FC: Senate Republicans urge defeat of stock-option charges bill

[Declan McCullagh <declan () well com>]

The bill in question:
http://rs9.loc.gov/cgi-bin/bdquery/z?d107:s.01940:

T.J. Rodgers' typically-provocative op-ed opposing it:
http://online.wsj.com/article_email/0,,SB101519745263202320,00.html

Sen. Carl Levin (D-Mich) press release in favor of bill:
http://levin.senate.gov/releases/021302pr1.htm

---

For Release:  Tuesday, March 12, 2002
Contact:    Matt Raymond
        (202) 224-4121

High Tech Task Force Urges Defeat of Stock-Options Measure, Possible Energy
Amendment, That Would Harm Tech Community

WASHINGTON, DC Members of the Senate Republican High Tech Task Force
sent a letter to Senate Majority Leader Tom Daschle and Minority
Leader Trent Lott voicing concerns that legislation which may be
offered as an amendment to the energy bill would legislate financial
accounting rules and have substantially harmful implications for the
technology community and enterprises.

In the letter, the Senators expressed concerns that S. 1940, the
Ending the Double Standard for Stock Options Act, would require
companies to expense stock options on their income statements and
preclude them from taking the tax deduction they are entitled to if
they fail to do so.  Neither SEC rules nor generally accepted
accounting standards require companies to expense stock options.  If
it is approved, the Senators wrote that technology companies would be
forced to reduce the number of stock options issued to rank-and-file
employees in order to minimize the false hit to earnings required by
the harmfu l legislation.

Stock options are a vital and powerful tool to motivate employees to
improve the productivity, efficiency and overall excellence of their
companies.  In fact, many executives at a number of companies are
compensated solely through stock options, High Tech Task Force
Chairman George Allen (R-VA) said.  Limits on stock options would
seriously harm many of our most innovative companies, especially the
technology companies that make broad use of them for their employees
at all levels from shipping to management.

The Senators also expressed concerns that by limiting the tax
deduction for stock options, S. 1940 would impose a tax increase that
would hurt small, medium-sized and large businesses and could
ultimately hinder job growth.  Particularly troublesome to the
technology community, the bill would discourage research and
development by absurdly reducing the R&D tax credit for companies that
do not expense stock options.

Leading technology industry associations including AeA, the Business
Software Alliance, CapNet, the Information Technology Association of
America, the Information Technology Industry Council, the Software &
Information Industry Association, and TechNet oppose this legislation.

The letter was signed by High Tech Task Force Members Senators Allen,
Wayne Allard (CO), Robert Bennett (UT), Conrad Burns (MT), John Ensign
(NV), Orrin Hatch (UT), Gordon Smith (OR) and John Warner (VA), as
well as Senators Larry Craig (R-ID), Tim Hutchinson (R-AR), and Don
Nickles (R-OK).

###

______________________________________
MATT RAYMOND
Communications Director, Sen. George Allen
204 Russell Senate Office Building
Washington, DC  20510
Ph: 202-224-4121
Cell: 703-969-8271
Fax: 202-228-1573




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