[Congressional Record (Bound Edition), Volume 163 (2017), Part 4]
[House]
[Pages 5313-5326]
[From the U.S. Government Publishing Office, www.gpo.gov]




               ENCOURAGING EMPLOYEE OWNERSHIP ACT OF 2017

  Mr. HENSARLING. Mr. Speaker, pursuant to House Resolution 240, I call 
up the bill (H.R. 1343) to direct the Securities and Exchange 
Commission to revise its rules so as to increase the threshold amount 
for requiring issuers to provide certain disclosures relating to 
compensatory benefit plans, and ask for its immediate consideration in 
the House.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. Pursuant to House Resolution 240, an 
amendment in the nature of a substitute consisting of the text of Rules 
Committee Print 115-11 is adopted and the bill, as amended, is 
considered read.
  The text of the bill, as amended, is as follows:

                               H.R. 1343

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Encouraging Employee 
     Ownership Act of 2017''.

     SEC. 2. INCREASED THRESHOLD FOR DISCLOSURES RELATING TO 
                   COMPENSATORY BENEFIT PLANS.

       Not later than 60 days after the date of the enactment of 
     this Act, the Securities and Exchange Commission shall revise 
     section 230.701(e) of title 17, Code of Federal Regulations, 
     so as to increase from $5,000,000 to $10,000,000 the 
     aggregate sales price or amount of securities sold during any 
     consecutive 12-month period in excess of which the issuer is 
     required under such section to deliver an additional 
     disclosure to investors. The Commission shall index for 
     inflation such aggregate sales price or amount every 5 years 
     to reflect the change in the Consumer Price Index for All 
     Urban Consumers published by the Bureau of Labor Statistics, 
     rounding to the nearest $1,000,000.

  The SPEAKER pro tempore. The bill shall be debatable for 1 hour 
equally divided and controlled by the chair and ranking minority member 
of the Committee on Financial Services.
  After 1 hour of debate, it shall be in order to consider the 
amendment printed in House Report 115-75, if offered by the Member 
designated in the report, which shall be considered read, shall be 
separately debatable for the time specified in the report equally 
divided and controlled by the proponent and an opponent.
  The gentleman from Texas (Mr. Hensarling) and the gentleman from 
Michigan (Mr. Kildee) each will control 30 minutes.
  The Chair recognizes the gentleman from Texas.


                             General Leave

  Mr. HENSARLING. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days in which to revise and extend their remarks 
and submit extraneous materials on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  There was no objection.
  Mr. HENSARLING. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I rise in support of H.R. 1343, the Encouraging Employee 
Ownership Act. I also want to commend the Republican and Democrat 
sponsors of this important bill: Mr. Hultgren of Illinois, Mr. Delaney 
of Maryland, Mr. Higgins of New York, Mr. MacArthur of New Jersey, Ms. 
Sinema of Arizona, and Mr. Stivers of Ohio.
  Their bipartisan efforts resulted in a bipartisan bill that will help 
small businesses, including startups, to successfully reward their 
hardworking employees; and, while doing so, this bill will allow small 
businesses to effectively deploy their capital to grow and to create 
jobs on Main Streets all across our country.
  We all know, Mr. Speaker, that small businesses are the heart and 
soul of the American economy. In fact, they helped create more than 60 
percent of the Nation's net new jobs over the past two decades. So if 
our Nation is to have a healthier economy that offers more opportunity 
to more Americans, then we must encourage small-business growth and 
small-business startups, and this starts with ensuring they have access 
to the capital and credit they need to grow.
  Yet as we have heard from countless witnesses who have appeared 
before the House Financial Services Committee, community banks and 
credit unions in particular--the primary source of our small-business 
loans--are simply drowning, Mr. Speaker, in a sea of complicated and 
costly regulations. The same occurs with the maze of burdensome 
securities regulations that are written with the largest public 
companies in mind but end up hurting smaller companies.
  Although small companies are at the forefront of innovation and job 
creation, they often face significant obstacles in obtaining funding in 
our capital markets. These obstacles often result from the 
proportionately larger burden that securities regulations place on 
small companies when they seek to access capital both in the public and 
private markets.
  These small companies also face difficult challenges on how best they 
can deploy their limited resources and capital--to grow and thrive or 
to be able to sufficiently compensate their workforce, which is a 
critical component of their success.
  Currently, the SEC allows private companies to offer their own 
securities to employees as part of written compensation agreements 
without having to comply with burdensome Federal securities 
registration requirements under what is called SEC rule 701. Now, 
unfortunately, one of the rule's thresholds has not been adjusted in 
two decades. What the bipartisan supporters of this bill are proposing 
is simply to modernize this SEC rule with a modest increase in that 
threshold.
  Increasing the rule 701 threshold gives private companies more 
flexibility to reward and retain employees and permits private 
companies to keep valuable, skilled employees without having to use 
other methods such as borrowing money or selling securities. Updating 
this rule can encourage more companies to offer more incentives to more 
employees.
  As one witness who testified before Congress said, this bill ``would 
support a valuable compensation practice that allows small businesses 
to hire the most highly skilled workers'' and better enable small, 
emerging growth companies that are at a competitive disadvantage with 
bigger businesses to attract and retain employees.
  Allowing employees to become owners in the company also benefits 
those employees. As startups and small companies reach success, we all 
want their employees to also reap the benefits of that success. That is 
what is happening with companies that are able to offer stock options 
as part of their employee compensation plans.
  For example, when Google was in its early stages, it hired someone to 
be an in-house, part-time masseuse and compensated her with both cash 
and stock options. That masseuse is now worth millions today. Another 
example is from an ad-tech company, MoPub. Thirty-six of its 100 
employees became millionaires when the company was acquired by Twitter 
because MoPub's CEO set his employees up for success by offering them 
performance-based stock-option grants.
  So, Mr. Speaker, shouldn't we want more American workers to have the 
opportunities like at Google and MoPub? Don't we want more Americans to 
have

[[Page 5314]]

an opportunity to obtain an ownership stake in the places that they 
work? That way the workers can earn the large financial upside that 
comes when the company performs well, and the company benefits by being 
able to attract talented workers.
  Unfortunately, again, Mr. Speaker, too many companies right now shy 
away from offering employees greater ownership opportunities because an 
expensive, bureaucratic, burdensome, top-down regulation in Washington 
hasn't been updated in nearly 20 years. Mr. Speaker, we can fix that 
today. We can fix that by passing this commonsense, bipartisan bill, 
the Encouraging Employee Ownership Act.
  We can provide American workers with more opportunities to share in 
the successes and profits of companies they work for. We can help to 
foster capital formation so more Americans can go back to work, have 
good careers, pay their mortgages, plan for a secure retirement, and 
ultimately give their families a better life.
  Mr. Speaker, I urge all my colleagues to join me in supporting this 
commonsense bipartisan legislation, and I reserve the balance of my 
time.

                              {time}  1515

  Mr. KILDEE. Mr. Speaker, I yield myself such time as I may consume.
  H.R. 1343, Encouraging Employee Ownership Act of 2017, eliminates 
important disclosures that private companies must provide to their 
employees in the event they are compensating those employees with 
stock.
  This bill would limit transparency. If companies want to pay their 
employees in stocks, they should have to simply disclose to their 
workers the risks associated with those investments.
  Currently, private companies can provide up to $5 million worth of 
stock compensation annually to their employees and are not required to 
provide any financial disclosure. This bill would lift that cap to $10 
million.
  If companies choose to provide an employee with stock compensation, 
they should be required to inform that employee of the appropriate 
financial information, benefits, and the risks associated with that 
investment, including 2 years of company financial statements. All of 
this information is commonly available to typical investors.
  Let's be clear: this stock is compensation for their work. Employees 
deserve to understand the value of their compensation prior to 
accepting it. They deserve the same protections that other investors 
would get.
  I agree with Professor Mercer Bullard, who is a professor of law at 
the University of Mississippi School of Law, who testified before the 
Capital Markets, Securities, and Investments Subcommittee voicing his 
concerns about the bill. In his testimony, he noted that to take 
advantage of the terms of this legislation, an issuer would have to 
have at least $34 million in total assets. Surely, such minimal 
disclosures are not too burdensome for those sort of companies.
  I do also understand that some proponents of this legislation argue 
that such an exemption is needed because disclosure of company 
information to employees runs the risk that confidential information 
could be leaked to competitors.
  Employees with access to such information could simply be subject to 
nondisclosure agreements, which are typical today. Indeed, 
nondisclosure agreements are a simple solution that protects the 
company, but does not deny the employees the right to understand the 
worth of, or the risks associated with, the compensation they are 
receiving. Unfortunately, this bill would limit that transparency and 
those protections.
  Mr. Speaker, I oppose this legislation, and I reserve the balance of 
my time.
  Mr. HENSARLING. Mr. Speaker, I yield the balance of my time to the 
gentleman from Michigan (Mr. Huizenga), and I ask unanimous consent 
that he may control that time.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  There was no objection.
  Mr. HUIZENGA. Mr. Speaker, I yield myself such time as I may consume, 
and I thank the chairman for his leadership on this particular issue.
  Mr. Speaker, small businesses and entrepreneurs are what drive the 
American economy. I meet with them in my district, the Second District 
of Michigan, all the time. I know my colleagues do as well back in 
their districts.
  We see them firsthand. We see firsthand the benefits that their 
dreams, their innovations, their inspiration, and their hard work 
provide to our communities.
  These innovators, entrepreneurs, and risk-takers are critical for our 
country's economic growth and prosperity. In fact, small businesses are 
responsible for 60 percent of the Nation's net new jobs over the past 
two decades. Not 2 years, not 10 years, but over the last 20 years, the 
last two decades.
  If our Nation is going to have an economy that provides opportunity 
for every American, then we must promote and encourage success and 
growth in our small businesses and our startups. It is this notion that 
brings us this legislation we are discussing today.
  H.R. 1343, Encouraging Employee Ownership Act, would simply level the 
playing field for small companies by updating Federal rules that allow 
small businesses to better compensate their employees with ownership in 
their own businesses.
  Currently, Securities and Exchange Commission rule 701 permits 
private companies to offer their securities as part of written 
compensation agreements to employees, directors, general partners, 
trustees, officers, or certain consultants without having to comply 
with rigid Federal securities registration requirements. SEC rule 701, 
therefore, allows small companies to reward its employees.
  Despite the SEC having the authority to increase the $5 million 
threshold disclosure via rulemaking, the SEC has once again chosen to 
prioritize highly politicized regulatory undertakings instead of 
focusing on its core mission. That mission includes facilitating 
capital formation. If the SEC cannot or will not focus its priorities, 
Congress will.
  It is imperative that small businesses in west Michigan, all of 
Michigan, and across America have the ability to compete. A critical 
element of competition and success is for those small businesses to be 
able to offer compensation packages that attract and retain top-tier 
talent.
  In today's world, that includes rewarding employees in stock options. 
To me, this just makes common sense. Small-business employees have a 
clear and vested interest in the success of their employer.
  By increasing the rule 701 threshold to $10 million, it will give 
private companies more flexibility to attract, reward, and retain those 
highly valuable employees. This simple change will allow companies to 
offer twice as much stock to their employers annually, as they 
currently can, without having to trigger additional disclosure 
information to investors about compensation packages that include these 
security offerings.
  By reforming this regulatory burden, startups, small businesses, and 
emerging growth companies will be better equipped to attract highly 
talented individuals from companies that are better capitalized and 
able to maybe provide some additional cash compensation.
  By incentivizing employees with stock options, small businesses will 
now be able to compete on a more level playing field with older, 
larger, and maybe more established companies. They are going to be able 
to retain their invaluable employees as well.
  This bill is an example of the positive bipartisan results that can 
be achieved when Republicans and Democrats reach across the aisle. I 
commend the sponsors of the bill, Representatives Hultgren, Delaney, 
Higgins, MacArthur, Sinema, and Stivers for their leadership on this 
issue. I encourage my colleagues to support H.R. 1343.
  Mr. Speaker, I reserve the balance of my time.
  Mr. KILDEE. Mr. Speaker, I yield 6 minutes to the gentleman from 
Minnesota (Mr. Ellison), a member of the Financial Services Committee.

[[Page 5315]]


  Mr. ELLISON. Mr. Speaker, the value of companies doesn't always go 
up. It is not true that the stock market always goes up and only goes 
up. It would be nice if Methuselahs at Google and every other company 
in America could get stock options and end up millionaires, but the 
truth is the world doesn't work that way. That is why disclosure is 
very important. That is why there is nothing wrong and no one objects 
to employees being compensated with stock options, but those employees 
ought to at least know the value of those stock options.
  If you give me a check and it has a monetary value, I can read it and 
I know how much it is. If you give me stock options and you don't tell 
me because you don't have to disclose how much they are worth, then 
that is not fair, and that is what we object to.
  This bill simply allows companies to avoid disclosure to employees of 
what those stock options are worth. That is wrong, and that is why we 
oppose it.
  Let me just start in terms of the context, Mr. Speaker. Today we 
consider yet another bill in favor of the moneyed interests. Today we 
consider another bill that basically helps out people who have a lot 
while so many Americans are struggling to get by and problems abound 
almost everywhere.
  I have got to wonder, of all the things the American public want, why 
is a revision to the SEC's rule--section 701, to be precise--the 
priority for this week?
  We have been here for about 3 months now. The Republicans have set 
the agenda. They are in the majority. They get to decide which bills 
come up. Why do they keep on bringing up bills that only the moneyed 
interests want?
  Mr. Speaker, in the past few months, congressional Republicans--I 
almost called them corporate Republicans--who decide which bills are 
the priority, have brought forth a hodgepodge of pieces of legislation. 
I will just review a few.
  Republicans made it easier to drug test people receiving unemployment 
compensation.
  Do you think the unemployed want that?
  I doubt it.
  Republicans have passed and the President even signed a law to 
protect corporate firms from having to disclose labor violations like 
wage theft before winning government contracts. I have got a feeling 
the employees were not calling for that.
  House and Senate Republicans passed laws that allow internet service 
providers to sell your browser history. I don't think most folks on the 
internet today were clamoring for that gem, which I was proud to vote 
``no'' on.
  Republicans enacted a new law making it easier to dump coal debris 
near rivers and streams.
  Republicans stopped efforts to help governments around the world 
avoid corruption.
  H.J. Res. 41 removed the requirement that corporations disclose 
resource payments to foreign governments, which is a crushing blow to 
democracy activists working in fragile nations.
  Mr. Speaker, this particular piece of legislation comes within a 
certain kind of context--a context where we are not talking about 
increase in pay, making people safer, making water cleaner, making 
foreign governments more honest. It is quite the opposite.
  In the 3 months that we have been back in Congress, these laws 
removing competition, removing disclosure, and removing consumer 
privacy are all priorities of Republicans, who set the agenda.
  Mr. Speaker, people who might be clued into this broadcast today need 
to know what the majority has been up to. It has not been up to 
business.
  These are all multinational corporate interests that don't punish 
people for polluting, allow them to sell your internet browser's 
history, allow them to make money off of testing laid-off workers 
receiving employment compensation that is due them, and don't make 
corporate interests disclose payments to foreign governments when they 
drill for oil and minerals.
  I just want the American people and Members to understand what is 
going on here, what is the larger context of this piece of legislation 
that we look at today.
  When I talk to my constituents, they don't bring up any of this 
stuff. Mr. Speaker, they want to know: Where is the jobs bill? When are 
we going to get back to work? Somebody said we were going to work on 
real infrastructure, real fair trade. When is that going to happen?
  Well, the people who are in charge around here, I guess they are 
going to get around to it at some point.
  My constituents say: Can't we raise the minimum wage from something 
higher than $7.25 an hour, which is the Federal minimum wage? When is 
that bill coming up? Or, what about reconstructing our roads and our 
bridges and allowing us to raise a gas tax to invest in our Nation's 
infrastructure?
  They say they want to increase skills. Let's invest in preschool, 
Pell grants, and community college. Let's put the people, not the 
corporate wish list, first.
  Today we are asked to vote on a bill that basically makes it easier 
for private companies to provide options, like stocks, rather than 
compensation to their employees. As I have said, fundamentally, this 
may not be a bad thing if disclosure is made. This bill makes it not 
required. This bill makes it easier for firms to offload some of their 
options to employees without disclosing financial information to them.
  While I am glad to see employers reward employees with stock and 
other compensation in addition to salaries, workers should be told the 
value of the compensation they receive. I don't think that is asking 
too much, Mr. Speaker.
  With this bill, H.R. 1343, it is possible that employees would be 
promised stock options which could be worth less than promised or even 
completely worthless.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. KILDEE. Mr. Speaker, I yield an additional 2 minutes to the 
gentleman from Minnesota.
  Mr. ELLISON. Employees could decide to forego a salary increase and 
accept lower pay in order to receive more stock options; yet, those 
stock options could be worth way less than they expected.
  Why should employees receive less information than any other minority 
shareholder?
  If an employee is trusted enough to run day-to-day aspects of the 
business, they should be trusted enough to receive full disclosure 
about the stock. Employees should be able to receive information on the 
financial position of the company so they can make an educated 
decision.
  It is not difficult to allow participating employees to sign 
nondisclosure agreements, and it can't be because these disclosures are 
an additional burden on the firm. These firms prepare these types of 
disclosures to receive rule 701 exemption from the SEC in the first 
place.

                              {time}  1530

  So I am also concerned about the mismatch of power between 
corporations and their employees, and I am very concerned that 
employees can be susceptible to pressure. Let me do a quick example.
  George Maddox was one of 21,000 people who worked for Enron. After 
working at Enron for 30 years, he had 14,000 shares of company stock 
valued at $1.3 million. When Enron collapsed, he had literally nothing, 
Mr. Speaker. All of his retirement was Enron stocks. If you haven't 
watched the movie ``Enron: The Smartest Guys in the Room'' recently, I 
would urge you to watch it again. You could also read Bethany McLean's 
book by the same name.
  One image consistently stuck with me: a staff rally where leaders 
extolled the virtues of the firm. Just as we heard on the other side of 
the aisle a moment ago, leaders whipped employees into a frenzy to buy 
Enron stock, even as leaders knew it was worthless. In fact, corporate 
leaders had already sold their stock while urging employees to buy. 
Enron had a strategy of buying companies and then pressuring new 
employees to buy Enron stock to keep the stock price inflated. Since 
Enron usually fired 10 percent of the workers every year, workers felt 
pressured to buy stock to show commitment to the firm.

[[Page 5316]]

  I can't just support a bill that gives employees fewer protections 
than investors. I can't support a bill that encourages employees to 
possibly forgo cash in their paychecks in exchange for some unverified 
investment option. It is not right.
  Mr. Speaker, I see you reaching for the gavel. I will include the 
rest of my comments in the Record. I urge a ``no'' vote on this 
particular piece of legislation until it allows for disclosures.
  Today we consider another bill requested by corporations.
  But, I got to wonder, of all the things the American public want, why 
is a revision to the Securities and Exchange Commission rules--Section 
701 to be precise--the priority for this week?
  We've been here for three months now.
  House Republicans set the agenda.
  They lead this governing body.
  Why do they keep bringing us bills that corporate America wants?
  In the past few months, Congressional Republicans, who decide which 
bills are priorities have brought forward a hodgepodge of corporate 
requests.
  Here are some of the bills that are now law.
  Republicans made it easier to drug test people receiving unemployment 
compensation (H.J. Res. 42).
  Republicans passed--and the President signed--a law to protect 
corporate firms from having to disclose labor violations--like wage 
theft--before winning government contracts (H.J. Res. 37).
  House and Senate Republicans passed laws that allow internet services 
providers to sell your browser history.
  Republicans enacted a new law making it easier to dump coal debris 
near rivers and streams (H.J. Res. 38).
  Republicans stopped efforts to help governments around the world 
avoid corruption.
  H.J. Res. 41 removed the requirement that corporations disclose 
resource payments to foreign governments.
  Which is a crushing blow to democracy activists working in fragile 
nations.
  And, a law preventing State governments from setting up retirement 
plans for residents who do not have a work-based plan.
  So, in the three months we've been back, these laws--removing 
competition, disclosure, and consumer privacy--are the priorities of 
Republicans who set the agenda.
  These are all asks of corporate America--don't punish us for 
polluting streams; let us sell your internet browser history; let us 
make money drug testing laid off workers receiving unemployment due 
them, and; don't make us disclose our payments to foreign governments 
when we drill for oil or minerals.
  When I talk to my constituents, they don't ask for any of these.
  They say, ``Where's the jobs bill?''
  My constituents say, can't we raise the minimum wage from $7.25 an 
hour?
  They say, our roads and bridges need work. Let's raise the gas tax a 
skoch and invest in infrastructure?
  They say, we want to increase our skills; let's invest in pre-school, 
Pell grants and community colleges.
  Let's put people, not corporate wish lists--first.
  But, nope, today we are asked to vote on a bill that makes it easier 
for private companies to provide options--like stocks--rather than 
compensation to their employees.
  This bill makes it easier for firms to offload some of their options 
to their employees without disclosing financial information to them.
  While I'm glad to see companies reward employees with stock and other 
compensation in addition to salaries, workers should be told the value 
of the compensation they receive.
  With this bill--H.R. 1343--it is possible that employees would be 
promised stock options which could be worth less than promised, or 
even, completely worthless.
  So, employees could decide to forego a salary increase--or accept 
lower pay--in order to receive more stock options, yet, those stock 
options could be worth way less than expected.
  Why should employees receive less information than that of any other 
minority shareholder?
  If an employee is trusted enough to run the day-to-day aspects of the 
business, they should be trusted enough to receive full disclosure 
about the stock.
  Employees should be able to receive information on the financial 
position of the company so they can make an educated decision.
  It's not difficult to allow participating employees to sign non-
disclosure agreements.
  And it can't be because these disclosures are an additional burden on 
the firm.
  Because these companies prepared these types of disclosures to 
receive the Rule 701 exemption from the SEC in the first place.
  I'm also concerned about the mismatch in power between the 
corporations and their employees.
  I am very concerned that employees can be more susceptible to 
pressure to take options instead of salary increases.
  For example, we could ask George Maddox.
  George was one of the 21,000 people who worked at ENRON.
  After working at ENRON for 30 years, he had 14,000 shares of company 
stock. It was valued at $1.3 million.
  Then ENRON collapsed, and he had literally nothing.
  All his retirement was in ENRON stocks.
  If you haven't watched the movie ENRON: The Smartest Guys in the Room 
recently, I'd urge you to watch it again.
  You could also read Bethany McLean's book by the same name.
  One image has consistently stuck with me.
  A staff rally where leadership extolled the virtues of the firm.
  Leaders whipped employees into a frenzy to buy ENRON stock even as 
the leaders knew it was worthless.
  In fact, corporate leaders had already sold their stock while urging 
employees to buy.
  ENRON had a strategy of buying companies and then pressuring the new 
employees to buy ENRON stock to keep the stock price inflated.
  And since ENRON usually fired 10% of workers every year, workers felt 
pressured to buy stock to show a commitment to the firm.
  I just can't support a bill that gives employees fewer protections 
than investors.
  I can't support a bill that encourages employees to possibly forego 
cash in their paychecks in exchange for some unverified investment 
option.
  I don't think the supporters of this bill are doing this for 
nefarious reasons.
  I'm sure they find my reference to Enron hyperbolic.
  They might also say that it's irrelevant since Enron was a public 
company and we are talking about private companies.
  So, let's talk about Palantir Technologies.
  This $20 billion company convinced top-tier engineers to accept 
below-market salaries by promising them generous stock options.
  But some employees who accepted this bargain, hoping to make money on 
selling their shares, cannot sell them.
  The only buyer of their stocks is Palantir Technologies themselves--
or a buyer approved by Palantir Technologies.
  Palantir is not a small firm.
  Palantir is the third biggest American tech startup, behind only Uber 
and AIR B-N-B.
  It was also founded in 2004, which makes Palantir as old as 
Facebook--which is a long time to wait to cash in your options.
  Pushing employees to own more of employer's stock exposes workers--
like George Maddox--to put all their retirement eggs in one basket--
what we call ``concentration risk.''
  I ask this Congress to stop doing the bidding of corporate America 
until we address the priorities of American families and workers.
  We should increase wages and access to affordable housing, provide 
clean air and clean water, and protect our privacy.
  We should not make it easier for employers to pressure workers to 
choose options over salary without adequate disclosures. Vote no on 
H.R. 1343.
  Mr. HUIZENGA. Mr. Speaker, I yield 2 minutes to the gentleman from 
Missouri (Mr. Luetkemeyer), my fellow subcommittee chairman.
  Mr. LUETKEMEYER. Mr. Speaker, I thank the gentleman for yielding me 
this time. I also want to thank the distinguished gentleman from 
Illinois (Mr. Hultgren) for his work on this legislation and, more 
broadly, issues surrounding American entrepreneurship. He has been a 
tireless advocate.
  Mr. Speaker, over the last 2 weeks, the Subcommittee on Financial 
Institutions and Consumer Credit, which I chair, has held hearings to 
examine the impact regulations have had on financial institutions, 
small businesses, and American consumers. What we have seen is that the 
burdens stemming from Dodd-Frank and associated Obama era policies 
continue to harm consumers and small businesses.
  We have what some have referred to as a two-speed economy. Large 
banks and their large customers are thriving, but the story isn't as 
bright for small businesses. That is why H.R. 1343 is so important. 
Small businesses and startups don't necessarily have the same 
opportunities to access the capital markets as their larger 
competitors, but from a regulatory standpoint, the small guys are 
treated the same as the big guys.

[[Page 5317]]

  Mr. Hultgren's legislation takes an important step in addressing some 
of the disparities that exist. H.R. 1343 will allow small businesses to 
attract and retain employees through incentives similar to those that 
may be offered by large businesses. Unlike the gentleman who just got 
done speaking, this is not about Enrons. It is about small businesses 
that we are talking about.
  It will also ease some of the reporting burden on small and emerging 
businesses. The bill does so simply by increasing the SEC rule 701 
threshold, taking the existing rule and simply expanding it, a figure 
that hasn't been touched since 1999.
  It is essential that Washington take steps to level the playing field 
for small businesses and eliminate this two-speed economy. The bill the 
House will consider today is another step toward job creation and a 
more reasonable regulatory environment.
  I again want to thank and commend Mr. Hultgren for his leadership and 
ask that my colleagues join me in supporting H.R. 1343.
  Mr. KILDEE. Mr. Speaker, I yield 4 minutes to the gentleman from 
Maryland (Mr. Delaney), a member of the Committee on Financial 
Services, my classmate, and a cosponsor of this legislation.
  Mr. DELANEY. Mr. Speaker, I want to thank my good friend from 
Michigan for yielding me this time, the vice ranking member of our 
committee, and the gentleman from Illinois (Mr. Hultgren), my good 
friend, for cosponsoring this legislation with me.
  I do rise in support of H.R. 1343, Mr. Speaker, and I think it is a 
very simple piece of legislation. The chairman of the committee said it 
was a simple piece of legislation. It is very straightforward. It 
simply raises the threshold as to the amount of stock a private 
corporation can give its employees, from $5 million to $10 million, 
without triggering additional disclosure.
  What this bill is not about is rolling back disclosure because, as a 
practical matter, it simply defines the threshold as to when additional 
disclosure is required. That threshold was originally established in 
1988 at $5 million. Five million dollars was good in 1988; it is no 
longer good in 2017. We have simply escalated that amount by inflation, 
and we have come up with the number $10 million, which is proposed in 
the legislation.
  One of the reasons this legislation does not roll back disclosures, 
which is a myth that I intend to debunk here this afternoon, is 
because, as a practical matter, what corporations will do is, in fact, 
not give additional stock to their employees if, in fact, it triggers 
additional disclosures. That is what actually happens in the private 
market is this threshold defines the amount of stock that a company 
will, in fact, give to its employees in any given year; and, if we 
don't raise the cap from $5 million to $10 million, we are effectively 
preventing companies from allowing their employees to share in stock 
ownership.
  Private companies make decisions, Mr. Speaker, to stay private for 
many reasons: either because they are too small and they don't want to 
go public; or they don't want to, in fact, disclose their confidential 
information; or they don't want the costs or burdens of being a public 
company; or because they don't want to give up control. Whatever reason 
they have, it is a very important decision for a private company to 
stay private and not go public. The current threshold of $5 million 
effectively forces a company to make the kind of disclosures it would 
have to make as a public company if it elects to give more than $5 
million of stock to its employees.
  We, as policymakers, should encourage more employee ownership in the 
markets because it is good for both the corporations and the employees. 
It is good for the corporations because it creates a better culture. It 
allows the management team and the employees of the company to have a 
more long-term perspective, and it reduces turnover, which is one of 
the highest costs that companies have. So it is very good for the 
companies.
  But, in fact, Mr. Speaker, it is even better for the employees. The 
data suggest that companies that have high employee ownership are much 
less likely to lay off their employees during a recession. So it 
creates, effectively, better retention, which is obviously in the 
interest of employees.
  But the other thing it does--and I think this is the most important 
point--is it encourages kind of an inclusive capitalism whereby workers 
actually own more of the U.S. economy. This is something, as Democrats, 
we should care about, in particular, because we have talked for many 
years about how the growth in the U.S. economy and the increases in 
productivity have disproportionately gone to capital and not to 
workers.
  We believe there are many reasons this has occurred, but one of the 
things we should be advocating for, strongly, is increasing workers' 
ownership of capital. It will inevitably lead to more savings among 
workers, and it will start balancing out the distribution of profits in 
society. One of the ways we do that is to eliminate the barriers for 
companies to issue stock to their employees, which is effectively what 
this bill does.
  So if we care about this concept of inclusive capitalism, if we 
believe American workers should own a greater percentage of the economy 
and, therefore, benefit from the productivity enhancements that are 
occurring in the economy and the economic growth that is occurring in 
the economy, we should put policies in place specifically to make it 
easier for corporations to engage in shared employee ownership, which 
is exactly what this bill does.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. KILDEE. Mr. Speaker, I yield an additional 1 minute to the 
gentleman from Maryland.
  Mr. DELANEY. I had firsthand experience with this prior to coming to 
Congress. I started two businesses as private companies, and they both 
became publicly traded companies. I shared ownership in those companies 
broadly with my team. It was very good for my business, and it was very 
good for hundreds of them when those initial public offerings occurred.
  So I have firsthand experience with this. I do think it is good 
public policy across the long term, and I encourage my colleagues to 
support H.R. 1343.
  Mr. HUIZENGA. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Illinois (Mr. Hultgren), the author of this legislation.
  Mr. HULTGREN. Mr. Speaker, I thank the chairman.
  I do want to thank my colleagues for being here. I think this is a 
really important discussion that we are having today. It is such an 
honor to serve with all of my colleagues.
  I do think some who have spoken opposed to this legislation really 
don't understand the impact. There is nothing in this legislation that 
takes away any disclosures. Disclosures still remain. The same 
disclosures that have been in place for 30 years remain exactly there. 
This does not have anything to do with Enron, a publicly traded 
company. It is completely different. This is private sector. This is 
opening up opportunity. I think, by arguing against this, ultimately, 
it is taking away opportunity from employees to benefit.
  It is such a privilege to serve with people like the gentleman from 
Maryland (Mr. Delaney), who was part of this, opening up opportunities 
to hundreds of families. Congressman MacArthur, similarly, opened up 
opportunities that changed lives, as well as Congressman Trott, who is 
going to be speaking as well. They opened up opportunities to people 
who would never have had opportunity to own a company, to own that and 
to have it completely change their family and their future.
  I rise to support H.R. 1343, the Encouraging Employee Ownership Act 
of 2017.
  My legislation is based on a simple principle: Employees who own a 
stake in the company they work for every day want to see it do well and 
will do their best to make sure that that business succeeds. Their 
sense of ownership over details, large and small, makes a

[[Page 5318]]

real difference to the bottom line and, just as importantly, to the 
quality of life of the employers and employees. When the company 
succeeds, the employee succeeds. The business, in turn, receives a 
large boost in productivity, enabling it to expand its reach and invest 
in new technology and equipment.
  EEOA would make it easier for companies in Illinois and nationwide to 
let hardworking employees own a stake in the business they pour their 
sweat into every single day. This benefit also helps companies attract 
top talent, even if the company is just starting out.
  Warren Ribley of the Illinois Biotechnology Industry Organization, 
which represents companies that employ thousands of residents in the 
14th Congressional District, believes: `` . . . offering an ownership 
stake to employees is a critical tool in recruiting top talent to job-
generating companies. And there is no doubt that an equity stake 
encourages employees to drive hard for success of that enterprise.''
  Unfortunately, some companies are shying away from offering employee 
ownership because of regulations that limit how much ownership they can 
safely offer. SEC rule 701 mandates various disclosures for certain 
privately held companies that use more than $5 million worth of 
securities for employee compensation per year.
  This threshold was arbitrarily set by the SEC in 1999. For businesses 
that want to offer more stock to more employees, this rule forces those 
businesses to make confidential disclosures that could greatly damage 
future innovation if they fell into the wrong hands; this includes 
business-sensitive information, including the financials and 
corresponding materials like future plans and capital expenditures. The 
SEC's original rulemaking acknowledged these concerns.
  And these disclosures aren't just risky, they are costly. As the 
Chamber of Commerce has explained, the Encouraging Employee Ownership 
Act would instead ``help give employees of American businesses a 
greater chance to participate in the success of their company.''
  EEOA builds off the JOBS Act reform to rule 12(g), which increased 
the number of shareholders of record that a company could have without 
SEC registration from 500 to 2,000 and exempted employee compensation 
securities from the registration requirements. This idea championed in 
the JOBS Act, that the law should treat employee compensation 
securities differently than traditional securities, has not been 
extended to the SEC rule 701.
  My bill is simple. It is a bipartisan fix. EEOA raises the outdated 
threshold for enhanced disclosure from $5 million to $10 million, 
keeping pace with inflation every 5 years. We are taking something that 
is already working and making it available for even more companies and, 
more importantly, more employees.
  To be clear, issuers who are exempt from enhanced disclosure would 
still have to comply with all pertinent antifraud civil liability 
requirements. Furthermore, the employees purchasing these securities 
observe the business they work for every day and have a closer 
perspective on its operation that is not available to the traditional 
investor, thus negating the need for additional disclosure. We should 
applaud the employee ownership from the board room to the shop floor.
  I thank the bipartisan cosponsors of this EEOA legislation, 
especially Congressman Delaney for his hard work and Congressmen 
Stivers, Sinema, Higgins of New York, MacArthur, Gottheimer, and Trott. 
I thank Speaker Ryan and Chairman Hensarling for their support in 
advancing this critical legislation.
  Mr. KILDEE. Mr. Speaker, I yield myself such time as I may consume.
  I appreciate the comments of my colleague and friend. I do, however, 
disagree that the question here derives from a lack of understanding of 
the legislation. I think it is entirely possible--in fact, I would 
suggest that it is likely--that members of a body such as this, from 
435 distinct districts and different experiences, can look at the same 
information, fully understand it, and come to different conclusions as 
to what sort of policy ought to be in place, and that is where I have 
landed on this particular subject. I fully understand.

                              {time}  1545

  I also think it is important to note that we can't on one hand say 
that this is not about disclosure and on the other hand mention that 
these disclosure requirements could have a negative impact and 
encourage or discourage companies from engaging in the practice of 
awarding employees with stock as a part of their compensation.
  It is a question of disclosure. This legislation is about the 
disclosure requirements that should be applied in this case. That is 
really what we have heard from both sides of this argument: where 
should that disclosure requirement be, and at what level should it be 
incurred?
  What I would say is--and I think this is important to note, speaking 
for myself--I know many other members of the Financial Services 
Committee and Members of this body that may oppose this legislation 
feel strongly that the direction toward awarding employees with stock 
ownership is a positive direction. It is something that my friend, Mr. 
Delaney, has not only advocated for, but has practiced in his own 
private sector experience. It is a positive thing for a company and it 
is a positive thing for the employees.
  The only point that I continue to drive home and that others have 
reiterated is that it is important that employees understand the nature 
of the stock that is being awarded to them and that the disclosure 
requirements make clear employees are aware of the compensation and its 
true value. That is really the point of my objection.
  Mr. Speaker, I include in the Record a letter I received from Public 
Citizen, which articulates some of these same arguments.

                                               PUBLIC CITIZEN,

                                    Washington, DC, March 8, 2017.
     Member,
     House Committee on Financial Services,
     Washington, DC.
       Dear Representative: On behalf of more than 400,000 members 
     and supporters of Public Citizen, we offer the following 
     comments on bills facing a committee vote March 9, 2017.
       In securities lawmaking, we believe the committee's compass 
     should always point to investor protection. Well informed 
     investors who can trust disclosures form the bedrock of 
     capital formation. We are concerned that a few of these 
     measures point in a different direction.
       HR 910: The ``Fair Access to Investor Research Act of 
     2017'' directs the SEC to eliminate restrictions on research 
     reports that cover Exchange Traded Funds (ETEs). The result 
     of this measure means that firms promoting ETFs can 
     simultaneously publish reports that appear to be impartial 
     analysis. This may lead investors to take unwarranted comfort 
     in the security. In the last decade, ETFs have grown from 
     about 100 funds with $100 billion in assets to more than 1300 
     funds with $1.8 trillion in assets, That makes the playing 
     field for mischief immense.
       Puffery parading as research led to the dot-com bubble in 
     the late 1990s, where analysts disregarded fundamental 
     metrics such as a revenue and income when recommending the 
     purchase of new internet-based firms. This measure improves 
     on a previous iteration of the legislation by allowing 
     fundamental fraud oversight by the SEC. But the bill ignores 
     the basic hazard that a firm's motivation in funding research 
     may be sales promotion and not bona fide education for its 
     clients. We also note that ETFs represent the securities of 
     active firms. That is, an ETF holds assets such as stocks or 
     bonds. That means this has little to do with capital 
     formation. Now, research reports insulated from government 
     scrutiny may too often serve to promote more turnover and 
     commissions, not sound guidance. For these reasons, we oppose 
     this bill and encourage members to vote no.
       HR 1343: The ``Encouraging Employee Ownership Act of 2017'' 
     increases from $5 million to $10 million the amount of 
     securities a firm may sell annually to its employees without 
     providing certain basic financial information. We believe 
     this is misguided for a number of reasons. First, defenders 
     of this measure reference the potential for leakage of 
     propriety information. There's little evidence of this 
     problem. It's simply not in the self-interest of an employee-
     owner to divulge critical information to a rival, especially 
     if it would undermine the value of the stock. Second, 
     employees who are compensated in stock (instead of additional 
     cash) should be entitled to be informed about the financial 
     condition of their company, the same as any other investor. 
     Other company creditors, such as the firm's bank or major 
     supplier, receive this information, however this measure

[[Page 5319]]

     reduces stock-compensated employees to a class below these 
     other creditors. Young firms may be struggling with cash-flow 
     problems and choose to use stock rather than cash for 
     compensation. But those employees should be informed about 
     such risks. Third, the basic thrust of this measure is to 
     lead employees to hold a greater share of their savings in 
     the firm. An employee invested in his or her own firm may be 
     more productive and lead to greater profits at the firm that 
     the employee then shares; but there is a point beyond which 
     this dynamic dissipates. Any prudent investor should 
     diversify. Overconcentration in one asset, especially where 
     the firm's prospects are less than stellar, compounds the 
     employee-investor's risk. We oppose this bill, and encourage 
     members to do the same.
       HR 1366: The ``U.S. Territories Investor Protection Act'' 
     extends basic U.S. securities law oversight to investment 
     firms operating in Puerto Rico and other U.S. territories. To 
     date, these firms have escaped oversight, disclosure and 
     conflict-of-interest requirements that mainland firms face. 
     We support this common sense reform.
           Sincerely
                                                  Bartlett Naylor,
                                                   Public Citizen.

  Mr. KILDEE. Mr. Speaker, I reserve the balance of my time.
  Mr. HUIZENGA. Mr. Speaker, I yield such time as he may consume to the 
distinguished gentleman from Arkansas (Mr. Hill).
  Mr. HILL. Mr. Speaker, I thank my friend from Michigan, the 
distinguished chairman of the Capital Markets, Securities, and 
Investments Subcommittee, for yielding the time.
  Mr. Speaker, what we are here talking about today is opportunity. We 
are not talking about the money interests. We are not talking about 
waving the bloody shirt of the Enron debacle. What we are talking about 
here today, Mr. Speaker, is in the interest of innovators. It is in the 
interest of talented Millennials who have huge student loans, who have 
a great idea to benefit themselves, their community, their economy. We 
are here to be in the interest of hardworking workers who have no big 
investment dollars, but have an abundance of sweat equity. We are here 
in the interest, Mr. Speaker, of building businesses and growing this 
economy. If we do that, we are growing jobs and opportunity for our 
citizens. And we are in the interest, Mr. Speaker, again, not of the 
money interest, but of efforts all over this country, led by people 
like John Delaney of Maryland and Stephen Case of Virginia, to build 
out venture capital and entrepreneurship in places other than Boston, 
Massachusetts; Menlo Park; places like Detroit; Flint; Little Rock; St. 
Louis; and Chicago. That is why we are here today. This bill is a 
simple, commonsense, small step in that effort.
  For many years, in my private sector life, I helped young companies 
form and raise capital for them. In my own business, I extended stock 
options and opportunities to buy stock to those very people who did not 
have the excess cash to invest. Many companies issue stock to 
compensate their employees, but it is especially important to startup 
businesses and private businesses. It is especially important to those 
businesses that are trying to compete with big private enterprises that 
have a public stock to offer as an incentive. And structuring 
competitive compensation in private businesses is very challenging.
  Further, for employees, this stock ownership is a huge source of 
pride, allowing individuals to participate in the growth and prosperity 
that their hard work and sweat equity have helped build.
  Through rule 701, the SEC allows private companies to offer up to $5 
million in their own securities without additional regulatory 
bureaucracy. My friend from Illinois (Mr. Hultgren) and my friend from 
Maryland (Mr. Delaney) have simply made a small change, Mr. Speaker; 
and that is to raise that commensurate with inflation to $10 million to 
reflect the world we live in today. This is not rocket science; this is 
something we need to do for building our economy.
  As we celebrate the fifth anniversary of the signing of the JOBS Act 
by President Obama and the successes this legislation has yielded in 
capital formation for small and emerging growth companies, I urge my 
colleagues to support this effort by my friend from Illinois in this 
bipartisan, commonsense job-creating proposal.
  Mr. KILDEE. Mr. Speaker, I yield 2 minutes to the distinguished 
gentleman from Colorado (Mr. Polis), a member of the Committee on Rules 
and the Committee on Education and the Workforce.
  Mr. POLIS. Mr. Speaker, I thank the gentleman for yielding the time.
  Various measurements of the economy have shown economic growth and an 
increase in the stock market. The frustration that I hear from so many 
of my constituents is that: With all of this economic growth, why 
haven't my prospects improved? Why has there been wage stagnation? Why 
aren't my family and I earning any more than I was?
  It is true, because a lot of the benefits of this economic growth 
have gone to shareholders and consumers rather than workers. We are all 
consumers, and we have all benefited from that. And do you know what? 
We are all shareholders through pensions and through retirement 
accounts, public and private. Many people also put food on their table 
and pay their rent, wearing their hat as an employee or a worker.
  One of the things that we can do not just by passing this bill, but 
by passing a whole host of legal changes both in the tax framework and 
in the regulatory framework to make it easier for employees to own 
companies, is allow employees and workers to share in the value that is 
being created on the shareholder side of the ledger. Then, and only 
then, can we have an economy that works for more people rather than 
just a few.
  This bill is a small step in that direction. It can reduce the cost 
and remove a detriment that small to midsize companies have from 
aggressively pursuing employee stock ownership. But it is just a first 
step.
  There is a lot of work that we need to do to reorient the economy 
around a shareholder economy that aligns the incentives of workers with 
those of shareholders. It is good for sustainable profits, it is good 
for long-term economic growth, it is good for stability. It is a better 
way to make sure that of this vast value that is being created, we all 
can partake in it on both sides of the ledger, as shareholders and as 
workers.
  That is why I rise today in support of the bill, and that is why I 
call upon my colleagues on both sides of the aisle to see this as but a 
modest first step towards a shareholder economy that works for every 
worker.
  Mr. HUIZENGA. Mr. Speaker, may I inquire as to the balance of time 
remaining on each side?
  The SPEAKER pro tempore. The gentleman from Michigan (Mr. Huizenga) 
has 10 minutes remaining. The gentleman from Michigan (Mr. Kildee) has 
10 minutes remaining.
  Mr. HUIZENGA. Mr. Speaker, I yield 3 minutes to the gentleman from 
Georgia (Mr. Loudermilk).
  Mr. LOUDERMILK. Mr. Speaker, I thank the gentleman from Michigan for 
yielding the time.
  Mr. Speaker, over the last 8 years, our Nation has experienced 
sluggish economic growth. Americans have suffered through stagnant 
paychecks and a lack of new opportunities. Last year, the economy grew 
at a meager 1.6 percent, which is half of the historic average.
  However, there has been one job filled that has grown at a faster 
rate than any other; and that job is those who specialize in regulatory 
compliance. This is a testament to the crushing onslaught of new 
regulations under the previous administration, where compliance with 
regulation and red tape was emphasized more than growing businesses and 
creating jobs.
  We in Congress must do our part to foster economic growth and relieve 
our job creators of the excessive burden of complying with unnecessary 
regulation. The bill before us today will do exactly that.
  Currently, businesses that offer more than $5 million in stock to 
their own employees are required by law to comply with costly financial 
disclosures. This number was set nearly 20 years ago. It is time to 
update the law and raise this threshold to encourage

[[Page 5320]]

small-business startups and give them the resources they need to expand 
and create jobs.
  The Encouraging Employee Ownership Act would raise this threshold to 
$10 million and give private businesses more flexibility to reward 
their employees with ownership of a company. This bill passed the 
Financial Services Committee last month with strong bipartisan support.
  This is just one of the many steps that we must take to foster 
innovation and encourage capital formation, to provide every American 
with opportunities that they deserve. We must build an economy that is 
open and accessible to every single American, not one that is closed 
off to those who can't afford to comply with the high cost of 
bureaucratic red tape and endless government paperwork.
  As a former small-business owner for 20 years, I know the employees 
benefit tremendously from any opportunity to participate in a company's 
success. I support this bill because I know from personal experience 
this model works and helps startup companies to retain their best 
employees over the long term.
  Americans are not satisfied with the stagnant economy that has become 
the new norm in our Nation. It is unacceptable for government to stand 
in the way of prosperity and make it harder for Americans to succeed. 
Small businesses employ half of U.S. workers, and we must promote, not 
hinder, small business growth.
  This bill, Mr. Speaker, empowers Main Street, not Wall Street. I 
encourage all of my colleagues to support this bill.
  Mr. KILDEE. Mr. Speaker, I yield myself such time as I may consume.
  I would just point out again that the position many of us are taking 
does not contradict the principles that are being articulated. In fact, 
the law does not preclude any company from awarding stock as 
compensation at any level. It simply requires that information be 
provided so that those individuals who are receiving that compensation 
have the information and have the resources to understand the value of 
that compensation. I just want to reiterate that because it is 
important that the position not be mischaracterized as one that wants 
to dampen the ability of companies to reward their employees with stock 
or use that as a form of compensation. It is just important that they 
have transparency in that process so people who are receiving that 
compensation understand its true value.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HUIZENGA. Mr. Speaker, I yield 2 minutes to the gentleman from 
Michigan (Mr. Trott), my fellow Michiganian.
  Mr. TROTT. Mr. Speaker, I rise in support of H.R. 1343, the 
Encouraging Employee Ownership Act.
  I want to thank my colleagues, Mr. Hultgren and Mr. Delaney, for 
their thoughtful and bipartisan work on this issue.
  This is a commonsense, simple bill that makes it easier for employees 
to obtain ownership in the companies they work for. When I was in the 
private sector, I gave dozens of employees an ownership interest. It 
worked out great for them, it worked out great for the company, and it 
worked out great for our customers. Ownership interest gave them an 
upside that could not be realized through a salary. The stock instilled 
loyalty and dedication. More importantly, it created a family 
atmosphere. We were all in it together. Our opportunities would rise 
and fall, depending on our collective success.
  To have a career where someday, through your hard work, you can end 
up owning a piece of action is what the American Dream is all about. 
The outdated cap is keeping this dream, for no good reason, from many 
Americans.
  I suspect that those who oppose the bill, while they may understand 
the legislation, probably have never worked in the private sector and 
have no clue how meaningful incentives and opportunities, such as stock 
ownership, are to individuals. I found it was the best way to motivate 
and reward employees. In fact, it worked so well, no one ever left the 
company except to retire.
  My friends from Michigan and Minnesota oppose the bill because of a 
lack of transparency. The argument is flawed because it assumes stock 
ownership opportunities comprise all or a significant portion of the 
individual's compensation. This is not correct. A stock ownership 
benefit is typically over and above salary and bonuses.
  To require the owner of a small business or a startup to make 
disclosures will cause many employers not to give employees this 
opportunity. Implicit in their argument is an assumption, like in so 
many other areas of life, that individuals cannot be trusted to make 
decisions on their own, that they need the help of all of the smart 
politicians and bureaucrats in Washington, D.C., to tell them what to 
do and what they need to see, and, of course, we cannot trust people to 
make decisions and discern for themselves whether stock ownership is a 
fair opportunity.
  This bill had the support of a bipartisan group in our committee. I 
urge all of my colleagues to support H.R. 1343.

                              {time}  1600

  Mr. KILDEE. Mr. Speaker, I reserve the balance of my time.
  Mr. HUIZENGA. Mr. Speaker, I yield 2 minutes to the gentleman from 
New York (Mr. Zeldin).
  Mr. ZELDIN. Mr. Speaker, I rise today in strong support of H.R. 1343, 
the Encouraging Employee Ownership Act of 2017. This is bipartisan 
legislation that will remove outdated barriers to capital formation and 
job creation imposed on the small businesses and startups that are 
driving America's innovation economy.
  The SEC still hasn't updated a rule from 17 years ago that imposed an 
undue burden on entrepreneurs when they want to attract and retain 
talent through employee compensation plans. Startup ventures, by 
offering their employees a stake in the company through equity and 
other forms of deferred compensation, can reward hardworking employees 
by giving them direct ownership while their business continues to grow.
  SEC rules governing these compensation plans haven't been updated 
since 1999, and they are imposing burdensome compliance and reporting 
requirements on the very entrepreneurs we should be encouraging to 
expand and create more good-paying, private sector jobs. We see the 
effects of this compliance tax placing a drain on our economy because 
it diverts the resources and human capital of entrepreneurs away from 
expansion and job creation.
  In my district on Long Island and nationwide, entrepreneurs who have 
the next great invention or idea are struggling to gain access to 
capital. By regulating small startup ventures as if they are large, 
publicly traded companies, the SEC is imposing an unnecessary mound of 
paperwork on startups. A large corporation may have the lawyers and 
accountants to fill out the mountain of paperwork imposed on them by 
the SEC, but a small business can't compete, and that is why they need 
relief.
  This Congress we have an opportunity through bipartisan reforms like 
this legislation to reverse that troubling trend by removing the 
regulatory burdens that harm the economy, consumers, and prospects for 
job growth.
  In closing, Mr. Speaker, I want to thank my colleague from the 
Committee on Financial Services, Randy Hultgren, for his leadership on 
this issue.
  I urge adoption of this commonsense bipartisan bill.
  Mr. KILDEE. Mr. Speaker, I continue to reserve the balance of my 
time.
  Mr. HUIZENGA. Mr. Speaker, may I inquire as to the balance of time 
remaining on each side?
  The SPEAKER pro tempore (Mr. Shimkus). The gentleman from Michigan 
(Mr. Huizenga) has 3\1/2\ minutes remaining. The gentleman from 
Michigan (Mr. Kildee) has 9 minutes remaining.
  Mr. HUIZENGA. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
New York (Ms. Tenney).
  Ms. TENNEY. Mr. Speaker, I rise today in support of H.R. 1343, which 
passed the Committee on Financial

[[Page 5321]]

Services by a very large bipartisan vote of 48-11. I thank the 
gentleman from Illinois (Mr. Hultgren) and the gentleman from Maryland 
(Mr. Delaney) for introducing this essential piece of legislation.
  As the coowner of a small manufacturing business in New York, this 
legislation would help companies in New York and across our Nation to 
grow stronger while allowing hardworking employees to have a stake in a 
business' future through ownership.
  Company leaders across America understand that greater employee 
investment through ownership will develop a stronger workplace culture 
and increase productivity by giving private companies more flexibility 
in retaining and rewarding employees, the people we so vitally need to 
grow our businesses.
  I want to thank the sponsors of this bill, and I urge my colleagues 
to support this legislation.
  Mr. KILDEE. Mr. Speaker, I yield myself the balance of my time to 
close.
  I have heard a number of my colleagues point to the red tape and the 
unnecessary burdens that are placed on a company that wishes to provide 
stock compensation.
  Let me be clear about what it is that we would require. This is what 
is required for a company that exceeds the threshold: That they provide 
a copy of the compensation plan or a contract, if they disclose that; a 
copy of a summary plan description, if it is an ERISA retirement plan 
or, if not, a summary of the plan's material terms; risk factors 
associated with the stock; and the company's most recent financial 
statements from the last 2 years, which don't need to be audited.
  This is important information for anyone receiving stock as 
compensation in order to understand the value of that stock and not a 
burdensome requirement on a company, particularly a company of the size 
that would be required under the increased threshold that is being 
proposed by this law.
  If there is any aspect of this debate which is common sense, it is 
common sense that a person receiving compensation ought to have 
information that tells them the value of that compensation.
  Mr. Speaker, I think this is an important debate and discussion. It 
is one that this body is well-served by taking on.
  I do agree, as I said, that this is an important direction for us to 
take as a nation. And it certainly makes sense that, in order for us to 
fully all participate in the economy, employee ownership is a value. It 
creates more productive companies, more competitive companies. It 
provides better compensation, and, as has been pointed out, it creates 
more stable organizations less likely to lay people off, more likely to 
be sustainable companies. That is all good, and that is important.
  It comes down to the question of transparency. Employees deserve to 
know the state of their employer's finances, if they are to accept 
stock in lieu of monetary compensation. They deserve no less protection 
than other investors in the company.
  We shouldn't fear that kind of transparency. A company that wants its 
employees to accept stock instead of monetary compensation should 
embrace this sort of compensation. If they want to empower those 
employees and they want to make them a part of the company, they should 
provide them with the information that helps them understand the value 
of that ownership.
  Transparency is important for individuals to make informed choices, 
not informed choices coming from a dictate from Washington but 
information that they have the right to have. It empowers them with 
knowledge that allows them to make choices about the form of 
compensation that they would accept.
  That is what this legislation really is about, and that is why I 
oppose the legislation and encourage my colleagues to join me in that.
  I yield back the balance of my time.
  Mr. HUIZENGA. Mr. Speaker, I yield myself the balance of my time to 
close.
  My colleague on the other side is trying to maybe split some hairs. 
We heard some rhetoric earlier on the floor here which, I think, shows 
why many on both sides of the aisle scratch their heads in opposition 
to this bill. We heard about monied interests. We heard about corporate 
wish lists. We heard about Enron which is, by the way, a publicly 
traded company which has absolutely nothing to do with this bill. Now, 
that all might play really well on a leftwing political base, but that 
is detached from the realities of what our economy is about.
  As we have talked, 60 percent of all new job creation happens in 
small businesses. These are not corporations. These are LLCs, limited 
liability corporations. These are subchapter S sole proprietorships. 
These are small entrepreneurs and innovators.
  By the way, I looked up the definition of innovator. It is a person 
who introduces new methods, ideas, or products. Those are the kind of 
dynamic elements that we are seeing here. And I think this confusion 
between corporations and Enron and what we are trying to do here is 
really a disservice to the American people.
  This is about making sure that we update basically an inflation 
escalator from 1988. We update a rule that the SEC could have the power 
to do, which it has not done, that benefits employees and benefits 
those owner-employer's workers who oftentimes, more often than not, 
work alongside their employees. So they are the ones who are seeing 
this on a daily basis.
  I can just say to you that, as was pointed out by my colleague from 
across the aisle from Maryland, if we don't do this, what most of those 
small businesses are going to do is say: You know what, it is just not 
worth the effort; I am not going to do it. And we will see that lack of 
upside going to those employees.
  As was pointed out by my fellow colleague from Michigan, this is 
beyond their salary, this is beyond bonuses. This is an additional way 
to make sure that those relationships get cemented in.
  So, at a minimum, all you would be doing is voting to confirm the 
inflation escalator from 1988. It is not a radical change to the law. 
This is a commonsense, I believe, innovative way of trying to make sure 
that this next generation of workers has the ability to really reap the 
benefits of success here in the United States.
  I yield back the balance of my time.
  Mr. ELLISON. Mr. Speaker, today we consider another bill requested by 
large corporations. But, I have to wonder, of all the things the 
American public want, why is a revision to the Securities and Exchange 
Commission rules--Section 701 to be precise--the priority for this 
week?
  We've been here for three months now. House Republicans set the 
agenda. They lead this governing body. Why do they keep bringing us 
bills that are the priorities of corporate America? In the past few 
months, Congressional Republicans, who decide which bills get 
considered have brought forward a hodgepodge of corporate requests.
  Here are some of the bills that are now law:
  1) Republicans passed--and the President signed--a law to protect 
corporate firms from having to disclose labor violations--like wage 
theft--before winning government contracts (H.J. Res. 37).
  2) Republicans made it easier to drug test people receiving 
unemployment compensation (H.J. Res 42).
  3) House and Senate Republicans--and the President signed--H.J. Res. 
86 which allow Internet Services Providers to sell your browser 
history.
  4) Republicans enacted a new law making it easier to dump coal debris 
near rivers and streams (H.J. Res. 38).
  5) Republicans stopped efforts to help governments around the world 
avoid corruption. H.J. Res. 41 removed the requirement that 
corporations disclose resource payments to foreign governments. This is 
a crushing blow to democracy activists working in fragile nations.
  6) And, a law preventing state governments from setting up retirement 
plans for residents who do not have a work-based plan (H.J. Res 66).
  So, in the three months we've been back, these laws, removing 
competition, disclosure, and consumer privacy, are the priorities of 
Republicans who set the agenda. These are all asks of corporate 
America--
  1) don't punish us for polluting streams,
  2) let us sell your internet browser history,
  3) let us make money drug testing laid off workers receiving 
unemployment due them and do not make us disclose our payments to

[[Page 5322]]

foreign governments when we drill for oil or minerals.
  When I talk to my constituents, they don't ask for any of these. They 
say, ``Where's the jobs bill?'' My constituents say, can't we raise the 
minimum wage from $7.25 an hour? They say, our roads and bridges need 
work. Let's raise the gas tax a bit and invest in infrastructure. They 
say, we want to increase our skills; let's invest in pre-school, Pell 
grants and community colleges.
  Let's put people, not corporate wish lists-- first.
  But, nope, today we are asked to vote on a bill that makes it easier 
for private companies to provide options--like stocks--rather than 
compensation to their employees.
  This bill makes it easier for firms to offload some of their options 
to their employees without disclosing financial information to them. 
While I'm glad to see companies reward employees with stock and other 
compensation in addition to salaries, workers should be told the value 
of the compensation they receive. Not some IOU that they cannot cash in 
any time soon.
  With this bill, H.R. 1343, it is possible that employees would be 
promised stock options which could be worth less than promised, or 
even, completely worthless. So, employees could decide to forego a 
salary increase--or accept lower pay--in order to receive more stock 
options, yet, those stock options could be worth way less than 
expected. And the market to sell them could be non-existent.
  Why should employees receive less information than that of any other 
minority shareholder? Employees should be able to receive information 
on the financial position of the company so they can make an educated 
decision about whether to invest in securities.
  If an employee is trusted enough to run the day-to-day aspects of the 
business, they should be trusted enough to receive full disclosure 
about the company's financials. It's not difficult to allow 
participating employees to sign non-disclosure agreements. It can't be 
because these disclosures are an additional burden on the firm. These 
companies prepared these types of disclosures to receive the Rule 701 
Exemption from the SEC in the first place.
  I'm also concerned about the mismatch in power between the 
corporations and their employees. I am very concerned that employees 
can be more susceptible to pressure to take options instead of salary 
increases. For example, we could ask George Maddox. George was one of 
the 21,000 people who worked at ENRON. After working at ENRON for 30 
years, he had 14,000 shares of company stock. It was valued at $1.3 
million. Then ENRON collapsed, and he had literally nothing. All his 
retirement was in ENRON stocks.
  If you haven't watched the movies ENRON: The Smartest Guys in the 
Room recently, I'd urge you watch it again. You could also read Bethany 
McLean's book by the same name. One image has consistently stuck with 
me. A staff rally where leadership extolled the virtues of the firm. 
Leaders whipped employees into a frenzy to buy ENRON stock even as the 
leaders knew it was worthless. In fact, corporate leaders had already 
their stock. Yet, they were urging employees to buy!
  ENRON had a strategy of buying companies and then pressuring the new 
employees to buy ENRON stock to keep the stock price inflated. And 
since ENRON usually fired 10 percent of workers every year, workers 
felt pressured to buy stock to show a commitment to the firm.
  I don't think the supporters of this bill are doing this for 
nefarious reasons. I'm sure they find my reference to ENRON hyperbolic. 
They might also say that it's irrelevant since ENRON was a public 
company and we are talking about private companies.
  So, let's talk about Palantir Technonologies. This $20 billion 
company convinced top-tier engineers to accept below-market salaries by 
promising them generous stock options. But some employees who accepted 
this bargain, hoping to make money on selling their shares, cannot sell 
them. The only buyer of their stocks is Palantir Technologies 
themselves--or a buyer approved by Palantir Technologies.
  Palantir is not a small firm. Palantir is the third biggest American 
tech startup, behind only Uber and AIRbnb. It was also founded in 2004, 
which makes Palantir as old as Facebook. Which is a long time to wait 
to cash in your options.
  Pushing employees to own more of employer's stock exposes workers, 
like George Maddox, to put all their retirement eggs in one basket--
what we call ``concentration risk.''
  I just can't support a bill that gives employees fewer protections 
than investors. I can't support a bill that encourages employees to 
possibly forego cash in their paychecks in exchange for some unverified 
investment option. We should not make it easier for employers to 
pressure workers to choose options over salary without adequate 
disclosures.
  I ask this Congress to stop doing the bidding of corporate America 
until we address the priorities of American families and workers. We 
should increase wages and access to affordable housing, provide clean 
air and clean water, and protect our privacy
  Vote no on H.R. 1343.
  I would like to include in the Record an article from BuzzFeed News 
regarding ex-Palantir employees struggling to sell their shares:

                  [From BuzzFeed News, Oct. 28, 2016]

       Ex-Palantir Employees are Struggling To Sell Their Shares

       ``Demand has evaporated'' for the shares that make up the 
     bulk of Palantir's pay packages, and the company's CEO seems 
     aware of financial angst among his staff.
       Former employees of one of Silicon Valley's most valuable 
     startups are struggling to cash out of the stock options that 
     formed a major part of their pay packages.
       As it grew into a $20 billion company, Palantir 
     Technologies convinced top-tier engineers to accept salaries 
     considered meager by Silicon Valley standards, pairing the 
     relatively low wages with generous stock option grants. But 
     some former employees who accepted this bargain, banking on a 
     future windfall, are now complaining that the market for 
     their stock has gone ``completely dead.''
       The complaints add to pressure on Palantir CEO Alex Karp, 
     who has long contended that the company would avoid the 
     public markets. This week, Karp acknowledged publicly that he 
     was ``positioning'' Palantir for an initial public offering, 
     as part of efforts to reward cash-starved employees.
       This reversal didn't come out of the blue. A chorus of 
     complaints has arisen in a private Facebook group for 
     Palantir alumni, with many former employees expressing 
     concern and regret over their inability to sell their shares. 
     In September and October, two former employees promoted 
     possible opportunities to join together to sell a block of 
     shares, including an unsuccessful attempt to organize a sale 
     in China.
       Numerous other former employees shared personal stories: 
     Some said they needed the cash to buy a house or pay down 
     debt, while another said they took out a loan to fund the 
     process of turning the options into shares. One said it was 
     ``infuriating'' trying to sell their shares in a ``crap'' 
     market.
       Compared with last year, when the stock was highly sought 
     after, demand among big investors for Palantir shares has 
     recently gone cold, two brokers who specialize in startup 
     shares told BuzzFeed News.
       This chill reveals more about the fickle and sometimes 
     inscrutable nature of markets for startup stock than it does 
     about the business health of Palantir,'' which makes money by 
     analyzing data for government and corporate clients But it 
     has stirred frustration among current and former employees.
       A complaint about Palantir's below-market compensation was 
     the most upvoted question in an internal question-and-answer 
     session in the first part of this year, with 259 votes from 
     employees, an internal document reviewed by BuzzFeed News 
     shows. ``Our cash compensation + bonuses are below the market 
     for tech and our equity growth has slown significantly,'' the 
     question, posed anonymously by an employee, said. ``The total 
     comp is not competitive; even more so due to the 
     illiquidity.'' The questioner continued, ``Are we planning to 
     change our compensation model?''
       Palantir did move to address such concerns in April, 
     announcing it would raise salaries for many employees by 20% 
     and offer to buy back a portion of employee shares.
       But on Wednesday, Oct. 26, in another move that seemed 
     aimed at placating employees and investors, Karp gave the 
     strongest indication yet that an IPO could be on the 
     horizon--though it is hardly a certainty. ``We're now 
     positioning the company so we could go public,'' he said from 
     the stage of a tech conference hosted by the Wall Street 
     Journal in Laguna Beach, California. ``I'm not saying we will 
     go public, but it's a possibility.''
       An IPO would provide a payday to major investors, including 
     Palantir co-founder and chairman Peter Thiel. ``Of course I 
     want my investors to be happy,'' Karp said, ``but the primary 
     people I care about are the wide-eyed people at Palantir who 
     are working day and night.''
       A Palantir spokesperson declined to comment.
       With a $20 billion valuation, Palantir is the third biggest 
     American tech startup, behind only Uber and Airbnb. It is 
     also by far the oldest of that elite group, meaning its 
     workers have waited a long time for their stock-option 
     payday. Founded in 2004, Palantir is as old as Facebook--
     which went public in 2012. In tech years, it is a generation 
     older than Airbnb, founded in 2008, and Uber, which was 
     founded in 2009. The much younger Snapchat, which was founded 
     in 2011, is reportedly laying plans for an IPO early next 
     year that could cause its valuation to leapfrog Palantir's.
       Stock options have long been central to compensation at 
     Palantir. A 2015 template for a Palantir offer letter gave 
     new hires the

[[Page 5323]]

     ability to choose among three different pay packages, with 
     lower cash salaries corresponding to higher amounts of stock 
     options. ``It is our hope and belief that these options will 
     ultimately constitute the bulk of your overall 
     compensation,'' says this internal Palantir document, which 
     was reviewed by BuzzFeed News.
       To illustrate the potential value of the options, the offer 
     letter template invites new hires to imagine a scenario in 
     which Palantir's valuation were to grow to $50 billion, or 
     $100 billion--or even $200 billion. ``Although the values in 
     the table below are hypothetical and inherently uncertain, we 
     want to emphasize our belief in Palantir's potential to 
     become a $100 billion company,'' the letter says. .
       While it waits for this dream to materialize, the company 
     has sought to ease financial angst among its employees. It 
     held a ``liquidity event'' this year that gave current and 
     former employees an opportunity to sell a fraction of their 
     shares. But Palantir also indicated it wanted to curb share 
     sales done outside of its official channels, warning that 
     selling to outsiders could make staff ineligible for future 
     liquidity events.
       That outside market hasn't exactly been humming with deal 
     activity anyway. Trading in private company shares is opaque 
     and fragmented, and data is hard to come by. But the two 
     brokers who spoke with BuzzFeed News said Palantir's prolific 
     fundraising--the company has raised more than $2.5 billion in 
     capital, according to data provider PitchBook--may have 
     dampened investor appetite. A number of big investors who 
     would want a piece of Palantir already have one, they said.
       In May, BuzzFeed News revealed some of the setbacks 
     Palantir has experienced as it seeks to expand beyond its 
     roots as a government contractor and woo major corporations. 
     The article, based on internal documents and insider 
     interviews, reported that Palantir had lost some blue-chip 
     corporate clients, was struggling to stem staff departures, 
     and had recorded revenue that was a fraction of its customer 
     bookings.
       At the conference Wednesday, Karp was asked about those 
     customer losses, which included Coca-Cola, American Express, 
     and Nasdaq. ``We date heavily before we marry,'' he answered.
       Even before the article was published, members of the 
     private Facebook group for Palantir alumni voiced concern 
     about selling their shares in the so-called secondary market. 
     BuzzFeed News is withholding the names of former employees to 
     protect their privacy.
       ``Any 2nd market shares going on right now? My broker 
     disappeared,'' one former employee posted in April.
       ``There are still periodic deals happening,'' another 
     replied. ``One that I know of right now, but it's full 
     already.''
       ``Yeah, the demand has evaporated,'' another said.
       More recently, however, some of the posts took on an urgent 
     tone, as sales appeared to grow scarcer. Options are 
     contracts to buy shares at a certain price; to use them, the 
     owner must pay this price in addition to applicable taxes--
     which can amount to a large bill. What's more, options expire 
     at a certain point if they're not used, adding time pressure 
     to the equation.
       In the public market, owners of options can easily sell a 
     portion of their holdings to cover the tax bill and the 
     exercise price. But this strategy is much trickier in the 
     private market, and there was some debate in the Facebook 
     group over whether Polar would even allow it.
       In September, one former employee asked the group whether 
     anyone was ``coming up on their 3-year expiration,'' 
     soliciting advice on ``approaches people are taking given the 
     less-than-stellar private market.''
       Among the replies, one former employee reported taking out 
     ``a personal loan to meet my exercise deadline.''
       Another wrote: ``I'm in the same boat: 3 years coming up in 
     April, market is crap, and I probably don't have the 
     resources available for a loan. The fact that it's so 
     difficult to sell is infuriating and I'm wishing that I'd 
     taken the `high' salary option (which TBH wasn't that high to 
     begin with).''
       ``On the same boat,'' wrote another. ``Hoping to buy a 
     house next year and really couldn't wrap my head around 
     throwing so much money in addition to the stress and work 
     needed to process.''
       The former employee who started that thread apparently 
     didn't receive much solace. In response to a later post, 
     which asked whether there were ``any secondary market sales 
     brewing,'' this former employee wrote, ``Sorry to be the 
     bearer of bad news, but the market is completely dead at the 
     moment.''
       This person then quoted an unidentified broker as saying, 
     ``There is absolutely nothing moving in Palantir. People who 
     have bought through us are trying to sell now. I don't see it 
     changing without the company changing their tone on an IPO.''
       Others in the thread shared snippets of information they 
     said they had heard from brokers. According to one, a broker 
     ``told me that there are a few `price insensitive' sellers 
     satisfying what little demand exists.''
       Another former employee wrote: ``I'm interested in joining 
     any sales going down too, I've got a year to pay off a hefty 
     debt with the proceeds.'' The person added a neutral face 
     emoji.
       With buyers scarce, one former employee tried looking 
     across the Pacific.
       ``I spoke to someone that brokers sales in China, they said 
     they might be willing to get something together if there's 
     enough of us,'' they wrote above a link to a Google Doc that 
     asked others to report information about their holdings
       One of the repliers questioned whether this process would 
     actually turn into a sale--potential investors might just be 
     ``fishing for information on prices''--and another cautioned 
     the original poster against ``acting as an agent for a group 
     of sellers.'' (The poster said the query was ``just intended 
     as an interest check.'')
       In the end, none of that mattered. ``Not likely to go 
     anywhere in the next couple of months,'' the former employee 
     who posted the opportunity wrote later. ``Sorry if I got 
     anyone's hopes up.''
       Early this month, another member of the group posted about 
     an opportunity to sell options through EquityZen, a startup 
     that arranges small transactions of private company shares. 
     This former employee advised others to contact the EquityZen 
     CEO, providing the CEO's email address. But less than 12 
     hours later, another former employee replied to say that the 
     deal ``has been already submitted,'' meaning the opportunity 
     had passed.
       ``Dang,'' another member wrote.
       Discussions in the group about news related to Palantir 
     often come back to a familiar theme. In September, for 
     example, the Department of Labor accused Palantir of 
     discriminating against Asian job applicants, a claim Palantir 
     later rejected as ``flawed and illogical.'' In a thread 
     discussing the allegations, one former employee found a 
     financial angle.
       ``I sure hope this isn't an expensive lawsuit for them to 
     defend,'' this person wrote. ``I don't claim to understand 
     how the legal system works in cases like this, but geeeeez 
     this doesn't bode well for any of us looking for liquidity at 
     a fair price over anytime soon.''
  The SPEAKER pro tempore. All time for debate has expired.


                  Amendment No. 1 Offered by Mr. Polis

  The SPEAKER pro tempore. It is now in order to consider amendment No. 
1 printed in House Report 115-75.
  Mr. POLIS. Mr. Speaker, I have an amendment at the desk.
  The SPEAKER pro tempore. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Page 2, after line 2, insert the following:

     SEC. 3. GAO REPORT ON IMPACT ON EMPLOYEE OWNERSHIP.

       Not later than 1 year after the date of the enactment of 
     this Act, the Comptroller General of the United States shall 
     submit to Congress a report on the impact on employee 
     ownership of the revisions required by section 2, including 
     the impact on--
       (1) the number of employees participating in compensatory 
     benefit plans; and
       (2) diversification of the securities held by employee 
     pension benefit plans subject to title I of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1001 et 
     seq.).

  The SPEAKER pro tempore. Pursuant to House Resolution 240, the 
gentleman from Colorado (Mr. Polis) and a Member opposed each will 
control 5 minutes.
  The Chair recognizes the gentleman from Colorado.
  Mr. POLIS. I yield myself such time as I may consume.
  Mr. Speaker, my amendment would require GAO to do a study on the 
impact of this legislation on employee ownership. When employees are 
offered the opportunity to have an ownership stake in the place they 
work, there are benefits for both workers and businesses in our entire 
economy.
  Many studies have shown that employee ownership increases 
productivity, promotes employee retention and stability, and has long-
term growth benefits for the business. I believe that the underlying 
legislation is an important first step to increase employee ownership 
opportunities, but we should want to make sure that opportunities for 
participation are widely available to employees at different income 
levels.
  The amendment also requests the GAO to see the effect of this 
legislation on the diversification of securities held in ERISA-governed 
retirement plans. As we all know, diversification in any type of 
financial portfolio can help weather dramatic fluctuations in the 
economy and limit financial risk for retirees.
  By requesting the GAO study, we will be able to understand this 
legislation's full impact on employee ownership and

[[Page 5324]]

make necessary changes and improvements in the future.
  I yield to the gentleman from Illinois (Mr. Hultgren) for the purpose 
of a colloquy.
  Mr. HULTGREN. Mr. Speaker, I thank the gentleman from Colorado (Mr. 
Polis) for offering this important amendment to study the impact of 
this legislation on employee ownership.
  I believe that employee ownership opportunities should be made widely 
available to all employees of a company, from the boardroom to the shop 
floor.
  As the gentleman from Colorado (Mr. Polis) stated, this legislation 
is an important step forward to increasing ownership opportunities and 
gives companies more flexibility to make those opportunities available.
  We should understand how this legislation would help increase 
participation for employees at all key levels. A study will help us 
understand what we can do in the future to incentivize employee 
ownership and increase employee ownership participation.
  If the gentleman would withdraw his amendment, I would like to work 
with him in requesting GAO to carry out this study.
  Mr. POLIS. Mr. Speaker, I thank the gentleman from Illinois (Mr. 
Hultgren), and I take the gentleman at his word. I look forward to 
working with him on this important issue in coordination with GAO.
  Mr. Speaker, I ask unanimous consent to withdraw my amendment.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Colorado?
  There was no objection.
  The SPEAKER pro tempore. The amendment is withdrawn.
  Pursuant to the rule, the previous question is ordered on the bill, 
as amended.
  The question is on the engrossment and third reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.


                           Motion to Recommit

  Mr. SWALWELL of California. Mr. Speaker, I have a motion to recommit 
at the desk.
  The SPEAKER pro tempore. Is the gentleman opposed to the bill?
  Mr. SWALWELL of California. I am opposed in its current form.
  The SPEAKER pro tempore. The Clerk will report the motion to 
recommit.
  The Clerk read as follows:

       Mr. Swalwell of California moves to recommit the bill H.R. 
     1343 to the Committee on Financial Services with instructions 
     to report the same back to the House forthwith with the 
     following amendment:
       Add at the end the following:

     SEC. 3. PROHIBITION.

       Any exemption, safe harbor, or other authority provided by 
     this Act or a regulation issued pursuant to this Act shall 
     not apply to an issuer if the issuer or a director, officer, 
     or affiliate of the issuer has withheld information from 
     Congress relevant to its investigation of any collusion 
     between persons associated with the Russian Government and 
     persons associated with the presidential campaign of Donald 
     J. Trump to influence the outcome of the 2016 United States 
     presidential election.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
California (Mr. Swalwell) is recognized for 5 minutes in support of his 
motion.
  Mr. SWALWELL of California. Mr. Speaker, this is the final amendment 
to the bill. It will not kill the bill or send it back to committee. If 
adopted, the bill will immediately proceed to final passage, as 
amended.
  Russia attacked our democracy this past Presidential election. This 
motion asks Members of this House: Do you want to do something about 
it? Do you want to do all you can to make sure it doesn't happen again?

                              {time}  1615

  If you do, support this amendment. If you don't, vote against it, and 
watch Russia and other adversaries of ours with similar cyber 
capabilities carry out similar attacks, and the very democracy that we 
treasure will erode before our eyes. But I believe we are a better body 
than one that would let another country attack us and then divide us.
  What does this motion to recommit do? It requires any company--
particularly, I am concerned about financial institutions--to cooperate 
with all investigations into collusion between President Trump, his 
campaign, his family, his businesses, and anyone on his team and 
Russia's interference campaign during the 2016 election.
  The evidence is overwhelming. In the 2016 election, Russia ran a 
multifaceted electronic interference campaign against our democracy. 
They used paid social media trolls. They hacked Democratic emails and 
disseminated the information in those emails through cutouts like 
WikiLeaks and Guccifer 2.0. They had a clear preference for Donald 
Trump as their candidate. It was ordered by their own President, 
Vladimir Putin.
  And most concerning for every person in this House--should be--they 
are sharpening their knives, and they intend to do it again. That was 
the final finding in the intelligence report. They are sharpening their 
knives and intend to do it again not just to the United States, but to 
our allies like France and Germany, who are a part of the best check on 
Russia, the NATO alliance.
  Why are we concerned about finances and companies cooperating with 
the United States in this investigation? Well, we know from the 
Kremlin's playbook that they use financial entanglements as a means to 
recruit individuals or to peddle influence.
  Why are we concerned about financial ties among Donald Trump and his 
team? Because unlike any Presidential candidate in the history of our 
Presidential elections, there are an unprecedented amount of personal, 
political, and financial ties to a foreign adversary. They include, but 
are not limited to:
  Paul Manafort, where it is alleged he was paid by pro-Russian Ukraine 
Government individuals and also paid up to $10 million a year by 
Vladimir Putin's associates;
  Former national security adviser Michael Flynn, who should have known 
better as the former Director of the Defense Intelligence Agency, 
should have known about Russia's playbook and their ability to 
influence people, but after leaving the DIA, went over to Moscow, sat 
next to Vladimir Putin, and was paid by Russia's propaganda tool, 
Russia Today, also known as RT, who General Flynn would have known is 
an arm of Russia's intelligence services;
  Donald J. Trump, Jr., who said in 2008, in terms of high-end product 
influx into the United States, Russians make up a pretty 
disproportionate cross section of a lot of our assets. In Dubai, and 
certainly with our project in SoHo, and anywhere in New York, we see a 
lot of money pouring in from Russia;
  President Trump, who has invested in the past in Russia: over half a 
dozen trademarks granted to him in Russia, a vodka brand he tried to 
peddle in Russia, a Miss Universe contest that he held in Moscow in 
2013, and Russia has invested in our President. There are Russian 
businessowners who have bought condos in his Trump Tower building. 
There are loans from banks that have paid fines for laundering money 
through Russia. There is a home sale in 2008 where the President reaped 
129 percent in profit. He bought a home in 2004 in West Palm Beach for 
$40 million; sold it in 2008, as the real estate market was collapsing, 
for over $90 million; sold it to a Russian businessman known as the 
fertilizer king. No one else in that ZIP Code reaped a profit of 129 
percent.
  So why are banks particularly relevant for this motion? We know they 
are used by Russia to move money and extend influence. Their 
cooperation will be crucial to understanding how Russia finances its 
interference campaign.
  Mr. Speaker, I urge my colleagues to support this motion to recommit 
and get to the bottom of exactly what happened with Russia.
  Mr. Speaker, I yield back the balance of my time.
  Mr. HUIZENGA. Mr. Speaker, I claim the time in opposition to the 
motion.
  The SPEAKER pro tempore. The gentleman from Michigan is recognized 
for 5 minutes.

[[Page 5325]]


  Mr. HUIZENGA. Mr. Speaker, I just want to point out a couple of 
things.
  The Senate Banking Committee has moved an identical bill forward, 
unanimously, recently.
  Regarding the subject matter that the gentleman from California was 
throwing out, this bill is not about anything other than providing 
hardworking Americans an opportunity to succeed. It is not about 
relitigating the last election or even about Susan Rice illegally 
unmasking American citizens. This is about an underlying bill that will 
help American citizens.
  I urge my colleagues to vote ``no'' on this motion to recommit, and I 
urge them to vote ``yes'' on the underlying bill.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to recommit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. SWALWELL of California. Mr. Speaker, on that I demand the yeas 
and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 9 of rule XX, the Chair 
will reduce to 5 minutes the minimum time for any electronic vote on 
the question of passage of the bill.
  The vote was taken by electronic device, and there were--yeas 185, 
nays 228, not voting 16, as follows:

                             [Roll No. 215]

                               YEAS--185

     Adams
     Aguilar
     Barragan
     Bass
     Beatty
     Bera
     Beyer
     Bishop (GA)
     Blumenauer
     Blunt Rochester
     Bonamici
     Boyle, Brendan F.
     Brady (PA)
     Brown (MD)
     Brownley (CA)
     Bustos
     Butterfield
     Capuano
     Carbajal
     Cardenas
     Carson (IN)
     Cartwright
     Castor (FL)
     Castro (TX)
     Chu, Judy
     Cicilline
     Clark (MA)
     Clarke (NY)
     Clay
     Cleaver
     Clyburn
     Cohen
     Connolly
     Conyers
     Cooper
     Correa
     Costa
     Courtney
     Crist
     Crowley
     Cuellar
     Cummings
     Davis (CA)
     DeFazio
     DeGette
     Delaney
     DeLauro
     DelBene
     Demings
     DeSaulnier
     Deutch
     Dingell
     Doggett
     Doyle, Michael F.
     Ellison
     Engel
     Eshoo
     Espaillat
     Esty
     Evans
     Foster
     Fudge
     Gabbard
     Gallego
     Garamendi
     Gonzalez (TX)
     Gottheimer
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hanabusa
     Hastings
     Heck
     Higgins (NY)
     Himes
     Hoyer
     Huffman
     Jackson Lee
     Jayapal
     Jeffries
     Johnson (GA)
     Johnson, E. B.
     Kaptur
     Keating
     Kelly (IL)
     Kennedy
     Khanna
     Kihuen
     Kildee
     Kilmer
     Kind
     Krishnamoorthi
     Kuster (NH)
     Langevin
     Larsen (WA)
     Lawrence
     Lawson (FL)
     Lee
     Levin
     Lewis (GA)
     Lieu, Ted
     Lipinski
     Loebsack
     Lofgren
     Lowenthal
     Lowey
     Lujan Grisham, M.
     Lujan, Ben Ray
     Lynch
     Maloney, Carolyn B.
     Maloney, Sean
     Matsui
     McCollum
     McGovern
     McNerney
     Meeks
     Meng
     Moore
     Moulton
     Nadler
     Napolitano
     Neal
     Nolan
     Norcross
     O'Halleran
     O'Rourke
     Pallone
     Panetta
     Pascrell
     Payne
     Pelosi
     Perlmutter
     Peters
     Peterson
     Pingree
     Pocan
     Polis
     Price (NC)
     Quigley
     Raskin
     Rice (NY)
     Richmond
     Rosen
     Roybal-Allard
     Ruiz
     Ruppersberger
     Rush
     Ryan (OH)
     Sanchez
     Sarbanes
     Schakowsky
     Schiff
     Schneider
     Schrader
     Scott (VA)
     Scott, David
     Serrano
     Sewell (AL)
     Shea-Porter
     Sherman
     Sinema
     Sires
     Smith (WA)
     Soto
     Speier
     Swalwell (CA)
     Takano
     Thompson (CA)
     Thompson (MS)
     Titus
     Tonko
     Torres
     Tsongas
     Vargas
     Veasey
     Vela
     Velazquez
     Walz
     Wasserman Schultz
     Waters, Maxine
     Watson Coleman
     Welch
     Wilson (FL)
     Yarmuth

                               NAYS--228

     Abraham
     Aderholt
     Allen
     Amash
     Amodei
     Arrington
     Babin
     Bacon
     Banks (IN)
     Barletta
     Barr
     Barton
     Bergman
     Biggs
     Bilirakis
     Bishop (MI)
     Black
     Blackburn
     Blum
     Bost
     Brady (TX)
     Brat
     Brooks (AL)
     Brooks (IN)
     Buchanan
     Buck
     Bucshon
     Budd
     Burgess
     Byrne
     Calvert
     Carter (GA)
     Carter (TX)
     Chabot
     Chaffetz
     Cheney
     Coffman
     Cole
     Collins (GA)
     Collins (NY)
     Comer
     Comstock
     Conaway
     Cook
     Costello (PA)
     Cramer
     Crawford
     Culberson
     Curbelo (FL)
     Davidson
     Davis, Rodney
     Denham
     Dent
     DeSantis
     DesJarlais
     Diaz-Balart
     Donovan
     Duffy
     Duncan (SC)
     Duncan (TN)
     Dunn
     Emmer
     Farenthold
     Faso
     Ferguson
     Fitzpatrick
     Fleischmann
     Flores
     Fortenberry
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gaetz
     Gallagher
     Garrett
     Gibbs
     Gohmert
     Goodlatte
     Gosar
     Gowdy
     Granger
     Graves (GA)
     Graves (LA)
     Graves (MO)
     Griffith
     Guthrie
     Harper
     Harris
     Hartzler
     Hensarling
     Herrera Beutler
     Hice, Jody B.
     Higgins (LA)
     Hill
     Holding
     Hollingsworth
     Hudson
     Huizenga
     Hultgren
     Hunter
     Hurd
     Issa
     Jenkins (KS)
     Jenkins (WV)
     Johnson (LA)
     Johnson (OH)
     Johnson, Sam
     Jordan
     Joyce (OH)
     Katko
     Kelly (MS)
     Kelly (PA)
     King (IA)
     King (NY)
     Kinzinger
     Knight
     Kustoff (TN)
     Labrador
     LaHood
     LaMalfa
     Lance
     Latta
     Lewis (MN)
     LoBiondo
     Long
     Loudermilk
     Love
     Lucas
     Luetkemeyer
     MacArthur
     Marchant
     Marino
     Marshall
     Massie
     Mast
     McCarthy
     McCaul
     McClintock
     McHenry
     McKinley
     McMorris Rodgers
     McSally
     Meadows
     Meehan
     Messer
     Mitchell
     Moolenaar
     Mooney (WV)
     Mullin
     Murphy (PA)
     Newhouse
     Noem
     Nunes
     Olson
     Palazzo
     Palmer
     Paulsen
     Pearce
     Perry
     Pittenger
     Poliquin
     Posey
     Ratcliffe
     Reed
     Reichert
     Renacci
     Rice (SC)
     Roby
     Roe (TN)
     Rogers (KY)
     Rokita
     Rooney, Francis
     Rooney, Thomas J.
     Ros-Lehtinen
     Roskam
     Ross
     Rothfus
     Rouzer
     Royce (CA)
     Russell
     Rutherford
     Sanford
     Scalise
     Schweikert
     Scott, Austin
     Sensenbrenner
     Sessions
     Shimkus
     Shuster
     Simpson
     Smith (MO)
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Smucker
     Stefanik
     Stewart
     Stivers
     Taylor
     Tenney
     Thompson (PA)
     Thornberry
     Tiberi
     Tipton
     Trott
     Turner
     Upton
     Valadao
     Wagner
     Walberg
     Walden
     Walker
     Walorski
     Walters, Mimi
     Weber (TX)
     Webster (FL)
     Wenstrup
     Westerman
     Williams
     Wilson (SC)
     Wittman
     Womack
     Woodall
     Yoder
     Yoho
     Young (AK)
     Young (IA)
     Zeldin

                             NOT VOTING--16

     Bishop (UT)
     Bridenstine
     Davis, Danny
     Frankel (FL)
     Grothman
     Jones
     Lamborn
     Larson (CT)
     McEachin
     Murphy (FL)
     Poe (TX)
     Rogers (AL)
     Rohrabacher
     Slaughter
     Suozzi
     Visclosky

                              {time}  1644

  Messrs. NEWHOUSE, KINZINGER, WEBSTER of Florida, Mrs. BLACKBURN, 
Messrs. CULBERSON, COLLINS of Georgia, LOUDERMILK, HUDSON, THOMAS J. 
ROONEY of Florida, WALKER, COOK, MULLIN, BANKS of Indiana, GRAVES of 
Georgia, and ROKITA changed their vote from ``yea'' to ``nay.''
  Messrs. DOGGETT and CARDENAS changed their vote from ``nay'' to 
``yea.''
  So the motion to recommit was rejected.
  The result of the vote was announced as above recorded.
  Stated for:
  Ms. FRANKEL of Florida. Mr. Speaker, I was unavoidably detained. Had 
I been present, I would have voted ``yea'' on rollcall No. 215.
  Mr. SUOZZI. Mr. Speaker, I was unavoidably detained. Had I been 
present, I would have voted ``yea'' on rollcall No. 215.
  Stated against:
  Mr. LAMBORN. Mr. Speaker, had I been present, I would have voted 
``nay'' on rollcall No. 215.
  The SPEAKER pro tempore. The question is on the passage of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. HUIZENGA. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. This is a 5-minute vote.
  The vote was taken by electronic device, and there were--yeas 331, 
nays 87, not voting 11, as follows:

                             [Roll No. 216]

                               YEAS--331

     Abraham
     Aderholt
     Aguilar
     Allen
     Amash
     Amodei
     Arrington
     Babin
     Bacon
     Banks (IN)
     Barletta
     Barr
     Barton
     Bera
     Bergman
     Beyer
     Biggs
     Bilirakis
     Bishop (GA)
     Bishop (MI)
     Bishop (UT)
     Black
     Blackburn
     Blum
     Blumenauer
     Blunt Rochester
     Bost
     Boyle, Brendan F.
     Brady (TX)
     Brat
     Brooks (AL)
     Brooks (IN)
     Brown (MD)
     Brownley (CA)
     Buchanan
     Buck
     Bucshon
     Budd
     Burgess
     Bustos
     Byrne
     Calvert
     Carbajal
     Cardenas
     Carter (GA)
     Carter (TX)
     Cartwright
     Castor (FL)
     Chabot
     Chaffetz
     Cheney
     Clay
     Cleaver
     Coffman
     Cohen
     Cole

[[Page 5326]]


     Collins (GA)
     Collins (NY)
     Comer
     Comstock
     Conaway
     Connolly
     Cook
     Cooper
     Correa
     Costa
     Costello (PA)
     Courtney
     Cramer
     Crawford
     Crowley
     Cuellar
     Culberson
     Curbelo (FL)
     Davidson
     Davis (CA)
     Davis, Rodney
     DeGette
     Delaney
     DeLauro
     DelBene
     Denham
     Dent
     DeSantis
     DesJarlais
     Deutch
     Diaz-Balart
     Donovan
     Duffy
     Duncan (SC)
     Duncan (TN)
     Dunn
     Emmer
     Engel
     Eshoo
     Esty
     Farenthold
     Faso
     Ferguson
     Fitzpatrick
     Fleischmann
     Flores
     Fortenberry
     Foster
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gaetz
     Gallagher
     Garrett
     Gibbs
     Gohmert
     Gonzalez (TX)
     Goodlatte
     Gosar
     Gottheimer
     Gowdy
     Granger
     Graves (GA)
     Graves (LA)
     Graves (MO)
     Green, Gene
     Griffith
     Guthrie
     Harper
     Harris
     Hartzler
     Hastings
     Heck
     Hensarling
     Herrera Beutler
     Hice, Jody B.
     Higgins (LA)
     Higgins (NY)
     Hill
     Himes
     Holding
     Hollingsworth
     Hoyer
     Hudson
     Huffman
     Huizenga
     Hultgren
     Hunter
     Hurd
     Issa
     Jenkins (KS)
     Jenkins (WV)
     Johnson (LA)
     Johnson (OH)
     Johnson, Sam
     Jordan
     Joyce (OH)
     Katko
     Keating
     Kelly (MS)
     Kelly (PA)
     Kennedy
     Kihuen
     Kilmer
     Kind
     King (IA)
     King (NY)
     Kinzinger
     Knight
     Krishnamoorthi
     Kuster (NH)
     Kustoff (TN)
     Labrador
     LaHood
     LaMalfa
     Lamborn
     Lance
     Larsen (WA)
     Larson (CT)
     Latta
     Lawson (FL)
     Lewis (MN)
     Lieu, Ted
     Lipinski
     LoBiondo
     Loebsack
     Lofgren
     Long
     Loudermilk
     Love
     Lucas
     Luetkemeyer
     MacArthur
     Maloney, Carolyn B.
     Maloney, Sean
     Marchant
     Marino
     Marshall
     Massie
     Mast
     Matsui
     McCarthy
     McCaul
     McClintock
     McHenry
     McKinley
     McMorris Rodgers
     McNerney
     McSally
     Meadows
     Meehan
     Meeks
     Messer
     Mitchell
     Moolenaar
     Mooney (WV)
     Moulton
     Mullin
     Murphy (PA)
     Neal
     Newhouse
     Noem
     Nolan
     Norcross
     Nunes
     O'Halleran
     O'Rourke
     Olson
     Palazzo
     Palmer
     Panetta
     Pascrell
     Paulsen
     Pearce
     Pelosi
     Perlmutter
     Perry
     Peters
     Peterson
     Pittenger
     Poliquin
     Polis
     Posey
     Price (NC)
     Quigley
     Ratcliffe
     Reed
     Reichert
     Renacci
     Rice (NY)
     Roby
     Roe (TN)
     Rogers (KY)
     Rokita
     Rooney, Francis
     Rooney, Thomas J.
     Ros-Lehtinen
     Rosen
     Roskam
     Ross
     Rothfus
     Rouzer
     Royce (CA)
     Ruiz
     Ruppersberger
     Russell
     Rutherford
     Ryan (OH)
     Sanford
     Scalise
     Schneider
     Schrader
     Schweikert
     Scott, Austin
     Scott, David
     Sensenbrenner
     Sessions
     Shea-Porter
     Sherman
     Shimkus
     Shuster
     Simpson
     Sinema
     Smith (MO)
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Smucker
     Soto
     Speier
     Stefanik
     Stewart
     Stivers
     Suozzi
     Swalwell (CA)
     Taylor
     Tenney
     Thompson (CA)
     Thompson (PA)
     Thornberry
     Tiberi
     Tipton
     Titus
     Torres
     Trott
     Tsongas
     Turner
     Upton
     Valadao
     Vargas
     Veasey
     Vela
     Wagner
     Walberg
     Walden
     Walker
     Walorski
     Walters, Mimi
     Walz
     Wasserman Schultz
     Weber (TX)
     Webster (FL)
     Wenstrup
     Westerman
     Williams
     Wilson (SC)
     Wittman
     Womack
     Woodall
     Yarmuth
     Yoder
     Yoho
     Young (AK)
     Young (IA)
     Zeldin

                                NAYS--87

     Adams
     Barragan
     Bass
     Beatty
     Bonamici
     Brady (PA)
     Butterfield
     Capuano
     Carson (IN)
     Castro (TX)
     Chu, Judy
     Cicilline
     Clark (MA)
     Clarke (NY)
     Clyburn
     Conyers
     Crist
     Cummings
     DeFazio
     Demings
     DeSaulnier
     Dingell
     Doggett
     Doyle, Michael F.
     Ellison
     Espaillat
     Evans
     Frankel (FL)
     Fudge
     Gabbard
     Gallego
     Garamendi
     Green, Al
     Grijalva
     Gutierrez
     Hanabusa
     Jackson Lee
     Jayapal
     Jeffries
     Johnson (GA)
     Johnson, E. B.
     Jones
     Kaptur
     Kelly (IL)
     Khanna
     Kildee
     Langevin
     Lawrence
     Lee
     Levin
     Lewis (GA)
     Lowenthal
     Lowey
     Lujan Grisham, M.
     Lujan, Ben Ray
     Lynch
     McCollum
     McGovern
     Meng
     Moore
     Nadler
     Napolitano
     Pallone
     Payne
     Pingree
     Pocan
     Raskin
     Richmond
     Roybal-Allard
     Rush
     Sanchez
     Sarbanes
     Schakowsky
     Schiff
     Scott (VA)
     Serrano
     Sewell (AL)
     Sires
     Smith (WA)
     Takano
     Thompson (MS)
     Tonko
     Velazquez
     Waters, Maxine
     Watson Coleman
     Welch
     Wilson (FL)

                             NOT VOTING--11

     Bridenstine
     Davis, Danny
     Grothman
     McEachin
     Murphy (FL)
     Poe (TX)
     Rice (SC)
     Rogers (AL)
     Rohrabacher
     Slaughter
     Visclosky

                              {time}  1657

  Mr. DeFAZIO changed his vote from ``yea'' to ``nay.''
  Ms. ESTY and Mr. RYAN of Ohio changed their vote from ``nay'' to 
``yea.''
  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________