Small Business Mergers, Acquisitions, Sales, and Brokerage Simplification Act of 2017

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, H.R. 2201 would create an unnecessary and potentially dangerous loophole in Federal and State securities laws by allowing companies to sell unregistered securities without important safeguards that normally apply to such transactions. Specifically, the bill would allow a company to raise up to $500,000 from 35 or fewer investors, subject only to the requirement that each of these investors has a substantive preexisting relationship with the company.

Currently, before a company can offer or sell its securities, it must either register the offering with the Securities and Exchange Commission--that is the SEC--or qualify for at least one of several existing exemptions from registration. These exemptions provide reduced regulatory requirements for businesses conducting the offerings, but are limited to investors who have the financial sophistication to understand the risks, or enough assets to bear losses without the full protections of the securities laws.

Additionally, unlike H.R. 2201, these existing exemptions include several critical investor protections, such as notice to regulators, limitations on advertising, and restrictions on resale. For example, securities offered pursuant to rule 506 of regulation D are restricted, meaning they cannot be resold for at least a year without registering them; that is, re-registering them.

Additionally, the re-registration exemptions available under the crowdfunding rules and regulation A impose limitations on the amounts an individual can invest in a year, thereby placing a cap on potential losses.

H.R. 2201's lack of basic safeguards would leave investors vulnerable to an array of investment scams. For example, a purchaser of securities offered pursuant to H.R. 2201 would be able to immediately resell the securities in secondary transactions. In the past, the failure to restrict the resale of unregistered securities has exposed secondary investors to ``pump and dump'' schemes, a form of fraud that involves hyping up cheap junk stock in order to resell it at a higher price to unwitting investors.

Additionally, investor and consumer advocates, like Americans for Financial Reform, Center for American Progress, and Public Citizen, oppose H.R. 2201 because it would enable a particularly deceptive scam known as ``affinity fraud.'' Bad actors perpetrating affinity fraud could use H.R. 2201 to prey upon religious communities, ethnic groups, and the elderly.

Just a few years ago, the SEC shut down a scheme targeting the Hispanic community in southern California. The perpetrators raised more than $800,000 by representing to close friends and family members that their investment would be used to develop a financial services firm serving the Hispanic community.

The SEC found that, instead of developing the purported business, the scammers ``used a large part of the investors' money to engage unsuccessfully in high risk `day-trading' of stocks; pay personal living, travel, and entertainment expenses; or make other unexplained expenditures with no connection to the purported startup business activities.''

H.R. 2201 would provide a roadmap for bad actors to similarly rip off investors. The bill's $500,000 cap on offerings does not eliminate the need for robust safeguards against fraud and abuse. In fact, these protections are even more important for offerings of this size, given the proliferation of investment schemes in the smaller offering space.

The SEC has found that ``fraud in the micro cap stock markets is of increasing concern to regulators, as such markets have proven to be fertile grounds for fraud and abuse.''

While $500,000 may not seem like a lot on Wall Street, for Main Street Americans, losing even a fraction of that amount would destroy the hope of one day retiring with dignity. Existing exemptions such as those available under the SEC's regulation D, regulation A, and crowdfunding rules provide ample opportunities for companies to raise capital while also protecting investors.

H.R. 2201 would only expose hardworking Americans to a new and wholly unnecessary risk. For these reasons, I urge my colleagues to vote ``no'' on H.R. 2201, and I reserve the balance of my time.

General Leave

Mr. Speaker, I yield such time as he may consume to the gentleman from Rhode Island (Mr. Cicilline).

Mr. Speaker, may I inquire as to how much time I have remaining.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, we have laid out this morning exactly how vulnerable groups and individuals can be taken advantage of with legislation like this. I don't know exactly where this legislation originated, but I can almost guarantee you that we are creating opportunities for individuals who don't have the best interest of our constituents at heart to literally get small groups together, 35, I guess, or less, and sell them on ideas where they are raising funds that probably will not result in profits as expected by those who are investing in these schemes.

No, there are no protections. There is no notice. The SEC will not know when and where these schemes are arising. So I would say to my colleagues on the opposite side of the aisle: When are we going to act as if we have the best interests of our constituents at heart? When are we going to be about protecting consumers rather than opening up opportunities for them to be the victims of fraud?

We have fraudulent schemes that are directed at the most vulnerable people. I know where those people who are organizing these schemes will go. They will go to our churches where well-meaning ministers and parishioners will be taken advantage of.

In these vulnerable communities that are always taken advantage of, we have people who are the victims of payday loans where they are paying 400 percent for moneys that they are borrowing when they are desperate in between paychecks. We have rent-to-own schemes. We have all kinds of schemes where these convenience stores, in places where we have food deserts, are charging extremely high prices for food that is basically being sold for regular, ordinary, good prices in other communities.

In some communities, even in California, the gas taxes are rising. We have the rental market that is going off the scale all over this country with people not being able to afford a decent lease or a decent rental space, and so here we are just opening up another opportunity for folks to be ripped off.

It is going to happen; I can guarantee you that. When you have something like this that is passed by the Congress of the United States, it is going to be taken advantage of, and the way that this is constructed, it almost begs to be taken advantage of.

So do you know what happens when this kind of thing takes place and Members of Congress put their reputations on passing this kind of legislation? When the rip-offs start and people are harmed a few years later, then they are going to come back with legislation talking about how they are correcting the fraud and the rip-offs that we caused in the first place.

When is this going to stop? We have a Consumer Financial Protection Bureau that is struggling every day to protect our consumers. Prior to Dodd-Frank, we had our oversight agencies with the responsibility of protecting consumers, but they didn't have any real protection. So Dodd-Frank reforms helped to create opportunities for Members of Congress to be able to protect their consumers and not to be involved in these kinds of schemes.

But the opposite side of the aisle has spent an inordinate amount of time trying to kill off the Consumer Financial Protection Bureau, and they have done it in so many ways. Not only do they come up with amendments time and time again to try and shut down the Consumer Financial Protection Bureau, they treat the Director of the Consumer Financial Protection Bureau so badly that they almost deny him the opportunity to come before our committee and to be heard.

So I don't know whose side legislators are on who create this kind of crap. I don't understand why it is deemed to be important to open up the opportunity for schemes and to not give the SEC the ability to know when they are getting started, to have the

kind of disclosures, and to have the kind of oversight that would protect the most vulnerable people in our society.

Mr. Speaker, yes, this legislation will probably pass today. The Republicans have the majority votes in this Congress, and I suppose they are going to get all of their people to vote for this bill that is going to rip off some of their constituents, and, again, we won't be able to stop it because, again, they have the majority votes.

But I want the people of this country to know and understand what is happening, who is doing it to them, and why they are having a difficult time. At a time when the rental market is going off the scale and they can't afford to pay the first and the last month's rent to get into a place, I want them to know who is creating the difficulties in their lives when their jobs have not increased their pay, they are still trying to have a decent quality of life for their families, despite the fact that the pay does not match the job that they are doing, and they haven't had the pay increases.

When are we going to show that we stand up for the least of these? When your churches get ripped off--and we are working on some of those schemes now where, even with the responsibilities that the SEC has, we have people who are getting ripped off, and here we come with another piece of legislation. Then what we do is we shade it in terms of this is for small business development. Then we hear from the opposite side about all the other companies who started as little-bitty companies in their garage. Well, they all started without this bill. They didn't need this bill to start.

So why are you doing this? Yeah, you are right; there are a lot of companies, and you have named them, particularly in the high tech industries that started, and they had some of their own money to get started with, and maybe the family helped them, I don't know, but they didn't have this legislation. They didn't need this legislation. Nobody needs this legislation.

This legislation is harmful, and I would ask my colleagues to vote against the bill. If there are any Members on the opposite side of the aisle who really are concerned about their constituents, I would ask them to defy their leadership and vote against this bill.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, by allowing entities to sell unregistered securities based solely on a preexisting relationship with the investor, H.R. 2201 would create a road map for affinity fraud.

Affinity fraud is a type of investment scam where swindlers prey upon members of identifiable groups such as ethnic or religious communities or the elderly. Often, affinity fraudsters take advantage of preexisting relationships to engender trust and convince victims that a dubious investment is legitimate.

The Securities and Exchange Commission has found that such frauds pose heightened risks to investors because they can be difficult for regulators or law enforcement officials to detect, particularly where the fraudsters have used respected community or religious leaders to convince others to join the investment.

The following cases represent a sampling of recent affinity fraud actions from around the United States.

In August, 2013, the SEC halted an offering fraud scheme where Steven Bruce Heinz, a Utah resident purporting to be an investment adviser, sold phony investment contracts to more than 15 of his former clients, family members, and friends. According to the SEC's complaint, Heinz raised $4 million in investor funds he used to engage in high-risk trading of future contracts and to pay his own personal expenses such as family vacations to Mexico and a $600,000 loan.

Among the investors taken in by Heinz scam was ``the recent widow of a church associate of Heinz who invested with Heinz after he volunteered to assist her with her finances and investments after her spouse died.''

In 2012, the SEC stopped a $7.5 million fraud operation targeting the Persian-Jewish community in Los Angeles. The SEC's assistant regional director stated that Shervin Neman ``deceived members of his own community to raise money in this fraudulent Ponzi scheme. By exploiting investors' trust in him, Neman was continually able to raise more money to pay back existing investors and finance an extravagant lifestyle.''

According to the SEC's complaint, among other things, Neman spent investor funds to pay for his wedding and honeymoon, his wife's engagement ring, luxury cars, and VIP tickets to entertainment venues.

In 2015, the SEC permanently barred John Allan Russell from the securities industry after Russell pled guilty to securities fraud in Colorado State court. The SEC's administrative law judge found that Russell obtained almost $300,000 by selling debt securities to an elderly victim who suffered from dementia and Alzheimer's disease. The ALJ also determined that ``Russell's scheme may have involved affinity fraud because the misconduct began a few years after the victim acted as Russell's godfather at his baptism.''

These cases demonstrate that H.R. 2201's preexisting relationship requirement would not provide any meaningful deterrent against abuse. On the contrary, it would encourage opportunistic conduct targeting communities.

Mr. Speaker, I urge my colleagues to join me in voting ``no'' for this bill.

Given all that the SEC is able to do, they can't keep up with these schemes, and now you are going to open up the door for them to have to wrestle with trying to help people who are victims of these kinds of schemes.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, the North American Securities Administrators Association sent this letter of concern. They said that H.R. 2201 would result in an overly broad Federal exemption that would allow public solicitation and sales to any investor, regardless of sophistication or financial wherewithal, subject only to the requirement that there be a previously existing relationship, a standard that is not difficult to establish.

In practical terms, this means that Main Street investors could be solicited and sold up to $500,000 in private security by bad actors, including persons having been convicted of crimes or subject to one or more previous State enforcement actions, without any disclosure to the investor and without any notice to State or Federal regulators.

There is no valid basis for Congress to prevent State officials charged with protecting their constituents from making decisions about purely local or regional issues that would rely on the exemption established by H.R. 2201.

Further, preemption of State review or even notification for the type of small, localized offerings contemplated by H.R. 2201 would effectively handcuff the regulators best positioned to oversee such offerings.

Public Citizen said this bill ``would permit small offerings with no investor protections, such as notice of the offerings. It will enable a type of affinity fraud, where the seller can unload dubious securities, provided there is some relationship between seller and purchaser. This bill assumes that a preexisting relationship will deter abuse, which is a tenuous foundation, at best. Further, the relationship can begin with the offer.''

They don't have to have a previous relationship. It would start when the offer takes place.

Public Citizen further stated that ``the bill says the relationship must only exist before the purchase.''

Mr. Speaker, I include in the Record letters from these groups, as well as a letter from Americans for Financial Reform.

North American Securities

Administrators Association, Inc.,

Washington, DC, November 7, 2017.

Re H.R. 2201--The Micro-Offering Safe Harbor Act.

Hon. Paul Ryan,

Speaker, House of Representatives,

Washington, DC.

Hon. Nancy Pelosi,

Democratic Leader, House of Representatives,

Washington, DC.

Dear Speaker Ryan and Leader Pelosi: On behalf of the North

American Securities Administrators Association (``NASAA''), I

write to express concern and raise specific objections to

certain provisions of H.R. 2201, The Micro-Offering Safe

Harbor Act, which is scheduled to be considered by the House

of Representatives this week. The legislation would amend

securities laws in ways that could be profoundly detrimental

to investors, and detract from the viability of the

marketplace for offerings from new or smaller issuers that

are compliant with securities law.

The Micro-Offering Safe Harbor Act amends Section 4 of the

Securities Act of 1933 to create a new exemption from

registration. To qualify for the exemption, an offering would

have to meet certain criteria regarding the number of

purchasers, their relationship to the issuer, and the amount

of capital raised. However, as more fully discussed below,

the legislation fails to include critical investor protection

measures and would preempt state regulatory authority.

State securities regulators understand the need of small

businesses to efficiently raise capital and the role strong

investor protection plays in facilitating this goal.

Unfortunately, the changes embodied in H.R. 2201, while well

intended, are ill-advised and potentially quite dangerous.

For example, unregistered securities purchased under the

exemption established by H.R. 2201 would not be

``restricted,'' and could thus be sold immediately, exposing

investors to classic ``pump and dump'' schemes. Furthermore,

NASAA is aware of no evidence to support the proposition that

Congress should create a ``safe harbor'' to permit

unregistered securities offerings to be offered and sold,

including through general solicitation, regardless of

investor sophistication or financial wherewithal. Even as the

bill stands to introduce new and totally unnecessary risk

into securities markets--failing to even disqualify ``bad

actors'' from these markets--the goal of the legislation

remains unclear and its necessity is, at best, not well-

established. It is clear, however, from the terms of the

exemption, and its failure to impose even the modicum of

regulatory oversight that exists for similar ``private''

offerings under SEC Regulation D Rule 506, that offerings

made under the new exemption are likely to be

disproportionately risky and illiquid. This fact alone should

be cause for concern by Congress.

Beyond stark new risks to investors, this legislation

threatens to jeopardize the continued viability of

established markets geared to smaller issuers, many of which

operate lawfully within existing federal and state securities

laws. Such markets include securities sold pursuant to SEC

Rule 506, new federal exemptions established by the JOBS Act,

and exemptions adopted in many states to permit intrastate

crowdfunding. Without effective investor protection measures

a potential effect of H.R. 2201 could be to cause investors

to abandon the markets for smaller issues.

In closing, NASAA reiterates strong opposition to the

preemption of state registration and notice filing authority

in H.R. 2201. There is no valid basis for Congress to prevent

states from making decisions about the local or regional

issues that H.R. 2201 seeks to encourage. Failure to register

or at the very least, to notice file with state regulators

results in unknown sales, by unknown actors of unknown

enterprises and result in no gatekeeper function to protect

retail investors whose only source of recourse for fraudulent

sales are the state securities regulators. At a minimum H.R.

2201 should:

1) Include bad actor disqualifications;

2) Establish a holding period to reduce the likelihood of

``pump and dump'' schemes;

3) Provide at least a notice filing with state regulators

so that in the event of a fraudulent offering, state

regulators can begin an investigation to try and protect

retail investors;

4) Limit the sale amount to retail investors so that

investors are not ``encouraged'' to place all their eggs in

one basket; and

5) Prohibit or restrict general solicitation of what are

clearly high risk securities.

Thank you for your consideration of NASAA's views.

Sincerely,

Joseph P. Borg,

NASAA President and Alabama

Securities Director.

Mr. Speaker, I don't understand why Members of Congress would disregard what the State regulators are saying. State regulators are saying: Don't do this. Don't preempt us. Don't pass legislation that would undermine our ability to protect your constituents.

Yet they are ignoring this altogether. I know that they received this information. I know that they know that the association had cautioned against this legislation. Let me just make sure that everybody knows. It is the North American Securities Administrators Association. They represent all of the States in cautioning against this legislation.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

For my colleagues on the opposite side of the aisle who are bemoaning the fact that small businesses don't have access to capital, they have these relationships with all of these big banks.

Why don't they get to the big banks and tell them they ought to be making loans to small businesses?

I don't hear them, as a part of, you know, their rhetoric, talking about how many of the big banks are not being responsible. And so my colleague on the opposite side of the aisle and my friend talk about what is common sense. I tell you what is common sense. Common sense is not to place vulnerable people in a position where they are going to get ripped off.

Mr. Speaker, H.R. 2201 is a harmful bill that would simply serve as an invitation for investment scams. The bill fails to take into account the numerous other exemptions we have for small-dollar offerings, including under regulation D, regulation A, and crowdfunding rules. These exemptions already permit small businesses to raise capital while also protecting against fraud.

In light of these exemptions, there seems to be no reasonable explanation for the amount of legislative effort that has been wasted on this bill. Instead of H.R. 2201, which is unwarranted and may actually harm investors and the integrity of our markets, the House should be focused on passing legislation that can actually improve the lives of the Americans whom we serve.

Mr. Speaker, I urge my colleagues to vote ``no'' on H.R. 2201. Don't be a part of enacting one more scheme that is going to rip off our constituents, and then, you know, a few years later, come back here and talk about what a terrible thing it is that people are being ripped off by these investors, some of them who are criminals, but nobody knows it. The disclosure does not have to take place. They don't know that they have people who have already been involved in crimes who are coming to them talking about: let me help you earn some profits on this investment.

We know better. Common sense tells us better. If, in fact, we are committed to the proposition that we have a responsibility to protect our constituents from rip-offs, from fraud, from being taken advantage of, we will not support this bill. And I would hope that my friends on the opposite side of the aisle, despite how far they have gone in trying to represent that this bill is something that it is not, would at least change their minds today and support their constituents and vote ``no'' on this bill.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I claim the time in opposition to the amendment, even though I am not opposed.

Mr. Speaker, under the current language of H.R. 2201, investors could be sold private securities by persons who have committed fraud or have violated security laws. Representative Emmer's amendment purports to add a layer of investor protections by adding a provision to so-called disqualify certain bad actors from utilizing the exemption.

While I applaud Mr. Emmer's attempt to add this most basic guardrail to a bill that otherwise creates an unmitigated safe harbor for fraudsters, I wonder why this provision was dropped from a similar bill that Mr. Emmer introduced last Congress.

Unfortunately, this amendment is woefully inadequate to address the otherwise dangerous new exemption created by H.R. 2201. Because the underlying bill requires no disclosure to investors and imposes no obligation to notify regulators of the offering, even if amended, H.R. 2201 would lead convicted fraudsters and lawbreakers to police themselves.

Moreover, the bill ties the hands of State securities regulators, who are the primary watchdogs over small, local securities offerings. If enacted, H.R. 2201 would leave a gaping hole in oversight of the very offerings it permits.

H.R. 2201 is a misguided attempt to support small businesses that is not meaningfully improved by the meager protections of this amendment. For these reasons, I continue to oppose this bill, and I urge all of my colleagues to vote ``no'' on H.R. 2201.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I would like to warn the Members of this House not to take the compliments seriously that are being given by the gentleman who would have you believe that somehow I have totally embraced this amendment because I think it is going to change the fact that there is no disclosure to those who would be investing and no notice to the SEC.

So don't take him seriously when he talks about thanking me for encouraging and embracing. I have not done that. I am going to tolerate this amendment. It is late. It doesn't do what he says it is going to do. The bill is still a bad bill. It is a bill that is going to harm people. It is a bill that targets the most vulnerable people in our society. It is a bill where fraudsters are going to go into churches and convince ministers and parishioners that they are out to help them.

Members of Congress, do the right thing. Today, stand up against another attempt by misguided folks who would have you believe that they are helping people when, in fact, they are opening up opportunities for them to be ripped off one more time, ripped off in ways that could have been avoided.

Mr. Speaker, I oppose this bill. I ask everybody to vote against this bill.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 647 and ask for its immediate consideration.

Mr. Speaker, for the purpose of debate only, I yield the customary 30 minutes to the gentlewoman from New York (Ms. Slaughter), 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. Speaker, I ask unanimous consent that all Members have 5 legislative days to revise and extend their remarks on House Resolution 647.

Mr. Speaker, I hope you were listening as the Reading Clerk was going through this rule, because there was a lot of meat in this rule today.

Ordinarily, and, in fact, historically, we will do a bill and we will do a rule; we will do a rule and we will do a bill. This rule today makes three bills in order, three important bills in order.

I am proud to be able to carry this rule today. I hope my colleagues will see the merits of it as I do.

The rule provides a structured rule for the debate of two bills out of the Financial Services Committee. One is H.R. 477, Mr. Speaker, the Small Business Mergers, Acquisitions, Sales, and Brokerage Simplification Act of 2017. The second is H.R. 3971, the Community Institution Mortgage Relief Act. The rule also provides for consideration of a continuing resolution, H.J. Res. 123, which provides appropriations through December 22, as final year decisionmaking and negotiating goes on. It also allows the Centers for Medicare & Medicaid Services, CMS, to reallocate existing funds for the CHIP program through December 31, 2017.

Mr. Speaker, I want to start off talking about the Financial Services bills. We will have some members from the Financial Services Committee come down. They can talk about it in details that I cannot.

It was a fascinating hearing that we had in the Rules Committee last night, Mr. Speaker. We had the chairman, Mr.

Hensarling from Texas, and we had the ranking member, Ms. Waters. It was a conversation about how we protect people, how do we serve people better.

Now, the Community Institution Mortgage Relief Act, Mr. Speaker, is the result of small community banks and local credit unions saying: We are having a tough time providing mortgages to our members because the Consumer Financial Protection Bureau has created rules designed to protect consumers that are protecting them right out of access to a mortgage at all.

Mr. Speaker, it is a legitimate disagreement that we have here from time to time about how to protect people best, about how to love people best, but it is the right kind of conversation to be having. If we pass this rule today, we will be able to get into debate on that underlying bill.

The debate will not be about should we protect people, because we all agree that we should.

The debate will be about how should we protect those people, an issue on which legitimate, well-intentioned, thoughtful men and women can disagree. I look forward to this body working its will.

The second bill, Mr. Speaker, from the Financial Services Committee, H.R. 477, was introduced by a classmate of mine in that big class of 2011, Mr. Huizenga from Michigan. He has worked this bill through the process one step at a time, trying to build consensus so that, Mr. Speaker, as we were in the Rules Committee last night, the conversation between the chairman and the ranking member was: Hey, if we can make one more amendment in order, one more amendment that Mr. Huizenga and Mr. Sherman had worked out together, if we can make one more round of changes, we believe we can get this through on a big bipartisan majority coming out of the Financial Services Committee.

Mr. Speaker, we don't celebrate those things, we don't talk about those things. The newspaper will be filled with discord coming out of this city tomorrow morning, but I can tell you that it gives me great pride to come on behalf of the Rules Committee today bringing forward these bills, not that are going to change the world overnight, but are going to make a big difference for real people facing real challenges across this country.

It turns out, Mr. Speaker, my experience is if we do a little bit together every day, a little bit today, a little bit tomorrow, a little bit the next day, we wake up a year from now finding out we have done a whole lot together on behalf of the American people.

Mr. Speaker, finally, the continuing resolution. I am not a fan of continuing resolutions, I just want to tell you. I got to talk to you about my enthusiastic, optimistic part of this rule earlier. I am going to lay some tough love on you now, Mr. Speaker. We are not supposed to be in the continuing resolution business. You know with your leadership, the leadership of the gentlewoman from New York, the leadership of the two gentlemen from Michigan here on the floor, this House passed on time, ahead of schedule, the funding bills to fund the priorities of the American people for fiscal year 2018.

Folks said we couldn't get it done, folks said we couldn't do it all. We did, and we did. We sent that to the Senate, Mr. Speaker, before the end of the fiscal year, which was back on September 30. The Senate hasn't been able to take it up yet, Mr. Speaker. The Senate hasn't been able to debate it yet, Mr. Speaker.

I don't know if the Senate is going to get it done in the next 2 weeks, but there are folks in this institution, Mr. Speaker, who say: You know what? We couldn't get it done in the Senate over these last 2 months, so let's just go ahead and pass a continuing resolution for all of fiscal year 2018.

A continuing resolution, for folks who don't follow the appropriations process, means, hey, if it worked well last year, let's just do the same thing next year. Mr. Speaker, that is awful public policy.

We came together debating almost 500 amendments. Having moved every single appropriations bill through the Appropriations Committee, we came together not just in a bipartisan way in the committee, we came together here on the House floor, debated these issues, grappled with these issues, and produced a work product with which the American people can take great pride.

I don't want to give up on that work product, Mr. Speaker. I don't want to settle for the way things have been. I believe that we can do better.

By passing a 2-week continuing resolution today, we ensure that all the features of government continue to operate as the American people expect them to, and we provide another window for the Senate to come together and pass those appropriations bills as we have done here in the House.

I am optimistic about that coming to fruition, Mr. Speaker. I believe that we can get that done together.

Mr. Speaker, we can take up these bipartisan efforts from the Financial Services Committee, we can take up this important effort to continue the funding of the government if we pass this rule today.

With that, Mr. Speaker, I urge my colleagues to support the rule, and I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I don't disagree with a lot of what my friend from New York had to say when it comes to the facts. I do disagree with the conclusions that are reached there, Mr. Speaker.

We do need to do a better job of working together. Now, sometimes that means Republicans and Democrats, sometimes that means the House and the Senate, sometimes that means the White House and the Congress. We need to hold each other accountable, but we also need to give each other credit for our successes.

The gentlewoman talked about important issues relating to education and improving workforce. We passed together in this institution a continuation of career and technical education funding. We reauthorized that program together, led by G.T. Thompson on my side of the aisle, by Mr. Krishnamoorthi on your side of the aisle, by Chairwoman Foxx on our side of the aisle, by Ranking Member Scott on your side of the aisle. We grappled with that issue together. We did it together, because it was the right thing for the American people, and now it sits in the United States Senate without action.

We came together, and we funded the government. We grappled, line by line, section by section, we did it together, and now it sits in the United States Senate.

Mr. Speaker, what needs to be said, one can describe it as Republican incompetence. One can describe it as Democrat intransigence. But we, as a House, have come together and gotten our work done. The Senate cannot, and why the Senate cannot is because it requires 60 votes to get something done over there under Senate rules. In order to have 60 votes, you have to have Democrat votes.

If the Senate changed its rules tomorrow and made it just a Republican majority institution, they could move all of these bills without delay. Far from being a reflection of incompetence, it is a reflection of a commitment to a bipartisan effort on the Senate side.

We can poke them and poke them and poke them and, just one day, folks might get their wish, and we may make that a completely Republican streamlined process over there. But be careful what you wish for.

We don't have to kick each other in the shins all day long, every day, over here. We have success after success that we have earned together. We should spend more time celebrating those successes, Mr. Speaker. Among those successes is the bill I mentioned earlier, offered by the gentleman from Michigan (Mr. Huizenga).

Mr. Speaker, I yield 4 minutes to the gentleman from Michigan (Mr. Huizenga) to talk about the hard work, the effort, and the success that he has been able to accomplish in a bipartisan way.

Mr. Speaker, I yield myself such time as I may consume.

I would be interested sometime, Mr. Speaker, having a team building expert take a look at some of our proceedings here on the House floor and see if they think that the conversations that happen here bring us closer to working together on serious solutions, or push us further away.

I agree with my friend from Michigan; we need to get about the business of the American people. The business of

the American people is not figuring out who to blame, it is figuring out how to fix things. And to continue to perpetuate the inaccurate message that we don't collaborate on those issues is to do our bosses, the American people, a terrible disservice.

On bill after bill to combat the opioid epidemic, we have come together in this institution. We have passed these bills in a collaborative way and sent them to the United States Senate. Bill after bill on human trafficking, we have come together in this institution. We have passed these bills. We have sent those bills to the United States Senate.

Mr. Speaker, we are talking about funding the American Government. I have been in this Congress since 2011. I got to vote, for the very first time, on funding the Centers for Disease Control, which sits right in my back yard in the great State of Georgia.

I got to vote, for the very first time, on funding the National Institutes of Health, which do such amazing research, both for our seniors and for our children. The kind of talent that we have there, Mr. Speaker, boggles the mind. We came together, and we funded those institutions in the annual appropriations bill for the first time ever.

Now, we can spend our time together talking about who hates children and who hates old people, and why it is everybody is an untalented buffoon; or we can recognize that, on issue after issue, we come together and get about the business that our bosses sent us to get about.

I don't think any of us are going to be rewarded by figuring out who to blame. I think we are going to be rewarded by getting it fixed.

Mr. Speaker, I yield 4 minutes to the gentlewoman from New York (Ms. Tenney), who has worked, through the Financial Services Committee, again, in a bipartisan way, to deal with local community financial institutions and local home buyers who are getting shut out of the process by an overly burdensome Consumer Financial Protection Bureau.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I opened with a discussion about how we all care about these American homeowners who are trying to get, oftentimes, into their first home, and how it is that we protect them better.

We disagreed about how to protect them.

Do you do it through the CFPB and Federal regulation? Or do you do it through more local hometown institutions being governed by their neighbors?

We agreed on what the need was, but we disagreed on how to get there.

What is so frustrating to me--I still feel like a relatively new Member of this institution, Mr. Speaker. I guess I am not any longer-- is that we seem to have one standard when we are in the majority and a completely different standard when the other guy takes over the institution. It seems to me that principles should be principles irrespective of who sits in your chair.

The very first big vote I took when I got here in 2011, Mr. Speaker, was to fund the United States Government in February.

Why?

Because when Democrats ran every single facet of government--they controlled the House, they controlled the Senate, and they controlled the White House--they didn't get it done. They couldn't get it done. It is hard to do sometimes, Mr. Speaker.

I will take you back. You weren't in this institution at that time. The year is 2010. The first CR that they passed went from October 1 to December 3, about the same length of time as the one that we passed.

They weren't up to anything nefarious when that happened, Mr. Speaker, and I resent the implication that we have been during that same path. They needed a little extra time and they took it.

When that CR expired, Mr. Speaker, they then went and passed, lo and behold, a 2-week CR--a 2-week CR from December 4 to December 18. They needed a little more time. They passed one for 2 more weeks to get themselves a little more time.

That didn't work out, Mr. Speaker. They still weren't able to get it done in those 2 weeks, so their next CR, Mr. Speaker, went from December 19 to December 21. Three days is what they found to be the right number to extend funding of the Federal Government so they could continue to get their work done, Mr. Speaker.

When that 3-day CR didn't work, they then punted altogether; and when my freshman class came in in 2011, we took over and we funded the government instead.

Mr. Speaker, we can describe what happened when my friends last controlled this institution as an abominable failure, or we can describe it as a frustrating failure but something that happens in this institution. It happened when my friends ran it. It happens when we run it. We need, on behalf of the American people, to get on a better track. Let me stipulate that is true.

But let me ask my friends to stipulate, Mr. Speaker, that for the first time in a long time we are on a better track because we came together in this institution and we got our work done. The Senate hasn't, and I am frustrated by that, but I want to give them a little more time.

For my friend from Michigan who asked the question, ``What difference does 2 weeks make,'' I would ask anyone who has that question to Google ``continuing resolution'' and ``Department of Defense.''

If you think that continuing to fund the government one day at a time with a continuing resolution, or even 12 months of the time during a continuing resolution, if you think that is the definition of success, Google ``continuing resolution'' and ``Department of Defense.''

Every single day that we fail to take up in the United States Senate the large full-year funding appropriations bill, we do a disservice to every single man and woman in uniform.

If we have a choice here today, Mr. Speaker, between doing that disservice to those men and women for 2 weeks or 6 weeks or 8 weeks or 12 months, I choose to.

If you wonder what difference it makes, ask any man or woman in uniform. There is a reason, Mr. Speaker, as hard as the appropriations process is, that you and I took up the defense portion, the Homeland Security portion, the national security portion all the way back in the summer and passed it out of this House before the end of July, because we knew how important it was. We knew how mission critical it was, and we wanted to give the Senate the most time we possibly could.

I am frustrated, too, but let us not describe these failures as partisan failures, as an effort by one side or the other to subvert the process. These are failures. But 2 weeks, Mr. Speaker, is going to be less of a failure for our men and women in uniform than would be 3 weeks, 4 weeks, or 12 months.

I am sorry that we are here, but this is the best circumstance that we can create to allow our Senate time to succeed.

They cannot succeed alone. Republicans cannot succeed there alone. It requires a bipartisan majority to succeed. Let us not pretend this is a partisan problem. This is an American challenge, and I believe we are up for it.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself the balance of my time.

I thank my friend from New York for helping me to bring the rule today.

Mr. Speaker, I believe in truth in advertising, and of all the things that you heard the Reading Clerk read, when he went through word for word for word from this rule, you heard not one word about taxes today. Why? Because we are not talking about taxes today at all. Because nothing that we are doing today has anything to do with taxes at all. Because of all the successes that we are down here to partner on today, tax is not one of them.

What is on the list today?

Well, in the spirit of truth in advertising, Mr. Speaker, shutdowns aren't on the list either. In fact, the opposite is true. If we pass this rule today, we will fund the government. We will prioritize keeping the doors open.

Mr. Speaker, habits are hard things to break, and we are in two very bad habits in this institution. One is failing to see the merit in what the other side is offering. We have two Financial Services bills today that break that pattern, that see the merit in working together and collaborating together, and we bring two bills to the floor that this entire institution can be proud of.

We have another bad habit of ascribing to the other side's motives that I believe are not worthy of this institution at all. A government shutdown would be one of those things. We are, in good faith, working together--Republicans and Democrats, House and Senate, Congress and White House--to get about the business of the American people, and it is hard. But it is worth doing, and it is worth doing right.

If I have to choose between fast and right, I choose right. We have got a chance today, with the passage of this rule, to bring up two bills that our colleagues, in bipartisan ways, have worked through on the Financial Services Committee that will make a big difference to families and businesses across this Nation.

We have an opportunity today, if we pass this rule, to bring up a continuing resolution that guarantees to every single American that the doors are open, the lights are on, and we continue and have an opportunity for the Senate to move final legislation.

I want my colleagues to support this rule. I want my colleagues to support the underlying bills. But, Mr. Speaker, more than anything, I want my colleagues to take pride in the successes that we have achieved here today.

CHIP funding, Children's Health Insurance funding, is at risk, but not because we haven't succeeded. We have. All we need is one more signature from the Senate.

CDC funding may be at risk, but not because we haven't succeeded. We have. We just need that bill to get across the floor in the Senate.

Our troops are on the cusp of receiving a well-deserved pay raise. Why? Because we came together and we passed it here. We just need it to get across the floor of the Senate.

And there is not one of those items or a dozen more that I could list, Mr. Speaker, that will move across the floor of the Senate in anything but a bipartisan way.

Do you want bipartisanship? If you want cooperation, if you want success, we have our chance today. Vote ``yes'' on this rule, Mr. Speaker. Vote ``yes'' on these underlying bills, and let's get together and get the Senate across the finish line as well.

Mr. Speaker, I yield back the balance of my time, and I move the previous question on the resolution.

Mr. Speaker, I thank the gentleman for yielding me the customary 30 minutes, and I yield myself such time as I may consume.

Mr. Speaker, I have great fondness for Mr. Woodall. I think he is one of the best, most pleasant persons on the Rules Committee, and it grieves me that I have to, right off the bat here, take issue with him, but I have to take issue with the claim that Republicans completed their appropriation work on time.

I have got a timetable of the budget process that came from the website of the Budget Committee majority, on which my colleague, Mr. Woodall, serves. Let's review the most important deadlines.

First, the President must submit his budget to Congress by the first Monday in February. The truth: this year, the administration released what they called a skinny budget on March 16 and didn't release the full budget until May 23. From our reckoning, that is 4 months late.

Second, the Congress must complete action on the budget by April 15. The truth: this year, Republicans weren't able to get the fiscal year 2018 budget through Congress until October 26, over 6 months late and nearly a month into the new fiscal year.

Now, here is another deadline, again available on the Republican Budget Committee's website. The Appropriations Committee is supposed to complete their work by June 10. The truth: this year, they didn't report out any appropriations bills until after that deadline had passed.

Another deadline: the House is supposed to complete action on annual appropriations bills by June 30. The truth: not only did the Republican majority fail to meet that deadline, they weren't able to pass any of them separately at all. Instead, they lumped four bills together and passed them on July 27 and then passed an Omnibus with all 12 bills together on September 14, leaving 2 weeks only for the House and Senate to work out their differences, but the law said that they should have 3 months to do it.

I wouldn't bring this up except I know Mr. Woodall believes, with all his heart, that what he is saying is right, because we have heard it before.

That leads me to the final deadline that they missed. Fiscal year 2018 began October 1, but here we are more than two months later on December 7. The Republican majority has still failed to fund the government, because they have been too busy working to kill the Affordable Care Act and to give big tax breaks to corporations and billionaires.

On time, Mr. Speaker? Any school child could tell you that you don't get credit for an assignment that is 2 months late.

Mr. Speaker, I include in the Record the timetable of the budget process from the website of the House Budget Committee majority.

Time Table of the Budget Process

Title III of the Congressional Budget Act establishes a

specific timetable for the congressional budget process.

On or Before, Action to be completed:

First Monday in February, President submits his budget;

February 15, Congressional Budget Office submits report to

Budget Committees; Not later than 6 weeks after the President

submits the budget, Committees

submit views and estimates to Budget Committees. (Frequently,

the House Budget Committee sets own date based on Legislative

Calendar); April 1, Senate Budget Committee reports

concurrent resolution on the budget; April 15, Congress

completes action on the concurrent resolution on the budget.

(This is not signed by the President)*; May 15, Annual

appropriation bills may be considered in House; June 10,

House Appropriations Committee reports last annual

appropriation bill; June 15, Congress completes action on

reconciliation legislation. (If required by the budget

resolution); June 30, House completes action on annual

appropriation bills; October 1, Fiscal year begins.

Mr. Speaker, the majority has put before us today a 2- week continuing resolution to fund the government through December 22.

I have heard some in the majority question why anyone would take issue with this approach, but, Mr. Speaker, the question that should be asked is this one: What is the majority actually willing to get done over the next 2 weeks? Because it has now been more than 2 months since some vital national priorities have lapsed under their leadership.

The Children's Health Insurance Program, which provides healthcare to more than 9 million children across this Nation, expired on September 30. So did the community health centers, which serve more than 25 million people. Now, this expiration has put 2,800 centers in danger of closure and 9 million people at risk for losing their access to their healthcare.

The Perkins Loan Program, which many low-income students rely on for their education, was allowed to expire by the majority with no reauthorization in sight, despite broad bipartisan support for a bill to do just that. Unfortunately, the majority has been unwilling even to bring it up for a vote.

Are they now ready to take meaningful action to protect our children, our students, our public health, and our Nation?

Democrats haven't just been fighting to reauthorize programs that expired 2 months ago, we are also trying to address the priorities that we know our Nation will face in the weeks ahead. That includes passing hurricane relief funding to help the families that are still recovering from this horrendous hurricane season; and as all of us are fearful of and sad about, California is burning once again; reauthorizing section 702 of the Foreign Intelligence Surveillance Act, which we depend on, which is due to expire at the end of this month. The FISA court helps to keep our country safe.

Mr. Speaker, if past is prologue, this majority will be missing in action 2 weeks from now, just as they have been for months.

Just consider, for a moment, how they have squandered this year, wasting months on fruitless attempts to repeal the Affordable Care Act until persuaded by their constituents that they did not want that done. It remains the law of the land today after the public overwhelmingly demanded the majority stop that crusade.

Now they are trying to pass a tax cut for the wealthy that, if enacted, would represent one of the largest transfers of wealth from working families to the wealthy that our Nation has ever seen.

I want everybody to please pay attention to this, because it is proof positive of what is happening with this majority. According to the Joint Committee on Taxation and the Congressional Budget Office, under the majority's plan, those making $40,000 to $50,000 would pay an additional $5.3 billion in taxes combined over the next decade. Now, remember, they are going to pay more into the number of $5.3 billion.

At the same time--attention, America--those earning $1 million or more would see a $5.8 billion cut. Have you ever seen anything as cut and dry? They absolutely want to take from the poor to give to the rich--Robin Hood in reverse.

So we are 2 months into the fiscal year, and the majority has been so preoccupied with the special interest agenda, that we haven't passed full year appropriations. This has robbed the Federal agencies and our economy of the certainty that they need.

The majority holds the House, the Senate, and the White House and still can't get anything done. So when Democrats see a continuing resolution for 2 weeks, we don't see a simple extension of the status quo; we see it for what it really is: kicking the can down the road in order to pursue reckless partisan politics, and it comes without any plan to tackle the major issues that face our Nation today.

Let me remind my colleagues how important it has been for both parties to work together, because in this process, both the CR and the tax bill, there are no Democrat fingerprints on any of it. For a lot of this stuff, there has even been no committee action.

Democrats have helped the majority pass every major funding bill since they assumed control in 2011. That is the result of bipartisanship.

This time, the majority decided not to compromise with us to reach a deal. Let's see if they can cobble together the votes to get this proposal over the finish line.

Even if it passes, we will be back here later this month to consider another short-term continuing resolution, and we still have no idea whether this bill, the one we are working on today, could even pass the Senate.

This is no way to run the United States of America. The lives of our countrymen are hanging in the balance.

All we do under this majority is to lurch from one self-inflicted crisis to the next. Our constituents deserve much better than this.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 5 minutes to the gentleman from Michigan (Mr. Kildee).

Mr. Speaker, I yield 2 minutes to the gentlewoman from California (Ms. Lee).

Mr. Speaker, I yield an additional 2 minutes to the gentlewoman.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, the gentleman from Georgia said they need the Democrats. He must be aware that they only need us when the votes come.

There is not a Democrat fingerprint on that tax bill. We had nothing to say about any of it. And while we begged almost on our hands and knees to be a part of what they are doing, we are not. It always sounds good when we hear it on the floor: Bipartisan. Oh, look, we want to work together.

But then, oftentimes, as you know, Mr. Speaker, bills come to the Rules Committee with no committee action whatsoever and no possible description to be bipartisan.

Mr. Speaker, for years we have endured relentless Republican attacks on the Affordable Care Act, including just last week in the Senate's disastrous tax bill. By repealing the individual mandate, the Senate bill has knocked 13 million people from their health insurance.

I must have asked 20 times when they were doing those 60 times to try to repeal and replace the Affordable Care Act: Why do you want to take healthcare away from people?

I have never, to this day, gotten an answer as to why it is they so despise a healthcare bill that is working and has literally insured more Americans than have ever been insured before.

Then suddenly, just on a whim, one party decides--the one that has been fighting to kill it over and over again--that they will come at it piecemeal and just try to render it helpless by taking away the ability to even say it is time to go sign up again.

I am sure they thought they would do grievous harm, but it didn't work that way, and millions of people came out to sign up again because healthcare is one of the most critical needs for any American family.

To make matters worse, the bill also repeals most of the State and local tax deductions, and that is a deduction that helps middle class families in my State of New York.

New York, on average, gives back to the Federal Government of the United States $40 billion; money that we send to Washington and get nothing back for it, the way we are rewarded for that. I think that probably will not be happening anymore since the taxes are going to go up so much higher on the people of my State, unless they do away with what is absolutely one of the most atrocious things I have ever seen them do.

Mr. Speaker, it is evident that the tax bill was not designed to help middle class families put food on their table, but, instead, it gives corporation tax cuts to line the pockets of their shareholders.

I have yet to read or see the Senate tax bill, but I understand there are gifts in there for people who own jet planes. I don't represent any of those.

But taking care, again, of the rich, as demonstrated in the figures that supported my speech a while ago, that just

short of $6 billion, that goes from the poor people who make under $40,000 to the rich people, the same office, the same amount of money, dollar for dollar, and absolutely proves what we are saying.

But you don't need to hear from it me. Don't take my word for it. Republican Congressman Mark Sanford recently said in a moment of great candor: ``From a truth-in-advertising standpoint, it would have been a lot simpler if we just acknowledged reality on this bill, which is it's fundamentally a corporate tax reduction and restructuring bill, period.''

There is no tiny scintilla of reform in this bill. It is simply, as he points out, a way to lower the corporate tax and take care of the extraordinarily wealthy in this country who don't need it.

Mr. Speaker, I wish we could provide health for middle class families, which is what I believe the President of the United States thinks he did. I hear him say all the time that there is nothing in there to benefit him--except, probably, the estate tax, which we understand would save him about $1 billion.

So, if we defeat the previous question, I will offer an amendment that will prohibit any legislation being considered on the floor that limits or repeals the State and local tax deduction or repeals the ACA individual mandate.

Mr. Speaker, I ask unanimous consent to insert the text of my amendment in the Record, along with extraneous material, immediately prior to the vote on the previous question.

Mr. Speaker, let me take a moment and remind everyone watching of the impacts of the majority's last shutdown in 2013. The impacts on our economy were significant. We lost $24 billion in just those 2 weeks. The impacts on our economy, as I said, were very significant:

Federal loans to small businesses, homeowners, and families were brought to a halt.

Banks and other lenders were unable to access government verification services, which delayed private sector lending to small businesses and individuals alike.

Federal permitting was brought to a standstill, which delayed job- creating projects in the transportation and energy sectors.

Experts have estimated that all told, this 16-day shutdown cost our economy an estimated $24 billion.

So, during this shutdown, again, vital services were put on hold.

At the National Institutes of Health, hundreds of patients were unable to enroll in possibly lifesaving clinical trials.

Federal agencies like the Food and Drug Administration and the Environmental Protection Agency were unable to conduct health and safety inspections.

Federal scientific research was also halted, and we lost a lot of scientists in this country because of all that. Five Nobel Prize winning scientists who worked for the Federal Government at the time of the shutdown, four of the five of them were laid off.

This is all according to a report issued by the Office of Management and Budget.

The public knows how devastating another shutdown could be. According to a poll conducted by Morning Consult and Politico released this week, there is bipartisan opposition, with 68 percent of Democrats, 62 percent of Republicans, and 61 percent of Independents all opposing a government shutdown.

I forgot to mention up there about Social Security checks and things for the Veterans Administration. They came to a halt.

So that is what makes this so frustrating. I agree with Mr. Woodall. This is a frustrating part of what we are trying to do here. Every day it seems we get up and we face some kind of new disaster.

We could have crafted a bipartisan bill--we sure could have--that would have removed any question of whether a continuing resolution would pass the House and Senate.

We could have reauthorized the Children's Health Insurance Program, community health centers, Perkins loans, and more months ago, if only the majority were willing to work with Democrats. Instead, bipartisanship is all too often becoming a dirty word under the majority. I sadly say: It is the American people left to pay the price.

So I urge a ``no'' vote on the previous question, the rule, and the bill, and I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, while government isn't meant to create jobs, with the help of the President, Congress can set Federal policies that establish a pro-worker, pro-business environment that lifts people out of poverty, helps families, and drives our country forward.

One problem today that is impeding job growth is access to capital for small businesses. American businessmen and -women are often unable to get the loans they need to start a new enterprise or to grow an existing one.

Additionally, if a firm would like to publicly sell stock to raise money, it must register with the Securities and Exchange Commission, which costs $2.5 million, on average; an amount most small businesses simply cannot afford.

Small and emerging businesses are a key to the economic engine in America. The Small Business Administration found that these businesses create over half of the new jobs on an annual basis in this country. More importantly, today's small businesses are tomorrow's success story.

Just think of all the great businesses in this country that started with a dream in a garage: Amazon, Apple, Microsoft, Disney, Harley- Davidson, and Minnesota's own Medtronic. We want to empower the entrepreneurs in this country to dream, innovate, and create jobs that grow our economy.

That is why I introduced the Micro Offering Safe Harbor Act. This bill will make it easier for entrepreneurs and

small businesses to raise money from family, friends, and their personal network without running afoul of the vague and undefined ``private offering'' safe harbor provisions in the Securities Act of 1933.

Thus, the Micro Offering Safe Harbor Act helps bring clarity to existing law so that our current and future job creators can easily raise capital within the confines of an easy-to-understand provision without the help of an expert.

This legislation requires three specific criteria to be met simultaneously in order to trigger a safe harbor exemption for a security offering instead of just one or more. These criteria ensure that: one, each purchaser has a substantive preexisting relationship with an owner; two, there are no more than 35 purchasers of securities from the issuer that are sold in reliance on the exemption during the 12 months proceeding; and, three, the aggregate amount of all securities sold by the issuers does not exceed $500,000 during the 12- month period preceding the offering. The bill also exempts any of the aforementioned security offerings from blue-sky laws, while maintaining antifraud provisions at the Federal and State level.

These provisions protect Americans from criminals trying to swindle them out of their hard-earned money, while making capital more accessible to businesses by investors from around the country.

In fact, I will be offering an amendment to enhance these antifraud provisions. This amendment, which incorporates the suggestions made by my colleagues on the other side of the aisle during a legislative hearing in the last Congress, will ensure that individuals who have been disqualified under the ``bad actor'' disqualification standard, as is listed under current law, are prohibited from using the exemption provided under H.R. 2201, establishing yet an additional layer of investor protection.

Entrepreneurs and small-business owners need access to capital in order to achieve the American Dream. Although small businesses accounted for 99.7 percent of all the businesses in the United States last year, only half of them will survive longer than 5 years, according to our Bureau of Labor Statistics.

Lack of capital or difficulty accessing capital is one of the main causes of failure for many of these small businesses. A 2015 survey conducted by BlueVine found that 75 percent of small and emerging businessowners reported their primary source of funding comes from their own personal finances, followed by banks at 16 percent and family and friends at 6 percent.

While banks and credit unions do their best to offer the funding these businesses need to grow and thrive, there are still 3 million fewer small business loans made annually, today, than there were before the 2008 financial crisis. H.R. 2201 seeks to build off the success of the Jumpstart Our Business Startups Act of 2012, better known as the JOBS Act, and will continue to spur capital formation for the true job creators and drivers of our country's economy.

The Micro Offering Safe Harbor Act helps small and emerging companies add another tool to the toolkit, enabling them to confidently find alternative ways of raising these funds without having to pay for costly securities experts and without the fear of lawsuits if they operate within these easy-to-understand parameters.

That is why the Micro Offering Safe Harbor Act is endorsed by the National Small Business Association; the Small Business & Entrepreneurship Council; the National Federation of Independent Business; the Chamber of Commerce; Heritage Action; and Engine, ``The Voice of Startups in Government.''

The House approved an identical version of this legislation during the 114th Congress as part of the Accelerating Access to Capital Act, and language similar to H.R. 2201 was included in the Financial CHOICE Act, which was adopted by this Chamber in June.

Mr. Speaker, the time has come for Congress to come together and help small businesses help themselves by making this important update and improvement to the Securities Act of 1933.

I want to thank Chairman Hensarling; Capital Markets, Securities, and Investment Subcommittee Chairman Huizenga; and all of the staff on the Financial Services Committee for their hard work on this legislation.

Mr. Speaker, I urge my colleagues to support this legislation and hope that both parties will use H.R. 2201 as a way to show their support for more opportunities and better lives for our job creators.

Mr. Speaker, I include in the Record letters from the National Small Business Association, the Small Business & Entrepreneurship Council, the United States Chamber of Commerce, Heritage Action for America, and Engine.

National Small Business Association.

Hon. Tom Emmer,

House of Representatives,

Washington, DC.

Dear Representative Emmer: On behalf of the National Small

Business Association (NSBA), the nation's first small-

business advocacy organization, with more than 65,000 small-

business members representing every state and every industry

across the country, I commend your leadership for introducing

the Micro Offering Safe Harbor Act (H.R. 2201) as it will

have an immediate and direct impact on small businesses

looking to raise capital. NSBA has long supported the kind of

simplification this legislation would bring for small

businesses.

Capital is the lifeblood of any small business, and often

small-business owners need capital at various stages; some at

their startup and others later when they are looking to

expand. Despite this ongoing need, small-business lending

from banks has decreased over the last decade and many small

businesses have few options for obtaining capital. According

to NSBA's 2016 Year-End Economic Report, small-business

access to capital remains stubbornly unchanged since the

previous year, with just 69 percent of small firms reporting

they are able to get adequate financing. This drop has real-

world implications: 41 percent said lack of capital is

hindering their ability to grow their business or expand

operations, and 20 percent said they had to reduce the number

of employees as a result of tight credit.

Therefore, raising capital though securities is an

attractive alternative option for many small-business owners.

However, the current regulatory requirements are quite

onerous for small businesses, often requiring expensive

specialized counsel for even very small securities offerings.

NSBA supports this targeted legislation that creates a safe

harbor for small securities offerings which meet requirements

clearly identified in the legislation. Under the legislation,

these exemptions include offerings in which each purchaser

has a substantive pre-existing relationship with the owners,

where the issuer has less than 35 purchasers utilizing the

exemption in the preceding 12 month period, or where the

total amount raised during the preceding 12 month period is

less than $500,000. By creating three safe harbor exemptions

for ``non-public offerings,'' businesses can operate with

clarity and a clear conscience knowing that they would be

exempted from registering with the Securities and Exchange

Commission (SEC). Additionally, the legislation also exempts

transactions meeting the specified requirements from state

registration requirements, commonly referred to as ``blue sky

laws.''

Raising capital for small businesses from friends and

family already takes place on a regular basis, except those

transactions often lack the legal protections and structure

of securities law. In addition to expanding access to capital

for small businesses, this legislation will bring those

transactions under a recognized legal framework, and make

resolving disputes that arise much more efficient. Finally,

bringing these existing transactions under an existing legal

framework will provide a sound legal basis for subsequent

larger offerings requiring registration with the SEC.

Access to capital continues to be one of the most pressing

issues facing the small-business community. All small

businesses need an injection of capital at one point or

another, unfortunately in the past several years it has

become difficult for small businesses to get the funds they

need to grow and expand. NSBA is pleased to support the Micro

Offering Safe Harbor Act as it will help small businesses

around the country expand and create new jobs in their

communities.

Sincerely,

Todd McCracken,

President & CEO.

Mr. Speaker, I have an amendment at the desk.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, the amendment I am offering today will enhance antifraud and consumer protections for small businesses and startups seeking to take advantage of the micro offering exemption outlined in the underlying bill.

While the legislation itself requires three specific criteria to be met simultaneously in order to trigger a safe harbor exemption for a security offering, my amendment adds an additional layer of protection to further safeguard investors from bad actors.

Specifically, my amendment prohibits the exemption from being available for those who have been disqualified under the bad actor disqualification standard established by the SEC. This language was included with the support of my colleagues from both sides of the aisle during consideration in committee in the 114th Congress, and I am hopeful they will support its inclusion again in the 115th.

I want to reiterate that nothing in the base text of this bill erodes or limits the ability of Federal or State regulators to prosecute fraud, nor would it prevent private common law causes of action for fraud or breach of contract between the interested parties.

This amendment builds upon these existing protections and drives home the point that the Micro Offering Safe Harbor Act is purely focused on helping our small businesses and entrepreneurs access the tools they need to grow and create jobs in an orderly and legal manner.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I will close at this point.

Mr. Speaker, I want to thank the ranking member for her encouragement and her compliments, and I want to just point out that the Micro Offering Safe Harbor Act was actually improved as a direct result of the ranking member's suggestions.

So, again, I want to thank her for her compliments here today, her encouragement in helping us make this an even better bill for entrepreneurs and small businesses across the country. At this point, I would encourage support for the amendment.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, pursuant to House Resolution 609, I call up the bill (H.R. 2201) to amend the Securities Act of 1933 to exempt certain micro-offerings from the registration requirements of such Act, and for other purposes, and ask for its immediate consideration in the House.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, we know that, unfortunately, after 8 years of bad economic policies from the Obama administration, working people did not receive a pay increase. We know that we had one of the lowest labor participation rates in modern history. We know that the economy was limping along at 1\1/2\ to 2 percent economic growth.

But, fortunately, Mr. Speaker, a new day has dawned and now, all of a sudden, we see that, with the policies of Republicans in Congress, with the policies of the Trump administration, we are seeing promising signs. What we are seeing all of a sudden now is 2 quarters, Mr. Speaker, of 3-plus percent economic growth. This means a difference to working families. They are finally seeing increases in their paychecks, increases in their take-home pay.

That is why one of the most exciting policies that are being worked upon today that we hope to see soon is fundamental, pro-growth tax reform for the entire American economy; one that would grow our economy and that makes a Tax Code fairer, flatter, simpler, more competitive; one that would lower rates for families and allow 90 percent of Americans to fill out their forms on something akin to a postcard; something that would help our small businesses and entrepreneurs.

I look forward, Mr. Speaker, to having that legislation on the floor soon. But we have legislation today that is also important to our small businesses and our entrepreneurs, H.R. 2201, by the gentleman from Minnesota.

What is so important about this legislation, Mr. Speaker, is that it would allow our entrepreneurs and our small businesses to more effectively be able to reach out to family and friends to get the needed capital to start their businesses.

A 2014 survey by the Kauffman Foundation found out that over 28 percent of startups raise their funding from their personal network. Mr. Speaker, we have a challenge, and that is the Securities Act does not clearly define what is a public offering or, conversely, a nonpublic offering. So this makes it very difficult for our early-stage entrepreneurial growth companies to go out and do any kind of private placement to raise funds from friends and family.

Now, we know that a private placement is already something that is established in law. But what isn't established is a bright line, safe harbor for these business enterprises to go out and raise these funds.

So what we also know, unfortunately, from our Securities and Exchange Commission is that a registered offering is simply not economically

feasible for a small business, an entrepreneur, an issuer who is seeking to raise less than $1 million.

So too often, Mr. Speaker, we have a number of these enterprises that, frankly, just never get jump-started because they don't have the opportunity for a private offering. That is why it is so important.

I want to thank the gentleman from Minnesota (Mr. Emmer) for his leadership in bringing this legislation to the House floor today.

So it is a simple piece of legislation. Again, it simply allows a bright line, safe harbor for very small offerings. It requires that each purchaser has a substantive preexisting relationship with an officer, director, or shareholder of the issuer.

The issuer must reasonably believe that there are no more than 35 purchasers of the securities, and the aggregate amount of all securities sold by the issuer cannot exceed $500,000 in a 12-month period.

So, Mr. Speaker, we are talking about a very small portion of startups, but a very vitally important section of our startups that need capital.

Mr. Speaker, a few decades ago there was a company where a gentleman borrowed money from his father to import Japanese sports shoes, and he purchased 200 pairs of these Japanese sports shoes. He started a business called Blue Ribbon Sports, and today we know it as Nike.

A few decades ago there was an investor out in Omaha, Nebraska, who borrowed money from seven friends and family members, including his sister Doris and Aunt Alice. Over the next 9 years, this initial investment grew, and this gentleman purchased something called Berkshire Hathaway, the textile company that has now led to the Berkshire Hathaway empire.

In 1994, there was a gentleman who took a loan from his parents, moved to a two-bedroom, small apartment, and launched a company called Amazon.

We want to make sure that the next Berkshire Hathaway, the next Amazon get launched, and that is why it is so critical we enact H.R. 2201.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and submit extraneous material on the bill under consideration.

Mr. Speaker, I yield 5 minutes to the gentleman from Minnesota (Mr. Emmer), the sponsor of the legislation and an outstanding member of the Financial Services Committee.

Mr. Speaker, I yield an additional 30 seconds to the gentleman from Minnesota.

Mr. Speaker, I yield myself 30 seconds, just to say, as I listen to the gentleman from Rhode Island and the ranking member, their comments are very interesting, but everything they described is already illegal. Their remarks acknowledge that the SEC can and does bring actions to enforce the securities laws and shut down fraud when they discover the fraud.

Nothing in H.R. 2201 eliminates the DOJ's ability to pursue criminal prosecutions or fraud. Nothing in it impacts the SEC's ability to pursue civil actions against issuers who engage in fraud under section 17(a) of the Securities Act of 1933. It is just a red herring. It is one of the reasons we have had such poor economic growth under the Democratic regime.

Mr. Speaker, I yield 3 minutes to the gentleman from Missouri (Mr. Luetkemeyer), chairman of the Financial Institutions and Consumer Credit Subcommittee of our committee.

Mr. Speaker, number one, I was very pleased to hear one of the most compelling indictments of 8 years of the Obama administration I have ever heard on the House floor, and I thank the ranking member for it.

Mr. Speaker, I yield 3 minutes to the gentleman from Pennsylvania (Mr. Rothfus), who is the vice chairman of the Financial Institutions and Consumer Credit Subcommittee.

Mr. Speaker, I yield 3 minutes to the gentleman from Colorado (Mr. Tipton), who is the vice chairman of the Oversight and Investigations Subcommittee.

Mr. Speaker, I yield myself 10 seconds just to say I heard the word ``protection'' often used by my friend, the ranking member, but she and her friends on the other side of the aisle had 10 years to protect paychecks, protect savings, and protect economic opportunity and the American Dream, and they failed miserably.

Mr. Speaker, I yield 2 minutes to the gentleman from Ohio (Mr. Davidson), a member of the Financial Services Committee.

Mr. Speaker, I yield 2 minutes to the gentleman from Indiana (Mr. Hollingsworth), another member of the Financial Services Committee.

Mr. Speaker, I yield 2 minutes to the gentleman from South Carolina (Mr. Norman), he is not a member of the Financial Services Committee, but we would be proud if he were.

Mr. Speaker, I yield 1 minute to the gentleman from Wisconsin (Mr. Duffy), the chairman of the Housing and Insurance Subcommittee.

Mr. Speaker, I yield an additional 30 seconds to the gentleman from Wisconsin.

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, as always, I listen very carefully to my friend, the ranking member. I know that she started off her closing remarks by saying: We don't need this bill, H.R. 2201, because the big banks can loan to the small businesses.

Well, that is fascinating to me, Mr. Speaker, because of the Dodd- Frank Act, which she so jealously supports, all of a sudden, the risk- based capital standards say that the banks have to reserve more for small business loans than they do for sovereign debt and municipal debt.

So all of a sudden, it is because of Dodd-Frank. In addition, we know that the ranking member supports the Federal Reserve policy of paying interest on excess reserves where the Federal Reserve takes taxpayer money to pay the big banks not to loan money. So if the ranking member was curious why the big banks aren't loaning to the small businesses, which they aren't--and prior to the Trump administration, we know that small business lending by banks was at a 25-year low--it is the very reason, Mr. Speaker, that we need the bill, the legislation of the gentleman from Minnesota (Mr. Emmer) so that we can unlock this.

Again, there is no surprise why, after 8 years of Obamanomics and the thinking from my friends on the other side of the aisle, small businesses have languished and why the economy has dropped down to a 1\1/2\ to 2 percent GDP growth. In fact, I think President Obama is one of the few Presidents in American history never to enjoy a year of 3 percent economic growth.

Now, he may personally have enjoyed it, but the American people didn't, Mr. Speaker. But the good news is that there is a change in administration and a change of attitude. That is why it is so important that we be able to get capital to our entrepreneurs, to our small businesses. Let them thrive again on Main Street.

We hear so often the ranking member decry Wall Street. We are talking about offerings of a half a million dollars. No on in Wall Street would touch that with a 10-foot pole. This is about Main Street, not Wall Street, Mr. Speaker.

It is interesting, as I listen to my friend, the ranking member, decry the fact that someone might be able to raise capital under this particular set of circumstances. Well, I have a news flash for all my colleagues. Already the SEC can grant a private offering for exactly the set of circumstances that my friend, the gentleman from Minnesota, puts into his bill. All the gentleman is doing is creating a bright line, safe harbor, so that the next Nike or the next Amazon isn't stopped from launching their enterprise by having to spend a million dollars on lawyers and accountants trying to navigate this uncertain murky labyrinth of SEC waters trying to determine what is a private offering and what is a public offering. That is all he is doing.

Again, this is already legal. It simply is discretionary to decide what is a private offering and what is a public offering by the Securities and Exchange Commission.

We now, Mr. Speaker, have had two quarters of 3-plus percent economic growth. We are seeing working Americans. We are seeing their paychecks increase yet again. We are seeing hope and resilience in the American Dream yet again, but we have so much more work to do, and that is why H.R. 2201 is so critical.

It takes small businesses today to be the big businesses of tomorrow. They are the creators. They are the job engine of America. They are the drivers of increased paychecks, greater economic opportunity, and a bigger, bolder American Dream. I thank the gentleman from Minnesota for this great legislation. I encourage all of my colleagues to adopt it.

Mr. Speaker, I yield back the balance of my time.