[Congressional Record Volume 164, Number 46 (Thursday, March 15, 2018)]
[House]
[Pages H1634-H1642]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 REGULATION A+ IMPROVEMENT ACT OF 2017

  Mr. HENSARLING. Mr. Speaker, pursuant to House Resolution 773, I call 
up the bill (H.R. 4263) to amend the Securities Act of 1933 with 
respect to small company capital formation, and for other purposes, and 
ask for its immediate consideration in the House.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. Pursuant to House Resolution 773, the 
amendment printed in part D of House Report 115-595 is adopted, and the 
bill, as amended, is considered read.
  The text of the bill, as amended, is as follows:

                               H.R. 4263

       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 ``Regulation A+ Improvement 
     Act of 2017''.

     SEC. 2. JOBS ACT-RELATED EXEMPTION.

       Section 3(b) of the Securities Act of 1933 (15 U.S.C. 
     77c(b)) is amended--
       (1) in paragraph (2)(A), by striking ``$50,000,000'' and 
     inserting ``$75,000,000, adjusted for inflation by the 
     Commission every 2 years to the nearest $10,000 to reflect 
     the change in the Consumer Price Index for All Urban 
     Consumers published by the Bureau of Labor Statistics''; and
       (2) in paragraph (5)--
       (A) by striking ``such amount as'' and inserting: ``such 
     amount, in addition to the adjustment for inflation provided 
     for under such paragraph (2)(A), as''; and
       (B) by striking ``such amount, it'' and inserting ``such 
     amount, in addition to the adjustment for inflation provided 
     for under such paragraph (2)(A), it''.

  The SPEAKER pro tempore. The bill, as amended, shall be debatable for 
1 hour equally divided and controlled by the chair and ranking minority 
member of the Committee on Financial Services.
  The gentleman from Texas (Mr. Hensarling) and the gentlewoman from 
California (Ms. Maxine Waters) each will control 30 minutes.
  The Chair recognizes the gentleman from Texas.


                             General Leave

  Mr. HENSARLING. Mr. Speaker, I ask unanimous consent that all Members 
have 5 legislative days to revise and extend their remarks and submit 
extraneous material on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  There was no objection.
  Mr. HENSARLING. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I rise in very strong support of H.R. 4263, the 
Regulation A+ Improvement Act.
  I want to thank the sponsor of this bipartisan legislation, the 
gentleman from New Jersey (Mr. MacArthur). He has been a huge leader on 
all capital formation issues within our committee and in this Congress. 
He is a real asset. His business acumen is well positioned to help 
serve us, and his leadership on this bill should be commended.
  Mr. Speaker, although small companies are at the forefront of 
technological innovation and job creation, they often face significant 
obstacles in obtaining funding in our capital markets. These obstacles 
generally stem from the disproportionately larger burden that 
securities regulations, written principally for large public companies, 
instead place on small companies when they seek to go public.
  In 2012, the Jumpstart Our Business Startups Act, known as JOBS Act, 
sought to modernize and better tailor some of these regulations, 
including Reg. A, under our securities law. Reg.

[[Page H1635]]

A is a longstanding exemption from SEC registration that permits public 
offerings without formal registration as long as certain conditions are 
met.
  Prior to the JOBS Act, a small company seeking to use Reg. A was 
limited to raising $5 million of securities in a 12-month period. As 
you can imagine, over time, Mr. Speaker, Reg. A offerings became 
increasingly rare due to the relatively small offering size that was 
available and a requirement that Reg. A securities still comply with 50 
different State securities law registration and qualification 
requirements.
  Title IV of the JOBS Act attempted to address the antiquated 
Regulation A by directing the SEC to update it, which the SEC did in 
2015, under the moniker Reg. A+, by creating two tiers of Regulation A 
offerings and allowing certain securities to qualify for preemption 
from State securities law.
  Under the second tier, the SEC increased the amount companies can 
offer from $5 million to $50 million. Mr. MacArthur's legislation only 
pertains to the Tier 2 limit.
  Since Reg. A+ was implemented in 2015, small businesses have 
increasingly been able to use this tool to raise much-needed capital to 
expand their businesses and create new jobs in our economy. According 
to the SEC Office of Small Business Policy, as of November 2017, 69 
completed Reg. A+ offerings had raised a total of $611 million.
  Unfortunately, the $50 million cap leaves significant opportunity on 
the table for our startups, opportunity that could be better realized 
if the limit were increased to $75 million, which the Treasury 
Department has recommended as a potentially less costly alternative for 
startups to raise capital. Moreover, increasing the Reg. A+ limit will 
better position companies that want to use the exemption as an on-ramp 
to list publicly to bear the corresponding compliance burdens and still 
invest in jobs and growth.
  Mr. Speaker, more and more, we have seen IPOs of companies with 
products that we use every day--Uber, Facebook, Spotify, Snapchat--come 
after the company is already valued over $1 billion. For everyday 
investors, this often means missing out on some of the most dynamic 
growth stages of the company that would provide the highest rate of 
returns for them and their family, all while the wealthy, accredited 
investors and venture capital firms can invest early, and they get to 
rake in the better rates of return.
  With regulations disproportionately stacked against them, it isn't 
surprising that small companies so often are choosing to stay private. 
Many have no other choice. Again, after all, the SEC has estimated that 
the costs of going public, on average, are $2.5 million in regulatory 
costs for undergoing an IPO and annual compliance costs averaging $1.5 
million thereafter.
  Those costs stand in stark contrast to the $111,000 the SEC says is 
the average legal and auditing cost for Reg. A+ offerings. In other 
words, by utilizing Reg. A+, small businesses can raise significant 
capital while saving more than $2 million--$2 million that can be 
invested in jobs and research and other growth opportunities. This is 
why Reg. A+ is so important: it provides a more cost-effective way to 
raise equity capital early on in the growth stages of these companies.
  Additionally, Reg. A offerings enjoy preemption from State securities 
laws. Mr. Speaker, I hope every Member pays close attention to this. 
They may not know it.
  In 1980, when a startup computer company, by the way, called Apple 
decided to go public, the Commonwealth of Massachusetts decided the 
stock was too risky and barred its sale to individual investors in the 
State. Today, Apple's market valuation is almost $1 trillion. It is an 
American iconic brand and one of the largest companies in the world. 
And it is, again, potentially going to be the first public company with 
a trillion-dollar market cap. If you had bought 45 shares of Apple when 
it was offered at its IPO, by the end of last year you would have over 
$394,000. That is hardly crumbs, Mr. Speaker.
  In short, I strongly urge my colleagues to support this legislation. 
It is a very smart but modest improvement in a popular JOBS Act 
provision.
  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. 4263, the so-called Regulation A+ Improvement Act, 
is a solution in search of a problem that threatens to undermine 
protections for mom-and-pop investors and the integrity of our capital 
markets. The bill would arbitrarily and prematurely increase the 
maximum amount of securities that private companies can sell each year 
to the public from $50 million to $75 million under the Securities and 
Exchange Commission's Regulation A+ exemption from registration.
  Mr. Speaker, such a change makes no sense. First, the SEC only 
recently implemented Regulation A+ pursuant to the Jumpstart Our 
Business Startups, the JOBS Act. Effective June 19, 2015, that rule now 
allows private companies to raise either $20 million under Tier 1 or 
$50 million under Tier 2 from the public with less investor protections 
and oversight than a public securities offering registered with the 
SEC.
  What little data we have since it became effective suggests that 
there is no need to raise that $50 million limit. As of December 31, 
2017, only 39 percent of the 172 companies using Tier 2 of Regulation 
A+ sought the maximum amount of $50 million; and only three issuers, or 
5 percent, of the 61 issuers that have reported proceeds in Tier 2 
offerings actually raised the maximum amount.
  Second, in the JOBS Act, Congress specifically directed the SEC to 
review the Regulation A+ limit every 2 years and report its reasons for 
not raising it to Congress. On April 5, 2016, the SEC sent Congress its 
report, stating: ``Given the short period of time that the final rules 
have been in effect and in light of the limited number of Regulation A+ 
offerings qualified and completed to date, the Commission does not 
believe that the information currently reported by companies on the 
amount of capital raised pursuant to Regulation A+ is sufficient to 
determine whether it would be appropriate to propose an increase in the 
Tier 2 $50 million offering limit.''
  If my Republican colleagues think that the SEC should be doing more, 
they only have to wait a few more weeks for the SEC's next review and 
report on the Regulation A+ offering limit. There is no reason why 
Congress shouldn't acknowledge the SEC's existing efforts to study the 
empirical evidence instead of making arbitrary decisions devoid of any 
real analysis.
  Finally, and most importantly, the bill may harm retail investors and 
our markets. What my Republican colleagues fail to acknowledge is that 
the purpose of Regulation A+ is to provide small private businesses 
with access to financing from mom-and-pop investors, many of whom are 
in their community, so that they can grow and eventually enter the 
public markets as full SEC reporting companies traded on a national 
securities exchange.
  As public companies, they are subject to the full set of investor 
protections under the securities laws, but also gain access to much 
deeper sources of capital. Indeed, under the current system, eight 
Regulation A+ issuers have already listed their shares on an exchange, 
becoming true public companies. This positive development suggests that 
Regulation A+ is working as Congress intended, and expanding it could 
discourage companies from becoming truly public.
  However, it is also clear that additional study of the existing 
Regulation A+ exemption is warranted. A series of recent press articles 
highlight the high risk of loss that investors face in investing in 
companies that have used Regulation A+ even when those companies later 
list their securities for trading on an exchange.
  According to a February 2018 article in The Wall Street Journal, 
seven out of the eight companies that listed their securities for 
trading on an exchange in 2017 following a Regulation A+ offering are 
trading an average of 42 percent below their offering prices. By 
comparison, companies that engaged in a traditional initial public 
offering, or an IPO, in 2017 are trading an average of 22 percent above 
their offering prices. Moreover, those Regulation A+ companies were 
trading lower, even as the S&P 500, which tracks 500 large publicly 
traded companies, has risen 18 percent since the start of 2017.
  Congress should better understand why Regulation A+ companies that 
have gone public fared so poorly compared to the rest of the market 
before

[[Page H1636]]

we go ahead and expand Regulation A+ through legislation like H.R. 
4263.
  Now, Mr. Speaker, I joined with my friends on the opposite side of 
the aisle, and Mr. McHenry in particular, and supported the JOBS Act, 
and of course I had some questions about the risk that would be 
involved with our mom-and-pop investors. I wasn't sure, but I decided 
to support the JOBS Act and Mr. McHenry even with my concerns because I 
certainly wanted the opportunity for these small businesses to have 
access to capital that perhaps they would not be able to get otherwise.

                              {time}  1430

  Along with that bill, we talked about the review that would be done 
to determine whether or not we should be increasing, particularly, Tier 
2, that would expand the ability for the small businesses to have 
access to more than $50 million. So I don't know why we just don't 
stick with what we did.
  I think that, despite whatever we are learning about the A+ 
regulation, we need to understand thoroughly what the advantages are, 
what the disadvantages are, and what the risks are to investors, et 
cetera.
  So I am going to ask my colleagues to oppose this legislation.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I yield 5 minutes to the gentleman from 
New Jersey (Mr. MacArthur), the sponsor of this legislation and a 
hardworking member of the Financial Services Committee.
  Mr. MacARTHUR. Mr. Speaker, I am proud to advance this bill--this 
bipartisan bill. I am grateful for my Democratic cosponsor, 
Congresswoman Sinema; Democratic Congressman Gottheimer; and Republican 
Congressman Hollingsworth, for joining me in this effort.
  The purpose of this bill is pretty simple and pretty narrow. Seven 
out of ten new jobs in this country come from our Nation's 28 million 
small businesses. When we help those businesses grow, we help them 
create new jobs.
  I think of the biopharmaceutical companies in my home State of New 
Jersey as an example of companies that desperately need capital to 
continue to grow, and that growth creates new jobs. The Federal 
Government cannot do everything, but we can surely help these companies 
grow in our country.
  The 1933 Securities Act laid the groundwork that all interstate 
security offerings have to be registered with the SEC. It was 
cumbersome, it was expensive, so that Congress made some exceptions. 
Regulation A allowed a limited amount of offerings for Main Street 
investors, and Regulation D allowed unlimited offerings for accredited 
investors. This bill is working at Regulation A.
  Over time, those limits have gone up periodically. The last time it 
was lifted was effective 2015. It was raised to $50 million, and it has 
been helpful. It has created growth. It has created new jobs.
  This bill is a modest improvement, raising that $50 million to $75 
million. This was contemplated in the original JOBS Act, where we 
raised it to $50 million. In that law, the SEC was required to either 
increase the $50 million or to explain to us why they weren't doing it. 
Their deadline for doing that expired at the end of 2017. So this is an 
overdue increase, and I think it is high time that we do it.
  I could offer a lot of anecdotes of how this benefits companies. I 
thought I would offer the one that is closest to home, my own story.
  I was fortunate enough to buy a fairly small business in 2002. I did 
three capital raises in the years that followed. The first was for $12 
million, the second was for $75 million, the third was for $500 
million. And those capital raises continued during my period of 
ownership of the company.
  I can tell you, without any question, the smallest capital raises 
were the hardest for me. It is much harder to raise this much money 
than it is to raise this much. When I was raising a lot of money, I had 
a lot of interested parties. When I was raising the smaller amount, it 
was difficult.
  What this bill does is allow growing companies to have another point 
in the market where they can raise money. It is not just banks or 
private equity funds; it is regular, Main Street investors.
  I heard the remarks that this creates risk. I can tell you that there 
are dozens of people in my old company who became shareholders, who are 
living a better life today, them and their families, because they had 
an opportunity to buy stock in a growing company.
  Mr. Speaker, this bill is good for businesses. It is good for 
employees. It is good for Main Street investors. It is a win, win, win. 
And, ultimately, it is good for the American economy. I urge my 
colleagues to support it. Let's not be afraid of making a commonsense 
change. I urge my colleagues to support it.
  Ms. MAXINE WATERS of California. Mr. Speaker, I reserve the balance 
of my time.
  Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from 
Michigan (Mr. Huizenga), the chairman of the Capital Markets, 
Securities, and Investments Subcommittee.
  Mr. HUIZENGA. Mr. Speaker, I want to commend my friend from New 
Jersey and the work that he has put into this.
  I rise today in support of this much-needed legislation that would 
increase the limit that small companies looking for additional 
investments and investors can solicit under Reg. A+. These deals would 
increase from $50 million to $75 million. This will enhance capital 
formation for growing small companies that are exploring crowdfunding 
as a method to raise capital.
  The JOBS Act has proven to be wildly successful, and this program has 
proven itself successful as well. Yet it can be even more so with this 
modest increase.
  So, specifically, the legislation further strengthens the ability for 
small- to mid-sized companies to attract more traditional underwriters 
and more sophisticated investors into the Reg. A+ process.
  Reg. A+ has been termed a ``Mini IPO'' or an ``IPO to go,'' and for 
good reason. While the cost of doing a full-blown IPO has skyrocketed, 
and the crowdfunding industry has been adopting Reg. A+ and leveraging 
it to raise growth capital for a fraction of what a traditional full-
blown IPO would be, would cost, while still having access to the 
capital markets.
  Like the chairman, I and many others on the committee have been 
concerned about the decrease in these initial public offerings, or 
IPOs, over the last number of years. Reg. A+ has been able to step in 
and help fill that gap. It provides much greater flexibility and 
marketing to potential investors, both accredited an non-accredited, 
while maintaining important consumer protections that everybody agrees 
needs to be there.

  Despite Reg. A+ being cheaper and faster, however, major underwriters 
and broker dealers have been slow to fully adopt Reg. A+ because the 
size of the increase up to that $50 million has really been minimal 
compared to a traditional IPO.
  Raising the Reg. A+ limit to $75 million is certainly a step in the 
right direction to alleviate this problem, as it opens Reg. A+ to 
larger companies that may be considering doing a full-blown traditional 
IPO.
  Additionally, this increased limit will have a positive impact for 
smaller companies because it can attract some of the more traditional 
underwriters to the process.
  So, again, I want to congratulate my friend from New Jersey on his 
work on this, and the chairman for really trying to push this issue 
forward. It is an important piece that we have been dealing with on the 
capital markets as we are trying to maintain and make sure that our 
markets are the most liquid and deep in the world, and that maintains 
that.
  So I urge my colleagues to support this important bill.
  Ms. MAXINE WATERS of California. Mr. Speaker, I continue to reserve 
the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from 
Illinois (Mr. Hultgren), the vice chairman of the Financial Services 
Subcommittee on Capital Markets, Securities, and Investments.
  Mr. HULTGREN. Mr. Speaker, this is an exciting, important debate. I 
rise today to speak in support of H.R. 4263, the Regulation A+ 
Improvement Act.
  Congressman MacArthur's bipartisan legislation would increase the 
offering amount that companies can offer

[[Page H1637]]

under Tier 2 of Reg. A from $50 million to $75 million, adjusted for 
inflation by the SEC every 2 years.
  This type of legislation, modeled after the bipartisan JOBS Act, 
typically enjoys strong bipartisan support in Congress. I hope that 
will be the case again today.
  Title IV of the JOBS Act directed the SEC to issue rules to update 
Reg. A, which exempts small offerings of up to $5 million within a 12-
month period from Federal registration. The updated exemption, now 
known as Reg. A+, increased the amount companies could offer from $5 
million to $50 million within a 12-month period of time, and preempts 
State registration and qualification requirements to make it easier for 
small- and medium-sized businesses to undertake Reg. A+ offerings by 
avoiding the oftentimes prohibitively expensive complexities of 
complying with up to 50 State regulators, all providing different 
regulations.
  Some opponents of this legislation have argued that it is unnecessary 
because the SEC is required to review this threshold and has the 
authority to increase it.
  On April 5, 2016, SEC staff informed the Financial Services Committee 
that the $50 million threshold would remain in place throughout 2018 
because of a lack of information available on Reg. A+ offerings since 
the rule was finalized in 2015.
  However, during the comment period for implementing Reg. A+, the SEC 
received a significant number of comments that Reg. A+ should be 
expanded beyond the $50 million threshold. Furthermore, since the 
amendment to Reg. A became effective, the rate of Reg. A+ securities 
offerings has increased.
  Last year, the U.S. Chamber of Commerce testified before the Capital 
Markets, Securities, and Investments Subcommittee, noting this 
legislation ``is a way to help make it easier for a small business to 
access capital to get deals done. To do that, even with the bump up to 
$50 million, people are still finding their sea legs. But in terms of 
driving liquidity, we thought the $75 million number was important.''
  Former SEC Commissioner Dan Gallagher has stated: ``The SEC should 
have exercised our clear authority under the JOBS Act to raise the 
offering limit to $75 million.''
  Hester Peirce, now an SEC Commissioner, testified during a hearing of 
the Financial Services Committee that, ``Prior to the JOBS Act's 
changes to Regulation A, that provision languished unused by companies, 
so it is important to revisit different avenues for raising capital 
frequently to ensure their continued usefulness.''
  Congressman MacArthur's legislation will help ensure that the SEC 
focuses on its mission of capital formation, especially for small 
businesses. This is vital if we are going to continue on the course of 
economic growth.
  And at the end of the day, after all of our debate on the merits of 
this legislation, let's make sure we remember it is simply an inflation 
adjustment for the amount of shares that can be issued under this 
exemption. Congressman MacArthur is simply proposing to make this 
financing tool available to more startup companies and their investors. 
This should not be controversial.
  I urge support for Congressman MacArthur's bipartisan legislation.
  Ms. MAXINE WATERS of California. Mr. Speaker, I continue to reserve 
the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from 
Arkansas (Mr. Hill), the majority whip of the committee.
  Mr. HILL. Mr. Speaker, I, too, want to add my congratulations to Mr. 
MacArthur for continuing to find ways to improve Mr. Obama's and this 
committee's excellent work on the JOBS Act from some 8 years ago. We 
have learned a lot. We have seen the benefits of the JOBS Act, and 
today we have a chance to make it even better by improving Reg. A+.
  I appreciate Mr. MacArthur's personal story about his 
entrepreneurship and how this is an opportunity for more investors in 
our country and more capital for our entrepreneurs.
  Mr. Speaker, this week I attended a meeting where people asked: Why 
do we need more public companies?
  Gosh, that is an easy rhetorical question.
  Because we have half the number of public companies we had during the 
Reagan administration, and we need them for our young people to invest 
in. We need them for our union workers to have an earning asset in 
their pension fund.
  So we need more public companies in this Nation to share the growth 
and prosperity of this Nation. That is what this legislation is all 
about.
  I thank Mr. MacArthur for his very straightforward, bipartisan, 
commonsense increase in the authority from $50 million to $75 million 
for young, growing companies to raise money under Reg. A+.
  Former SEC Commissioner Dan Gallagher advocated the increase in the 
offering threshold to even $100 million before the SEC adopted their 
final rule.

                              {time}  1445

  Mr. Gallagher expressed his disappointment that this offering 
threshold was not raised in the final rule from that original statutory 
cap of $50 million.
  We have support through the commission and through the staff for 
raising this amount, Mr. Speaker, to help our entrepreneurs. Expanding 
Reg. A+ to include offerings up to $75 million will allow private 
companies to consider a mini-IPO under Reg. A+. This will give us more 
competition for capital, driving down cost of capital, driving up the 
number of opportunities for people to take advantage of going public, 
growing a prosperous company, and sharing that equity with investors 
through their exchange-traded fund, through their pension plan, through 
their 401(k) plan. We want more opportunities to share our Nation's 
prosperity.
  I thank my friend, Mr. MacArthur, for his thoughtful work, and I 
thank our chairman for his leadership on the committee.
  Ms. MAXINE WATERS of California. Mr. Speaker, I continue to reserve 
the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from 
Maine (Mr. Poliquin), from the land of moose and maple syrup, a 
hardworking member of the Financial Services Committee.
  Mr. POLIQUIN. Mr. Speaker, I appreciate this opportunity very much. 
You notice, Mr. Speaker, those who do not live in the great State of 
Maine are very envious of those who do; so I take full advantage of the 
moose, bear, and other critters that we have in the State of Maine.
  Right now, today, Mr. Speaker, I am talking about H.R. 4263, the 
Regulation A+ Improvement Act, and I want to congratulate the gentleman 
from New Jersey (Mr. MacArthur) for the great work he has done on this 
bill, and I want to thank Chairman Hensarling for bringing this bill to 
the floor. It is very important for all of us to consider this.
  Now, Mr. Speaker, we all know what we want in this country, which are 
more opportunities and more jobs for our kids--better opportunities for 
our kids so they will have better lives and more freedom. This cannot 
happen, Mr. Speaker, unless our businesses are able to grow and hire 
more individuals and pay them more.
  Now, that mostly can only happen, Mr. Speaker, if businesses are able 
to more easily borrow money. The chairman and I both know that the 
government's job is to help our economy grow, not get in the way.
  That is why Reg. A+ cuts through the red tape such that more small- 
and medium-sized businesses are able to access capital, grow their 
operations, and hire more people. In a sense, Reg. A+ has implemented, 
Mr. Speaker, billions of dollars of new financing and has led economic 
growth in small to medium businesses to grow and present more 
opportunities for their workers. So Reg. A+ works. We know that because 
the evidence is there.
  With that, Mr. Speaker, I would like to close by saying, Mr. 
MacArthur's bill is a commonsense technical adjustment to a bill--a 
rule, rather, that works. It simply increases the amount that companies 
are able to borrow under this rule that works.
  Please, everybody, Republicans and Democrats, support Mr. MacArthur's 
bill.
  Ms. MAXINE WATERS of California. Mr. Speaker, I continue to reserve 
the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from

[[Page H1638]]

Ohio (Mr. Davidson), a hardworking member of the Financial Services 
Committee.
  Mr. DAVIDSON. Mr. Speaker, I rise today to offer my support for H.R. 
4263, the Regulation A+ Improvement Act. I greatly appreciate my 
colleague, Representative MacArthur, for this bill and for our chairman 
for moving it through our committee, and, frankly, my colleagues from 
across the aisle who came together to recognize the need for this bill.
  As has already been stated, this has broad implications for small 
capital companies. I spent the past 15 years, prior to coming to 
Congress, growing small manufacturing companies, and I can greatly 
appreciate the challenge of raising capital. This is another means of 
doing that, but I want to highlight another area that it might be 
suitable.
  With approximately $4 billion of capital raised worldwide in 2017, it 
is fair to say that initial coin offerings are just another great way 
for startups to raise capital and grow their businesses. ICOs in 
Regulation A+ could work great together, and with Mr. MacArthur's bill, 
they can work even better.
  An example of this harmonization is the investor-based Reg. A+ allows 
investors of any wealth to participate. This Democratic process is a 
pillar for ICOs in terms of the premise behind distributed ledger 
technology.
  Another provision is anti-money laundering. Reg. A+ requires the 
validation of investors, as well as background checks on the principles 
of offering companies. This goes hand in hand with improving the 
credibility of ICO business practices and reducing the risk of loss.
  Compliance with Reg. A+ would mean a disclosure memorandum, not just 
a white paper. Reg. A+ provides ICO entrepreneurs and their startups 
with a viable path to compliance with SEC security regulation. So it is 
important that we have guardrails established in this explosive new 
industry, while not hampering the ability to grow the business. I urge 
my colleagues to support this vital legislation.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such 
time as I may consume.
  Mr. Speaker, I have extensive information here about what is 
happening with Regulation A+. At first, I decided that some of this 
information I wouldn't share because I am so anxious for these small 
businesses to be able to access capital, but I think that, you know, 
some of my earlier concerns, perhaps, may have been justified.
  H.R. 4263, the so-called Regulation A+ Improvement Act, is opposed by 
consumer and investor advocates. I would like to take a moment to read 
some of their statements in opposition to this bill.
  Consumer Federation of America:
  ``This bill would increase the offering limit, despite the fact that 
the SEC already has unlimited authority to raise the cap as it deems 
appropriate. Moreover, the SEC is required to review the offering limit 
every 2 years, with its next analysis expected to be released next 
month. . . . A vote for this bill, before the SEC has had a chance to 
complete its analysis, is a vote against evidence-based policymaking.
  ``If Congress were to take the time to consider the research that the 
SEC has conducted on the Regulation A markets since the Regulation A+ 
rules were adopted, it would find that there currently is no need to 
raise the limit . . . data suggest that issuers generally are not 
clamoring for more capital than is currently allowed to them under the 
rules. . . .
  ``The market's tepid reaction to Regulation A offerings is surely 
also related to the largely abysmal performance of Regulation A 
offerings to date. . . . A recent Barron's article provided an in-depth 
review of the Regulation A market, describing the `woeful performance' 
of the few dozen companies that are currently exchange-listed and the 
difficulty trading or getting a price quote for the vast majority of 
companies that aren't exchange listed. The Barron's article further 
described how `most Reg. A+ businesses haven't gotten beyond the 
startup phase known as the pipedream.' Some examples that the article 
cites include businesses seeking capital for cannabis paraphernalia, 
flying cars, studying UFOs, telepathy, and light-speed travel. We 
wonder why the backers of this legislation would spend so much time and 
effort seeking to artificially prop up businesses of this sort.
  ``And while Regulation A's supporters have touted Regulation A's job 
creating potential, the Barron's article states that the only people 
Regulation A clearly has created jobs for are Regulation A underwriters 
and promoters on Wall Street, many of whom have `checkered stock market 
histories.'''
  Are these really the sort of jobs Congress is intending to promote?
  ``In conclusion, because this bill arbitrarily increases the offering 
limit without evidence that doing so is either necessary or beneficial, 
and in the face of evidence that Regulation A offerings to date largely 
have been market failures, we urge you to vote `no.'''
  Let me just continue to quote. Americans for Financial Reform: ``This 
is an unwarranted increase in the threshold. Most fundamentally, 
Congress should not be undermining public securities markets by 
expanding the ability of larger companies to make offerings while being 
exempt from core disclosure and investor protection requirements. 
Private offerings were designed to permit early stage capital raising 
from sophisticated investors by small companies, but the current cap of 
$50 million per year in private capital raising already permits fairly 
large companies to take advantage of this route. Additionally, the 
Securities and Exchange Commission, SEC, already has regulatory 
authority to increase the current threshold, which they examine on a 
biannual basis. . . .
  ``Seven of the eight companies with Regulation A+ offerings in 2017 
are down 42 percent from their offer prices, as compared to 
conventional offerings made during the same period, which are up 22 
percent from offer prices. This is to be expected, given that 
Regulation A+ permits companies to avoid requirements such as 
disclosures that were designed to protect investors. If it expanded 
such exemptions, Congress would facilitate increased harm to investors.
  ``Members should also take notice that with the blockchain and 
cryptocurrency fever, SEC filing and disclosure exemptions like 
Regulation A+ are becoming a popular avenue for initial coin offerings, 
ICOs. . . .
  ``In the middle of this SEC crackdown on fraudulent ICOs, H.R. 4263 
would potentially expose a larger number of investors--including 
nonaccredited, unsophisticated investors--to shady companies, Ponzi 
schemes, and exit scams.
  ``The widespread use of private offerings reduces transparency and 
investor protections in capital markets. Raising capital under 
Regulation A+ should be used as an on-ramp to a true public offering 
and not as an end in itself for larger issuers. Increasing the annual 
threshold for exempted Regulation A+ offerings goes in the opposite 
direction.''
  Public Citizen had this to say:
  ``Evidence shows little demand for this measure. A study by the SEC 
of Regulation A+ offerings found that the average issuer sought only 
$18 million. Moreover, these firms pose risk for investors, as the 
issuers had only an average of $50,000 in cash; no property, plants, 
and equipment; no revenues; and no net income. Increasing access to 
capital with no additional investor protections exacerbates the 
problem.''
  And so, yes, I do oppose the bill. Let me just say this. I would like 
small businesses to do well. I would like our small businesses to have 
access to the capital that they need to support, you know, good ideas 
that have been given the kind of research that is necessary to 
determine the potential for some of these businesses.
  You just heard this information from the Barron report. This is 
serious. What we have seen, despite the fact what we want to happen, is 
that it is not happening. The fact that we would like very much--and we 
have done everything that we could do with the JOBS Act to give support 
to our small businesses because we want them to thrive. We believe that 
they are job intensive, if they can get up and get going. It is not 
happening.
  What we are doing is we are exposing these little mom-and-pop 
investors to situations where they are going to lose what small amounts 
of money they are investing. So let's just be cool, let's be calm, and 
let's give the SEC the opportunity to do its analysis. There is no 
reason to push this now.

[[Page H1639]]

  I would ask my Members on the opposite side of the aisle to rethink 
and to join with me, oppose the bill so that we can give the SEC the 
opportunity, again, to do the kind of analysis it needs to do, and 
let's think about what else can we do to help small businesses, rather 
than continue down the road of failure, because this is exactly what is 
being exposed.
  Mr. Speaker, I reserve the balance of my time.

                              {time}  1500

  Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentlewoman 
from New York (Ms. Tenney), a hardworking member of the Financial 
Services Committee.
  Ms. TENNEY. Mr. Speaker, I thank the chairman for yielding me time.
  Mr. Speaker, I rise to support this bipartisan legislation, H.R. 
4263, the Regulation A+ Improvement Act, introduced by my colleague 
from New Jersey (Mr. MacArthur).
  Congratulations to Mr. MacArthur and the chairman for bringing this 
great legislation to the floor.
  This legislation would increase, from $50 million to $75 million, the 
offering exemption amount that companies can offer under the Securities 
and Exchange Commission's, the SEC, Tier 2 of Regulation A, an 
amendment to the 2012 JOBS Act.
  As the owner of a small business, I understand firsthand the vital 
importance of making our Nation's business climate competitive at all 
levels. Small businesses create nearly 70 percent of the new jobs in 
our country. Yet small businesses are only starting to see a resurgence 
from the struggling ecosystem created in the last Presidential era. 
Thanks to the recent tax cuts and regulatory changes, we have seen 
continued growth.
  H.R. 4263 would be the next step toward helping small companies raise 
necessary equity capital to enable them to grow and compete in a 
changing and dynamic marketplace. This will result in more jobs and 
more opportunities for our communities.
  This bill would expand the SEC's Regulation A+ from $50 million to 
$75 million, and it would allow companies to consider mini IPOs or mini 
initial public offerings at a less costly alternative to raising 
capital.
  In my district, it is difficult to raise capital and secure a steady 
line of credit for developing and sustaining small businesses. I have 
experienced this very difficulty and struggle with clients I have 
represented in my own legal practice.
  This bill would help tremendously in improving access to capital for 
small companies that ultimately are the drivers of job growth in New 
York and across the Nation.
  Mr. Speaker, I want to again thank Mr. MacArthur and the bipartisan 
group of cosponsors for their hard work, and I urge my colleagues to 
support this great legislation.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself the 
balance of my time.
  Mr. Speaker, H.R. 4263 is just another reckless partisan bill that 
could harm mom-and-pop investors and weaken the integrity of the U.S. 
capital markets. It continues the efforts to repeal or weaken important 
regulatory protections under the guise of supporting jobs.
  Not only have my Republican colleagues failed to come up with any 
real data or analysis to support this claim, but they also completely 
substitute their own judgment for that of the SEC, the agency with the 
expertise over these issues.
  As I have already said, we only have to wait a few more weeks to see 
if the SEC decides to expand the Regulation A+ exemption and to 
understand its rationale for the decision. But I suppose a few weeks is 
a few weeks too long for my friends on the opposite side of the aisle 
who are currently pushing for as many of these kinds of bills as 
possible to be included in the Senate's Dodd-Frank rollback.
  Those bad bills would cause further harm to investors by allowing 
newly public companies to avoid audits of their controls over financial 
reporting for a decade; by hampering investors' ability to get 
independent, reliable information ahead of a shareholder meeting; and 
by making it easier for fraudsters to swindle unsophisticated investors 
into buying stock in a fake or failing company.
  It should come as no surprise that these same harmful provisions show 
up in the CHOICE Act, which is 10 times worse than the Senate's 
deregulatory bill.
  Mr. Speaker, both Democrats and Republicans want to help small 
businesses grow and create jobs, but as Members of Congress, we also 
have the responsibility to protect investors, particularly retail 
investors, who are looking to save for retirement, to buy a house, or 
to support our children's education.
  As I have repeatedly said, any regulation must strike the right 
balance between capital formation in our securities markets and 
investor protection. This bill fails to do that, and that is why it is 
opposed by consumer and investor advocates like Americans for Financial 
Reform, Consumer Federation of America, and Public Citizen.
  Mr. Speaker, I would urge all Members to join me in standing up for 
investors and vote ``no'' on H.R. 4263, and I yield back the balance of 
my time.
  Mr. HENSARLING. Mr. Speaker, may I inquire as to how much time I have 
remaining.
  The SPEAKER pro tempore (Mr. Ferguson). The gentleman from Texas has 
5\1/2\ minutes remaining.
  Mr. HENSARLING. Mr. Speaker, I yield myself the balance of my time.
  Mr. Speaker, I again want to thank the gentleman from New Jersey (Mr. 
MacArthur), an entrepreneur, someone who brings years and years of 
experience in capital formation of building a business to help grow 
jobs and our economy.
  H.R. 4263, again, is, in part, an expansion of the JOBS Act, 
something that was signed into law by President Barack Obama. I didn't 
agree with that particular President on many occasions, but he got this 
right, and this has been something good for the American economy.
  But what I fear is that, if we don't go forward, we end up going 
backwards. And what we hear from our friends on the other side of the 
aisle is: Let's keep the status quo.
  But, Mr. Speaker, the status quo is what brought us a 1.6 percent 
economy. The status quo is what brought paychecks to become stagnant. 
The status quo ensured that Americans did not recover their savings 
from the great financial crisis.
  Now we have the Tax Cuts and Jobs Act, and now we have 3 percent 
economic growth; now we have the lowest unemployment rate in 17 years; 
now we have seen the greatest growth in paychecks in almost a decade; 
now we are seeing 90 percent--90 percent--of wage earners seeing a 
bigger paycheck, better take-home pay, because of the economic policies 
of this Republican Congress and of the Trump administration.
  So the gentleman from New Jersey has brought us, really, in some 
respects, an important but modest proposition: that we ought to 
increase the threshold for Reg A+ to $75 million.
  Again, we don't know where the next Uber is coming from. We don't 
know where the next Spotify is coming from. We don't know where the 
next Apple is coming from. But do you know what, Mr. Speaker? We all 
know they need capital. And this is a valuable alley, chain, path in 
order to bring capital into our startup businesses.
  Now, a constant theme we hear from our friends on the other side of 
the aisle is consumer protection. Do you know what? Back in the 1980s, 
the Commonwealth of Massachusetts decided to protect their people from 
this fly-by-night company called Apple, which now is looking at an 
almost $1 trillion market cap valuation, and had you invested at the 
IPO, you would have a 45,000 percent rate of return. You could buy a 
home; your children could buy a home; your great-grandchildren could 
buy a home. You could achieve your American Dream. But a government 
decided: No, you are too stupid to make this investment decision on 
your own. We must protect you.
  Nothing--nothing--in the bill from the gentleman from New Jersey 
alters the vast, vast array of consumer protection laws that are 
already on the books. Nothing in H.R. 4263 prevents the Department of 
Justice from pursuing criminal prosecutions of fraud. Nothing in the 
bill impacts the SEC's ability to pursue civil actions for those

[[Page H1640]]

who engage in fraud, negligent misrepresentations, negligent 
transactions.
  Nothing in this bill prevents the SEC from entering into cease and 
desist orders and imposing civil liabilities for those who violate SEC 
rules. Investors get to pursue Federal civil actions against those who 
defraud them, those who make untrue statements. So there are plenty of 
very important laws that are on our books.
  What we shouldn't do, though, is protect our hardworking constituents 
from the ability to make decisions for themselves and participate in 
these early growth companies that now are only restricted to accredited 
investors. It is only the wealthiest who get to make these decisions. 
Well, in the land of the free, maybe a few more should, and maybe we 
ought to have a few more Apples, a few more Ubers, a few more Spotifys.
  I want to thank, again, the gentleman from New Jersey (Mr. 
MacArthur), who has been a great leader in capital formation and job 
creation on our committee and in this Congress, and I want to urge all 
Members to adopt H.R. 4263.
  I yield back the balance of my time.
  The SPEAKER pro tempore. All time for debate has expired.
  Pursuant to House Resolution 773, the previous question is ordered on 
the bill, as amended.
  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.


                           Motion to Recommit

  Mrs. BEATTY. Mr. Speaker, I have a motion to recommit at the desk.
  The SPEAKER pro tempore. Is the gentlewoman opposed to the bill?
  Mrs. BEATTY. Mr. Speaker, I am opposed to it in its present form.
  The SPEAKER pro tempore. The Clerk will report the motion to 
recommit.
  The Clerk read as follows:

       Mrs. Beatty moves to recommit the bill H.R. 4263 to the 
     Committee on Financial Services with instructions to report 
     the same back to the House forthwith with the following 
     amendment:
       Page 3, line 10, strike ``$75,000,000'' and insert 
     ``$50,000,000''.
       Page 3, line 23, insert the following new section:

     SEC. 3. EFFECT OF INCREASE IN OFFERING LIMIT.

       The amendments made by this Act shall take effect on the 
     date that the Securities and Exchange Commission revises 
     regulations promulgated pursuant to subparagraphs (B) through 
     (G) of paragraph (2) of subsection (b) of section 3 of the 
     Securities Act of 1933 (15 U.S.C. 77c) as necessary to 
     protect investors before increasing the aggregate offering 
     amount described in subparagraph (A) of such paragraph to an 
     amount that is greater than $50,000,000.

  Mrs. BEATTY (during the reading). Mr. Speaker, I ask unanimous 
consent to dispense with the reading of the motion.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from Ohio?
  There was no objection.
  The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from 
Ohio is recognized for 5 minutes in support of her motion.
  Mrs. BEATTY. Mr. Speaker, this is the final amendment to the bill, 
which will not kill the bill or send it back to committee. If adopted, 
the bill will immediately proceed to final passage, as amended.
  Mr. Speaker, this motion to recommit is simple and should be able to 
garner the support of every Member of this body who seeks to enhance 
our robust public and private markets while, at the same time, ensuring 
there are adequate safeguards in place for the benefit of Main Street 
investors.
  Specifically, this motion will accomplish two simple things: one, it 
will strike the increase in the offering limit to $75 million; and, 
two, it will require the SEC to review and revise their bad actor 
disqualification regulations prior to future increases in the offering 
threshold.
  Unfortunately, as currently written, with all due respect to my 
Republican colleagues, raising the offering threshold is a solution in 
search of a problem. Congress designated the SEC with regulating the 
offering. Congress decided the SEC would administer the offering. The 
SEC is the expert on Regulation A+, and it should be the one to raise 
the offering threshold, assuming the data supports such an increase.
  Under the law, the SEC will be reporting to Congress whether or not 
they will raise the threshold just next month. This bill is premature, 
and for the lawyers in the room, it is not ripe for review. So why 
wouldn't we wait?
  Right now there is zero data to suggest Congress needs to raise the 
threshold, and it seems prudent to wait until next month to see what 
the SEC has to say before rushing to increase it.
  The majority argues this bill will allow companies to raise more 
money. I say this bill is a solution in search of a problem because 
only less than a handful of companies have ever actually raised the 
current maximum amount of $50 million.
  With regard to updating the bad actor disqualification regulation, 
Bloomberg recently published an article on Regulation A+ and the 
companies using the offering and found one executive of a company was 
convicted for filing false tax returns, another for obstructing 
justice, and another was accused of selling unregistered stock. For the 
sake of time, these are just a few examples. Are these really the types 
of individuals we want selling securities to Main Street mom-and-pop 
investors?
  Another article, appearing in Barron's, studied the hundreds of 
companies that have used Regulation A+ to raise funds, and I quote 
them: ``We were supposed to get new jobs and new industries. Instead, 
we've gotten GoFundMe-style websites hawking penny stocks and 
professional wrestlers shilling shares on TV.''
  They went on to highlight some of the companies and the products 
availing themselves of the lightly regulated Regulation A+ offering, 
which included companies trying to make cannabis paraphernalia, flying 
cars, guns, and my personal favorite, the founder of a rock band 
seeking to raise money to study UFOs and light-speed travel.
  Now, I am not trying to persuade Members that all companies seeking 
to raise money through Regulation A+ are Wolf of Wall Street or UFO 
chasers, because back in my home district, a Scottish-based company 
successfully used Regulation A+ to open their first brewery and 
restaurant in the United States. That example is exactly what Congress 
had in mind when it called for the creation of Regulation A+, and it is 
precisely the type of opportunity for investors that the law was 
intended to create.

                              {time}  1515

  This is why we need to ensure that we maintain the integrity of the 
Regulation A+ offering and that we prevent bad actors from using it in 
a way to rip off and scam all of our constituents.
  That is why I urge Congress to adopt this motion, to stand up for 
strong public and private markets, to wait the 30 days when the SEC can 
come back to us, and to stand up for strong protections for Main Street 
investors.
  Mr. Speaker, I yield back the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I rise in opposition to the motion to 
recommit.
  The SPEAKER pro tempore. The gentleman from Texas is recognized for 5 
minutes.
  Mr. HENSARLING. Mr. Speaker, when I have said something incorrect, I 
wish to correct myself in front of my colleagues in the public. I 
earlier said that my colleagues were trying to give us status quo. I 
wish to correct myself. This motion to recommit is worse than status 
quo. It would take us back even further.
  The gentlewoman from Ohio should admit when she is wrong. She is 
wrong when she says this will not kill the bill. This will kill it. It 
will gut it. It will bury it 6 feet under. I think she knows that. So 
she is entitled to her opinion about what Reg. A+ should be, but she 
absolutely eviscerates the bipartisan bill that is before the House.
  Because many who are watching this may somehow think, ``Oh, my Lord, 
there are no consumer protections for Reg. A+ offerings,'' the basic 
requirements that are applicable to both Tier 1 and tier offerings 
include company eligibility requirements, bad actor disqualification 
requirements, issuer disclosure requirements, ongoing reporting 
requirements.
  And then for Tier 2 offerings, additional requirements: providing 
audited financial statements; requirement to file annual, semiannual, 
and current event reports; and limitation on the amount of security 
nonaccredited and accredited investors can purchase.

[[Page H1641]]

  Then those that are offered on an exchange have to adhere to the 
exchange's listing standards, including corporate governance 
requirement, background checks on the management and board, shareholder 
approval of certain corporate actions, and the list goes on.
  Mr. Speaker, I think there is a good case here. Anybody who picked up 
a newspaper recently would find out that, yesterday, the SEC charged 
Theranos with raising more than $700 million from investors through 
exaggerated and false statements about the company's technology.
  Guess what. In announcing the enforcement decision, here is what the 
SEC noted:

       The charges make clear that there is no exemption--no 
     exemption--from the antifraud provisions of the Federal 
     securities laws simply because a company is nonpublic, 
     development-stage, or the subject of exuberant media 
     attention.

  In other words, the SEC was thoroughly able to do their job, and they 
were ready and willing to investigate and bring enforcement actions, as 
they well should. This is part of their job, investor protection. But 
guess what. So is capital formation. Capital formation is part of the 
mission of the SEC. That is why it is so important that we not protect 
our constituents against great investment opportunities, like Apple, 
like Uber, and like Spotify.
  So when we have so many Americans who are still living paycheck to 
paycheck, when they finally get a little savings together, shouldn't 
they be able to invest in great opportunities of early growth 
companies? Shouldn't these early growth companies have access to 
capital?
  I think so.
  You can't have capitalism without capital. Let's get more capital 
circulating in the system. The Tax Cuts and Jobs Act has done so much 
good, but we need so much more. We need capital circulating the system, 
particularly for our startups and our early growth stage companies.
  We need to reject the MTR, and we need to vote in support of H.R. 
4263.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to recommit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mrs. BEATTY. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 and clause 9 of rule 
XX, and the order of the House of today, this 15-minute vote on the 
motion to recommit will be followed by 5-minute votes on:
  Passage of H.R. 4263, if ordered;
  Adoption of the amendment to H.R. 4545;
  A motion to recommit on H.R. 4545, if ordered;
  Passage of H.R. 4545, if ordered;
  Ordering the previous question on House Resolution 780; and
  Adoption of House Resolution 780, if ordered.
  The vote was taken by electronic device, and there were--yeas 182, 
nays 235, not voting 13, as follows:

                             [Roll No. 109]

                               YEAS--182

     Adams
     Aguilar
     Barragan
     Bass
     Beatty
     Bera
     Beyer
     Bishop (GA)
     Blumenauer
     Blunt Rochester
     Bonamici
     Boyle, Brendan F.
     Brady (PA)
     Brown (MD)
     Brownley (CA)
     Bustos
     Butterfield
     Capuano
     Carbajal
     Cardenas
     Carson (IN)
     Cartwright
     Castor (FL)
     Castro (TX)
     Chu, Judy
     Cicilline
     Clark (MA)
     Clarke (NY)
     Clay
     Cleaver
     Clyburn
     Cohen
     Connolly
     Cooper
     Correa
     Courtney
     Crist
     Crowley
     Cuellar
     Davis (CA)
     DeFazio
     DeGette
     Delaney
     DeLauro
     DelBene
     Demings
     DeSaulnier
     Deutch
     Dingell
     Doggett
     Doyle, Michael F.
     Duncan (TN)
     Engel
     Eshoo
     Espaillat
     Esty (CT)
     Evans
     Foster
     Frankel (FL)
     Fudge
     Gabbard
     Gallego
     Garamendi
     Gomez
     Gottheimer
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hanabusa
     Hastings
     Heck
     Higgins (NY)
     Himes
     Hoyer
     Huffman
     Jackson Lee
     Jayapal
     Jeffries
     Johnson (GA)
     Johnson, E. B.
     Jones
     Kaptur
     Keating
     Kelly (IL)
     Kennedy
     Khanna
     Kihuen
     Kildee
     Kilmer
     Kind
     Krishnamoorthi
     Kuster (NH)
     Langevin
     Larsen (WA)
     Larson (CT)
     Lawrence
     Lawson (FL)
     Lee
     Levin
     Lewis (GA)
     Lieu, Ted
     Loebsack
     Lofgren
     Lowenthal
     Lowey
     Lujan Grisham, M.
     Lujan, Ben Ray
     Lynch
     Maloney, Carolyn B.
     Maloney, Sean
     Matsui
     McCollum
     McEachin
     McGovern
     McNerney
     Meeks
     Meng
     Moore
     Moulton
     Murphy (FL)
     Nadler
     Napolitano
     Neal
     Nolan
     Norcross
     O'Halleran
     O'Rourke
     Pallone
     Panetta
     Pascrell
     Payne
     Pelosi
     Perlmutter
     Peters
     Pingree
     Pocan
     Polis
     Price (NC)
     Quigley
     Raskin
     Richmond
     Roybal-Allard
     Ruiz
     Ruppersberger
     Rush
     Ryan (OH)
     Sanchez
     Sarbanes
     Schakowsky
     Schiff
     Schneider
     Schrader
     Scott (VA)
     Scott, David
     Serrano
     Sewell (AL)
     Shea-Porter
     Sherman
     Sires
     Smith (WA)
     Soto
     Speier
     Suozzi
     Swalwell (CA)
     Takano
     Thompson (CA)
     Thompson (MS)
     Titus
     Tonko
     Torres
     Tsongas
     Vargas
     Veasey
     Vela
     Velazquez
     Visclosky
     Wasserman Schultz
     Waters, Maxine
     Watson Coleman
     Welch
     Yarmuth

                               NAYS--235

     Abraham
     Aderholt
     Allen
     Amash
     Amodei
     Arrington
     Babin
     Bacon
     Banks (IN)
     Barletta
     Barr
     Barton
     Bergman
     Biggs
     Bilirakis
     Bishop (MI)
     Bishop (UT)
     Black
     Blackburn
     Blum
     Bost
     Brady (TX)
     Brat
     Bridenstine
     Brooks (AL)
     Brooks (IN)
     Buchanan
     Buck
     Bucshon
     Budd
     Burgess
     Byrne
     Calvert
     Carter (GA)
     Chabot
     Cheney
     Coffman
     Cole
     Collins (GA)
     Collins (NY)
     Comer
     Comstock
     Conaway
     Cook
     Costello (PA)
     Cramer
     Crawford
     Culberson
     Curbelo (FL)
     Curtis
     Davidson
     Davis, Rodney
     Denham
     Dent
     DeSantis
     DesJarlais
     Diaz-Balart
     Donovan
     Duffy
     Duncan (SC)
     Dunn
     Emmer
     Estes (KS)
     Farenthold
     Faso
     Ferguson
     Fitzpatrick
     Fleischmann
     Flores
     Fortenberry
     Foxx
     Frelinghuysen
     Gaetz
     Gallagher
     Garrett
     Gianforte
     Gibbs
     Gohmert
     Gonzalez (TX)
     Goodlatte
     Gosar
     Gowdy
     Granger
     Graves (GA)
     Graves (LA)
     Graves (MO)
     Griffith
     Grothman
     Guthrie
     Handel
     Harper
     Harris
     Hartzler
     Hensarling
     Herrera Beutler
     Hice, Jody B.
     Higgins (LA)
     Hill
     Holding
     Hollingsworth
     Hudson
     Huizenga
     Hultgren
     Hunter
     Hurd
     Issa
     Jenkins (KS)
     Jenkins (WV)
     Johnson (LA)
     Johnson (OH)
     Johnson, Sam
     Jordan
     Joyce (OH)
     Kelly (MS)
     Kelly (PA)
     King (IA)
     King (NY)
     Kinzinger
     Knight
     Kustoff (TN)
     Labrador
     LaHood
     LaMalfa
     Lamborn
     Lance
     Latta
     Lewis (MN)
     LoBiondo
     Long
     Love
     Lucas
     Luetkemeyer
     MacArthur
     Marchant
     Marino
     Marshall
     Massie
     Mast
     McCarthy
     McCaul
     McClintock
     McHenry
     McKinley
     McMorris Rodgers
     McSally
     Meadows
     Meehan
     Messer
     Mitchell
     Moolenaar
     Mooney (WV)
     Mullin
     Newhouse
     Noem
     Norman
     Nunes
     Olson
     Palazzo
     Palmer
     Paulsen
     Pearce
     Perry
     Peterson
     Pittenger
     Poe (TX)
     Poliquin
     Posey
     Ratcliffe
     Reed
     Reichert
     Renacci
     Rice (SC)
     Roby
     Roe (TN)
     Rogers (AL)
     Rogers (KY)
     Rohrabacher
     Rokita
     Rooney, Francis
     Rooney, Thomas J.
     Rosen
     Roskam
     Ross
     Rothfus
     Rouzer
     Royce (CA)
     Russell
     Rutherford
     Sanford
     Scalise
     Schweikert
     Scott, Austin
     Sensenbrenner
     Sessions
     Shimkus
     Shuster
     Simpson
     Sinema
     Smith (MO)
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Smucker
     Stefanik
     Stewart
     Stivers
     Taylor
     Tenney
     Thompson (PA)
     Thornberry
     Tipton
     Trott
     Turner
     Upton
     Valadao
     Wagner
     Walberg
     Walden
     Walker
     Walorski
     Walters, Mimi
     Weber (TX)
     Webster (FL)
     Wenstrup
     Westerman
     Williams
     Wilson (SC)
     Wittman
     Womack
     Woodall
     Yoder
     Yoho
     Young (AK)
     Young (IA)
     Zeldin

                             NOT VOTING--13

     Carter (TX)
     Costa
     Cummings
     Davis, Danny
     Ellison
     Katko
     Lipinski
     Loudermilk
     Rice (NY)
     Ros-Lehtinen
     Slaughter
     Walz
     Wilson (FL)

                              {time}  1548

  Messrs. OLSON, RUTHERFORD, ABRAHAM and STEWART changed their vote 
from ``yea'' to ``nay.''
  Messrs. LARSEN of Washington, Mses. SHEA-PORTER and BLUNT ROCHESTER 
changed their vote from ``nay'' to ``yea.''
  So the motion to recommit was rejected.
  The result of the vote was announced as above recorded
  The SPEAKER pro tempore. The question is on the passage of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. HENSARLING. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. This is a 5-minute vote.
  The vote was taken by electronic device, and there were--yeas 246, 
nays 170, not voting 14, as follows:

[[Page H1642]]

  


                             [Roll No. 110]

                               YEAS--246

     Abraham
     Aderholt
     Allen
     Amash
     Amodei
     Arrington
     Babin
     Bacon
     Banks (IN)
     Barletta
     Barr
     Barton
     Bergman
     Biggs
     Bilirakis
     Bishop (MI)
     Bishop (UT)
     Black
     Blackburn
     Blum
     Bost
     Brady (TX)
     Brat
     Bridenstine
     Brooks (AL)
     Brooks (IN)
     Buchanan
     Buck
     Bucshon
     Budd
     Burgess
     Byrne
     Calvert
     Carter (GA)
     Chabot
     Cheney
     Coffman
     Cole
     Collins (GA)
     Collins (NY)
     Comer
     Comstock
     Conaway
     Cook
     Correa
     Costello (PA)
     Cramer
     Crawford
     Cuellar
     Culberson
     Curbelo (FL)
     Curtis
     Davidson
     Davis, Rodney
     Denham
     Dent
     DeSantis
     DesJarlais
     Diaz-Balart
     Donovan
     Duffy
     Duncan (SC)
     Duncan (TN)
     Dunn
     Emmer
     Eshoo
     Estes (KS)
     Farenthold
     Faso
     Ferguson
     Fitzpatrick
     Fleischmann
     Flores
     Fortenberry
     Foxx
     Frelinghuysen
     Gaetz
     Gallagher
     Garamendi
     Garrett
     Gianforte
     Gibbs
     Gohmert
     Goodlatte
     Gosar
     Gottheimer
     Gowdy
     Granger
     Graves (GA)
     Graves (LA)
     Graves (MO)
     Griffith
     Grothman
     Guthrie
     Handel
     Harper
     Harris
     Hartzler
     Hensarling
     Herrera Beutler
     Hice, Jody B.
     Higgins (LA)
     Hill
     Holding
     Hollingsworth
     Hudson
     Huizenga
     Hultgren
     Hunter
     Hurd
     Issa
     Jenkins (KS)
     Jenkins (WV)
     Johnson (LA)
     Johnson (OH)
     Johnson, Sam
     Jordan
     Joyce (OH)
     Kelly (MS)
     Kelly (PA)
     King (IA)
     King (NY)
     Kinzinger
     Knight
     Kustoff (TN)
     Labrador
     LaHood
     LaMalfa
     Lamborn
     Lance
     Latta
     Lewis (MN)
     LoBiondo
     Long
     Loudermilk
     Love
     Lucas
     Luetkemeyer
     MacArthur
     Maloney, Sean
     Marchant
     Marino
     Marshall
     Massie
     Mast
     McCarthy
     McCaul
     McClintock
     McHenry
     McKinley
     McMorris Rodgers
     McSally
     Meadows
     Meehan
     Messer
     Mitchell
     Moolenaar
     Mooney (WV)
     Mullin
     Newhouse
     Noem
     Norman
     Nunes
     Olson
     Palazzo
     Palmer
     Paulsen
     Pearce
     Perlmutter
     Perry
     Peters
     Peterson
     Pittenger
     Poe (TX)
     Poliquin
     Polis
     Posey
     Ratcliffe
     Reed
     Reichert
     Renacci
     Rice (SC)
     Roby
     Roe (TN)
     Rogers (AL)
     Rogers (KY)
     Rohrabacher
     Rokita
     Rooney, Francis
     Rooney, Thomas J.
     Rosen
     Roskam
     Ross
     Rothfus
     Rouzer
     Royce (CA)
     Russell
     Rutherford
     Sanford
     Schneider
     Schweikert
     Scott, Austin
     Sensenbrenner
     Sessions
     Shimkus
     Shuster
     Simpson
     Sinema
     Smith (MO)
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Smucker
     Stefanik
     Stewart
     Stivers
     Suozzi
     Taylor
     Tenney
     Thompson (PA)
     Thornberry
     Tipton
     Trott
     Turner
     Upton
     Valadao
     Wagner
     Walberg
     Walden
     Walker
     Walorski
     Walters, Mimi
     Weber (TX)
     Webster (FL)
     Wenstrup
     Westerman
     Williams
     Wilson (SC)
     Wittman
     Womack
     Woodall
     Yoder
     Yoho
     Young (AK)
     Young (IA)
     Zeldin

                               NAYS--170

     Adams
     Aguilar
     Barragan
     Bass
     Beatty
     Bera
     Beyer
     Bishop (GA)
     Blumenauer
     Blunt Rochester
     Bonamici
     Boyle, Brendan F.
     Brady (PA)
     Brown (MD)
     Brownley (CA)
     Bustos
     Butterfield
     Capuano
     Carbajal
     Cardenas
     Carson (IN)
     Cartwright
     Castor (FL)
     Castro (TX)
     Chu, Judy
     Cicilline
     Clark (MA)
     Clarke (NY)
     Clay
     Cleaver
     Clyburn
     Cohen
     Connolly
     Cooper
     Courtney
     Crist
     Crowley
     Davis (CA)
     DeFazio
     DeGette
     Delaney
     DeLauro
     DelBene
     Demings
     DeSaulnier
     Deutch
     Dingell
     Doggett
     Doyle, Michael F.
     Engel
     Espaillat
     Esty (CT)
     Evans
     Foster
     Frankel (FL)
     Fudge
     Gabbard
     Gallego
     Gomez
     Gonzalez (TX)
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hanabusa
     Hastings
     Heck
     Higgins (NY)
     Himes
     Hoyer
     Huffman
     Jackson Lee
     Jayapal
     Jeffries
     Johnson (GA)
     Johnson, E. B.
     Jones
     Kaptur
     Keating
     Kelly (IL)
     Kennedy
     Khanna
     Kihuen
     Kildee
     Kilmer
     Kind
     Krishnamoorthi
     Kuster (NH)
     Langevin
     Larsen (WA)
     Larson (CT)
     Lawrence
     Lawson (FL)
     Lee
     Levin
     Lewis (GA)
     Lieu, Ted
     Loebsack
     Lofgren
     Lowenthal
     Lowey
     Lujan Grisham, M.
     Lujan, Ben Ray
     Lynch
     Maloney, Carolyn B.
     Matsui
     McCollum
     McEachin
     McGovern
     McNerney
     Meeks
     Meng
     Moore
     Moulton
     Murphy (FL)
     Nadler
     Napolitano
     Neal
     Nolan
     Norcross
     O'Halleran
     O'Rourke
     Pallone
     Panetta
     Pascrell
     Payne
     Pelosi
     Pingree
     Pocan
     Price (NC)
     Quigley
     Raskin
     Richmond
     Roybal-Allard
     Ruiz
     Ruppersberger
     Rush
     Ryan (OH)
     Sanchez
     Sarbanes
     Schakowsky
     Schiff
     Schrader
     Scott (VA)
     Scott, David
     Serrano
     Sewell (AL)
     Shea-Porter
     Sherman
     Sires
     Smith (WA)
     Soto
     Swalwell (CA)
     Takano
     Thompson (CA)
     Thompson (MS)
     Titus
     Tonko
     Torres
     Tsongas
     Vargas
     Veasey
     Vela
     Velazquez
     Visclosky
     Wasserman Schultz
     Waters, Maxine
     Watson Coleman
     Welch
     Yarmuth

                             NOT VOTING--14

     Carter (TX)
     Costa
     Cummings
     Davis, Danny
     Ellison
     Katko
     Lipinski
     Rice (NY)
     Ros-Lehtinen
     Scalise
     Slaughter
     Speier
     Walz
     Wilson (FL)


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (during the vote). There are 2 minutes 
remaining.

                              {time}  1555

  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________