[Congressional Record Volume 162, Number 135 (Thursday, September 8, 2016)]
[House]
[Pages H5178-H5187]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PROVIDING FOR CONSIDERATION OF H.R. 2357, ACCELERATING ACCESS TO
CAPITAL ACT OF 2016, AND PROVIDING FOR CONSIDERATION OF H.R. 5424,
INVESTMENT ADVISERS MODERNIZATION ACT OF 2016
Mr. SESSIONS. Mr. Speaker, by direction of the Committee on Rules, I
call up House Resolution 844 and ask for its immediate consideration.
The Clerk read the resolution, as follows:
H. Res. 844
Resolved, That at any time after adoption of this
resolution the Speaker may, pursuant to clause 2(b) of rule
XVIII, declare the House resolved into the Committee of the
Whole House on the state of the Union for consideration of
the bill (H.R. 2357) to direct the Securities and Exchange
Commission to revise Form S-3 so as to add listing and
registration of a class of common equity securities on a
national securities exchange as an additional basis for
satisfying the requirements of General Instruction I.B.1. of
such form and to remove such listing and registration as a
requirement of General Instruction I.B.6. of such form. The
first reading of the bill shall be dispensed with. All points
of order against consideration of the bill are waived.
General debate shall be confined to the bill and amendments
specified in this section and shall not exceed one hour
equally divided and controlled by the chair and ranking
minority member of the Committee on Financial Services. After
general debate the bill shall be considered for amendment
under the five-minute rule. It shall be in order to consider
as an original bill for the purpose of amendment under the
five-minute rule an amendment in the nature of a substitute
consisting of the text of Rules Committee Print 114-62. That
amendment in the nature of a substitute shall be considered
as read. All points of order against that amendment in the
nature of a substitute are waived. No amendment to that
amendment in the nature of a substitute shall be in order
except those printed in part A of the report of the Committee
on Rules accompanying this resolution. Each such amendment
may be offered only in the order printed in the report, may
be offered only by a Member designated in the report, shall
be considered as read, shall be debatable for the time
specified in the 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. All
points of order against such amendments are waived. At the
conclusion of consideration of the bill for amendment the
Committee shall rise and report the bill to the House with
such amendments as may have been adopted. Any Member may
demand a separate vote in the House on any amendment adopted
in the Committee of the Whole to the bill or to the amendment
in the nature of a substitute made in order as original text.
The previous question shall be considered as ordered on the
bill and amendments thereto to final passage without
intervening motion except one motion to recommit with or
without instructions.
Sec. 2. Upon adoption of this resolution it shall be in
order to consider in the House the bill (H.R. 5424) to amend
the Investment Advisers Act of 1940 and to direct the
Securities and Exchange Commission to amend its rules to
modernize certain requirements relating to investment
advisers, and for other purposes. All points of order against
consideration of the bill are waived. The amendment in the
nature of a substitute recommended by the Committee on
Financial Services now printed in the bill shall be
considered as adopted. The bill, as amended, shall be
considered as read. All points of order against provisions in
the bill, as amended, are waived. The previous question shall
be considered as ordered on the bill, as amended, and on any
further amendment thereto, to final passage without
intervening motion except: (1) one hour of debate equally
divided and controlled by the chair and ranking minority
member of the Committee on Financial Services; (2) the
further amendment printed in part B of the report of the
Committee on Rules accompanying this resolution, if offered
by the Member designated in the report, which shall be in
order without intervention of any point of order, shall be
considered as read, shall be separately debatable for the
time specified in the report equally divided and controlled
by the proponent and an opponent, and shall not be subject to
a demand for a division of the question; and (3) one motion
to recommit with or without instructions.
The SPEAKER pro tempore. The gentleman from Texas is recognized for 1
hour.
Mr. SESSIONS. Mr. Speaker, for the purpose of debate only, I yield
the customary 30 minutes to the gentleman from Colorado (Mr. Polis),
pending which I yield myself such time as I may consume. During
consideration of this resolution, all time yielded is for the purpose
of debate only.
General Leave
Mr. SESSIONS. Mr. Speaker, I ask unanimous consent that all Members
have 5 legislative days to revise and extend their remarks.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Mr. SESSIONS. Mr. Speaker, I rise in support of this rule, which is a
fair rule that makes in order every single amendment submitted to the
Rules Committee. The rule provides for consideration of H.R. 5424, the
Investment Advisers Modernization Act of 2016, and H.R. 2357, the
Accelerating Access to Capital Act of 2016.
This package comes to the floor via the chairman of the House
Financial Services Committee, Chairman Jeb Hensarling, who brought this
package to the Rules Committee because of the needs of the American
people and the needs of the financial services industry that is trying
to grow jobs, investment, and opportunity for people in America.
We have an incredible opportunity before us today, Mr. Speaker, an
opportunity to take good ideas, good ideas that come directly from the
American people. It is called the financial services industry of the
United States of America, men and women who get up and handle our
financial needs, many men and women who not only have dedicated
themselves to the success of this country, but also to the success of
the American people.
We are trying to take this opportunity to move those ideas that they
bring to us today through the House of Representatives so that we have
a bill that we can present on a bipartisan basis to the United States
Senate and to the President of the United States and say these are
great ideas.
Mr. Speaker, I will tell you that your work that you do personally to
make sure these ideas are brought forth not only to the Financial
Services Committee, but to other areas of this Congress to make sure
that we are passing legislation that is about jobs, job creation, and
the availability of the American people to have a better shot at the
American Dream, is why we are here today.
{time} 1245
The goal of this rule and the underlying legislation is simple: to
keep the flow of capital moving across our capital markets, to make it
easier--not harder--to make it easier to overcome barriers for small
businesses, entrepreneurs, and startups to have the capital that they
desperately need to grow and thrive.
Mr. Speaker, this part of the American Dream is someone who has great
ideas, the ability, and the desire, and to take those ideas and match
it up with the capital, a marketing plan, and the ability to move forth
in that plan.
[[Page H5179]]
That is part of the American Dream to make not only your life better
but, along the way, a bunch of other people who meet their American
Dream also.
Capital is the lifeblood of growing new companies--not a surprise--
and access to capital can literally make or break small business. Mr.
Speaker, it can make or break a person's great idea also. That is why
we are here today on the floor. Good ideas that come from men and women
in the industry, men and women who talk to the Financial Services
Committee on a partisan basis, men and women of this Congress bringing
these great ideas, and it is all on behalf of trying to give people a
better shot at the American Dream through growing companies accessing
capital and making the hard break become successful.
I have seen firsthand the detriment of overregulation in industries
and poorly written laws, and I have also seen the power of the free
enterprise system. While serving as chairman on the board of the
Greater East Dallas Chamber of Commerce, I saw, firsthand, companies
that could not get the capital that they needed because they weren't
large enough to qualify or perhaps had some other burden or impediment
in front of them.
As we know today, because of technology, time, and people's purpose,
we have the opportunity for doing something remarkable. We have the
ability today to enact legislation that will bolster opportunities for
small businesses to secure capital, to reduce the strain of a one-size-
fits-all regulatory regime, and to take that and add an opportunity to
overcome these by using the American spirit and killing regulatory
things that stand in the way. That is why we are here.
Mr. Speaker, I reserve the balance of my time.
Mr. POLIS. Mr. Speaker, I yield myself such time as I may consume.
I thank the gentleman for yielding me the customary 30 minutes.
Mr. Speaker, over 6 months ago, the Obama administration actually
identified the Zika virus as a public health crisis. It is well
reported on. My constituents are aware of it. It has already affected
many Americans in States like Florida, Texas, and Louisiana. The Obama
administration requested additional resources to combat the virus.
The White House and the CDC correctly predicted that the virus would
soon spread to the Southern United States. In fact, just as Congress
left for its 7-week break, there were several reports of Zika
transmission in south Florida. In fact, just last week, the Director of
the CDC warned that, without congressional action, they will soon run
out of money for combating Zika.
Now, in a moment, I will talk about the bills we are considering, but
I think the American people expect Congress to react to a public health
crisis. Had we reacted 7 weeks ago, perhaps we wouldn't be where we are
today. I need and call upon this body to act today so that we are in a
better situation 7 weeks hence.
In fact, the House is only in session for 15 more days before taking
at least a 6-week break in October and November. In the handful of days
we have left, it is critical to provide an emergency package to fight
back against Zika. That is not currently on the calendar, Mr. Speaker.
Instead, we are considering these bills. I will be going into the
merits and lack thereof of them; but certainly, I think my colleagues
on the other side of the aisle would agree with the objective
assessment that these bills do nothing to combat Zika or address the
public health concerns around Zika.
The Senate did pass a partisan Zika funding bill to provide emergency
resources. It doesn't have unrelated poison pills unrelated to Zika.
Obviously, issues like where or if the flag of the rebel States, the
Confederate flag, is displayed, or whether Planned Parenthood is
funded, these are contentious issues here, but I think we all agree
they have nothing to do with Zika. The Confederate flag does not have
an impact on Zika. Planned Parenthood has at least a related aspect to
it--reproductive health.
Of course, one of the symptoms or one of the effects of Zika is a
higher rate of microcephaly among children that are born to women who
suffer from Zika while they are pregnant. So certainly the family
planning aspect of it is relevant, but not central, to the issues
affecting public health around Zika. We need to make sure that there
aren't any of those poison pill provisions and move forward.
Instead, we have different bills here. We have bills related to
financial markets.
The first one is the Accelerating Access to Capital Act of 2016. That
one brings together several different bills that had been offered.
First, it includes a bill that affects microcap companies, or pink
sheet companies, and removes many of the SEC transparency regulations
around how they sell stock and how they are listed. It is not a step
forward for transparency. In fact, this kind of effort is likely to
decrease confidence in our public marketplace. It is likely to hurt the
very stock market that presumably it was designed to help.
This would effectively allow microcap companies worth less than $75
million with one class of securities to issue an unlimited number of
shares using shelf registration in a 12-month period, not even
notifying the SEC ahead of the issuance, and permit unlisted microcap
companies to sell up to one-third of the aggregate market value of
their common equity using shelf registration in a 12-month period.
In many ways, these provisions are at odds with the other bills that
I will talk about, which provides some regulatory relief towards
private equity by favoring small cap public companies. It is hard for a
small company to be public. It is questionable whether small cap
companies should be public.
When we talk about private equity in a moment, we will see that one
of the features of that is: A, they have, of course, a more
sophisticated ownership; and, B, they have a more concentrated
ownership. So, for instance, the issues like runaway executive pay, CEO
pay, is less of a problem with private equity and a significant problem
with public companies, and, again, in particularly small cap companies
with diffuse ownership, which this bill would likely lead to more of.
It would also remove exchange protections like corporate governance
requirements. Again, these kinds of measures reduce confidence in the
public marketplace, they hurt the stock market, and, in the immediate
and long term, they hurt the ability of companies to go public and
access public capital because of the reputation of the pink sheets and
the reputation of microcap.
It is a fine line. I am sure that we would probably agree on some
regulatory relief around small cap companies, but this package is not
it. This package would hurt the stock market, hurt access to capital,
and hurt the very legitimate players that it is designed to help.
The second bill in here is the Micro Offering Safe Harbor Act. It
would eliminate Federal and State investor protection around
crowdfunding in regulation A under certain conditions.
First, I was an original sponsor of the JOBS bill. I worked with many
of my colleagues on both sides of the aisle to get that through. I will
be among the first to say that I was disappointed with the way that
that has been implemented by the administration. Crowdfunding should be
easy. It should not have 900 pages of regulations.
The main consumer safeguard that we have in there is that
nonaccredited investors are only allowed to invest up to $10,000. That
is a very important protection that we have. This would eliminate that
protection under several circumstances. One, if there are 35 or fewer
purchasers; or, two, the aggregate amount of securities sold by the
issuer is $500,000 or less in a 1-year period. It basically does away
with one of the legislatively imposed consumer protections in the JOBS
Act.
Now, I would agree. I think there has been some regulatory-imposed
inhibitions in the JOBS Act that I wish that we could strike out in a
laser-like way with a scalpel. In fact, many States, including my own
State of Colorado, have implemented more sensible bipartisan
crowdfunding legislation that enables it to occur at least within a
State in a much easier way than the very cumbersome Federal law which
does inhibit both the use of crowdfunding as well as the presence of
crowdfunding as part of an overall capital strategy because of the
difficulties concerning other types of capital investors and capital
partners.
[[Page H5180]]
I would love to see reform of the JOBS Act or reform around micro
offering, but this particular answer really undermines the entire
concept of the consumer protections. It is not targeted. It removes the
protections for smaller of the smallest of the small offerings. And
again, what you would find and the danger here is folks--we can call
them scam artists or folks trying to make a buck off of this and not
build legitimate businesses--can simply set up a number of companies
each raising under $500,000 to meet the criteria of this exemption.
There is not any consumer protection around that. There is nothing to
stop a bad actor from asking for significant investments for each of
those companies, even from the same individual depleting the savings of
that individual rather than sticking to the $10,000 cap, which was in
our JOBS Act.
So again, I would like, and many of my colleagues on my side of the
aisle would like, crowdfunding to be easier, to be done quicker, to
remove some of the excess paperwork and regulation A requirements, but
maintaining that basic consumer safeguard and not providing exemptions
just because there are 35 or fewer purchasers or $500,000 or less over
a 1-year period. It doesn't even address overlapping ownership or
related status between, again, multiple companies that might each raise
$500,000, might substantially have the same external owners, but would
get around the JOBS Act consumer protection provisions by effectively
cloning a bunch of small companies and offering them up separately for
individual investors. These things need to be thought through.
There is a kernel of an idea in there. I agree that the
administration has gone beyond the legislative intent of the JOBS Act
in its implementation of the JOBS Act. There is, hopefully, a way that
we can work together to empower crowdfunding to play a more central
role in capital development in entrepreneurship in our country. This
bill is not it.
The final component of that bill, the Private Placement Improvement
Act of 2016, would make it very difficult for the SEC to finalize
investor protections that it proposed back in 2013. The title would
require issuers selling securities under an exemption that allows
companies to raise an unlimited amount of money to file within 15 days
of sale a single notice of sale, which the SEC would then be required
to make available to State and other regulators.
This relates to some current rules that the SEC is moving forward
with. I think that, again, there is a way to tweak those rules, but I
don't think that this is the way to do it, to allow for unlimited
capital to be raised under a single notice of sale. And, of course,
this also affects the prerogative of State regulators, and there are a
variety of practices there, by requiring the SEC to make it available
to State and other regulators.
I think that there is room for improvement in that area, but, again,
the bill falls short.
Now, the other bill, the Investment Advisers Modernization Act of
2016, a majority of Democrats on the committee support it. Many also
voiced concerns. Some were the concerns of the Obama administration
about some of those provisions. But I am glad to say that many of those
concerns have been addressed by my colleague's, Mr. Foster's,
amendment.
First, a little bit about private equity and what this bill does and
doesn't do.
{time} 1300
My State and my district, like, probably, every other district in the
country, has seen the benefits and the impact of private equity
investment in its providing growth capital to companies, providing
stability in ownership. There are over 100 private equity-backed
companies headquartered in Colorado that we know of that support close
to 100,000 jobs in Colorado. In 2015, private equity firms invested $12
billion in Colorado-based companies. They are real jobs, and they have
contributed to the economic growth that Colorado has seen over the last
few years and that the country will see over the next few years.
Private equity has helped to create and sustain thousands of jobs and
has made substantial investments in every State in the country. It
provides returns to public pensions, to university endowments, to many
people as part of their own individual retirement plans and savings. It
is important both from a capital perspective and from an operating
perspective--a very important sector. Firms that are owned by private
equity--at least, because, again, there could be some that are not part
of this--employ over 8 million people. The private equity industry
invested over $600 billion into these companies. For physical
infrastructure, for additional hires, for expansion, private equity has
been a source of capital for Main Street businesses across our country,
in my State, and everywhere else in the country.
That is why the bill passed the Financial Services Committee with a
majority of Democrats--with strong bipartisan support--and I think it
will pass this body with strong bipartisan support as well.
Of course, there have been stories about bad actors in private equity
just as there could be bad actors among any type of ownership entity.
That is what private equity is. It is a type of entity that may own a
local company.
What are the other kinds of ownership that a company may have?
It may have public ownership. It may be public. We talked about that
in the microcap bill. In many ways, that is a worse form of ownership
in that there is additional administrative overhead that is associated
with being public. Even if the regulatory relief were to become the
law, there is still significant additional overhead with being public.
It is very difficult for a $20 million or a $50 million company.
Two, because of the diffuse ownership, frequently, there is no one
watching the shop, meaning that management runs it. We have the
problems of excess CEO pay, of excess executive pay. There are horror
stories of CEOs making hundreds of times the pay of the line workers.
Those kinds of things don't happen in private equity-backed companies.
There is someone minding the shop, and the entity that is minding the
shop is an entity that is looking for long-term growth, for long-term
stability. They are not in and out.
There has been some confusion among Members of this body in
discussing hedge funds versus private equity. Private equity is not a
hedge fund. Hedge funds have liquidity, and they make transactions
rapidly. They don't participate in governance and growth. Private
equity is very, very different. It is more analogous to venture
capital. They are in there for 5 years, 6 or 7 years, 10 years--long-
term investors who are building the companies, serving on boards,
recruiting others to serve on boards, providing sound corporate
governance, making sure that CEOs and executives aren't paid too much,
making sure that talent is in the company, making sure that growth
capital is available.
H.R. 5424 just takes a scalpel approach to existing regulations by
focusing on aspects of SEC adviser registration that impede the capital
formation in the private equity industry. For instance, there are
provisions in the bill that would make reporting to the SEC more
efficient and effective for their purposes and less costly and
burdensome for private equity firms.
Keep in mind that private equity firms do not represent, in any way,
shape, or form, a systemic risk to our Nation's financial security.
They are simply a type of ownership that Main Street companies have. If
a private equity firm invests poorly, runs companies poorly, they will
deliver a very poor return for their investors. That does not impact in
any systemic way the economy in the way that a hedge fund--placing
highly leveraged bets on derivatives or on some other financial
instrument--can cause an entire economic meltdown, as we saw during the
mortgage-backed security crisis in 2008 and in 2009.
Private equity firms provide patient, stable, long-term capital to
privately owned businesses across the country. In fact, they help take
the emphasis off of the quarterly financial reports that are so
important for public companies.
One of the failures of public company governance is that there is too
much emphasis on the short term at the expense of the long term--too
much emphasis to pump up the quarter at the expense of medium- and
long-term growth--2 years, 3 years, 4 years--in underinvestment in
research and in
[[Page H5181]]
underinvestment in long-term growth. Having a private equity ownership
of an operating company addresses that kind of moral hazard that exists
with regard to the incentives of the public marketplace.
Private equity firms have a long-term outlook that results in lower
volatility. While the public company model may not perform as well as
private equity firms, it, obviously, can provide access to capital, to
additional liquidity that private equity doesn't have. The two are
related in that, for some private equity investors, their goal is a
public offering exit in the 5-to 10-year time frame. That is not always
the case, but that can be the case; and having an operable public
market in addition to a private equity market is, of course, of
interest and importance to the private equity industry as well, which
is why the reforms in the other bill are so bad, because they
deteriorate confidence in the stock market. They ultimately will result
in decreasing liquidity for the good actors, meaning some of the
private equity-backed or owner-operator-owned companies that want to
have a public partial exit or exit through the public marketplace.
Again, the bill isn't perfect. The White House identified a number of
issues. But, fortunately, my colleague, Representative Foster, offered
an amendment, which has been accepted and, hopefully, that will address
a number of these issues.
The amendment removes a provision of the bill that would have allowed
certain ancillary or minor funds or entities that are affiliated with a
private equity firm to also be exempt from annual audits or surprise
inspections. It addresses concerns around transparency by continuing
the current requirement that advisers provide information about fees
and services in a brochure. It restores the transparency elements while
maintaining the concept of the regulatory relief of redundant
regulations with regard to capital formation and private equity.
The goal is to enact this commonsense bill that will make it more
efficient for private equity firms to operate and continue to grow
businesses on Main Street in districts like mine and across the country
while simultaneously maintaining the regulatory regime to make sure
that nothing untoward is occurring.
The bill does not, as some have falsely argued, allow private equity
firms to escape regulation by any stretch. In fact, most private equity
firms have embraced the changes that have been implemented under Dodd-
Frank. They have compliance teams to make sure they are operating
properly under the new regulatory scheme. In any form, they do not
represent a systemic risk, but to protect investors, many of them agree
with the sensible regulations that have been imposed with the exception
of those that we are seeking to remove that are redundant and that
create overhead. When you create overhead for private equity firms,
that results in less investment in our Main Street businesses. If they
have to divert funds to comply with unnecessary regulations for the
sake of regulations, it is that much less money and that many fewer
jobs in your Main Street businesses located in your districts.
The substitute amendment makes positive changes to the legislation.
It addresses many of the concerns that have been raised about the bill.
I and many of my colleagues plan to support its passage and also take
this occasion to make sure that our colleagues are aware of the
contributions of this particular model of ownership to our Main Street
businesses. It has been a growth sector, in fact, largely due to
showing, over time, superior performance to companies that have a
public governance model, in fact, in large part, due to their
dissipated owner base and lack of concentration in ownership.
I reserve the balance of my time.
Mr. SESSIONS. Mr. Speaker, I appreciate the gentleman from Colorado's
not only observations as a business leader from Colorado, but as a
member of the Rules Committee. He recognizes the need for ideas to flow
up from the industry to Members of Congress, for us to, on a bipartisan
basis, approach these issues to where we can provide safety and
soundness for the American people.
Mr. Speaker, I yield 5 minutes to the gentleman from Delano,
Minnesota (Mr. Emmer), the gentleman who is offering his legislation,
which is a part of title II of the legislation.
Mr. EMMER of Minnesota. I thank the chairman.
Mr. Speaker, government doesn't create jobs; people create jobs. But
with the President, Congress can create Federal policies that establish
a pro-worker and pro-business environment to lift people out of
poverty, to help families, and to allow Americans to realize their
greatest dreams.
One problem today that is impeding job growth is the access to
capital for small business. Often, American entrepreneurs can't get the
money they need to start a new enterprise or to grow an existing one.
In fact, small businesses still create the majority of new jobs in our
country today despite the fact that far fewer small business loans are
being made today than were being made prior to the 2008 recession.
Compounding this problem even further is the unfortunate reality that
entrepreneurs from less affluent communities often have the greatest
difficulty in securing the capital they need to make their business
dreams come true. As a result, thousands of jobs and hundreds of new
products are left on the drawing board as unrealized aspirations of
American entrepreneurs. Thankfully, if the rule before us today is
adopted, the House can consider four solutions that will address this
small business access to capital problem immediately.
The Accelerating Access to Capital Act of 2016 will make it easier
for businesses to raise capital. First, thanks to Congresswoman Wagner,
this legislation will make it easier for small companies to comply with
SEC security registration requirements by simplifying the process, by
eliminating duplicative paperwork, and by, ultimately, allowing people
to do their business instead of compliance.
Second, thanks to Congressman Garrett's Private Placement Improvement
Act, the bill will make it easier for small businesses to raise capital
under rule 506 of regulation D, ultimately leading to greater access to
capital for small businesses and unleashing the full potential of title
II of the JOBS Act.
Third, the Micro Offering Safe Harbor Act will make it easier for
Americans to raise capital from friends and family if three simple
criteria are met. These three criteria include that the investor has a
substantive preexisting relationship with the owner, that there are 35
or fewer investors, and that the aggregate amount of the investment
does not exceed $500,000.
Additionally, this provision would exempt such offerings from blue
sky requirements, but with all Federal and State antifraud laws
remaining in effect. It is important to note that this micro offering
proposal does not create a new law, but, rather, simply clarifies an
existing law by making an explicit safe harbor for certain private
security offerings under the Securities Act of 1933.
Finally, thanks to Congressman Hurt and Congressman Vargas, the
Investment Advisers Modernization Act will modernize the Investment
Advisers Act by removing redundancies and making necessary enhancements
to increase capital formation.
With American productivity decreasing, wages essentially stagnant,
and the U.S. economy struggling to get to historically normal GDP
growth levels, these proposals in the Accelerating Access to Capital
Act will help jump-start our ailing economy. By providing new
opportunities to make the most of capital formation vehicles that are
already available or by creating new ones, these proposed reforms will
enable American entrepreneurs and small businesses to access the
capital they need to grow and to prosper.
I thank the Speaker of the House and the chairman of the Financial
Services Committee for prioritizing the consideration of these pro-
business, pro-jobs, and antipoverty bills. I encourage my colleagues in
the House to support the rule. This is a tremendous opportunity for the
House to support Main Street mom-and-pop stores, aspiring
entrepreneurs, and established manufacturers to create jobs, wealth,
and opportunity for Americans from all walks of life.
Mr. POLIS. Mr. Speaker, I do have a speaker, but I can't locate her
right now.
[[Page H5182]]
I reserve the balance of my time.
Mr. SESSIONS. Mr. Speaker, you just heard from one of our brightest
new members of the Committee on Financial Services. This committee is
full, on a bipartisan basis, of men and women who care very much about
growing our economy.
Mr. Speaker, I yield 5 minutes to the gentleman from California (Mr.
Royce), a senior member of the Financial Services Committee and the
chairman of the House Foreign Affairs Committee.
Mr. ROYCE. I thank the chairman.
Mr. Speaker, I rise in support of the rule and the underlying
legislation of this H.R. 2357. It encompasses, by the way, H.R. 4850,
and this is the Micro Offering Safe Harbor Act.
What I will share with my colleagues is that California is the
innovation capital of the world. From Silicon Valley to Orange County,
technology startups are reimagining the way that the world works, and
these new companies don't have thousands of people on payroll.
{time} 1315
They don't need dozens of floors of office space. They don't need
billions of dollars to function, but they do need capital. They need
that capital to operate. Our current regulatory framework creates
impediments to these small businesses tapping into the market.
According to the Federal Reserve, the startup rate has fallen sharply
over the past 30 years. It was 14 percent of total companies in a given
year, but today it is down to 8 percent. The likelihood of a young firm
being a high-growth firm has also declined over the years, and these
trends are alarming, if you think about the consequences. These trends
need to be reversed.
The Micro Offering Safe Harbor Act turns the tide by lowering
compliance burdens for firms seeking low-dollar investments from a
small group of investors that they have a relationship with. So the
legislation appropriately scales the regulatory oversight of capital
formation, while keeping intact investor protections.
The resources that startups would sink into compliance and legal
costs could be redirected--to what?--to hiring workers, redirected to
creating new products. Uber, Google, and Airbnb, these were all
startups. Passage of the Micro Offering Safe Harbor Act ensures that
the next success story will be told.
I thank Mr. Emmer of Minnesota for his work on this important issue.
I urge my colleagues to support both the rule and the legislation.
Mr. POLIS. Mr. Speaker, I yield myself such time as I may consume.
The gentleman talked about the Micro Offering Safe Harbor Act. Again,
I think that there is the kernel of a good idea there, if the good idea
would be to streamline the excess regulation above and beyond the
consumer safeguards that were put in the JOBS Act; if the bill, for
instance, were to take some of the best practices from the States,
including my home State of Colorado, around crowdfunding and put them
into a revised version of Federal direction.
To be clear, I would join my colleagues in agreeing that the
administration went well beyond the expressed legislative intent and
legislative language of the JOBS Act in creating barriers to micro
financing across the country. Unfortunately, that is not what this bill
does.
It cuts back by providing gaping loopholes on the consumer
protections that Congress very thoughtfully intended to put in the JOBS
Act. So these are not the unintended regulatory aspects that the
administration added to the JOBS Act. These are cutting away at the
very consumer protections which Congress deliberately--including, as
one of the coauthors of the bill along with my Republican colleagues,
Mr. Issa and many others, the protections that we actually put into the
bill, this would gut. So, again, a kernel of a good idea.
Perhaps the inception of this bill is, hey, we messed up on the
implementation of crowdfunding. Let's fix it. Unfortunately, that is
not what this bill does. I wish it was what this bill does. It is
something I am certainly interested in doing. I think many of my
Democratic colleagues are, and we would be happy to work on a
bipartisan basis to address the poor implementation of the JOBS Act.
Of course, if there was something expressly provided legislatively,
we would be happy to go back and look at that. But this glaring
loophole that is opened is simply not it, with regard to if there are
fewer than 35 purchasers, under $500,000, some kind of preexisting
relationship. These loopholes are simply too broad and would
effectively remove the consumer protections that we have in
crowdfunding.
Mr. Speaker, if we defeat the previous question, I will offer an
amendment to the rule to bring up the bipartisan no fly, no buy
legislation, which I am proud to support. It would allow the Attorney
General to bar the sale of firearms and explosives to those on the
FBI's terrorist watch list.
If somebody is on the FBI terrorist watch list, they should not be
allowed to quietly assemble an arsenal to commit a terrorist act. In
fact, the FBI should immediately be on top of the situation, find out
their intent, and see what is going on. It is a commonsense bill that
would help keep America safe. My amendment would give the House an
opportunity to simply vote on this commonsense bill, which so far,
unfortunately, the Republicans have not even allowed us to debate. We
cannot wait any longer for Congress to take meaningful action to reduce
the risk of terrorism in our own country, and this bill would do that.
Mr. Speaker, I ask unanimous consent to include in the Record the
text of my amendment, along with extraneous material, immediately prior
to the vote on the previous question.
The SPEAKER pro tempore (Mr. Emmer of Minnesota). Is there objection
to the request of the gentleman from Colorado?
There was no objection.
Mr. POLIS. Mr. Speaker, I reserve the balance of my time.
Mr. SESSIONS. Mr. Speaker, we have been talking about thoughtful
young members of the Financial Services Committee, who work with people
all across the United States who are engaged in financial services to
bring more capital to bear, not only for small business, but also
better investment tools, investor tools. We have had the advantage of
having not only Mr. Polis, a young entrepreneur from Colorado, but we
have had Ed Royce. We have had Tom Emmer.
We now would like to have another very bright, young man who serves
on the Financial Services Committee to talk to us, who brings this bill
to us from Winfield, Illinois.
Mr. Speaker, I yield 5 minutes to the gentleman from Illinois (Mr.
Hultgren).
Mr. HULTGREN. Mr. Speaker, I rise today in support of H. Res. 844,
which provides for the consideration of H.R. 2357, the Accelerating
Access to Capital Act, and H.R. 5424, the Investment Advisers
Modernization Act.
I know how hard my colleagues on the Financial Services Committee
worked in crafting this legislation that will strengthen our economy. I
am, also, grateful for the hard work to make sure that this is a
bipartisan effort. I was proud to support this legislation in the
committee, and I am hopeful it will see a strong vote of approval when
voted here on the House floor.
I am proud to join Representatives Vargas, Stivers, Foster, and
Sinema as a cosponsor of Mr. Hurt's legislation, H.R. 5424, the
Investment Advisers Modernization Act. The modest changes that this
legislation would make makes it easier to invest in job creators, our
families, and our communities.
Dan Gallagher, a recent Commissioner of the Securities and Exchange
Commission, agrees and has testified in the Financial Services
Committee that the bill ``preserves the registration regime for private
fund advisers while at the same time removing or modernizing--in rather
modest ways--some of the more unnecessary, outdated, and overly
burdensome requirements of the now 76-year old Advisers Act that drive
costs up for funds and investors, and hinder the efficient allocation
of capital to help grow businesses and create jobs.''
These changes will make it easier to invest in our communities, and
these administrative savings then can be passed on to investors.
The Accelerating Access to Capital Act, led by my colleague on the
Financial Services Committee Mrs. Wagner,
[[Page H5183]]
would make it easier for small businesses and entrepreneurs to access
the capital they need to grow their companies and create jobs.
It is important that we have smart regulations in place that provide
certainty to investors and to our markets. It is equally important that
the Securities and Exchange Commission not unnecessarily inhibit
capital formation. In fact, the agency has a mission that states these
two things should be treated with equal importance.
This important package of legislation includes relatively modest but
meaningful changes to our securities laws that will improve access to
capital for smaller businesses and entrepreneurs without jeopardizing
consumer protection.
Title I of this package authorized by Mrs. Wagner makes it easier for
more small companies to use a less burdensome document when registering
with the SEC. Over the last 5 years, the number of smaller companies--
those with less than 500 employees--has declined. This is the first
time that this has happened since the U.S. Census Bureau began keeping
data on the subject.
In 2012, the SEC's Government-Business Forum on Small Business
Capital Formation report included a recommendation to modernize and
expand the utility of form S-3 for a great number of public companies.
This is just what Mrs. Wagner's legislation proposes to do.
Furthermore, the report noted that investor protection concerns have
been substantially eliminated with the advanced information technology,
including EDGAR, which is the SEC's electronic disclosure filing
system.
The Accelerating Access to Capital Act includes two other very
important titles. The gentleman from Minnesota (Mr. Emmer) has put
forth legislation that would exempt certain micro offerings from the
registration requirement of the Securities Act of 1933. This important
change in law would allow a startup business--the engines driving
growth in our economy--to solicit friends and family to invest in their
businesses.
Investors with a preexisting relationship with those most committed
to the company's success likely have the greatest understanding of its
growth trajectory and prospects for generating a healthy return on
investment. This will allow small business to access capital without
having to navigate more complicated Federal securities registration or
win approval of the SEC. Mr. Emmer's legislation will help fuel growth
on Main Street and help create the jobs our constituents deserve.
Mr. Garrett, the chairman of the Subcommittee on Capital Markets and
Government Sponsored Enterprises and a strong leader on these issues,
has put forth legislation to ensure the SEC returns more of its focus
to supporting capital formation, just as Congress intended in the JOBS
Act.
Mr. Garrett's legislation would direct the SEC to revise regulation
D, so fewer small businesses are required to register their securities
with the agency. It would help eliminate some of the most excessive
regulation we hear about far too often from our constituents.
The legislation will allow entrepreneurs and small businesses to go
back to doing what they do best--innovating and creating jobs--ensuring
families in our communities have a paycheck to put food on the table,
can cover the increasing costs of health care, and provide
opportunities to help their children be successful in the world.
Again, I would like to thank Chairman Hensarling and my colleagues on
the Financial Services Committee for all of this hard work. I encourage
all of my colleagues to support the rule and the legislation to follow.
Mr. POLIS. Mr. Speaker, I would like to inquire if the gentleman has
any remaining speakers.
Mr. SESSIONS. Mr. Speaker, in fact, in this colloquy, I do have an
additional speaker, and then I would choose to close.
Mr. POLIS. Mr. Speaker, I reserve the balance of my time.
Mr. SESSIONS. Mr. Speaker, the Committee on Financial Services has
presented a number of their members who have come to the floor today to
offer thoughts and ideas on a bipartisan basis, thoughts and ideas that
have emanated up from literally financial services experts across the
country, commonsense ideas, and investor ideas. They have been vetted.
They have been looked at. They have been talked about. They have been
marked up on a bipartisan basis; and that is why we are here today, to
make capital easier and more available from an investor perspective, as
well as from the perspective of the financial services industry.
One of the leaders from the Financial Services Committee for a number
of years has been our next speaker, and I am delighted to yield 5
minutes to a favorite son of St. Elizabeth, Missouri (Mr. Luetkemeyer).
Mr. LUETKEMEYER. Mr. Speaker, I want to thank the distinguished
gentleman and friend from Texas, the chairman of the Rules Committee,
for that eloquent introduction. I also thank him for all of his hard
work on his committee as well as bringing this important bill to the
floor.
I also want to recognize my colleagues on the Financial Services
Committee, Mr. Garrett, Mrs. Wagner, Mr. Emmer, and Mr. Hurt, for their
tireless efforts on behalf of our Nation's investors and small
businesses.
Mr. Speaker, today or tomorrow, the House will consider legislation
that will allow small businesses and those starting or investing in
small businesses to access needed capital without being subject to
burdensome and unnecessary regulation.
As we have seen throughout the financial services sector and across
our economy, one-size-fits-all rules are damaging our Nation's
businesses, financial institutions, and, as a result, American workers
and their families. Main Street has been crushed under the weight of
this administration's regulatory regime, as even the ranking member
admits.
H.R. 2357, composed of three bills that passed the Financial Services
Committee earlier this year, simplifies registration requirements for
small companies and facilitates access to capital without triggering
costly regulatory expenditures.
H.R. 5424, the Investment Advisers Modernization Act of 2016,
eliminates duplicative requirements for investment advisers, allows for
greater capital formation and development, and streamlines elements of
the 76-year-old Investment Advisers Act.
I recently met with a company in my district that relied upon private
equity to stay afloat and continued to employ my constituents. Capital
should be used to create jobs and spur economic growth and, as the
chairman mentioned in his opening remarks, to help Americans realize
the American Dream. Capital should not be used to fulfill meaningless
and unproductive regulatory requirements.
Our economy sits in idle. It is time to put it in drive. Regulation
should serve to protect taxpayers and not hurt them. It should enhance
the economy, not stymie it. There is no room for regulation that serves
to appease bureaucratic demands.
{time} 1330
Mr. Speaker, I come from the business world, and in another life I
was a banker on the regulatory side of the table as well as a bank
examiner. I have seen the impact of rules and regulations on small
businesses and communities, and my community as well. I have looked
across the table and helped those small businesses get started. Capital
is the lifeblood of these small businesses being able to start
businesses, help employ people, and be able to help people have jobs
and enhance the communities that they come from. It is extremely
important.
These discussions that we are having today are important from the
standpoint of enhancing our ability as a nation to continue to thrive
and grow, and to stymie what is hurting ourselves. The statistics are
there. Small businesses have been deteriorating. We have lost more
small businesses in the last several years than we have had. So,
therefore, why do you think we have the jobs problem that we have
today? It is pretty evident to me.
This rule and the underlying bills we will consider during the
remainder of this week will move us towards an economic recovery and a
more responsible regulatory environment.
I want to, again, thank my colleagues on the Committee on Financial
[[Page H5184]]
Services and the Committee on Rules for their work on these issues and
for their advocacy on behalf of our Nation's investors, small
businesses, and employees.
Mr. POLIS. Mr. Speaker, is the gentleman from Texas prepared to
close?
Mr. SESSIONS. Mr. Speaker, I would expect at this time that I have no
further speakers and will close when given that opportunity.
Mr. POLIS. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, again, while I do applaud Democrats and Republicans for
coming together around H.R. 5424, the Investment Advisers Modernization
Act, I wish that we had come together around the pressing public health
crisis of Zika. I wish we had come together to prevent terrorists from
assembling arsenals to commit terrorist acts in our country.
Unfortunately, while the Senate has acted in a bipartisan way to
address Zika, House Republicans continue to sit on their hands and
ignore this critical public health issue. The CDC is quickly running
out of money to combat Zika. We have yet to even begin serious
discussions on comprehensive immigration reform, with only a couple
months left in this session, not to mention the crisis of lead in the
pipes in Flint, Michigan. And, of course, in the weeks after the
deadliest mass shooting in our Nation's history, Congress has not acted
on anything around preventing violence, as well.
We should be voting on those kinds of bills. Many of those are also
bipartisan, just as this private equity bill is, but I would argue that
they are more timely, more important. Instead of focusing on policies
that help save lives, Republicans are instead spending time on two
bills, one of which will almost certainly receive a veto from the
President. The other one, we hope that Mr. Foster's amendment addresses
the issues the President had with it, but both of which are not likely
to pass the United States Senate.
We are spending more of our time and taxpayer money ignoring the most
pressing issues before us, issues that could move through the Senate,
issues that I hear about from my constituents every day back home.
Again, I applaud the Democrats and Republicans coming together around
the H.R. 5424 bill. This bill, if it were to become law, would
absolutely encourage greater investment in mainstream businesses in our
communities. It might make the difference of them making that
additional hire or two. That might be your neighbor; that might be your
cousin; that might be your spouse; it might even be you, that extra job
or two or three that is created by encouraging private capital
resources to be put into our communities.
Again, private equity had nothing to do with the financial meltdown
in 2008 and 2009. There is nothing systemic about it. It is simply
ownership groups of companies, and whether those owners are local
ownership groups, whether they are founders, whether they are family
offices, whether they are private equity, whether they are publicly
traded, they all have pros and cons.
We, of course, like to think of the very idealized vision of a
mainstream business where it is owned by your neighbor and somebody who
is accountable that you know, but those kinds of businesses have
transition issues as well. When their owner-operator gets ill or passes
on, what is to become of those businesses? What is the route to
sustainability? How can we make sure they continue to add value in the
community? For many, for transition planning, private equity can
provide that answer.
I urge my colleagues to vote ``no'' on the bill and defeat the
previous question so we can reduce the risk of a terrorist attack in
our country, and vote ``no'' on this restrictive, misguided rule.
Mr. Speaker, I yield back the balance of my time.
Mr. SESSIONS. Mr. Speaker, may I inquire as to the time I have
remaining.
The SPEAKER pro tempore (Mr. Hultgren). The gentleman from Texas has
7\1/4\ minutes remaining.
Mr. SESSIONS. Mr. Speaker, thank you very much. I yield myself the
balance of my time.
Mr. Speaker, I want to congratulate and thank my colleague, Mr.
Polis. Today has been a thoughtful exercise where there was some
disagreement. That is okay. That does not bother me, and it should not
bother him that he had to speak his mind in areas that he felt were
important.
But today, Mr. Speaker, Mr. Polis has very objectively been able to
critique the bill in front of us, to provide his analysis of that bill,
acknowledging it is a bipartisan bill, acknowledging that this bill is
about jobs, job creation, making life better, albeit that it might be
one or two people in a neighborhood. This country is full of
neighborhoods and full of people who want a better job, people who want
a better opportunity to invest, people who want to have their ideas
taken up, and this bill came directly to us today from back home, back
home people who have ideas, back home people who are looking at rules
and regulations and saying, wow, that is an impediment to my good idea.
Mr. Luetkemeyer, Mr. Emmer, Chairman Royce all said, oh, by the way,
they have an American Dream they are trying to live up to also, and
there are things that are getting in the way of their dream. So they do
the things that are necessary to float their ideas up to their Member
of Congress. It came to the Committee on Financial Services. The young
chairman, Jeb Hensarling, creates ideas that are able to move to
legislation. That is why we are here on the floor today, subscribing
ideas that provide more capital that is available.
The cost of securities regulation continues to fall heaviest on small
companies. Small companies are the engine of our economy, where many of
the bright people who today, by graduating from college, going to
business school, learning things, they realize as they enter the
marketplace, wow, there is another hurdle out there.
That is why we are here today. They want to bring their ideas to the
marketplace. We are here to help them through safety and soundness,
through working through the instruments of government, and to do so so
that traditional financing options are available for small companies
that work.
Our predatory administration--that is this Obama administration--is
using Dodd-Frank as its main weapon against the free enterprise system
today. This administration is using the weapons that they have
available to them to stop and stifle and to make more difficult the
creation of jobs, the creation of more wealth, the creation of
investment, and it is all done. We see this, Mr. Speaker, when we look
at GDP growth. Our country is stagnant.
Yesterday, when we were having the motion to recommit, the young
gentlewoman from the Democratic side acknowledged most forthrightly,
these are difficult financial times. All across America there are
terrible financial times because of an administration that chooses to
strike at the heart of the free enterprise system: the heart of the
free enterprise system in health care, the heart of the free enterprise
system in banking, and regulations on the energy industry, striking at
the heart of people trying to get homes and keep jobs and to move
things.
This administration has a constant attack against jobs, job creation,
and, I believe, the American worker, yet they find it easier to give
lots of money to other people but not Americans for our own job
creation. That is why we are here today. But we are not going to cast
this as what this is about.
What this is about is a positive effort about the American Dream,
about good ideas, about bipartisanship, about following the rules to
get things through a committee, to get things to the Committee on
Rules, to get things on the floor, to get people to vote on a
bipartisan basis.
We have, essentially, four bills in this rule, four bills that I
believe are desperately--I will use that word, ``desperately''--needed
by small business to grow and innovate ideas. What is on the other side
of that? We have already said it 10 times, the American Dream. But it
is also freedom. When issuers sell securities to the public, that means
more money goes into the company, money that can be used to hire more
people, push a product and make it successful. That is why we are here.
We are here to take the ideas, a process, in a bipartisan way.
Lastly, Mr. Speaker, I include in the Record a letter which addresses
an issue that my dear colleague has
[[Page H5185]]
talked about, and that is the Zika funding issue.
The letter was written to the President of the United States on July
14, 2016, and among other things it says: ``The House passed a
conference report that would provide an additional $1.1 billion in
emergency supplemental funding to continue to prepare for, and prevent,
Zika both domestically and internationally. It is unfortunate that
Democrats have blocked action on this legislation in the Senate.'' Mr.
Speaker, they continue to do it today.
This letter--which was signed by the chairman of the House Committee
on Appropriations, the gentleman Hal Rogers; the gentleman Thad
Cochran, chairman of the Senate Committee on Appropriations; Chairman
Tom Cole, House Appropriations Subcommittee on Labor, Health and Human
Services; Roy Blunt, chairman, Appropriations Subcommittee on Labor,
Health and Human Services; Kay Granger from Fort Worth, Texas,
chairwoman, House Appropriations Subcommittee on State and Foreign
Operations; Lindsey Graham, chairman, Senate Appropriations
Subcommittee on State and Foreign Operations--very clearly says: Mr.
President, until that block by Senate Democrats is stopped, we give you
authorization to reprogram money that would be available. You seem to
find lots of money that is available to bring people to this country
who might be displaced in other places around the world. Why don't you
spend a little bit of money on important issues like the Zika virus?
We are on record. We are waiting for the Senate to move the bill. Mr.
Speaker, I want you to know your time that you have allocated today,
the precious time of this House, was done today for bills that came to
us from ideas from the American people that floated on a bipartisan
basis directly up to the Committee on Financial Services, which brought
these bills forward. They have been talked about, marked up, and
vetted. They are good to go, and I am in full support of not only this
rule, but this legislation; and for that reason, I urge my colleagues
to continue to support this rule and the underlying bills.
Appropriations Committee Sends Joint House and Senate Letter to the
White House Urging Action on Zika Funding
Washington, July 14.--House Appropriations Committee
Chairman Hal Rogers, along with Senate Appropriations
Chairman Thad Cochran and other senior members of the House
and Senate committees, today sent a joint letter to President
Obama urging White House action on Zika funding.
Senate Democrats today again blocked legislation that would
immediately fund efforts to prevent and fight the spread of
the Zika virus. Chairmen Rogers and Cochran wrote that given
the critical need for these funds and absent the funding that
was blocked today, the White House should ``aggressively use
funds already available to mount a strong defense against the
virus.''
The full text of the letter is below:
July 14, 2016.
President Barack Obama,
The White House,
Washington, DC.
Dear Mr. President: Your Administration has asked Congress
to provide additional resources to prepare for, and prevent,
the spread of the Zika virus. We have responded by both
supporting the reprioritization of existing resources and
passing through our respective chambers legislation that
would provide additional Zika response funding.
On February 18, 2016, we called upon your Administration to
repurpose available funds to be spent immediately to fight
the disease. On April 6, 2016, you did so through the use of
existing authorities, repurposing $589 million for Zika
response activities. Given the urgency of your request, we
were surprised last week when Politico reported the following
based on information shared by Administration officials:
``The Obama administration has so far distributed only about
one-sixth of the unspent Ebola funding that it diverted to
combat the Zika virus.'' This money is available immediately
to prepare for and combat Zika, yet is seemingly not being
spent.
The House passed a conference report that would provide an
additional $1.1 billion in emergency supplemental funding to
continue to prepare for, and prevent, Zika both domestically
and internationally. It is unfortunate that Democrats have
blocked action on this legislation in the Senate. The
conference report provides the same amount of funding that
every Senate Democrat previously supported. It fully funds
vaccine research, and increases funding for mosquito spraying
and eradication, Zika surveillance, and advanced development
of treatments and diagnostics. The conference agreement
provides the same access to health services as your
supplemental request, contains no new prohibition on any
health service, and expands access to health services in
Puerto Rico beyond your initial request.
If Senate Democrats continue to block consideration of Zika
legislation, we urge you to aggressively use funds already
available to mount a strong defense against the virus. We
also note that the fiscal year 2016 appropriations bills
allow the Administration access to additional funds. The
Secretary of the Department of Health and Human Services has
transfer authority that can be used as an additional source
for Zika preparedness. The previous Secretary did not
hesitate to use this authority to support the failing
Affordable Care Act Exchanges. The Secretary of State also
has authority to reprogram funding to provide additional
foreign assistance to address the Zika virus outside the
United States.
We urge you to use available funding now to ensure our
nation is prepared.
Sincerely,
Rep. Hal Rogers,
Chairman, House Appropriations Committee.
Sen. Thad Cochran,
Chairman, Senate Appropriations Committee.
Rep. Tom Cole,
Chairman, House Appropriations Subcommittee on Labor,
Health and Human Services.
Sen. Roy Blunt,
Chairman, Senate Appropriations Subcommittee on Labor,
Health and Human Services.
Rep. Kay Granger,
Chairwoman, House Appropriations Subcommittee on State and
Foreign Operations.
Sen. Lindsey Graham,
Chairman, Senate Appropriations Subcommittee on State and
Foreign Operations.
The material previously referred to by Mr. Polis is as follows:
An Amendment to H. Res. 844 Offered by Mr. Polis
At the end of the resolution, add the following new
sections:
Sec. 3. Immediately upon adoption of this resolution the
Speaker shall, pursuant to clause 2(b) of rule XVIII, declare
the House resolved into the Committee of the Whole House on
the state of the Union for consideration of the bill (H.R.
1076) to increase public safety by permitting the Attorney
General to deny the transfer of a firearm or the issuance of
firearms or explosives licenses to a known or suspected
dangerous terrorist. The first reading of the bill shall be
dispensed with. All points of order against consideration of
the bill are waived. General debate shall be confined to the
bill and shall not exceed one hour equally divided and
controlled by the chair and ranking minority member of the
Committee on the Judiciary. After general debate the bill
shall be considered for amendment under the five-minute rule.
All points of order against provisions in the bill are
waived. At the conclusion of consideration of the bill for
amendment the Committee shall rise and report the bill to the
House with such amendments as may have been adopted. The
previous question shall be considered as ordered on the bill
and amendments thereto to fmal passage without intervening
motion except one motion to recommit with or without
instructions. If the Committee of the Whole rises and reports
that it has come to no resolution on the bill, then on the
next legislative day the House shall, immediately after the
third daily order of business under clause 1 of rule XIV,
resolve into the Committee of the Whole for further
consideration of the bill.
Sec. 4. Clause 1(c) of rule XIX shall not apply to the
consideration of H.R. 1076.
____
The Vote on the Previous Question: What It Really Means
This vote, the vote on whether to order the previous
question on a special rule, is not merely a procedural vote.
A vote against ordering the previous question is a vote
against the Republican majority agenda and a vote to allow
the Democratic minority to offer an alternative plan. It is a
vote about what the House should be debating.
Mr. Clarence Cannon's Precedents of the House of
Representatives (VI, 308-311), describes the vote on the
previous question on the rule as ``a motion to direct or
control the consideration of the subject before the House
being made by the Member in charge.'' To defeat the previous
question is to give the opposition a chance to decide the
subject before the House. Cannon cites the Speaker's ruling
of January 13, 1920, to the effect that ``the refusal of the
House to sustain the demand for the previous question passes
the control of the resolution to the opposition'' in order to
offer an amendment. On March 15, 1909, a member of the
majority party offered a rule resolution. The House defeated
the previous question and a member of the opposition rose to
a parliamentary inquiry, asking who was entitled to
recognition. Speaker Joseph G. Cannon (R-Illinois) said:
[[Page H5186]]
``The previous question having been refused, the gentleman
from New York, Mr. Fitzgerald, who had asked the gentleman to
yield to him for an amendment, is entitled to the first
recognition.''
The Republican majority may say ``the vote on the previous
question is simply a vote on whether to proceed to an
immediate vote on adopting the resolution . . . [and] has no
substantive legislative or policy implications whatsoever.''
But that is not what they have always said. Listen to the
Republican Leadership Manual on the Legislative Process in
the United States House of Representatives, (6th edition,
page 135). Here's how the Republicans describe the previous
question vote in their own manual: ``Although it is generally
not possible to amend the rule because the majority Member
controlling the time will not yield for the purpose of
offering an amendment, the same result may be achieved by
voting down the previous question on the rule. . . . When the
motion for the previous question is defeated, control of the
time passes to the Member who led the opposition to ordering
the previous question. That Member, because he then controls
the time, may offer an amendment to the rule, or yield for
the purpose of amendment.''
In Deschler's Procedure in the U.S. House of
Representatives, the subchapter titled ``Amending Special
Rules'' states: ``a refusal to order the previous question on
such a rule [a special rule reported from the Committee on
Rules] opens the resolution to amendment and further
debate.'' (Chapter 21, section 21.2) Section 21.3 continues:
``Upon rejection of the motion for the previous question on a
resolution reported from the Committee on Rules, control
shifts to the Member leading the opposition to the previous
question, who may offer a proper amendment or motion and who
controls the time for debate thereon.''
Clearly, the vote on the previous question on a rule does
have substantive policy implications. It is one of the only
available tools for those who oppose the Republican
majority's agenda and allows those with alternative views the
opportunity to offer an alternative plan.
Mr. SESSIONS. Mr. Speaker, I yield back the balance of my time, and I
move the previous question on the resolution.
The SPEAKER pro tempore. The question is on ordering the previous
question.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Recorded Vote
Mr. POLIS. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The SPEAKER pro tempore. Pursuant to clause 8 and clause 9 of rule
XX, this 15-minute vote on ordering the previous question will be
followed by 5-minute votes on adopting the resolution, if ordered; and
suspending the rules and adopting H. Res. 660.
The vote was taken by electronic device, and there were--ayes 238,
noes 180, not voting 13, as follows:
[Roll No. 489]
AYES--238
Abraham
Aderholt
Allen
Amash
Amodei
Babin
Barletta
Barr
Barton
Benishek
Bilirakis
Bishop (MI)
Bishop (UT)
Black
Blackburn
Blum
Bost
Boustany
Brady (TX)
Brat
Bridenstine
Brooks (AL)
Brooks (IN)
Buchanan
Buck
Bucshon
Burgess
Byrne
Calvert
Carter (GA)
Carter (TX)
Chabot
Chaffetz
Clawson (FL)
Coffman
Cole
Collins (GA)
Collins (NY)
Comstock
Conaway
Cook
Costello (PA)
Cramer
Crawford
Crenshaw
Culberson
Curbelo (FL)
Davidson
Davis, Rodney
Denham
Dent
DeSantis
Diaz-Balart
Dold
Donovan
Duffy
Duncan (SC)
Duncan (TN)
Ellmers (NC)
Emmer (MN)
Farenthold
Fincher
Fitzpatrick
Fleischmann
Fleming
Flores
Forbes
Fortenberry
Foxx
Franks (AZ)
Frelinghuysen
Garrett
Gibbs
Gibson
Gohmert
Goodlatte
Gosar
Gowdy
Granger
Graves (GA)
Graves (LA)
Graves (MO)
Griffith
Grothman
Guinta
Guthrie
Hanna
Hardy
Harper
Harris
Hartzler
Heck (NV)
Hensarling
Herrera Beutler
Hice, Jody B.
Hill
Holding
Hudson
Huelskamp
Huizenga (MI)
Hultgren
Hunter
Hurd (TX)
Hurt (VA)
Issa
Jenkins (KS)
Jenkins (WV)
Johnson (OH)
Jolly
Jones
Jordan
Joyce
Katko
Kelly (MS)
Kelly (PA)
King (IA)
King (NY)
Kinzinger (IL)
Kline
Knight
Labrador
LaHood
LaMalfa
Lamborn
Lance
Latta
LoBiondo
Long
Loudermilk
Love
Lucas
Luetkemeyer
Lummis
MacArthur
Marchant
Marino
Massie
McCarthy
McCaul
McClintock
McHenry
McKinley
McMorris Rodgers
McSally
Meadows
Meehan
Messer
Mica
Miller (FL)
Miller (MI)
Moolenaar
Mooney (WV)
Mullin
Mulvaney
Murphy (PA)
Neugebauer
Newhouse
Noem
Nunes
Olson
Palmer
Paulsen
Pearce
Perry
Peterson
Pittenger
Pitts
Poe (TX)
Poliquin
Pompeo
Posey
Price, Tom
Ratcliffe
Reed
Renacci
Ribble
Rice (SC)
Rigell
Roby
Roe (TN)
Rogers (AL)
Rogers (KY)
Rohrabacher
Rokita
Rooney (FL)
Ros-Lehtinen
Roskam
Rothfus
Rouzer
Royce
Russell
Salmon
Sanford
Scalise
Schweikert
Scott, Austin
Sensenbrenner
Sessions
Shimkus
Shuster
Simpson
Smith (MO)
Smith (NE)
Smith (NJ)
Smith (TX)
Stefanik
Stewart
Stivers
Stutzman
Thompson (PA)
Thornberry
Tiberi
Tipton
Trott
Turner
Upton
Valadao
Wagner
Walberg
Walden
Walker
Walorski
Weber (TX)
Webster (FL)
Wenstrup
Westerman
Williams
Wilson (SC)
Wittman
Womack
Woodall
Yoder
Yoho
Young (AK)
Young (IA)
Young (IN)
Zeldin
Zinke
NOES--180
Adams
Aguilar
Ashford
Bass
Beatty
Becerra
Bera
Beyer
Blumenauer
Bonamici
Boyle, Brendan F.
Brady (PA)
Brownley (CA)
Bustos
Butterfield
Capps
Capuano
Cardenas
Carney
Carson (IN)
Cartwright
Castor (FL)
Castro (TX)
Chu, Judy
Cicilline
Clark (MA)
Clay
Cleaver
Clyburn
Cohen
Connolly
Conyers
Cooper
Costa
Courtney
Crowley
Cuellar
Cummings
Davis (CA)
Davis, Danny
DeFazio
DeGette
Delaney
DeLauro
DelBene
DeSaulnier
Deutch
Dingell
Doggett
Doyle, Michael F.
Duckworth
Edwards
Ellison
Engel
Eshoo
Esty
Farr
Foster
Frankel (FL)
Fudge
Gabbard
Gallego
Garamendi
Graham
Grayson
Green, Al
Green, Gene
Grijalva
Gutierrez
Hahn
Hastings
Heck (WA)
Higgins
Himes
Hinojosa
Honda
Hoyer
Huffman
Israel
Jackson Lee
Jeffries
Johnson (GA)
Kaptur
Keating
Kelly (IL)
Kennedy
Kildee
Kilmer
Kind
Kirkpatrick
Kuster
Langevin
Larsen (WA)
Larson (CT)
Lawrence
Lee
Levin
Lewis
Lieu, Ted
Lipinski
Loebsack
Lofgren
Lowenthal
Lowey
Lujan Grisham (NM)
Lujan, Ben Ray (NM)
Lynch
Maloney, Carolyn
Maloney, Sean
Matsui
McCollum
McDermott
McGovern
McNerney
Meeks
Meng
Moore
Moulton
Murphy (FL)
Nadler
Napolitano
Neal
Nolan
Norcross
O'Rourke
Pallone
Pascrell
Payne
Pelosi
Perlmutter
Peters
Pingree
Pocan
Polis
Price (NC)
Quigley
Rangel
Rice (NY)
Richmond
Roybal-Allard
Ruiz
Ruppersberger
Rush
Ryan (OH)
Sanchez, Linda T.
Sarbanes
Schakowsky
Schiff
Schrader
Scott (VA)
Scott, David
Serrano
Sewell (AL)
Sherman
Sinema
Sires
Slaughter
Smith (WA)
Speier
Swalwell (CA)
Takano
Thompson (CA)
Thompson (MS)
Titus
Tonko
Torres
Tsongas
Van Hollen
Vargas
Veasey
Vela
Velazquez
Visclosky
Walz
Wasserman Schultz
Waters, Maxine
Watson Coleman
Welch
Wilson (FL)
Yarmuth
NOT VOTING--13
Bishop (GA)
Brown (FL)
Clarke (NY)
DesJarlais
Johnson, E. B.
Johnson, Sam
Nugent
Palazzo
Reichert
Ross
Sanchez, Loretta
Walters, Mimi
Westmoreland
{time} 1405
Mr. WALKER changed his vote from ``no'' to ``aye.''
So the previous question was ordered.
The result of the vote was announced as above recorded.
The SPEAKER pro tempore. The question is on the resolution.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Recorded Vote
Mr. POLIS. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The SPEAKER pro tempore. This is a 5-minute vote.
The vote was taken by electronic device, and there were--ayes 237,
noes 181, not voting 13, as follows:
[Roll No. 490]
AYES--237
Abraham
Aderholt
Allen
Amash
Amodei
Babin
Barletta
Barr
Barton
Benishek
Bilirakis
Bishop (MI)
Bishop (UT)
Black
Blackburn
Blum
Bost
Boustany
Brady (TX)
Brat
Bridenstine
Brooks (AL)
Brooks (IN)
Buchanan
Buck
Bucshon
Burgess
Byrne
Calvert
Carter (GA)
Carter (TX)
Chabot
Chaffetz
Clawson (FL)
Coffman
Cole
Collins (GA)
Collins (NY)
Comstock
Conaway
Cook
Costello (PA)
Cramer
Crenshaw
Culberson
Curbelo (FL)
Davidson
Davis, Rodney
Denham
Dent
DeSantis
Diaz-Balart
Dold
Donovan
Duffy
Duncan (SC)
Duncan (TN)
Ellmers (NC)
Emmer (MN)
Farenthold
Fincher
Fitzpatrick
Fleischmann
[[Page H5187]]
Fleming
Flores
Forbes
Fortenberry
Foxx
Franks (AZ)
Frelinghuysen
Garrett
Gibbs
Gibson
Gohmert
Goodlatte
Gosar
Gowdy
Granger
Graves (GA)
Graves (LA)
Graves (MO)
Griffith
Grothman
Guinta
Guthrie
Hanna
Hardy
Harper
Harris
Hartzler
Heck (NV)
Hensarling
Herrera Beutler
Hice, Jody B.
Hill
Holding
Hudson
Huelskamp
Huizenga (MI)
Hultgren
Hunter
Hurd (TX)
Hurt (VA)
Issa
Jenkins (KS)
Jenkins (WV)
Johnson (OH)
Jolly
Jones
Jordan
Joyce
Katko
Kelly (MS)
Kelly (PA)
King (IA)
King (NY)
Kinzinger (IL)
Kline
Knight
Labrador
LaHood
LaMalfa
Lamborn
Lance
Latta
LoBiondo
Long
Loudermilk
Love
Lucas
Luetkemeyer
Lummis
MacArthur
Marchant
Marino
Massie
McCarthy
McCaul
McClintock
McHenry
McKinley
McMorris Rodgers
McSally
Meadows
Meehan
Messer
Mica
Miller (FL)
Miller (MI)
Moolenaar
Mooney (WV)
Mullin
Mulvaney
Murphy (PA)
Neugebauer
Newhouse
Noem
Nunes
Olson
Palmer
Paulsen
Pearce
Perry
Pittenger
Pitts
Poe (TX)
Poliquin
Pompeo
Posey
Price, Tom
Ratcliffe
Reed
Renacci
Ribble
Rice (SC)
Rigell
Roby
Roe (TN)
Rogers (AL)
Rogers (KY)
Rohrabacher
Rokita
Rooney (FL)
Ros-Lehtinen
Roskam
Rothfus
Rouzer
Royce
Russell
Salmon
Sanford
Scalise
Schweikert
Scott, Austin
Sensenbrenner
Sessions
Shimkus
Shuster
Simpson
Sinema
Smith (MO)
Smith (NE)
Smith (NJ)
Smith (TX)
Stefanik
Stewart
Stivers
Stutzman
Thompson (PA)
Thornberry
Tiberi
Tipton
Trott
Turner
Upton
Valadao
Wagner
Walberg
Walden
Walker
Walorski
Weber (TX)
Webster (FL)
Wenstrup
Westerman
Williams
Wilson (SC)
Wittman
Womack
Woodall
Yoder
Yoho
Young (AK)
Young (IA)
Young (IN)
Zeldin
Zinke
NOES--181
Adams
Aguilar
Ashford
Bass
Beatty
Becerra
Bera
Beyer
Blumenauer
Bonamici
Boyle, Brendan F.
Brady (PA)
Brownley (CA)
Bustos
Capps
Capuano
Cardenas
Carney
Carson (IN)
Cartwright
Castor (FL)
Castro (TX)
Chu, Judy
Cicilline
Clark (MA)
Clarke (NY)
Clay
Cleaver
Clyburn
Cohen
Connolly
Conyers
Cooper
Costa
Courtney
Crowley
Cuellar
Cummings
Davis (CA)
Davis, Danny
DeFazio
DeGette
Delaney
DeLauro
DelBene
DeSaulnier
Deutch
Dingell
Doggett
Doyle, Michael F.
Duckworth
Edwards
Ellison
Engel
Eshoo
Esty
Farr
Foster
Frankel (FL)
Fudge
Gabbard
Gallego
Garamendi
Graham
Grayson
Green, Al
Green, Gene
Grijalva
Gutierrez
Hahn
Hastings
Heck (WA)
Higgins
Himes
Hinojosa
Honda
Hoyer
Huffman
Israel
Jackson Lee
Jeffries
Johnson (GA)
Johnson, E. B.
Kaptur
Keating
Kelly (IL)
Kennedy
Kildee
Kilmer
Kind
Kirkpatrick
Kuster
Langevin
Larsen (WA)
Larson (CT)
Lawrence
Lee
Levin
Lewis
Lieu, Ted
Lipinski
Loebsack
Lofgren
Lowenthal
Lowey
Lujan Grisham (NM)
Lujan, Ben Ray (NM)
Lynch
Maloney, Carolyn
Maloney, Sean
Matsui
McCollum
McDermott
McGovern
McNerney
Meeks
Meng
Moore
Moulton
Murphy (FL)
Nadler
Napolitano
Neal
Nolan
Norcross
O'Rourke
Pallone
Pascrell
Payne
Pelosi
Perlmutter
Peters
Peterson
Pingree
Pocan
Polis
Price (NC)
Quigley
Rangel
Rice (NY)
Richmond
Roybal-Allard
Ruiz
Ruppersberger
Rush
Ryan (OH)
Sanchez, Linda T.
Sarbanes
Schakowsky
Schiff
Schrader
Scott (VA)
Scott, David
Serrano
Sewell (AL)
Sherman
Sires
Slaughter
Smith (WA)
Speier
Swalwell (CA)
Takano
Thompson (CA)
Thompson (MS)
Titus
Tonko
Torres
Tsongas
Van Hollen
Vargas
Veasey
Vela
Velazquez
Visclosky
Walz
Wasserman Schultz
Waters, Maxine
Watson Coleman
Welch
Wilson (FL)
Yarmuth
NOT VOTING--13
Bishop (GA)
Brown (FL)
Butterfield
Crawford
DesJarlais
Johnson, Sam
Nugent
Palazzo
Reichert
Ross
Sanchez, Loretta
Walters, Mimi
Westmoreland
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore (during the vote). There are 2 minutes
remaining.
{time} 1412
So the resolution was agreed to.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
____________________