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U.S. GOVERNMENT
INFORMATION
Gp
115TH CONGRESS REPORT
1st Session HOUSE OF REPRESENTATIVES 115-71
ENCOURAGING EMPLOYEE OWNERSHIP ACT OF 2017
MARCH 29, 2017.-Committed to the Committee of the Whole House on the State
of the Union and ordered to be printed
Mr. HENSARLING, from the Committee on Financial Services,
submitted the following
REPORT
together with
MINORITY VIEWS
[To accompany H.R. 1343]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred the
bill (H.R. 1343) to direct the Securities and Exchange Commission
to revise its rules so as to increase the threshold amount for requir-
ing issuers to provide certain disclosures relating to compensatory
benefit plans, having considered the same, report favorably thereon
without amendment and recommend that the bill do pass.
PURPOSE AND SUMMARY
Introduced by Representative Hultgren on March 2, 2017, H.R.
1343, the Encouraging Employee Ownership Act of 2017, amends
the Securities and Exchange Commission (SEC) Rule 701, origi-
nally adopted in 1988 under Section 3(b) of the Securities Act of
1933 (Securities Act) and last updated in 1999. Under current law,
if an issuer sells, in the aggregate, more than $5 million of securi-
ties in any consecutive 12-month period, the issuer is required to
provide additional disclosures to investors, such as risk factors, the
plans under which offerings are made, and certain financial state-
ments. H.R. 1343 requires the SEC to increase that threshold from
$5 million to $10 million, and index the amount for inflation every
five years. Identical legislation has been introduced by Senators
Pat Toomey and Mark Warner, and support for this effort to up-
date Rule 701 can be found in the SEC's Government-Business
69-006](ViewImageLocal?handle=hein.congrecreports/crptxaaex0001&div=1&collection=&method=preview&ext=.png&size=3)