Guiding Uniform and Responsible Disclosure Requirements and Information Limits Act of 2023

Floor Speech

BREAK IN TRANSCRIPT

Mr. HUIZENGA. Mr. Speaker, pursuant to House Resolution 1455, I call up the bill (H.R. 4790) to amend the Federal securities laws with respect to the materiality of disclosure requirements, to establish the Public Company Advisory Committee, and for other purposes, and ask for its immediate consideration in the House.

The Clerk read the title of the bill.

Mr. Speaker, today, we have an opportunity to put a stake in the ground and ensure our financial system remains the envy of the world by passing H.R. 4790, the Prioritizing Economic Growth Over Woke Policies Act.

Under the Biden-Harris administration, agencies that have traditionally been viewed as independent have been hijacked to push through a partisan environmental, social, and governance, or ESG, agenda.

Politically motivated, unelected bureaucrats are forcing these leftwing political priorities--which, by the way, Mr. Speaker, Democrats were unable to pass into law even when they had unified control of Congress--on the American people through financial regulation.

In other words, rogue Democrat-appointed regulators are forcing companies to waste limited time and resources on ESG political mandates that have little or nothing to do with a firm's financial performance.

These misguided ESG efforts don't benefit our banking system or our capital markets. They certainly don't help consumers, workers, job creators, everyday investors, or retirement savers.

That is why House Republicans are fighting back with the Prioritizing Economic Growth Over Woke Policies Act. This bill is critical to combat the risks woke ESG initiatives pose to the American people and our financial system.

I applaud my colleagues for their work and appreciate their partnership. I also commend Chairman McHenry for his steadfast leadership to ensure protecting Americans and our financial system from out-of-bounds ESG mandates is a key priority for Republicans on the Committee on Financial Services.

I want to underscore, Mr. Speaker, why H.R. 4790 is so desperately needed. Under the Biden-Harris administration, rogue regulators are weaponizing independent agencies to pursue the objective of the political far left at the expense of our financial system and, more importantly, everyday investors.

SEC Chair Gensler and progressive Democrats are abusing our securities laws, overstepping their statutory authority, and redefining the long-accepted ``materiality standard'' to accommodate the demands of radical climate and social activists.

The materiality standard, which has been a pillar of American securities laws for decades, requires public companies to disclose information that has substantial likelihood to influence the financial judgments of a reasonable investor. Those are the standards that have been accepted, I believe, since 1976.

House Democrats have proposed legislation to require public companies to disclose nonmaterial information, including all information related to climate impact and emissions, human capital, and ``equity,'' whatever that might be, none of which have a substantial impact on a given firm's financial performance. None of these proposals were enacted into law.

More recently, Chair Gensler's rogue SEC has overstepped its authority by pursuing rulemakings to mandate similar nonmaterial disclosures. This includes finalizing the disastrous climate disclosure rule earlier this year.

Let me be clear: If this information is material to a business' financial performance and therefore affects the everyday investor, it is already required to be disclosed under the materiality standard.

That is where my GUARDRAIL Act, a key pillar of this legislation we are considering today, comes in. It protects U.S. capital markets and the financial interests of everyday investors by rejecting this new, prescriptive, and expansive notion of materiality by reining in SEC overreach.

Specifically, the bill prevents rogue regulators from mandating the disclosure of nonmaterial ESG information that would overwhelm, not inform, everyday investors, also known as reasonable investors.

At the same time, H.R. 4790 holds large asset managers and the proxy advisory duopoly of ISS and Glass Lewis accountable. These firms are abusing their outsized market influence to force leftwing political views on public companies, rather than aligning their shareholder voting with the financial interests of investors and economic goals.

The Prioritizing Economic Growth Over Woke Policies Act returns power to everyday investors and retirement savers from these unaccountable third parties. Additionally, the bill would require the SEC's shareholder proposal process to stop progressive activists from hijacking the proxy process to inject woke ESG initiatives into corporate boardrooms.

Now, Mr. Speaker, it actually would stop all left, right, or center activists' proposals from being introduced. That is a good thing for everyone. This will allow executives and directors to focus on creating shareholder value--by the way, their legal responsibility--and benefiting retirement savers and bolstering economic growth.

Finally, this bill would stop the alliance of leftwing activists, unaccountable global governance organizations, and politicized Biden- Harris regulators from weaponizing the U.S. banking regulatory framework to inject radical ESG initiatives to the detriment of consumers and American competitiveness.

With the Prioritizing Economic Growth Over Woke Policies Act, House Republicans are taking action to protect the financial system, workers, job creators, and everyday investors from radical ESG initiatives that put leftwing political goals above American prosperity.

Mr. Speaker, I urge my colleagues to support H.R. 4790, and I reserve the balance of my time.

BREAK IN TRANSCRIPT

Mr. HUIZENGA. Mr. Speaker, I will just note that, yes, it is America, and I will note that the ranking member voted against a continuing resolution just yesterday to keep government open. However, I am sure, Mr. Speaker, that she will have another opportunity very, very soon.
BREAK IN TRANSCRIPT

Mr. HUIZENGA. Mr. Speaker, I will note that, for some, the louder and longer they say something, they hope people will believe it.

BREAK IN TRANSCRIPT

Mr. HUIZENGA. Mr. Speaker, I note that this bill is absolutely neutral on climate change and doesn't even reference it.

BREAK IN TRANSCRIPT

Mr. HUIZENGA.
BREAK IN TRANSCRIPT

Mr. HUIZENGA. Mr. Speaker, I simply note that if this was about protecting investors and maximizing their profit, we wouldn't force them to go into a lower return product like my colleagues are trying to do.
BREAK IN TRANSCRIPT

Mr. HUIZENGA. Mr. Speaker, may I inquire as to how much time is remaining.
BREAK IN TRANSCRIPT

Mr. HUIZENGA. Mr. Speaker, I am prepared to close.

Meanwhile, I again reiterate that the law requires any material information, including climate information, must be disclosed currently, if it is material.

I will continue to reserve the balance of my time until the gentlewoman is prepared to close.

BREAK IN TRANSCRIPT

Mr. HUIZENGA. Mr. Speaker, I continue to reserve the balance of my time until the gentlewoman is prepared to close.

Mr. Speaker, I thank all of my colleagues, the Members who spoke here today, as well as the 20 Members who included their bills in this particular package.

We have heard a lot of rhetoric. We have heard a lot of hyperbole. We have heard a lot of fearmongering, charged rhetoric, and, frankly, even some falsehoods today from my colleagues across the aisle.

I want to be clear, Mr. Speaker, that again, the law requires any material information, including climate, and all these other things that have been discussed today, must be disclosed to investors, if it is material.

Now, in 1976, the great Thurgood Marshall established standards of materiality in the TSC v. Northway case.

Thurgood Marshall realized, as did the rest of the Supreme Court, that having just arbitrary and capricious and sort of willy-nilly rules surrounding what should or shouldn't be disclosed and what should and shouldn't be informative to the reasonable investor--his words and their words--to the reasonable investor, they needed to put guardrails around that. In 1976, Thurgood Marshall did that.

This administration, after nearly 50 years, and their puppets in the supposedly independent agencies have turned that concept on its head.

We see this time and time again because they cannot do this through the legislative process. They are turning to those regulators who are abusing their situations.

Here are the facts. Unelected bureaucrats have hijacked and overhauled the public company shareholder proxy process.

Here are the facts. They have adopted rules and guidance that exceeds their statutory authority, and by the way, those same courts have been putting them back in their place.

Here are the facts. They have redefined the materiality standard. They have ceded authority over American financial regulation to global governance bodies.

Why would we do this? Why would we do this when the U.S. capital markets are the envy of the world? Capital comes to the United States because of our strength. Yet, they want to undermine and weaken it.

In response, our bill, H.R. 4790, the Prioritizing Economic Growth Over Woke Policies Act, will prevent regulatory overreach.

It will restore the materiality standard. It will restore the SEC's proxy voting process. It will hold large proxy advisory firms accountable.

It will block regulators from injecting ESG and other initiatives into our financial system. It will reassert sovereignty over American financial regulation to American regulators, not international bodies. Again, Mr. Speaker, the law requires any material information be included to the reasonable investor.

Let's seize this opportunity to protect workers, to create jobs, to protect those job creators and everyday investors from radical ESG initiatives that put leftwing political goals above American prosperity.

Let's ensure our financial system remains the envy of the world, Mr. Speaker. Let's vote ``yes''.

BREAK IN TRANSCRIPT

Mr. HUIZENGA. Mr. Speaker, on that I demand the yeas and nays.

The yeas and nays were ordered.

BREAK IN TRANSCRIPT

Source