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116th Congress   }                                    {        Report
                        HOUSE OF REPRESENTATIVES
 1st Session     }                                    {       116-237

======================================================================

 
  PROVIDING FOR CONSIDERATION OF THE BILL (H.R. 1815) TO REQUIRE THE 
     SECURITIES AND EXCHANGE COMMISSION, WHEN DEVELOPING RULES AND 
REGULATIONS ABOUT DISCLOSURES TO RETAIL INVESTORS, TO CONDUCT INVESTOR 
TESTING, INCLUDING A SURVEY AND INTERVIEWS OF RETAIL INVESTORS, AND FOR 
OTHER PURPOSES, AND PROVIDING FOR CONSIDERATION OF THE BILL (H.R. 3624) 
TO AMEND THE SECURITIES EXCHANGE ACT OF 1934 TO REQUIRE THE DISCLOSURE 
OF THE TOTAL NUMBER OF DOMESTIC AND FOREIGN EMPLOYEES OF CERTAIN PUBLIC 
                   COMPANIES, AND FOR OTHER PURPOSES

                                _______
                                

  October 15, 2019.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

             Mr. DeSaulnier, from the Committee on Rules, 
                        submitted the following

                              R E P O R T

                       [To accompany H. Res. 629]

    The Committee on Rules, having had under consideration 
House Resolution 629, by a record vote of 6 to 4, report the 
same to the House with the recommendation that the resolution 
be adopted.

                SUMMARY OF PROVISIONS OF THE RESOLUTION

    The resolution provides for consideration of H.R. 1815, the 
SEC Disclosure Effectiveness Testing Act, under a structured 
rule. The resolution provides one hour of general debate on the 
bill equally divided and controlled by the chair and ranking 
minority member of the Committee on Financial Services. The 
resolution waives all points of order against consideration of 
the bill. The resolution provides that an amendment in the 
nature of a substitute consisting of the text of Rules 
Committee Print 116-34, modified by the amendment printed in 
part A of this report, shall be considered as adopted and the 
bill, as amended, shall be considered as read. The resolution 
waives all points of order against provisions in the bill, as 
amended. The resolution makes in order only those further 
amendments printed in Part B of this report. Each such 
amendment may be offered only in the order printed in this 
report, may be offered only by a Member designated in this 
report, shall be considered as read, shall be debatable for the 
time specified in this report equally divided and controlled by 
the proponent and an opponent, shall not be subject to 
amendment, and shall not be subject to a demand for division of 
the question in the House or in the Committee of the Whole. The 
resolution waives all points of order against the amendments 
printed in part B of this report. The resolution provides for 
one motion to recommit with or without instructions. The 
resolution provides for consideration of H.R. 3624, the 
Outsourcing Accountability Act of 2019, under a structured 
rule. The resolution provides one hour of general debate on the 
bill equally divided and controlled by the chair and ranking 
minority member of the Committee on Financial Services. The 
resolution waives all points of order against consideration of 
the bill. The resolution makes in order as original text for 
the purpose of amendment the amendment in the nature of a 
substitute recommended by the Committee on Financial Services 
now printed in the bill and provides that it shall be 
considered as read. The resolution waives all points of order 
against that amendment in the nature of a substitute. The 
resolution makes in order only those further amendments printed 
in Part C of this report. Each such amendment may be offered 
only in the order printed in this report, may be offered only 
by a Member designated in this report, shall be considered as 
read, shall be debatable for the time specified in this report 
equally divided and controlled by the proponent and an 
opponent, shall not be subject to amendment, and shall not be 
subject to a demand for division of the question in the House 
or in the Committee of the Whole. The resolution waives all 
points of order against the amendments printed in Part C of 
this report. The resolution provides one motion to recommit 
with or without instructions.

                         EXPLANATION OF WAIVERS

    The waiver of all points of order against consideration of 
H.R. 1815 includes waivers of the following:
           Clause 12(a)(1) of rule XXI, which prohibits 
        consideration of a bill unless there is a searchable 
        electronic comparative print that shows how the bill 
        proposes to change current law.
           Clause 12(b) of rule XXI, which prohibits 
        consideration of a bill unless there is a searchable 
        electronic comparative print that shows how the text of 
        the bill as proposed to be considered differs from the 
        text of the bill as reported.
    Although the resolution waives all points of order against 
provisions in H.R. 1815, as amended, the Committee is not aware 
of any points of order. The waiver is prophylactic in nature.
    Although the resolution waives all points of order against 
the amendments printed in part B of this report, the Committee 
is not aware of any points of order. The waiver is prophylactic 
in nature.
    Although the resolution waives all points of order against 
consideration of H.R. 3624, the Committee is not aware of any 
points of order. The waiver is prophylactic in nature.
    Although the resolution waives all points of order against 
the amendment in the nature of a substitute to H.R. 3624 made 
in order as original text, the Committee is not aware of any 
points of order. The waiver is prophylactic in nature.
    Although the resolution waives all points of order against 
the amendments printed in part C of this report, the Committee 
is not aware of any points of order. The waiver is prophylactic 
in nature.

                            COMMITTEE VOTES

    The results of each record vote on an amendment or motion 
to report, together with the names of those voting for and 
against, are printed below:

Rules Committee record vote No. 175

    Motion by Mr. Cole to report an open rule for H.R. 1815 and 
H.R. 3624. Defeated: 4-6

----------------------------------------------------------------------------------------------------------------
                Majority Members                      Vote               Minority Members               Vote
----------------------------------------------------------------------------------------------------------------
Mr. Hastings....................................          Nay   Mr. Cole..........................          Yea
Mrs. Torres.....................................  ............  Mr. Woodall.......................          Yea
Mr. Perlmutter..................................          Nay   Mr. Burgess.......................          Yea
Mr. Raskin......................................  ............  Mrs. Lesko........................          Yea
Ms. Scanlon.....................................          Nay
Mr. Morelle.....................................          Nay
Ms. Shalala.....................................          Nay
Mr. DeSaulnier..................................          Nay
Mr. McGovern, Chairman..........................  ............
----------------------------------------------------------------------------------------------------------------

Rules Committee record vote No. 176

    Motion by Mr. Woodall to add a section to the rule that 
provides that it shall be in order at any time through October 
31, 2019, for the Speaker to entertain motions that the House 
suspend the rules relating to the bill (H.R. 553) to amend 
title 10, United States Code, to repeal the requirement for 
reduction of survivor annuities under the Survivor Benefit Plan 
for military surviving spouses to offset the receipt of 
veterans dependency and indemnity compensation, and for other 
purposes. Defeated: 4-6

----------------------------------------------------------------------------------------------------------------
                Majority Members                      Vote               Minority Members               Vote
----------------------------------------------------------------------------------------------------------------
Mr. Hastings....................................          Nay   Mr. Cole..........................          Yea
Mrs. Torres.....................................  ............  Mr. Woodall.......................          Yea
Mr. Perlmutter..................................          Nay   Mr. Burgess.......................          Yea
Mr. Raskin......................................  ............  Mrs. Lesko........................          Yea
Ms. Scanlon.....................................          Nay
Mr. Morelle.....................................          Nay
Ms. Shalala.....................................          Nay
Mr. DeSaulnier..................................          Nay
Mr. McGovern, Chairman..........................  ............
----------------------------------------------------------------------------------------------------------------

Rules Committee record vote No. 177

    Motion by Mr. Burgess to amend the rule to H.R. 1815 to 
make in order amendment #2, offered by Rep. Stivers (OH), which 
adds climate change disclosures to the proposed rules and 
regulations that would be subjected to investor testing in the 
underlying bill. Defeated: 4-6

----------------------------------------------------------------------------------------------------------------
                Majority Members                      Vote               Minority Members               Vote
----------------------------------------------------------------------------------------------------------------
Mr. Hastings....................................          Nay   Mr. Cole..........................          Yea
Mrs. Torres.....................................  ............  Mr. Woodall.......................          Yea
Mr. Perlmutter..................................          Nay   Mr. Burgess.......................          Yea
Mr. Raskin......................................  ............  Mrs. Lesko........................          Yea
Ms. Scanlon.....................................          Nay
Mr. Morelle.....................................          Nay
Ms. Shalala.....................................          Nay
Mr. DeSaulnier..................................          Nay
Mr. McGovern, Chairman..........................  ............
----------------------------------------------------------------------------------------------------------------

Rules Committee record vote No. 178

    Motion by Mrs. Lesko to amend the rule to H.R. 1815 to make 
in order amendment #4, offered by Rep. Emmer (MN), which 
applies the bill's investor testing to any disclosures relating 
to ``environmental, social, or governance'' (ESG) factors. 
Defeated: 4-6

----------------------------------------------------------------------------------------------------------------
                Majority Members                      Vote               Minority Members               Vote
----------------------------------------------------------------------------------------------------------------
Mr. Hastings....................................          Nay   Mr. Cole..........................          Yea
Mrs. Torres.....................................  ............  Mr. Woodall.......................          Yea
Mr. Perlmutter..................................          Nay   Mr. Burgess.......................          Yea
Mr. Raskin......................................  ............  Mrs. Lesko........................          Yea
Ms. Scanlon.....................................          Nay
Mr. Morelle.....................................          Nay
Ms. Shalala.....................................          Nay
Mr. DeSaulnier..................................          Nay
Mr. McGovern, Chairman..........................  ............
----------------------------------------------------------------------------------------------------------------

Rules Committee record vote No. 179

    Motion by Mr. Hastings to report the rule. Adopted: 6-4

----------------------------------------------------------------------------------------------------------------
                Majority Members                      Vote               Minority Members               Vote
----------------------------------------------------------------------------------------------------------------
Mr. Hastings....................................          Yea   Mr. Cole..........................          Nay
Mrs. Torres.....................................  ............  Mr. Woodall.......................          Nay
Mr. Perlmutter..................................          Yea   Mr. Burgess.......................          Nay
Mr. Raskin......................................  ............  Mrs. Lesko........................          Nay
Ms. Scanlon.....................................          Yea
Mr. Morelle.....................................          Yea
Ms. Shalala.....................................          Yea
Mr. DeSaulnier..................................          Yea
Mr. McGovern, Chairman..........................  ............
----------------------------------------------------------------------------------------------------------------

            SUMMARY OF THE AMENDMENT TO H.R. 1815 IN PART A 
                         CONSIDERED AS ADOPTED

    1. Waters (CA): Makes several technical changes to the bill 
to correct citations and internal references.

           SUMMARY OF THE AMENDMENTS TO H.R. 1815 IN PART B 
                             MADE IN ORDER

    1. Huizenga (MI): Exempts Form CRS, a recently developed 
disclosure document that went through SEC investor testing, 
from the bill's investor testing requirements. (10 minutes)
    2. Gottheimer (NJ): Requires the SEC to include a specific 
consideration of the unique challenges senior investors face as 
part of their overall investor testing. (10 minutes)
    3. Wagner (MO): Applies the bill's investor testing 
requirements only to applicable disclosure documents developed 
after January 21, 2021--that is, following the next 
presidential election cycle. (10 minutes)
    4. Maloney, Sean (NY): Clarifies that the term ``retail 
investor'' does not mean an institutional investor. (10 
minutes)

           SUMMARY OF THE AMENDMENTS TO H.R. 3624 IN PART C 
                             MADE IN ORDER

    1. Huizenga (MI): Exempts issuers from making these 
disclosures if they are required to make a CEO pay ratio 
disclosure or disclosures relating to conflict minerals. (10 
minutes)
    2. Hill, French (AR): Requires disclosure of the 
information under the bill only if that information is material 
information for investors. (10 minutes)

      PART A--TEXT OF AMENDMENT TO H.R. 1815 CONSIDERED AS ADOPTED

  Page 5, line 1, strike ``section 2'' and insert ``this 
paragraph''.
  Page 5, line 12, strike ``paragraph 4(A)'' and insert 
``paragraph (4)(A)''.
  Page 5, line 13, strike ``section 2'' and insert ``this 
paragraph''.
  Page 5, line 17, strike ``section 2'' and insert ``this 
paragraph''.
  Page 5, line 21, strike ``section 2'' and insert ``this 
paragraph''.
  Page 8, line 13, strike ``paragraph 4(A)'' and insert 
``Section 23(a)(4) of the Securities 6 Exchange Act of 1934''.
  Page 9, line 9, strike ``section 2''.
  Page 9, line 12, strike ``section 2''.
  Page 9, line 16, strike ``section 2''.

         PART B--TEXT OF AMENDMENTS TO H.R. 1815 MADE IN ORDER

1. An Amendment To Be Offered by Representative Huizenga of Michigan or 
                 His Designee, Debatable for 10 Minutes

  Page 2, line 17, after ``Guides),'' insert the following: 
``Form CRS''.
                              ----------                              


   2. An Amendment To Be Offered by Representative Gottheimer of New 
            Jersey or His Designee, Debatable for 10 Minutes

  Page 4, insert after line 8 the following:
                          (v) A consideration of unique 
                        challenges faced by retail investors 
                        age 65 or older.
                              ----------                              


 3. An Amendment To Be Offered by Representative Wagner of Missouri or 
                 Her Designee, Debatable for 10 Minutes

  Page 1, line 11, insert after ``regulation'' the following 
``after January 21, 2021''.
  Page 7, strike line 12 and all that follows through the end.
                              ----------                              


4. An Amendment To Be Offered by Representative Maloney of New York or 
                 His Designee, Debatable for 10 Minutes

  Page 6, insert after line 5 the following:
                  ``(H) Retail investor defined.--For the 
                purposes of this paragraph, the term `retail 
                investor' means any investor that is not an 
                institutional investor.''.

         PART C--TEXT OF AMENDMENTS TO H.R. 3624 MADE IN ORDER

1. An Amendment To Be Offered by Representative Huizenga of Michigan or 
                 His Designee, Debatable for 10 Minutes

  Page 3, line 21, insert after ``emerging growth company'' the 
following: ``and except as provided in paragraph (3)''.
  Page 5, after line 2, insert the following:
          ``(3) Exception.--An issuer is not required to 
        disclose information pursuant to paragraph (2) if such 
        issuer is required to make disclosures pursuant to--
                  ``(A) subsection 13(p); or
                  ``(B) section 229.402 of title 17, Code of 
                Federal Regulation, relating to chief executive 
                officer pay ratios.''.
  Page 5, line 3, strike ``(3)'' and insert ``(4)''.
                              ----------                              


2. An Amendment To Be Offered by Representative Hill of Arkansas or His 
                   Designee, Debatable for 10 Minutes

  Page 3, line 21, insert after ``emerging growth company'' the 
following: ``and except as provided in paragraph (3)''.
  Page 5, after line 2, insert the following:
          ``(3) Exception.--An issuer is not required to 
        disclose information pursuant to paragraph (2) if such 
        information is not material.''.
  Page 5, line 3, strike ``(3)'' and insert ``(4)''.

                                  [all]