[Congressional Record Volume 163, Number 76 (Wednesday, May 3, 2017)]
[Senate]
[Pages S2724-S2725]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DAINES:
  S. 1031. A bill to amend provisions in the securities laws relating 
to regulation crowdfunding to raise the dollar amount limit and to 
clarify certain requirements and exclusions for funding portals 
established by such an Act; to the Committee on Banking, Housing, and 
Urban Affairs.
  Mr. DAINES. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1031

       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 ``Crowdfunding Enhancement 
     Act''.

     SEC. 2. CROWDFUNDING VEHICLES.

       (a) Amendments to the Securities Act of 1933.--The 
     Securities Act of 1933 (15 U.S.C. 77a et seq.) is amended--
       (1) in section 4A(f)(3) (15 U.S.C. 77d-1(f)(3)), by 
     inserting ``by any of paragraphs (1) through (14) of'' before 
     ``section 3(c)''; and
       (2) in section 4(a)(6)(B) (15 U.S.C. 77d(a)(6)(B)), by 
     inserting ``, other than a crowdfunding vehicle (as defined 
     in section 2(a) of the Investment Company Act of 1940 (15 
     U.S.C. 80a-2(a))),'' after ``any investor''.
       (b) Amendments to the Investment Company Act of 1940.--The 
     Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.) is 
     amended--
       (1) in section 2(a) (15 U.S.C. 80a-2(a)), by adding at the 
     end the following:
       ``(55) The term `crowdfunding vehicle' means a company--
       ``(A) whose purpose (as set forth in its organizational 
     documents) is limited to acquiring, holding, and disposing 
     securities issued by a single company in 1 or more 
     transactions and made pursuant to section 4(a)(6) of the 
     Securities Act of 1933 (15 U.S.C. 77d(a)(6));
       ``(B) that issues only 1 class of securities;
       ``(C) that receives no compensation in connection with such 
     acquisition, holding, or disposition of securities;
       ``(D) no associated person of which receives any 
     compensation in connection with such acquisition, holding or 
     disposition of securities unless such person is acting as or 
     on behalf of an investment adviser registered under the 
     Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.) or 
     registered as an investment adviser in the State in which the 
     investment adviser maintains its principal office and place 
     of business;
       ``(E) the securities of which have been issued in a 
     transaction made pursuant to section 4(a)(6) of the 
     Securities Act of 1933 (15 U.S.C. 77d(a)(6)), if both the 
     crowdfunding vehicle and the company whose securities it 
     holds are co-issuers;
       ``(F) that is current in its ongoing disclosure obligations 
     under section 227.202 of title 17, Code of Federal 
     Regulations;
       ``(G) the company whose securities it holds is current in 
     its ongoing disclosure obligations under section 227.202 of 
     title 17, Code of Federal Regulations; and
       ``(H) is advised by an investment adviser registered under 
     the Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.) 
     or registered as an investment adviser in the State in which 
     the investment adviser maintains its principal office and 
     place of business.''; and
       (2) in section 3(c) (15 U.S.C. 80a-3(c)), by adding at the 
     end the following:
       ``(15) Any crowdfunding vehicle.''.

[[Page S2725]]

  


     SEC. 3. CROWDFUNDING EXEMPTION FROM REGISTRATION.

       Section 12(g)(6) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78l(g)(6)) is amended--
       (1) by striking ``The Commission'' and inserting the 
     following:
       ``(A) In general.--The Commission'';
       (2) by striking ``section 4(6)'' and inserting ``section 
     4(a)(6)''; and
       (3) by adding at the end the following:
       ``(B) Treatment of securities issued by certain issuers.--
     An exemption under subparagraph (A) shall be unconditional 
     for securities offered by an issuer that had a public float 
     of less than $75,000,000 as of the last business day of the 
     issuer's most recently completed semiannual period, computed 
     by multiplying the aggregate worldwide number of shares of 
     the issuer's common equity securities held by non-affiliates 
     by the price at which such securities were last sold (or the 
     average bid and asked prices of such securities) in the 
     principal market for such securities or, in the event the 
     result of such public float calculation is zero, had annual 
     revenues of less than $50,000,000 as of the issuer's most 
     recently completed fiscal year.''.

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