[Congressional Record (Bound Edition), Volume 162 (2016), Part 9]
[House]
[Pages 12023-12033]
[From the U.S. Government Publishing Office, www.gpo.gov]




   PROVIDING FOR CONSIDERATION OF H.R. 2357, ACCELERATING ACCESS TO 
  CAPITAL ACT OF 2016, AND PROVIDING FOR CONSIDERATION OF H.R. 5424, 
             INVESTMENT ADVISERS MODERNIZATION ACT OF 2016

  Mr. SESSIONS. Mr. Speaker, by direction of the Committee on Rules, I 
call up House Resolution 844 and ask for its immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 844

       Resolved, That at any time after adoption of this 
     resolution the Speaker may, pursuant to clause 2(b) of rule 
     XVIII, declare the House resolved into the Committee of the 
     Whole House on the state of the Union for consideration of 
     the bill (H.R. 2357) to direct the Securities and Exchange 
     Commission to revise Form S-3 so as to add listing and 
     registration of a class of common equity securities on a 
     national securities exchange as an additional basis for 
     satisfying the requirements of General Instruction I.B.1. of 
     such form and to remove such listing and registration as a 
     requirement of General Instruction I.B.6. of such form. The 
     first reading of the bill shall be dispensed with. All points 
     of order against consideration of the bill are waived. 
     General debate shall be confined to the bill and amendments 
     specified in this section and shall not exceed one hour 
     equally divided and controlled by the chair and ranking 
     minority member of the Committee on Financial Services. After 
     general debate the bill shall be considered for amendment 
     under the five-minute rule. It shall be in order to consider 
     as an original bill for the purpose of amendment under the 
     five-minute rule an amendment in the nature of a substitute 
     consisting of the text of Rules Committee Print 114-62. That 
     amendment in the nature of a substitute shall be considered 
     as read. All points of order against that amendment in the 
     nature of a substitute are waived. No amendment to that 
     amendment in the nature of a substitute shall be in order 
     except those printed in part A of the report of the Committee 
     on Rules accompanying this resolution. Each such amendment 
     may be offered only in the order printed in the report, may 
     be offered only by a Member designated in the report, shall 
     be considered as read, shall be debatable for the time 
     specified in the report equally divided and controlled by the 
     proponent and an opponent, shall not be subject to amendment, 
     and shall not be subject to a demand for division of the 
     question in the House or in the Committee of the Whole. All 
     points of order against such amendments are waived. At the 
     conclusion of consideration of the bill for amendment the 
     Committee shall rise and report the bill to the House with 
     such amendments as may have been adopted. Any Member may 
     demand a separate vote in the House on any amendment adopted 
     in the Committee of the Whole to the bill or to the amendment 
     in the nature of a substitute made in order as original text. 
     The previous question shall be considered as ordered on the 
     bill and amendments thereto to final passage without 
     intervening motion except one motion to recommit with or 
     without instructions.
       Sec. 2.  Upon adoption of this resolution it shall be in 
     order to consider in the House the bill (H.R. 5424) to amend 
     the Investment Advisers Act of 1940 and to direct the 
     Securities and Exchange Commission to amend its rules to 
     modernize certain requirements relating to investment 
     advisers, and for other purposes. All points of order against 
     consideration of the bill are waived. The amendment in the 
     nature of a substitute recommended by the Committee on 
     Financial Services now printed in the bill shall be 
     considered as adopted. The bill, as amended, shall be 
     considered as read. All points of order against provisions in 
     the bill, as amended, are waived. The previous question shall 
     be considered as ordered on the bill, as amended, and on any 
     further amendment thereto, to final passage without 
     intervening motion except: (1) one hour of debate equally 
     divided and controlled by the chair and ranking minority 
     member of the Committee on Financial Services; (2) the 
     further amendment printed in part B of the report of the 
     Committee on Rules accompanying this resolution, if offered 
     by the Member designated in the report, which shall be in 
     order without intervention of any point of order, shall be 
     considered as read, shall be separately debatable for the 
     time specified in the report equally divided and controlled 
     by the proponent and an opponent, and shall not be subject to 
     a demand for a division of the question; and (3) one motion 
     to recommit with or without instructions.

  The SPEAKER pro tempore. The gentleman from Texas is recognized for 1 
hour.
  Mr. SESSIONS. Mr. Speaker, for the purpose of debate only, I yield 
the customary 30 minutes to the gentleman from Colorado (Mr. Polis), 
pending which I yield myself such time as I may consume. During 
consideration of this resolution, all time yielded is for the purpose 
of debate only.


                             General Leave

  Mr. SESSIONS. Mr. Speaker, I ask unanimous consent that all Members 
have 5 legislative days to revise and extend their remarks.

[[Page 12024]]

  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  There was no objection.
  Mr. SESSIONS. Mr. Speaker, I rise in support of this rule, which is a 
fair rule that makes in order every single amendment submitted to the 
Rules Committee. The rule provides for consideration of H.R. 5424, the 
Investment Advisers Modernization Act of 2016, and H.R. 2357, the 
Accelerating Access to Capital Act of 2016.
  This package comes to the floor via the chairman of the House 
Financial Services Committee, Chairman Jeb Hensarling, who brought this 
package to the Rules Committee because of the needs of the American 
people and the needs of the financial services industry that is trying 
to grow jobs, investment, and opportunity for people in America.
  We have an incredible opportunity before us today, Mr. Speaker, an 
opportunity to take good ideas, good ideas that come directly from the 
American people. It is called the financial services industry of the 
United States of America, men and women who get up and handle our 
financial needs, many men and women who not only have dedicated 
themselves to the success of this country, but also to the success of 
the American people.
  We are trying to take this opportunity to move those ideas that they 
bring to us today through the House of Representatives so that we have 
a bill that we can present on a bipartisan basis to the United States 
Senate and to the President of the United States and say these are 
great ideas.
  Mr. Speaker, I will tell you that your work that you do personally to 
make sure these ideas are brought forth not only to the Financial 
Services Committee, but to other areas of this Congress to make sure 
that we are passing legislation that is about jobs, job creation, and 
the availability of the American people to have a better shot at the 
American Dream, is why we are here today.

                              {time}  1245

  The goal of this rule and the underlying legislation is simple: to 
keep the flow of capital moving across our capital markets, to make it 
easier--not harder--to make it easier to overcome barriers for small 
businesses, entrepreneurs, and startups to have the capital that they 
desperately need to grow and thrive.
  Mr. Speaker, this part of the American Dream is someone who has great 
ideas, the ability, and the desire, and to take those ideas and match 
it up with the capital, a marketing plan, and the ability to move forth 
in that plan. That is part of the American Dream to make not only your 
life better but, along the way, a bunch of other people who meet their 
American Dream also.
  Capital is the lifeblood of growing new companies--not a surprise--
and access to capital can literally make or break small business. Mr. 
Speaker, it can make or break a person's great idea also. That is why 
we are here today on the floor. Good ideas that come from men and women 
in the industry, men and women who talk to the Financial Services 
Committee on a partisan basis, men and women of this Congress bringing 
these great ideas, and it is all on behalf of trying to give people a 
better shot at the American Dream through growing companies accessing 
capital and making the hard break become successful.
  I have seen firsthand the detriment of overregulation in industries 
and poorly written laws, and I have also seen the power of the free 
enterprise system. While serving as chairman on the board of the 
Greater East Dallas Chamber of Commerce, I saw, firsthand, companies 
that could not get the capital that they needed because they weren't 
large enough to qualify or perhaps had some other burden or impediment 
in front of them.
  As we know today, because of technology, time, and people's purpose, 
we have the opportunity for doing something remarkable. We have the 
ability today to enact legislation that will bolster opportunities for 
small businesses to secure capital, to reduce the strain of a one-size-
fits-all regulatory regime, and to take that and add an opportunity to 
overcome these by using the American spirit and killing regulatory 
things that stand in the way. That is why we are here.
  Mr. Speaker, I reserve the balance of my time.
  Mr. POLIS. Mr. Speaker, I yield myself such time as I may consume.
  I thank the gentleman for yielding me the customary 30 minutes.
  Mr. Speaker, over 6 months ago, the Obama administration actually 
identified the Zika virus as a public health crisis. It is well 
reported on. My constituents are aware of it. It has already affected 
many Americans in States like Florida, Texas, and Louisiana. The Obama 
administration requested additional resources to combat the virus.
  The White House and the CDC correctly predicted that the virus would 
soon spread to the Southern United States. In fact, just as Congress 
left for its 7-week break, there were several reports of Zika 
transmission in south Florida. In fact, just last week, the Director of 
the CDC warned that, without congressional action, they will soon run 
out of money for combating Zika.
  Now, in a moment, I will talk about the bills we are considering, but 
I think the American people expect Congress to react to a public health 
crisis. Had we reacted 7 weeks ago, perhaps we wouldn't be where we are 
today. I need and call upon this body to act today so that we are in a 
better situation 7 weeks hence.
  In fact, the House is only in session for 15 more days before taking 
at least a 6-week break in October and November. In the handful of days 
we have left, it is critical to provide an emergency package to fight 
back against Zika. That is not currently on the calendar, Mr. Speaker. 
Instead, we are considering these bills. I will be going into the 
merits and lack thereof of them; but certainly, I think my colleagues 
on the other side of the aisle would agree with the objective 
assessment that these bills do nothing to combat Zika or address the 
public health concerns around Zika.
  The Senate did pass a partisan Zika funding bill to provide emergency 
resources. It doesn't have unrelated poison pills unrelated to Zika. 
Obviously, issues like where or if the flag of the rebel States, the 
Confederate flag, is displayed, or whether Planned Parenthood is 
funded, these are contentious issues here, but I think we all agree 
they have nothing to do with Zika. The Confederate flag does not have 
an impact on Zika. Planned Parenthood has at least a related aspect to 
it--reproductive health.
  Of course, one of the symptoms or one of the effects of Zika is a 
higher rate of microcephaly among children that are born to women who 
suffer from Zika while they are pregnant. So certainly the family 
planning aspect of it is relevant, but not central, to the issues 
affecting public health around Zika. We need to make sure that there 
aren't any of those poison pill provisions and move forward.
  Instead, we have different bills here. We have bills related to 
financial markets.
  The first one is the Accelerating Access to Capital Act of 2016. That 
one brings together several different bills that had been offered.
  First, it includes a bill that affects microcap companies, or pink 
sheet companies, and removes many of the SEC transparency regulations 
around how they sell stock and how they are listed. It is not a step 
forward for transparency. In fact, this kind of effort is likely to 
decrease confidence in our public marketplace. It is likely to hurt the 
very stock market that presumably it was designed to help.
  This would effectively allow microcap companies worth less than $75 
million with one class of securities to issue an unlimited number of 
shares using shelf registration in a 12-month period, not even 
notifying the SEC ahead of the issuance, and permit unlisted microcap 
companies to sell up to one-third of the aggregate market value of 
their common equity using shelf registration in a 12-month period.
  In many ways, these provisions are at odds with the other bills that 
I will talk about, which provides some regulatory relief towards 
private equity by favoring small cap public companies. It is hard for a 
small company to be public. It is questionable whether small cap 
companies should be public.

[[Page 12025]]

  When we talk about private equity in a moment, we will see that one 
of the features of that is: A, they have, of course, a more 
sophisticated ownership; and, B, they have a more concentrated 
ownership. So, for instance, the issues like runaway executive pay, CEO 
pay, is less of a problem with private equity and a significant problem 
with public companies, and, again, in particularly small cap companies 
with diffuse ownership, which this bill would likely lead to more of.
  It would also remove exchange protections like corporate governance 
requirements. Again, these kinds of measures reduce confidence in the 
public marketplace, they hurt the stock market, and, in the immediate 
and long term, they hurt the ability of companies to go public and 
access public capital because of the reputation of the pink sheets and 
the reputation of microcap.
  It is a fine line. I am sure that we would probably agree on some 
regulatory relief around small cap companies, but this package is not 
it. This package would hurt the stock market, hurt access to capital, 
and hurt the very legitimate players that it is designed to help.
  The second bill in here is the Micro Offering Safe Harbor Act. It 
would eliminate Federal and State investor protection around 
crowdfunding in regulation A under certain conditions.
  First, I was an original sponsor of the JOBS bill. I worked with many 
of my colleagues on both sides of the aisle to get that through. I will 
be among the first to say that I was disappointed with the way that 
that has been implemented by the administration. Crowdfunding should be 
easy. It should not have 900 pages of regulations.
  The main consumer safeguard that we have in there is that 
nonaccredited investors are only allowed to invest up to $10,000. That 
is a very important protection that we have. This would eliminate that 
protection under several circumstances. One, if there are 35 or fewer 
purchasers; or, two, the aggregate amount of securities sold by the 
issuer is $500,000 or less in a 1-year period. It basically does away 
with one of the legislatively imposed consumer protections in the JOBS 
Act.
  Now, I would agree. I think there has been some regulatory-imposed 
inhibitions in the JOBS Act that I wish that we could strike out in a 
laser-like way with a scalpel. In fact, many States, including my own 
State of Colorado, have implemented more sensible bipartisan 
crowdfunding legislation that enables it to occur at least within a 
State in a much easier way than the very cumbersome Federal law which 
does inhibit both the use of crowdfunding as well as the presence of 
crowdfunding as part of an overall capital strategy because of the 
difficulties concerning other types of capital investors and capital 
partners.
  I would love to see reform of the JOBS Act or reform around micro 
offering, but this particular answer really undermines the entire 
concept of the consumer protections. It is not targeted. It removes the 
protections for smaller of the smallest of the small offerings. And 
again, what you would find and the danger here is folks--we can call 
them scam artists or folks trying to make a buck off of this and not 
build legitimate businesses--can simply set up a number of companies 
each raising under $500,000 to meet the criteria of this exemption. 
There is not any consumer protection around that. There is nothing to 
stop a bad actor from asking for significant investments for each of 
those companies, even from the same individual depleting the savings of 
that individual rather than sticking to the $10,000 cap, which was in 
our JOBS Act.
  So again, I would like, and many of my colleagues on my side of the 
aisle would like, crowdfunding to be easier, to be done quicker, to 
remove some of the excess paperwork and regulation A requirements, but 
maintaining that basic consumer safeguard and not providing exemptions 
just because there are 35 or fewer purchasers or $500,000 or less over 
a 1-year period. It doesn't even address overlapping ownership or 
related status between, again, multiple companies that might each raise 
$500,000, might substantially have the same external owners, but would 
get around the JOBS Act consumer protection provisions by effectively 
cloning a bunch of small companies and offering them up separately for 
individual investors. These things need to be thought through.
  There is a kernel of an idea in there. I agree that the 
administration has gone beyond the legislative intent of the JOBS Act 
in its implementation of the JOBS Act. There is, hopefully, a way that 
we can work together to empower crowdfunding to play a more central 
role in capital development in entrepreneurship in our country. This 
bill is not it.
  The final component of that bill, the Private Placement Improvement 
Act of 2016, would make it very difficult for the SEC to finalize 
investor protections that it proposed back in 2013. The title would 
require issuers selling securities under an exemption that allows 
companies to raise an unlimited amount of money to file within 15 days 
of sale a single notice of sale, which the SEC would then be required 
to make available to State and other regulators.
  This relates to some current rules that the SEC is moving forward 
with. I think that, again, there is a way to tweak those rules, but I 
don't think that this is the way to do it, to allow for unlimited 
capital to be raised under a single notice of sale. And, of course, 
this also affects the prerogative of State regulators, and there are a 
variety of practices there, by requiring the SEC to make it available 
to State and other regulators.
  I think that there is room for improvement in that area, but, again, 
the bill falls short.
  Now, the other bill, the Investment Advisers Modernization Act of 
2016, a majority of Democrats on the committee support it. Many also 
voiced concerns. Some were the concerns of the Obama administration 
about some of those provisions. But I am glad to say that many of those 
concerns have been addressed by my colleague's, Mr. Foster's, 
amendment.
  First, a little bit about private equity and what this bill does and 
doesn't do.

                              {time}  1300

  My State and my district, like, probably, every other district in the 
country, has seen the benefits and the impact of private equity 
investment in its providing growth capital to companies, providing 
stability in ownership. There are over 100 private equity-backed 
companies headquartered in Colorado that we know of that support close 
to 100,000 jobs in Colorado. In 2015, private equity firms invested $12 
billion in Colorado-based companies. They are real jobs, and they have 
contributed to the economic growth that Colorado has seen over the last 
few years and that the country will see over the next few years.
  Private equity has helped to create and sustain thousands of jobs and 
has made substantial investments in every State in the country. It 
provides returns to public pensions, to university endowments, to many 
people as part of their own individual retirement plans and savings. It 
is important both from a capital perspective and from an operating 
perspective--a very important sector. Firms that are owned by private 
equity--at least, because, again, there could be some that are not part 
of this--employ over 8 million people. The private equity industry 
invested over $600 billion into these companies. For physical 
infrastructure, for additional hires, for expansion, private equity has 
been a source of capital for Main Street businesses across our country, 
in my State, and everywhere else in the country.
  That is why the bill passed the Financial Services Committee with a 
majority of Democrats--with strong bipartisan support--and I think it 
will pass this body with strong bipartisan support as well.
  Of course, there have been stories about bad actors in private equity 
just as there could be bad actors among any type of ownership entity. 
That is what private equity is. It is a type of entity that may own a 
local company.
  What are the other kinds of ownership that a company may have?

[[Page 12026]]

  It may have public ownership. It may be public. We talked about that 
in the microcap bill. In many ways, that is a worse form of ownership 
in that there is additional administrative overhead that is associated 
with being public. Even if the regulatory relief were to become the 
law, there is still significant additional overhead with being public. 
It is very difficult for a $20 million or a $50 million company.
  Two, because of the diffuse ownership, frequently, there is no one 
watching the shop, meaning that management runs it. We have the 
problems of excess CEO pay, of excess executive pay. There are horror 
stories of CEOs making hundreds of times the pay of the line workers. 
Those kinds of things don't happen in private equity-backed companies. 
There is someone minding the shop, and the entity that is minding the 
shop is an entity that is looking for long-term growth, for long-term 
stability. They are not in and out.
  There has been some confusion among Members of this body in 
discussing hedge funds versus private equity. Private equity is not a 
hedge fund. Hedge funds have liquidity, and they make transactions 
rapidly. They don't participate in governance and growth. Private 
equity is very, very different. It is more analogous to venture 
capital. They are in there for 5 years, 6 or 7 years, 10 years--long-
term investors who are building the companies, serving on boards, 
recruiting others to serve on boards, providing sound corporate 
governance, making sure that CEOs and executives aren't paid too much, 
making sure that talent is in the company, making sure that growth 
capital is available.
  H.R. 5424 just takes a scalpel approach to existing regulations by 
focusing on aspects of SEC adviser registration that impede the capital 
formation in the private equity industry. For instance, there are 
provisions in the bill that would make reporting to the SEC more 
efficient and effective for their purposes and less costly and 
burdensome for private equity firms.
  Keep in mind that private equity firms do not represent, in any way, 
shape, or form, a systemic risk to our Nation's financial security. 
They are simply a type of ownership that Main Street companies have. If 
a private equity firm invests poorly, runs companies poorly, they will 
deliver a very poor return for their investors. That does not impact in 
any systemic way the economy in the way that a hedge fund--placing 
highly leveraged bets on derivatives or on some other financial 
instrument--can cause an entire economic meltdown, as we saw during the 
mortgage-backed security crisis in 2008 and in 2009.
  Private equity firms provide patient, stable, long-term capital to 
privately owned businesses across the country. In fact, they help take 
the emphasis off of the quarterly financial reports that are so 
important for public companies.
  One of the failures of public company governance is that there is too 
much emphasis on the short term at the expense of the long term--too 
much emphasis to pump up the quarter at the expense of medium- and 
long-term growth--2 years, 3 years, 4 years--in underinvestment in 
research and in underinvestment in long-term growth. Having a private 
equity ownership of an operating company addresses that kind of moral 
hazard that exists with regard to the incentives of the public 
marketplace.
  Private equity firms have a long-term outlook that results in lower 
volatility. While the public company model may not perform as well as 
private equity firms, it, obviously, can provide access to capital, to 
additional liquidity that private equity doesn't have. The two are 
related in that, for some private equity investors, their goal is a 
public offering exit in the 5- to 10-year time frame. That is not 
always the case, but that can be the case; and having an operable 
public market in addition to a private equity market is, of course, of 
interest and importance to the private equity industry as well, which 
is why the reforms in the other bill are so bad, because they 
deteriorate confidence in the stock market. They ultimately will result 
in decreasing liquidity for the good actors, meaning some of the 
private equity-backed or owner-operator-owned companies that want to 
have a public partial exit or exit through the public marketplace.
  Again, the bill isn't perfect. The White House identified a number of 
issues. But, fortunately, my colleague, Representative Foster, offered 
an amendment, which has been accepted and, hopefully, that will address 
a number of these issues.
  The amendment removes a provision of the bill that would have allowed 
certain ancillary or minor funds or entities that are affiliated with a 
private equity firm to also be exempt from annual audits or surprise 
inspections. It addresses concerns around transparency by continuing 
the current requirement that advisers provide information about fees 
and services in a brochure. It restores the transparency elements while 
maintaining the concept of the regulatory relief of redundant 
regulations with regard to capital formation and private equity.
  The goal is to enact this commonsense bill that will make it more 
efficient for private equity firms to operate and continue to grow 
businesses on Main Street in districts like mine and across the country 
while simultaneously maintaining the regulatory regime to make sure 
that nothing untoward is occurring.
  The bill does not, as some have falsely argued, allow private equity 
firms to escape regulation by any stretch. In fact, most private equity 
firms have embraced the changes that have been implemented under Dodd-
Frank. They have compliance teams to make sure they are operating 
properly under the new regulatory scheme. In any form, they do not 
represent a systemic risk, but to protect investors, many of them agree 
with the sensible regulations that have been imposed with the exception 
of those that we are seeking to remove that are redundant and that 
create overhead. When you create overhead for private equity firms, 
that results in less investment in our Main Street businesses. If they 
have to divert funds to comply with unnecessary regulations for the 
sake of regulations, it is that much less money and that many fewer 
jobs in your Main Street businesses located in your districts.
  The substitute amendment makes positive changes to the legislation. 
It addresses many of the concerns that have been raised about the bill. 
I and many of my colleagues plan to support its passage and also take 
this occasion to make sure that our colleagues are aware of the 
contributions of this particular model of ownership to our Main Street 
businesses. It has been a growth sector, in fact, largely due to 
showing, over time, superior performance to companies that have a 
public governance model, in fact, in large part, due to their 
dissipated owner base and lack of concentration in ownership.
  I reserve the balance of my time.
  Mr. SESSIONS. Mr. Speaker, I appreciate the gentleman from Colorado's 
not only observations as a business leader from Colorado, but as a 
member of the Rules Committee. He recognizes the need for ideas to flow 
up from the industry to Members of Congress, for us to, on a bipartisan 
basis, approach these issues to where we can provide safety and 
soundness for the American people.
  Mr. Speaker, I yield 5 minutes to the gentleman from Delano, 
Minnesota (Mr. Emmer), the gentleman who is offering his legislation, 
which is a part of title II of the legislation.
  Mr. EMMER of Minnesota. I thank the chairman.
  Mr. Speaker, government doesn't create jobs; people create jobs. But 
with the President, Congress can create Federal policies that establish 
a pro-worker and pro-business environment to lift people out of 
poverty, to help families, and to allow Americans to realize their 
greatest dreams.
  One problem today that is impeding job growth is the access to 
capital for small business. Often, American entrepreneurs can't get the 
money they need to start a new enterprise or to grow an existing one. 
In fact, small businesses still create the majority of new jobs in our 
country today despite the fact that far fewer small business loans are 
being made today than were being made prior to the 2008 recession.

[[Page 12027]]

  Compounding this problem even further is the unfortunate reality that 
entrepreneurs from less affluent communities often have the greatest 
difficulty in securing the capital they need to make their business 
dreams come true. As a result, thousands of jobs and hundreds of new 
products are left on the drawing board as unrealized aspirations of 
American entrepreneurs. Thankfully, if the rule before us today is 
adopted, the House can consider four solutions that will address this 
small business access to capital problem immediately.
  The Accelerating Access to Capital Act of 2016 will make it easier 
for businesses to raise capital. First, thanks to Congresswoman Wagner, 
this legislation will make it easier for small companies to comply with 
SEC security registration requirements by simplifying the process, by 
eliminating duplicative paperwork, and by, ultimately, allowing people 
to do their business instead of compliance.
  Second, thanks to Congressman Garrett's Private Placement Improvement 
Act, the bill will make it easier for small businesses to raise capital 
under rule 506 of regulation D, ultimately leading to greater access to 
capital for small businesses and unleashing the full potential of title 
II of the JOBS Act.
  Third, the Micro Offering Safe Harbor Act will make it easier for 
Americans to raise capital from friends and family if three simple 
criteria are met. These three criteria include that the investor has a 
substantive preexisting relationship with the owner, that there are 35 
or fewer investors, and that the aggregate amount of the investment 
does not exceed $500,000.
  Additionally, this provision would exempt such offerings from blue 
sky requirements, but with all Federal and State antifraud laws 
remaining in effect. It is important to note that this micro offering 
proposal does not create a new law, but, rather, simply clarifies an 
existing law by making an explicit safe harbor for certain private 
security offerings under the Securities Act of 1933.
  Finally, thanks to Congressman Hurt and Congressman Vargas, the 
Investment Advisers Modernization Act will modernize the Investment 
Advisers Act by removing redundancies and making necessary enhancements 
to increase capital formation.
  With American productivity decreasing, wages essentially stagnant, 
and the U.S. economy struggling to get to historically normal GDP 
growth levels, these proposals in the Accelerating Access to Capital 
Act will help jump-start our ailing economy. By providing new 
opportunities to make the most of capital formation vehicles that are 
already available or by creating new ones, these proposed reforms will 
enable American entrepreneurs and small businesses to access the 
capital they need to grow and to prosper.
  I thank the Speaker of the House and the chairman of the Financial 
Services Committee for prioritizing the consideration of these pro-
business, pro-jobs, and antipoverty bills. I encourage my colleagues in 
the House to support the rule. This is a tremendous opportunity for the 
House to support Main Street mom-and-pop stores, aspiring 
entrepreneurs, and established manufacturers to create jobs, wealth, 
and opportunity for Americans from all walks of life.
  Mr. POLIS. Mr. Speaker, I do have a speaker, but I can't locate her 
right now.
  I reserve the balance of my time.
  Mr. SESSIONS. Mr. Speaker, you just heard from one of our brightest 
new members of the Committee on Financial Services. This committee is 
full, on a bipartisan basis, of men and women who care very much about 
growing our economy.
  Mr. Speaker, I yield 5 minutes to the gentleman from California (Mr. 
Royce), a senior member of the Financial Services Committee and the 
chairman of the House Foreign Affairs Committee.
  Mr. ROYCE. I thank the chairman.
  Mr. Speaker, I rise in support of the rule and the underlying 
legislation of this H.R. 2357. It encompasses, by the way, H.R. 4850, 
and this is the Micro Offering Safe Harbor Act.
  What I will share with my colleagues is that California is the 
innovation capital of the world. From Silicon Valley to Orange County, 
technology startups are reimagining the way that the world works, and 
these new companies don't have thousands of people on payroll.

                              {time}  1315

  They don't need dozens of floors of office space. They don't need 
billions of dollars to function, but they do need capital. They need 
that capital to operate. Our current regulatory framework creates 
impediments to these small businesses tapping into the market.
  According to the Federal Reserve, the startup rate has fallen sharply 
over the past 30 years. It was 14 percent of total companies in a given 
year, but today it is down to 8 percent. The likelihood of a young firm 
being a high-growth firm has also declined over the years, and these 
trends are alarming, if you think about the consequences. These trends 
need to be reversed.
  The Micro Offering Safe Harbor Act turns the tide by lowering 
compliance burdens for firms seeking low-dollar investments from a 
small group of investors that they have a relationship with. So the 
legislation appropriately scales the regulatory oversight of capital 
formation, while keeping intact investor protections.
  The resources that startups would sink into compliance and legal 
costs could be redirected--to what?--to hiring workers, redirected to 
creating new products. Uber, Google, and Airbnb, these were all 
startups. Passage of the Micro Offering Safe Harbor Act ensures that 
the next success story will be told.
  I thank Mr. Emmer of Minnesota for his work on this important issue.
  I urge my colleagues to support both the rule and the legislation.
  Mr. POLIS. Mr. Speaker, I yield myself such time as I may consume.
  The gentleman talked about the Micro Offering Safe Harbor Act. Again, 
I think that there is the kernel of a good idea there, if the good idea 
would be to streamline the excess regulation above and beyond the 
consumer safeguards that were put in the JOBS Act; if the bill, for 
instance, were to take some of the best practices from the States, 
including my home State of Colorado, around crowdfunding and put them 
into a revised version of Federal direction.
  To be clear, I would join my colleagues in agreeing that the 
administration went well beyond the expressed legislative intent and 
legislative language of the JOBS Act in creating barriers to micro 
financing across the country. Unfortunately, that is not what this bill 
does.
  It cuts back by providing gaping loopholes on the consumer 
protections that Congress very thoughtfully intended to put in the JOBS 
Act. So these are not the unintended regulatory aspects that the 
administration added to the JOBS Act. These are cutting away at the 
very consumer protections which Congress deliberately--including, as 
one of the coauthors of the bill along with my Republican colleagues, 
Mr. Issa and many others, the protections that we actually put into the 
bill, this would gut. So, again, a kernel of a good idea.
  Perhaps the inception of this bill is, hey, we messed up on the 
implementation of crowdfunding. Let's fix it. Unfortunately, that is 
not what this bill does. I wish it was what this bill does. It is 
something I am certainly interested in doing. I think many of my 
Democratic colleagues are, and we would be happy to work on a 
bipartisan basis to address the poor implementation of the JOBS Act.
  Of course, if there was something expressly provided legislatively, 
we would be happy to go back and look at that. But this glaring 
loophole that is opened is simply not it, with regard to if there are 
fewer than 35 purchasers, under $500,000, some kind of preexisting 
relationship. These loopholes are simply too broad and would 
effectively remove the consumer protections that we have in 
crowdfunding.
  Mr. Speaker, if we defeat the previous question, I will offer an 
amendment to the rule to bring up the bipartisan no fly, no buy 
legislation, which I am proud to support. It would allow

[[Page 12028]]

the Attorney General to bar the sale of firearms and explosives to 
those on the FBI's terrorist watch list.
  If somebody is on the FBI terrorist watch list, they should not be 
allowed to quietly assemble an arsenal to commit a terrorist act. In 
fact, the FBI should immediately be on top of the situation, find out 
their intent, and see what is going on. It is a commonsense bill that 
would help keep America safe. My amendment would give the House an 
opportunity to simply vote on this commonsense bill, which so far, 
unfortunately, the Republicans have not even allowed us to debate. We 
cannot wait any longer for Congress to take meaningful action to reduce 
the risk of terrorism in our own country, and this bill would do that.
  Mr. Speaker, I ask unanimous consent to include in the Record the 
text of my amendment, along with extraneous material, immediately prior 
to the vote on the previous question.
  The SPEAKER pro tempore (Mr. Emmer of Minnesota). Is there objection 
to the request of the gentleman from Colorado?
  There was no objection.
  Mr. POLIS. Mr. Speaker, I reserve the balance of my time.
  Mr. SESSIONS. Mr. Speaker, we have been talking about thoughtful 
young members of the Financial Services Committee, who work with people 
all across the United States who are engaged in financial services to 
bring more capital to bear, not only for small business, but also 
better investment tools, investor tools. We have had the advantage of 
having not only Mr. Polis, a young entrepreneur from Colorado, but we 
have had Ed Royce. We have had Tom Emmer.
  We now would like to have another very bright, young man who serves 
on the Financial Services Committee to talk to us, who brings this bill 
to us from Winfield, Illinois.
  Mr. Speaker, I yield 5 minutes to the gentleman from Illinois (Mr. 
Hultgren).
  Mr. HULTGREN. Mr. Speaker, I rise today in support of H. Res. 844, 
which provides for the consideration of H.R. 2357, the Accelerating 
Access to Capital Act, and H.R. 5424, the Investment Advisers 
Modernization Act.
  I know how hard my colleagues on the Financial Services Committee 
worked in crafting this legislation that will strengthen our economy. I 
am, also, grateful for the hard work to make sure that this is a 
bipartisan effort. I was proud to support this legislation in the 
committee, and I am hopeful it will see a strong vote of approval when 
voted here on the House floor.
  I am proud to join Representatives Vargas, Stivers, Foster, and 
Sinema as a cosponsor of Mr. Hurt's legislation, H.R. 5424, the 
Investment Advisers Modernization Act. The modest changes that this 
legislation would make makes it easier to invest in job creators, our 
families, and our communities.
  Dan Gallagher, a recent Commissioner of the Securities and Exchange 
Commission, agrees and has testified in the Financial Services 
Committee that the bill ``preserves the registration regime for private 
fund advisers while at the same time removing or modernizing--in rather 
modest ways--some of the more unnecessary, outdated, and overly 
burdensome requirements of the now 76-year old Advisers Act that drive 
costs up for funds and investors, and hinder the efficient allocation 
of capital to help grow businesses and create jobs.''
  These changes will make it easier to invest in our communities, and 
these administrative savings then can be passed on to investors.
  The Accelerating Access to Capital Act, led by my colleague on the 
Financial Services Committee Mrs. Wagner, would make it easier for 
small businesses and entrepreneurs to access the capital they need to 
grow their companies and create jobs.
  It is important that we have smart regulations in place that provide 
certainty to investors and to our markets. It is equally important that 
the Securities and Exchange Commission not unnecessarily inhibit 
capital formation. In fact, the agency has a mission that states these 
two things should be treated with equal importance.
  This important package of legislation includes relatively modest but 
meaningful changes to our securities laws that will improve access to 
capital for smaller businesses and entrepreneurs without jeopardizing 
consumer protection.
  Title I of this package authorized by Mrs. Wagner makes it easier for 
more small companies to use a less burdensome document when registering 
with the SEC. Over the last 5 years, the number of smaller companies--
those with less than 500 employees--has declined. This is the first 
time that this has happened since the U.S. Census Bureau began keeping 
data on the subject.
  In 2012, the SEC's Government-Business Forum on Small Business 
Capital Formation report included a recommendation to modernize and 
expand the utility of form S-3 for a great number of public companies. 
This is just what Mrs. Wagner's legislation proposes to do.
  Furthermore, the report noted that investor protection concerns have 
been substantially eliminated with the advanced information technology, 
including EDGAR, which is the SEC's electronic disclosure filing 
system.
  The Accelerating Access to Capital Act includes two other very 
important titles. The gentleman from Minnesota (Mr. Emmer) has put 
forth legislation that would exempt certain micro offerings from the 
registration requirement of the Securities Act of 1933. This important 
change in law would allow a startup business--the engines driving 
growth in our economy--to solicit friends and family to invest in their 
businesses.
  Investors with a preexisting relationship with those most committed 
to the company's success likely have the greatest understanding of its 
growth trajectory and prospects for generating a healthy return on 
investment. This will allow small business to access capital without 
having to navigate more complicated Federal securities registration or 
win approval of the SEC. Mr. Emmer's legislation will help fuel growth 
on Main Street and help create the jobs our constituents deserve.
  Mr. Garrett, the chairman of the Subcommittee on Capital Markets and 
Government Sponsored Enterprises and a strong leader on these issues, 
has put forth legislation to ensure the SEC returns more of its focus 
to supporting capital formation, just as Congress intended in the JOBS 
Act.
  Mr. Garrett's legislation would direct the SEC to revise regulation 
D, so fewer small businesses are required to register their securities 
with the agency. It would help eliminate some of the most excessive 
regulation we hear about far too often from our constituents.
  The legislation will allow entrepreneurs and small businesses to go 
back to doing what they do best--innovating and creating jobs--ensuring 
families in our communities have a paycheck to put food on the table, 
can cover the increasing costs of health care, and provide 
opportunities to help their children be successful in the world.
  Again, I would like to thank Chairman Hensarling and my colleagues on 
the Financial Services Committee for all of this hard work. I encourage 
all of my colleagues to support the rule and the legislation to follow.
  Mr. POLIS. Mr. Speaker, I would like to inquire if the gentleman has 
any remaining speakers.
  Mr. SESSIONS. Mr. Speaker, in fact, in this colloquy, I do have an 
additional speaker, and then I would choose to close.
  Mr. POLIS. Mr. Speaker, I reserve the balance of my time.
  Mr. SESSIONS. Mr. Speaker, the Committee on Financial Services has 
presented a number of their members who have come to the floor today to 
offer thoughts and ideas on a bipartisan basis, thoughts and ideas that 
have emanated up from literally financial services experts across the 
country, commonsense ideas, and investor ideas. They have been vetted. 
They have been looked at. They have been talked about. They have been 
marked up on a bipartisan basis; and that is

[[Page 12029]]

why we are here today, to make capital easier and more available from 
an investor perspective, as well as from the perspective of the 
financial services industry.
  One of the leaders from the Financial Services Committee for a number 
of years has been our next speaker, and I am delighted to yield 5 
minutes to a favorite son of St. Elizabeth, Missouri (Mr. Luetkemeyer).
  Mr. LUETKEMEYER. Mr. Speaker, I want to thank the distinguished 
gentleman and friend from Texas, the chairman of the Rules Committee, 
for that eloquent introduction. I also thank him for all of his hard 
work on his committee as well as bringing this important bill to the 
floor.
  I also want to recognize my colleagues on the Financial Services 
Committee, Mr. Garrett, Mrs. Wagner, Mr. Emmer, and Mr. Hurt, for their 
tireless efforts on behalf of our Nation's investors and small 
businesses.
  Mr. Speaker, today or tomorrow, the House will consider legislation 
that will allow small businesses and those starting or investing in 
small businesses to access needed capital without being subject to 
burdensome and unnecessary regulation.
  As we have seen throughout the financial services sector and across 
our economy, one-size-fits-all rules are damaging our Nation's 
businesses, financial institutions, and, as a result, American workers 
and their families. Main Street has been crushed under the weight of 
this administration's regulatory regime, as even the ranking member 
admits.
  H.R. 2357, composed of three bills that passed the Financial Services 
Committee earlier this year, simplifies registration requirements for 
small companies and facilitates access to capital without triggering 
costly regulatory expenditures.
  H.R. 5424, the Investment Advisers Modernization Act of 2016, 
eliminates duplicative requirements for investment advisers, allows for 
greater capital formation and development, and streamlines elements of 
the 76-year-old Investment Advisers Act.
  I recently met with a company in my district that relied upon private 
equity to stay afloat and continued to employ my constituents. Capital 
should be used to create jobs and spur economic growth and, as the 
chairman mentioned in his opening remarks, to help Americans realize 
the American Dream. Capital should not be used to fulfill meaningless 
and unproductive regulatory requirements.
  Our economy sits in idle. It is time to put it in drive. Regulation 
should serve to protect taxpayers and not hurt them. It should enhance 
the economy, not stymie it. There is no room for regulation that serves 
to appease bureaucratic demands.

                              {time}  1330

  Mr. Speaker, I come from the business world, and in another life I 
was a banker on the regulatory side of the table as well as a bank 
examiner. I have seen the impact of rules and regulations on small 
businesses and communities, and my community as well. I have looked 
across the table and helped those small businesses get started. Capital 
is the lifeblood of these small businesses being able to start 
businesses, help employ people, and be able to help people have jobs 
and enhance the communities that they come from. It is extremely 
important.
  These discussions that we are having today are important from the 
standpoint of enhancing our ability as a nation to continue to thrive 
and grow, and to stymie what is hurting ourselves. The statistics are 
there. Small businesses have been deteriorating. We have lost more 
small businesses in the last several years than we have had. So, 
therefore, why do you think we have the jobs problem that we have 
today? It is pretty evident to me.
  This rule and the underlying bills we will consider during the 
remainder of this week will move us towards an economic recovery and a 
more responsible regulatory environment.
  I want to, again, thank my colleagues on the Committee on Financial 
Services and the Committee on Rules for their work on these issues and 
for their advocacy on behalf of our Nation's investors, small 
businesses, and employees.
  Mr. POLIS. Mr. Speaker, is the gentleman from Texas prepared to 
close?
  Mr. SESSIONS. Mr. Speaker, I would expect at this time that I have no 
further speakers and will close when given that opportunity.
  Mr. POLIS. Mr. Speaker, I yield myself the balance of my time.
  Mr. Speaker, again, while I do applaud Democrats and Republicans for 
coming together around H.R. 5424, the Investment Advisers Modernization 
Act, I wish that we had come together around the pressing public health 
crisis of Zika. I wish we had come together to prevent terrorists from 
assembling arsenals to commit terrorist acts in our country. 
Unfortunately, while the Senate has acted in a bipartisan way to 
address Zika, House Republicans continue to sit on their hands and 
ignore this critical public health issue. The CDC is quickly running 
out of money to combat Zika. We have yet to even begin serious 
discussions on comprehensive immigration reform, with only a couple 
months left in this session, not to mention the crisis of lead in the 
pipes in Flint, Michigan. And, of course, in the weeks after the 
deadliest mass shooting in our Nation's history, Congress has not acted 
on anything around preventing violence, as well.
  We should be voting on those kinds of bills. Many of those are also 
bipartisan, just as this private equity bill is, but I would argue that 
they are more timely, more important. Instead of focusing on policies 
that help save lives, Republicans are instead spending time on two 
bills, one of which will almost certainly receive a veto from the 
President. The other one, we hope that Mr. Foster's amendment addresses 
the issues the President had with it, but both of which are not likely 
to pass the United States Senate.
  We are spending more of our time and taxpayer money ignoring the most 
pressing issues before us, issues that could move through the Senate, 
issues that I hear about from my constituents every day back home.
  Again, I applaud the Democrats and Republicans coming together around 
the H.R. 5424 bill. This bill, if it were to become law, would 
absolutely encourage greater investment in mainstream businesses in our 
communities. It might make the difference of them making that 
additional hire or two. That might be your neighbor; that might be your 
cousin; that might be your spouse; it might even be you, that extra job 
or two or three that is created by encouraging private capital 
resources to be put into our communities.
  Again, private equity had nothing to do with the financial meltdown 
in 2008 and 2009. There is nothing systemic about it. It is simply 
ownership groups of companies, and whether those owners are local 
ownership groups, whether they are founders, whether they are family 
offices, whether they are private equity, whether they are publicly 
traded, they all have pros and cons.
  We, of course, like to think of the very idealized vision of a 
mainstream business where it is owned by your neighbor and somebody who 
is accountable that you know, but those kinds of businesses have 
transition issues as well. When their owner-operator gets ill or passes 
on, what is to become of those businesses? What is the route to 
sustainability? How can we make sure they continue to add value in the 
community? For many, for transition planning, private equity can 
provide that answer.
  I urge my colleagues to vote ``no'' on the bill and defeat the 
previous question so we can reduce the risk of a terrorist attack in 
our country, and vote ``no'' on this restrictive, misguided rule.
  Mr. Speaker, I yield back the balance of my time.
  Mr. SESSIONS. Mr. Speaker, may I inquire as to the time I have 
remaining.
  The SPEAKER pro tempore (Mr. Hultgren). The gentleman from Texas has 
7\1/4\ minutes remaining.
  Mr. SESSIONS. Mr. Speaker, thank you very much. I yield myself the 
balance of my time.
  Mr. Speaker, I want to congratulate and thank my colleague, Mr. 
Polis.

[[Page 12030]]

Today has been a thoughtful exercise where there was some disagreement. 
That is okay. That does not bother me, and it should not bother him 
that he had to speak his mind in areas that he felt were important.
  But today, Mr. Speaker, Mr. Polis has very objectively been able to 
critique the bill in front of us, to provide his analysis of that bill, 
acknowledging it is a bipartisan bill, acknowledging that this bill is 
about jobs, job creation, making life better, albeit that it might be 
one or two people in a neighborhood. This country is full of 
neighborhoods and full of people who want a better job, people who want 
a better opportunity to invest, people who want to have their ideas 
taken up, and this bill came directly to us today from back home, back 
home people who have ideas, back home people who are looking at rules 
and regulations and saying, wow, that is an impediment to my good idea.
  Mr. Luetkemeyer, Mr. Emmer, Chairman Royce all said, oh, by the way, 
they have an American Dream they are trying to live up to also, and 
there are things that are getting in the way of their dream. So they do 
the things that are necessary to float their ideas up to their Member 
of Congress. It came to the Committee on Financial Services. The young 
chairman, Jeb Hensarling, creates ideas that are able to move to 
legislation. That is why we are here on the floor today, subscribing 
ideas that provide more capital that is available.
  The cost of securities regulation continues to fall heaviest on small 
companies. Small companies are the engine of our economy, where many of 
the bright people who today, by graduating from college, going to 
business school, learning things, they realize as they enter the 
marketplace, wow, there is another hurdle out there.
  That is why we are here today. They want to bring their ideas to the 
marketplace. We are here to help them through safety and soundness, 
through working through the instruments of government, and to do so so 
that traditional financing options are available for small companies 
that work.
  Our predatory administration--that is this Obama administration--is 
using Dodd-Frank as its main weapon against the free enterprise system 
today. This administration is using the weapons that they have 
available to them to stop and stifle and to make more difficult the 
creation of jobs, the creation of more wealth, the creation of 
investment, and it is all done. We see this, Mr. Speaker, when we look 
at GDP growth. Our country is stagnant.
  Yesterday, when we were having the motion to recommit, the young 
gentlewoman from the Democratic side acknowledged most forthrightly, 
these are difficult financial times. All across America there are 
terrible financial times because of an administration that chooses to 
strike at the heart of the free enterprise system: the heart of the 
free enterprise system in health care, the heart of the free enterprise 
system in banking, and regulations on the energy industry, striking at 
the heart of people trying to get homes and keep jobs and to move 
things.
  This administration has a constant attack against jobs, job creation, 
and, I believe, the American worker, yet they find it easier to give 
lots of money to other people but not Americans for our own job 
creation. That is why we are here today. But we are not going to cast 
this as what this is about.
  What this is about is a positive effort about the American Dream, 
about good ideas, about bipartisanship, about following the rules to 
get things through a committee, to get things to the Committee on 
Rules, to get things on the floor, to get people to vote on a 
bipartisan basis.
  We have, essentially, four bills in this rule, four bills that I 
believe are desperately--I will use that word, ``desperately''--needed 
by small business to grow and innovate ideas. What is on the other side 
of that? We have already said it 10 times, the American Dream. But it 
is also freedom. When issuers sell securities to the public, that means 
more money goes into the company, money that can be used to hire more 
people, push a product and make it successful. That is why we are here. 
We are here to take the ideas, a process, in a bipartisan way.
  Lastly, Mr. Speaker, I include in the Record a letter which addresses 
an issue that my dear colleague has talked about, and that is the Zika 
funding issue.
  The letter was written to the President of the United States on July 
14, 2016, and among other things it says: ``The House passed a 
conference report that would provide an additional $1.1 billion in 
emergency supplemental funding to continue to prepare for, and prevent, 
Zika both domestically and internationally. It is unfortunate that 
Democrats have blocked action on this legislation in the Senate.'' Mr. 
Speaker, they continue to do it today.
  This letter--which was signed by the chairman of the House Committee 
on Appropriations, the gentleman Hal Rogers; the gentleman Thad 
Cochran, chairman of the Senate Committee on Appropriations; Chairman 
Tom Cole, House Appropriations Subcommittee on Labor, Health and Human 
Services; Roy Blunt, chairman, Appropriations Subcommittee on Labor, 
Health and Human Services; Kay Granger from Fort Worth, Texas, 
chairwoman, House Appropriations Subcommittee on State and Foreign 
Operations; Lindsey Graham, chairman, Senate Appropriations 
Subcommittee on State and Foreign Operations--very clearly says: Mr. 
President, until that block by Senate Democrats is stopped, we give you 
authorization to reprogram money that would be available. You seem to 
find lots of money that is available to bring people to this country 
who might be displaced in other places around the world. Why don't you 
spend a little bit of money on important issues like the Zika virus?
  We are on record. We are waiting for the Senate to move the bill. Mr. 
Speaker, I want you to know your time that you have allocated today, 
the precious time of this House, was done today for bills that came to 
us from ideas from the American people that floated on a bipartisan 
basis directly up to the Committee on Financial Services, which brought 
these bills forward. They have been talked about, marked up, and 
vetted. They are good to go, and I am in full support of not only this 
rule, but this legislation; and for that reason, I urge my colleagues 
to continue to support this rule and the underlying bills.

  Appropriations Committee Sends Joint House and Senate Letter to the 
               White House Urging Action on Zika Funding

       Washington, July 14.--House Appropriations Committee 
     Chairman Hal Rogers, along with Senate Appropriations 
     Chairman Thad Cochran and other senior members of the House 
     and Senate committees, today sent a joint letter to President 
     Obama urging White House action on Zika funding.
       Senate Democrats today again blocked legislation that would 
     immediately fund efforts to prevent and fight the spread of 
     the Zika virus. Chairmen Rogers and Cochran wrote that given 
     the critical need for these funds and absent the funding that 
     was blocked today, the White House should ``aggressively use 
     funds already available to mount a strong defense against the 
     virus.''
       The full text of the letter is below:
                                                    July 14, 2016.
     President Barack Obama,
     The White House,
     Washington, DC.
       Dear Mr. President: Your Administration has asked Congress 
     to provide additional resources to prepare for, and prevent, 
     the spread of the Zika virus. We have responded by both 
     supporting the reprioritization of existing resources and 
     passing through our respective chambers legislation that 
     would provide additional Zika response funding.
       On February 18, 2016, we called upon your Administration to 
     repurpose available funds to be spent immediately to fight 
     the disease. On April 6, 2016, you did so through the use of 
     existing authorities, repurposing $589 million for Zika 
     response activities. Given the urgency of your request, we 
     were surprised last week when Politico reported the following 
     based on information shared by Administration officials: 
     ``The Obama administration has so far distributed only about 
     one-sixth of the unspent Ebola funding that it diverted to 
     combat the Zika virus.'' This money is available immediately 
     to prepare for and combat Zika, yet is seemingly not being 
     spent.
       The House passed a conference report that would provide an 
     additional $1.1 billion in emergency supplemental funding to 
     continue to prepare for, and prevent, Zika both domestically 
     and internationally. It is unfortunate that Democrats have 
     blocked action on this legislation in the Senate. The 
     conference report provides the same amount of

[[Page 12031]]

     funding that every Senate Democrat previously supported. It 
     fully funds vaccine research, and increases funding for 
     mosquito spraying and eradication, Zika surveillance, and 
     advanced development of treatments and diagnostics. The 
     conference agreement provides the same access to health 
     services as your supplemental request, contains no new 
     prohibition on any health service, and expands access to 
     health services in Puerto Rico beyond your initial request.
       If Senate Democrats continue to block consideration of Zika 
     legislation, we urge you to aggressively use funds already 
     available to mount a strong defense against the virus. We 
     also note that the fiscal year 2016 appropriations bills 
     allow the Administration access to additional funds. The 
     Secretary of the Department of Health and Human Services has 
     transfer authority that can be used as an additional source 
     for Zika preparedness. The previous Secretary did not 
     hesitate to use this authority to support the failing 
     Affordable Care Act Exchanges. The Secretary of State also 
     has authority to reprogram funding to provide additional 
     foreign assistance to address the Zika virus outside the 
     United States.
       We urge you to use available funding now to ensure our 
     nation is prepared.
           Sincerely,
     Rep. Hal Rogers,
       Chairman, House Appropriations Committee.
     Sen. Thad Cochran,
       Chairman, Senate Appropriations Committee.
     Rep. Tom Cole,
       Chairman, House Appropriations Subcommittee on Labor, 
     Health and Human Services.
     Sen. Roy Blunt,
       Chairman, Senate Appropriations Subcommittee on Labor, 
     Health and Human Services.
     Rep. Kay Granger,
       Chairwoman, House Appropriations Subcommittee on State and 
     Foreign Operations.
     Sen. Lindsey Graham,
       Chairman, Senate Appropriations Subcommittee on State and 
     Foreign Operations.

  The material previously referred to by Mr. Polis is as follows:

            An Amendment to H. Res. 844 Offered by Mr. Polis

       At the end of the resolution, add the following new 
     sections:
       Sec. 3. Immediately upon adoption of this resolution the 
     Speaker shall, pursuant to clause 2(b) of rule XVIII, declare 
     the House resolved into the Committee of the Whole House on 
     the state of the Union for consideration of the bill (H.R. 
     1076) to increase public safety by permitting the Attorney 
     General to deny the transfer of a firearm or the issuance of 
     firearms or explosives licenses to a known or suspected 
     dangerous terrorist. The first reading of the bill shall be 
     dispensed with. All points of order against consideration of 
     the bill are waived. General debate shall be confined to the 
     bill and shall not exceed one hour equally divided and 
     controlled by the chair and ranking minority member of the 
     Committee on the Judiciary. After general debate the bill 
     shall be considered for amendment under the five-minute rule. 
     All points of order against provisions in the bill are 
     waived. At the conclusion of consideration of the bill for 
     amendment the Committee shall rise and report the bill to the 
     House with such amendments as may have been adopted. The 
     previous question shall be considered as ordered on the bill 
     and amendments thereto to fmal passage without intervening 
     motion except one motion to recommit with or without 
     instructions. If the Committee of the Whole rises and reports 
     that it has come to no resolution on the bill, then on the 
     next legislative day the House shall, immediately after the 
     third daily order of business under clause 1 of rule XIV, 
     resolve into the Committee of the Whole for further 
     consideration of the bill.
       Sec. 4. Clause 1(c) of rule XIX shall not apply to the 
     consideration of H.R. 1076.
                                  ____


        The Vote on the Previous Question: What It Really Means

       This vote, the vote on whether to order the previous 
     question on a special rule, is not merely a procedural vote. 
     A vote against ordering the previous question is a vote 
     against the Republican majority agenda and a vote to allow 
     the Democratic minority to offer an alternative plan. It is a 
     vote about what the House should be debating.
       Mr. Clarence Cannon's Precedents of the House of 
     Representatives (VI, 308-311), describes the vote on the 
     previous question on the rule as ``a motion to direct or 
     control the consideration of the subject before the House 
     being made by the Member in charge.'' To defeat the previous 
     question is to give the opposition a chance to decide the 
     subject before the House. Cannon cites the Speaker's ruling 
     of January 13, 1920, to the effect that ``the refusal of the 
     House to sustain the demand for the previous question passes 
     the control of the resolution to the opposition'' in order to 
     offer an amendment. On March 15, 1909, a member of the 
     majority party offered a rule resolution. The House defeated 
     the previous question and a member of the opposition rose to 
     a parliamentary inquiry, asking who was entitled to 
     recognition. Speaker Joseph G. Cannon (R-Illinois) said: 
     ``The previous question having been refused, the gentleman 
     from New York, Mr. Fitzgerald, who had asked the gentleman to 
     yield to him for an amendment, is entitled to the first 
     recognition.''
       The Republican majority may say ``the vote on the previous 
     question is simply a vote on whether to proceed to an 
     immediate vote on adopting the resolution . . . [and] has no 
     substantive legislative or policy implications whatsoever.'' 
     But that is not what they have always said. Listen to the 
     Republican Leadership Manual on the Legislative Process in 
     the United States House of Representatives, (6th edition, 
     page 135). Here's how the Republicans describe the previous 
     question vote in their own manual: ``Although it is generally 
     not possible to amend the rule because the majority Member 
     controlling the time will not yield for the purpose of 
     offering an amendment, the same result may be achieved by 
     voting down the previous question on the rule. . . . When the 
     motion for the previous question is defeated, control of the 
     time passes to the Member who led the opposition to ordering 
     the previous question. That Member, because he then controls 
     the time, may offer an amendment to the rule, or yield for 
     the purpose of amendment.''
       In Deschler's Procedure in the U.S. House of 
     Representatives, the subchapter titled ``Amending Special 
     Rules'' states: ``a refusal to order the previous question on 
     such a rule [a special rule reported from the Committee on 
     Rules] opens the resolution to amendment and further 
     debate.'' (Chapter 21, section 21.2) Section 21.3 continues: 
     ``Upon rejection of the motion for the previous question on a 
     resolution reported from the Committee on Rules, control 
     shifts to the Member leading the opposition to the previous 
     question, who may offer a proper amendment or motion and who 
     controls the time for debate thereon.''
       Clearly, the vote on the previous question on a rule does 
     have substantive policy implications. It is one of the only 
     available tools for those who oppose the Republican 
     majority's agenda and allows those with alternative views the 
     opportunity to offer an alternative plan.

  Mr. SESSIONS. Mr. Speaker, I yield back the balance of my time, and I 
move the previous question on the resolution.
  The SPEAKER pro tempore. The question is on ordering the previous 
question.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.


                             Recorded Vote

  Mr. POLIS. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 and clause 9 of rule 
XX, this 15-minute vote on ordering the previous question will be 
followed by 5-minute votes on adopting the resolution, if ordered; and 
suspending the rules and adopting H. Res. 660.
  The vote was taken by electronic device, and there were--ayes 238, 
noes 180, not voting 13, as follows:

                             [Roll No. 489]

                               AYES--238

     Abraham
     Aderholt
     Allen
     Amash
     Amodei
     Babin
     Barletta
     Barr
     Barton
     Benishek
     Bilirakis
     Bishop (MI)
     Bishop (UT)
     Black
     Blackburn
     Blum
     Bost
     Boustany
     Brady (TX)
     Brat
     Bridenstine
     Brooks (AL)
     Brooks (IN)
     Buchanan
     Buck
     Bucshon
     Burgess
     Byrne
     Calvert
     Carter (GA)
     Carter (TX)
     Chabot
     Chaffetz
     Clawson (FL)
     Coffman
     Cole
     Collins (GA)
     Collins (NY)
     Comstock
     Conaway
     Cook
     Costello (PA)
     Cramer
     Crawford
     Crenshaw
     Culberson
     Curbelo (FL)
     Davidson
     Davis, Rodney
     Denham
     Dent
     DeSantis
     Diaz-Balart
     Dold
     Donovan
     Duffy
     Duncan (SC)
     Duncan (TN)
     Ellmers (NC)
     Emmer (MN)
     Farenthold
     Fincher
     Fitzpatrick
     Fleischmann
     Fleming
     Flores
     Forbes
     Fortenberry
     Foxx
     Franks (AZ)
     Frelinghuysen
     Garrett
     Gibbs
     Gibson
     Gohmert
     Goodlatte
     Gosar
     Gowdy
     Granger
     Graves (GA)
     Graves (LA)
     Graves (MO)
     Griffith
     Grothman
     Guinta
     Guthrie
     Hanna
     Hardy
     Harper
     Harris
     Hartzler
     Heck (NV)
     Hensarling
     Herrera Beutler
     Hice, Jody B.
     Hill
     Holding
     Hudson
     Huelskamp
     Huizenga (MI)
     Hultgren
     Hunter
     Hurd (TX)
     Hurt (VA)
     Issa
     Jenkins (KS)
     Jenkins (WV)
     Johnson (OH)

[[Page 12032]]


     Jolly
     Jones
     Jordan
     Joyce
     Katko
     Kelly (MS)
     Kelly (PA)
     King (IA)
     King (NY)
     Kinzinger (IL)
     Kline
     Knight
     Labrador
     LaHood
     LaMalfa
     Lamborn
     Lance
     Latta
     LoBiondo
     Long
     Loudermilk
     Love
     Lucas
     Luetkemeyer
     Lummis
     MacArthur
     Marchant
     Marino
     Massie
     McCarthy
     McCaul
     McClintock
     McHenry
     McKinley
     McMorris Rodgers
     McSally
     Meadows
     Meehan
     Messer
     Mica
     Miller (FL)
     Miller (MI)
     Moolenaar
     Mooney (WV)
     Mullin
     Mulvaney
     Murphy (PA)
     Neugebauer
     Newhouse
     Noem
     Nunes
     Olson
     Palmer
     Paulsen
     Pearce
     Perry
     Peterson
     Pittenger
     Pitts
     Poe (TX)
     Poliquin
     Pompeo
     Posey
     Price, Tom
     Ratcliffe
     Reed
     Renacci
     Ribble
     Rice (SC)
     Rigell
     Roby
     Roe (TN)
     Rogers (AL)
     Rogers (KY)
     Rohrabacher
     Rokita
     Rooney (FL)
     Ros-Lehtinen
     Roskam
     Rothfus
     Rouzer
     Royce
     Russell
     Salmon
     Sanford
     Scalise
     Schweikert
     Scott, Austin
     Sensenbrenner
     Sessions
     Shimkus
     Shuster
     Simpson
     Smith (MO)
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Stefanik
     Stewart
     Stivers
     Stutzman
     Thompson (PA)
     Thornberry
     Tiberi
     Tipton
     Trott
     Turner
     Upton
     Valadao
     Wagner
     Walberg
     Walden
     Walker
     Walorski
     Weber (TX)
     Webster (FL)
     Wenstrup
     Westerman
     Williams
     Wilson (SC)
     Wittman
     Womack
     Woodall
     Yoder
     Yoho
     Young (AK)
     Young (IA)
     Young (IN)
     Zeldin
     Zinke

                               NOES--180

     Adams
     Aguilar
     Ashford
     Bass
     Beatty
     Becerra
     Bera
     Beyer
     Blumenauer
     Bonamici
     Boyle, Brendan F.
     Brady (PA)
     Brownley (CA)
     Bustos
     Butterfield
     Capps
     Capuano
     Cardenas
     Carney
     Carson (IN)
     Cartwright
     Castor (FL)
     Castro (TX)
     Chu, Judy
     Cicilline
     Clark (MA)
     Clay
     Cleaver
     Clyburn
     Cohen
     Connolly
     Conyers
     Cooper
     Costa
     Courtney
     Crowley
     Cuellar
     Cummings
     Davis (CA)
     Davis, Danny
     DeFazio
     DeGette
     Delaney
     DeLauro
     DelBene
     DeSaulnier
     Deutch
     Dingell
     Doggett
     Doyle, Michael F.
     Duckworth
     Edwards
     Ellison
     Engel
     Eshoo
     Esty
     Farr
     Foster
     Frankel (FL)
     Fudge
     Gabbard
     Gallego
     Garamendi
     Graham
     Grayson
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hahn
     Hastings
     Heck (WA)
     Higgins
     Himes
     Hinojosa
     Honda
     Hoyer
     Huffman
     Israel
     Jackson Lee
     Jeffries
     Johnson (GA)
     Kaptur
     Keating
     Kelly (IL)
     Kennedy
     Kildee
     Kilmer
     Kind
     Kirkpatrick
     Kuster
     Langevin
     Larsen (WA)
     Larson (CT)
     Lawrence
     Lee
     Levin
     Lewis
     Lieu, Ted
     Lipinski
     Loebsack
     Lofgren
     Lowenthal
     Lowey
     Lujan Grisham (NM)
     Lujan, Ben Ray (NM)
     Lynch
     Maloney, Carolyn
     Maloney, Sean
     Matsui
     McCollum
     McDermott
     McGovern
     McNerney
     Meeks
     Meng
     Moore
     Moulton
     Murphy (FL)
     Nadler
     Napolitano
     Neal
     Nolan
     Norcross
     O'Rourke
     Pallone
     Pascrell
     Payne
     Pelosi
     Perlmutter
     Peters
     Pingree
     Pocan
     Polis
     Price (NC)
     Quigley
     Rangel
     Rice (NY)
     Richmond
     Roybal-Allard
     Ruiz
     Ruppersberger
     Rush
     Ryan (OH)
     Sanchez, Linda T.
     Sarbanes
     Schakowsky
     Schiff
     Schrader
     Scott (VA)
     Scott, David
     Serrano
     Sewell (AL)
     Sherman
     Sinema
     Sires
     Slaughter
     Smith (WA)
     Speier
     Swalwell (CA)
     Takano
     Thompson (CA)
     Thompson (MS)
     Titus
     Tonko
     Torres
     Tsongas
     Van Hollen
     Vargas
     Veasey
     Vela
     Velazquez
     Visclosky
     Walz
     Wasserman Schultz
     Waters, Maxine
     Watson Coleman
     Welch
     Wilson (FL)
     Yarmuth

                             NOT VOTING--13

     Bishop (GA)
     Brown (FL)
     Clarke (NY)
     DesJarlais
     Johnson, E. B.
     Johnson, Sam
     Nugent
     Palazzo
     Reichert
     Ross
     Sanchez, Loretta
     Walters, Mimi
     Westmoreland

                              {time}  1405

  Mr. WALKER changed his vote from ``no'' to ``aye.''
  So the previous question was ordered.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore. The question is on the resolution.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.


                             Recorded Vote

  Mr. POLIS. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The SPEAKER pro tempore. This is a 5-minute vote.
  The vote was taken by electronic device, and there were--ayes 237, 
noes 181, not voting 13, as follows:

                             [Roll No. 490]

                               AYES--237

     Abraham
     Aderholt
     Allen
     Amash
     Amodei
     Babin
     Barletta
     Barr
     Barton
     Benishek
     Bilirakis
     Bishop (MI)
     Bishop (UT)
     Black
     Blackburn
     Blum
     Bost
     Boustany
     Brady (TX)
     Brat
     Bridenstine
     Brooks (AL)
     Brooks (IN)
     Buchanan
     Buck
     Bucshon
     Burgess
     Byrne
     Calvert
     Carter (GA)
     Carter (TX)
     Chabot
     Chaffetz
     Clawson (FL)
     Coffman
     Cole
     Collins (GA)
     Collins (NY)
     Comstock
     Conaway
     Cook
     Costello (PA)
     Cramer
     Crenshaw
     Culberson
     Curbelo (FL)
     Davidson
     Davis, Rodney
     Denham
     Dent
     DeSantis
     Diaz-Balart
     Dold
     Donovan
     Duffy
     Duncan (SC)
     Duncan (TN)
     Ellmers (NC)
     Emmer (MN)
     Farenthold
     Fincher
     Fitzpatrick
     Fleischmann
     Fleming
     Flores
     Forbes
     Fortenberry
     Foxx
     Franks (AZ)
     Frelinghuysen
     Garrett
     Gibbs
     Gibson
     Gohmert
     Goodlatte
     Gosar
     Gowdy
     Granger
     Graves (GA)
     Graves (LA)
     Graves (MO)
     Griffith
     Grothman
     Guinta
     Guthrie
     Hanna
     Hardy
     Harper
     Harris
     Hartzler
     Heck (NV)
     Hensarling
     Herrera Beutler
     Hice, Jody B.
     Hill
     Holding
     Hudson
     Huelskamp
     Huizenga (MI)
     Hultgren
     Hunter
     Hurd (TX)
     Hurt (VA)
     Issa
     Jenkins (KS)
     Jenkins (WV)
     Johnson (OH)
     Jolly
     Jones
     Jordan
     Joyce
     Katko
     Kelly (MS)
     Kelly (PA)
     King (IA)
     King (NY)
     Kinzinger (IL)
     Kline
     Knight
     Labrador
     LaHood
     LaMalfa
     Lamborn
     Lance
     Latta
     LoBiondo
     Long
     Loudermilk
     Love
     Lucas
     Luetkemeyer
     Lummis
     MacArthur
     Marchant
     Marino
     Massie
     McCarthy
     McCaul
     McClintock
     McHenry
     McKinley
     McMorris Rodgers
     McSally
     Meadows
     Meehan
     Messer
     Mica
     Miller (FL)
     Miller (MI)
     Moolenaar
     Mooney (WV)
     Mullin
     Mulvaney
     Murphy (PA)
     Neugebauer
     Newhouse
     Noem
     Nunes
     Olson
     Palmer
     Paulsen
     Pearce
     Perry
     Pittenger
     Pitts
     Poe (TX)
     Poliquin
     Pompeo
     Posey
     Price, Tom
     Ratcliffe
     Reed
     Renacci
     Ribble
     Rice (SC)
     Rigell
     Roby
     Roe (TN)
     Rogers (AL)
     Rogers (KY)
     Rohrabacher
     Rokita
     Rooney (FL)
     Ros-Lehtinen
     Roskam
     Rothfus
     Rouzer
     Royce
     Russell
     Salmon
     Sanford
     Scalise
     Schweikert
     Scott, Austin
     Sensenbrenner
     Sessions
     Shimkus
     Shuster
     Simpson
     Sinema
     Smith (MO)
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Stefanik
     Stewart
     Stivers
     Stutzman
     Thompson (PA)
     Thornberry
     Tiberi
     Tipton
     Trott
     Turner
     Upton
     Valadao
     Wagner
     Walberg
     Walden
     Walker
     Walorski
     Weber (TX)
     Webster (FL)
     Wenstrup
     Westerman
     Williams
     Wilson (SC)
     Wittman
     Womack
     Woodall
     Yoder
     Yoho
     Young (AK)
     Young (IA)
     Young (IN)
     Zeldin
     Zinke

                               NOES--181

     Adams
     Aguilar
     Ashford
     Bass
     Beatty
     Becerra
     Bera
     Beyer
     Blumenauer
     Bonamici
     Boyle, Brendan F.
     Brady (PA)
     Brownley (CA)
     Bustos
     Capps
     Capuano
     Cardenas
     Carney
     Carson (IN)
     Cartwright
     Castor (FL)
     Castro (TX)
     Chu, Judy
     Cicilline
     Clark (MA)
     Clarke (NY)
     Clay
     Cleaver
     Clyburn
     Cohen
     Connolly
     Conyers
     Cooper
     Costa
     Courtney
     Crowley
     Cuellar
     Cummings
     Davis (CA)
     Davis, Danny
     DeFazio
     DeGette
     Delaney
     DeLauro
     DelBene
     DeSaulnier
     Deutch
     Dingell
     Doggett
     Doyle, Michael F.
     Duckworth
     Edwards
     Ellison
     Engel
     Eshoo
     Esty
     Farr
     Foster
     Frankel (FL)
     Fudge
     Gabbard
     Gallego
     Garamendi
     Graham
     Grayson
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hahn
     Hastings
     Heck (WA)
     Higgins
     Himes
     Hinojosa
     Honda
     Hoyer
     Huffman
     Israel
     Jackson Lee
     Jeffries
     Johnson (GA)
     Johnson, E. B.
     Kaptur
     Keating
     Kelly (IL)
     Kennedy
     Kildee
     Kilmer
     Kind
     Kirkpatrick
     Kuster
     Langevin
     Larsen (WA)
     Larson (CT)
     Lawrence
     Lee
     Levin
     Lewis
     Lieu, Ted
     Lipinski
     Loebsack
     Lofgren
     Lowenthal
     Lowey
     Lujan Grisham (NM)
     Lujan, Ben Ray (NM)
     Lynch
     Maloney, Carolyn
     Maloney, Sean
     Matsui
     McCollum
     McDermott
     McGovern
     McNerney
     Meeks
     Meng
     Moore
     Moulton
     Murphy (FL)
     Nadler
     Napolitano
     Neal
     Nolan
     Norcross
     O'Rourke
     Pallone
     Pascrell
     Payne
     Pelosi
     Perlmutter
     Peters
     Peterson
     Pingree
     Pocan
     Polis
     Price (NC)
     Quigley
     Rangel
     Rice (NY)
     Richmond
     Roybal-Allard
     Ruiz
     Ruppersberger
     Rush
     Ryan (OH)
     Sanchez, Linda T.
     Sarbanes
     Schakowsky
     Schiff
     Schrader
     Scott (VA)
     Scott, David
     Serrano
     Sewell (AL)
     Sherman
     Sires
     Slaughter
     Smith (WA)
     Speier
     Swalwell (CA)
     Takano
     Thompson (CA)
     Thompson (MS)
     Titus

[[Page 12033]]


     Tonko
     Torres
     Tsongas
     Van Hollen
     Vargas
     Veasey
     Vela
     Velazquez
     Visclosky
     Walz
     Wasserman Schultz
     Waters, Maxine
     Watson Coleman
     Welch
     Wilson (FL)
     Yarmuth

                             NOT VOTING--13

     Bishop (GA)
     Brown (FL)
     Butterfield
     Crawford
     DesJarlais
     Johnson, Sam
     Nugent
     Palazzo
     Reichert
     Ross
     Sanchez, Loretta
     Walters, Mimi
     Westmoreland


                Announcement by the Speaker Pro Tempore

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

                              {time}  1412

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

                          ____________________