[Congressional Record (Bound Edition), Volume 158 (2012), Part 3]
[House]
[Pages 4130-4137]
[From the U.S. Government Publishing Office, www.gpo.gov]




                  JUMPSTART OUR BUSINESS STARTUPS ACT

  Mr. BACHUS. Madam Speaker, I move to suspend the rules and concur in 
the Senate amendment to the bill (H.R. 3606) to increase American job 
creation and economic growth by improving access to the public capital 
markets for emerging growth companies.
  The Clerk read the title of the bill.
  The text of the Senate amendment is as follows:
  Senate amendment:

       Strike title III and insert the following:

                        TITLE III--CROWDFUNDING

     SEC. 301. SHORT TITLE.

       This title may be cited as the ``Capital Raising Online 
     While Deterring Fraud and Unethical Non-Disclosure Act of 
     2012'' or the ``CROWDFUND Act''.

     SEC. 302. CROWDFUNDING EXEMPTION.

       (a) Securities Act of 1933.--Section 4 of the Securities 
     Act of 1933 (15 U.S.C. 77d) is amended by adding at the end 
     the following:
       ``(6) transactions involving the offer or sale of 
     securities by an issuer (including all entities controlled by 
     or under common control with the issuer), provided that--
       ``(A) the aggregate amount sold to all investors by the 
     issuer, including any amount sold in reliance on the 
     exemption provided under this paragraph during the 12-month 
     period preceding the date of such transaction, is not more 
     than $1,000,000;
       ``(B) the aggregate amount sold to any investor by an 
     issuer, including any amount sold in reliance on the 
     exemption provided under this paragraph during the 12-month 
     period preceding the date of such transaction, does not 
     exceed--
       ``(i) the greater of $2,000 or 5 percent of the annual 
     income or net worth of such investor, as applicable, if 
     either the annual income or the net worth of the investor is 
     less than $100,000; and
       ``(ii) 10 percent of the annual income or net worth of such 
     investor, as applicable, not to exceed a maximum aggregate 
     amount sold of $100,000, if either the annual income or net 
     worth of the investor is equal to or more than $100,000;
       ``(C) the transaction is conducted through a broker or 
     funding portal that complies with the requirements of section 
     4A(a); and
       ``(D) the issuer complies with the requirements of section 
     4A(b).''.
       (b) Requirements To Qualify for Crowdfunding Exemption.--
     The Securities Act of 1933 (15 U.S.C. 77a et seq.) is amended 
     by inserting after section 4 the following:

     ``SEC. 4A. REQUIREMENTS WITH RESPECT TO CERTAIN SMALL 
                   TRANSACTIONS.

       ``(a) Requirements on Intermediaries.--A person acting as 
     an intermediary in a transaction involving the offer or sale 
     of securities for the account of others pursuant to section 
     4(6) shall--
       ``(1) register with the Commission as--
       ``(A) a broker; or
       ``(B) a funding portal (as defined in section 3(a)(80) of 
     the Securities Exchange Act of 1934);
       ``(2) register with any applicable self-regulatory 
     organization (as defined in section 3(a)(26) of the 
     Securities Exchange Act of 1934);
       ``(3) provide such disclosures, including disclosures 
     related to risks and other investor education materials, as 
     the Commission shall, by rule, determine appropriate;
       ``(4) ensure that each investor--
       ``(A) reviews investor-education information, in accordance 
     with standards established by the Commission, by rule;
       ``(B) positively affirms that the investor understands that 
     the investor is risking the loss of the entire investment, 
     and that the investor could bear such a loss; and
       ``(C) answers questions demonstrating--
       ``(i) an understanding of the level of risk generally 
     applicable to investments in startups, emerging businesses, 
     and small issuers;
       ``(ii) an understanding of the risk of illiquidity; and
       ``(iii) an understanding of such other matters as the 
     Commission determines appropriate, by rule;
       ``(5) take such measures to reduce the risk of fraud with 
     respect to such transactions, as established by the 
     Commission, by rule, including obtaining a background and 
     securities enforcement regulatory history check on each 
     officer, director, and person holding more than 20 percent of 
     the outstanding equity of every issuer whose securities are 
     offered by such person;
       ``(6) not later than 21 days prior to the first day on 
     which securities are sold to any investor (or such other 
     period as the Commission may establish), make available to 
     the Commission and to potential investors any information 
     provided by the issuer pursuant to subsection (b);
       ``(7) ensure that all offering proceeds are only provided 
     to the issuer when the aggregate capital raised from all 
     investors is equal to or greater than a target offering 
     amount, and allow all

[[Page 4131]]

     investors to cancel their commitments to invest, as the 
     Commission shall, by rule, determine appropriate;
       ``(8) make such efforts as the Commission determines 
     appropriate, by rule, to ensure that no investor in a 12-
     month period has purchased securities offered pursuant to 
     section 4(6) that, in the aggregate, from all issuers, exceed 
     the investment limits set forth in section 4(6)(B);
       ``(9) take such steps to protect the privacy of information 
     collected from investors as the Commission shall, by rule, 
     determine appropriate;
       ``(10) not compensate promoters, finders, or lead 
     generators for providing the broker or funding portal with 
     the personal identifying information of any potential 
     investor;
       ``(11) prohibit its directors, officers, or partners (or 
     any person occupying a similar status or performing a similar 
     function) from having any financial interest in an issuer 
     using its services; and
       ``(12) meet such other requirements as the Commission may, 
     by rule, prescribe, for the protection of investors and in 
     the public interest.
       ``(b) Requirements for Issuers.--For purposes of section 
     4(6), an issuer who offers or sells securities shall--
       ``(1) file with the Commission and provide to investors and 
     the relevant broker or funding portal, and make available to 
     potential investors--
       ``(A) the name, legal status, physical address, and website 
     address of the issuer;
       ``(B) the names of the directors and officers (and any 
     persons occupying a similar status or performing a similar 
     function), and each person holding more than 20 percent of 
     the shares of the issuer;
       ``(C) a description of the business of the issuer and the 
     anticipated business plan of the issuer;
       ``(D) a description of the financial condition of the 
     issuer, including, for offerings that, together with all 
     other offerings of the issuer under section 4(6) within the 
     preceding 12-month period, have, in the aggregate, target 
     offering amounts of--
       ``(i) $100,000 or less--

       ``(I) the income tax returns filed by the issuer for the 
     most recently completed year (if any); and
       ``(II) financial statements of the issuer, which shall be 
     certified by the principal executive officer of the issuer to 
     be true and complete in all material respects;

       ``(ii) more than $100,000, but not more than $500,000, 
     financial statements reviewed by a public accountant who is 
     independent of the issuer, using professional standards and 
     procedures for such review or standards and procedures 
     established by the Commission, by rule, for such purpose; and
       ``(iii) more than $500,000 (or such other amount as the 
     Commission may establish, by rule), audited financial 
     statements;
       ``(E) a description of the stated purpose and intended use 
     of the proceeds of the offering sought by the issuer with 
     respect to the target offering amount;
       ``(F) the target offering amount, the deadline to reach the 
     target offering amount, and regular updates regarding the 
     progress of the issuer in meeting the target offering amount;
       ``(G) the price to the public of the securities or the 
     method for determining the price, provided that, prior to 
     sale, each investor shall be provided in writing the final 
     price and all required disclosures, with a reasonable 
     opportunity to rescind the commitment to purchase the 
     securities;
       ``(H) a description of the ownership and capital structure 
     of the issuer, including--
       ``(i) terms of the securities of the issuer being offered 
     and each other class of security of the issuer, including how 
     such terms may be modified, and a summary of the differences 
     between such securities, including how the rights of the 
     securities being offered may be materially limited, diluted, 
     or qualified by the rights of any other class of security of 
     the issuer;
       ``(ii) a description of how the exercise of the rights held 
     by the principal shareholders of the issuer could negatively 
     impact the purchasers of the securities being offered;
       ``(iii) the name and ownership level of each existing 
     shareholder who owns more than 20 percent of any class of the 
     securities of the issuer;
       ``(iv) how the securities being offered are being valued, 
     and examples of methods for how such securities may be valued 
     by the issuer in the future, including during subsequent 
     corporate actions; and
       ``(v) the risks to purchasers of the securities relating to 
     minority ownership in the issuer, the risks associated with 
     corporate actions, including additional issuances of shares, 
     a sale of the issuer or of assets of the issuer, or 
     transactions with related parties; and
       ``(I) such other information as the Commission may, by 
     rule, prescribe, for the protection of investors and in the 
     public interest;
       ``(2) not advertise the terms of the offering, except for 
     notices which direct investors to the funding portal or 
     broker;
       ``(3) not compensate or commit to compensate, directly or 
     indirectly, any person to promote its offerings through 
     communication channels provided by a broker or funding 
     portal, without taking such steps as the Commission shall, by 
     rule, require to ensure that such person clearly discloses 
     the receipt, past or prospective, of such compensation, upon 
     each instance of such promotional communication;
       ``(4) not less than annually, file with the Commission and 
     provide to investors reports of the results of operations and 
     financial statements of the issuer, as the Commission shall, 
     by rule, determine appropriate, subject to such exceptions 
     and termination dates as the Commission may establish, by 
     rule; and
       ``(5) comply with such other requirements as the Commission 
     may, by rule, prescribe, for the protection of investors and 
     in the public interest.
       ``(c) Liability for Material Misstatements and Omissions.--
       ``(1) Actions authorized.--
       ``(A) In general.--Subject to paragraph (2), a person who 
     purchases a security in a transaction exempted by the 
     provisions of section 4(6) may bring an action against an 
     issuer described in paragraph (2), either at law or in equity 
     in any court of competent jurisdiction, to recover the 
     consideration paid for such security with interest thereon, 
     less the amount of any income received thereon, upon the 
     tender of such security, or for damages if such person no 
     longer owns the security.
       ``(B) Liability.--An action brought under this paragraph 
     shall be subject to the provisions of section 12(b) and 
     section 13, as if the liability were created under section 
     12(a)(2).
       ``(2) Applicability.--An issuer shall be liable in an 
     action under paragraph (1), if the issuer--
       ``(A) by the use of any means or instruments of 
     transportation or communication in interstate commerce or of 
     the mails, by any means of any written or oral communication, 
     in the offering or sale of a security in a transaction 
     exempted by the provisions of section 4(6), makes an untrue 
     statement of a material fact or omits to state a material 
     fact required to be stated or necessary in order to make the 
     statements, in the light of the circumstances under which 
     they were made, not misleading, provided that the purchaser 
     did not know of such untruth or omission; and
       ``(B) does not sustain the burden of proof that such issuer 
     did not know, and in the exercise of reasonable care could 
     not have known, of such untruth or omission.
       ``(3) Definition.--As used in this subsection, the term 
     `issuer' includes any person who is a director or partner of 
     the issuer, and the principal executive officer or officers, 
     principal financial officer, and controller or principal 
     accounting officer of the issuer (and any person occupying a 
     similar status or performing a similar function) that offers 
     or sells a security in a transaction exempted by the 
     provisions of section 4(6), and any person who offers or 
     sells the security in such offering.
       ``(d) Information Available to States.--The Commission 
     shall make, or shall cause to be made by the relevant broker 
     or funding portal, the information described in subsection 
     (b) and such other information as the Commission, by rule, 
     determines appropriate, available to the securities 
     commission (or any agency or office performing like 
     functions) of each State and territory of the United States 
     and the District of Columbia.
       ``(e) Restrictions on Sales.--Securities issued pursuant to 
     a transaction described in section 4(6)--
       ``(1) may not be transferred by the purchaser of such 
     securities during the 1-year period beginning on the date of 
     purchase, unless such securities are transferred--
       ``(A) to the issuer of the securities;
       ``(B) to an accredited investor;
       ``(C) as part of an offering registered with the 
     Commission; or
       ``(D) to a member of the family of the purchaser or the 
     equivalent, or in connection with the death or divorce of the 
     purchaser or other similar circumstance, in the discretion of 
     the Commission; and
       ``(2) shall be subject to such other limitations as the 
     Commission shall, by rule, establish.
       ``(f) Applicability.--Section 4(6) shall not apply to 
     transactions involving the offer or sale of securities by any 
     issuer that--
       ``(1) is not organized under and subject to the laws of a 
     State or territory of the United States or the District of 
     Columbia;
       ``(2) is subject to the requirement to file reports 
     pursuant to section 13 or section 15(d) of the Securities 
     Exchange Act of 1934;
       ``(3) is an investment company, as defined in section 3 of 
     the Investment Company Act of 1940, or is excluded from the 
     definition of investment company by section 3(b) or section 
     3(c) of that Act; or
       ``(4) the Commission, by rule or regulation, determines 
     appropriate.
       ``(g) Rule of Construction.--Nothing in this section or 
     section 4(6) shall be construed as preventing an issuer from 
     raising capital through methods not described under section 
     4(6).
       ``(h) Certain Calculations.--
       ``(1) Dollar amounts.--Dollar amounts in section 4(6) and 
     subsection (b) of this section shall be adjusted by the 
     Commission not less frequently than once every 5 years, by 
     notice published in the Federal Register to reflect any 
     change in the Consumer Price Index for All Urban Consumers 
     published by the Bureau of Labor Statistics.
       ``(2) Income and net worth.--The income and net worth of a 
     natural person under section 4(6)(B) shall be calculated in 
     accordance with any rules of the Commission under this title 
     regarding the calculation of the income and net worth, 
     respectively, of an accredited investor.''.
       (c) Rulemaking.--Not later than 270 days after the date of 
     enactment of this Act, the Securities and Exchange Commission 
     (in this title referred to as the ``Commission'') shall issue 
     such rules as the Commission determines may be necessary or 
     appropriate for the protection of investors to carry out 
     sections 4(6) and section 4A of the Securities Act of 1933, 
     as added by this

[[Page 4132]]

     title. In carrying out this section, the Commission shall 
     consult with any securities commission (or any agency or 
     office performing like functions) of the States, any 
     territory of the United States, and the District of Columbia, 
     which seeks to consult with the Commission, and with any 
     applicable national securities association.
       (d) Disqualification.--
       (1) In general.--Not later than 270 days after the date of 
     enactment of this Act, the Commission shall, by rule, 
     establish disqualification provisions under which--
       (A) an issuer shall not be eligible to offer securities 
     pursuant to section 4(6) of the Securities Act of 1933, as 
     added by this title; and
       (B) a broker or funding portal shall not be eligible to 
     effect or participate in transactions pursuant to that 
     section 4(6).
       (2) Inclusions.--Disqualification provisions required by 
     this subsection shall--
       (A) be substantially similar to the provisions of section 
     230.262 of title 17, Code of Federal Regulations (or any 
     successor thereto); and
       (B) disqualify any offering or sale of securities by a 
     person that--
       (i) is subject to a final order of a State securities 
     commission (or an agency or officer of a State performing 
     like functions), a State authority that supervises or 
     examines banks, savings associations, or credit unions, a 
     State insurance commission (or an agency or officer of a 
     State performing like functions), an appropriate Federal 
     banking agency, or the National Credit Union Administration, 
     that--

       (I) bars the person from--

       (aa) association with an entity regulated by such 
     commission, authority, agency, or officer;
       (bb) engaging in the business of securities, insurance, or 
     banking; or
       (cc) engaging in savings association or credit union 
     activities; or

       (II) constitutes a final order based on a violation of any 
     law or regulation that prohibits fraudulent, manipulative, or 
     deceptive conduct within the 10-year period ending on the 
     date of the filing of the offer or sale; or

       (ii) has been convicted of any felony or misdemeanor in 
     connection with the purchase or sale of any security or 
     involving the making of any false filing with the Commission.

     SEC. 303. EXCLUSION OF CROWDFUNDING INVESTORS FROM 
                   SHAREHOLDER CAP.

       (a) Exemption.--Section 12(g) of the Securities Exchange 
     Act of 1934 (15 U.S.C. 78l(g)) is amended by adding at the 
     end the following:
       ``(6) Exclusion for persons holding certain securities.--
     The Commission shall, by rule, exempt, conditionally or 
     unconditionally, securities acquired pursuant to an offering 
     made under section 4(6) of the Securities Act of 1933 from 
     the provisions of this subsection.''.
       (b) Rulemaking.--The Commission shall issue a rule to carry 
     out section 12(g)(6) of the Securities Exchange Act of 1934 
     (15 U.S.C. 78c), as added by this section, not later than 270 
     days after the date of enactment of this Act.

     SEC. 304. FUNDING PORTAL REGULATION.

       (a) Exemption.--
       (1) In general.--Section 3 of the Securities Exchange Act 
     of 1934 (15 U.S.C. 78c) is amended by adding at the end the 
     following:
       ``(h) Limited Exemption for Funding Portals.--
       ``(1) In general.--The Commission shall, by rule, exempt, 
     conditionally or unconditionally, a registered funding portal 
     from the requirement to register as a broker or dealer under 
     section 15(a)(1), provided that such funding portal--
       ``(A) remains subject to the examination, enforcement, and 
     other rulemaking authority of the Commission;
       ``(B) is a member of a national securities association 
     registered under section 15A; and
       ``(C) is subject to such other requirements under this 
     title as the Commission determines appropriate under such 
     rule.
       ``(2) National securities association membership.--For 
     purposes of sections 15(b)(8) and 15A, the term `broker or 
     dealer' includes a funding portal and the term `registered 
     broker or dealer' includes a registered funding portal, 
     except to the extent that the Commission, by rule, determines 
     otherwise, provided that a national securities association 
     shall only examine for and enforce against a registered 
     funding portal rules of such national securities association 
     written specifically for registered funding portals.''.
       (2) Rulemaking.--The Commission shall issue a rule to carry 
     out section 3(h) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78c), as added by this subsection, not later than 270 
     days after the date of enactment of this Act.
       (b) Definition.--Section 3(a) of the Securities Exchange 
     Act of 1934 (15 U.S.C. 78c(a)) is amended by adding at the 
     end the following:
       ``(80) Funding portal.--The term `funding portal' means any 
     person acting as an intermediary in a transaction involving 
     the offer or sale of securities for the account of others, 
     solely pursuant to section 4(6) of the Securities Act of 1933 
     (15 U.S.C. 77d(6)), that does not--
       ``(A) offer investment advice or recommendations;
       ``(B) solicit purchases, sales, or offers to buy the 
     securities offered or displayed on its website or portal;
       ``(C) compensate employees, agents, or other persons for 
     such solicitation or based on the sale of securities 
     displayed or referenced on its website or portal;
       ``(D) hold, manage, possess, or otherwise handle investor 
     funds or securities; or
       ``(E) engage in such other activities as the Commission, by 
     rule, determines appropriate.''.

     SEC. 305. RELATIONSHIP WITH STATE LAW.

       (a) In General.--Section 18(b)(4) of the Securities Act of 
     1933 (15 U.S.C. 77r(b)(4)) is amended--
       (1) by redesignating subparagraphs (C) and (D) as 
     subparagraphs (D) and (E), respectively; and
       (2) by inserting after subparagraph (B) the following:
       ``(C) section 4(6);''.
       (b) Clarification of the Preservation of State Enforcement 
     Authority.--
       (1) In general.--The amendments made by subsection (a) 
     relate solely to State registration, documentation, and 
     offering requirements, as described under section 18(a) of 
     Securities Act of 1933 (15 U.S.C. 77r(a)), and shall have no 
     impact or limitation on other State authority to take 
     enforcement action with regard to an issuer, funding portal, 
     or any other person or entity using the exemption from 
     registration provided by section 4(6) of that Act.
       (2) Clarification of state jurisdiction over unlawful 
     conduct of funding portals and issuers.--Section 18(c)(1) of 
     the Securities Act of 1933 (15 U.S.C. 77r(c)(1)) is amended 
     by striking ``with respect to fraud or deceit, or unlawful 
     conduct by a broker or dealer, in connection with securities 
     or securities transactions.'' and inserting the following: 
     ``, in connection with securities or securities transactions
       ``(A) with respect to--
       ``(i) fraud or deceit; or
       ``(ii) unlawful conduct by a broker or dealer; and
       ``(B) in connection to a transaction described under 
     section 4(6), with respect to--
       ``(i) fraud or deceit; or
       ``(ii) unlawful conduct by a broker, dealer, funding 
     portal, or issuer.''.
       (c) Notice Filings Permitted.--Section 18(c)(2) of the 
     Securities Act of 1933 (15 U.S.C. 77r(c)(2)) is amended by 
     adding at the end the following:
       ``(F) Fees not permitted on crowdfunded securities.--
     Notwithstanding subparagraphs (A), (B), and (C), no filing or 
     fee may be required with respect to any security that is a 
     covered security pursuant to subsection (b)(4)(B), or will be 
     such a covered security upon completion of the transaction, 
     except for the securities commission (or any agency or office 
     performing like functions) of the State of the principal 
     place of business of the issuer, or any State in which 
     purchasers of 50 percent or greater of the aggregate amount 
     of the issue are residents, provided that for purposes of 
     this subparagraph, the term `State' includes the District of 
     Columbia and the territories of the United States.''.
       (d) Funding Portals.--
       (1) State exemptions and oversight.--Section 15(i) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78o(i)) is 
     amended--
       (A) by redesignating paragraphs (2) and (3) as paragraphs 
     (3) and (4), respectively; and
       (B) by inserting after paragraph (1) the following:
       ``(2) Funding portals.--
       ``(A) Limitation on state laws.--Except as provided in 
     subparagraph (B), no State or political subdivision thereof 
     may enforce any law, rule, regulation, or other 
     administrative action against a registered funding portal 
     with respect to its business as such.
       ``(B) Examination and enforcement authority.--Subparagraph 
     (A) does not apply with respect to the examination and 
     enforcement of any law, rule, regulation, or administrative 
     action of a State or political subdivision thereof in which 
     the principal place of business of a registered funding 
     portal is located, provided that such law, rule, regulation, 
     or administrative action is not in addition to or different 
     from the requirements for registered funding portals 
     established by the Commission.
       ``(C) Definition.--For purposes of this paragraph, the term 
     `State' includes the District of Columbia and the territories 
     of the United States.''.
       (2) State fraud authority.--Section 18(c)(1) of the 
     Securities Act of 1933 (15 U.S.C. 77r(c)(1)) is amended by 
     striking ``or dealer'' and inserting ``, dealer, or funding 
     portal''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Alabama (Mr. Bachus) and the gentleman from Connecticut (Mr. Himes) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Alabama.


                             General Leave

  Mr. BACHUS. Madam Speaker, I ask unanimous consent that all Members 
have 5 legislative days in which to revise and extend their remarks and 
to add any extraneous material on this bill.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Alabama?
  There was no objection.

                              {time}  1230

  Mr. BACHUS. Madam Speaker, I yield myself such time as I may consume.
  I rise in strong support of the JOBS Act and urge the House to 
approve this bill today so that we can send it to the President for his 
immediate signature. The President has indicated that he strongly 
supports the legislation.
  The JOBS Act is a victory for unemployed Americans who are literally

[[Page 4133]]

crying out for more jobs. It is a victory for small companies and for 
entrepreneurs who want Washington to reduce the red tape that stifles 
innovation, economic growth, and job creation. The JOBS Act will do 
exactly what its title says, jump-start our economy by creating new job 
opportunities for America's start-up companies and small businesses. 
And I would like to introduce into the Record some statistics on the 
number of jobs created by new companies.
  As chairman of the Financial Services Committee, I am proud that the 
JOBS Act is comprised of six pieces of legislation that originated in 
our committee and received overwhelming bipartisan support. In fact, 
managing this bill for the minority is the gentleman from Connecticut, 
who was the sponsor of one of those six bills; and I commend Mr. Himes 
for his work on all of these bills. The JOBS Act is proof that 
Republicans and Democrats can come together to find common ground, work 
together, and offer legislation that will help small businesses. Small 
businesses are the growth engine of our economy.
  A study between 1985 and 2005 found that 96 percent of the jobs 
created at new companies are created within 5 years of an IPO, and this 
will give those companies who want to offer an IPO the opportunity to 
do so at a much reduced cost.
  Nearly 65 percent of new jobs traditionally are created by small 
businesses. Now, that's not the case in this economic recovery. Almost 
all the job growth has come from large corporations, which is really 
the opposite of what you normally see. Small businesses have not been 
created and have not been growing as they should, and there are two 
reasons for that: one is regulation. These regulations are costly; 
they're time consuming; and they're simply inhibiting the growth of 
small businesses. The second reason is a lack of capital.
  Now, there are two ways traditionally to raise capital. One is to go 
to a bank, a lending institution, and ask for a loan. Well, because of 
tighter lending standards, these new companies don't have a track 
record, so they don't have a record of generating profits. Many of them 
are offering new services, new products that have not really found a 
market or have a small market. And there is a risk involved. So when 
banks turn those companies down, the other path is for someone to 
invest in those companies; and that is exactly what that bill does. It 
offers those companies an opportunity to receive investments, capital 
investments from individuals who want to participate not only in the 
risk but in the reward.
  With the JOBS Act, start-up companies--like those at the Innovation 
Depot in Birmingham, Alabama, where there are several start-up 
companies with new products, new services--the JOBS Act will allow 
those companies and companies throughout the United States, people with 
new ideas, new services, new products, like a Google of the future or 
an eBay or an Amazon. Take those companies, they didn't exist 20 years 
ago. Now they're the fastest-growing companies in America. There are 
other Googles, there are other eBays, there are other Amazons, there 
are other Costcos, there are other Chick-fil-A's that are just waiting 
to come to market.
  And for that reason, I want to commend the Senate, and I want to 
thank the sponsors of this legislation. Finally, I want to salute this 
House for coming together when it counted to address the lack of growth 
in jobs in our small businesses.
  There are some signs that hiring is coming back at larger companies, 
but not at our small businesses and startup companies. There are 2 main 
reasons for that The first is regulation--which has a bigger impact on 
small companies than large companies. The second is capital--it is 
harder for business startups to get traditional bank financing so they 
have to rely more on investors and capital markets for financing. The 
JOBS Act will make it easier for them to access capital, locate 
investors and go public.
  This bill is designed specially to help the type of small business 
startups and emerging growth companies that you find at places like the 
Innovation Depot.
  We know that small business is the growth engine of our economy. 
Nearly 65 percent of all new jobs created over the last 15 years were 
created by small businesses. Yet today, many small companies find it 
hard to obtain the investments and the financing they need to expand 
their operations and create jobs. That's why Congress mist cut the red 
tape that prevent many startup companies from raising capital and going 
public. The JOBS Act removes some of the unnecessary and outdated 
government barriers to capital formation--so entrepreneurs have more 
freedom to access capital, hire workers and grow their businesses.
  We need to do everything we can to ensure that America remains a 
country of opportunity, where jobs are created and small businesses 
flourish without being stifled by costly and unnecessary red tape. The 
JOBS Act will help foster an environment that allows our small 
businesses, startups and entrepreneurs to raise the capital needed to 
get job creation going again.
  I'm proud that all 6 bills that make up the JOBS Act originated in 
the Financial Services Committee and that all 6 received overwhelming, 
strong bipartisan support. It shows that Republicans and Democrats CAN 
find common ground and work together when it comes to helping America's 
small businesses.
  Companies obtain capital through either borrowing, from places like 
community banks, or through equity financing.
  Equity financing, in which investors purchase ownership stakes in a 
company in exchange for a share of the company's future profit, allows 
companies to obtain funds without having to repay specific amounts at 
particular times.
  The tightening of credit has made equity financing all the more 
important as a means of providing small companies with the capital they 
need to grow and create jobs.
  The JOBS Act will make it easier for small companies to access 
capital through both the public and private markets, which will 
facilitate economic growth and job creation. For example:
  Title 3 of the bill will allow what is known as ``crowdfunding''--
which will allow groups of investors to pool money, typically comprised 
of very small individual contributions, to support an effort such as 
growing a new company like those that are found at the Innovation 
Depot. Investments would be limited to an amount equal to or less than 
the lesser of $10,000 or 10 percent of the investor's annual income. 
Before the JOBS Act, the SEC had outdated regulations that prohibited 
this type of investment.
  Title 1 of the JOBS Act will provide smaller to mid-sized private 
companies with temporary exemptions from several government 
regulations, who could go public and raise capital needed to expand 
their business but for the expense associated with complying with them. 
These companies will have up to a five year timeframe to be on an ``On 
Ramp'' to comply with certain regulatory requirements (Section 404(b) 
of Sarbanes-Oxley or 953(b) of the Dodd-Frank Act). This ``On-Ramp'' 
status is designed to be temporary and transitional, encouraging small 
companies to go public but ensuring they transition to full compliance 
over time or as they grow large enough to have the resources to sustain 
the type of compliance infrastructure associated with more mature 
enterprises. A task force put together to study how to help smaller 
companies found that from 1980 to 2005, firms less than 5 years old 
accounted for all net U.S. job growth. On average, 92 percent of a 
company's job growth occurs after an ``initial public offering'' (IPO). 
Since 2006, companies have reported an average of 86 percent job growth 
since IPO.
  Titles 5 and 6 of the JOBS Act would allow private companies and 
community banks to increase the number of shareholders they have before 
they are forced to register with the SEC. This will save these 
companies regulatory compliance costs from regulations that are 
generally intended for large companies and instead give small companies 
and banks more readily available capital to hire new employees and lend 
to local businesses to expand.
  I reserve the balance of my time.
  Mr. HIMES. Madam Speaker, I now yield myself such time as I may 
consume.
  Madam Speaker, I am thrilled to be participating in the management of 
this debate today and want to start by thanking Chairman Bachus and 
thanking my friends on the other side of the aisle for the bipartisan 
and collaborative spirit with which we moved this legislation.
  This is important legislation, but the process by which it moved, I 
think, is something that we should celebrate. This is a time, of 
course, when the

[[Page 4134]]

American people are none too happy with us; but this bill was done 
collaboratively with the support of the President of the United States, 
the majority and the minority in the House; and it will be good for our 
economy. So I thank the chairman for his leadership on this, the 
ranking member, and all who participated in the creation of this 
important legislation.
  As the chairman said, this is good stuff. It has received the support 
of entrepreneurs, of industry associations, and of people on both sides 
of the aisle because it does something very, very important, which is 
acknowledge that regulation is always a balance. It's not always good; 
it's not always bad. And one of the duties of legislators and 
regulators is to make sure that our regulation is finely calibrated to 
protect us, to protect us from fraud, to protect us from mortgages that 
blow up, to keep our air clean, to keep our water clean. But if it's 
done in too ham-handed a fashion, it can compromise the vibrancy that 
provides so much economic opportunity in this country. Every day this 
institution should be focused on finding that balance, and that's what 
this bill is about.
  It's been criticized here and there by people who I think are of the 
mindset that any retreat, any revisiting, any amendment to our current 
regulatory structure is a bad idea. That can't be the right way to 
think about this stuff. Regulation, like anything else, has to adapt to 
change with the times. And what we're doing here is particularly 
important because we are talking about the regulation of small banks 
which, let's face it, have a tough time competing against the big 
banks.
  And it's about our start-up and emerging-growth companies that may 
not have the free cash flow in their first couple of years of existence 
to completely adopt all of the regulation, the disclosure that we might 
expect of a multibillion-dollar corporation. We have provided an onramp 
for entrepreneurs as they gain currency, as they increase their 
revenues, as they become more of a presence--and frankly, therefore, 
affect the lives of more people--to gradually work into the full 
regulatory structures of Sarbanes-Oxley and other regulation. And 
that's a good thing to do.
  Today in Palo Alto, there are companies that might not have made it 
but for this legislation. In Connecticut and Massachusetts, there are 
start-up companies for which this legislation is going to make the 
difference between thriving, as the chairman said--maybe being the next 
Microsoft or the next Google--and actually not making it. So I'm very 
happy that we have, in a bipartisan fashion, put forward this 
legislation which will be good for economic vibrancy and opportunity in 
this country. Again, I thank the chairman for his collaborative and 
thoughtful work on this bill.
  With that, I reserve the balance of my time.
  Mr. BACHUS. At this time, I yield 2 minutes to the gentlelady from 
Illinois (Mrs. Biggert), the chairman of the subcommittee.
  Mrs. BIGGERT. I thank the chairman for yielding.
  Madam Speaker, the American economy has the capacity and the 
resilience to overcome almost any obstacle. We've seen it time and time 
again. In the face of foreign crises, natural disaster, or fiscal 
adversity, American entrepreneurs and job creators never stop 
innovating. But to harness that power and the jobs that come with it, 
we need to clear a path for the start-ups and fledgling businesses that 
bring new goods and ideas into the marketplace. That's the purpose of 
H.R. 3606, the Jumpstart Our Business Startups, or JOBS, Act.

                              {time}  1240

  This legislation package includes six bipartisan proposals, many of 
which I cosponsored, to streamline or eliminate the regulatory and 
legal barriers that prevent emerging businesses from reaching out to 
investors, accessing capital, and selling shares on the public market. 
This legislation will make it possible for promising new businesses to 
go public and access financial opportunities that currently are limited 
to large corporations, and it eliminates needless costs and delays 
imposed by the SEC and other regulators.
  Madam Speaker, for tens of millions of Americans, including families 
from my suburban Chicago district, there is no priority more important 
or urgent than job creation. Over the last few months, unemployment has 
slowly receded to 8.3 percent nationally and 9.1 percent in Illinois, 
but Washington must pick up the pace. And that means unleashing the 
drive and ingenuity of hardworking Americans.
  I urge my colleagues to support the JOBS Act and empower American 
businesses to do what they do best.
  Mr. HIMES. I continue to reserve the balance of my time.
  Mr. BACHUS. I would like to inquire, Madam Speaker, as to how much 
time remains on our side.
  The SPEAKER pro tempore. The gentleman from Alabama has 13\1/2\ 
minutes remaining, and the gentleman from Connecticut has 16\1/2\ 
minutes remaining.
  Mr. BACHUS. At this time, Madam Speaker, I yield 2 minutes to another 
Illinois Congressman, Mr. Dold.
  Mr. DOLD. I certainly want to thank the chairman for yielding. I 
think it's important, and I'm delighted to be able to speak here on 
this bipartisan piece of legislation.
  Madam Speaker, as part of any jobs agenda, I believe that increased 
access to capital for small businesses is absolutely critical. That's 
why I'm a supporter of this bipartisan JOBS Act. When we empower small 
businesses to grow and expand, we enable them to create jobs and get 
people back to work.
  As a member of the Financial Services Committee, I cosponsored 
several of the bills that are in this package because they allow small 
businesses to increase capital formation, spur the growth of small 
businesses, and pave the way for our small businesses and entrepreneurs 
to create new jobs.
  Two-thirds of all net new jobs, Madam Speaker, are created by small 
business. We have 29 million small businesses in our Nation. If we can 
create an environment here in Washington, D.C., that enables half of 
those businesses to create a single job, think about where we'd be 
then.
  Finding new ways to spur the economy is not a Republican idea or a 
Democratic priority, but it certainly should be an American priority. 
As a small business owner, I know that we have to start putting people 
before politics and progress before partisanship and remain focused on 
finding solutions for the barriers that stand in the way of 
entrepreneurs and job creators. I want to encourage my colleagues to 
support this bipartisan piece of legislation.
  Madam Speaker, pieces of this legislation, aspects of this bill 
passed this House with over 400 votes. We hear a lot about the gridlock 
that's going on in Washington, D.C. When we can get legislation that 
passes this body with over 400 votes, that is wildly bipartisan, things 
that I believe that the American public are asking for us to do: come 
up with solutions to the problems that they face; to try to stem the 
8.3 percent unemployment, which we know is much larger if we count the 
underemployed and those that have left the workforce.
  We certainly need the Senate to act. It's absolutely critical. And I 
ask my colleagues to support this legislation, find common ground, and 
move our country forward.
  Mr. HIMES. I continue to reserve the balance of my time.
  Mr. BACHUS. At this time, I yield 2 minutes to the gentleman from 
Arizona (Mr. Schweikert), a member of the committee, who sponsored and 
worked on these bills.
  Mr. SCHWEIKERT. I thank the gentleman.
  Madam Speaker, I rise in support of the JOBS Act.
  Think about this. We literally started over a year ago putting 
together the pieces of legislation that moved forward with us today. 
Many of them were bipartisan. Many of them had to go through 
subcommittee and committee and then back through more hearings and more 
testimony. A couple of these bills have actually been to this floor 
multiple times. It's been well vetted.

[[Page 4135]]

And I hold a great appreciation, because I've only been here 15 months 
and this is my first opportunity to actually have a piece of 
legislation with multiple bills I've sponsored heading on their way to 
the President, hopefully, after the votes today and tomorrow. And I owe 
a great thank you to Chairman Garrett and Committee Chairman Spencer 
Bachus.
  But I also want to share a bit of a concern.
  Congressman McHenry has a really neat portion of this bill. We call 
it crowdfunding. The Senate has amended that in such a way that I 
believe it does great damage to the goal of a much more egalitarian, 
technologically advanced, using-the-Internet way for people to invest, 
for being able to reach out and gain that capital for very small 
companies. And I'm hoping I can reach out to my friends and say, Let's 
fix what the Senate did.
  We still should be voting for this bill. This is wonderful. We're 
making progress. But there are things we have to do to fix this for the 
future.
  Mr. HIMES. I yield myself such time as I may consume.
  I thank my friend, Mr. Schweikert, with whom I've enjoyed working on 
this legislation and in a spirit of bipartisanship; ultimately a bill 
that was designed to make it easier for small banks, which Congressman 
Schweikert and I worked together.
  I would also like to highlight the work of Congressman Steve Womack 
of Arkansas on that bill. It found its way into this legislation under 
another Congressman's name, but it is important and good legislation, 
and I continue to support it and am thrilled that it's part of this.
  Madam Speaker, I would just take issue with one thing that my good 
friend from Arizona said. The crowdfunding provisions in this 
legislation should be subject to scrutiny and to careful regulatory 
oversight. When you combine the concept of the Internet and retail 
investors into one piece of legislation, be careful.
  The Senate amendment to the House crowdfunding provisions in fact 
adds more protection to small investors who might be subject to being 
fooled by an Internet predator. And I would just say we should be 
careful.
  We should be careful when we are talking about retail investors, the 
classic widows and orphans out there that are not necessarily 
financially sophisticated. They are not the big financial players who 
get labeled accredited investors or institutional investors and who, 
frankly, have the capability to take care of themselves. Retail 
investors who might be subject to the temptations of a deal that in 
fact is too good to be true offered on the Internet ought to be a cause 
of concern both for this body and for the regulators who ultimately 
will write the rules around crowdfunding.
  With that, I reserve the balance of my time.
  Mr. BACHUS. At this time, I yield 1 minute to the chairman of the 
Subcommittee on Financial Institutions, the gentlelady from West 
Virginia (Mrs. Capito), who also worked very hard on this legislation.
  Mrs. CAPITO. I want to thank the chairman. I really want to thank the 
whole Financial Services Committee for working together on this bill, 
the JOBS bill, Jumpstart Our Business Startups.
  Our unemployment in this country is over 8 percent. We've got to find 
and make every means available to create jobs and to give those great 
ideas to be able to grow from small businesses to large businesses. We 
want to make sure that our entrepreneurs are able to find the funding 
to be able to grow those seeds of a business that then could flourish 
and grow.
  When we talk about some of the things that have started in this 
country as start-ups most recently, we might look at something like AOL 
or something like Apple or even FedEx when Fred Smith wrote that famous 
paper in business school that I think didn't get a very good grade but 
now has resulted in our FedEx. If they hadn't been able to find the 
funding to begin, many of them I think today would say that because of 
the regulatory structure, because of the inability to find funding, 
that they wouldn't even be able to get started today and grow to the 
thousands of jobs that they have.
  This has great potential. It's bipartisan. I support the JOBS Act.
  Mr. HIMES. I continue to reserve the balance of my time.
  Mr. BACHUS. Madam Speaker, I would like to again inquire as to the 
amount of time remaining on our side.
  The SPEAKER pro tempore. The gentleman from Alabama has 9 minutes 
remaining. The gentleman from Connecticut has 14\1/2\ minutes 
remaining.
  Mr. BACHUS. I yield 3 minutes to an outstanding freshman on our 
committee, the gentleman from Tennessee (Mr. Fincher).
  Everyone speaking on our side has worked very hard on these bills or 
spent a lot of time, as have many of our Democratic colleagues.

                              {time}  1250

  Mr. FINCHER. Madam Speaker, I thank the chairman for his leadership 
and patience in working with us freshmen the last year, year and a 
half. I'm pleased to be the lead cosponsor of H.R. 3606, the Jumpstart 
Our Business Startups Act with Congressman John Carney from Delaware. 
This bill has been a bipartisan effort from the beginning, and I want 
to thank the gentleman from Delaware and his staff, Sam Hodas, for 
working with us on this bill. I also want to thank the Financial 
Services Committee staff, Kevin Edgar, Jason Goggins, Walton Liles and 
Chris Russell, for their efforts on this legislation as well.
  Small businesses and entrepreneurs are the backbone of our Nation and 
our economy. This bill puts the focus on the private sector, 
capitalism, and the free market, providing the jump-start our Nation's 
entrepreneurs and small businesses need to grow and create jobs. This 
is about certainty and removing government bureaucratic redtape. Our 
Nation has seen a decline in small business start-ups over the last few 
years, which means fewer jobs created for American workers. The best 
thing our government can do right now to get our economy moving in the 
right direction is to help create an environment where new ideas and 
start-up companies have a chance to grow and succeed.
  Title I of this bill is legislation I introduced with Congressman 
Carney called the Reopening American Capital Markets to Emerging Growth 
Companies Act. During the last 15 years, fewer and fewer start-up 
companies have pursued initial public offerings because of burdensome 
costs created by a series of one-size-fits-all laws and regulations. 
This bill would help more small and mid-size companies go public by 
creating a new category of issuers called ``emerging-growth companies'' 
that have less than $1 billion in annual revenues when they register 
with the SEC and less than $700 million in public float after the IPO.
  Emerging-growth companies will have as many as 5 years, depending on 
revenue size, to transition to full compliance with a variety of new 
regulations that are expensive and burdensome to new companies. This 
``onramp'' status will allow small and mid-size companies the 
opportunity to save on expensive compliance costs and create the cash 
needed to successfully grow their businesses and create American jobs.
  In addition, this bill would only require emerging-growth companies 
to provide audited financial statements for the 2 years prior to 
registration rather than 3 years, saving many companies millions of 
dollars. It will also make it easier for potential investors to get 
access to research and company information in advance of an IPO in 
order to make informed decisions about investing. This is critical for 
small and medium-size companies trying to raise capital that have less 
visibility in the marketplace.
  I urge my colleagues to support this bill again, send it to the 
President to sign, and give our small businesses and entrepreneurs the 
opportunity to create jobs for Americans.
  Mr. HIMES. Madam Speaker, I yield myself such time as I may consume 
and thank my friend from Tennessee for his hard work on this bill of 
which,

[[Page 4136]]

as I said in my previous statement, I'm very supportive.
  I do want to take the opportunity, though, having heard from the 
gentleman from Tennessee phrases that we hear all too often--phrases 
like ``one-size-fits-all regulation'' and ``bound up in redtape''--I do 
want to take this opportunity to remind the American people that those 
are phrases that sound scary: ``regulation,'' ``redtape,'' and ``one 
size fits all.'' But what we're talking about here is protection for 
the American people.
  In my previous statement, I made the point that we have to get the 
balance right; but like everybody else in this Chamber, I woke up a 
couple of years ago to learn that 11 men were dead on a deep-sea 
drilling platform in the Gulf of Mexico and an ocean was poisoned, 
devastating the economy of the gulf. We've all seen what happens when 
you sell exploding mortgages to people who can't possibly repay them, 
even though the people who sold those mortgages know that. I come from 
a district which actually has some of the poorest air quality in the 
country.
  Why do I enumerate these things? Because they are all a failure to 
regulate to provide a safe and good environment in which we can thrive. 
Nobody wants to see 11 men die on a deep-sea drilling platform. Nobody 
wants to see a return to the notion that anybody should buy an 
interest-only, reverse-amortizing mortgage that the bankers don't 
understand.
  So I said it before, I'll say it again: the balance is key. And I 
will oppose those who say that more regulation is always the right 
idea, but I will also stand up, as I have now, and say there is a 
balance. And the other side needs to recognize that that balance does 
not come from opposing and labeling ``redtape'' and ``obstructionism'' 
and ``one size fits all.''
  Mr. BACHUS. Would the gentleman yield?
  Mr. HIMES. I yield to my friend from Alabama.
  Mr. BACHUS. Let me say this. The gentleman from Connecticut mentioned 
crowdfunding, and I think that was what gave us more concern than 
anything else, some of the things he said about the Internet people 
making an investment being subject to fraud. That is a concern, and the 
Senate addressed those concerns. I'd like to stress what they amended 
was a very small part of this bill that dealt with crowdfunding. It is 
also important to know that all the antifraud protection, we didn't 
take any of that away. But I think we're getting there. The Senate and 
the House deliberated with the White House, and we will continue to 
look at crowdfunding. We'll see how this goes.
  With any investment, particularly a new company, a new venture, there 
is a certain amount of risk. You can't take the risk out. If you take 
the risk out, you take the reward. But what the gentleman says I fully 
appreciate, and I think that's where our committee has come together, 
and we tried to get it right for the good of the Americans in creating 
these new jobs. So I appreciate the opportunity and thank you for 
yielding.
  Mr. HIMES. Thank you, Mr. Chairman. I reserve the balance of my time.
  Mr. BACHUS. At this time, I yield 4 minutes to the gentleman from 
North Carolina (Mr. McHenry). Again, this is a bill that several 
Members worked very hard on, and he is very knowledgeable on these 
bills.
  Mr. McHENRY. I thank the chairman, and I appreciate the opportunity 
to address the crowdfunding section of this bill.
  One year ago, Oversight Chairman Darrell Issa sent a letter with 33 
questions to the Securities and Exchange Commission asking them to 
justify outdated securities laws that restrict capital formation and 
stunted job growth. It was a letter that really challenged the 
Commission's complacency and asked them about these 80-year-old 
regulations that were modern at the time where the new invention was 
the telephone and asked them if they had ways to update them.
  One question specifically asked Chairman Schapiro if she had 
considered creating an exemption to enable everyday investors to 
invest, with reasonable limitations, in unregistered securities issued 
by start-ups. This is known as ``crowdfunding.''
  At the time, I was only familiar with crowdfunding--which is a hybrid 
of microfinance and crowdsourcing--as a charitable method. It's done 
around the world, with billions of dollars of moneys raised. For 
example, a local brewery in my home State of North Carolina was able to 
raise $44,000 on a platform called Kickstarter. Now, that's done on the 
charitable side; but with crowdfunding, the success we see on the 
charitable side can be brought over on the investor side, on the equity 
side, of capital raising. We recognized the consequences of Dodd-Frank 
that limit the ability to get lending through traditional means and as 
a way to promote small business capital formation. Crowdfunding 
relieves part of that pressure.
  In September of last year, after countless meetings, conferences, 
congressional hearings, and bipartisan negotiation, I introduced the 
Entrepreneur Access to Capital Act. The bill was simple and direct. It 
offered a means of capital formation that would forgo costly SEC and 
State registration if issuers and investors operated within reasonable 
limitations. Most importantly, the foundation of the legislation upheld 
investor protections by empowering regulators to prosecute those who 
participated in securities fraud or deceit. That is preserved.
  In the Entrepreneur Access to Capital Act, our focus was on market 
innovation and investor protection to attract both political parties 
and well-known market participants to the table. As a result of that 
bipartisan bill, we had over 400 Members on this floor vote for that 
bill, the President said he would sign that bill, and we sent it over 
to the Senate with thousands of market participants saying it was good.
  This year, that same language was included as a provision within this 
legislation, the JOBS Act. Regrettably, just before the House-passed 
version of the JOBS Act received an up-or-down vote on the Senate 
floor, a handful of Senators misunderstood the spirit and the promise 
of crowdfunding, resulting in last-minute changes to the bill.
  Our essential framework is preserved for crowdfunding. Rather than 
recognizing that crowdfunding could create new markets and 
opportunities for small businesses and start-ups, these misguided 
Senators simply saw crowdfunding as unregulated activities. This 
misperception caused them to design a crowdfunding title that is 
riddled with burdens on issuers, investors, and intermediaries and 
limits general solicitation and enhances SEC rulemaking authority.

                              {time}  1300

  But, fortunately, as I said, the basic architecture of the 
Entrepreneur Access to Capital Act, crowdfunding, that bipartisan 
measure that we took through committee markup and House floor action, 
is preserved. Although I'm disappointed by the ill-conceived and 
burdensome changes within the crowdfunding title of this bill, I stand 
committed to working across the aisle to make sure that we fix this 
after the President signs it. That's what we intend to do.
  I urge my colleagues to vote for this bill and move forward.
  Mr. HIMES. Madam Speaker, I yield myself 1 minute.
  I salute Mr. McHenry, my friend from North Carolina, for his work on 
this bill.
  I think it's probably worth talking a bit more about crowdfunding. I 
appreciate the chairman's point of view, but let's be clear here that 
we are talking about marketing done at retail investors, up to $10,000 
more.
  Mr. McHenry called the Senate activity ill-conceived and burdensome. 
We are at the nexus here of potentially unsophisticated investors and 
people who see an opportunity.
  I would remind Mr. McHenry in citing a charitable background for this 
bill, when you give to a charity, you know you're not getting your 
money back. When you invest in a company, you hope you're getting your 
money back. And we should be vigilant that that, in fact, occurs.

[[Page 4137]]

  With that, I reserve the balance of my time.
  Mr. BACHUS. Madam Speaker, we have the right to close. So I would ask 
the gentleman from Connecticut to proceed. Could I inquire as to time.
  The SPEAKER pro tempore. The gentleman from Alabama has 2 minutes 
remaining, and the gentleman from Connecticut has 10 minutes remaining.
  Mr. HIMES. Madam Speaker, in closing, let me again reiterate my 
thanks to Chairman Bachus and to all of the members of the Financial 
Services Committee who worked hard on this bill.
  I think we've had a lot of good debate around very real and important 
issues. Unusual for this institution is that we've actually managed to 
keep the ideology and the barbs out of it. I'm very appreciative of 
that, and I know that the American people are as well.
  I appreciate coming, as I do, from a district and a State that will 
rise or fall on our ability to innovate, to grow small businesses into 
real world leaders, and to have a financial services sector which is 
vibrant and innovative, but safe.
  I very much appreciate the intent of this legislation. We had good 
support from both sides of the aisle. The President is supportive. We 
heard from industry associations that this was a good thing.
  With that, I encourage all of the Members of this body to support 
this legislation.
  I thank again the chairman and the ranking member of the committee 
and yield back the balance of my time.
  Mr. BACHUS. Madam Speaker, I yield myself such time as I may consume.
  Let me say this: during this debate, we focused on crowdfunding, but 
I think we're all in agreement that this bill is a great improvement, 
and we will revisit that. That shouldn't distract from the fact that 
this is a major piece of legislation that will cause, I think, a great 
deal of new competition, innovation of new products and services.
  In my revised remarks, which I intend to submit in the next week, I 
will highlight biomedical research, which we think has the potential to 
address some diseases that are rare diseases or degenerative conditions 
which would really receive a boost from this.
  So I commend all of our Members. We've come together here, and we've 
accomplished great things, along with the Senate, the House, and the 
administration.
  I yield to the gentlelady from Illinois.
  Mrs. BIGGERT. Madam Speaker, the proposals contained in the JOBS Act 
are not political or partisan, as has been mentioned. It comes from the 
small business community in districts like mine where I meet regularly 
with local employers who tell me that accessing capital is the hardest 
part of enduring the current recession.
  Many of these changes in this bill have bipartisan backing and have 
been endorsed by members of the President's Council on Jobs and 
Economic Competitiveness.
  Today's legislation will enable America's start-up companies--the job 
engines of our economy--to access the equity markets, not just the debt 
market. This is a bill that will give investors and emerging growing 
companies--perhaps a future Google, Apple, or Home Depot--the 
opportunity to reach investors, cut through the red tape, and overcome 
the financial barriers to success.
  I ask my colleagues on both sides of the aisle to support the bill.
  Mr. BACHUS. Madam Speaker, I yield back the balance of my time.
  Mr. NADLER. Madam Speaker, I rise in opposition to the Motion to 
Concur with the Senate Amendment to H.R. 3606, the Jumpstart Our 
Business Startups, JOBS, Act.
  Many of us agree with the general principle that we should modernize 
the financial system to help small businesses raise capital, attract 
investors, and contribute to our economic recovery. However, this must 
be done in a balanced way that also protects those investors and the 
public interest. I had hoped that the Senate would have an opportunity 
to bolster the bill with key consumer- and investor-rights provisions--
provisions that had no chance of passage in this House. While the 
Senate certainly strengthened the proposal, the Senate Amendment to 
H.R. 3606 does not go far enough to ensure that investors will be 
protected from unscrupulous actors.
  Since the bill was introduced, numerous experts and organizations, 
including the current and former chairmen of the Securities and 
Exchange Commission, Americans for Financial Reform, AARP, and the 
Consumer Federation of America, have raised significant concerns about 
this legislation. According to the New York Times, many fear the bill 
will allow companies to raise money without having to follow rules on 
disclosure, accounting, auditing and other regulatory mainstays. The 
deregulation measures in this bill could actually raise the cost of 
capital by harming investors and impairing markets, making it harder 
for legitimate companies to thrive. In addition, the bill will allow 
certain companies to ignore, for the first five years that they are 
public, certain regulations, such as the requirement to hire an 
independent outside auditor to attest to a company's internal financial 
controls. Also, recent experience clearly shows that arguments that the 
market will have sufficient incentive to police itself have led to 
disaster in the recent past and cannot be relied upon in the future. We 
should have all learned a lesson when it comes to hasty deregulation of 
financial markets. Even if there is a short term gain to be had, the 
long term consequences can be quite costly.
  In light of the fact that the Senate has not been able to add 
adequate consumer and investor protections, and the growing information 
about the potential long-term harm of these provisions, I must vote 
``No.''
  Mr. VAN HOLLEN. Madam Speaker, the Senate amendment to the Jumpstart 
Our Business Startups, JOBS, Act represents an improvement over the 
original House-passed version of this legislation, and I will support 
it today.
  Specifically, today's legislation strengthens the crowdfunding 
provisions of the JOBS Act by adding important investor protections. 
Under the revised bill, crowdfunding issuances will have to be offered 
through either an SEC-registered broker or an SEC-registered funding 
portal, which will further protect investors by improving 
accountability and enhancing regulatory oversight. Additionally, the 
maximum amount permitted to be raised in any one crowdfunding issuance 
has been reduced from $2 million to $1 million, and the maximum amount 
a non-accredited investor can invest has been limited to $2000 or 5 
percent of income for those earning less than $100,000, and the lesser 
of $10,000 or 10 percent of income for those earning more than 
$100,000.
  Madam Speaker, innovation and entrepreneurship in markets governed by 
clear and fair rules of the road has always been the key to our 
economic success. While I believe that there are stronger job creation 
measures we can and should be considering today, and that this 
legislation will itself merit continued oversight to ensure it is in 
fact striking an appropriate regulatory balance, I will support it 
today for the benefit it may provide.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Alabama (Mr. Bachus) that the House suspend the rules 
and concur in the Senate amendment to the bill, H.R. 3606.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. BACHUS. Madam Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this question will be postponed.

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