legislation, H.R. 1343, 
oppose the rule, and defeat the previous question so I can bring 
forward not only the employee stock ownership rule, but also the 
Paycheck Fairness Act here on Equal Pay Day across America so that we 
can make sure as we are talking about making sure that women receive 
the same cash and ownership in recognition of their efforts as 
employees across the country.
  This bill will hopefully pass overwhelmingly. I just wish it could be 
an example of how we could work under an open rule and give Democrats 
and Republicans a chance to build upon and improve legislation. There 
have been zero open rules under Speaker Ryan since he has taken over 
the Speaker's gavel promising, ironically, a more open process. It is 
about time.
  If not this bill, what bill, Mr. Speaker? If not a bill with strong 
bipartisan support that Democratic and Republican leaders are committed 
to bringing across the finish line, when can we have an open process 
that allows us as legislators to bring forward our amendments in 
response to debate on the floor in realtime?
  I wish that this would have been that bill. And I hope that by 
defeating this rule, we can send a message back to the Rules Committee 
that we should consider open rules for these kinds of bipartisan 
legislation.
  Promoting employee stock ownership is incredibly important. To have a 
multistakeholder economy that works for everybody will help address a 
lot of the legitimate concerns that Americans have, that workers and 
employees have not shared, and the great amount of value that has been 
created.
  Mr. Speaker, I yield 4 minutes to the distinguished gentlewoman from 
Connecticut (Ms. DeLauro) to further discuss our proposal on the 
previous question on Equal Pay Day and the Paycheck Fairness Act.
  Ms. DeLAURO. Mr. Speaker, I rise in strong opposition to the previous 
question and to the rule. If we defeat this rule, we can enable the 
House of Representatives to vote on the Paycheck Fairness Act.
  Today is Equal Pay Day. This is the day that the average woman's 
earnings finally catch up to what the average man made last year--and 
we are 94 days into 2017.
  Women are nearly half the workforce, yet they still only earn about 
80 cents, on average, to a man's dollar. The gap widens even further 
when you consider women of color. African-American women make 63 cents 
on the dollar, while Latinas make only 54 cents, on average, compared 
with White men.
  This is unacceptable. The National Women's Law Center found that, 
based on today's wage gap, a woman starting her career will lose 
$418,800 over a 40-year career. For African-American women, the losses 
are $840,000. For Latinas, the lifetime gap is over $1 million.
  This disparity, by the way, exists at all levels of education and 
occupation--even at the very top. The world champion U.S. women's 
soccer team is fighting for pay equity, as are Academy Award-winning 
actresses like Emma Stone and Viola Davis, who have used their 
platforms to call for equal pay in Hollywood. The fact that women at 
the top of their field feel the repercussions of this issue speaks to 
its pervasiveness. Women from the boardroom to the factory floor and in 
every industry in every State are hurt by the wage gap.
  The biggest issue of our time is that people are not making enough to 
live on, and their jobs just don't pay them enough money. Pay inequity 
does not just affect women; it affects children, families, and our 
economy as a whole, and that is because women in this country are the 
sole or co-breadwinner in half of families with children today.
  I first introduced the Paycheck Fairness Act on June 24, 1997, almost 
20 years ago. The Paycheck Fairness Act will mean real progress in the 
fight to eliminate the gender wage gap and help families. The act 
ensures that employers who try to justify paying a man more than a 
woman for the same job must show the disparity is not sex-based but 
job-related and necessary. It prohibits employers from retaliating 
against employees who discuss or disclose salary information with their 
coworkers. The bill would allow women to join together in class action 
lawsuits where there are allegations of sex-based pay discrimination.
  This bill, by the way, has passed the House of Representatives twice 
in a bipartisan way. Today we have 198 cosponsors of that bill, and, 
yes, it is bipartisan. We can pass this piece of legislation in this 
body. We have not been able to get it to the President's desk despite 
the fact that this is an issue that affects every single State in this 
country.
  Every year I hope we never have to recognize this day again because 
equal pay will be the law of the land. Men and women in the same job 
deserve the same pay. It is true in the House of Representatives; it 
should be true all over this country. We are men and women in this body 
who come from different parts of the country with different skill sets, 
different educational backgrounds, and different philosophies, and, 
yes, we get paid the same amount of money. Let's make sure that the 
Paycheck Fairness Act is the

[[Page 5292]]

law of the land. The time has come for equal pay.
  Mr. BUCK. Mr. Speaker, I reserve the balance of my time.
  Mr. POLIS. Mr. Speaker, I yield myself the balance of my time.
  I want to thank Ms. DeLauro for her tireless advocacy on behalf of 
equal pay. I would also encourage my colleagues to join me in 
cosponsoring the Equal Rights Amendment to the U.S. Constitution. It is 
about time. Today, on Equal Pay Day, let's enshrine equality between 
men and women into the U.S. Constitution.
  If we can defeat the previous question, we will bring forward H.R. 
1343, the employee stock ownership bill, but we will also bring forward 
the Paycheck Fairness Act so that we can do a little more work of the 
people's work here in the House of Representatives and help make sure 
that we can look ourselves in the mirror knowing that men and women 
will both benefit equally from a hard day's work.
  Mr. Speaker, I encourage my colleagues to vote ``no'' on the rule to 
defeat the previous question and to vote ``yes'' on H.R. 1343 as a 
first step to encouraging an economy that works for everybody and 
employee stock ownership.
  Mr. Speaker, I yield back the balance of my time.
  Mr. BUCK. Mr. Speaker, I yield myself the balance of my time.
  Mr. Speaker, we often talk about coming together in support of good 
policy. We all have friends on both sides of the aisle, and we 
routinely promise to work together on issues upon which we agree. Most 
of us speak in front of our constituents about our desire to work with 
the other party. However, we all know that Americans perceive us to be 
constantly engaged in partisan conflict.
  It is unfortunate that we are not able to work together on good 
legislation more often. It is understandable that Americans feel 
disappointed by Washington's partisan sniping. But here before us today 
is a bill with wide bipartisan support. Not only has it already 
received numerous bipartisan votes, there were only two amendments 
offered to the bill. One amendment was withdrawn because it was not 
germane. The other amendment from my good friend from Colorado and the 
Rules Committee, Mr. Polis, is simply requiring a report.
  Why is this bill so noncontroversial?
  I believe it has to do with the process by which we received this 
legislation. The Committee on Financial Services held hearings as far 
back as 2015 in which problems with the SEC rule were raised by small-
business owners.
  The sponsor of this bill, Mr. Hultgren, worked with his Democratic 
colleagues on the committee and introduced a proposal to reform the SEC 
rule. Chairman Hensarling held a full committee markup last month which 
allowed for full debate and amendment, and now we have the bill on the 
floor this week. Good process produces good policy. But perhaps equally 
as important, good process helps instill faith in this institution. 
When Americans see us take up an issue, hear their concerns, and work 
together to find a commonsense solution, they will trust us to tackle 
even bigger problems.
  This may not be the largest legislative product that Chairman 
Hensarling and the Financial Services Committee produce in this 
Congress, but, nevertheless, it is an important work that is helping us 
solve problems faced by American small businesses. This legislation 
ensures that the employees of America's small businesses can take 
ownership in their companies and their jobs. It reduces regulatory 
encroachment on America's job creators and helps our small businesses 
expand and grow.
  I thank Representative Hultgren for bringing this bill before us. I 
commend Chairman Hensarling for working with both sides of the aisle 
and for following a good process on this legislation.
  Mr. Speaker, I urge my colleagues to vote ``yes'' on the rule and 
vote ``yes'' on the bill.
  The material previously referred to by Mr. Polis is as follows:

            An Amendment to H. Res. 240 Offered by Mr. Polis

       At the end of the resolution, add the following new 
     sections:
       Sec. 2. Immediately upon adoption of this resolution the 
     Speaker shall, pursuant to clause 2(b) of rule XVIII, declare 
     the House resolved into the Committee of the Whole House on 
     the state of the Union for consideration of the bill (H.R. 
     1869) to amend the Fair Labor Standards Act of 1938 to 
     provide more effective remedies to victims of discrimination 
     in the payment of wages on the basis of sex, and for other 
     purposes. The first reading of the bill shall be dispensed 
     with. All points of order against consideration of the bill 
     are waived. General debate shall be confined to the bill and 
     shall not exceed one hour equally divided and controlled by 
     the chair and ranking minority member of the Committee on 
     Education and the Workforce. After general debate the bill 
     shall be considered for amendment under the five-minute rule. 
     All points of order against provisions in the bill are 
     waived. At the conclusion of consideration of the bill for 
     amendment the Committee shall rise and report the bill to the 
     House with such amendments as may have been adopted. The 
     previous question shall be considered as ordered on the bill 
     and amendments thereto to final passage without intervening 
     motion except one motion to recommit with or without 
     instructions. If the Committee of the Whole rises and reports 
     that it has come to no resolution on the bill, then on the 
     next legislative day the House shall, immediately after the 
     third daily order of business under clause 1 of rule XIV, 
     resolve into the Committee of the Whole for further 
     consideration of the bill.
       Sec. 3. Clause 1(c) of rule XIX shall not apply to the 
     consideration of H.R. 1869.
                                 ______
                                 

        The Vote on the Previous Question: What It Really Means

       This vote, the vote on whether to order the previous 
     question on a special rule, is not merely a procedural vote. 
     A vote against ordering the previous question is a vote 
     against the Republican majority agenda and a vote to allow 
     the Democratic minority to offer an alternative plan. It is a 
     vote about what the House should be debating.
       Mr. Clarence Cannon's Precedents of the House of 
     Representatives (VI, 308-311), describes the vote on the 
     previous question on the rule as ``a motion to direct or 
     control the consideration of the subject before the House 
     being made by the Member in charge.'' To defeat the previous 
     question is to give the opposition a chance to decide the 
     subject before the House. Cannon cites the Speaker's ruling 
     of January 13, 1920, to the effect that ``the refusal of the 
     House to sustain the demand for the previous question passes 
     the control of the resolution to the opposition'' in order to 
     offer an amendment. On March 15, 1909, a member of the 
     majority party offered a rule resolution. The House defeated 
     the previous question and a member of the opposition rose to 
     a parliamentary inquiry, asking who was entitled to 
     recognition. Speaker Joseph G. Cannon (R-Illinois) said: 
     ``The previous question having been refused, the gentleman 
     from New York, Mr. Fitzgerald, who had asked the gentleman to 
     yield to him for an amendment, is entitled to the first 
     recognition.''
       The Republican majority may say ``the vote on the previous 
     question is simply a vote on whether to proceed to an 
     immediate vote on adopting the resolution. . . . [and] has no 
     substantive legislative or policy implications whatsoever.'' 
     But that is not what they have always said. Listen to the 
     Republican Leadership Manual on the Legislative Process in 
     the United States House of Representatives, (6th edition, 
     page 135). Here's how the Republicans describe the previous 
     question vote in their own manual: ``Although it is generally 
     not possible to amend the rule because the majority Member 
     controlling the time will not yield for the purpose of 
     offering an amendment, the same result may be achieved by 
     voting down the previous question on the rule. . . . When the 
     motion for the previous question is defeated, control of the 
     time passes to the Member who led the opposition to ordering 
     the previous question. That Member, because he then controls 
     the time, may offer an amendment to the rule, or yield for 
     the purpose of amendment.''
       In Deschler's Procedure in the U.S. House of 
     Representatives, the subchapter titled ``Amending Special 
     Rules'' states: ``a refusal to order the previous question on 
     such a rule [a special rule reported from the Committee on 
     Rules] opens the resolution to amendment and further 
     debate.'' (Chapter 21, section 21.2) Section 21.3 continues: 
     ``Upon rejection of the motion for the previous question on a 
     resolution reported from the Committee on Rules, control 
     shifts to the Member leading the opposition to the previous 
     question, who may offer a proper amendment or motion and who 
     controls the time for debate thereon.''
       Clearly, the vote on the previous question on a rule does 
     have substantive policy implications. It is one of the only 
     available tools for those who oppose the Republican 
     majority's agenda and allows those with alternative views the 
     opportunity to offer an alternative plan.

  Mr. BUCK. Mr. Speaker, I yield back the balance of my time, and I 
move the previous question on the resolution.

[[Page 5293]]

  The SPEAKER pro tempore. The question is on ordering the previous 
question.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. POLIS. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER. Pursuant to clause 8 of rule XX, further proceedings on 
this question will be postponed.

                          ____________________