[Congressional Record Volume 171, Number 200 (Monday, December 1, 2025)]
[House]
[Pages H4950-H4952]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
IMPROVING CAPITAL ALLOCATION FOR NEWCOMERS ACT OF 2025
Mr. DAVIDSON. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 4431) to amend the Investment Company Act of 1940 with
respect to the definition of qualifying venture capital funds, and for
other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 4431
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 ``Improving Capital
Allocation for Newcomers Act of 2025''.
SEC. 2. QUALIFYING VENTURE CAPITAL FUNDS.
Section 3(c)(1) of the Investment Company Act of 1940 (15
U.S.C. 80a-3(c)(1)) is amended--
(1) in the matter preceding subparagraph (A), by striking
``250 persons'' and inserting ``500 persons''; and
(2) in subparagraph (C)(i)--
(A) by striking ``$10,000,000'' and inserting
``$50,000,000''; and
(B) by striking ``beginning from a measurement made by
the Commission on a date selected by the Commission'' and
inserting ``beginning from a measurement made on the date of
the enactment of the Improving Capital Allocation for
Newcomers Act of 2025''.
SEC. 3. STUDY AND RULEMAKING.
(a) Study Required.--
(1) In general.--Beginning 5 years after the date of
enactment of this Act, the Advocate for Small Business
Capital Formation, in consultation with the Investor
Advocate, shall conduct a study on the effect of the
amendments made by section 2 on the businesses and startup
entities in which qualifying venture capital funds invest,
specifically including, with respect to such businesses and
startup entities, changes or trends relating to--
(A) the geographic distribution of capital to portfolio
companies;
(B) the socio-economic characteristics of founders or
controlling persons;
(C) the veteran status of founders or controlling
persons;
(D) the industry sector, size, stage of development, and
related details; and
(E) other factors or metrics determined by the Advocate
for Small Business Capital Formation.
(2) Authorities related to required study.--For purposes
of conducting the study required by paragraph (1), the
Advocate for Small Business Capital Formation and the
Investor Advocate shall have authority to--
(A) obtain from the Securities and Exchange Commission
(in this section referred to as the ``Commission'') and
utilize any
[[Page H4951]]
data or information necessary to carry out the study;
(B) request and receive assistance from any division or
office of the Commission, including the Division of Economic
and Risk Analysis; and
(C) enter into agreements with third parties to assist in
data analysis.
(b) Report.--The Advocate for Small Business Capital
Formation shall issue a report to the Congress containing all
findings and determinations made in carrying out the study
required by subsection (a)(1), and make such report available
to the public on the website of the Commission.
(c) Public Comment.--During the 180-day period beginning
on the date the report is issued under subsection (b), the
Commission shall solicit feedback from the public on the
findings and determinations contained in the report.
(d) Rulemaking.--
(1) In general.--The Commission, in consultation with the
Investor Advocate and the Advocate for Small Business Capital
Formation, may, after considering all comments received under
subsection (c) and only if the Commission determines in such
report that the amendments made by section 2 have had a
demonstrable effect on increasing the geographic distribution
of capital to portfolio companies, increasing the variety of
the socio-economic characteristics of founders or controlling
persons, or increasing the number of founders or controlling
persons who are veterans, issue rules to--
(A) increase or decrease the 500 person threshold
described in the matter preceding subparagraph (A) of section
3(c)(1) of the Investment Company Act of 1940, but such
threshold may not exceed 750 persons or be reduced below 250
persons; and
(B) increase or decrease the $50,000,000 dollar figure in
section 3(c)(1)(C)(i) of the Investment Company Act of 1940,
but such dollar figure may not exceed $100,000,000 or be
reduced below $10,000,000.
(2) Deadline for rulemaking.--The rulemaking authority in
paragraph (1) only applies to a rule with respect to which
the proposed rule was issued during the 180-day period
beginning at the end of the public comment period described
in subsection (c).
(3) No effect on inflation adjustments.--A rule issued
under this subsection shall have no effect on the requirement
under clause (i) of section 3(c)(1)(C) of the Investment
Company Act of 1940 (15 U.S.C. 80a-3(c)(1)(C)), as amended by
section 2, to index the first dollar amount in such clause
for inflation.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Ohio (Mr. Davidson) and the gentlewoman from California (Ms. Waters)
each will control 20 minutes.
The Chair recognizes the gentleman from Ohio.
General Leave
Mr. DAVIDSON. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days to revise and extend their remarks and
include extraneous material on the bill.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Ohio?
There was no objection.
Mr. DAVIDSON. Mr. Speaker, I yield 3 minutes to the gentleman from
South Carolina (Mr. Timmons).
Mr. TIMMONS. Mr. Speaker, I rise for my bill, H.R. 4431, the
Improving Capital Allocation for Newcomers Act, also known as the ICAN
Act.
I am proud to partner with my colleague Representative Brittany
Pettersen on this bipartisan legislation that expands access to venture
capital far beyond our Nation's traditional financial hubs.
H.R. 4431 updates the qualifying venture capital fund exemption by
raising the capital cap from $10 million to $50 million and by
increasing the allowable number of investors from 250 to 500.
These updates allow venture funds to raise more capital from more
individuals. This will support the growth of startups located outside
of Silicon Valley and other major financial centers.
Today, nearly half of the United States' venture funding goes into
companies in California alone, and more than 70 percent is concentrated
in only four States. Meanwhile, many entrepreneurs in other regions
struggle to secure critical Series A funding, which limits their
ability to grow and attract later-stage investments.
Mr. Speaker, an entrepreneur in Spartanburg, South Carolina, deserves
the same access to capital as an entrepreneur in Silicon Valley. This
bill democratizes venture capital by enabling more Americans to invest
in their own communities, drive innovation, and create good-paying
jobs. It is about expanding opportunity and fostering economic growth
in regions that are much in need.
Mr. Speaker, I urge my colleagues on both sides of the aisle to
support this legislation and to help ensure that investors and
entrepreneurs in every one of our districts have a fair and level
playing field.
Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume.
I rise in support of H.R. 4431, the Improving Capital Allocation for
Newcomers Act of 2025, or ICAN Act, offered by Mr. Timmons and Ms.
Pettersen.
Like the DEAL Act, the ICAN Act also amends the definition of
``venture capital fund'' under the Investment Company Act. Currently,
in order to qualify as a venture capital fund under this act, a private
fund must hold $12 million or less in assets and have no more than 250
investors. This bill adjusts those figures upward, raising the cap to
$50 million and the investor limit to 500.
It also requires the SEC to conduct a study 5 years after enactment
to determine the bill's impact on how capital is being allocated to
companies owned by these venture funds. Based on the results of the
study, the SEC could further adjust the $50 million and 500 beneficial
owner limit upward or downward.
The ICAN Act should help venture funds to more widely invest in small
and growing businesses.
Mr. Speaker, I urge all colleagues to support H.R. 4431 to make it
easier for capital to flow to startups and small businesses. This bill
does so by increasing the dollar size and number of investors for
venture funds.
Additionally, it requires the SEC to conduct a study that examines
how funds are invested across several metrics, including the veteran
status of a company's founders, geographical location, and industry
sector, size, and state of development. Based on the results of this
study, the SEC would be authorized to adjust the bill's limits upward
or downward by a tailored amount, if needed.
Mr. Speaker, I urge my colleagues to support this bill, and I yield
back the balance of my time.
Mr. DAVIDSON. Mr. Speaker, I include in the Record the CBO estimate
for this bill.
Legislation Considered Under Suspension of the Rules
The Majority Leader of the House of Representatives
announces bills that will be considered under suspension of
the rules in that chamber. Under suspension, floor debate is
limited, all floor amendments are prohibited, points of order
against the bill are waived, and final passage requires a
two-thirds majority vote.
At the request of the Majority Leader and the House
Committee on the Budget, CBO estimates the effects of those
bills on direct spending and revenues. CBO has limited time
to review the legislation before consideration. Although it
is possible in most cases to determine whether the
legislation would affect direct spending or revenues, time
may be insufficient to estimate the magnitude of those
effects. Tf CBO has prepared estimates for similar or
identical legislation, a more detailed assessment of
budgetary effects, including effects on spending subject to
appropriation, may be included.
EFFECTS ON DIRECT SPENDING AND REVENUES OF LEGISLATION CONSIDERED UNDER SUSPENSION OF THE RULES IN THE HOUSE OF
REPRESENTATIVES
----------------------------------------------------------------------------------------------------------------
Additional
Effect on Direct Effect on Information on
Bill Number Title Spending Revenues Direct Spending and
Revenue Effects
----------------------------------------------------------------------------------------------------------------
H.R. 176....................... No Immigration Reduce by Less None............. ....................
Benefits for Than $500K.
Hamas Terrorists
Act of 2025, as
amended.
H.R. 225....................... HUD Transparency None.............. None............. ....................
Act, as amended.
H.R. 1262...................... Mikaela Naylon Increase by at Increase by at Section 3 would
Give Kids a Least $500K. Least $500K. increase revenues
Chance Act, as by an insignificant
amended. amount. Section 10
would reduce direct
spending and
increase revenues
for a net $1.219
billion reduction
in the deficit.
Section 11 would
appropriate $1.219
billion to the
Medicare
Improvement Fund.
On net, the bill
would reduce the
deficit by an
insignificant
amount over the
2026-2035 period.
H.R. 2066...................... Investing in All None.............. None............. ....................
of America Act of
2025, as amended.
H.R. 2159...................... Count the Crimes Increase by Less None............. Includes
to Cut Act, as Than $500K. insignificant costs
amended. for Postal Service
Fund, which are
classified as off-
budget direct
spending.
[[Page H4952]]
H.R. 3174...................... Made in America None.............. None............. ....................
Manufacturing
Finance Act, as
amended.
H.R. 3716...................... Systemic Risk Increase by Less Reduce by Less ....................
Authority Than $500K. Than $500K.
Transparency Act.
H.R. 4313...................... Hospital Inpatient Change by Less None............. ....................
Services Than $500K,
Modernization Direction Unknown.
Act, as amended.
H.R. 4323...................... Trafficking None.............. None............. ....................
Survivors Relief
Act, as amended.
H.R. 4423...................... No New Burma Funds None.............. None............. ....................
Act, as amended.
H.R. 4429...................... Developing and None.............. None............. ....................
Empowering our
Aspiring Leaders
Act of 2025, as
amended.
H.R. 4430...................... Expanding WKSI None.............. None............. ....................
Eligibility Act,
as amended.
H.R. 4431...................... Improving Capital None.............. None............. ....................
Allocation for
Newcomers Act of
2025, as amended.
H.R. 4491...................... SBA IT None.............. None............. ....................
Modernization
Reporting Act.
H.R. 4495...................... SBA Fraud Reduce by at Least Increase by Less ....................
Enforcement $500K. Than $500K.
Extension Act.
H.R. 4549...................... Office of Rural None.............. None............. ....................
Affairs
Enhancement Act.
H.R. 5284...................... Claiming Age None.............. None............. ....................
Clarity Act, as
amended.
H.R. 5345...................... Improving Social None.............. None............. ....................
Security's
Service to
Victims of
Identity Theft
Act, as amended.
H.R. 5346...................... Fair and None.............. Increase by at Would increase
Accountable IRS least $500K. revenues by $117
Reviews Act, as million over 2026-
amended. 2036.
H.R. 5348...................... Social Security None.............. None............. ....................
Child Protection
Act of 2025, as
amended.
H.R. 5349...................... Tax Court None.............. Increase by at Would increase
Improvement Act, Least $500K. revenues by $6
as amended. million over 2026-
2036.
S. 616......................... Foundation of the None.............. None............. ....................
Federal Bar
Association
Charter
Amendments Act of
2025.
----------------------------------------------------------------------------------------------------------------
Source: Congressional Budget Office; Joint Committee on Taxation
Mr. DAVIDSON. Mr. Speaker, I yield myself the balance of my time.
For the reasons I explained earlier, I urge all of my colleagues to
support this bill, and I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Ohio (Mr. Davidson) that the House suspend the rules and
pass the bill, H.R. 4431, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
____________________