Today, Congressman Bill Huizenga (MI-02) spoke on the House floor in support of H.R. 1343, the Encouraging Employee Ownership Act. This legislation would provide greater opportunity for small businesses to compete with larger companies by reforming SEC Rule 701 which places burdensome federal filing requirements on employee compensation packages. By lifting the threshold, small businesses will be able to better retain and attract talent. H.R. 1343 passed with strong bipartisan support by a vote of 331 to 87.
Rep. Huizenga’s Remarks:
Small businesses and entrepreneurs are what drive the American economy. I meet them in West Michigan and I see firsthand the benefits that their dreams, their innovations, their inspirations, and their hard work provide to our communities. These innovators, entrepreneurs, and risk-takers are critical to 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. So if our nation is going to have an economy that provides opportunities for every American, then we must promote and encourage success and growth of our small businesses and startups. It’s this notion that brings us to the legislation we are discussing today.
H.R. 1343, the Encouraging Employee Ownership Act, would simply level the playing field for small companies by updating federal rules to allow small businesses to better compensate their employees with ownership in their own businesses. Currently, SEC 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. The SEC Rule 701 therefore allows small companies to reward its employees. Despite the SEC having the authority to increase the $5 million disclosure threshold via rulemaking, the SEC has once again chosen to prioritize highly politicized regulatory undertakings instead of focusing on its core mission – that mission includes the facilitation of 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 small businesses to be able to offer compensation packages that attract and retain top-tier talent. In today’s world, that includes rewarding employees with 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 Rule 701 to the threshold of $10 million, it will give private companies more flexibility to attract, reward, and retain employees. This simple change would allow companies to offer twice as much stock to their employees annually without having to trigger additional disclosure information to investors about compensation packages that include securities offerings.
By removing this regulatory burden, start-ups, small businesses, and emerging growth companies will be better equipped to attract highly talented individuals from companies that are better capitalized and able to provide cash incentives and compensation. By incentivizing employees with stock options, small businesses will now be able to compete on a more level playing field in order to retain valuable employees. This bill is an example of the positive bipartisan results that can be achieved when Republicans and Democrats reach across the aisle.
Many West Michigan families have already begun, or are about to begin their holiday weekend. As you climb into your car and get on the road, remember to travel safely. Enjoy the weekend with your family, friends, and loved-ones, but please keep in your hearts the men and women who made the ultimate sacrifice in defense of freedom as well as the veterans and families who carry their memory.
Update on the Great Lakes & President Trump's Budget. An important fact to remember in this discussion is that Congress, not the President, determines what programs are funded. I believe the Great Lakes are a national priority. In fact, Congress just supported fully funding the Great Lakes Restoration Initiative for the remainder of the current fiscal year. By reaching across the aisle, I have worked in a bipartisan manner to reject cuts put forward by President Obama and President Trump to the GLRI. The health and vitality of the Great Lakes are instrumental to having sustained economic growth in Michigan and across the entire Great Lakes region. I remain committed to working with both Republicans and Democrats to prioritize, strengthen, and defend the Great Lakes.
This afternoon, the CBO's projection confirmed that the American Health Care Act will lower premiums and reduce the federal deficit. Yesterday, the Department of Health and Human Services released a study detailing how premiums for Michigan residents on the individual market have increased by 90% over the last four years alone. ObamaCare is collapsing and isn’t sustainable. We need to restore the ability for hardworking Michiganders to choose the health care plan that best meets their needs. The AHCA is a positive step in helping to achieve that objective.
My heart goes out to the families impacted by the heinous attack in Manchester. We must stand united with our allies across the Atlantic and around the globe to combat terrorism. Those who target and seek to harm innocent children are enemies of peace and freedom who must be held accountable for their actions.
The Congressional Review Act has allowed Congress to eliminate 14 burdensome regulations the Obama Administration finalized in its waning days - including my bill to eliminate a job-destroying provision of Dodd-Frank. We need to enact commonsense reforms that rein in "regulation nation" and allow our economy to grow.