[Congressional Record Volume 162, Number 65 (Wednesday, April 27, 2016)]
[House]
[Pages H2037-H2046]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
HELPING ANGELS LEAD OUR STARTUPS ACT
Mr. HENSARLING. Mr. Speaker, pursuant to House Resolution 701, I call
up the bill (H.R. 4498) to clarify the definition of general
solicitation under Federal securities law, and ask for its immediate
consideration in the House.
The Clerk read the title of the bill.
The SPEAKER pro tempore (Mr. Bost). Pursuant to House Resolution 701,
the bill is considered read.
The text of the bill is as follows:
H.R. 4498
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Helping Angels Lead Our
Startups Act'' or the ``HALOS Act''.
SEC. 2. DEFINITION OF ANGEL INVESTOR GROUP.
As used in this Act, the term ``angel investor group''
means any group that--
(1) is composed of accredited investors interested in
investing personal capital in early-stage companies;
(2) holds regular meetings and has defined processes and
procedures for making investment decisions, either
individually or among the membership of the group as a whole;
and
(3) is neither associated nor affiliated with brokers,
dealers, or investment advisers.
SEC. 3. CLARIFICATION OF GENERAL SOLICITATION.
(a) In General.--Not later than 6 months after the date of
enactment of this Act, the Securities and Exchange Commission
shall revise Regulation D of its rules (17 C.F.R. 230.500 et
seq.) to require that in carrying out the prohibition against
general solicitation or general advertising contained in
section 230.502(c) of title 17, Code of Federal Regulations,
the prohibition shall not apply to a presentation or other
communication made by or on behalf of an issuer which is made
at an event--
(1) sponsored by--
(A) the United States or any territory thereof, by the
District of Columbia, by any State, by a political
subdivision of any State or territory, or by any agency or
public instrumentality of any of the foregoing;
(B) a college, university, or other institution of higher
education;
(C) a nonprofit organization;
(D) an angel investor group;
(E) a venture forum, venture capital association, or trade
association; or
(F) any other group, person or entity as the Securities and
Exchange Commission may determine by rule;
(2) where any advertising for the event does not reference
any specific offering of securities by the issuer;
(3) the sponsor of which--
(A) does not make investment recommendations or provide
investment advice to event attendees;
(B) does not engage in an active role in any investment
negotiations between the issuer and investors attending the
event;
(C) does not charge event attendees any fees other than
administrative fees; and
(D) does not receive any compensation with respect to such
event that would require registration of the sponsor as a
broker or a dealer under the Securities Exchange Act of 1934,
or as an investment advisor under the Investment Advisers Act
of 1940; and
(4) where no specific information regarding an offering of
securities by the issuer is communicated or distributed by or
on behalf of the issuer, other than--
[[Page H2038]]
(A) that the issuer is in the process of offering
securities or planning to offer securities;
(B) the type and amount of securities being offered;
(C) the amount of securities being offered that have
already been subscribed for; and
(D) the intended use of proceeds of the offering.
(b) Rule of Construction.--Subsection (a) may only be
construed as requiring the Securities and Exchange Commission
to amend the requirements of Regulation D with respect to
presentations and communications, and not with respect to
purchases or sales.
The SPEAKER pro tempore. The bill shall be debatable for 1 hour,
equally divided and controlled by the chair and ranking minority member
of the Committee on Financial Services.
The gentleman from Texas (Mr. Hensarling) and the gentlewoman from
California (Ms. Maxine Waters) each will control 30 minutes.
The Chair recognizes the gentleman from Texas.
General Leave
Mr. HENSARLING. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days in which to revise and extend their remarks
and submit extraneous materials on the bill under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Mr. HENSARLING. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I rise in strong support today of H.R. 4498, the Helping
Angels Lead Our Startups Act, known as the HALOS Act. This is yet
another bipartisan bill that has been passed out of the Financial
Services Committee that I know will help create jobs and grow our
economy.
We all know from listening to our constituents that jobs and the
economy continue to be the number one issue of concern because this
economy is still not working for working Americans. After many years,
they still see their paychecks have stagnated. They have seen their
savings evaporate. They are losing hope. We see entrepreneurship is at
a generational low.
The HALOS Act is a step in the right direction. It is one of many
solutions that we need to enact in this body.
I commend the bipartisan sponsor of the bill, Mr. Chabot, the
chairman of the Small Business Committee; Mr. Hurt of Virginia and Ms.
Sinema of Arizona, the latter two who serve with me on the Financial
Services Committee.
I want to thank all of my colleagues on the Financial Services
Committee for voting overwhelmingly in favor of this bill. Almost 80
percent of the membership of the committee voted to advance it to the
floor.
I am proud that our committee has a strong record of bipartisanship.
Since the beginning of the 114th Congress, Mr. Speaker, the House has
passed 56 of our measures--30 have been signed into law--and each one
of these measures received bipartisan support. In an era of divided
government, that is not a bad record.
I believe that most Americans also believe that our economy works
better for all Americans when small businesses can focus on creating
jobs rather than navigating meaningless bureaucratic red tape.
The HALOS Act provides an important fix to regulations so it will be
easier for our small businesses to attract investments. Again, Mr.
Speaker, so critical when entrepreneurship is at a generational low and
our economy limps along at even less than 2 percent of economic growth.
The HALOS Act provides a clearer path for startup businesses to
connect with angel investors and allows investors to make their own
informed decisions. Angel investors play an incredibly active role in
helping small businesses open their doors and grow so they can open
their doors even wider and hire more workers.
We should remember--and many of our colleagues are now aware--that
companies like Amazon, Costco, Google, Facebook, and Starbucks were all
first funded by angel investors. Now, today, not only the services they
provide in our economy, but approximately 600,000 employees earn their
paychecks and provide for their families working for companies that
were started with angel investors.
Unfortunately, as so often happens, when Washington regulators get
out of control, they step into the picture and we have yet more
unintended consequences. Four years ago, Congress passed a bipartisan
JOBS Act to make it easier for business startups to gain access to
capital, but the Securities and Exchange Commission issued misguided
regulations on angel investors that had exactly the opposite effect.
By inappropriately classifying events where entrepreneurs showcased
their business models to angel investors as general solicitations, the
SEC regulations are causing innovative startups to lose access to
capital, which means our economy loses jobs. This is counter to
Congress' intent when we passed the JOBS Act, and it is certainly
counter to what our economy needs now. Mr. Speaker, what is so ironic
is that the practice was legal and proper before the passage of the
JOBS Act. It should remain legal and proper after the passage of the
JOBS Act.
This is a problem that Congress can easily fix by approving the HALOS
Act. It is not a complicated bill, Mr. Speaker. It is four pages long.
It simply ensures that funding from angel investors remains available
to business startups.
The bipartisan bill makes sure that events where entrepreneurs and
angel investors get together are not classified as general
solicitations because they are not. Instead of onerous bureaucratic red
tape that deters investors from backing new business startups, the
four-page HALOS Act will help new businesses gain investor support when
they need it most.
Mr. Speaker, as I mentioned earlier, this bill sailed through the
House Financial Services Committee with strong bipartisan support. Out
of 57 members voting in committee that day, only 13 opposed the bill.
In other words, 80 percent of the committee voted in favor of the HALOS
Act.
The bill has strong bipartisan support because it is common sense. It
is about jobs; it is about helping small businesses overcome misguided
regulation; and it is about making sure that Congress makes the law--
not the regulators, who are unelected and who are unaccountable.
Mr. Speaker, I reserve the balance of my time.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such
time as I may consume.
I rise in opposition to H.R. 4498, the Helping Angels Lead Our
Startups Act.
This bill will make changes to investor protections under the JOBS
Act that I believe are ill-advised and could lead to unintended
consequences for our regulatory framework.
{time} 1600
It would do so by broadening the scope of when private securities
offerings can be solicited or advertised to the public without first
verifying that the purchaser is financially sophisticated enough to
understand the risk involved, what we call ``accredited investors.''
Specifically, the bill would require the SEC to amend its safe harbor
rules for private placements under Rule 506 of Regulation D so that the
current verification requirements for general solicitation and
advertising do not effectively apply to sales events that are sponsored
by certain groups, colleges, nonprofits, trade associations, or angel
investor groups, for example.
The bill's intent is to expand the role of angel investors in capital
formation. It is a laudable goal, but it is one that needs appropriate
rules to ensure investors have the protection and legal recourse needed
to make sound investments.
So, while the bill would limit the amount and type of information
that can be communicated for these events, it would still allow
companies to condition the markets for their securities and offer them
to any member of the public who walks in the door.
Let me be clear. If a university wants to sponsor a so-called demo
day with companies that want to pitch their ideas and products, they
already can, and the entire public can attend. The companies, however,
just can't talk about offers or sell securities in their companies.
I am concerned that this bill, however, would cause real harm to
retail investors. For example, a hedge fund could set up an event that
is sponsored by a questionable college, like Corinthian, could pass out
flyers on campus
[[Page H2039]]
that advertise their shares, and then sell those shares to anyone who
had attended the event, including the students who may know nothing
about how this whole operation works. They would not have to take
reasonable steps to verify that these purchasers are accredited
investors.
Furthermore, events sponsored by government entities, nonprofits, and
universities are likely to attract the very people we are trying to
protect, investors who are not accredited and do not have enough
financial sophistication or wherewithal to understand the investments
or bear their high risk of loss.
We created the Rule 506 exemption under the JOBS Act to expand the
market for private offerings. Private companies can now advertise and
solicit offerings to the general public, which helps them to raise the
capital they need to grow their businesses.
In exchange for the expanded framework and lower levels of investor
protection, we passed a simple amendment that I offered to require
companies to just take reasonable steps to verify that the purchaser of
the security is an accredited investor.
The intent was simple. If a company is going to advertise riskier
private offerings, it must ensure that the buyer has the necessary
income and assets to qualify for such a purchase rather than rely on
so-called self-certification. The bill would effectively reverse this
sensible amendment during these sales events.
At best, the bill is also unnecessary. The SEC has already provided
relief to angel investor groups if they curate the people who attend
these sales events. They have to either make sure they have a
preexisting relationship with the investor or verify their income and
assets at the time of purchase, which is consistent with our regulatory
framework.
I have offered an amendment, which will be debated later today, that
would codify the SEC's relief and prevent harm to everyday investors.
It would also limit the exemptions to operating companies so that shell
companies and investment vehicles, like hedge funds, can't solicit
potentially risky offerings to unknowing investors.
These revisions to the bill would strike an appropriate balance
between capital formation and investor protection while still
supporting angel investor groups. However, without my amendment, I
cannot support this bill.
Mr. Speaker, I reserve the balance of my time.
Mr. HENSARLING. Mr. Speaker, I yield 1 minute to the gentleman from
California (Mr. McCarthy), the distinguished Republican leader and a
leader in the JOBS Act and in innovation.
Mr. McCARTHY. I thank the gentleman for yielding. Before I move on, I
thank the gentleman for his work on the Committee on Financial
Services.
Mr. Speaker, this is another bill that comes to the floor with a
large bipartisan vote coming out so as to create jobs, and that is what
this floor is all about. Today we are talking about an American economy
that is ripe for innovation. This is what is needed to create jobs and
opportunity.
To my colleagues, I ask them: How many times have you traveled back
to your districts and sat down and seen individuals who crave to be
entrepreneurs? It could be that single mom or maybe it is that person
who is stuck in a job or is a young kid with a great idea.
But as they roll out their ideas, they find they are not going to get
stopped except by, maybe, a government regulation. Think of the jobs
they could create and the places in which we can grow.
Because of the technological revolution of our country's experience,
the startups we have come to know are now some of the largest companies
in our economy. Our goal shouldn't be to stop the next great American
company from coming into existence. We should actually enable it.
We should tear down the government-made barriers to their potential
and embrace the positive disruption that will keep America as the world
leader in innovation. That is the goal of the Innovation Initiative,
and that is what we are doing here today.
We will pass today the Helping Angels Lead Our Startups Act, which
enables ready investors to invest in startups. Startups are in a world
of high risk and high reward.
They can't just go to a bank for a loan. They need angel investors
who are willing to take that risk for the next company that will change
the world, and Washington should not stand in the way of making that
happen.
Several years ago Congress passed and the President did sign the JOBS
Act. Our goal was to help increase access to capital. Unfortunately,
some of the provisions in our bill were misinterpreted by the SEC
against the spirit of entrepreneurship, thus keeping the barriers to
capital in place.
Today's bill gives new companies an opportunity to identify and to
interact with potential investors, thus opening the door for the next
great idea to get the funding it needs to get up and running.
I give a special thanks to Chairman Chabot for identifying this
inefficiency and acting to solve it.
I started my first business when I was 19 years old. There are three
lessons you learn: you are the first one to work; you are the last one
to leave; and you are the last one to be paid. The last thing you need
is for government to stop you from achieving your dream.
It is very simple, when I talk to my colleagues here, in that there
are one or two ways to go on this bill. If you sit back and you look at
Facebook, Amazon, or Starbucks, they are amazing success stories in
America and are where millions of people work.
The idea would be, if you believe America needs to continue the
opportunity for our entrepreneurs and for more companies such as those,
it starts with angel investing. So you would vote ``yes.''
If you believe America doesn't need innovation, that America thinks
that the new Facebook shouldn't be there, that we should put up new
barriers to stop a dream, to stop the growth, you would probably vote
``no.''
That is why later today, when this bill gets through, it will be a
big bipartisan vote: because we believe in America.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield 3 minutes to
the gentlewoman from Arizona (Ms. Sinema).
Ms. SINEMA. Mr. Speaker, I thank Ranking Member Maxine Waters for
granting me time.
I thank Mr. Chabot and Mr. Hurt and others for working with me on
this bipartisan bill to help entrepreneurs and startup companies create
jobs and grow our economy.
Mr. Speaker, American startup businesses are growing both in number
and diversity. Entrepreneurs are finding new and better ways to bring
together talent, innovation, and investment capital in an increasingly
competitive small-business environment.
The HALOS Act clarifies SEC regulations to ensure small businesses
may participate in educational demo days without the burden of having
to verify that attendees are accredited investors. These events provide
invaluable opportunities for entrepreneurs to meet and exchange ideas
with students, professors, business professionals, and potential future
investors.
The HALOS Act creates a clear path for startups to participate in
demo days that are sponsored by a government entity, a nonprofit
organization, an angel investor group, a venture association, or other
entity that is permitted by the SEC.
Specifically, this act clarifies the definition of ``general
solicitation'' to exempt communications and presentations at these
events where advertising does not make specific investment offerings
and where no specific securities offering information is communicated
at the event.
This permits startups to connect with business experts, potential
future investors, and other entrepreneurs while maintaining existing
accredited investor verification requirements and exceptions already
under Regulation D for the actual purchase or sale of securities. It
does not in any way permit the sale of securities to unaccredited
investors at demo days.
Companies such as Amazon, Costco, Facebook, Google, and Starbucks
were all initially funded by angel investors. As we work to make
America more competitive in the new global economy, we need to
encourage the growth of innovative startups and job-creating small
businesses.
[[Page H2040]]
Again I thank my cosponsors and the chairman for working with us on
this commonsense, bipartisan bill. I am committed to working with my
colleagues on both sides of the aisle to ensure that Arizona startups
have the support that they need to grow their businesses and create
jobs.
Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from
Ohio (Mr. Chabot), who is the chief sponsor of the HALOS Act and is the
chairman of our Small Business Committee.
Mr. CHABOT. I thank Mr. Hensarling for his leadership on this. I
thank the gentlewoman from Arizona, who just spoke, for her leadership
on this as well.
Mr. Speaker, as the chairman of the House Small Business Committee, I
have the pleasure of hearing from America's small-business owners each
and every day, both in my district and up here in Washington.
The stories of success are always encouraging to hear, but all too
often, what I am told is how the government is making it difficult for
small businesses to grow and succeed and to, therefore, create jobs.
Perhaps the most common concern is just how difficult it is for
entrepreneurs who are starting out to access the needed capital to
grow. This bill expands access to capital by ensuring small businesses
can continue to connect with so-called angel investors.
One popular way small businesses have connected with angel investors
is through demo days. These are events that are sponsored by
universities, nonprofits, local governments, accelerators, incubators,
and other groups that allow entrepreneurs to showcase their products
and to informally meet investors and customers.
However, SEC regulations are threatening to force these events out of
business by imposing unwieldy regulations that dictate who is and who
is not allowed to simply attend.
These regulations would force everybody who merely walks through the
door to go through what is essentially a full financial interrogation
in one's handing over of tax documents and bank statements, paybook
information, and on and on and on.
Mr. Speaker, this doesn't make any sense. We should be encouraging
participation in demo days, not creating obstacles. After all, not only
are these events places at which to connect investors with our
communities' small businesses and entrepreneurs, but they also provide
a great opportunity for students, for example, and our next generation
of entrepreneurs to ask questions and learn what it takes to get a
business off the ground.
Mr. Speaker, again I thank Chairman Hensarling for his leadership in
getting this bill through the committee, as well as to thank
Representative Hurt, Representative Sinema, and Representative Takai
for working in a cooperative and bipartisan manner to move this bill to
the House floor.
It was very bipartisan. All of the Republicans voted for it, and
almost half of the Democrats voted for it in committee. It is always
wonderful when we are able to work together to support small business,
and there is no better time than now.
Next week is National Small Business Week, when we will be
celebrating the contributions of small businesses and entrepreneurs in
every community all across America. Every one of us has small
businesses in our districts. It serves as a reminder to us in this
Chamber of how important it is to create policies that promote an
environment for small businesses to succeed, and this bill is one more
step in that direction.
I urge my colleagues to support H.R. 4498. Again, I really appreciate
the bipartisan nature of this bill and its support thus far.
1615
Ms. MAXINE WATERS of California. Mr. Speaker, I reserve the balance
of my time.
Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from
Virginia (Mr. Hurt), a sponsor of the bill.
Mr. HURT of Virginia. Mr. Speaker, I rise in support of the HALOS
Act. I first would like to thank the chairman of the Financial Services
Committee, Mr. Hensarling, for his leadership on the JOBS Act and on
this issue specifically.
I would also like to commend the efforts of Representatives Chabot
and Sinema. It has been an honor to be able to work with them on such
an important issue, and it is an honor to be able to work with them to
craft a sensible bipartisan bill aimed at removing a regulatory hurdle
for innovative companies and startups seeking early-stage equity
capital investment.
Mr. Speaker, I represent a rural district in Virginia, Virginia's
Fifth District, that stretches from the northern Piedmont of Virginia
to the North Carolina border. As I travel across my district, a
recurring theme that I hear from my constituents is that they are
concerned about jobs and the economy.
At a time when our economy is struggling, Congress must do everything
possible to help small businesses achieve success. These entities are
our Nation's most dynamic job creators, and their success is essential
to our economy.
Earlier this year Charlottesville, Virginia, was recognized as one of
the Nation's fastest growing markets for venture capital investment.
Over the past 5 years, the amount of capital invested in
Charlottesville has grown over 150 percent.
This type of investment can have a profound impact on a community,
making it more attractive to other startup companies and ultimately
producing more job growth. Indeed, Senator Chris Murphy of Connecticut
said it best when he introduced the Senate version of the HALOS Act:
I have heard from local entrepreneurs and interested
backers alike that the most important thing we can do to help
these businesses is make it easier for angel investors to put
capital behind them, and that is exactly what our bipartisan
HALOS Act will do.
In 2014 alone, angel investors deployed over $24 billion to over
70,000 startups. Many of these investments go into companies in their
own communities and States.
Beyond capital, angel investors often provide advice and guidance to
help these companies succeed and create jobs. It is for these reasons
that I ask my colleagues to support this bill.
If enacted, the HALOS Act would amend the Securities Act to define an
angel investor group and would clarify the definition of general
solicitation so that startup enterprises would be able to continue to
promote their businesses at certain events called demo days where there
is no direct investment offering.
The HALOS Act would alleviate the burden placed on startups with
regard to privacy and compliance concerns, which often require
entrepreneurs and startups to take on burdens that they do not have the
means to handle.
These burdens have a significant impact on an entrepreneur's ability
to interface with investors because of the risk of violating Federal
securities laws by having their interactions with investors being
viewed as a general solicitation.
HALOS would lift this burden and is an important step to continuing
the success that this committee has achieved with the bipartisan JOBS
Act.
The JOBS Act made it easier for startup enterprises to market their
securities to a larger pool of investors. Unfortunately, while
implementing the JOBS Act, the SEC has classified events held by angel
investors as general solicitations, requiring entrepreneurs and
startups to verify accredited investor status.
This jeopardizes the future of events like demo days where startups
can interact with these investors and venture capitalists.
The HALOS Act would simply ensure that angel funding remains
available to startups by defining the term ``angel investor group'' and
exempting an angel investor event from being considered general
solicitation.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. HENSARLING. Mr. Speaker, I yield the gentleman from Virginia an
additional 30 seconds.
Mr. HURT of Virginia. Mr. Speaker, the HALOS Act is a simple,
bipartisan, bicameral solution that will ensure that investors and
companies can continue this commonsense interaction.
Ms. MAXINE WATERS of California. Mr. Speaker, I reserve the balance
of my time.
Mr. HENSARLING. Mr. Speaker, may I inquire if the other side has any
further speakers before we use all our time?
[[Page H2041]]
Ms. MAXINE WATERS of California. Mr. Speaker, we have no further
speakers.
Mr. HENSARLING. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman
from New Jersey (Mr. Garrett), the chairman of our Capital Markets and
Government Sponsored Enterprises Subcommittee.
Mr. GARRETT. Mr. Speaker, I want to thank the sponsor of the
underlying legislation for the underlying bill.
I rise in support of H.R. 4498, the Helping Angels Lead Our Startups
Act. I urge all of my colleagues on both sides of the aisle to support
this very important piece of legislation.
Mr. Speaker, it was 2 weeks ago at the Capital Markets and Government
Sponsored Enterprises Subcommittee that we held a hearing that examined
the positive impact the 2012 JOBS Act is having on our economy. By
reducing burdens on startup companies and modernizing our security
laws, the consensus was very clear.
The JOBS Act was a big win for entrepreneurs, innovation, and,
ultimately, economic growth and opportunity and job creation in this
country.
But that doesn't mean that we shouldn't be doing more besides the
JOBS Act, and it certainly doesn't mean that the Securities and
Exchange Commission, the SEC, has done a perfect job, by any means,
when it comes to implementing the important provisions of the JOBS Act.
At times, the SEC has taken liberties, if you will, with their
rulemaking that run contrary to the wishes and purposes of Congress,
which ultimately could limit the impact this great, new revolutionary
legislation has for our economy.
One example of this was the way in which the SEC implemented title II
of the JOBS Act, which made it easier for companies to use general
solicitation in order to attract investors for private offering of
stocks.
You see, what happened here was, in their final rule, the SEC
classified events such as demo days held by angel investors as being
general solicitation. This means that angel groups would have to then
comply with all the rules and regulations that are designed for issuers
who are actually engaged in the offering of securities, which this is
not.
So events such as demo days are an important economic development
tool, if you will, used by small startup companies to help educate
people, educate a pool of potential investors. They are not security
offerings, and they should really, really not be treated as such.
Why is this important? Well, in 2014, angel investors put some $24
billion to work in over 73,000 startups. So, clearly, this is a
preferred source of capital throughout the economy.
Any kind of regulation that would hamper the ability of angel
investors to communicate with startup companies would jeopardize the
ability of angel investors to fund the next Apple or Google or startup.
So here we are with H.R. 4498. It would simply make a small technical
fix to the JOBS Act and would allow such events to continue without
that heavy hand of government getting in the way. So I want to thank
the sponsors.
I urge bipartisan support of this underlying bill.
Ms. MAXINE WATERS of California. Mr. Speaker, I continue to reserve
the balance of my time.
Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from
Michigan (Mr. Huizenga), chairman of Monetary Policy and Trade
Subcommittee.
Mr. HUIZENGA of Michigan. Mr. Speaker, as a small-business owner and
coming from a family of very entrepreneurial people, I know the
importance of fostering an environment that promotes economic
opportunity and especially allows small businesses to grow and create
jobs.
West Michigan, which I represent, is a hub of entrepreneurial
activity. Organizations like the Grand Rapids Inventors Network and a
very innovative place called Start Garden are the center of that.
Start Garden does two demo days a year with very sophisticated
investors. In fact, over the last 3 years of Start Garden's existence,
they have helped and launched 200 various companies and have given them
that investment.
One of those is Boxed Water is Better. Just this past week, my office
received its first shipment from Holland, Michigan, of Boxed Water is
Better.
Founded in 2009, the team at Boxed Water combined west Michigan
ingenuity with capital from investors through Start Garden, who now
employ 60 people and have facilities in both Michigan and Utah. They
sell their product in over 8,000 stores nationwide and are now starting
to sell around the globe.
Small businesses across the globe and across the country like Boxed
Water are looking for real solutions from Congress to help them
innovate and thrive.
The JOBS Act, a solution designed to jump-start capital formation for
small businesses, entrepreneurs, and startups, was signed into law in
2012. Instead of helping small businesses access capital through the
JOBS Act, as Congress had intended, the Securities and Exchange
Commission has choked off avenues of that capital formation.
In order to participate in a demo day, the SEC requires startups to
register a securities offering and verify the sophistication level of
potential funders, something most of them do not have the physical or
financial means to do, according to Start Garden.
I thank the gentleman from Ohio for introducing the HALOS Act, an
important bill that connects fledgling companies to angel investors who
may provide them with the capital that they need to turn their startup
into a growing, thriving business.
By exempting demo days featuring many small businesses like Boxed
Water and others, these participants are not considered as general
solicitors under the Securities Act.
We need more entrepreneurs to expand, hire, and invest, and the HALOS
Act is an innovative way of doing that.
Ms. MAXINE WATERS of California. Mr. Speaker, I reserve the balance
of my time.
Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentlewoman
from Missouri (Mrs. Wagner).
Mrs. WAGNER. Mr. Speaker, I thank Representative Chabot of Ohio for
introducing this bipartisan piece of legislation as well as my
colleagues on the Financial Services Committee, Congressman Hurt of
Virginia and Congresswoman Sinema of Arizona, for sponsoring the
legislation.
H.R. 4498, the Helping Angels Lead Our Startups Act, provides an
important fix to our securities regulations that removes friction
between entrepreneurs and the potential investors that are looking to
support startup companies.
When we think about angel investing or venture capital, we naturally
think of the Silicon Valley tech scene or the financial powerhouse of
New York City.
However, more and more startups all across the country are using
important changes under the JOBS Act in order to raise financing no
matter where they are located. In fact, as reported in the St. Louis
Business Journal, St. Louis has the Nation's fastest growing startup
scene.
As more and more investors are drawn to the St. Louis area, these
early-stage investments are critical for helping keep these companies
in Missouri and creating more local Missouri jobs.
Yet, while St. Louis' startups have experienced tremendous growth
recently, small businesses and startups everywhere are still having
difficulty in obtaining financing and investment in today's economy at
a crucial stage when they are trying to grow and expand.
The HALOS Act will make a small change that makes it easier for small
businesses to find those vital investments. It would exempt demo days
from general solicitation requirements that would put a burden on
entrepreneurs and that would make it more difficult for investors to
provide financing.
For those companies that are not yet ready to go public, it is
important that they are given the opportunity to pitch their business
ideas to those who are interested in learning more.
I urge passage of this bipartisan piece of legislation.
Ms. MAXINE WATERS of California. Mr. Speaker, I continue to reserve
the balance of my time.
Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from
Illinois (Mr. Hultgren).
[[Page H2042]]
Mr. HULTGREN. Mr. Speaker, today I am proud to be able to speak in
support of the Helping Angels Lead Our Startups, or HALOS, Act.
I would also like to thank Chairman Chabot, Congressman Hurt, and
Congresswoman Sinema for putting forward this important bipartisan
legislation.
I am fortunate to hear regularly from innovators across Illinois and
through my work on the House Science, Space, and Technology Committee.
Chicago is recognized nationally as a hub for angel investors. The
Illinois Venture Capital Association was one of the first associations
to represent private equity and venture capital groups.
The State of Illinois also offers an angel investment credit program
to attract and encourage investment into early-stage innovative
companies throughout my State.
These innovators oftentimes have a simple idea that can be life
changing, but financing these ideas so that they can become a reality
is harder than you might think.
Angel investors play a key role in the earliest stages of these
startups. They provide the initial round of funding to help get these
life-changing ideas off the ground. Startups are the job creators that
drive our economy, make life-changing medical breakthroughs, and
harness technology to accomplish the impossible.
These startup companies frequently participate in demo days, as has
been talked about, to increase the visibility of their company, explain
their ideas and hope to informally attract investors. These demo days
are sponsored by a variety of organizations interested in promoting
innovation and job creation.
For example, the University of Illinois Research Park told me that
this bill would address some of the unintended consequences of the JOBS
Act and crowdfunding, which could make things like Cozad New Venture
Competition, Urbana-Champaign Angel Network angel presentations, the
Share the Vision Technology Showcase, pitch practice at
EnterpriseWorks, and other public forums for startups in Illinois
problematic.
They want to encourage showcasing our startups without fear that
these programs would be constituting a formal fundraising solicitation
that would require reporting to the SEC.
This bill simply clarifies SEC regulations to ensure small businesses
may participate in educational demo days without having to verify that
attendees are accredited investors. This is a burdensome process meant
only for security solicitation, not just informal conversations.
I encourage all my colleagues to support this important bill.
{time} 1630
Ms. MAXINE WATERS of California. Mr. Speaker, I continue to reserve
the balance of my time.
Mr. HENSARLING. Mr. Speaker, may I inquire how much time I have
remaining?
The SPEAKER pro tempore. The gentleman from Texas has 8\1/2\ minutes
remaining.
Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from
Arizona (Mr. Schweikert).
Mr. SCHWEIKERT. Mr. Speaker, there is a crisis right now in our
country, and the fact of the matter is, we have more business concerns
closing, going out of business, than being started. If you are
concerned about economic growth, if you are concerned about growing
payrolls, people being able to survive financially, you should be
fixated on the fact that we have more businesses closing than opening.
Being someone who was here and spent a year of his life working on
the JOBS Act, the individual bills, who was almost giddy that we had a
bipartisan piece of success that so many of us were incredibly
optimistic that was going to create some economic growth, and to be
here today 4 years later dealing with something, I am sorry, that is
almost absurd in the discussion: that the SEC has made it more
restrictive today than it was before the JOBS Act.
Think about this: your university, your community college, your group
brings together a number of little businesses that are trying to raise
capital, and now under the interpretation that is coming at us, you are
going to have to have security at the door to interview people, look at
their financials. I mean, this is crazy.
Is the caterer going to have to get certified? How about the security
person at the door, are they going to have to get secure?
Think about what this means and the absurdity that little businesses
that were trying to capitalize can't even tell their story without
making sure that the people in the room hearing it have met some sort
of definition that the SEC has imposed after we all thought we did a
piece of legislation that opened up this type of communication.
Ms. MAXINE WATERS of California. Mr. Speaker, I continue to reserve
the balance of my time.
Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from
Pennsylvania (Mr. Costello).
Mr. COSTELLO of Pennsylvania. Mr. Speaker, I rise today in support of
H.R. 4498, the Helping Angels Lead Our Startups Act.
I cosponsored this bipartisan legislation because it will assist
entrepreneurs in accessing angel investors, who provide critical
financing for startup businesses and local entrepreneurs.
From construction companies to medical technology producers and
manufacturing and perhaps even the next iPhone app, there are
Pennsylvanians in my district who are full of forward-thinking ideas
who need access to capital.
By revising an unintended bureaucratic regulation that places an
encumbrance on startup businesses, this legislation will further enable
entrepreneurs access to the capital they need to create jobs and be
successful.
Let me just say that again, Mr. Speaker. Here we have an example of a
Washington, D.C., bureaucratic rulemaking interpretation getting in the
way of enabling entrepreneurs with good ideas from getting access to
capital and subsequently creating jobs in local communities. There is a
simple solution to fix that.
That is why I am supporting this legislation. I am proud of
Pennsylvania's longstanding history as a leader in innovation, and I
want to do everything I can to remove barriers and support our local
job creators. I encourage all my colleagues to support this bipartisan
legislation.
Ms. MAXINE WATERS of California. Mr. Speaker, I reserve the balance
of my time.
Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from
Colorado (Mr. Polis), a member of the Committee on Rules.
Mr. POLIS. Mr. Speaker, I thank the gentleman for yielding me the
time.
The United States leads the global economy on innovation. There are a
lot of pieces of the innovation agenda, some that Republicans and
Democrats disagree on, some that they agree on. I am pleased to be here
today on a small but important piece that can help move the innovation
agenda forward, help America retain and grow its competitive advantage.
Let me set the scene. This could be a ballroom at a university, it
could be a theater that is rented out for the night. There might be 5
or 10 teams of entrepreneurs who worked hard on their business plans.
Perhaps they were part of some business plan competition to refine what
they call their pitch deck. The audience fills out.
Who is in the audience?
It wouldn't be a worthwhile event if there weren't potential
investors there. So, of course, the bulk of the audience--it could be
half, it could be three-quarters, it could be most of it--will be
accredited investors. They are the only people who can invest in these
companies.
Who else should be in the room? Who do we want to make sure that we
don't seal off the opportunity to learn and gain from that experience?
Well, it could be university faculty, graduate students, professors.
They don't happen to be worth $2 million, but they might have technical
expertise. They might be able to be consultants. They might be
professionals, lawyers and bankers, who might be able to assist the
companies develop, patent their ideas, and raise money. It might be
students and future entrepreneurs who want to learn about the pitch
process so they, too, can refine their ideas and be on the stage the
next time around.
That is what this bill allows, for us to make sure that the great
opportunity that this country offers reaches
[[Page H2043]]
people from all economic backgrounds. We can't lock everybody except
for the millionaires and billionaires out of the room that helps form
the seed capital for tomorrow's great company.
HALOS does not change the existing law about who can and can't buy
private securities. What it does do is allow folks who are not
accredited investors, who are not there as a potential investor to be
in the room, to learn from the experience, to perhaps get a job if they
are an aspiring programmer, to have to team up with one of the
companies that presented as a cofounder to complement some of the
competencies that the other founder has, to make sure that they, too,
are in that great room of opportunity.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. HENSARLING. Mr. Speaker, I yield the gentleman an additional 30
seconds.
Mr. POLIS. I thank the gentleman.
Mr. Speaker, I believe our startup communities will be strengthened.
Startup ecosystems like the ones that I am proud to say exist in towns
like Fort Collins and Boulder in my district can be made more diverse
through this law and will inevitably make sure that those in the room
can expand opportunity beyond people who are already millionaires and
billionaires.
Mr. Speaker, I urge my colleagues to vote ``yes.''
Ms. MAXINE WATERS of California. I yield myself such time as I may
consume.
Mr. Speaker and Members, we have heard a lot of conversation from the
opposite side of the aisle about what the SEC has done or has not done.
As a matter of fact, it was represented that the SEC had misinterpreted
the bill. That is not true.
We absolutely need rules of the road. We need to make sure that we
are protecting investors. We need to make sure that we are not allowing
folks to be put at great risk who don't understand or know what is
happening in these rooms. I am concerned about these demo days on
campuses where students may be encouraged in these presentations to
invest their parents' money or get their parents involved in schemes
that they may not be aware of.
Why is this so important to us?
It is important to us because we have arrived at a time in the
Congress of the United States where we recognize the need for consumer
protection. Prior to the recession that we had that was created in 2008
because of the subprime meltdown and the faulty products that were
placed out in the marketplace by banks and financial institutions,
consumers were really ignored and not protected.
We have payday loans that target our communities that charge 400 to
500 percent interest and take advantage of some of the most vulnerable
people in our society. We have all of these fraudulent mortgages that
almost brought this country down, that created a recession--almost a
depression--and we are still finding out about some of the exotic
products that they put out on the market that tricked people into
signing on the dotted line who eventually lost their homes.
We have the fiduciary duty that we have been debating in Congress.
Do you know why we are debating that?
We are debating that because we have investment advisers who were in
conflict with the people they were supposed to be protecting and
supposed to be advising, and they literally were advising seniors, who
had savings for their retirement, to invest in plans that they would
ultimately lose all of their money in.
So in addition to payday loans and fraudulent mortgages and conflict
of interest and fiduciary, we have had mandatory arbitration and on and
on and on. We have arrived at a time when Democrats are implementing
Dodd-Frank. We are making sure that we have the Consumer Financial
Protection Bureau that is doing the work that had not been done all of
these years.
Yes, we are concerned about this. We supported the JOBS Act. We
supported it with an amendment that I put in there that said that you
must take reasonable opportunities to ensure that you know who these
investors are. We are talking about accredited investors, folks who
have resources, folks who know how this game is operated, folks who can
protect themselves. They have lawyers, they have consultants, all of
that.
What we don't want is--we don't want these students and we don't want
people who walk in off the street who may be presented with an
opportunity that is not a real opportunity.
For example, what if we had something like Corinthian that is a
private, postsecondary school that we had to close down, or DeVry
University, or the University of Phoenix, or the Trump University?
Any of these could present themselves as credible businesses to be
invested in, only to find out later that the students have been misled,
they have not gotten jobs, they don't have anything. They have not made
any money. We are saying this is another effort to simply protect those
who oftentimes are the targets of the rip-offs and the fraud.
I would ask my colleagues to support the amendment that I am going to
put to the bill to make sure that they know who is in the room. I would
ask them to support this simple amendment that was made in order in the
Committee on Rules to make sure that we are protecting those investors
and keeping them from getting ripped off.
Now, some of my friends on the opposite side of the aisle would have
you believe that we are not interested in capital formation, that we
are not interested in entrepreneurship, that we are not interested in
joint ventures. That is absolutely not true. As a matter of fact, folks
on this side of the aisle are fighting to make the financial
institutions responsible and the banks to make loans where they should
be making loans. We have to have a CRA to make sure that they are doing
what they should be doing with the depositors' money and on and on and
on. We fight for small businesses every day.
We joined up with our colleagues on the opposite side of the aisle to
support the JOBS Act even though we had some concerns, and the SEC
tried to make sure that we had the kind of legislation that would
protect these investors.
Now they are saying: We don't like what the SEC is doing. They are
misinterpreting it. They are messing this all up.
Well, that is not true. Now, we know they don't like the SEC. As a
matter of fact, they do everything that they can to limit their funding
so that they cannot be effective. But these are our cops on the block.
The SEC is our cop on the block to try and make sure that we limit the
rip-off and the fraud and the undermining of average citizens in our
society. We support the JOBS Act. We believe that we should not have
these operations on the campuses without knowing who is in the room and
allowing investors to be put at risk.
Mr. Speaker and Members, I would ask for a ``no'' vote on the bill. I
am going to ask for an ``aye'' vote on the amendment that is going to
come up. If my colleagues on the opposite side of the aisle accept this
very, very reasonable amendment, then I will vote to support the bill.
But if they don't show any concern or compassion for the interests of
investors, then I cannot support the bill, and I will ask my caucus not
to support the bill. It is as simple as that.
{time} 1645
When are we going to stop the fraudulent operations in this country
that rip off working people every day, rip off students, and don't care
about our investors who are interested in capital formation and
investing in real enterprises that can help to grow their business and
make some money themselves? When are we going to recognize we can do
both?
We don't have to just be on the side of those who would take
advantage of people. We must be on the side of both--our investors who
are willing to put up money and our businesses who need capital
formation--but somehow we always end up letting the most vulnerable
people in our society be the target of fraud by those who take
advantage of them.
Mr. Speaker, I yield back the balance of my time.
Mr. HENSARLING. Mr. Speaker, how much time do I have remaining?
The SPEAKER pro tempore. The gentleman from Texas has 2\1/2\ minutes
remaining.
[[Page H2044]]
Mr. HENSARLING. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, again, I am very, very happy that yet another bipartisan
bill has come out of the Financial Services Committee to try to get
this economy working for working people. I took note that there were
more Democrats coming to the floor in favor of the bill than against
the bill, and that almost 80 percent of the members of the Financial
Services Committee reported this bill favorably.
Now, the ranking member spoke passionately about trying to help the
most vulnerable. She cares about investor protection. But, Mr. Speaker,
the only people who can buy these securities in a private offering are
millionaires. So the question is: Who do you care more about, the
millionaire investors or the working poor who need better jobs?
You can't have capitalism without capital, and yet the ranking member
would put one more burden in front of small businesses and
entrepreneurs trying to create businesses so that people can have
better jobs and a better future for themselves and their families.
I am glad we have millionaire investors. I wish we had more of them.
But they are already protected. You must be an accredited investor in
order to partake, to actually buy the security. All we are debating now
is whether you are going to have to prescreen, as the gentleman from
Arizona said, the caterer or the security guard at the door, to be part
of the demo day--something, Mr. Speaker, that was perfectly legal and
had gone on for years and years and years prior to this SEC rule.
Yet we have an agency, the Securities and Exchange Commission,
creating law out of thin air, making it more difficult for the working
poor to find better jobs, to make sure that people have a better career
path, to make sure that we can find the next Facebook. They are making
it more difficult.
I believe this will have strong bipartisan support on the floor. We
all need to support the HALOS Act, H.R. 4498. At the end of the day,
who are you going to come down in favor of, the working poor or
millionaire investors who are already protected? This side of the aisle
will come down in favor of the working poor who need jobs in an economy
that has been hurt by Obamanomics.
Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. All time for debate on the bill has expired.
Amendment No. 1 Offered by Ms. Maxine Waters of California
Ms. MAXINE WATERS of California. Mr. Speaker, I have an amendment at
the desk.
The SPEAKER pro tempore. The Clerk will designate the amendment.
The text of the amendment is as follows:
Page 5, line 5, strike ``and''.
Page 5, after line 5, insert the following:
(D) does not receive any compensation for making
introductions between investors attending the event and
issuers, or for investment negotiations between such parties;
and
Page 5, line 6, strike ``(D)'' and insert ``(E)''.
Page 5, line 11, strike ``and''.
Page 5, line 23, strike the period and insert ``; and''.
Page 5, after line 23, insert the following:
(5) where attendance to the event is limited to members of
an angel investor group or to accredited investors.
At the end of the bill, insert the following:
(c) Definition of Issuer.--For purposes of this section and
the revision of rules required under this section, the term
``issuer'' means an issuer that is in day-to-day operations
as a business, is not in bankruptcy or receivership, is not
an investment company, and is not a blank check, blind pool,
or shell company.
The SPEAKER pro tempore. Pursuant to House Resolution 701, the
gentlewoman from California (Ms. Maxine Waters), and a Member opposed
each will control 5 minutes.
The Chair recognizes the gentlewoman from California.
Ms. MAXINE WATERS of California. Mr. Speaker, as I mentioned during
the general debate on H.R. 4498, I am offering this amendment today in
order to clarify and improve the bill. If this amendment is accepted, I
am prepared to support this legislation.
Indeed, I support the goal of connecting angel investor groups with
companies seeking funding, particularly startups and emerging firms.
Angel investor groups tend to be comprised of highly sophisticated
individuals with significant experience investing in higher risk
offerings. They tend to curate their groups carefully and are good
gatekeepers for these demo day events.
As such, my amendment seeks to support the efforts of these angel
investor associations without creating a harmful loophole in some of
the protections we put in place when we adopted the JOBS Act of 2012.
This amendment includes several provisions to advance these goals.
First, my amendment stipulates that no sponsor of a demo day can
collect finders' fees for connecting investors to companies. This
provision ensures that event sponsors--colleges, nonprofits, trade
associations, or otherwise--don't have perverse incentives to drum up
securities sales.
Second, my amendment limits the relief offered under the bill to
actual operating companies in the ``real economy.'' As such, it
excludes certain entities like shell companies and investment vehicles
like hedge funds. I think that my amendment is appropriately calibrated
to ensure that the benefits provided under the bill go to startups like
technology firms or manufacturing companies rather than opaque or
speculative firms.
Third, my amendment would codify the relief the SEC has already
provided for angel investor groups as it relates to these demo days.
This will provide legal certainty to these groups without opening up
any new loopholes. Let me describe how this would work.
If the company wants to hold a demo day and also condition the market
for a securities sale, as H.R. 4498 would allow, they would have to
curate the group of people that attend the event. To be clear, under
the bill as currently drafted, companies aren't limited to holding
science fair-style demonstrations. They can discuss actual securities
being offered, the types and amounts of those securities, who has
already subscribed to their offerings, and how they intend to use the
proceeds of the offering.
Under the SEC's relief and codified in this provision in my
amendment, companies can hold these presentations, can talk about their
securities, and can solicit attendance. They can even avoid the
accredited investor verification requirement in the JOBS Act. They just
have to call their existing networks of accredited investors and angel
investor group members rather than blasting out an invitation to an
entire college campus. If companies do want to blast out the invitation
to entire campuses, they still can; they just have to abide by the
verification provisions in the JOBS Act.
In summary, this amendment I am offering today ensures that no
loopholes to the JOBS Act verification requirement are opened up, that
all manner of conflicted fees are prohibited, and that the benefits of
the bill go to actual operating companies. And that is very important,
actual operating companies.
Mr. Speaker, whether it is through my work to clarify and improve the
JOBS Act during the 112th Congress or my work with members on the
committee this Congress to amend the definition of ``accredited
investors'' or through my amendment today, I have long shown a
willingness to work in good faith on issues related to capital
formation. I would urge my colleagues to adopt my amendment so that we
can all support a strong, bipartisan bill.
Mr. Hensarling brags about how many Democrats supported this bill. He
brags about the fact that, in committee and then on the floor, we all
tried to be very cooperative in the JOBS Act. And I bent over backwards
to ensure that we could get a JOBS Act to see what could happen with
creating jobs, but what they have done now is to go a step further
beyond what we agreed upon.
Mr. Speaker, I ask for an ``aye'' vote on my amendment.
I yield back the balance of my time.
Mr. HENSARLING. Mr. Speaker, I rise in opposition to the amendment.
The SPEAKER pro tempore. The gentleman from Texas is recognized for 5
minutes.
Mr. HENSARLING. Mr. Speaker, the amendment from the ranking member of
the Financial Services Committee effectively repeals the HALOS Act.
We are having the same debate that we just had. It would effectively
outlaw
[[Page H2045]]
demo days as they are currently practiced. The whole idea of the HALOS
Act is to ensure that demo days, which existed prior to this SEC rule,
will continue and that startups can continue to have access to capital
without the additional burden of having to screen those who actually
come in to demo days.
Mr. Speaker, again, a private offering. The security can only be
purchased by an accredited investor. Those are the existing rules. So
there is almost a mythical group that the ranking member is attempting
to protect. At the end of the day, these are millionaire investors who
are the angel investors, who are the accredited investors whom we need
to help fund these startups.
What the gentlewoman from California's amendment does, again, is guts
the bill. It basically just simply codifies this SEC rule, and that
absolutely overturns the congressional intent to make sure that we have
greater access to capital.
In addition, there is an entire new defined term of ``issuer'' in her
amendment, notwithstanding the fact that this is already defined in
section 3(aa) of the Securities and Exchange Act of 1934. So we have
undefined, vague terms that are being introduced here.
I would also remind the gentlewoman from California and all that the
HALOS Act already prohibits a sponsor from engaging in investment
negotiations between the issuer and investors, charging event attendees
any fees other than administrative fees, and receiving any compensation
that would require the sponsor to register with the SEC as a broker-
dealer or investment adviser.
So these are ill-placed concerns that at the end of the day put up
yet another hurdle for angel investors funding the next new Facebook,
the next new Costco, the next new Starbucks, and putting tens of
thousands of Americans back to work.
It is time that we affirm the JOBS bill, not gut the JOBS bill, and I
would urge all Members to reject the amendment of the gentlewoman from
California.
Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. Pursuant to the rule, the previous question
is ordered on the bill, and on the amendment by the gentlewoman from
California (Ms. Maxine Waters).
The question is on the amendment by the gentlewoman from California
(Ms. Maxine Waters).
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Ms. MAXINE WATERS of California. Mr. Speaker, on that I demand the
yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 and clause 9 of rule
XX, this 15-minute vote on adoption of the amendment will be followed
by 5-minute votes on:
A motion to recommit, if ordered;
Passage of the bill, if ordered; and
The motion to suspend the rules and pass S. 1890.
The vote was taken by electronic device, and there were--yeas 139,
nays 272, not voting 22, as follows:
[Roll No. 170]
YEAS--139
Adams
Bass
Beatty
Becerra
Bishop (GA)
Blumenauer
Bonamici
Boyle, Brendan F.
Brady (PA)
Brown (FL)
Butterfield
Capps
Capuano
Carson (IN)
Cartwright
Castor (FL)
Castro (TX)
Chu, Judy
Cicilline
Clark (MA)
Clarke (NY)
Clay
Clyburn
Cohen
Courtney
Crowley
Cuellar
Cummings
Davis (CA)
Davis, Danny
DeFazio
DeGette
DeLauro
DelBene
DeSaulnier
Deutch
Dingell
Doggett
Doyle, Michael F.
Duckworth
Edwards
Engel
Esty
Farr
Frankel (FL)
Fudge
Gabbard
Gallego
Garamendi
Graham
Grayson
Green, Al
Green, Gene
Grijalva
Hahn
Hastings
Heck (WA)
Higgins
Hinojosa
Honda
Hoyer
Huffman
Israel
Johnson (GA)
Johnson, E. B.
Keating
Kelly (IL)
Kennedy
Kildee
Kilmer
Kind
Kirkpatrick
Langevin
Larsen (WA)
Larson (CT)
Lee
Levin
Lewis
Lieu, Ted
Loebsack
Lofgren
Lowenthal
Lowey
Lujan Grisham (NM)
Lujan, Ben Ray (NM)
Maloney, Carolyn
Matsui
McCollum
McDermott
McGovern
McNerney
Meeks
Meng
Moore
Murphy (FL)
Nadler
Napolitano
Neal
Nolan
Norcross
O'Rourke
Pallone
Payne
Pelosi
Perlmutter
Pingree
Pocan
Price (NC)
Quigley
Rangel
Roybal-Allard
Ruppersberger
Rush
Ryan (OH)
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Schakowsky
Schiff
Scott (VA)
Scott, David
Serrano
Sherman
Sires
Slaughter
Smith (WA)
Speier
Takano
Thompson (MS)
Tonko
Tsongas
Vargas
Veasey
Velazquez
Visclosky
Waters, Maxine
Watson Coleman
Welch
Wilson (FL)
NAYS--272
Abraham
Aderholt
Aguilar
Allen
Amash
Ashford
Babin
Barletta
Barr
Barton
Benishek
Bera
Beyer
Bilirakis
Bishop (MI)
Bishop (UT)
Black
Blackburn
Blum
Bost
Boustany
Brady (TX)
Brat
Bridenstine
Brooks (AL)
Brooks (IN)
Brownley (CA)
Buchanan
Buck
Bucshon
Burgess
Bustos
Byrne
Calvert
Cardenas
Carney
Carter (GA)
Carter (TX)
Chabot
Chaffetz
Clawson (FL)
Cleaver
Coffman
Cole
Collins (GA)
Collins (NY)
Comstock
Conaway
Connolly
Cook
Cooper
Costa
Costello (PA)
Cramer
Crawford
Crenshaw
Culberson
Curbelo (FL)
Davis, Rodney
Delaney
Denham
Dent
DeSantis
DesJarlais
Diaz-Balart
Dold
Donovan
Duffy
Duncan (SC)
Duncan (TN)
Ellison
Ellmers (NC)
Emmer (MN)
Eshoo
Farenthold
Fincher
Fitzpatrick
Fleischmann
Fleming
Flores
Forbes
Fortenberry
Foster
Foxx
Franks (AZ)
Frelinghuysen
Garrett
Gibbs
Gibson
Goodlatte
Gosar
Gowdy
Granger
Graves (GA)
Graves (LA)
Graves (MO)
Griffith
Grothman
Guinta
Guthrie
Hardy
Harper
Harris
Hartzler
Heck (NV)
Hensarling
Herrera Beutler
Hice, Jody B.
Hill
Himes
Holding
Hudson
Huelskamp
Huizenga (MI)
Hultgren
Hunter
Hurd (TX)
Hurt (VA)
Jenkins (KS)
Jenkins (WV)
Johnson (OH)
Johnson, Sam
Jolly
Jones
Jordan
Joyce
Katko
Kelly (MS)
Kelly (PA)
King (IA)
King (NY)
Kinzinger (IL)
Kline
Knight
Kuster
Labrador
LaHood
LaMalfa
Lamborn
Lance
Latta
Lipinski
LoBiondo
Long
Loudermilk
Love
Lucas
Luetkemeyer
Lummis
Maloney, Sean
Marchant
Marino
Massie
McCarthy
McClintock
McHenry
McKinley
McMorris Rodgers
McSally
Meadows
Meehan
Messer
Mica
Miller (FL)
Miller (MI)
Moolenaar
Mooney (WV)
Moulton
Mullin
Mulvaney
Murphy (PA)
Neugebauer
Newhouse
Noem
Nugent
Nunes
Olson
Palazzo
Palmer
Paulsen
Pearce
Perry
Peters
Peterson
Pitts
Poe (TX)
Poliquin
Polis
Pompeo
Posey
Price, Tom
Ratcliffe
Reed
Reichert
Renacci
Ribble
Rice (NY)
Rice (SC)
Rigell
Roby
Roe (TN)
Rogers (AL)
Rogers (KY)
Rohrabacher
Rokita
Rooney (FL)
Ros-Lehtinen
Roskam
Ross
Rothfus
Rouzer
Royce
Ruiz
Russell
Salmon
Sanford
Scalise
Schrader
Schweikert
Scott, Austin
Sensenbrenner
Sessions
Shimkus
Shuster
Simpson
Sinema
Smith (MO)
Smith (NE)
Smith (NJ)
Smith (TX)
Stefanik
Stewart
Stivers
Stutzman
Swalwell (CA)
Takai
Thompson (CA)
Thompson (PA)
Thornberry
Tiberi
Tipton
Titus
Trott
Turner
Upton
Valadao
Vela
Wagner
Walberg
Walden
Walker
Walorski
Walters, Mimi
Walz
Weber (TX)
Webster (FL)
Wenstrup
Westerman
Whitfield
Williams
Wilson (SC)
Wittman
Womack
Woodall
Yarmuth
Yoder
Yoho
Young (AK)
Young (IA)
Young (IN)
Zeldin
Zinke
NOT VOTING--22
Amodei
Conyers
Fattah
Gohmert
Gutierrez
Hanna
Issa
Jackson Lee
Jeffries
Kaptur
Lawrence
Lynch
MacArthur
McCaul
Pascrell
Pittenger
Richmond
Sewell (AL)
Torres
Van Hollen
Wasserman Schultz
Westmoreland
{time} 1719
Messrs. FARENTHOLD, GROTHMAN, RUSSELL, POE of Texas, Ms. HERRERA
BEUTLER, Mr. HULTGREN, Ms. ESHOO, Messrs. CULBERSON, ROKITA, CALVERT,
WITTMAN, and SHUSTER changed their vote from ``yea'' to ``nay.''
Messrs. CARSON of Indiana, KILMER, and SCHIFF changed their vote from
``nay'' to ``yea.''
So the amendment was rejected.
The result of the vote was announced as above recorded.
Stated for:
Mr. ELLISON. Mr. Speaker, during rollcall vote No. 170 on H.R. 4998,
I mistakenly recorded my vote as ``no'' when I should have voted
``yes.''
The SPEAKER pro tempore (Mr. Carter of Georgia). The question is on
the engrossment and third reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
[[Page H2046]]
The SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. HENSARLING. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. This is a 5-minute vote.
The vote was taken by electronic device, and there were--yeas 325,
nays 89, not voting 19, as follows:
[Roll No. 171]
YEAS--325
Abraham
Aderholt
Aguilar
Allen
Amash
Ashford
Babin
Barletta
Barr
Barton
Beatty
Benishek
Bera
Beyer
Bilirakis
Bishop (GA)
Bishop (MI)
Bishop (UT)
Black
Blackburn
Blum
Bost
Boustany
Boyle, Brendan F.
Brady (TX)
Brat
Bridenstine
Brooks (AL)
Brooks (IN)
Brownley (CA)
Buchanan
Buck
Bucshon
Burgess
Bustos
Byrne
Calvert
Capps
Cardenas
Carney
Carter (GA)
Carter (TX)
Castor (FL)
Castro (TX)
Chabot
Chaffetz
Clawson (FL)
Coffman
Cole
Collins (GA)
Collins (NY)
Comstock
Conaway
Connolly
Cook
Cooper
Costa
Costello (PA)
Courtney
Cramer
Crawford
Crenshaw
Crowley
Cuellar
Culberson
Curbelo (FL)
Davis (CA)
Davis, Rodney
DeFazio
DeGette
Delaney
DelBene
Denham
Dent
DeSantis
DesJarlais
Deutch
Diaz-Balart
Dold
Donovan
Duckworth
Duffy
Duncan (SC)
Duncan (TN)
Edwards
Ellmers (NC)
Emmer (MN)
Eshoo
Esty
Farenthold
Farr
Fincher
Fitzpatrick
Fleischmann
Fleming
Flores
Forbes
Fortenberry
Foster
Foxx
Franks (AZ)
Frelinghuysen
Garamendi
Garrett
Gibbs
Gibson
Goodlatte
Gosar
Gowdy
Graham
Granger
Graves (GA)
Graves (LA)
Graves (MO)
Griffith
Grothman
Guinta
Guthrie
Hahn
Hardy
Harper
Harris
Hartzler
Heck (NV)
Hensarling
Herrera Beutler
Hice, Jody B.
Hill
Himes
Hinojosa
Holding
Hoyer
Hudson
Huelskamp
Huizenga (MI)
Hultgren
Hunter
Hurd (TX)
Hurt (VA)
Jenkins (KS)
Jenkins (WV)
Johnson (OH)
Johnson, Sam
Jolly
Jones
Jordan
Joyce
Katko
Keating
Kelly (IL)
Kelly (MS)
Kelly (PA)
Kennedy
Kilmer
Kind
King (IA)
King (NY)
Kinzinger (IL)
Kirkpatrick
Kline
Knight
Kuster
Labrador
LaHood
LaMalfa
Lamborn
Lance
Larsen (WA)
Larson (CT)
Latta
Levin
Lieu, Ted
Lipinski
LoBiondo
Loebsack
Long
Loudermilk
Love
Lucas
Luetkemeyer
Lujan Grisham (NM)
Lujan, Ben Ray (NM)
Lummis
Maloney, Carolyn
Maloney, Sean
Marchant
Marino
Massie
Matsui
McCarthy
McClintock
McCollum
McHenry
McKinley
McMorris Rodgers
McSally
Meadows
Meehan
Meeks
Meng
Messer
Mica
Miller (FL)
Miller (MI)
Moolenaar
Mooney (WV)
Moulton
Mullin
Mulvaney
Murphy (FL)
Murphy (PA)
Neal
Neugebauer
Newhouse
Noem
Nolan
Nugent
Nunes
Olson
Palazzo
Palmer
Paulsen
Pearce
Perlmutter
Perry
Peters
Peterson
Pingree
Pitts
Poe (TX)
Poliquin
Polis
Pompeo
Posey
Price (NC)
Price, Tom
Quigley
Ratcliffe
Reed
Reichert
Renacci
Ribble
Rice (NY)
Rice (SC)
Rigell
Roby
Roe (TN)
Rogers (AL)
Rogers (KY)
Rohrabacher
Rokita
Rooney (FL)
Ros-Lehtinen
Roskam
Ross
Rothfus
Rouzer
Royce
Ruiz
Ruppersberger
Russell
Salmon
Sanford
Scalise
Schiff
Schrader
Schweikert
Scott, Austin
Scott, David
Sensenbrenner
Sessions
Shimkus
Shuster
Simpson
Sinema
Smith (MO)
Smith (NE)
Smith (NJ)
Smith (TX)
Speier
Stefanik
Stewart
Stivers
Stutzman
Swalwell (CA)
Takai
Thompson (CA)
Thompson (PA)
Thornberry
Tiberi
Tipton
Titus
Trott
Tsongas
Turner
Upton
Valadao
Vargas
Veasey
Vela
Wagner
Walberg
Walden
Walker
Walorski
Walters, Mimi
Walz
Weber (TX)
Webster (FL)
Wenstrup
Westerman
Whitfield
Williams
Wilson (SC)
Wittman
Womack
Woodall
Yarmuth
Yoder
Yoho
Young (AK)
Young (IA)
Young (IN)
Zeldin
Zinke
NAYS--89
Adams
Bass
Becerra
Blumenauer
Bonamici
Brady (PA)
Brown (FL)
Butterfield
Capuano
Carson (IN)
Cartwright
Chu, Judy
Cicilline
Clark (MA)
Clarke (NY)
Clay
Cleaver
Clyburn
Cohen
Cummings
Davis, Danny
DeLauro
DeSaulnier
Dingell
Doggett
Doyle, Michael F.
Ellison
Engel
Frankel (FL)
Fudge
Gabbard
Gallego
Grayson
Green, Al
Green, Gene
Grijalva
Hastings
Heck (WA)
Higgins
Honda
Huffman
Israel
Johnson (GA)
Johnson, E. B.
Kaptur
Kildee
Langevin
Lee
Lewis
Lofgren
Lowenthal
Lowey
Lynch
McDermott
McGovern
McNerney
Moore
Nadler
Napolitano
Norcross
O'Rourke
Pallone
Pascrell
Payne
Pelosi
Pocan
Rangel
Roybal-Allard
Rush
Ryan (OH)
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Schakowsky
Scott (VA)
Serrano
Sherman
Sires
Slaughter
Smith (WA)
Takano
Thompson (MS)
Tonko
Velazquez
Visclosky
Waters, Maxine
Watson Coleman
Welch
Wilson (FL)
NOT VOTING--19
Amodei
Conyers
Fattah
Gohmert
Gutierrez
Hanna
Issa
Jackson Lee
Jeffries
Lawrence
MacArthur
McCaul
Pittenger
Richmond
Sewell (AL)
Torres
Van Hollen
Wasserman Schultz
Westmoreland
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore (during the vote). There are 2 minutes
remaining.
{time} 1726
So the bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
____________________