[Congressional Record (Bound Edition), Volume 163 (2017), Part 4]
[House]
[Pages 5707-5715]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              {time}  0915
              SUPPORTING AMERICA'S INNOVATORS ACT OF 2017

  Mr. HUIZENGA. Mr. Speaker, pursuant to House Resolution 242, I call 
up the bill (H.R. 1219) to amend the Investment Company Act of 1940 to 
expand the investor limitation for qualifying venture capital funds 
under an exemption from the definition of an investment company, and 
ask for its immediate consideration in the House.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore (Mr. Simpson). Pursuant to House Resolution 
242, the bill is considered read.
  The text of the bill is as follows:

                               H.R. 1219

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Supporting America's 
     Innovators Act of 2017''.

     SEC. 2. INVESTOR LIMITATION FOR QUALIFYING VENTURE CAPITAL 
                   FUNDS.

       Section 3(c)(1) of the Investment Company Act of 1940 (15 
     U.S.C. 80a-3(c)(1)) is amended--
       (1) in the matter preceding subparagraph (A), by inserting 
     ``(or, in the case of a qualifying venture capital fund, 250 
     persons)'' after ``one hundred persons''; and
       (2) by adding at the end the following:
       ``(C)(i) The term `qualifying venture capital fund' means a 
     venture capital fund that has not more than $10,000,000 in 
     aggregate capital contributions and uncalled committed 
     capital, with such dollar amount to be indexed for inflation 
     once every 5 years by the Commission, beginning from a 
     measurement made by the Commission on a date selected by the 
     Commission, rounded to the nearest $1,000,000.
       ``(ii) The term `venture capital fund' has the meaning 
     given the term in section 275.203(l)-1 of title 17, Code of 
     Federal Regulations, or any successor regulation.''.

  The SPEAKER pro tempore. The gentleman from Michigan (Mr. Huizenga) 
and the gentlewoman from California (Ms. Maxine Waters) each will 
control 30 minutes.
  The Chair recognizes the gentleman from Michigan.


                             General Leave

  Mr. HUIZENGA. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days in which to revise and extend their remarks 
and to submit extraneous materials on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Michigan?
  There was no objection.
  Mr. HUIZENGA. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, we all know that small businesses and entrepreneurs are 
the heartbeat of the American economy. Access to financial capital is 
vital for entrepreneurs seeking to start up, operate, or expand their 
businesses. However, gaining access to capital has remained an enduring 
challenge for many small businesses.
  The financial crisis and the Great Recession made the situation 
worse, frankly, as capital became increasingly hard to access from 
institutional banks and various capital market players. While 
conditions have improved somewhat in recent years, many entrepreneurs 
continue to struggle with accessing the capital they need to compete 
and to grow.
  In order to succeed, these companies need capital and credit, the 
lifeblood for growth, expansion, and job creation. Yet the government 
continues to construct arbitrary walls that cut them off from essential 
financing, as smaller companies are caught in a sea of regulatory red 
tape created by Washington bureaucrats.
  We know that 60 percent of all net new jobs that have come into this 
country, that have been created here in the United States, come from 
these small businesses. They are oftentimes S corporations, LLCs, sole 
proprietorships. Small companies often have such owners also be 
operators. They are working alongside their fellow employees.
  That 60 percent of those jobs that have been created here in the 
United States isn't just a one-time blip. That is over the last 20 
years, the last two decades, that we have seen that trend.
  Congress has made strides in tailoring the regulatory environment for 
smaller companies, no doubt, most notably when we passed, with strong 
bipartisan support, the Jumpstart Our Business Startups, or JOBS, Act 
in 2012. This was a bipartisan bill that was signed into law by 
President Obama. The JOBS Act's benefits are notable as more and more 
companies use its provisions to raise investment capital in both the 
public and private markets.
  The JOBS Act has raised the cap on investors in a privately held 
company from 500 to 2,000 investors, but the limit on the number of 
investors acting as a coordinated group to invest in a company remained 
at 100, where it has been since 1940, some 77 years ago.
  As noted by Kevin Laws of AngelList in his written testimony before 
our Capital Markets Subcommittee: ``With online fundraising and general 
solicitation becoming more common because of the JOBS Act, companies 
are bumping up against the limit more frequently. The current limit . . 
. now acts as a brake on the amount of money the company wanted to 
raise, leaving tens of millions of dollars on the table that did not go 
into startups.''
  While H.R. 1219, the Supporting America's Innovators Act, a 
bipartisan bill introduced by the vice chairman of our Financial 
Services Committee, Representative Patrick McHenry, and Nydia Velazquez 
of New York, would amend the cap currently contained in the Investment 
Company Act to allow 250 investors for a ``qualified venture capital 
fund,'' therefore enhancing angel investors' ability to provide 
important funding to small businesses.
  This bill is a very modest increase to the current exemption that has 
been in place for nearly 77 years. Modernizing this cap is long overdue 
and reflects today's capital markets and the reality of the 
increasingly important role that angel investors and others play as 
they commit the funds necessary to help small businesses grow.
  The Securities and Exchange Commission, unfortunately, continues to 
ignore the backlog of good ideas to spur capital formation, which is 
recommended by entrepreneurs, small businesses, and market participants 
from their annual SEC Government-Business Forum on Capital Formation. 
This is a forum that is put together annually. They take and solicit 
ideas. They want to hear from people that are in the marketplace to 
figure out what ways they could go to improve that. Unfortunately, they 
have not acted on this, and in the SEC's absence, Congress must act to 
promote market efficiency and capital formation.
  I think we can all agree that we support smart regulation that 
protects investors and maintains orderly and efficient markets. But 
outdated, excessive, and unnecessary regulation whose costs outweigh 
benefits is dumb regulation that overburdens smaller companies. Let's 
provide some regulatory relief by enacting the bipartisan bill that 
will ease the burdens on small businesses and job creators and help 
foster capital formation and get Americans back to work.
  Mr. Speaker, I would also like to note, in a hearing that we had on 
this bill last Congress, it passed our committee 52-2, including the 
ranking member voting for it. There were no dissenting minority views 
that were offered, and no amendments were offered at the Rules 
Committee on this. We have got a lot of consensus. I believe this is 
the right thing to do to move forward.
  Mr. Speaker, I reserve the balance of my time.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such 
time as I may consume.

[[Page 5708]]

  Mr. Speaker, H.R. 1219, the Supporting America's Innovators Act, is 
legislation that certainly shows that sometimes we can get together and 
we can support a good idea. This act is such a thing. It shows how well 
we can work together to craft bipartisan solutions that support our 
Nation's innovators and the jobs that they create.
  Last Congress, Mr. McHenry came to me with a problem: Sophisticated 
angel investors who fund promising startup businesses want to pool 
their money together, but the law effectively caps them at 100 
investors per fund. If more than 100 people want to invest, the fund is 
forced to exclude some of them from the deal to avoid registration and 
regulation as an ``investment company'' under the securities laws. That 
means investors willing to commit capital are being turned away and 
startups are losing out on important early-stage funding.
  Because of Congresswoman Nydia Velazquez and Mr. Patrick McHenry 
working together, working out any concerns that had been identified on 
either side of the aisle, we now, today, have a piece of legislation, a 
bill, that would narrowly increase the investor limitation from 100 to 
250 persons for certain venture capital funds, provided that the fund 
does not have more than $10 million in total investor capital.
  This type of fund structure is used today by AngelList, an angel 
investing platform that connects investors meeting certain income and 
asset thresholds with one another so they can pool their money into 
special-purpose funds which then invest them in a particular startup 
company. Importantly, both the companies and the investors benefit from 
this structure.
  Compared with making hundreds of smaller direct investments, a 
company, for example, only has as a single point of contact, the angel 
fund advised by a fiduciary, rather than hundreds of investors who must 
all individually approve corporate actions such as mergers and 
acquisitions and expanding ownership.
  Investors also like this structure because they can delegate 
monitoring the startups they invest in to the investment adviser to the 
fund. Such monitoring may be significant, considering that investors, 
recognizing that most early-stage companies fail, typically diversify 
their investments among 30 to 80 companies.
  H.R. 1219 reasonably promotes this fund structure for startup 
investments by providing a narrowly tailored exemption for certain 
venture capital funds which must invest at least 80 percent of their 
funds in small businesses. Under the bill, the venture capital funds 
must have no more than 250 investors and no more than $10 million in 
investor capital, ensuring that they are small enough that investors 
are able to monitor and manage their investments.
  The bill's limits also ensure that we aren't creating a loophole for 
other investment companies, like mutual funds, to avoid regulation; nor 
are we providing relief to other private funds, like hedge funds or 
private equity funds, that have very little restriction and investor 
protection.
  Mr. Speaker, too often Congress seeks to help small businesses by 
repealing sensible guardrails and rules of the road with little to no 
thought of the impact on investors or market integrity. This is a 
mistake since it is investors that provide the money necessary for 
small businesses to grow. If investors don't trust the markets to 
operate fairly, they will decline to invest or raise costs on the very 
businesses we want to help. H.R. 1219 is different and reflects a 
measured, bipartisan approach to promoting our Nation's startups and 
the investors who take a chance on them.
  I thank Mr. McHenry and Ms. Velazquez for their leadership on this 
bill. I urge all of my colleagues to vote ``yes.''
  Mr. Speaker, I reserve the balance of my time.
  Mr. HUIZENGA. Mr. Speaker, I yield 2 minutes to the gentleman from 
North Carolina (Mr. McHenry), our vice chairman and the sponsor of this 
bill.
  Mr. McHENRY. Mr. Speaker, it is an honor to be here today, the day 
after the fifth anniversary of the JOBS Act.
  Five years ago, yesterday, in a bipartisan way, this divided House, 
this divided government that got next to nothing done, in a bipartisan 
way, was able to achieve a huge bipartisan victory to help small 
businesses raise capital. In light of that and in that history, in that 
spirit, we have reached across the aisle, and Representative Velazquez 
and Ranking Member Waters worked with me to craft a very good bill here 
today.
  This bill is targeted at small businesses across the rest of the 
country. We know that 78 percent of venture capital goes to just three 
States. If you are in Austin, Boston, or the Silicon Valley, you have 
capital flowing to you; you have funds for your idea. The rest of the 
country, whether you are in an urban area or rural area, is starved for 
capital.
  In light of that problem, we are trying to work for a solution for 
those small businesses, those innovators with good ideas that maybe 
don't have the best access to capital. We raised the cap on angel 
investing, thereby allowing more people to participate at a lower 
threshold dollar amount while still including important investor 
protection.
  Today is a great victory for small-business folks that need access, 
that need capital to take their idea to market. Mr. Speaker, I urge my 
colleagues to support this measure.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield as much time as 
she may consume to the gentlewoman from New York (Ms. Velazquez).
  Ms. VELAZQUEZ. Mr. Speaker, let me take this opportunity to thank the 
ranking member for yielding me time.
  Mr. Speaker, I rise in support of H.R. 1219, the Supporting America's 
Innovators Act of 2017, which I am proud to cosponsor with Mr. McHenry.
  Throughout my career here in Congress, I have always supported and 
encouraged legislation that creates jobs and fosters innovation for 
America's entrepreneurs and small businesses. The bill we are 
considering today will further that goal.
  Mr. Speaker, I always say access to capital is access to opportunity. 
That is exactly what this legislation does.
  The Investment Company Act of 1940 currently limits the number of 
accredited investors in a venture fund to no more than 100 individuals, 
but most funds try not to reach that limit in order to adjust for 
unforeseen circumstances. This artificially low limit restricts the 
number of individuals that can invest in small businesses and startups. 
That means less opportunity for entrepreneurs.
  Our bill will address this problem by allowing up to 250 accredited 
investors to participate in venture funds with up to $10 million in 
capital.

                              {time}  0930

  It is important to stress that these are accredited investors. They 
have at least $200,000 in minimum income or $1 million in net assets. 
These are sophisticated investors comfortable with the risks involved 
in the startup sector.
  Many of these investors pool their money together either in local or 
national groups. More recently, many have gotten involved in online 
crowdfunding platforms, which were created through the JOBS Act, to 
funnel more capital to small businesses and startups.
  Our bill will create greater access for women-owned and women-led 
businesses. The types of funds empowered to attract more investors 
under this bill are often a good capital source for women-owned firms.
  I am proud that our bipartisan legislation has garnered a wide range 
of attention and support from the industry. The Angel Capital 
Association and the Internet Association have endorsed the bill. These 
are groups dedicated to expanding capital opportunities for small 
businesses.
  This bill has also moved through the legislative process with strong 
bipartisan support every step of the way. Last month, we passed this 
bill out of the Financial Services Committee with a broad bipartisan 
vote of 54-2. The same day, the Senate Banking Committee was busy 
passing its bipartisan companion version, S. 444, sponsored by

[[Page 5709]]

Senators Heitkamp and Heller. It is also important to recognize that, 
last year, this Chamber passed a nearly identical version of our bill 
by a vote of 388-9.
  It is time to see this legislation enacted. It will create more 
capital for small businesses and it will mean more jobs throughout the 
Nation.
  Let me take a moment to thank Mr. McHenry for working with me on this 
bill, as well as Chairman Hensarling. And let me also thank Ranking 
Member Waters for her leadership and hard work.
  Again, a vote for this bill is a vote for America's entrepreneurs. I 
urge my colleagues to vote ``yes.''
  Mr. HUIZENGA. Mr. Speaker, I yield 2 minutes to the gentleman from 
Ohio (Mr. Chabot), the chairman of the Committee on Small Business here 
in the House of Representatives and a strong supporter of this bill.
  Mr. CHABOT. Mr. Speaker, I thank the gentleman from North Carolina 
(Mr. McHenry) for the work that he has done on H.R. 1219, the 
Supporting America's Innovators Act, and the entire Financial Services 
Committee for their work on this important topic.
  As chairman of the House Small Business Committee--and I would note 
that you have here not only the Republican chair, but we just heard 
speak the ranking member of the Small Business Committee, Ms. 
Velazquez; both in support of this legislation. It is bipartisan, 
which, as Patrick McHenry mentioned, doesn't happen around here often 
enough, but it did in this case.
  I often hear from entrepreneurs and small-business folks that the 
process to obtain capital is too rigid for them to expand and create 
jobs. Access to capital is a major issue that we need to address, and 
that is what we are doing here.
  When it comes to helping small businesses get off the ground, no 
effort we can make is too small. The Supporting America's Innovators 
Act could make all the difference for an entrepreneur, and that is why, 
again, we are here to support it.
  Commonsense reforms like this one, which raises the cap on the number 
of people who can invest in a venture fund, can go a long way for the 
Nation's entrepreneurs, startups, and small businesses. With 28 small 
businesses in the United States and nearly half of all private sector 
workers employed by one, the Nation's economic future lies squarely 
with this Nation's smallest companies and firms.
  Those who risk everything and sacrifice much to take a shot at 
building the next great American company should be operating in a 
business environment that is free from overly burdensome rules and 
regulations. They should be able to concentrate on expanding their 
companies, gaining more customers, and job creation, not compliance 
issues and outdated capital formation rules that prevent the largest 
pool of investors from investing in these companies.
  As this economic recovery continues to take shape, let's stand with 
our small businesses and create an environment for growth. This bill is 
another important step in that direction.
  Mr. Speaker, I urge my colleagues on both sides of the aisle to 
support this very good legislation.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield 4 minutes to 
the gentlewoman from New York (Mrs. Carolyn B. Maloney), the ranking 
member of the Financial Services Committee's Subcommittee on Capital 
Markets, Securities, and Investments.
  Mrs. CAROLYN B. MALONEY of New York. Mr. Speaker, I thank the ranking 
member for her leadership on this bill and in so many other areas. I 
also thank Chairmen Hensarling and Huizenga; and, of course, my good 
friend and colleague from the great State of New York, Nydia Velazquez, 
the champion for small businesses; and Mr. McHenry, who has spent a 
great deal of his time focusing on job creation and access to capital 
for small businesses.
  This bill passed in the last Congress under suspension with 
overwhelming bipartisan support. This bill is intended to make it 
easier for startup companies to raise money from sophisticated 
investors by allowing sophisticated angel investors to pool their money 
into a single venture capital fund, which allows them to leverage their 
resources and make investments more effectively.
  The bill does this by increasing the number of investors who can 
invest in venture capital funds that are exempt from SEC oversight.
  Under current law, a fund can be exempt from SEC oversight if it has 
fewer than 100 investors and its securities are not offered publicly. 
This is the exemption that the majority of venture capital funds 
currently rely on.
  Venture capital funds are long-term investors that provide much-
needed equity capital to startups and other small companies. The fact 
that venture capital funds are subject to the same limitation on the 
number of investors they can have as other private funds, like hedge 
funds and private equity funds, has limited the growth of venture 
capital funds.
  Specifically, it has limited the ability of angel investors--all of 
whom are sophisticated, accredited investors--to coordinate their 
investments by grouping together into a single venture capital fund in 
order to invest in a promising startup company.
  This bill will accommodate these types of angel investors who want to 
coordinate their investments by increasing the number of accredited 
investors they can have before they are required to register with the 
SEC--from 100 investors to 250 investors.
  The bill is also narrowly tailored to avoid raising investor 
protection concerns. It only raises the investor threshold to 250 for 
venture capital funds that meet the SEC's rigorous five-part definition 
of a venture capital fund.
  Finally, the bill is limited to funds that have less than $10 million 
in capital invested. So we are only providing relief to relatively 
small venture capital funds that do not pose a huge risk to the capital 
markets.
  This bill is the product of genuine hard work and bipartisan 
compromise. Again, I thank Mr. McHenry for his leadership, along with 
Ms. Velazquez, Ranking Member Waters, and Chairman Hensarling for their 
hard work on this bill.
  I urge my colleagues to join me--and I believe the majority in this 
body--in supporting this important bill to provide easier and better 
access to capital for small businesses.
  Mr. HUIZENGA. Mr. Speaker, I yield 2 minutes to the gentleman from 
Illinois (Mr. Hultgren), the vice chairman of our Subcommittee on 
Capital Markets, Securities, and Investments.
  Mr. HULTGREN. Mr. Speaker, I rise today to speak in support of H.R. 
1219, the Supporting America's Innovators Act of 2017. This is another 
example of great bipartisan legislation that has been produced by the 
House Financial Services Committee. Mr. McHenry and Ms. Velazquez 
should be commended for their hard work on this important piece of 
legislation.
  Startups and small businesses are the primary job creators and 
engines for growth in our economy. Unfortunately, the Securities and 
Exchange Commission has not been focused enough on capital formation 
aspects of its tripartite mission. This has left thousands of companies 
interested in raising capital stuck complying with outdated regulations 
that make it more difficult for them to invest in growing their 
businesses. This means job creation and wealth building are not 
reaching their full potential.
  Certainly, the SEC should not overlook investor protection, but the 
number one concern of my constituents is jobs. This directly impacts 
their ability to put food on the table, get the car repaired, and pay 
for college.
  Today we have the opportunity to consider a noncontroversial bill 
that will make it easier for companies to raise capital without 
undermining investor production.
  The Supporting America's Innovators Act of 2017 increases the limit 
on the number of individuals who can invest in certain venture capital 
funds before those funds must register with the SEC as investment 
companies. Currently, the Investment Company Act limits the number of 
investors in an investment company fund to 100 if the fund is

[[Page 5710]]

to be exempt from registration with the SEC, a burdensome requirement.
  This would permit angel funds, which run syndicates that allow 
accredited investors to participate in investing in startups, to obtain 
funds from a greater number of investors. As a result, investors will 
benefit from investment opportunities that otherwise they would have no 
access to.
  As noted by Kevin Laws of AngelList in written testimony before the 
Subcommittee on Capital Markets, Securities and Investments:
  ``With online fundraising and general solicitation becoming more 
common because of the JOBS Act, companies are bumping up against the 
limit more frequently. The current limit now acts as a brake on the 
amount of money the company wanted to raise, leaving tens of millions 
of dollars on the table that did not go into startups.''
  Mr. Speaker, I urge all of my colleagues to vote in support of this 
legislation. A nearly identical bill passed the House last Congress 
with 388 votes in support, and we passed the bill out of the Financial 
Services Committee with almost no opposition.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield 3 minutes to 
the gentleman from Illinois (Mr. Foster), a member of the Subcommittee 
on Capital Markets, Securities, and Investments.
  Mr. FOSTER. Mr. Speaker, I rise today in support of H.R. 1219, the 
Supporting America's Innovators Act of 2017.
  This bill will increase the number of accredited investors who can 
invest in an angel or venture fund before requiring the fund to 
register as an investment company. This will encourage capital 
formation in one of the major types of funds that seed startups and 
helps bring new ideas to market.
  Innovation and invention are integral to economic growth, but new 
ideas are only the first step in the type of businesses that can grow 
the economic pie. It is crucial that these companies have access to 
capital to grow and to bring the product to market. Competition from 
startups, bolstered by access to funding, creates jobs and forces 
incumbent firms to stay aggressive in their own research and 
development.
  H.R. 1219 is exactly the type of bipartisan legislation that Congress 
should be considering to facilitate capital formation.
  This bill will make it easier to form a fund made up of sophisticated 
investors who can assess and bear the risks that come with investing in 
startups. These funds are capped at $10 million in paid-in and callable 
capital. This means the funds will largely be engaged in angel 
investing that helps early-stage investors build a better mousetrap. 
These funds can often be cheaper for the company and can be structured 
as equity debt or a combination of both.
  A fund like this can bring expertise and connections that increase 
the likelihood of success for the inventor. It can also spread the risk 
and rewards for investors because it is important to note that not 
every invention will turn into the next big thing.
  We need a startup ecosystem that encourages the testing of new ideas 
and products with a wide range of risks and rewards. This bill is a 
targeted measure to help create that ecosystem by enhancing the ability 
of early-stage companies to get funding.
  Mr. Speaker, I urge my colleagues to support the bill today.
  Mr. HUIZENGA. Mr. Speaker, I yield 2 minutes to the gentleman from 
Maine (Mr. Poliquin).
  Mr. POLIQUIN. Mr. Speaker, the responsibility of those of us in 
Congress is to create a predictable and streamlined set of regulations, 
such that we have an environment for the private sector, for businesses 
to invest, to grow, and to hire more of our constituents. And when that 
happens, Mr. Speaker, the folks in America live better lives with 
fatter paychecks and better futures.
  Now, we all know that small businesses need more help than large 
companies when it comes to dealing with the regulatory environment 
because they don't have the firepower, the horsepower, the manpower to 
deal with these complex regulations.
  When you start a small business, one of the most important 
ingredients is access to capital. You need investment funds, whether 
you are starting a bakery in Lewiston, Maine, or an auto body shop in 
Oxford, Maine. Now, that is why H.R. 1219 is important, and I want to 
congratulate Congressman Patrick McHenry for bringing this to the 
floor.
  By increasing the number of investors capped from 100 to 250 
individuals who are qualified to make these investments to help small 
businesses, it will provide more money, more funding, more capital for 
small businesses and startups to grow, to start, and to create more 
jobs for folks back home.
  Government is in the business and should be in the business to help 
our families, not hurt them. That is why I encourage all of my fellow 
colleagues here in the House, Republicans and Democrats, to support 
this good, commonsense bill.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such 
time as I may consume.
  Mr. Speaker, we have received tremendous support for this 
legislation, and we are extremely hopeful that we will be able to come 
together on both sides of the aisle and continue to give support to our 
small businesses. As a matter of fact, we have a lot of those in the 
Congress of the United States--a lot of Members, rather--who talk about 
supporting small businesses, but we don't often see real legislation 
that can do that. This is such legislation, and I cannot thank Ms. 
Velazquez and Mr. McHenry enough for the way that they have worked on 
this legislation together.

                              {time}  0945

  Mr. Speaker, I include in the Record some of the letters of support 
that we have received from the Center for American Entrepreneurship, 
the Internet Association, TechNet, Angel Capital Association, and 
AngelList.

                                                        Center for


                                    American Entrepreneurship,

                                                   April 25, 2016.
     Hon. Jeb Hensarling,
     Chairman, Committee on Financial Services, House of 
         Representatives, Washington, DC.
     Hon. Maxine Waters,
     Ranking Member, Committee on Financial Services, House of 
         Representatives, Washington, DC.
       Dear Chairman Hensarling and Ranking Member Waters: On 
     behalf of the Center for American Entrepreneurship, I write 
     today to express our strong support for legislation offered 
     by Rep. Patrick McHenry: H.R. 4854, the ``Supporting 
     America's Innovators Act of 2016,'' and H.R. 4855, the ``Fix 
     Crowdfunding Act of 2016.'' Both bills will significantly 
     enhance American entrepreneurs' access to the capital they 
     need to launch and grow new businesses and, in doing so, 
     accelerate economic growth and job creation.
       CAE is a nonpartisan policy and advocacy organization whose 
     mission is to engage policymakers in Washington and across 
     the nation regarding the critical importance of entrepreneurs 
     and start-ups to innovation, economic growth, and job 
     creation, and to pursue a comprehensive policy agenda 
     intended to significantly enhance the circumstances for new 
     business formation, survival, and growth.
       As you may know, recent research has demonstrated that 
     start-ups are disproportionately responsible for the 
     innovations that drive economic growth and account for 
     virtually all net new job creation. Alarmingly, recent 
     research has also demonstrated that, despite impressive 
     strength in certain cities around the country, rates of new 
     business formation in America have been declining for 30 
     years, and the decline is occurring in all 50 states, in all 
     but a handful of the 360 metro areas examined, and across a 
     broad range of industry sectors, including high-technology. 
     Given the importance of thriving entrepreneurship to 
     innovation, economic growth, and job creation, such 
     circumstances amount to nothing less than a national 
     emergency.
       When asked or surveyed, entrepreneurs across the country 
     report that access to sufficient capital on affordable terms 
     remains among their principal challenges. The legalization of 
     crowdfunding by way of the Jumpstart Our Business Start-ups 
     (JOBS) Act in 2012 was a major step forward in meaningfully 
     enhancing innovators' access to investment capital. But 
     further reforms are necessary to realize the Act's full 
     potential to promote entrepreneurship, growth, greater 
     opportunity, and job creation.
       H.R. 4854, the ``Supporting America's Innovators Act'' 
     would amend an exemption under the Investment Company Act of 
     1940 by increasing the investor limitation from 100 to 500 
     persons for qualifying venture capital funds that purchase no 
     more than $10

[[Page 5711]]

     million in securities in any one issuer, adjusted for 
     inflation. Lifting the current arbitrary cap would not only 
     increase entrepreneurs' access to additional investors, but 
     will protect investors through a greater diversification of 
     risk.
       H.R. 4855, the ``Fix Crowdfunding Act'' would amend the 
     crowdfunding aspects of the JOBS Act in a number of important 
     ways:
       Raising the annual issuance amount from $1 million to $5 
     million;
       Exempting the beneficial owners of crowdfunding securities 
     from counting towards the Exchange Act 12(g) requirement 
     triggering public reporting;
       Exempting special purpose vehicles (SPVs) created for the 
     purpose of investing in a single issuer of crowdfunding 
     securities from registration as investment companies under 
     the Investment Company Act, and permitting SPVs considered as 
     ``venture capital funds'' to offer crowdfunding securities;
       Revising the investment cap so that investors earning 
     $100,000 or less may invest up to 5 percent of their annual 
     income or net worth, and investors earning more than $100,000 
     to invest up to 10 percent of their annual income or net 
     worth;
       Defining the requirements for a crowdfunding intermediary 
     to disqualify an issuer when the intermediary, through a 
     background check or other means, determines that the issuer 
     knowingly made untrue statements or omissions related to 
     material facts, or engaged in fraud;
       Defining a crowdfunding intermediary's potential liability 
     to include only instances when the intermediary knowingly 
     makes untrue statements or omissions related to material 
     facts or knowingly engages in fraud;
       Permitting an issuer to ``test the waters'' by soliciting 
     non-binding commitments of interest from potential investors 
     without filing information with the SEC, provided that no 
     funds are accepted by the issuer and any material changes 
     that occur between the solicitation and the offer are 
     highlighted to potential investors; and,
       Providing a 5-year grace period for portals to make a good-
     faith effort to comply with all crowdfunding rules, and 
     prohibits the SEC from bringing any enforcement actions 
     during that period.
       Both bills help strike a more appropriate balance between 
     the twin priorities of capital formation and investor 
     protection. In doing so, these reforms significantly enhance 
     the prospects for new business formation, survival, and 
     growth at a time when faster economic growth is necessary to 
     address challenges such as underemployment, stagnant middle-
     class wages, the income and wealth gaps, and alarmingly high 
     levels of poverty and dependence.
       CAE commends you for your leadership to promote American 
     entrepreneurship and innovation and greatly appreciates your 
     thoughtful consideration of the reforms in H.R. 4854 and H.R. 
     4855. We look forward to continuing to work with you, the 
     bills' sponsors, and the Committee's distinguished members on 
     behalf of American entrepreneurs and start-ups.
           Sincerely,

                                              Robert E. Litan,

                                     Chairman, Center for American
     Entrepreneurship.
                                  ____



                                         Internet Association,

                                                    June 10, 2016.
     Hon. Jeb Hensarling,
     Chairman, Committee on Financial Services, House of 
         Representatives, Washington, DC.
     Hon. Maxine Waters,
     Ranking Member, Committee on Financial Services, House of 
         Representatives, Washington, DC.
       Dear Chairman Hensarling and Ranking Member Waters: The 
     Internet Association appreciates your attention to the issues 
     impacting startups, and urges support for the Supporting 
     America's Inventors Act of 2016 (H.R. 4854) and Fix 
     Crowdfunding Act (H.R. 4855). Both bills are common-sense, 
     meaningful reforms that will improve startups' access to 
     capital across the United States. There are a number of 
     internet based funding platforms that will benefit directly 
     from this legislation as well as the broader internet 
     ecosystem.
       The Internet Association works to advance policies that 
     foster innovation, promote economic growth, and empower 
     people through the free and open internet. Access to capital 
     funding is critical to internet companies as they scale 
     innovative business models that now account for six percent, 
     or nearly $1 billion, of our GDP. Empowering startups through 
     efficient mechanisms for investors and innovators to access 
     capital will ultimately grow our economy and help create the 
     internet industry leaders of tomorrow. The internet industry 
     is unique in the low barrier to entry for new ideas and 
     increased competition. Legislation that promotes growth 
     through internet platforms and for internet startups will 
     benefit the economy at large.
       The Supporting America's Inventors Act of 2016 and Fix 
     Crowdfunding Act both take common sense steps to empower 
     innovators through access to capital. The Supporting 
     America's Inventors Act of 2016 raises the number of 
     investors permitted in qualifying venture capital funds from 
     100 to 500 persons, eliminating an arbitrary cap and instead 
     creating a more efficient environment for investors to grow 
     startups. The Fix Crowdfunding Act would make necessary 
     reforms to Title III of the JOBS Act allowing for more 
     efficient and attractive investment crowdfunding, including 
     raising the annual limit on issuers and clarifying certain 
     definitions.
       We commend Representative McHenry for his commitment to 
     create a thriving startup ecosystem by enhancing the 
     opportunity for investment in our innovation economy. We urge 
     the Committee to support these bills.
           Respectfully Submitted,
                                                Michael Beckerman,
     President & CEO.
                                  ____



                                                      TechNet,

                                    Washington, DC, June 10, 2016.
     Hon. Patrick McHenry,
     House Majority Chief Deputy Whip,
     Washington, DC.
       Dear Representative McHenry: TechNet, the national, 
     bipartisan network of innovation economy CEOs and senior 
     executives, is pleased to offer our support for your efforts 
     to provide American innovators with the tools necessary to 
     launch, fund, and scale their companies.
       In particular, we are pleased to support the Supporting 
     America's Innovators Act of 2016 (H.R. 4854) and the Fix 
     Crowdfunding Act (H.R. 4855), both of which provide much 
     needed reforms to the laws governing early stage financing of 
     dynamic startups.
       The Supporting America's Innovators Act will expand the 
     pool of investors eligible to participate in venture capital 
     funds, creating a more robust venture funding marketplace and 
     increasing the amount of capital startups can potentially 
     raise.
       The Fix Crowdfunding Act contains a number of sensible and 
     timely reforms to the recently finalized Title III 
     crowdfunding rules of the JOBS Act. In particular, the 
     legislation defines the requirements and authority by which 
     intermediaries can disqualify issuers who make untrue 
     statements or engage in fraud. The legislation also makes 
     important reforms that will allow more companies to ``test 
     the waters'' and solicit non-binding commitments from 
     potential crowdfunding investors without filing with the 
     Securities and Exchange Commission. Finally, the legislation 
     creates a powerful incentive for more crowdfunding portals to 
     enter the marketplace by providing a 5-year grace period for 
     portals to make a good-faith effort to comply with all 
     crowdfunding rules.
       Taken together, these bills will expand access to early-
     stage funding, improving the process by which innovators 
     scale their companies and create American jobs.
       Thank you for your leadership on these important issues 
     affecting the innovation economy. TechNet looks forward to 
     working with you to advance this legislation.
       Sincerely,
                                                      Linda Moore,
     President and CEO.
                                  ____



                                    Angel Capital Association,

                                 Overland Park, KS, March 7, 2017.
     Hon. Jeb Hensarling,
     Chairman, Committee on Financial Services,
     Washington, DC.
       Dear Chairman Hensarling: On behalf of the 13,000 members 
     of the Angel Capital Association representing accredited 
     individual angel investors, accredited on-line platforms and 
     family offices, we write in support of H.R. 1219, Supporting 
     America's Innovators Act of 2017 sponsored by Reps. Patrick 
     T. McHenry (R-NC) and Nydia M. Velazquez (D-NY).
       Angel investors are directly engaged in supporting American 
     startup companies and providing much needed early stage 
     capital and mentoring to emerging businesses and 
     entrepreneurs. Angel investors invest their capital in new 
     ways, with many now choosing to pool their money in an angel 
     fund or syndicate on an online investing platform for 
     accredited investors. Two of the most well-known are the 
     Golden Seeds fund which invests nationally in women-led 
     companies and AngelList, which supports numerous investor 
     syndicates on its platform. Changes created in the JOBS Act 
     have allowed angel funds and online platforms of accredited 
     investors to catalyze investors across the country to support 
     startups. Platforms such as AngelList, FundersClub and 
     CircleUp have opened opportunities for entrepreneurs to reach 
     more investors and have expanded the capital opportunities 
     for startups.
       The ability of these venture funds has been limited by out-
     of-date regulations which have restricted these funds to no 
     more than 99 investors. This 99-investor cap is in reality 
     more like 90 investors because fund managers need to take 
     into effect potential splitting of assets in divorce, death 
     or other unforeseen circumstances.
       H.R. 1219 will allow up to 250 accredited investors--
     investors with at least $200,000 in minimum income (or 
     $300,000 for a couple or $1,000,000 in net worth, not 
     including their residence--to invest in an angel fund or 
     syndicate with a maximum of $10 million in assets. This 
     change in legislation will allow

[[Page 5712]]

     more investors to invest in these venture funds, creating 
     more capital opportunities for American entrepreneurs and 
     more American jobs.
       The Angel Capital Association worked closely with the 
     Investment Company Institute and other stakeholders to craft 
     what has become bi-partisan legislation by Representatives 
     McHenry and Velazquez. We urge the Members of the Committee 
     to support this legislation and seek quick consideration by 
     the broader House of Representatives.
           Sincerely,
                                                  Marianne Hudson,
     Executive Director.
                                  ____



                                                    AngelList,

                                  San Francisco, CA, June 9, 2016.
     Hon. Jeb Hensarling,
     Chairman, Committee on Financial Services, House of 
         Representatives, Washington, DC.
     Hon. Maxine Waters,
     Ranking Member, Committee on Financial Services, House of 
         Representatives, Washington, DC.
       Dear Chairman Hensarling and Ranking Member Waters: Thank 
     you for your recent hearings on ``The JOBS Act at Four: 
     Examining Its Impact and Proposals to Further Enhance Capital 
     Formation.'' I was honored to testify on the positive impacts 
     the JOBS Act has had on startup capital formation and the 
     potential improvements to the JOBS Act.
       AngelList helps early stage companies raise financing based 
     on the statutes laid out in the JOBS Act and subsequent SEC 
     no-action letters. To date, we have helped over a quarter 
     billion dollars from accredited investors reach almost one 
     thousand companies using the online portal provisions to make 
     such financings much more efficient.
       We have learned a great deal about the early stage capital 
     markets and how they function online. From that perspective, 
     we believe that several of the bills under consideration 
     would improve startup financing.
       H.R. 4854, the ``Supporting America's Innovators Act of 
     2016'', lifts the investor limit on LLCs created to finance 
     companies. One very good outcome of the move online has been 
     that more investors can invest smaller amounts. This allows 
     diversification for investors and more access to capital for 
     companies. However, smaller investors often band together in 
     a formal vehicle (usually a limited liability company or 
     LLC). This means the company deals with a single investor 
     (the LLC) and the investors can rely on a trusted lead to 
     review the documents and make decisions on behalf of the 
     investors. The JOBS Act lifted the shareholder limit to 
     2,000, but left in place the 99 limit on organized investors 
     that the LLC is subject to. This act lifts that limit to 499 
     to allow more investors in and more capital be raised by the 
     companies.
       As an online platform, most of our investors expect our 
     investments to be structured that way, and many angel groups 
     also form them to invest in startups. We believe this law 
     allows more sophisticated accredited investor activity.
       H.R. 4855, the ``Fix Crowdfunding Act'', takes into account 
     much of what has been learned in the accredited investor 
     space in the last 3 years and applies it to the recently 
     released crowdfunding regulations. There are three areas in 
     particular this bill addresses that we believe are important. 
     First, it fixes the so-called ``12g'' problem by which 
     crowdfunded companies are subject to public reporting 
     requirements at a very low asset threshold. That issue makes 
     it difficult for crowdfunded companies to raise subsequent 
     financing rounds and would dissuade many high growth 
     companies from using the provision. Fixing that problem makes 
     it more likely that high growth companies will consider 
     crowdfunding as an option. Second, the act allows special 
     purpose vehicles (like those LLCs referred to above in the 
     paragraph on H.R. 4854) to be used for crowdfunded offerings. 
     These benefit both investors and the companies. Finally, we 
     believe the ``test the waters'' provision is critical. Most 
     companies do not know whether they will be attractive to 
     investors beforehand; imposing high costs prior to finding 
     that out serves as a deterrent without any offsetting 
     investor protection benefit. The ``test the waters'' 
     provision will allow a crowdfunded company to incur the legal 
     costs only after it knows that it is likely to raise (but 
     still prior to accepting any investor funds).
       Finally, we feel that H.R. 4852, the ``Private Placement 
     Improvement Act of 2016'' addresses several issues that 
     affect the startup community. It clarifies that the JOBS Act 
     was intended to remove burdensome filing requirements that 
     would be difficult for early stage startups without full-time 
     lawyers to help. We at AngelList believe transparency has a 
     very positive effect on markets. We have made several 
     suggestions in a letter to the SEC (https://www.sec.gov/
comments/s7-06-13/s70613-37.pdf) as to how this can be 
     achieved without significant burden through use of modern 
     technology. We believe this act would provide good guidelines 
     to the SEC about the intent of the JOBS Act in ways that 
     would encourage that avenue to transparency rather than 
     additional burden that we do not believe helps investors.
       We look forward to engaging where we can to help further 
     both investor protections and capital formation.
           Thank You,
                                                       Kevin Laws,
                                        Chief Investments Officer.

  Ms. MAXINE WATERS of California. Mr. Speaker, I reserve the balance 
of my time.
  Mr. HUIZENGA. Mr. Speaker, I yield 2 minutes to the distinguished 
gentleman from Arkansas (Mr. Hill).
  Mr. HILL. Mr. Speaker, I rise in strong support today of H.R. 1219, 
the Supporting America's Innovators Act, introduced by the gentleman 
from North Carolina (Mr. McHenry), the chief deputy whip. I am proud to 
have his leadership in promoting capital formation in our country.
  Yesterday, as he has noted, marks the fifth anniversary of the JOBS 
Act, which has had a positive impact on easing capital formation woes 
for small businesses and startups.
  I am proud to represent and have the opportunity to work every day 
with The Venture Center in Little Rock and its FinTech Accelerator 
program, and the innovation hub in North Little Rock and its medical 
technology innovation hub. These high-tech innovations, combined with 
angel funds, give good-paying job opportunities to people out in the 
heartland and not just on the East and West Coasts.
  But in order for these innovative startups to grow, they have got to 
have access to greater sources of angel capital, and raising capital in 
rural America is a challenge.
  Having helped design and offer private placements for emerging 
companies during my whole career, and participating in angel funds in 2 
decades prior to coming to Congress, I know firsthand the importance of 
having a multitude of options for our small businesses to raise 
capital, no matter what their stage of formation.
  This bill builds on the success of the JOBS Act by providing an 
update to a limit set in 1940, Mr. Speaker, limiting the number of 
accredited investors that can participate in a qualified venture fund. 
I am glad we are rushing to a change since 1940. And this simple change 
from 100 to 250 really allows more angel investors to participate in 
funds of this nature across the country and gives particular advantage 
off the East and West Coasts.
  I thank the chairman for the time and my good friend from North 
Carolina for his leadership. I urge my colleagues on both sides of the 
aisle to support this worthy measure.
  Ms. MAXINE WATERS of California. Madam Speaker, I continue to reserve 
the balance of my time.
  Mr. HUIZENGA. Madam Speaker, I yield 2 minutes to the gentleman from 
Minnesota (Mr. Emmer).
  Mr. EMMER. Madam Speaker, I rise today in support of the Supporting 
America's Innovators Act of 2017.
  Far too often, during my travels throughout Minnesota's Sixth 
District, I hear frustrations from small-business owners and 
entrepreneurs about the difficulties they face gaining access to 
working capital.
  With Dodd-Frank's one-size-fits-all regulation being imposed on the 
banks and credit unions that drive America, our Nation's job creators 
struggle to grow existing businesses and to even start new ones.
  Today's small business is tomorrow's big business, and if our 
entrepreneurs and job creators are to succeed, we must remove the 
roadblocks currently standing in their way.
  Companies that started in a garage are now Fortune 500 companies and 
global giants that provide goods and services across the globe. These 
include many brands and companies we all use each and every day such as 
Apple, Amazon, Microsoft, and even Minnesota's own, Medtronic. They all 
started with a dream, a lot of hope, and necessary access to tools, 
resources, and, most importantly, working capital.
  Not only does the limited access to working capital affect our State 
and local economies, it impacts opportunities and jobs for hardworking 
Americans. Small businesses are responsible for nearly 70 percent of 
new jobs in this country. This legislation will help put Americans to 
work.

[[Page 5713]]

  The Supporting America's Innovators Act updates current law to 
increase the number of individuals who are able to invest in and 
support startups and small businesses across the country. This bill 
will help jump-start capital formation for local businesses and 
entrepreneurs, enabling Main Street America to not just survive but to, 
once again, thrive.
  I want to thank Congressman McHenry for introducing this bill that 
received, again, near unanimous support in the committee, and I 
encourage all my colleagues on both sides of the aisle to support this 
important legislation.
  Ms. MAXINE WATERS of California. Madam Speaker, I continue to reserve 
the balance of my time.
  Mr. HUIZENGA. Madam Speaker, may I inquire as to the balance of time 
each side has left?
  The SPEAKER pro tempore (Ms. Foxx). The gentleman from Michigan has 
14 minutes remaining. The gentlewoman from California has 15 minutes 
remaining.
  Mr. HUIZENGA. Madam Speaker, I yield 2 minutes to the gentleman from 
Ohio (Mr. Davidson).
  Mr. DAVIDSON. Madam Speaker, I thank Chairman Huizenga for the work 
on this with Patrick McHenry and the folks on the other side of the 
aisle. It is nice to come here and see something that is truly 
collaborative and underway that helps businesses.
  Prior to coming to Congress last year, I spent the past 16 years 
growing manufacturing companies in Ohio, so I know firsthand how 
difficult it is to acquire capital to start and operate and grow small 
businesses. Businesses that overcome the challenges are faced with 
numerous regulatory roadblocks that further hinder their growth. Many 
of those have come at the hands of regulatory frame works like Dodd-
Frank.
  But this bipartisan measure that we are talking about today has the 
opportunity to help the challenges with capital acquisition that 
government has created and continues to create. Currently, the 
Investment Company Act of 1940 requires any qualified venture fund over 
100 to register with the Securities and Exchange Commission.
  The real burden of these regulations hits small companies in middle 
America like Ohio's Eighth District where, unlike major cities, 
particularly on the coast, we do not have as many options for raising 
capital.
  Not every company seeks to become the next billion-dollar 
blockbuster, but some of them do. All these companies offer great jobs 
and give many people the dignity of work, but they can also provide 
great returns. So we are crowding out investment opportunities, and we 
are crowding out job opportunities.
  This is why I am pleased to support H.R. 1219, the Supporting 
America's Innovators Act of 2017, which simply increases the cap to 
allow up to 250 investors to be exempt from registration for qualified 
venture capital funds, allowing America's small businesses the 
flexibility to operate and grow their companies, hire employees, and 
innovate.
  Last year, this Congress passed legislation similar to H.R. 1219 on a 
bipartisan vote of 388-9. I urge my colleagues to vote ``yes'' on H.R. 
1219 and, perhaps, increase its margin of victory.
  Ms. MAXINE WATERS of California. Madam Speaker, I continue to reserve 
the balance of my time.
  Mr. HUIZENGA. Madam Speaker, I yield 2 minutes to the gentleman from 
Indiana (Mr. Hollingsworth), a new member of our Financial Services 
Committee.
  Mr. HOLLINGSWORTH. Madam Speaker, I also rise in support of H.R. 
1219. I absolutely believe that the time has come for us to modernize 
how capital gets to our small businesses.
  Prior to Congress, I have a history in business, so I fundamentally 
understand that having a better mousetrap is not enough. Small 
businesses need capital, need access to more capital in order to grow 
and get their innovations out to market. They also need access to these 
sophisticated, accredited investors so that they can get the advice 
that they need in order to get those better mousetraps out to the 
people who need them, want to buy them, and want to use them to better 
their lives.
  Fundamentally, everybody can agree that we want Americans to have 
more economic opportunity, and many Americans find that economic 
opportunity by starting small businesses or by being a part of small 
businesses, by investing in small businesses, by working for and with 
small businesses.
  Whether it is a startup in New Albany, Indiana, or a small company 
growing in Franklin, Indiana, these businesses need access to capital 
to realize the dreams of their founders, the dreams of their investors, 
and the dreams of their employees.
  Quite simply, H.R. 1219 provides them with the access to more 
accredited investors, enabling them and empowering them to bring their 
innovations to market. I am excited to be a cosponsor of this important 
legislation, and I thank all of my colleagues in the Financial Services 
Committee, as well as, hopefully, on the floor later today, for their 
support of this important legislation.
  Ms. MAXINE WATERS of California. Madam Speaker, I continue to reserve 
the balance of my time.
  Mr. HUIZENGA. Madam Speaker, I yield as much time as he may consume 
to the gentleman from Texas (Mr. Hensarling), chairman of the Financial 
Services Committee.
  Mr. HENSARLING. Madam Speaker, first, I want to thank the gentleman 
from Michigan, not only for yielding but, more importantly, for his 
leadership in helping improve our capital markets and our economy here.
  I want to thank all of the Republican and Democrat cosponsors of H.R. 
1219, particularly our vice chairman of the full committee Mr. McHenry 
of North Carolina, for his leadership and also Ms. Velazquez on the 
other side of the aisle for her leadership on this issue as well. Both 
of these colleagues are senior members of the committee which I have 
the honor of chairing.
  Madam Speaker, we know that while optimism and confidence in our 
economy are up considerably over the last few months, our Nation still 
has a way to go to experience the robust economic growth the American 
people have experienced in the past of which they also deserve.
  One obvious reason that the economy continues to limp along is 
bureaucratic burdens imposed by Washington's top-down regulations on 
America's small businesses on Main Street.
  I got a message from a gentleman by the name of Larry, a small-
business owner in Mabank, Texas, who I have the privilege of 
representing here in Congress, and he summed it up fairly well. He 
said: ``So many businesses have to deal with regulations and taxes that 
didn't exist a few years ago. It is especially hard on smaller 
businesses. While large companies have their own staff of attorneys and 
the capital to comply with regulations, small businesses don't.''
  So, Madam Speaker, as my colleagues on the Financial Services 
Committee know all too well, because we have had countless witnesses 
before our committee to attest to such, Washington has inflicted upon 
Main Street America a complex set of burdensome and expensive and 
confusing regulations.

                              {time}  1000

  Many were written, again, with the largest public companies in mind, 
but they burden small companies and hurt their ability to access 
capital. That is exactly what Larry of Mabank, Texas, has told me, and 
I believe it.
  So, clearly, Congress should work, preferably on a bipartisan basis, 
to level the playing field while maintaining fair and efficient capital 
markets, protecting investors, and allowing small companies the chance 
to succeed.
  We can make progress on these goals today by advancing this 
bipartisan bill, the Supporting America's Innovators Act. This bill was 
approved by the Financial Services Committee with the overwhelming 
support of Republicans and Democrats. The vote in committee was 54-2. 
In addition, a similar bill passed the House last year overwhelmingly 
on a bipartisan basis.
  Madam Speaker, these vote totals demonstrate that just about 
everyone--Republican and Democrat--agrees

[[Page 5714]]

that this commonsense legislation will indeed help grow our economy.
  H.R. 1219 specifically increases the limits on the number of 
individuals from 100 to 250 who invest in certain venture capital funds 
before those funds are forced to register with the SEC as ``investment 
companies.'' This change would permit angel and venture funds to better 
help accredited investors invest in small-business startups. These 
early stage investors play a vital role in helping many small 
businesses get their start. In 2015, angel investors deployed nearly 
$25 billion to 71,000 different startups across our Nation. In the 
first quarter of 2017, venture capital invested more than $16 billion 
in almost 1,800 startups.
  If anyone here, for some reason, doubts the impact these investors 
can have on our Nation's economic growth, let me remind them that 
companies such as Amazon, Costco, Google, Facebook, and Starbucks were 
all first funded by angel investors. Let's also remember, Madam 
Speaker, that almost half of the people who work in this country own or 
work for small businesses. They create nearly historically two-thirds 
of the new jobs in America. So clearly our economy works better for 
working Americans when small businesses thrive and have access to 
capital and credit they need to innovate, expand, and create jobs.
  The Supporting America's Innovators Act modernizes a regulation to 
enhance the ability for startups and small businesses to receive 
critical funding and capital from the private markets and, in 
particular, angel investors and venture capital. Undoubtedly it will 
help today's small-business startups become the next great American 
entrepreneurial success story and, in doing so, help invigorate 
economic growth and help create more American jobs.
  I urge the adoption of H.R. 1219.
  Ms. MAXINE WATERS of California. Madam Speaker, I have no further 
requests for time, and I yield myself the balance of my time.
  Madam Speaker, I am pleased that, for the first time this Congress, 
committee Republicans have brought to the House floor a bill that has 
broad bipartisan support. Oftentimes, the opposite side of the aisle on 
our committee take a partisan approach to legislation and sometimes do 
not express a lot of interest in the views of the opposite side of the 
aisle or the millions of Americans whom they represent. However, in 
contrast, this bill before us today is the product of thoughtful, 
bipartisan compromise and will help startup companies and their 
investors equally. Madam Speaker, this is how laws should be made.
  Indeed, last Congress, Mr. McHenry and I worked together to promote 
liquidity in the secondary market for startup company stock by creating 
a clearer path for startup investors to resell their stock. The result 
of our bipartisan efforts was the Reforming Access for Investments in 
Startup Enterprises Act, which became law in 2015, along with seven 
other bipartisan, financial services bills included in the Fixing 
America's Surface Transportation Act.
  Going forward, I hope that my friends on the opposite side of the 
aisle will remember what we can achieve when we work together. So, 
again, I thank both Mr. McHenry for reaching across the aisle and Ms. 
Velazquez for working with me on H.R. 1219, the Supporting America's 
Innovators Act of 2017. I urge all of my colleagues to join me and vote 
``yes.''
  Madam Speaker, I yield back the balance of my time.
  Mr. HUIZENGA. Madam Speaker, I yield myself such time as I may 
consume.
  Madam Speaker, as I close on this very important bill that we have 
been talking about, H.R. 1219, I just want to say congratulations to 
our sponsors, Congressman McHenry and Congresswoman Velazquez, for 
their leadership on this, as well as my Capital Markets, Securities, 
and Investments Subcommittee ranking member, Representative Maloney, 
for working together to advance this commonsense bill.
  As was pointed out by both the chairman and the ranking member, there 
is strong bipartisan consensus that this bill is a winner for the 
American people. Some people today, as they tee off the Masters, we 
might say it is a 6-inch putt for the American people knowing that this 
is good for them and good for the economy.
  I want to encourage all of my colleagues on both sides of the aisle 
to support this bill, H.R. 1219.
  Madam Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. All time for debate has expired.
  Pursuant to House Resolution 242, the previous question is ordered on 
the bill.
  The question is on the engrossment and third reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.
  The SPEAKER pro tempore. The question is on the passage of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. HUIZENGA. 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, this 15-
minute vote on passage of the bill will be followed by a 5-minute vote 
on agreeing to the Speaker's approval of the Journal, if ordered.
  The vote was taken by electronic device, and there were--yeas 417, 
nays 3, not voting 9, as follows:

                             [Roll No. 221]

                               YEAS--417

     Abraham
     Adams
     Aderholt
     Aguilar
     Allen
     Amodei
     Arrington
     Babin
     Bacon
     Banks (IN)
     Barletta
     Barr
     Barragan
     Barton
     Bass
     Beatty
     Bera
     Bergman
     Beyer
     Biggs
     Bilirakis
     Bishop (GA)
     Bishop (MI)
     Bishop (UT)
     Black
     Blackburn
     Blum
     Blumenauer
     Blunt Rochester
     Bonamici
     Bost
     Boyle, Brendan F.
     Brady (PA)
     Brady (TX)
     Brat
     Brooks (AL)
     Brooks (IN)
     Brown (MD)
     Brownley (CA)
     Buchanan
     Buck
     Bucshon
     Budd
     Burgess
     Bustos
     Butterfield
     Byrne
     Calvert
     Carbajal
     Cardenas
     Carson (IN)
     Carter (GA)
     Carter (TX)
     Cartwright
     Castor (FL)
     Castro (TX)
     Chabot
     Chaffetz
     Cheney
     Chu, Judy
     Cicilline
     Clark (MA)
     Clarke (NY)
     Clay
     Clyburn
     Coffman
     Cohen
     Cole
     Collins (GA)
     Collins (NY)
     Comer
     Comstock
     Conaway
     Connolly
     Conyers
     Cook
     Cooper
     Correa
     Costa
     Costello (PA)
     Courtney
     Cramer
     Crawford
     Crist
     Crowley
     Cuellar
     Culberson
     Cummings
     Curbelo (FL)
     Davidson
     Davis (CA)
     Davis, Rodney
     DeFazio
     DeGette
     Delaney
     DeLauro
     DelBene
     Demings
     Denham
     Dent
     DeSantis
     DeSaulnier
     DesJarlais
     Deutch
     Diaz-Balart
     Dingell
     Doggett
     Donovan
     Doyle, Michael F.
     Duffy
     Duncan (SC)
     Dunn
     Ellison
     Emmer
     Engel
     Eshoo
     Espaillat
     Esty
     Farenthold
     Faso
     Ferguson
     Fitzpatrick
     Fleischmann
     Flores
     Fortenberry
     Foster
     Foxx
     Frankel (FL)
     Franks (AZ)
     Frelinghuysen
     Fudge
     Gabbard
     Gaetz
     Gallagher
     Gallego
     Garamendi
     Garrett
     Gibbs
     Gohmert
     Gonzalez (TX)
     Goodlatte
     Gosar
     Gottheimer
     Gowdy
     Granger
     Graves (GA)
     Graves (LA)
     Graves (MO)
     Green, Al
     Green, Gene
     Griffith
     Grijalva
     Grothman
     Guthrie
     Gutierrez
     Hanabusa
     Harper
     Harris
     Hartzler
     Hastings
     Heck
     Hensarling
     Herrera Beutler
     Hice, Jody B.
     Higgins (LA)
     Higgins (NY)
     Hill
     Himes
     Holding
     Hollingsworth
     Hoyer
     Hudson
     Huffman
     Huizenga
     Hultgren
     Hunter
     Hurd
     Issa
     Jackson Lee
     Jayapal
     Jeffries
     Jenkins (KS)
     Jenkins (WV)
     Johnson (GA)
     Johnson (LA)
     Johnson (OH)
     Johnson, E. B.
     Johnson, Sam
     Jones
     Jordan
     Joyce (OH)
     Kaptur
     Katko
     Keating
     Kelly (IL)
     Kelly (MS)
     Kelly (PA)
     Kennedy
     Khanna
     Kihuen
     Kildee
     Kilmer
     Kind
     King (IA)
     Kinzinger
     Knight
     Krishnamoorthi
     Kuster (NH)
     Kustoff (TN)
     Labrador
     LaHood
     LaMalfa
     Lamborn
     Lance
     Langevin
     Larsen (WA)
     Larson (CT)
     Latta
     Lawrence
     Lawson (FL)
     Lee
     Levin
     Lewis (GA)
     Lewis (MN)
     Lieu, Ted
     Lipinski
     LoBiondo
     Loebsack
     Lofgren
     Long
     Loudermilk
     Love
     Lowenthal
     Lowey
     Lucas
     Luetkemeyer
     Lujan Grisham, M.
     Lujan, Ben Ray
     MacArthur
     Maloney, Carolyn B.
     Maloney, Sean
     Marchant
     Marino
     Marshall
     Massie
     Mast
     Matsui
     McCarthy
     McCaul
     McClintock
     McCollum
     McGovern
     McHenry
     McKinley
     McMorris Rodgers
     McNerney
     McSally
     Meadows
     Meehan
     Meeks
     Meng
     Messer
     Mitchell
     Moolenaar
     Mooney (WV)
     Moore
     Moulton
     Mullin
     Murphy (FL)
     Murphy (PA)
     Nadler
     Napolitano
     Neal
     Newhouse

[[Page 5715]]


     Noem
     Nolan
     Norcross
     Nunes
     O'Halleran
     O'Rourke
     Olson
     Palazzo
     Pallone
     Palmer
     Panetta
     Pascrell
     Paulsen
     Payne
     Pearce
     Pelosi
     Perlmutter
     Perry
     Peters
     Peterson
     Pingree
     Pittenger
     Pocan
     Poe (TX)
     Poliquin
     Polis
     Posey
     Price (NC)
     Quigley
     Raskin
     Ratcliffe
     Reed
     Reichert
     Renacci
     Rice (NY)
     Rice (SC)
     Richmond
     Roby
     Roe (TN)
     Rogers (AL)
     Rogers (KY)
     Rohrabacher
     Rokita
     Rooney, Francis
     Rooney, Thomas J.
     Ros-Lehtinen
     Rosen
     Roskam
     Ross
     Rothfus
     Rouzer
     Roybal-Allard
     Royce (CA)
     Ruiz
     Ruppersberger
     Rush
     Russell
     Rutherford
     Ryan (OH)
     Sanchez
     Sanford
     Sarbanes
     Scalise
     Schakowsky
     Schiff
     Schneider
     Schrader
     Schweikert
     Scott (VA)
     Scott, Austin
     Scott, David
     Sensenbrenner
     Serrano
     Sessions
     Sewell (AL)
     Shea-Porter
     Sherman
     Shimkus
     Shuster
     Simpson
     Sinema
     Sires
     Smith (MO)
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Smucker
     Soto
     Speier
     Stefanik
     Stewart
     Stivers
     Suozzi
     Swalwell (CA)
     Takano
     Taylor
     Tenney
     Thompson (CA)
     Thompson (MS)
     Thompson (PA)
     Thornberry
     Tiberi
     Tipton
     Titus
     Tonko
     Torres
     Trott
     Turner
     Upton
     Valadao
     Vargas
     Veasey
     Vela
     Velazquez
     Visclosky
     Wagner
     Walberg
     Walden
     Walker
     Walorski
     Walters, Mimi
     Walz
     Wasserman Schultz
     Waters, Maxine
     Watson Coleman
     Weber (TX)
     Webster (FL)
     Welch
     Wenstrup
     Westerman
     Williams
     Wilson (FL)
     Wilson (SC)
     Wittman
     Womack
     Woodall
     Yarmuth
     Yoder
     Yoho
     Young (AK)
     Young (IA)
     Zeldin

                                NAYS--3

     Amash
     Capuano
     Lynch

                             NOT VOTING--9

     Bridenstine
     Cleaver
     Davis, Danny
     Duncan (TN)
     Evans
     King (NY)
     McEachin
     Slaughter
     Tsongas

                              {time}  1031

  Mr. CAPUANO changed his vote from ``yea'' to ``nay.''
  Mses. SANCHEZ and SCHAKOWSKY changed their vote from ``nay'' to 
``yea.''
  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.


                          personal explanation

  Ms. SLAUGHTER. Madam Speaker, I was unavoidably detained and missed 
rollcall vote Nos. 217, 218, 219, 220, 221, and 222. Had I been 
present, I would have voted ``aye'' on votes 220 and 221. I would have 
voted ``nay'' on votes 217, 218, 219, and 222.

                          ____________________