Committee unanimously reports bill giving ESOP fiduciaries guidance on valuing employer stock
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Summary
The House Education and Labor Committee reported HR 5169, the Retire Through Ownership Act, with bipartisan support; it allows ESOP fiduciaries to rely in good faith on independent valuations that follow long-standing IRS valuation guidance and preserves the Labor Department's rulemaking authority.
The House Committee on Education and Labor unanimously voted to report HR 5169, the Retire Through Ownership Act, which would provide valuation guidance for employee stock ownership plans (ESOPs) by allowing ESOP fiduciaries to rely in good faith on independent valuations that use Internal Revenue Service guidance (including Revenue Ruling 59‑60) when valuing closely held employer stock.
Representative Allen, the bill’s sponsor, said ESOP fiduciaries have lacked definitive Department of Labor guidance for more than 50 years and that the proposal brings clarity by pointing to longstanding IRS valuation guidance. The amendment in the nature of a substitute adopted in committee clarified that the Secretary of Labor may issue implementing regulations, that the bill does not expand Secretary authority, and that ERISA fiduciary duties remain in force.
Supporters across the aisle, including Representative McBath, Representative Bonamici and Ranking Member Scott, spoke in favor. Representative Scott noted the bill aligns with a Senate companion measure that had unanimous committee approval in the Senate Health, Education, Labor and Pensions Committee; he also emphasized fiduciary protections and that the bill preserves the Department of Labor’s ability to issue regulations.
Representatives supporting the bill cited ESOPs’ role in retirement security and employee ownership; opponents were not prominent in the committee record. The committee adopted the substitute and moved to report the bill. The clerk announced the final recorded tally as 35 yeas and no nays for the motion to report HR 5169, and the motion passed.
The committee asked staff to make technical and conforming changes before transmittal and noted members may submit supplemental views as permitted by House rules.