Providing For Consideration Of H.R. 1343, Encouraging Employee
Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 240 and ask for its immediate consideration. Mr. Speaker, for the purpose of debate only, I yield the customary 30 minutes to the gentleman from Colorado (Mr.…
Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 240 and ask for its immediate consideration.
Mr. Speaker, for the purpose of debate only, I yield the customary 30 minutes to the gentleman from Colorado (Mr. Polis), pending which I yield myself such time as I may consume. During consideration of this resolution, all time yielded is for the purpose of debate only.
General Leave
Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days to revise and extend their remarks.
Mr. Speaker, I rise today in support of the rule and the underlying legislation. Americans have always been a people known for taking ownership. We take ownership of our lives and livelihoods, working hard to provide for our families. We take ownership in our communities, setting standards of conduct. We take ownership in all our political process, voting for the right candidates. We have even taken ownership in our world, fighting evil actors and regimes to maintain peace.
H.R. 1343, the bill we are discussing today, allows employees to take ownership in their companies. This is the American way.
Under SEC rule 701, private companies can offer their own securities to employees, enabling those employees to take a stake in the company. This is a great deal for both businessowners and employees. I doubt either side of the aisle would disagree.
Rule 701 allows employers to better recruit talented employees and pay them without having to borrow money or sell securities. For some companies, especially younger ones, compensating employees through equity is vital for survival.
These younger companies need the top talent but often can't pay the top salaries. Rule 701 allows them to offer potential recruits a tradeoff: accept a lower salary now for more equity in the company later.
By giving the employees a stake in the company, businessowners reward the employees for their continued hard
work and innovation. Workers have an opportunity to buy into the mission and future of the company. They have the opportunity to reap what they sow, making their work more meaningful and fulfilling.
Mr. Speaker, H.R. 1343 simply raises the reporting threshold for companies who issue securities to their employees as compensatory benefits. Right now, any company that issues more than $5 million of securities in a yearlong period faces significant reporting requirements, including financial statements and disclosure of risk factors. These requirements cost small businesses time and money, making them less likely to issue stock as compensation for their employees. That is why this legislation moves the threshold up to $10 million.
The original $5 million threshold was added to rule 701 in 1999 and hasn't been updated since. By easing the threshold and indexing it to inflation every 5 years, we allow companies to increase the amount of stock they offer to employees. Additionally, raising the threshold will prevent private companies from having to disclose confidential financial information.
America is known for taking ownership, but we are also known for innovation. Our technology industry, especially, has propelled our economy and quality of life forward. But so many great tech companies started as small startups, struggling along from month to month before the financial rewards of their hard work could be achieved.
Thinking about the young companies right now that have grand innovative visions for improving our quality of life, this legislation will help them thrive. The employees already pour so much of their livelihoods into the venture. This bill will reward those workers with equity so that their perseverance and investment will pay off.
Mr. Speaker, before I close, I would like to discuss the broad support for this bill. I indicated earlier that both sides of the aisle can support this legislation, and I want to highlight that bipartisan support for the bill.
H.R. 1343 has equal numbers of Republican and Democratic sponsors. Further, the bill passed out of the Financial Services Committee 48-11. A majority of the Democrats on the committee supported the bill. A similar bill passed with a bipartisan vote last Congress, with more than two dozen Democrats joining Republicans to pass the bill. And in the Senate, this same basic proposal passed the Senate Banking Committee by a voice vote just a few weeks ago.
Mr. Speaker, it is clear to see why this proposal is generating so much bipartisan support. With a higher threshold, companies can focus their time on innovating and creating jobs instead of filling out paperwork. Employees, meanwhile, can take a stake in their company and their own future. I urge my colleagues to vote for this important rule and the underlying legislation.
Mr. Speaker, I reserve the balance of my time.
Mr. Speaker, I just want to respond briefly to my friend from Colorado's comments about the nature of the rule. The Rules Committee did make in order every single germane rule that was offered to this bill.
Mr. Speaker, I yield such time as he may consume to the gentleman from Illinois (Mr. Hultgren).
Mr. Speaker, I yield 4 minutes to the gentleman from Michigan (Mr. Huizenga).
Mr. Speaker, I have no other speakers, and I reserve the balance of my time.
Mr. Speaker, I reserve the balance of my time.
Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, we often talk about coming together in support of good policy. We all have friends on both sides of the aisle, and we routinely promise to work together on issues upon which we agree. Most of us speak in front of our constituents about our desire to work with the other party. However, we all know that Americans perceive us to be constantly engaged in partisan conflict.
It is unfortunate that we are not able to work together on good legislation more often. It is understandable that Americans feel disappointed by Washington's partisan sniping. But here before us today is a bill with wide bipartisan support. Not only has it already received numerous bipartisan votes, there were only two amendments offered to the bill. One amendment was withdrawn because it was not germane. The other amendment from my good friend from Colorado and the Rules Committee, Mr. Polis, is simply requiring a report.
Why is this bill so noncontroversial?
I believe it has to do with the process by which we received this legislation. The Committee on Financial Services held hearings as far back as 2015 in which problems with the SEC rule were raised by small- business owners.
The sponsor of this bill, Mr. Hultgren, worked with his Democratic
colleagues on the committee and introduced a proposal to reform the SEC rule. Chairman Hensarling held a full committee markup last month which allowed for full debate and amendment, and now we have the bill on the floor this week. Good process produces good policy. But perhaps equally as important, good process helps instill faith in this institution. When Americans see us take up an issue, hear their concerns, and work together to find a commonsense solution, they will trust us to tackle even bigger problems.
This may not be the largest legislative product that Chairman Hensarling and the Financial Services Committee produce in this Congress, but, nevertheless, it is an important work that is helping us solve problems faced by American small businesses. This legislation ensures that the employees of America's small businesses can take ownership in their companies and their jobs. It reduces regulatory encroachment on America's job creators and helps our small businesses expand and grow.
I thank Representative Hultgren for bringing this bill before us. I commend Chairman Hensarling for working with both sides of the aisle and for following a good process on this legislation.
Mr. Speaker, I urge my colleagues to vote ``yes'' on the rule and vote ``yes'' on the bill.
Mr. Speaker, I yield back the balance of my time, and I move the previous question on the resolution.