[Congressional Record Volume 164, Number 160 (Thursday, September 27, 2018)]
[House]
[Pages H9113-H9118]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    AMERICAN INNOVATION ACT OF 2018

  Mr. BUCHANAN. Mr. Speaker, pursuant to House Resolution 1084, I call 
up the bill (H.R. 6756) to amend the Internal Revenue Code of 1986 to 
promote new business innovation, and for other purposes, and ask for 
its immediate consideration.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore (Mr. Poe of Texas). Pursuant to House 
Resolution 1084, the amendment recommended by the Committee on Ways and 
Means, printed in the bill, modified by the amendment printed in part A 
of House Report 115-985, is adopted, and the bill, as amended, is 
considered read.
  The text of the bill, as amended, is as follows:

                               H.R. 6756

       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 ``American Innovation Act of 
     2018''.

     SEC. 2. SIMPLIFICATION AND EXPANSION OF DEDUCTION FOR START-
                   UP AND ORGANIZATIONAL EXPENDITURES.

       (a) In General.--Section 195 of the Internal Revenue Code 
     of 1986 is amended by redesignating subsections (c) and (d) 
     as subsections (d) and (e), respectively, and by striking all 
     that precedes subsection (d) (as so redesignated) and 
     inserting the following:

     ``SEC. 195. START-UP AND ORGANIZATIONAL EXPENDITURES.

       ``(a) Capitalization of Expenditures.--Except as otherwise 
     provided in this section, no deduction shall be allowed for 
     start-up or organizational expenditures.
       ``(b) Election to Deduct.--
       ``(1) In general.--If a taxpayer elects the application of 
     this subsection with respect to any active trade or 
     business--
       ``(A) the taxpayer shall be allowed a deduction for the 
     taxable year in which such active trade or business begins in 
     an amount equal to the lesser of--
       ``(i) the aggregate amount of start-up and organizational 
     expenditures paid or incurred in connection with such active 
     trade or business, or
       ``(ii) $20,000, reduced (but not below zero) by the amount 
     by which such aggregate amount exceeds $120,000, and
       ``(B) the remainder of such start-up and organizational 
     expenditures shall be charged to capital account and allowed 
     as an amortization deduction determined by amortizing such 
     expenditures ratably over the 180-month period beginning with 
     the month in which the active trade or business begins.
       ``(2) Application to organizational expenditures.--In the 
     case of organizational expenditures with respect to any 
     corporation or partnership, the active trade or business 
     referred to in paragraph (1) means the first active trade or 
     business carried on by such corporation or partnership.
       ``(3) Inflation adjustment.--In the case of any taxable 
     year beginning after December 31, 2019, the $20,000 and 
     $120,000 amounts in paragraph (1)(A)(ii) shall each be 
     increased by an amount equal to--
       ``(A) such dollar amount, multiplied by
       ``(B) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which the taxable 
     year begins, determined by substituting `calendar year 2018' 
     for `calendar year 2016' in subparagraph (A)(ii) thereof.

     If any amount as increased under the preceding sentence is 
     not a multiple of $1,000, such amount shall be rounded to the 
     nearest multiple of $1,000.
       ``(c) Allowance of Deduction Upon Liquidation or 
     Disposition.--
       ``(1) Liquidation of partnership or corporation.--If any 
     partnership or corporation is completely liquidated by the 
     taxpayer, any start-up or organizational expenditures paid or 
     incurred in connection with such partnership or corporation 
     which were not allowed as a deduction by reason of this 
     section may be deducted to the extent allowable under section 
     165.
       ``(2) Disposition of trade or business.--If any trade or 
     business is completely disposed of or discontinued by the 
     taxpayer, any start-up expenditures paid or incurred in 
     connection with such trade or business which were not allowed 
     as a deduction by reason of this section (and not taken into 
     account in connection with a liquidation to which paragraph 
     (1) applies) may be deducted to the extent allowable under 
     section 165. For purposes of this paragraph, in the case of 
     any deduction allowed under subsection (b)(1) with respect to 
     both start-up and organizational expenditures, the amount 
     treated as so allowed with respect to start-up expenditures 
     shall bear the same ratio to such deduction as the start-up 
     expenditures taken into account in determining such deduction 
     bears to the aggregate of the start-up and organizational 
     expenditures so taken into account.''.
       (b) Organizational Expenditures.--Section 195(d) of such 
     Code, as redesignated by subsection (a), is amended by adding 
     at the end the following new paragraphs:
       ``(3) Organizational expenditures.--The term 
     `organizational expenditures' means any expenditure which--
       ``(A) is incident to the creation of a corporation or a 
     partnership,
       ``(B) is chargeable to capital account, and
       ``(C) is of a character which, if expended incident to the 
     creation of a corporation or a partnership having an 
     ascertainable life, would be amortizable over such life.
       ``(4) Application to certain disregarded entities.--In the 
     case of any entity with a single owner that is disregarded as 
     an entity separate from its owner, this section shall be 
     applied in the same manner as if such entity were a 
     corporation.''.
       (c) Election.--Section 195(e)(2) of such Code, as 
     redesignated by subsection (a), is amended to read as 
     follows:
       ``(2) Partnerships and s corporations.--In the case of any 
     partnership or S corporation, the election under subsection 
     (b) shall be made (and this section shall be applied) at the 
     entity level.''.
       (d) Conforming Amendments.--
       (1)(A) Part VIII of subchapter B of chapter 1 is amended by 
     striking section 248 of such Code (and by striking the item 
     relating to such section in the table of sections of such 
     part).
       (B) Section 170(b)(2)(D)(ii) of such Code is amended by 
     striking ``(except section 248)''.
       (C) Section 312(n)(3) of such Code is amended by striking 
     ``Sections 173 and 248'' and inserting ``Sections 173 and 
     195''.
       (D) Section 535(b)(3) of such Code is amended by striking 
     ``(except section 248)''.
       (E) Section 545(b)(3) of such Code is amended by striking 
     ``(except section 248)''.
       (F) Section 545(b)(4) of such Code is amended by striking 
     ``(except section 248)''.
       (G) Section 834(c)(7) of such Code is amended by striking 
     ``(except section 248)''.
       (H) Section 852(b)(2)(C) of such Code is amended by 
     striking ``(except section 248)''.
       (I) Section 857(b)(2)(A) of such Code is amended by 
     striking ``(except section 248)''.
       (J) Section 1363(b) of such Code is amended by adding 
     ``and'' at the end of paragraph (2), by striking paragraph 
     (3), and by redesignating paragraph (4) as paragraph (3).
       (K) Section 1375(b)(1)(B)(i) of such Code is amended by 
     striking ``(other than the deduction allowed by section 248, 
     relating to organization expenditures)''.
       (2)(A) Section 709 of such Code is amended to read as 
     follows:

     ``SEC. 709. TREATMENT OF SYNDICATION FEES.

       ``No deduction shall be allowed under this chapter to a 
     partnership or to any partner of the partnership for any 
     amounts paid or incurred to promote the sale of (or to sell) 
     an interest in the partnership.''.
       (B) The item relating to section 709 in the table of 
     sections for part I of subchapter K of chapter 1 of such Code 
     is amended to read as follows:

``Sec. 709. Treatment of syndication fees.''.

       (3) Section 1202(e)(2)(A) of such Code is amended by 
     striking ``section 195(c)(1)(A)'' and inserting ``section 
     195(d)(1)(A)''.
       (4) The item relating to section 195 in the table of 
     contents of part VI of subchapter B of chapter 1 of such Code 
     is amended to read as follows:

``Sec. 195. Start-up and organizational expenditures.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to expenditures paid or incurred in connection 
     with active trades or businesses which begin in taxable years 
     beginning after December 31, 2018.

     SEC. 3. PRESERVATION OF START-UP NET OPERATING LOSSES AND TAX 
                   CREDITS AFTER OWNERSHIP CHANGE.

       (a) Application to Net Operating Losses.--Section 382(d) of 
     the Internal Revenue Code of 1986 is amended by adding at the 
     end the following new paragraph:
       ``(4) Exception for start-up losses.--
       ``(A) In general.--In the case of any net operating loss 
     carryforward described in paragraph (1)(A) which arose in a 
     start-up period taxable year, the amount of such net 
     operating loss carryforward otherwise taken into account 
     under such paragraph shall be reduced by the net start-up 
     loss determined with respect to the trade or business 
     referred to in subparagraph (B)(i) for such start-up period 
     taxable year.
       ``(B) Start-up period taxable year.--The term `start-up 
     period taxable year' means any taxable year of the old loss 
     corporation which--
       ``(i) begins before the close of the 3-year period 
     beginning on the date on which any trade or business of such 
     corporation begins as an active trade or business (as 
     determined under section 195(d)(2) without regard to 
     subparagraph (B) thereof), and
       ``(ii) ends after September 10, 2018.
       ``(C) Net start-up loss.--
       ``(i) In general.--The term `net start-up loss' means, with 
     respect to any trade or business referred to in subparagraph 
     (B)(i) for any start-up period taxable year, the amount which 
     bears the same ratio (but not greater than 1) to the

[[Page H9114]]

     net operating loss carryforward which arose in such start-up 
     period taxable year as--

       ``(I) the net operating loss (if any) which would have been 
     determined for such start-up period taxable year if only 
     items of income, gain, deduction, and loss properly allocable 
     to such trade or business were taken into account, bears to
       ``(II) the amount of the net operating loss determined for 
     such start-up period taxable year.

       ``(ii) Special rule for last taxable year in start-up 
     period.--In the case of any start-up period taxable year 
     which ends after the close of the 3-year period described in 
     subparagraph (B)(i) with respect to any trade or business, 
     the net start-up loss with respect to such trade or business 
     for such start-up period taxable year shall be the same 
     proportion of such loss (determined without regard to this 
     clause) as the proportion of such start-up period taxable 
     year which is on or before the last day of such period.
       ``(D) Application to net operating loss arising in year of 
     ownership change.--Subparagraph (A) shall apply to any net 
     operating loss described in paragraph (1)(B) in the same 
     manner as such subparagraph applies to net operating loss 
     carryforwards described in paragraph (1)(A), but by only 
     taking into account the amount of such net operating loss 
     (and the amount of the net start-up loss) which is allocable 
     under paragraph (1)(B) to the period described in such 
     paragraph. Proper adjustment in the allocation of the net 
     start-up loss under the preceding sentence shall be made in 
     the case of a taxable year to which subparagraph (C)(ii) 
     applies.
       ``(E) Application to taxable years which are start-up 
     period taxable years with respect to more than 1 trade or 
     business.--In the case of any net operating loss carryforward 
     which arose in a taxable year which is a start-up period 
     taxable year with respect to more than 1 trade or business--
       ``(i) this paragraph shall be applied separately with 
     respect to each such trade or business, and
       ``(ii) the aggregate reductions under subparagraph (A) 
     shall not exceed such net operating loss carryforward.
       ``(F) Continuity of business requirement.--If the new loss 
     corporation does not continue the trade or business referred 
     to in subparagraph (B)(i) at all times during the 2-year 
     period beginning on the change date, this paragraph shall not 
     apply with respect to such trade or business.
       ``(G) Certain title 11 or similar cases.--
       ``(i) Multiple ownership changes.--In the case of a 2nd 
     ownership change to which subsection (l)(5)(D) applies, this 
     paragraph shall not apply for purposes of determining the 
     pre-change loss with respect to such 2nd ownership change.
       ``(ii) Certain insolvency transactions.--If subsection 
     (l)(6) applies for purposes of determining the value of the 
     old loss corporation under subsection (e), this paragraph 
     shall not apply.
       ``(H) Not applicable to disallowed interest.--This 
     paragraph shall not apply for purposes of applying the rules 
     of paragraph (1) to the carryover of disallowed interest 
     under paragraph (3).
       ``(I) Transition rule.--This paragraph shall not apply with 
     respect to any trade or business if the date on which such 
     trade or business begins as an active trade or business (as 
     determined under section 195(d)(2) without regard to 
     subparagraph (B) thereof) is on or before September 10, 
     2018.''.
       (b) Application to Excess Credits.--Section 383 of such 
     Code is amended by redesignating subsection (e) as subsection 
     (f) and by inserting after subsection (d) the following new 
     subsection:
       ``(e) Exception for Start-up Excess Credits.--
       ``(1) In general.--In the case of any unused general 
     business credit of the corporation under section 39 which 
     arose in a start-up period taxable year, the amount of such 
     unused general business credit otherwise taken into account 
     under subsection (a)(2)(A) shall be reduced by the start-up 
     excess credit determined with respect to any trade or 
     business referred to in section 382(d)(4)(B)(i) for such 
     start-up period taxable year.
       ``(2) Start-up period taxable year.--For purposes of this 
     subsection, the term `start-up period taxable year' has the 
     meaning given such term in section 382(d)(4)(B).
       ``(3) Start-up excess credit.--For purposes of this 
     subsection, the term `start-up excess credit' means, with 
     respect to any trade or business referred to in section 
     382(d)(4)(B)(i) for any start-up period taxable year, the 
     amount which bears the same ratio to the unused general 
     business credit which arose in such start-up period taxable 
     year as--
       ``(A) the amount of the general business credit which would 
     have been determined for such start-up period taxable year if 
     only credits properly allocable to such trade or business 
     were taken into account, bears to
       ``(B) the amount of the general business credit determined 
     for such start-up period taxable year.
       ``(4) Application of certain rules.--Rules similar to the 
     rules of subparagraphs (C)(ii), (D), (E), and (F) of section 
     382(d)(4) shall apply for purposes of this subsection.
       ``(5) Transition rule.--This subsection shall not apply 
     with respect to any trade or business if the date on which 
     such trade or business begins as an active trade or business 
     (as determined under section 195(d)(2) without regard to 
     subparagraph (B) thereof) is on or before September 10, 
     2018.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after September 10, 2018.

     SEC. 4. BUDGETARY EFFECTS.

       (a) Statutory PAYGO Scorecards.--The budgetary effects of 
     this Act shall not be entered on either PAYGO scorecard 
     maintained pursuant to section 4(d) of the Statutory Pay-As-
     You-Go Act of 2010.
       (b) Senate PAYGO Scorecards.--The budgetary effects of this 
     Act shall not be entered on any PAYGO scorecard maintained 
     for purposes of section 4106 of H. Con. Res. 71 (115th 
     Congress).

  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 Ways and Means.
  The gentleman from Florida (Mr. Buchanan) and the gentlewoman from 
California (Ms. Judy Chu) each will control 30 minutes.
  The Chair recognizes the gentleman from Florida.


                             General Leave

  Mr. BUCHANAN. Mr. Speaker, I ask unanimous consent that all Members 
have 5 legislative days within which to revise and extend their remarks 
and include extraneous materials on H.R. 6756, currently under 
consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Florida?
  There was no objection.
  Mr. BUCHANAN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I am grateful this bill has been brought to the floor 
for consideration.
  I rise in support of H.R. 6756, the American Innovation Act, which 
supports and encourages entrepreneurs to start new businesses.
  The United States recently dropped out of Bloomberg's list of the top 
10 most innovative countries in the world. New business formations in 
the United States have taken a dramatic downturn since the 2008 
recession.
  Between 1977 and 2007, those 30 years, the economy added 120,000, 
net, new businesses each year. Since 2008, however, the economy has 
added only about 2,000, net, new businesses each year since.
  We should all be committed to making the United States the innovation 
leader of the world. The American Innovation Act is a down payment 
towards reaching that goal.
  The American Innovation Act encourages entrepreneurs in two ways:
  First, H.R. 6756 allows new businesses to immediately deduct more of 
their startup organizational expenses. It simplifies the Code and 
allows businesses to deduct up to $20,000 of startup and organizational 
expenses when their new business begins. This doubles the amount of the 
expenses that a business may write off in its first year.
  Second, the American Innovation Act helps new businesses innovate by 
preserving valuable tax benefits, like the R&D credit, that are 
generated from activities conducted in the business' early years.
  As any entrepreneur knows, starting a new business requires hard work 
and a lot of capital. During its early years, many businesses operate 
at a loss, and these losses are used in later years when the business 
matures and becomes more profitable. To fund their innovation and 
growth, entrepreneurs and business owners may seek equity capital from 
other investors.
  Today, the infusion of this new investment may trigger limits on the 
use of a corporation's valuable losses and credits from the business' 
earlier years. Under the American Innovation Act, our country's 
businesses may fund their growth and innovation with equity investments 
from new shareholders without limiting the use of these valuable losses 
and credits.
  Mr. Speaker, the American Innovation Act supports our entrepreneurs 
and innovators and facilitates the creation of new businesses. I urge 
support for this important bill, and I reserve the balance of my time.
  Ms. JUDY CHU of California. Mr. Speaker, I yield myself such time as 
I may consume.
  Mr. Speaker, I rise in opposition to the American Innovation Act.
  But before I talk about the underlying bill, I want to make clear 
that this bill is part of the Republicans' larger tax scam 2.0. Instead 
of increasing opportunity or addressing the income inequality for 
Americans, the Republicans are doubling down on their failed policies 
that benefit the wealthiest Americans and are ultimately paid for by 
the middle class.
  As a result of the Republicans' tax law, health insurance companies 
in

[[Page H9115]]

State after State are announcing higher premiums for next year, while 
health coverage for those living with preexisting conditions is on the 
chopping block. To make matters worse, the Medicare trustees cut 3 
years off the life of the Medicare trust fund because of the Republican 
tax bill.
  But instead of backing away from their mistake, the Republicans are 
doubling down. Their second round of tax cuts for the wealthy will 
further compromise the future of Medicare and Social Security, 
depriving seniors the benefits they have earned.
  Not to mention, Republicans are cutting taxes for the rich for the 
second time in less than a year. By simply making permanent the cut to 
the top individual tax rate, Republicans are providing a huge tax cut 
for just a fraction of the top 5 percent of taxpayers.
  At the same time, the Republicans have doubled down on their attack 
on the middle class by making permanent the limits to the State and 
local tax deduction. In fact, in my home district in California, 37 
percent of tax filers claimed the SALT deduction in 2016, and the 
average SALT deduction was $18,517 according to IRS data. This is 
nearly double the cap that Republicans have put in place, and that 
means that middle class families in my district are footing the bill 
for the wealthy's permanent tax cuts.
  In addition, Republicans are also permanently limiting the mortgage 
interest deduction and casualty loss deduction.
  Furthermore, the so-called party of fiscal conservatism will be 
passing over $3 trillion in tax breaks in less than a year. Because of 
the Republican tax law and President Trump's irresponsible policies, 
the U.S. Treasury is now borrowing money at a rate of $5.4 billion per 
day.
  This package, like the one before it, is being rushed through with no 
hearings and no input from stakeholders. A rushed and lopsided process 
resulted in tax bill 1.0, and, in fact, Democrats have identified over 
100 problems with the Republicans' tax law.
  Republicans are doubling down on their flawed policies with this 
exercise, with bills guaranteed to be dead on arrival in the Senate. 
Tax scam 2.0 is another reckless tax cut for the wealthy that leaves 
behind average, hardworking families.

  Now I would like to discuss H.R. 6756, the American Innovation Act.
  This bill has never received consideration in a public committee 
hearing. Last year, the Republicans' rushed process created the end 
result of a disastrous tax law that is riddled with problems. Yet 
rather than learn from their mistake, the Republicans are, once again, 
moving forward with legislation without the appropriate oversight.
  Mr. Speaker, I strongly believe in American innovation and 
entrepreneurship. As the only member of both the House Small Business 
Committee and the Ways and Means Committee, I know just how critical 
small businesses are to the growth of our economy. They create two out 
of every three new jobs and allow people to be their own bosses.
  I know that my Democratic colleagues and I would have 
enthusiastically and actively participated in the construction of 
bipartisan legislation to help small businesses deduct more of their 
startup costs. This is something I care deeply about because access to 
capital is one of the biggest challenges facing our entrepreneurs 
today. However, Democrats were shut out of the process once again as 
the bill was rushed to the floor.
  With only a few days left for Congress to be in session, the 
Republicans have yet to address rising healthcare costs and how to pay 
for innovation and value in our healthcare system.

                              {time}  1415

  They have done nothing to stop the haphazard and reckless trade 
policy coming out of the White House.
  And this week, the Republicans are driving these so-called tax reform 
2.0 bills down a road to nowhere. If they were serious about helping 
small businesses and innovative startups, they surely would have not 
treated these provisions like an afterthought to their 2017 tax bill.
  Therefore, I oppose H.R. 6756 and encourage my colleagues to do the 
same. We should work together to ensure that small businesses and 
innovative startups have the tools to not just survive, but actually 
thrive in the economy. We can do better in a fiscally responsible 
manner that does not recklessly add to the deficit.
  Mr. Speaker, I reserve the balance of my time.
  Mr. BUCHANAN. Mr. Speaker, I yield 2 minutes to the distinguished 
gentleman from Texas (Mr. Brady), chairman of the Ways and Means 
Committee.
  Mr. BRADY of Texas. Mr. Speaker, I rise in support of H.R. 6756, the 
American Innovation Act of 2018, and thank Chairman Buchanan and others 
for his leadership for America's startup businesses and innovation.
  The truth is, startup businesses are huge contributors to innovation 
and productivity as well as job creation here in America. But the 
business environment since the great financial crisis has been tough 
for those looking to take a risk and start a business.
  In fact, new business formation here in America took a dramatic 
downturn during the recession, with startups only accounting for 8 
percent of all businesses in 2015. That is cut in half from 1977. The 
United States also dropped out of Bloomberg's list of the top 10 most 
innovative countries in the world. We know that the nation that wins 
the innovation race wins the future. This is a problem and, more 
importantly, it is a call to action.
  The American Innovation Act, led by Chairman Buchanan, will help our 
entrepreneurs move a business from their kitchen table to their first 
office by allowing them to write off more startup costs in their early 
years--years where every dollar matters.
  This bill will also allow startups to expand and go to the next level 
here in America by bringing in new investors without triggering tax 
limits on their access to tax benefits like the R&D tax credit for 
activities conducted in their early years.
  With a renewed focus on innovation and entrepreneurship, the American 
Innovation Act will help America's risk-takers create jobs, invest in 
their communities, and continue strengthening America's economy.
  Mr. Speaker, this is a very simple bill. It can be read in just a 
couple of minutes. It focuses on America's entrepreneurs and startup 
costs.
  A ``yes'' vote is in support of startup businesses here in America.
  A ``yes'' vote is for innovation expansion here in the United States, 
not somewhere else.
  A ``yes'' vote is for economic growth.
  Ms. JUDY CHU of California. Mr. Speaker, I yield 2 minutes to the 
gentleman from Vermont (Mr. Welch).
  Mr. WELCH. Mr. Speaker, it is with some sadness that I have to say I 
believe this is an absolutely terrible tax bill.
  The economy is growing. That has been a claim that has been made by 
proponents of this tax policy. But it is growing for the few. It is not 
growing for the many.
  We have the lowest unemployment rate we have had in years. We have 
had the highest profits in corporations that we have had since before 
the Great Depression. Yet, right now, in this country, childhood 
poverty is increasing relentlessly. Relentlessly.
  How does that happen when we have such a great so-called economy?
  It happens because we have created the hydraulic system that is 
transferring money from the low income and middle class to the very 
wealthy. That is what this Congress has done. And there are 
consequences to the children who are now in poverty and will be in 
poverty, but also to those everyday families who aren't on the right 
side of the digital divide and whose wages for the past 20 years have 
been stagnant or declining, even as the things they need--college 
education for their kids, prescription medication for their families--
those prices are exploding.
  And by the way, Pharma gets a huge giveaway. They have got the 
highest profits they have ever had, and we are passing a tax bill that 
gives them more. We are shoveling money to them when they are sticking 
price increases to all of us.
  This doesn't happen by accident. This has nothing to do with the so-
called entrepreneurial economy. This has to do with a Congress that has 
no conscience, that doesn't stand up for everyday people and say: We 
want policies that let you have a chance.

[[Page H9116]]

  Mr. Speaker, defeat this bill.
  Mr. BUCHANAN. Mr. Speaker, I yield myself such time as I may consume.
  Let me say to the gentleman that I am not sure how the economy works 
in Vermont, but I can tell you that in terms of the tax package--the 
original one and this one, 2.0--Florida is on fire, in terms of growth. 
There is more energy and more excitement about the tax thing.
  Ninety percent of people are getting a tax break. For families of 
four in my area, it is $2,400. We have seen little or no growth for the 
last 10 years. Now we are at 2 to 3 percent. We have got real growth. 
It is tough to get the amount of workers that we now need in Florida, 
in general. That is pushing paychecks.
  So I don't know what is going on in Vermont or different parts of the 
country, but I can tell you that in Florida it is making a huge 
difference in terms of the confidence with a lot of startups and 
entrepreneurs.
  Mr. Speaker, I yield 2 minutes to the gentleman from Michigan (Mr. 
Mitchell).
  Mr. MITCHELL. Mr. Speaker, I am changing my comments because I was 
offended by the last speaker.
  I grew up in a family where dad built trucks on the line and mom 
worked at the Salvation Army. In my district alone, people get to keep 
$2,700 of the money they earn in their pocket rather than being sent to 
the Federal Government so our colleagues on the other side of the aisle 
can find a way to spend it.
  The Tax Cuts and Jobs Act was the first major reforms and major tax 
cuts in 31 years. I was young the last time Congress was actually able 
to do something about taxing people, taxing money that they earned so 
we could figure out how to spend it here--and, frankly, some days, I am 
convinced not well.
  Since that tax cut jobs have grown. As is noted, unemployment is down 
record levels across all demographics. The class warfare kind of amazes 
me, frankly.
  This week, we are building on those achievements by advancing three 
critical pieces legislation. First, the bill now, the American 
Innovation Act, will allow startup businesses to double the write-off 
amount of startup costs to encourage new business, exactly the type of 
people we want to grow businesses and create jobs in this country. It 
will bring in new investors and doesn't trigger limits on their tax 
benefits.
  Today, we will also consider the Family Savings Act, which gives 
broader options for retirement savings for people that go to work and 
want to know what happens when they get older.
  Tomorrow, we will be debating the Protecting Families and Small 
Business Tax Cuts, which makes permanent the individual and small 
business tax cuts from the Tax Cuts and Jobs Act, tax benefits that 
were denied in the Senate because it was determined they needed 60 
votes.
  I will tell you where the 60 votes did not come in. It did not come 
in from our colleagues on the other side of the aisle. So when we were 
criticized that they are not permanent at this time, it is because our 
colleagues on the other side of the aisle decided they would use it as 
a political talking point rather than make permanent the benefits that 
would have helped my family, my parents, when they worked.
  Mr. Speaker, I am a cosponsor of all three bills, and I ask my 
colleagues to support them.
  Ms. JUDY CHU of California. Mr. Speaker, I yield 3 minutes to the 
gentleman from Wisconsin (Mr. Kind).
  Mr. KIND. Mr. Speaker, I thank the gentlewoman from California for 
yielding.
  Mr. Speaker, I rise reluctantly in opposition to this legislation. I 
say reluctantly because there are some good, decent provisions that are 
contained in this legislation.
  The first year expensing for new businesses, the net operating loss 
and tax credit carry over to new ownership and small businesses.
  There is a lot of bipartisan support for doing more to support 
entrepreneurs and the startup of businesses in that early stage capital 
that this bill, in part, is meant to address. Unfortunately the process 
is all wrong. Instead of holding hearings, instead of getting feedback, 
instead of soliciting bipartisan support--and I am confident that if 
time were in order to build support for this bill, there would be wide 
bipartisan support--this legislation is being driven for one reason and 
one reason only: the political calendar. That is a missed opportunity.
  We ought to get back to doing our business on the Ways and Means 
Committee and start holding hearings, start getting feedback, and doing 
it in a fiscally responsible manner.
  This bill, because of no effort to find an offset, will increase our 
debt by over $5 billion. Again, it is for some press releases leading 
to the midterm elections. Who cares what the impact is going to be for 
our children and grandchildren or on future financial obligations that 
our Nation shares. Apparently, that fiscal responsibility is out the 
window right now, based on the tax cut that passed last year and the 
next two bills coming up out of the Ways and Means Committee this week.
  But what else is also unfortunate is that during the markup of this 
bill, our good friend, the gentleman from California (Mr. Thompson), 
offered a very important and I thought thoughtful amendment that would 
allow tax credit deductibility for small businesses that were impacted 
by natural disasters.
  My district in western Wisconsin just got slammed with major flooding 
this past month. Unfortunately, there is not a lot of help at the 
Federal and State level, whether it is FEMA or State agencies, when it 
comes to helping small businesses get back on their feet. There just 
isn't. There are small, low-interest SBA loans and maybe some no-
interest loans that the State can offer that all have to be repaid. 
Other than that, there is really nothing.
  Representative Thompson offered an amendment that said: Let's have 
the Federal Tax Code work with these small businesses rather than 
against them. Instead of that being thoughtfully considered, it was 
rejected out of hand because of the rush to get this bill on the floor. 
Again, another missed opportunity of how we should be conducting 
business around here and recognizing the needs of small businesses 
throughout the country.
  Let's slow down. Let's reject what is before us today. We still have 
time. The Senate is not planning on taking up these bills. Let's go 
back to doing it the right way. Let's talk to one another and find some 
common ground. And let's do it in a fiscally responsible manner so we 
are not saddling future generations with huge debt, especially given 
the aging population in our country.
  What we have before us today is the result of a bad process. We can 
do better. I encourage my colleagues to reject it. Let's do it the 
right way.
  Mr. BUCHANAN. Mr. Speaker, I yield myself such time as I may consume.
  I just want to mention to the gentleman from Wisconsin that there 
were no amendments offered on this bill, if he wants to check that.
  I also have a list of groups who are supportive of this bill, such as 
Associated Builders and Contractors, the Chamber of Commerce, 
Biotechnology Innovation Organization, and Angel Capital Association.
  Mr. Speaker, I include in the Record this document listing 
organizations in support of the bill.

             H.R. 6756 the American Innovation Act of 2018

       AdvaMed
       American Dental Association
       Americans for Tax Reform, 60 Plus Association, American 
     Commitment, American Conservative Union, American Consumer 
     Institute, ALEC Action, Americans for a Strong Economy, 
     Association of Mature American Citizens, Campaign For 
     Liberty, Ryan Ellis, Center for a Free Economy, Center for 
     Freedom and Prosperity, Center for Individual Freedom, Center 
     for Worker Freedom, Citizen Outreach (Nevada), Consumer 
     Action for a Strong Economy, Council for Citizens Against 
     Government Waste, Competitive Enterprise Institute, Digital 
     Liberty, Family Business Coalition, Florida Center Right 
     Coalition, FreedomWorks, Frontiers of Freedom, Goldwater 
     Institute (Arizona), Granite State Taxpayers (New Hampshire), 
     Heritage Action for America, Hispanic American Center for 
     Economic Research, Hispanic Leadership Fund, Independent 
     Women's Forum, Independent Women's Voice, Institute for 
     Liberty, The James Madison Institute (Florida), Jesse Helms 
     Center (North Carolina), Kansas Policy Institute, Less 
     Government, Maine Center-right Coalition Meeting, Mississippi 
     Center for Public Policy, National Taxpayers Union,

[[Page H9117]]

     New Hampshire Center-Right Meeting, Ohioans for Tax Reform, 
     The Ohio Diversity Coalition, Oregon Capitol Watch, Pegasus 
     Institute (Kentucky), Pegasus Institute (Kentucky), Pelican 
     Institute for Public Policy (Louisiana), Property Rights 
     Alliance, Reaching America, Rhode Island Center for Freedom 
     and Prosperity, Rio Grande Foundation (New Mexico), Small 
     Business & Entrepreneurship Council, Ohio House of 
     Representatives Chair, Ohio Center-right Meeting, Taxpayers 
     Protection Alliance, Tea Party Nation, We the People 
     Convention, Women for Trump
       Angel Capital Association
       Associated Builders and Contractors, Inc. (Key Vote)
       Biotechnology Innovation Organization
       Chamber of Commerce
       Club for Growth
       Heating, Ventilation, Air Conditioning, and Refrigeration 
     Industry: Air Conditioning Contractors of America, Heating 
     Air Conditioning and Refrigeration Distributors 
     International. Plumbing Heating Cooling Contractors 
     Association, AMCA International, Air-Conditioning Heating and 
     Refrigeration Institute
       Heritage Foundation
       National Venture Capital Association
       The National Electrical Contractors Association

  Mr. BUCHANAN. Mr. Speaker, I yield 2 minutes to the gentleman from 
Illinois (Mr. LaHood).
  Mr. LaHOOD. Mr. Speaker, I want to thank Chairman Buchanan for all 
his hard work on this legislation.
  Mr. Speaker, today, I rise in support of H.R. 6756, the American 
Innovation Act.
  Over the last 9 months since we passed once-in-a-lifetime tax reform, 
small businesses have been empowered by those positive changes to 
expand operations, hire new workers, reward employees with bonuses or 
increased pay, and keep jobs here at home.
  In central and west central Illinois, in my district, we have seen 
firsthand how the Tax Cuts and Jobs Act has alleviated businesses of 
the burdensome Tax Code we were under before, giving companies all 
across different sectors and sizes the ability to innovate and grow 
into businesses.
  They are companies such as Rivian Automotive in Bloomington-Normal, 
Illinois, who is creating state-of-the-art full electric-powered 
pickups and SUVs. They announced in May they will be manufacturing 
their trucks in Bloomington-Normal, bringing jobs and economic 
opportunity to our community.
  AutonomouStuff in Morton, Illinois, has evolved into a worldwide 
leader in the development of innovative software and engineering 
technologies that enable robotics and autonomy.
  Precision Planting in Tremont, Illinois, is testing agriculture 
practices so that farmers all across the heartland can find innovative 
ways to increase production and sustain equipment, making central 
Illinois the Silicon Valley of the Midwest.
  With the largest medical community in downstate Illinois, the 
innovative breakthroughs at our local healthcare systems, such as OSF 
HealthCare's Jump Trading Simulation Center in Peoria, or the Memorial 
Center for Learning and Innovation in Springfield, serve as catalysts 
for reforming how healthcare is delivered by making healthcare safer, 
more accessible, and affordable.

                              {time}  1430

  The American Innovation Act, which we are presenting today after a 
lot of thoughtful work by the committee, builds upon the economic 
successes small businesses have seen over the last 9 months, unleashing 
entrepreneurs' innovative spirit, so they can continue to grow, 
prosper, and succeed.
  Since the recession, creation of new businesses has taken a 
significant downturn, and it is time we reform our Tax Code so 
entrepreneurs have the ability to achieve their goals.
  Mr. Speaker, I commend Chairman Buchanan and Chairman Brady for their 
hard work and urge my colleagues to support this bill.
  Ms. JUDY CHU of California. Mr. Speaker, I yield myself the balance 
of my time.
  Mr. Speaker, first, I would like to clarify something. I appreciate 
the comment from Chairman Buchanan regarding Mr. Thompson's amendment, 
but that does not change the fact that, during tax bill 2.0 and its 
markup, every Republican present voted against permanent natural 
disaster relief on H.R. 6760.
  Mr. Speaker, Democrats are strong believers in the power of American 
innovation and entrepreneurship. Democrats support small businesses, 
which are the backbone of our economy and create two out of every three 
new jobs. My Democratic colleagues and I would have loved to 
participate in the drafting of bipartisan legislation to help small 
businesses and innovative startups succeed, but that is not the process 
that the majority adopted.
  This bill, just like tax scam 1.0, has never received the scrutiny it 
deserves in a public committee hearing. A rushed and lopsided process 
resulted in the disastrous tax law. Yet, rather than learn from their 
mistakes, Republicans are once again rushing through legislation 
without the appropriate oversight.
  This process should tell you how serious the majority is about 
helping small businesses, which is not very. If the Republicans were 
serious about helping small businesses last year, they surely would not 
have enacted their so-called small business tax benefit to disguise a 
massive tax cut for millionaires.
  If Republicans were serious about helping small businesses and 
innovative startups today, they surely would not have treated these 
provisions like an afterthought, guaranteed to be dead on arrival in 
the Senate.
  Mr. Speaker, I believe we should work together to ensure that small 
businesses, ranging from mom-and-pop shops to cutting-edge startups, 
have the tools they need to thrive in this economy. But we should do it 
the right way, with hearings and input from stakeholders, and in a 
fiscally responsible manner, not by saddling future Americans with more 
debt.
  Mr. Speaker, I urge my colleagues to oppose this legislation, and I 
yield back the balance of my time.
  Mr. BUCHANAN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, as someone who has been in business 30 years, I can just 
tell you that, in the last couple of years, our economy in Florida and 
I think all over America has exploded. People are excited. They are 
enthusiastic.
  In fact, I did a roundtable of all women in my district. Why did I do 
that? Because 57 percent of startups in the next 10 years will be women 
led. So why would we want to not support giving them additional 
deductions? Instead of just writing off $5,000, they can write off 
$20,000.
  In terms of opening businesses, it is as little as 2,000 a year. It 
used to be 100,000-plus new startups a year. That is where the jobs are 
created.
  I chaired the local chamber in Sarasota, Florida. I can tell you, out 
of the 2,400 businesses, most of them were 15 employees or less, 90 
percent.
  I also chaired the Florida chamber. There were 126,000 businesses in 
that federation, and most of them were 15 employees or less, many times 
1, 2, 3 employees.
  It is tough when you open a business. Usually, you have losses for a 
couple of years. This bill helps to address that, especially as they 
try to attract capital. They could use some of those losses to attract 
capital.
  This is all about pro-business and growth. We have had little or no 
growth for the last 10 years. Now we are starting to take off and be 
much more competitive in the world. That is what this bill is all 
about.
  Mr. Speaker, let me just close with this thought. For too many years, 
the United States has been lagging in the creation of new businesses. 
Startup businesses are vital to the American economy, because they are 
significant contributors to innovation, productivity, and job creation.
  Together, we should all support the legislation. This makes it easier 
and less costly for hardworking Americans to realize their American 
Dream of starting businesses.
  The American Innovation Act does just that. It supports innovators, 
entrepreneurs, workers, and the economy with commonsense policy 
solutions.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. All time for debate has expired.
  Pursuant to House Resolution 1084, 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.

[[Page H9118]]

  The SPEAKER pro tempore. The question is on passage of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. BUCHANAN. Mr. 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, further 
proceedings on this question will be postponed.

                          ____________________