[Congressional Record Volume 163, Number 60 (Thursday, April 6, 2017)]
[House]
[Pages H2759-H2767]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
{time} 0915
SUPPORTING AMERICA'S INNOVATORS ACT OF 2017
Mr. HUIZENGA. Mr. Speaker, pursuant to House Resolution 242, I call
up the bill (H.R. 1219) to amend the Investment Company Act of 1940 to
expand the investor limitation for qualifying venture capital funds
under an exemption from the definition of an investment company, and
ask for its immediate consideration in the House.
The Clerk read the title of the bill.
The SPEAKER pro tempore (Mr. Simpson). Pursuant to House Resolution
242, the bill is considered read.
The text of the bill is as follows:
H.R. 1219
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 ``Supporting America's
Innovators Act of 2017''.
SEC. 2. INVESTOR LIMITATION FOR QUALIFYING VENTURE CAPITAL
FUNDS.
Section 3(c)(1) of the Investment Company Act of 1940 (15
U.S.C. 80a-3(c)(1)) is amended--
(1) in the matter preceding subparagraph (A), by inserting
``(or, in the case of a qualifying venture capital fund, 250
persons)'' after ``one hundred persons''; and
(2) by adding at the end the following:
``(C)(i) The term `qualifying venture capital fund' means a
venture capital fund that has not more than $10,000,000 in
aggregate capital contributions and uncalled committed
capital, with such dollar amount to be indexed for inflation
once every 5 years by the Commission, beginning from a
measurement made by the Commission on a date selected by the
Commission, rounded to the nearest $1,000,000.
``(ii) The term `venture capital fund' has the meaning
given the term in section 275.203(l)-1 of title 17, Code of
Federal Regulations, or any successor regulation.''.
The SPEAKER pro tempore. The gentleman from Michigan (Mr. Huizenga)
and the gentlewoman from California (Ms. Maxine Waters) each will
control 30 minutes.
The Chair recognizes the gentleman from Michigan.
General Leave
Mr. HUIZENGA. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days in which to revise and extend their remarks
and to submit extraneous materials on the bill under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Michigan?
There was no objection.
Mr. HUIZENGA. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, we all know that small businesses and entrepreneurs are
the heartbeat of the American economy. Access to financial capital is
vital for entrepreneurs seeking to start up, operate, or expand their
businesses. However, gaining access to capital has remained an enduring
challenge for many small businesses.
The financial crisis and the Great Recession made the situation
worse, frankly, as capital became increasingly hard to access from
institutional banks and various capital market players. While
conditions have improved somewhat in recent years, many entrepreneurs
continue to struggle with accessing the capital they need to compete
and to grow.
In order to succeed, these companies need capital and credit, the
lifeblood for growth, expansion, and job creation. Yet the government
continues to construct arbitrary walls that cut them off from essential
financing, as smaller companies are caught in a sea of regulatory red
tape created by Washington bureaucrats.
We know that 60 percent of all net new jobs that have come into this
country, that have been created here in the United States, come from
these small businesses. They are oftentimes S corporations, LLCs, sole
proprietorships. Small companies often have such owners also be
operators. They are working alongside their fellow employees.
That 60 percent of those jobs that have been created here in the
United States isn't just a one-time blip. That is over the last 20
years, the last two decades, that we have seen that trend.
Congress has made strides in tailoring the regulatory environment for
smaller companies, no doubt, most notably when we passed, with strong
bipartisan support, the Jumpstart Our Business Startups, or JOBS, Act
in 2012. This was a bipartisan bill that was signed into law by
President Obama. The JOBS Act's benefits are notable as more and more
companies use its provisions to raise investment capital in both the
public and private markets.
The JOBS Act has raised the cap on investors in a privately held
company from 500 to 2,000 investors, but the limit on the number of
investors acting as a coordinated group to invest in a company remained
at 100, where it has been since 1940, some 77 years ago.
As noted by Kevin Laws of AngelList in his written testimony before
our Capital Markets Subcommittee: ``With online fundraising and general
solicitation becoming more common because of the JOBS Act, companies
are bumping up against the limit more frequently. The current limit . .
. now acts as a brake on the amount of money the company wanted to
raise, leaving tens of millions of dollars on the table that did not go
into startups.''
While H.R. 1219, the Supporting America's Innovators Act, a
bipartisan bill introduced by the vice chairman of our Financial
Services Committee, Representative Patrick McHenry, and Nydia Velazquez
of New York, would amend the cap currently contained in the Investment
Company Act to allow 250 investors for a ``qualified venture capital
fund,'' therefore enhancing angel investors' ability to provide
important funding to small businesses.
This bill is a very modest increase to the current exemption that has
been in place for nearly 77 years. Modernizing this cap is long overdue
and reflects today's capital markets and the reality of the
increasingly important role that angel investors and others play as
they commit the funds necessary to help small businesses grow.
The Securities and Exchange Commission, unfortunately, continues to
ignore the backlog of good ideas to spur capital formation, which is
recommended by entrepreneurs, small businesses, and market participants
from their annual SEC Government-Business Forum on Capital Formation.
This is a forum that is put together annually. They take and solicit
ideas. They want to hear from people that are in the marketplace to
figure out what ways they could go to improve that. Unfortunately, they
have not acted on
[[Page H2760]]
this, and in the SEC's absence, Congress must act to promote market
efficiency and capital formation.
I think we can all agree that we support smart regulation that
protects investors and maintains orderly and efficient markets. But
outdated, excessive, and unnecessary regulation whose costs outweigh
benefits is dumb regulation that overburdens smaller companies. Let's
provide some regulatory relief by enacting the bipartisan bill that
will ease the burdens on small businesses and job creators and help
foster capital formation and get Americans back to work.
Mr. Speaker, I would also like to note, in a hearing that we had on
this bill last Congress, it passed our committee 52-2, including the
ranking member voting for it. There were no dissenting minority views
that were offered, and no amendments were offered at the Rules
Committee on this. We have got a lot of consensus. I believe this is
the right thing to do to move forward.
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.
Mr. Speaker, H.R. 1219, the Supporting America's Innovators Act, is
legislation that certainly shows that sometimes we can get together and
we can support a good idea. This act is such a thing. It shows how well
we can work together to craft bipartisan solutions that support our
Nation's innovators and the jobs that they create.
Last Congress, Mr. McHenry came to me with a problem: Sophisticated
angel investors who fund promising startup businesses want to pool
their money together, but the law effectively caps them at 100
investors per fund. If more than 100 people want to invest, the fund is
forced to exclude some of them from the deal to avoid registration and
regulation as an ``investment company'' under the securities laws. That
means investors willing to commit capital are being turned away and
startups are losing out on important early-stage funding.
Because of Congresswoman Nydia Velazquez and Mr. Patrick McHenry
working together, working out any concerns that had been identified on
either side of the aisle, we now, today, have a piece of legislation, a
bill, that would narrowly increase the investor limitation from 100 to
250 persons for certain venture capital funds, provided that the fund
does not have more than $10 million in total investor capital.
This type of fund structure is used today by AngelList, an angel
investing platform that connects investors meeting certain income and
asset thresholds with one another so they can pool their money into
special-purpose funds which then invest them in a particular startup
company. Importantly, both the companies and the investors benefit from
this structure.
Compared with making hundreds of smaller direct investments, a
company, for example, only has as a single point of contact, the angel
fund advised by a fiduciary, rather than hundreds of investors who must
all individually approve corporate actions such as mergers and
acquisitions and expanding ownership.
Investors also like this structure because they can delegate
monitoring the startups they invest in to the investment adviser to the
fund. Such monitoring may be significant, considering that investors,
recognizing that most early-stage companies fail, typically diversify
their investments among 30 to 80 companies.
H.R. 1219 reasonably promotes this fund structure for startup
investments by providing a narrowly tailored exemption for certain
venture capital funds which must invest at least 80 percent of their
funds in small businesses. Under the bill, the venture capital funds
must have no more than 250 investors and no more than $10 million in
investor capital, ensuring that they are small enough that investors
are able to monitor and manage their investments.
The bill's limits also ensure that we aren't creating a loophole for
other investment companies, like mutual funds, to avoid regulation; nor
are we providing relief to other private funds, like hedge funds or
private equity funds, that have very little restriction and investor
protection.
Mr. Speaker, too often Congress seeks to help small businesses by
repealing sensible guardrails and rules of the road with little to no
thought of the impact on investors or market integrity. This is a
mistake since it is investors that provide the money necessary for
small businesses to grow. If investors don't trust the markets to
operate fairly, they will decline to invest or raise costs on the very
businesses we want to help. H.R. 1219 is different and reflects a
measured, bipartisan approach to promoting our Nation's startups and
the investors who take a chance on them.
I thank Mr. McHenry and Ms. Velazquez for their leadership on this
bill. I urge all of my colleagues to vote ``yes.''
Mr. Speaker, I reserve the balance of my time.
Mr. HUIZENGA. Mr. Speaker, I yield 2 minutes to the gentleman from
North Carolina (Mr. McHenry), our vice chairman and the sponsor of this
bill.
Mr. McHENRY. Mr. Speaker, it is an honor to be here today, the day
after the fifth anniversary of the JOBS Act.
Five years ago, yesterday, in a bipartisan way, this divided House,
this divided government that got next to nothing done, in a bipartisan
way, was able to achieve a huge bipartisan victory to help small
businesses raise capital. In light of that and in that history, in that
spirit, we have reached across the aisle, and Representative Velazquez
and Ranking Member Waters worked with me to craft a very good bill here
today.
This bill is targeted at small businesses across the rest of the
country. We know that 78 percent of venture capital goes to just three
States. If you are in Austin, Boston, or the Silicon Valley, you have
capital flowing to you; you have funds for your idea. The rest of the
country, whether you are in an urban area or rural area, is starved for
capital.
In light of that problem, we are trying to work for a solution for
those small businesses, those innovators with good ideas that maybe
don't have the best access to capital. We raised the cap on angel
investing, thereby allowing more people to participate at a lower
threshold dollar amount while still including important investor
protection.
Today is a great victory for small-business folks that need access,
that need capital to take their idea to market. Mr. Speaker, I urge my
colleagues to support this measure.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield as much time as
she may consume to the gentlewoman from New York (Ms. Velazquez).
Ms. VELAZQUEZ. Mr. Speaker, let me take this opportunity to thank the
ranking member for yielding me time.
Mr. Speaker, I rise in support of H.R. 1219, the Supporting America's
Innovators Act of 2017, which I am proud to cosponsor with Mr. McHenry.
Throughout my career here in Congress, I have always supported and
encouraged legislation that creates jobs and fosters innovation for
America's entrepreneurs and small businesses. The bill we are
considering today will further that goal.
Mr. Speaker, I always say access to capital is access to opportunity.
That is exactly what this legislation does.
The Investment Company Act of 1940 currently limits the number of
accredited investors in a venture fund to no more than 100 individuals,
but most funds try not to reach that limit in order to adjust for
unforeseen circumstances. This artificially low limit restricts the
number of individuals that can invest in small businesses and startups.
That means less opportunity for entrepreneurs.
Our bill will address this problem by allowing up to 250 accredited
investors to participate in venture funds with up to $10 million in
capital.
{time} 0930
It is important to stress that these are accredited investors. They
have at least $200,000 in minimum income or $1 million in net assets.
These are sophisticated investors comfortable with the risks involved
in the startup sector.
Many of these investors pool their money together either in local or
national groups. More recently, many have gotten involved in online
crowdfunding platforms, which were created through the JOBS Act, to
funnel more capital to small businesses and startups.
[[Page H2761]]
Our bill will create greater access for women-owned and women-led
businesses. The types of funds empowered to attract more investors
under this bill are often a good capital source for women-owned firms.
I am proud that our bipartisan legislation has garnered a wide range
of attention and support from the industry. The Angel Capital
Association and the Internet Association have endorsed the bill. These
are groups dedicated to expanding capital opportunities for small
businesses.
This bill has also moved through the legislative process with strong
bipartisan support every step of the way. Last month, we passed this
bill out of the Financial Services Committee with a broad bipartisan
vote of 54-2. The same day, the Senate Banking Committee was busy
passing its bipartisan companion version, S. 444, sponsored by Senators
Heitkamp and Heller. It is also important to recognize that, last year,
this Chamber passed a nearly identical version of our bill by a vote of
388-9.
It is time to see this legislation enacted. It will create more
capital for small businesses and it will mean more jobs throughout the
Nation.
Let me take a moment to thank Mr. McHenry for working with me on this
bill, as well as Chairman Hensarling. And let me also thank Ranking
Member Waters for her leadership and hard work.
Again, a vote for this bill is a vote for America's entrepreneurs. I
urge my colleagues to vote ``yes.''
Mr. HUIZENGA. Mr. Speaker, I yield 2 minutes to the gentleman from
Ohio (Mr. Chabot), the chairman of the Committee on Small Business here
in the House of Representatives and a strong supporter of this bill.
Mr. CHABOT. Mr. Speaker, I thank the gentleman from North Carolina
(Mr. McHenry) for the work that he has done on H.R. 1219, the
Supporting America's Innovators Act, and the entire Financial Services
Committee for their work on this important topic.
As chairman of the House Small Business Committee--and I would note
that you have here not only the Republican chair, but we just heard
speak the ranking member of the Small Business Committee, Ms.
Velazquez; both in support of this legislation. It is bipartisan,
which, as Patrick McHenry mentioned, doesn't happen around here often
enough, but it did in this case.
I often hear from entrepreneurs and small-business folks that the
process to obtain capital is too rigid for them to expand and create
jobs. Access to capital is a major issue that we need to address, and
that is what we are doing here.
When it comes to helping small businesses get off the ground, no
effort we can make is too small. The Supporting America's Innovators
Act could make all the difference for an entrepreneur, and that is why,
again, we are here to support it.
Commonsense reforms like this one, which raises the cap on the number
of people who can invest in a venture fund, can go a long way for the
Nation's entrepreneurs, startups, and small businesses. With 28 small
businesses in the United States and nearly half of all private sector
workers employed by one, the Nation's economic future lies squarely
with this Nation's smallest companies and firms.
Those who risk everything and sacrifice much to take a shot at
building the next great American company should be operating in a
business environment that is free from overly burdensome rules and
regulations. They should be able to concentrate on expanding their
companies, gaining more customers, and job creation, not compliance
issues and outdated capital formation rules that prevent the largest
pool of investors from investing in these companies.
As this economic recovery continues to take shape, let's stand with
our small businesses and create an environment for growth. This bill is
another important step in that direction.
Mr. Speaker, I urge my colleagues on both sides of the aisle to
support this very good legislation.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield 4 minutes to
the gentlewoman from New York (Mrs. Carolyn B. Maloney), the ranking
member of the Financial Services Committee's Subcommittee on Capital
Markets, Securities, and Investments.
Mrs. CAROLYN B. MALONEY of New York. Mr. Speaker, I thank the ranking
member for her leadership on this bill and in so many other areas. I
also thank Chairmen Hensarling and Huizenga; and, of course, my good
friend and colleague from the great State of New York, Nydia Velazquez,
the champion for small businesses; and Mr. McHenry, who has spent a
great deal of his time focusing on job creation and access to capital
for small businesses.
This bill passed in the last Congress under suspension with
overwhelming bipartisan support. This bill is intended to make it
easier for startup companies to raise money from sophisticated
investors by allowing sophisticated angel investors to pool their money
into a single venture capital fund, which allows them to leverage their
resources and make investments more effectively.
The bill does this by increasing the number of investors who can
invest in venture capital funds that are exempt from SEC oversight.
Under current law, a fund can be exempt from SEC oversight if it has
fewer than 100 investors and its securities are not offered publicly.
This is the exemption that the majority of venture capital funds
currently rely on.
Venture capital funds are long-term investors that provide much-
needed equity capital to startups and other small companies. The fact
that venture capital funds are subject to the same limitation on the
number of investors they can have as other private funds, like hedge
funds and private equity funds, has limited the growth of venture
capital funds.
Specifically, it has limited the ability of angel investors--all of
whom are sophisticated, accredited investors--to coordinate their
investments by grouping together into a single venture capital fund in
order to invest in a promising startup company.
This bill will accommodate these types of angel investors who want to
coordinate their investments by increasing the number of accredited
investors they can have before they are required to register with the
SEC--from 100 investors to 250 investors.
The bill is also narrowly tailored to avoid raising investor
protection concerns. It only raises the investor threshold to 250 for
venture capital funds that meet the SEC's rigorous five-part definition
of a venture capital fund.
Finally, the bill is limited to funds that have less than $10 million
in capital invested. So we are only providing relief to relatively
small venture capital funds that do not pose a huge risk to the capital
markets.
This bill is the product of genuine hard work and bipartisan
compromise. Again, I thank Mr. McHenry for his leadership, along with
Ms. Velazquez, Ranking Member Waters, and Chairman Hensarling for their
hard work on this bill.
I urge my colleagues to join me--and I believe the majority in this
body--in supporting this important bill to provide easier and better
access to capital for small businesses.
Mr. HUIZENGA. Mr. Speaker, I yield 2 minutes to the gentleman from
Illinois (Mr. Hultgren), the vice chairman of our Subcommittee on
Capital Markets, Securities, and Investments.
Mr. HULTGREN. Mr. Speaker, I rise today to speak in support of H.R.
1219, the Supporting America's Innovators Act of 2017. This is another
example of great bipartisan legislation that has been produced by the
House Financial Services Committee. Mr. McHenry and Ms. Velazquez
should be commended for their hard work on this important piece of
legislation.
Startups and small businesses are the primary job creators and
engines for growth in our economy. Unfortunately, the Securities and
Exchange Commission has not been focused enough on capital formation
aspects of its tripartite mission. This has left thousands of companies
interested in raising capital stuck complying with outdated regulations
that make it more difficult for them to invest in growing their
businesses. This means job creation and wealth building are not
reaching their full potential.
Certainly, the SEC should not overlook investor protection, but the
number one concern of my constituents is jobs. This directly impacts
their ability to put food on the table, get the car repaired, and pay
for college.
[[Page H2762]]
Today we have the opportunity to consider a noncontroversial bill
that will make it easier for companies to raise capital without
undermining investor production.
The Supporting America's Innovators Act of 2017 increases the limit
on the number of individuals who can invest in certain venture capital
funds before those funds must register with the SEC as investment
companies. Currently, the Investment Company Act limits the number of
investors in an investment company fund to 100 if the fund is to be
exempt from registration with the SEC, a burdensome requirement.
This would permit angel funds, which run syndicates that allow
accredited investors to participate in investing in startups, to obtain
funds from a greater number of investors. As a result, investors will
benefit from investment opportunities that otherwise they would have no
access to.
As noted by Kevin Laws of AngelList in written testimony before the
Subcommittee on Capital Markets, Securities and Investments:
``With online fundraising and general solicitation becoming more
common because of the JOBS Act, companies are bumping up against the
limit more frequently. The current limit now acts as a brake on the
amount of money the company wanted to raise, leaving tens of millions
of dollars on the table that did not go into startups.''
Mr. Speaker, I urge all of my colleagues to vote in support of this
legislation. A nearly identical bill passed the House last Congress
with 388 votes in support, and we passed the bill out of the Financial
Services Committee with almost no opposition.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield 3 minutes to
the gentleman from Illinois (Mr. Foster), a member of the Subcommittee
on Capital Markets, Securities, and Investments.
Mr. FOSTER. Mr. Speaker, I rise today in support of H.R. 1219, the
Supporting America's Innovators Act of 2017.
This bill will increase the number of accredited investors who can
invest in an angel or venture fund before requiring the fund to
register as an investment company. This will encourage capital
formation in one of the major types of funds that seed startups and
helps bring new ideas to market.
Innovation and invention are integral to economic growth, but new
ideas are only the first step in the type of businesses that can grow
the economic pie. It is crucial that these companies have access to
capital to grow and to bring the product to market. Competition from
startups, bolstered by access to funding, creates jobs and forces
incumbent firms to stay aggressive in their own research and
development.
H.R. 1219 is exactly the type of bipartisan legislation that Congress
should be considering to facilitate capital formation.
This bill will make it easier to form a fund made up of sophisticated
investors who can assess and bear the risks that come with investing in
startups. These funds are capped at $10 million in paid-in and callable
capital. This means the funds will largely be engaged in angel
investing that helps early-stage investors build a better mousetrap.
These funds can often be cheaper for the company and can be structured
as equity debt or a combination of both.
A fund like this can bring expertise and connections that increase
the likelihood of success for the inventor. It can also spread the risk
and rewards for investors because it is important to note that not
every invention will turn into the next big thing.
We need a startup ecosystem that encourages the testing of new ideas
and products with a wide range of risks and rewards. This bill is a
targeted measure to help create that ecosystem by enhancing the ability
of early-stage companies to get funding.
Mr. Speaker, I urge my colleagues to support the bill today.
Mr. HUIZENGA. Mr. Speaker, I yield 2 minutes to the gentleman from
Maine (Mr. Poliquin).
Mr. POLIQUIN. Mr. Speaker, the responsibility of those of us in
Congress is to create a predictable and streamlined set of regulations,
such that we have an environment for the private sector, for businesses
to invest, to grow, and to hire more of our constituents. And when that
happens, Mr. Speaker, the folks in America live better lives with
fatter paychecks and better futures.
Now, we all know that small businesses need more help than large
companies when it comes to dealing with the regulatory environment
because they don't have the firepower, the horsepower, the manpower to
deal with these complex regulations.
When you start a small business, one of the most important
ingredients is access to capital. You need investment funds, whether
you are starting a bakery in Lewiston, Maine, or an auto body shop in
Oxford, Maine. Now, that is why H.R. 1219 is important, and I want to
congratulate Congressman Patrick McHenry for bringing this to the
floor.
By increasing the number of investors capped from 100 to 250
individuals who are qualified to make these investments to help small
businesses, it will provide more money, more funding, more capital for
small businesses and startups to grow, to start, and to create more
jobs for folks back home.
Government is in the business and should be in the business to help
our families, not hurt them. That is why I encourage all of my fellow
colleagues here in the House, Republicans and Democrats, to support
this good, commonsense bill.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such
time as I may consume.
Mr. Speaker, we have received tremendous support for this
legislation, and we are extremely hopeful that we will be able to come
together on both sides of the aisle and continue to give support to our
small businesses. As a matter of fact, we have a lot of those in the
Congress of the United States--a lot of Members, rather--who talk about
supporting small businesses, but we don't often see real legislation
that can do that. This is such legislation, and I cannot thank Ms.
Velazquez and Mr. McHenry enough for the way that they have worked on
this legislation together.
{time} 0945
Mr. Speaker, I include in the Record some of the letters of support
that we have received from the Center for American Entrepreneurship,
the Internet Association, TechNet, Angel Capital Association, and
AngelList.
Center for
American Entrepreneurship,
April 25, 2016.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services, House of
Representatives, Washington, DC.
Hon. Maxine Waters,
Ranking Member, Committee on Financial Services, House of
Representatives, Washington, DC.
Dear Chairman Hensarling and Ranking Member Waters: On
behalf of the Center for American Entrepreneurship, I write
today to express our strong support for legislation offered
by Rep. Patrick McHenry: H.R. 4854, the ``Supporting
America's Innovators Act of 2016,'' and H.R. 4855, the ``Fix
Crowdfunding Act of 2016.'' Both bills will significantly
enhance American entrepreneurs' access to the capital they
need to launch and grow new businesses and, in doing so,
accelerate economic growth and job creation.
CAE is a nonpartisan policy and advocacy organization whose
mission is to engage policymakers in Washington and across
the nation regarding the critical importance of entrepreneurs
and start-ups to innovation, economic growth, and job
creation, and to pursue a comprehensive policy agenda
intended to significantly enhance the circumstances for new
business formation, survival, and growth.
As you may know, recent research has demonstrated that
start-ups are disproportionately responsible for the
innovations that drive economic growth and account for
virtually all net new job creation. Alarmingly, recent
research has also demonstrated that, despite impressive
strength in certain cities around the country, rates of new
business formation in America have been declining for 30
years, and the decline is occurring in all 50 states, in all
but a handful of the 360 metro areas examined, and across a
broad range of industry sectors, including high-technology.
Given the importance of thriving entrepreneurship to
innovation, economic growth, and job creation, such
circumstances amount to nothing less than a national
emergency.
When asked or surveyed, entrepreneurs across the country
report that access to sufficient capital on affordable terms
remains among their principal challenges. The legalization of
crowdfunding by way of the Jumpstart Our Business Start-ups
(JOBS) Act in 2012 was a major step forward in meaningfully
enhancing innovators' access to investment capital. But
further reforms are necessary to realize the Act's full
potential to promote entrepreneurship, growth, greater
opportunity, and job creation.
H.R. 4854, the ``Supporting America's Innovators Act''
would amend an exemption
[[Page H2763]]
under the Investment Company Act of 1940 by increasing the
investor limitation from 100 to 500 persons for qualifying
venture capital funds that purchase no more than $10 million
in securities in any one issuer, adjusted for inflation.
Lifting the current arbitrary cap would not only increase
entrepreneurs' access to additional investors, but will
protect investors through a greater diversification of risk.
H.R. 4855, the ``Fix Crowdfunding Act'' would amend the
crowdfunding aspects of the JOBS Act in a number of important
ways:
Raising the annual issuance amount from $1 million to $5
million;
Exempting the beneficial owners of crowdfunding securities
from counting towards the Exchange Act 12(g) requirement
triggering public reporting;
Exempting special purpose vehicles (SPVs) created for the
purpose of investing in a single issuer of crowdfunding
securities from registration as investment companies under
the Investment Company Act, and permitting SPVs considered as
``venture capital funds'' to offer crowdfunding securities;
Revising the investment cap so that investors earning
$100,000 or less may invest up to 5 percent of their annual
income or net worth, and investors earning more than $100,000
to invest up to 10 percent of their annual income or net
worth;
Defining the requirements for a crowdfunding intermediary
to disqualify an issuer when the intermediary, through a
background check or other means, determines that the issuer
knowingly made untrue statements or omissions related to
material facts, or engaged in fraud;
Defining a crowdfunding intermediary's potential liability
to include only instances when the intermediary knowingly
makes untrue statements or omissions related to material
facts or knowingly engages in fraud;
Permitting an issuer to ``test the waters'' by soliciting
non-binding commitments of interest from potential investors
without filing information with the SEC, provided that no
funds are accepted by the issuer and any material changes
that occur between the solicitation and the offer are
highlighted to potential investors; and,
Providing a 5-year grace period for portals to make a good-
faith effort to comply with all crowdfunding rules, and
prohibits the SEC from bringing any enforcement actions
during that period.
Both bills help strike a more appropriate balance between
the twin priorities of capital formation and investor
protection. In doing so, these reforms significantly enhance
the prospects for new business formation, survival, and
growth at a time when faster economic growth is necessary to
address challenges such as underemployment, stagnant middle-
class wages, the income and wealth gaps, and alarmingly high
levels of poverty and dependence.
CAE commends you for your leadership to promote American
entrepreneurship and innovation and greatly appreciates your
thoughtful consideration of the reforms in H.R. 4854 and H.R.
4855. We look forward to continuing to work with you, the
bills' sponsors, and the Committee's distinguished members on
behalf of American entrepreneurs and start-ups.
Sincerely,
Robert E. Litan,
Chairman, Center for American
Entrepreneurship.
____
Internet Association,
June 10, 2016.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services, House of
Representatives, Washington, DC.
Hon. Maxine Waters,
Ranking Member, Committee on Financial Services, House of
Representatives, Washington, DC.
Dear Chairman Hensarling and Ranking Member Waters: The
Internet Association appreciates your attention to the issues
impacting startups, and urges support for the Supporting
America's Inventors Act of 2016 (H.R. 4854) and Fix
Crowdfunding Act (H.R. 4855). Both bills are common-sense,
meaningful reforms that will improve startups' access to
capital across the United States. There are a number of
internet based funding platforms that will benefit directly
from this legislation as well as the broader internet
ecosystem.
The Internet Association works to advance policies that
foster innovation, promote economic growth, and empower
people through the free and open internet. Access to capital
funding is critical to internet companies as they scale
innovative business models that now account for six percent,
or nearly $1 billion, of our GDP. Empowering startups through
efficient mechanisms for investors and innovators to access
capital will ultimately grow our economy and help create the
internet industry leaders of tomorrow. The internet industry
is unique in the low barrier to entry for new ideas and
increased competition. Legislation that promotes growth
through internet platforms and for internet startups will
benefit the economy at large.
The Supporting America's Inventors Act of 2016 and Fix
Crowdfunding Act both take common sense steps to empower
innovators through access to capital. The Supporting
America's Inventors Act of 2016 raises the number of
investors permitted in qualifying venture capital funds from
100 to 500 persons, eliminating an arbitrary cap and instead
creating a more efficient environment for investors to grow
startups. The Fix Crowdfunding Act would make necessary
reforms to Title III of the JOBS Act allowing for more
efficient and attractive investment crowdfunding, including
raising the annual limit on issuers and clarifying certain
definitions.
We commend Representative McHenry for his commitment to
create a thriving startup ecosystem by enhancing the
opportunity for investment in our innovation economy. We urge
the Committee to support these bills.
Respectfully Submitted,
Michael Beckerman,
President & CEO.
____
TechNet,
Washington, DC, June 10, 2016.
Hon. Patrick McHenry,
House Majority Chief Deputy Whip,
Washington, DC.
Dear Representative McHenry: TechNet, the national,
bipartisan network of innovation economy CEOs and senior
executives, is pleased to offer our support for your efforts
to provide American innovators with the tools necessary to
launch, fund, and scale their companies.
In particular, we are pleased to support the Supporting
America's Innovators Act of 2016 (H.R. 4854) and the Fix
Crowdfunding Act (H.R. 4855), both of which provide much
needed reforms to the laws governing early stage financing of
dynamic startups.
The Supporting America's Innovators Act will expand the
pool of investors eligible to participate in venture capital
funds, creating a more robust venture funding marketplace and
increasing the amount of capital startups can potentially
raise.
The Fix Crowdfunding Act contains a number of sensible and
timely reforms to the recently finalized Title III
crowdfunding rules of the JOBS Act. In particular, the
legislation defines the requirements and authority by which
intermediaries can disqualify issuers who make untrue
statements or engage in fraud. The legislation also makes
important reforms that will allow more companies to ``test
the waters'' and solicit non-binding commitments from
potential crowdfunding investors without filing with the
Securities and Exchange Commission. Finally, the legislation
creates a powerful incentive for more crowdfunding portals to
enter the marketplace by providing a 5-year grace period for
portals to make a good-faith effort to comply with all
crowdfunding rules.
Taken together, these bills will expand access to early-
stage funding, improving the process by which innovators
scale their companies and create American jobs.
Thank you for your leadership on these important issues
affecting the innovation economy. TechNet looks forward to
working with you to advance this legislation.
Sincerely,
Linda Moore,
President and CEO.
____
Angel Capital Association,
Overland Park, KS, March 7, 2017.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
Washington, DC.
Dear Chairman Hensarling: On behalf of the 13,000 members
of the Angel Capital Association representing accredited
individual angel investors, accredited on-line platforms and
family offices, we write in support of H.R. 1219, Supporting
America's Innovators Act of 2017 sponsored by Reps. Patrick
T. McHenry (R-NC) and Nydia M. Velazquez (D-NY).
Angel investors are directly engaged in supporting American
startup companies and providing much needed early stage
capital and mentoring to emerging businesses and
entrepreneurs. Angel investors invest their capital in new
ways, with many now choosing to pool their money in an angel
fund or syndicate on an online investing platform for
accredited investors. Two of the most well-known are the
Golden Seeds fund which invests nationally in women-led
companies and AngelList, which supports numerous investor
syndicates on its platform. Changes created in the JOBS Act
have allowed angel funds and online platforms of accredited
investors to catalyze investors across the country to support
startups. Platforms such as AngelList, FundersClub and
CircleUp have opened opportunities for entrepreneurs to reach
more investors and have expanded the capital opportunities
for startups.
The ability of these venture funds has been limited by out-
of-date regulations which have restricted these funds to no
more than 99 investors. This 99-investor cap is in reality
more like 90 investors because fund managers need to take
into effect potential splitting of assets in divorce, death
or other unforeseen circumstances.
H.R. 1219 will allow up to 250 accredited investors--
investors with at least $200,000 in minimum income (or
$300,000 for a couple or $1,000,000 in net worth, not
including their residence--to invest in an angel fund or
syndicate with a maximum of $10 million in assets. This
change in legislation will allow more investors to invest in
these venture funds, creating more capital opportunities for
American entrepreneurs and more American jobs.
The Angel Capital Association worked closely with the
Investment Company Institute and other stakeholders to craft
what has become bi-partisan legislation by Representatives
McHenry and Velazquez. We
[[Page H2764]]
urge the Members of the Committee to support this legislation
and seek quick consideration by the broader House of
Representatives.
Sincerely,
Marianne Hudson,
Executive Director.
____
AngelList,
San Francisco, CA, June 9, 2016.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services, House of
Representatives, Washington, DC.
Hon. Maxine Waters,
Ranking Member, Committee on Financial Services, House of
Representatives, Washington, DC.
Dear Chairman Hensarling and Ranking Member Waters: Thank
you for your recent hearings on ``The JOBS Act at Four:
Examining Its Impact and Proposals to Further Enhance Capital
Formation.'' I was honored to testify on the positive impacts
the JOBS Act has had on startup capital formation and the
potential improvements to the JOBS Act.
AngelList helps early stage companies raise financing based
on the statutes laid out in the JOBS Act and subsequent SEC
no-action letters. To date, we have helped over a quarter
billion dollars from accredited investors reach almost one
thousand companies using the online portal provisions to make
such financings much more efficient.
We have learned a great deal about the early stage capital
markets and how they function online. From that perspective,
we believe that several of the bills under consideration
would improve startup financing.
H.R. 4854, the ``Supporting America's Innovators Act of
2016'', lifts the investor limit on LLCs created to finance
companies. One very good outcome of the move online has been
that more investors can invest smaller amounts. This allows
diversification for investors and more access to capital for
companies. However, smaller investors often band together in
a formal vehicle (usually a limited liability company or
LLC). This means the company deals with a single investor
(the LLC) and the investors can rely on a trusted lead to
review the documents and make decisions on behalf of the
investors. The JOBS Act lifted the shareholder limit to
2,000, but left in place the 99 limit on organized investors
that the LLC is subject to. This act lifts that limit to 499
to allow more investors in and more capital be raised by the
companies.
As an online platform, most of our investors expect our
investments to be structured that way, and many angel groups
also form them to invest in startups. We believe this law
allows more sophisticated accredited investor activity.
H.R. 4855, the ``Fix Crowdfunding Act'', takes into account
much of what has been learned in the accredited investor
space in the last 3 years and applies it to the recently
released crowdfunding regulations. There are three areas in
particular this bill addresses that we believe are important.
First, it fixes the so-called ``12g'' problem by which
crowdfunded companies are subject to public reporting
requirements at a very low asset threshold. That issue makes
it difficult for crowdfunded companies to raise subsequent
financing rounds and would dissuade many high growth
companies from using the provision. Fixing that problem makes
it more likely that high growth companies will consider
crowdfunding as an option. Second, the act allows special
purpose vehicles (like those LLCs referred to above in the
paragraph on H.R. 4854) to be used for crowdfunded offerings.
These benefit both investors and the companies. Finally, we
believe the ``test the waters'' provision is critical. Most
companies do not know whether they will be attractive to
investors beforehand; imposing high costs prior to finding
that out serves as a deterrent without any offsetting
investor protection benefit. The ``test the waters''
provision will allow a crowdfunded company to incur the legal
costs only after it knows that it is likely to raise (but
still prior to accepting any investor funds).
Finally, we feel that H.R. 4852, the ``Private Placement
Improvement Act of 2016'' addresses several issues that
affect the startup community. It clarifies that the JOBS Act
was intended to remove burdensome filing requirements that
would be difficult for early stage startups without full-time
lawyers to help. We at AngelList believe transparency has a
very positive effect on markets. We have made several
suggestions in a letter to the SEC (https://www.sec.gov/
comments/s7-06-13/s70613-37.pdf) as to how this can be
achieved without significant burden through use of modern
technology. We believe this act would provide good guidelines
to the SEC about the intent of the JOBS Act in ways that
would encourage that avenue to transparency rather than
additional burden that we do not believe helps investors.
We look forward to engaging where we can to help further
both investor protections and capital formation.
Thank You,
Kevin Laws,
Chief Investments Officer.
Ms. MAXINE WATERS of California. Mr. Speaker, I reserve the balance
of my time.
Mr. HUIZENGA. Mr. Speaker, I yield 2 minutes to the distinguished
gentleman from Arkansas (Mr. Hill).
Mr. HILL. Mr. Speaker, I rise in strong support today of H.R. 1219,
the Supporting America's Innovators Act, introduced by the gentleman
from North Carolina (Mr. McHenry), the chief deputy whip. I am proud to
have his leadership in promoting capital formation in our country.
Yesterday, as he has noted, marks the fifth anniversary of the JOBS
Act, which has had a positive impact on easing capital formation woes
for small businesses and startups.
I am proud to represent and have the opportunity to work every day
with The Venture Center in Little Rock and its FinTech Accelerator
program, and the innovation hub in North Little Rock and its medical
technology innovation hub. These high-tech innovations, combined with
angel funds, give good-paying job opportunities to people out in the
heartland and not just on the East and West Coasts.
But in order for these innovative startups to grow, they have got to
have access to greater sources of angel capital, and raising capital in
rural America is a challenge.
Having helped design and offer private placements for emerging
companies during my whole career, and participating in angel funds in 2
decades prior to coming to Congress, I know firsthand the importance of
having a multitude of options for our small businesses to raise
capital, no matter what their stage of formation.
This bill builds on the success of the JOBS Act by providing an
update to a limit set in 1940, Mr. Speaker, limiting the number of
accredited investors that can participate in a qualified venture fund.
I am glad we are rushing to a change since 1940. And this simple change
from 100 to 250 really allows more angel investors to participate in
funds of this nature across the country and gives particular advantage
off the East and West Coasts.
I thank the chairman for the time and my good friend from North
Carolina for his leadership. I urge my colleagues on both sides of the
aisle to support this worthy measure.
Ms. MAXINE WATERS of California. Madam Speaker, I continue to reserve
the balance of my time.
Mr. HUIZENGA. Madam Speaker, I yield 2 minutes to the gentleman from
Minnesota (Mr. Emmer).
Mr. EMMER. Madam Speaker, I rise today in support of the Supporting
America's Innovators Act of 2017.
Far too often, during my travels throughout Minnesota's Sixth
District, I hear frustrations from small-business owners and
entrepreneurs about the difficulties they face gaining access to
working capital.
With Dodd-Frank's one-size-fits-all regulation being imposed on the
banks and credit unions that drive America, our Nation's job creators
struggle to grow existing businesses and to even start new ones.
Today's small business is tomorrow's big business, and if our
entrepreneurs and job creators are to succeed, we must remove the
roadblocks currently standing in their way.
Companies that started in a garage are now Fortune 500 companies and
global giants that provide goods and services across the globe. These
include many brands and companies we all use each and every day such as
Apple, Amazon, Microsoft, and even Minnesota's own, Medtronic. They all
started with a dream, a lot of hope, and necessary access to tools,
resources, and, most importantly, working capital.
Not only does the limited access to working capital affect our State
and local economies, it impacts opportunities and jobs for hardworking
Americans. Small businesses are responsible for nearly 70 percent of
new jobs in this country. This legislation will help put Americans to
work.
The Supporting America's Innovators Act updates current law to
increase the number of individuals who are able to invest in and
support startups and small businesses across the country. This bill
will help jump-start capital formation for local businesses and
entrepreneurs, enabling Main Street America to not just survive but to,
once again, thrive.
I want to thank Congressman McHenry for introducing this bill that
received, again, near unanimous support in the committee, and I
encourage all my colleagues on both sides of the aisle to support this
important legislation.
Ms. MAXINE WATERS of California. Madam Speaker, I continue to reserve
the balance of my time.
[[Page H2765]]
Mr. HUIZENGA. Madam Speaker, may I inquire as to the balance of time
each side has left?
The SPEAKER pro tempore (Ms. Foxx). The gentleman from Michigan has
14 minutes remaining. The gentlewoman from California has 15 minutes
remaining.
Mr. HUIZENGA. Madam Speaker, I yield 2 minutes to the gentleman from
Ohio (Mr. Davidson).
Mr. DAVIDSON. Madam Speaker, I thank Chairman Huizenga for the work
on this with Patrick McHenry and the folks on the other side of the
aisle. It is nice to come here and see something that is truly
collaborative and underway that helps businesses.
Prior to coming to Congress last year, I spent the past 16 years
growing manufacturing companies in Ohio, so I know firsthand how
difficult it is to acquire capital to start and operate and grow small
businesses. Businesses that overcome the challenges are faced with
numerous regulatory roadblocks that further hinder their growth. Many
of those have come at the hands of regulatory frame works like Dodd-
Frank.
But this bipartisan measure that we are talking about today has the
opportunity to help the challenges with capital acquisition that
government has created and continues to create. Currently, the
Investment Company Act of 1940 requires any qualified venture fund over
100 to register with the Securities and Exchange Commission.
The real burden of these regulations hits small companies in middle
America like Ohio's Eighth District where, unlike major cities,
particularly on the coast, we do not have as many options for raising
capital.
Not every company seeks to become the next billion-dollar
blockbuster, but some of them do. All these companies offer great jobs
and give many people the dignity of work, but they can also provide
great returns. So we are crowding out investment opportunities, and we
are crowding out job opportunities.
This is why I am pleased to support H.R. 1219, the Supporting
America's Innovators Act of 2017, which simply increases the cap to
allow up to 250 investors to be exempt from registration for qualified
venture capital funds, allowing America's small businesses the
flexibility to operate and grow their companies, hire employees, and
innovate.
Last year, this Congress passed legislation similar to H.R. 1219 on a
bipartisan vote of 388-9. I urge my colleagues to vote ``yes'' on H.R.
1219 and, perhaps, increase its margin of victory.
Ms. MAXINE WATERS of California. Madam Speaker, I continue to reserve
the balance of my time.
Mr. HUIZENGA. Madam Speaker, I yield 2 minutes to the gentleman from
Indiana (Mr. Hollingsworth), a new member of our Financial Services
Committee.
Mr. HOLLINGSWORTH. Madam Speaker, I also rise in support of H.R.
1219. I absolutely believe that the time has come for us to modernize
how capital gets to our small businesses.
Prior to Congress, I have a history in business, so I fundamentally
understand that having a better mousetrap is not enough. Small
businesses need capital, need access to more capital in order to grow
and get their innovations out to market. They also need access to these
sophisticated, accredited investors so that they can get the advice
that they need in order to get those better mousetraps out to the
people who need them, want to buy them, and want to use them to better
their lives.
Fundamentally, everybody can agree that we want Americans to have
more economic opportunity, and many Americans find that economic
opportunity by starting small businesses or by being a part of small
businesses, by investing in small businesses, by working for and with
small businesses.
Whether it is a startup in New Albany, Indiana, or a small company
growing in Franklin, Indiana, these businesses need access to capital
to realize the dreams of their founders, the dreams of their investors,
and the dreams of their employees.
Quite simply, H.R. 1219 provides them with the access to more
accredited investors, enabling them and empowering them to bring their
innovations to market. I am excited to be a cosponsor of this important
legislation, and I thank all of my colleagues in the Financial Services
Committee, as well as, hopefully, on the floor later today, for their
support of this important legislation.
Ms. MAXINE WATERS of California. Madam Speaker, I continue to reserve
the balance of my time.
Mr. HUIZENGA. Madam Speaker, I yield as much time as he may consume
to the gentleman from Texas (Mr. Hensarling), chairman of the Financial
Services Committee.
Mr. HENSARLING. Madam Speaker, first, I want to thank the gentleman
from Michigan, not only for yielding but, more importantly, for his
leadership in helping improve our capital markets and our economy here.
I want to thank all of the Republican and Democrat cosponsors of H.R.
1219, particularly our vice chairman of the full committee Mr. McHenry
of North Carolina, for his leadership and also Ms. Velazquez on the
other side of the aisle for her leadership on this issue as well. Both
of these colleagues are senior members of the committee which I have
the honor of chairing.
Madam Speaker, we know that while optimism and confidence in our
economy are up considerably over the last few months, our Nation still
has a way to go to experience the robust economic growth the American
people have experienced in the past of which they also deserve.
One obvious reason that the economy continues to limp along is
bureaucratic burdens imposed by Washington's top-down regulations on
America's small businesses on Main Street.
I got a message from a gentleman by the name of Larry, a small-
business owner in Mabank, Texas, who I have the privilege of
representing here in Congress, and he summed it up fairly well. He
said: ``So many businesses have to deal with regulations and taxes that
didn't exist a few years ago. It is especially hard on smaller
businesses. While large companies have their own staff of attorneys and
the capital to comply with regulations, small businesses don't.''
So, Madam Speaker, as my colleagues on the Financial Services
Committee know all too well, because we have had countless witnesses
before our committee to attest to such, Washington has inflicted upon
Main Street America a complex set of burdensome and expensive and
confusing regulations.
{time} 1000
Many were written, again, with the largest public companies in mind,
but they burden small companies and hurt their ability to access
capital. That is exactly what Larry of Mabank, Texas, has told me, and
I believe it.
So, clearly, Congress should work, preferably on a bipartisan basis,
to level the playing field while maintaining fair and efficient capital
markets, protecting investors, and allowing small companies the chance
to succeed.
We can make progress on these goals today by advancing this
bipartisan bill, the Supporting America's Innovators Act. This bill was
approved by the Financial Services Committee with the overwhelming
support of Republicans and Democrats. The vote in committee was 54-2.
In addition, a similar bill passed the House last year overwhelmingly
on a bipartisan basis.
Madam Speaker, these vote totals demonstrate that just about
everyone--Republican and Democrat--agrees that this commonsense
legislation will indeed help grow our economy.
H.R. 1219 specifically increases the limits on the number of
individuals from 100 to 250 who invest in certain venture capital funds
before those funds are forced to register with the SEC as ``investment
companies.'' This change would permit angel and venture funds to better
help accredited investors invest in small-business startups. These
early stage investors play a vital role in helping many small
businesses get their start. In 2015, angel investors deployed nearly
$25 billion to 71,000 different startups across our Nation. In the
first quarter of 2017, venture capital invested more than $16 billion
in almost 1,800 startups.
If anyone here, for some reason, doubts the impact these investors
can have on our Nation's economic growth, let me remind them that
companies such as Amazon, Costco, Google, Facebook, and Starbucks were
all first funded by angel investors. Let's also remember, Madam
Speaker, that almost half of the people who work in this country own or
work for small
[[Page H2766]]
businesses. They create nearly historically two-thirds of the new jobs
in America. So clearly our economy works better for working Americans
when small businesses thrive and have access to capital and credit they
need to innovate, expand, and create jobs.
The Supporting America's Innovators Act modernizes a regulation to
enhance the ability for startups and small businesses to receive
critical funding and capital from the private markets and, in
particular, angel investors and venture capital. Undoubtedly it will
help today's small-business startups become the next great American
entrepreneurial success story and, in doing so, help invigorate
economic growth and help create more American jobs.
I urge the adoption of H.R. 1219.
Ms. MAXINE WATERS of California. Madam Speaker, I have no further
requests for time, and I yield myself the balance of my time.
Madam Speaker, I am pleased that, for the first time this Congress,
committee Republicans have brought to the House floor a bill that has
broad bipartisan support. Oftentimes, the opposite side of the aisle on
our committee take a partisan approach to legislation and sometimes do
not express a lot of interest in the views of the opposite side of the
aisle or the millions of Americans whom they represent. However, in
contrast, this bill before us today is the product of thoughtful,
bipartisan compromise and will help startup companies and their
investors equally. Madam Speaker, this is how laws should be made.
Indeed, last Congress, Mr. McHenry and I worked together to promote
liquidity in the secondary market for startup company stock by creating
a clearer path for startup investors to resell their stock. The result
of our bipartisan efforts was the Reforming Access for Investments in
Startup Enterprises Act, which became law in 2015, along with seven
other bipartisan, financial services bills included in the Fixing
America's Surface Transportation Act.
Going forward, I hope that my friends on the opposite side of the
aisle will remember what we can achieve when we work together. So,
again, I thank both Mr. McHenry for reaching across the aisle and Ms.
Velazquez for working with me on H.R. 1219, the Supporting America's
Innovators Act of 2017. I urge all of my colleagues to join me and vote
``yes.''
Madam Speaker, I yield back the balance of my time.
Mr. HUIZENGA. Madam Speaker, I yield myself such time as I may
consume.
Madam Speaker, as I close on this very important bill that we have
been talking about, H.R. 1219, I just want to say congratulations to
our sponsors, Congressman McHenry and Congresswoman Velazquez, for
their leadership on this, as well as my Capital Markets, Securities,
and Investments Subcommittee ranking member, Representative Maloney,
for working together to advance this commonsense bill.
As was pointed out by both the chairman and the ranking member, there
is strong bipartisan consensus that this bill is a winner for the
American people. Some people today, as they tee off the Masters, we
might say it is a 6-inch putt for the American people knowing that this
is good for them and good for the economy.
I want to encourage all of my colleagues on both sides of the aisle
to support this bill, H.R. 1219.
Madam Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. All time for debate has expired.
Pursuant to House Resolution 242, the previous question is ordered on
the bill.
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.
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. HUIZENGA. Madam Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, this 15-
minute vote on passage of the bill will be followed by a 5-minute vote
on agreeing to the Speaker's approval of the Journal, if ordered.
The vote was taken by electronic device, and there were--yeas 417,
nays 3, not voting 9, as follows:
[Roll No. 221]
YEAS--417
Abraham
Adams
Aderholt
Aguilar
Allen
Amodei
Arrington
Babin
Bacon
Banks (IN)
Barletta
Barr
Barragan
Barton
Bass
Beatty
Bera
Bergman
Beyer
Biggs
Bilirakis
Bishop (GA)
Bishop (MI)
Bishop (UT)
Black
Blackburn
Blum
Blumenauer
Blunt Rochester
Bonamici
Bost
Boyle, Brendan F.
Brady (PA)
Brady (TX)
Brat
Brooks (AL)
Brooks (IN)
Brown (MD)
Brownley (CA)
Buchanan
Buck
Bucshon
Budd
Burgess
Bustos
Butterfield
Byrne
Calvert
Carbajal
Cardenas
Carson (IN)
Carter (GA)
Carter (TX)
Cartwright
Castor (FL)
Castro (TX)
Chabot
Chaffetz
Cheney
Chu, Judy
Cicilline
Clark (MA)
Clarke (NY)
Clay
Clyburn
Coffman
Cohen
Cole
Collins (GA)
Collins (NY)
Comer
Comstock
Conaway
Connolly
Conyers
Cook
Cooper
Correa
Costa
Costello (PA)
Courtney
Cramer
Crawford
Crist
Crowley
Cuellar
Culberson
Cummings
Curbelo (FL)
Davidson
Davis (CA)
Davis, Rodney
DeFazio
DeGette
Delaney
DeLauro
DelBene
Demings
Denham
Dent
DeSantis
DeSaulnier
DesJarlais
Deutch
Diaz-Balart
Dingell
Doggett
Donovan
Doyle, Michael F.
Duffy
Duncan (SC)
Dunn
Ellison
Emmer
Engel
Eshoo
Espaillat
Esty
Farenthold
Faso
Ferguson
Fitzpatrick
Fleischmann
Flores
Fortenberry
Foster
Foxx
Frankel (FL)
Franks (AZ)
Frelinghuysen
Fudge
Gabbard
Gaetz
Gallagher
Gallego
Garamendi
Garrett
Gibbs
Gohmert
Gonzalez (TX)
Goodlatte
Gosar
Gottheimer
Gowdy
Granger
Graves (GA)
Graves (LA)
Graves (MO)
Green, Al
Green, Gene
Griffith
Grijalva
Grothman
Guthrie
Gutierrez
Hanabusa
Harper
Harris
Hartzler
Hastings
Heck
Hensarling
Herrera Beutler
Hice, Jody B.
Higgins (LA)
Higgins (NY)
Hill
Himes
Holding
Hollingsworth
Hoyer
Hudson
Huffman
Huizenga
Hultgren
Hunter
Hurd
Issa
Jackson Lee
Jayapal
Jeffries
Jenkins (KS)
Jenkins (WV)
Johnson (GA)
Johnson (LA)
Johnson (OH)
Johnson, E. B.
Johnson, Sam
Jones
Jordan
Joyce (OH)
Kaptur
Katko
Keating
Kelly (IL)
Kelly (MS)
Kelly (PA)
Kennedy
Khanna
Kihuen
Kildee
Kilmer
Kind
King (IA)
Kinzinger
Knight
Krishnamoorthi
Kuster (NH)
Kustoff (TN)
Labrador
LaHood
LaMalfa
Lamborn
Lance
Langevin
Larsen (WA)
Larson (CT)
Latta
Lawrence
Lawson (FL)
Lee
Levin
Lewis (GA)
Lewis (MN)
Lieu, Ted
Lipinski
LoBiondo
Loebsack
Lofgren
Long
Loudermilk
Love
Lowenthal
Lowey
Lucas
Luetkemeyer
Lujan Grisham, M.
Lujan, Ben Ray
MacArthur
Maloney, Carolyn B.
Maloney, Sean
Marchant
Marino
Marshall
Massie
Mast
Matsui
McCarthy
McCaul
McClintock
McCollum
McGovern
McHenry
McKinley
McMorris Rodgers
McNerney
McSally
Meadows
Meehan
Meeks
Meng
Messer
Mitchell
Moolenaar
Mooney (WV)
Moore
Moulton
Mullin
Murphy (FL)
Murphy (PA)
Nadler
Napolitano
Neal
Newhouse
Noem
Nolan
Norcross
Nunes
O'Halleran
O'Rourke
Olson
Palazzo
Pallone
Palmer
Panetta
Pascrell
Paulsen
Payne
Pearce
Pelosi
Perlmutter
Perry
Peters
Peterson
Pingree
Pittenger
Pocan
Poe (TX)
Poliquin
Polis
Posey
Price (NC)
Quigley
Raskin
Ratcliffe
Reed
Reichert
Renacci
Rice (NY)
Rice (SC)
Richmond
Roby
Roe (TN)
Rogers (AL)
Rogers (KY)
Rohrabacher
Rokita
Rooney, Francis
Rooney, Thomas J.
Ros-Lehtinen
Rosen
Roskam
Ross
Rothfus
Rouzer
Roybal-Allard
Royce (CA)
Ruiz
Ruppersberger
Rush
Russell
Rutherford
Ryan (OH)
Sanchez
Sanford
Sarbanes
Scalise
Schakowsky
Schiff
Schneider
Schrader
Schweikert
Scott (VA)
Scott, Austin
Scott, David
Sensenbrenner
Serrano
Sessions
Sewell (AL)
Shea-Porter
Sherman
Shimkus
Shuster
Simpson
Sinema
Sires
Smith (MO)
Smith (NE)
Smith (NJ)
Smith (TX)
Smith (WA)
Smucker
Soto
Speier
Stefanik
Stewart
Stivers
Suozzi
Swalwell (CA)
Takano
Taylor
Tenney
Thompson (CA)
Thompson (MS)
Thompson (PA)
Thornberry
Tiberi
Tipton
Titus
Tonko
Torres
Trott
Turner
Upton
Valadao
Vargas
Veasey
Vela
Velazquez
Visclosky
Wagner
Walberg
Walden
Walker
Walorski
Walters, Mimi
Walz
Wasserman Schultz
Waters, Maxine
Watson Coleman
Weber (TX)
Webster (FL)
Welch
Wenstrup
[[Page H2767]]
Westerman
Williams
Wilson (FL)
Wilson (SC)
Wittman
Womack
Woodall
Yarmuth
Yoder
Yoho
Young (AK)
Young (IA)
Zeldin
NAYS--3
Amash
Capuano
Lynch
NOT VOTING--9
Bridenstine
Cleaver
Davis, Danny
Duncan (TN)
Evans
King (NY)
McEachin
Slaughter
Tsongas
{time} 1031
Mr. CAPUANO changed his vote from ``yea'' to ``nay.''
Mses. SANCHEZ and SCHAKOWSKY changed their vote from ``nay'' to
``yea.''
So the bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
personal explanation
Ms. SLAUGHTER. Madam Speaker, I was unavoidably detained and missed
rollcall vote Nos. 217, 218, 219, 220, 221, and 222. Had I been
present, I would have voted ``aye'' on votes 220 and 221. I would have
voted ``nay'' on votes 217, 218, 219, and 222.
____________________