HALOS Act

Mr. Speaker, I yield myself such time as I may consume. I thank the gentleman from Georgia for the customary 30 minutes.

We will get to the content of the bills in a moment, but there is a procedural issue here that disenfranchises millions of American citizens in this process.

We are in the 115th Congress since the founding of this country. We were just sworn in last week to begin that. There are 56 new Members who just started serving last week that have never served in this body before, and there were 56 people that served in the last session who are no longer with us. What we are doing here is we are taking bills that those former Representatives worked on and new Representatives have not worked on and advancing them to the floor without going through committee, without going through the regular order.

So, for example, you have two bills, H.R. 5 and H.R. 79. We will talk about them in a moment. These are Committee on Financial Services bills. They should have gone to that committee, and members of that committee, Democratic and Republican, would have had the chance to amend those bills in that committee and mark it up before it comes to the floor. That is the normal process. Both parties are now constituting those committees; we are putting people on them.

I heard you, Mr. Speaker, read just before we began this debate how a number of Members were officially appointed to those committees. That is what we do in our first week or two.

Fifty-six new Members should have a say on these bills. They will get a vote on the floor on these bills, but they were completely excluded from the committee process that wrote these bills. That is wrong, Mr. Speaker, to not allow 56 new Members of this body to be the lawmakers that the people of their districts elected them to do. In fact, it disenfranchises the tens of millions of people collectively that those 56 Members represent. And I hope that, for future legislation, we can move through regular order and allow the new Members, as well as those who are returning, to be part of the lawmaking process.

With regards to these bills, we have largely seen these bills in prior sessions that people who are no longer in this body worked on.

The HALOS Act, I was proud to support last session and I am proud to support again. It addresses a potentially real problem. There is guidance from the SEC that--in our Rules Committee meeting yesterday I questioned the subcommittee chair--largely also addresses those concerns, but it is better to do it in statute and it is better to do it in the broader language that is included in the bill, which is why many Democrats--I hope a majority--support the HALOS Act.

The United States is the leader in innovation in the global economy, and this is a small piece of that. What we are talking about here are demo days where entrepreneurs can pitch their idea. I, personally, have been able to attend a number of those, and it is a question of who can be in the room when that occurs.

Should it only be millionaires who are allowed in that room? Or can it be the next great generation of entrepreneurs? Can it be students? Can it be aspiring entrepreneurs? Can it be community members who want to learn what it means to pitch and how to do it and how ideas are spread, or maybe they are looking for a job?

It doesn't change who can invest in those startup companies. They still have to be qualified investors. By the way, I hope we have the opportunity to work with Republicans on the definition of ``qualified investor'' because I think it is unfair to restrict investment opportunities to multimillionaires. We need to allow educated and qualified investors of all levels.

Just because somebody is rich doesn't mean that they are a good investor, and just because somebody has not yet earned a lot of money doesn't mean that they can't be trusted to invest $10,000 or $50,000 of their own money.

We made progress in the original JOBS Act with the result of crowdfunded investing, but that is only a small piece--almost an insignificant piece. Private placements are the much larger piece of capital formation for venture-stage startups in our country. If there is a way we can have an alternative to the net worth test that allows individuals to, perhaps, take a qualitative test of their knowledge and, therefore, qualify as an investor, they ought to be able to do that, too.

This bill does not do any of that. That is a controversial area. It is one that it will take Democrats and Republicans working together on to help fund tomorrow's great companies and allow opportunity for all people, not just millionaires and billionaires.

What this bill does is it continues to restrict the actual investors to the millionaires. Okay? But it allows other people in the room at least. That is a start. It allows an MBA student who him- or herself wants to, perhaps, come up with their own company to hear 10 or 20 companies pitch so they can assemble their own deck; somebody who might have a great amount of value to give as a mentor who themselves is a veteran of a number of companies. Maybe they are not quite worth a couple of million dollars. Maybe they are worth only--only, right?-- $500,000. Maybe they were a reasonably successful person worth $500,000, but they have a lot of knowledge to give.

Without the HALOS Act, it would be unclear whether that person would even be allowed in that room. So we want to make sure that mentors, up and coming, young entrepreneurs, and, frankly, up-and-coming entrepreneurs of all ages have access to the knowledge and the learning that can occur in these pitch events.

Congress has a role in making sure we have laws in place that really help build an environment that promotes innovation. When we passed the JOBS Act in 2012 that allowed for crowdfunding, Congress took a step forward. We have room to go there, room to go with private placements.

The HALOS Act is a small step, but it is a good one and a noncontroversial one. It creates a clear path for startups to participate in demo days, sponsored by government entities, nonprofits, angel investment groups, et cetera, and

a clear safe harbor from the SEC with regard to the definition of general solicitation to make it clear that business experts and others can be in the room, while maintaining that only existing accredited investors can actually participate in offerings under Regulation D for the purchases or sale of securities that are mentioned in those demonstrations.

Currently, sponsors of demo days are relying on the 12-year-old, no- action letter by the SEC to make sure that they don't face the consequences of failing to comply. The guidelines outlined by the SEC's no-action letter are actually incorporated into the HALOS Act. So, in many ways, this clarifies and puts in statute something that has been at the whim of the SEC for too long.

The gentleman from Georgia (Mr. Collins) and others will join me in talking about the importance of angel investors for early stage capital to create jobs, to allow tomorrow's great entrepreneur who might not have any resources of their own today to raise the resources they need to hire people and succeed.

The Center for Venture Research estimates that U.S. angel investors invested $24.6 billion in about 71,000 small businesses in every area, every congressional district of our country. Many of those were startups in the early stages of building a company.

Tomorrow's company that employs 10,000 or even 50,000 people is today's garage startup trying to figure out how to get $50,000 or raise $100,000 to make their payroll or buy their inventory.

Angel investors focus their investment on local startups and much more so than, for instance, national venture capital firms that tend to be clustered at the coast. It is an important way we can continue to grow the economy in every ZIP code in this country, across the heartland and the middle of the country, not just the coasts where the venture capital firms themselves are situated.

The Colorado-based digital home design firm, Havenly, started by two sisters, utilized demo days as networking opportunities to perfect their pitch to investors, a very common path. After participating in a 500-startup demo day, the pair received nearly $13 million in investment capital from qualified investors. Now Havenly is a thriving business, employs hundreds of interior designers across the country, and I am proud to say it has a staff of 40 people in their Colorado headquarters. Havenly is a perfect example of how demo days provide opportunities to startups that create real jobs for real people in our country.

The HALOS Act simply gives the same opportunities to other startups that thousands of others have had when getting off the ground.

I believe the HALOS Act is the appropriate approach to regulatory relief. I appreciate the bipartisan nature of the legislation. It is targeted to provide clarity around a specific potential problem and certainty around what these events can entail.

Now, there is another bill under this rule as well. It is a bad bill. It is not a strong bipartisan bill. It is called H.R. 79. Since we began the 115th Congress here, the Republicans are promoting a deregulation agenda. Often this agenda results in this body, Congress, potentially being buried in having to do inordinate amounts of work to review the executive branch of government.

Now, we all believe in oversight of the executive branch. Believe me, Mr. Speaker, you are going to hear many Democrats speaking up about how important oversight of the executive branch is, particularly for the incoming administration.

We are not the executive branch. Congress delegates authority to agencies, under the laws we write, to fill in gaps and decide how best to implement the law. If we disagree, we can always change or amend the authorizing statute to make more clear the intent of this body.

However, these bills being brought to the floor by the Republicans would either require Congress to spell out exactly what ways to implement a policy in a changing world or give the authority of how to interpret and implement law to the judicial system, neither of which are wise or expedient choices regardless of who occupies the Presidency.

While I certainly will have more sympathy with this approach with President Trump in the White House than President Obama in the White House, I still believe this is the wrong way to go about the separation of powers under our Constitution.

This bill sets out 60 new analytical requirements that agency actions must meet before they can be implemented. In other words, any attempt by agencies to protect the public from toxic substances, make sure our planes and trains are meeting safety regulations, or make sure our food is toxin free would be subject to 60 new bureaucratic hurdles, effectively creating more and more red tape to tie the bureaucracy up rather than make their work quicker and more efficient, which is what Democrats seek to do.

This bill would bury the agency rulemaking process under a blizzard of bureaucratic hurdles and documentation requirements, literally burying the executive and administrative branch of government in red tape and paperwork. This bill would hold the regulatory process hostage to the whims of the very corporations and bureaucrats whose rulemaking it is designed to address.

The process that the bills call for have been roundly discredited by so many experts on regulatory policy from the left and the right and consumer advocates as well. The administrative law and regulatory practices section of the American Bar Association stated that these burdens would reduce transparency, reduce public input, threaten public safety, and, most importantly, not result in any better rules.

This bill is nothing other than a recycled effort that 56 Members of this body have not had a chance to participate in writing through the committee process to slow down the government and get in the way of agency rulemakings that are critical for protecting public health, safety, and our environment.

We are simply failing our constituents that we are elected to serve by spending time on legislation that would deliberately sabotage our own ability for our government to function efficiently. This is a bill that would make government less efficient. That is not what I hear when I am back home from my constituents--Democrat, Republican, Independent. I don't hear: Go to Washington to make government less efficient. My constituents want government to be more efficient.

Finally, this bill is being considered under a structured rule limiting the amendment process. There were over 30 amendments filed. Yet, we are only considering 16 amendments under this very overly restrictive rule. This is particularly onerous because, again, there was no opportunity for the 56 new Members through the committee process to amend this bill.

There was a new Member that appeared before the Rules Committee yesterday. Unfortunately, he was not even allowed to advance his amendment to the floor under this rule.

Another example is an amendment offered by a new Member, Ms. Blunt Rochester, who filed an amendment that would ensure that LGBT employees are protected from workplace discrimination. It would allow Federal agencies that are tasked with protecting the civil rights of employees to continue to do their work without being hamstrung with unnecessary requirements.

Civil rights protections do not fit neatly into a corporate monetary analysis, and our government has a responsibility to ensure that all Americans are protected from arbitrary or unjust discrimination based on race, gender, sexual orientation, or gender identity.

Given the breadth and scope of this legislation, an open amendment process would have allowed this amendment to be debated if the majority wanted, perhaps even voted down, although I hope the majority would have approved it. It would have produced a more thoughtful piece of legislation. Yet, we are not even allowed to have that debate on the floor of the House, which is why this rule is wrong and why I stand in strong opposition to it.

We should be considering legislation to create permanent, high-paying jobs, investing in infrastructure to grow our communities, fixing our broken immigration system, and streamlining and improving our tax system through tax reform rather than recycling old bills

that 56 Members have not even had the opportunity to put their imprint on.

I urge my colleagues to vote ``no'' on the rule for those very reasons.

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

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

Mr. Speaker, when we defeat the previous question, I will offer an amendment to the rule to bring up a bill that would establish a national commission to investigate foreign interference in the 2016 election.

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

Mr. Speaker, we have all been very concerned about the reports from our own intelligence agencies about foreign interference in the 2016 American elections.

I yield 4 minutes to the gentleman from Maryland (Mr. Cummings) to discuss our proposal, the ranking member of the Committee on Oversight and Government Reform.

I yield an additional 1 minute to the gentleman from Maryland.

Mr. Speaker, I yield 3 minutes to the gentlewoman from Texas (Ms. Jackson Lee), the distinguished ranking member of the Judiciary Subcommittee on Crime, Terrorism, Homeland Security, and Investigations.

I yield the gentlewoman an additional 30 seconds.

Mr. Speaker, I yield 4\1/2\ minutes to the gentleman from California (Mr. Swalwell).

Mr. Speaker, I am prepared to close if the gentleman from Georgia is.

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

Mr. Speaker, so, in summary, when we defeat the previous question, we will then bring forward our bill to establish an independent report on foreign interference in this most recent 2016 election, something that the American people deserve to see, that we need to see. We need to put safeguards in place to prevent our election system from being hijacked by foreign powers.

With regard to the rule, Mr. Speaker, it is a bad, closed rule, particularly given the chance that 56 new Members of Congress have not had the opportunity to add their imprint to the bills that are before us.

The gentleman mentioned, oh, the Democrats did this 10 years ago. Well,

that is hardly an excuse that the American people buy. There were many things about the Democrats' tenure in this body the American people didn't like; and to simply cite some of those less popular elements of Democratic leadership and now say: Well, now we Republicans are going to do earmarks; now we Republicans are going to have a closed process that doesn't allow amendment; now Republicans are going to gut the ethics rule.

In over 200 years, you can always cite some precedence for that from both Democrats and Republicans, but those aren't good things. We want to learn from our mistakes, I hope, and not say, just because some Democrat or some Republican did this in 1952, it is a good thing to do today.

Mr. Speaker, we are 6 days into the next Congress. After we defeat the rule, hopefully, and defeat the previous question, we can bring forward an independent study on foreign interference.

With regard to these two bills, I urge my colleagues to join me in voting ``yes'' on the HALOS Act and, of course, oppose the ridiculously broad H.R. 5, Regulatory Accountability Act, which would simply add more paperwork to the bureaucracy, further reducing the efficiency of a branch of government that many Americans believe is already too inefficient.

I urge my colleagues to vote ``no'' on the previous question and ``no'' on the rule.

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

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

Mr. Speaker, I demand a recorded vote.

I thank the chairman for his leadership.

Mr. Chairman, we all know that small businesses and entrepreneurs are what drive the American economy. We meet them in our districts and we see firsthand the benefits that their dreams and hard work provide to our constituents and to our communities.

These innovators, entrepreneurs, and risk-takers are really small- business people who are critical for our country's economic prosperity. Small businesses helped to create more than 60 percent of the Nation's net new jobs over the past two decades. So if our Nation is going to have an economy that provides opportunities for every American, then we must promote and encourage the success and growth of our small businesses and our startups.

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 up in red tape that was created, frankly, for the largest public companies, but those public companies have the financial means to hire lawyers and accountants and management consultants and all of those things that would then guide them through the sheer weight, volume, and complexity of the Federal securities laws.

Congress has made strides in tailoring the regulatory environment for smaller companies, most notably when we passed with strong bipartisan support the Jumpstart Our Business Startups, or JOBS Act, in 2012. 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.

One essential form of capital for many startups comes from angel investors--sophisticated, high net-worth individuals who invest their own money into startups and other early stage companies. Not many college students of whom I am aware would fit that definition of a sophisticated, high net-worth individual. In 2015, angel investors deployed over $24 billion to about 71,000 startups--many of these investments going to companies in their own communities and States. Beyond capital, angels provide advice and guidance to help these companies succeed and create jobs.

Mr. Chairman, I believe that it is important to note that companies such as Amazon, Costco, Facebook, Google, and Starbucks, among a myriad of others that we have not necessarily heard of as public names, were all initially funded by angel investors. Without angel investors, these very successful companies would have never gotten off the ground.

Yet, the Securities and Exchange Commission, whose neglect of its statutory mission to facilitate capital formation necessitated that Congress pass the JOBS Act in the first place, has further restricted startups from interacting with angel investors at demo days and similar pitch events. Startups rely on demo days and similar events to build relationships with angels and other investors and generate interest in their companies and their ideas. These events existed prior to the JOBS Act, but the SEC's rules jeopardize their future.

H.R. 79, the Helping Angels Lead Our Startups, or HALOS Act, is a commonsense, bipartisan bill that is aimed at removing a significant regulatory hurdle for innovative companies and startups that seek early stage equity investments. Specifically, the HALOS Act would clarify that these demo days, which are sponsored by angel investor groups, universities, municipalities, and nonprofits, are not considered to be general solicitations and would, instead, ensure that angel funding remains available to those businesses that seek investment capital. These are really educational opportunities.

Mr. Speaker, some of our colleagues on the other side of the aisle will claim that the HALOS Act guts critical investor protections and will subject honest, hardworking Americans to rampant fraud. We just had an example of college students being brought up. That is simply not true.

A company that offers securities to investors under these rules may only sell their securities to sophisticated or accredited investors. If these individuals do not meet the standards of an accredited investor, they are not then eligible or even allowed to invest in these types of startups that would participate in a demo day.

Instead, the HALOS Act is a simple, bipartisan, bicameral, and, I might add, short bill that will provide small innovative companies and startups the ability to interact with angels and other investors who can provide the capital that they need to succeed, grow, and create jobs.

Indeed, Senator Chris Murphy of Connecticut said it best when he introduced the HALOS Act last Congress: ``I have heard from local entrepreneurs and interested backers alike that the most important thing we can do to help these businesses is to make it easier for angel investors to put capital behind them--and that is exactly what our bipartisan HALOS Act will do.''

Mr. Chair, that was Senator Chris Murphy of Connecticut.

I commend the efforts of Representatives Chabot and Sinema for working together across the aisle on a bipartisan, positive solution.

Last Congress, the HALOS Act passed this very body with an overwhelming bipartisan vote of 325-89. I have high hopes that H.R. 79 will enjoy another strong, bipartisan vote.

I encourage all my colleagues to support its adoption.

Mr. Chairman, I yield 3 minutes to the gentleman from Illinois (Mr. Hultgren).

Mr. Chair, I yield 2 minutes to the gentleman from Texas (Mr. Williams).

Mr. Chairman, I yield 2 minutes to the gentleman from Tennessee (Mr. Kustoff), a new member of the House Financial Services Committee.

Mr. Chair, I yield 2 minutes to the gentleman from Illinois (Mr. Schneider) for 2 minutes.

Mr. Chairman, may I inquire as to the balance of time remaining on both sides.

Mr. Chair, I yield 2 minutes to the gentlewoman from Arizona (Ms. Sinema), the coauthor of this bill.

Mr. Chairman, I yield 2 minutes to the gentlewoman from Florida (Mrs. Murphy) and welcome her as a new Member.

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

I have actually had the pleasure and the honor of sitting through a number of these demo days and seeing these pitches being made. People are coming in, and they are literally laying out their dreams, their hopes, and, frankly, their hard work because they wouldn't be there that day if it wasn't for their hard work. They are looking for a couple of things. As small businesses and entrepreneurs, they are looking for capital and credit. We use the word ``capital'' a lot around here, but think of it as cash and credit. They really are looking for someone who will buy into their dream, who will look at their hard work, and who will understand that their dreams can become a reality with hope. This bill is trying to do that.

Members are hearing a lot of doom and gloom on the other side. In fact, I think the phrase was just thrown out, financial doom for the retail investor. Let's talk about these retail investors.

For you to become an accredited investor, someone who would qualify to be able to invest in these startup companies, according to SEC rule 501, you need to be married, jointly; $300,000 in income; and $1 million of net worth, excluding your home. So you cannot include a million-dollar home. You have to have $1 million net worth outside of your home and have an income of $300,000. Earlier, college students were brought up. Not a whole lot of college students that I am aware of have $300,000 annual income or $1 million net worth.

These are people who are sophisticated, typically. They are high net worth, by definition. Interestingly enough, as Members of Congress, if we allowed some of these amendments to go through and these restrictions to go through, as Members of Congress, we would be excluded from the room. We would be excluded. We couldn't even go in there to educate ourselves about how this process works. That, ultimately, is what this is about.

Those pitch days are not just for those people who are going to invest. Those pitch days are not just for the people who are going to do the investing. Those pitch days are for others to learn, to have an understanding.

If you are a college student sitting in the back row, to understand what it looks like to become an entrepreneur, to really become a part of that engine of the American economy, you should be in the room. If you are someone who might be making a pitch later on and want to see how this happens and

works, you ought to be in the room. Let's not exclude those people.

Why would we have a government closed off, closed room, a government- sanctioned closed room that would keep people from understanding and achieving their hopes and dreams and success?

I am pleased to be up here and to talk about this issue because we know that for our standing in the world, we need to have a dynamic economy. Our dynamic economy starts with our entrepreneurs and the risk-takers who are willing to invest in those ideas.

I just want to commend the gentlewoman from Arizona (Ms. Sinema) and the gentleman from Ohio (Mr. Chabot) for working in a bipartisan manner. I expect we are going to see a massively bipartisan vote for this bill, and I eagerly await that. I ask my colleagues to support

Mr. Chairman, I claim the time in opposition to this amendment.

Mr. Chairman, so here is the alternate reality you are expected to believe in this scenario that has been created. You are going to have somebody wander off the street with their checkbook in their pocket, listen to a 3- to 5-minute pitch on an idea that is going to change the world, and then they are going to sign away their financial future and life savings. That is the scenario that is being painted for you out there today by the opponents of this commonsense legislation.

Again, to be an investor, you must be an accredited investor, according to the SEC rules, Rule 501, that says you have $300,000 of income annually and a net worth of $1 million outside of your home. Owning your house doesn't count towards that.

I have been to these pitch days. You know what you are walking into. You don't just stumble on it and go: Wow, what's going on here?

I have never thought about this. Tell you what, I am going to write a five- or six- or seven-figure check today and put myself into financial ruin. That is not how these things work.

Mr. Chairman, at the end of the day, I think it is important to just review a little bit of the history here.

First of all, this amendment isn't necessary. It would create yet another SEC-required disclosure and further burden the ability for startups to present their ideas to demo days.

I would note that this amendment could have been offered last March, either in committee or while we here in the House had consideration last April 2016. However, in both cases that didn't occur.

Let's remember why we are here today, Mr. Chairman. When the SEC promulgated the rules to implement Title II of the JOBS Act, the agency made something that was legal prior to April 5 of 2012 suddenly illegal. The SEC decided that demo days that bring together those entrepreneurs and those companies suddenly became a general solicitation.

That isn't the case, and this amendment would require the SEC to prescribe a disclosure that ``describes the nature of the event and the risks of investing in securities being advertised.''

There is no sale that day, Mr. Chairman. No sale at all is going to happen. There is no exchange that happens at that event.

This amendment is unnecessary, overly broad, and would delay the return to the certainty that the pre-JOBS Act had brought.

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

Mr. Chairman, I have no further speakers on this amendment.

Mr. Chairman, you just heard the author of the amendment make the case that this is a complicated process in general that an unaccredited person is not going to be allowed to invest in. So it requires the event sponsor to provide attendees with a written disclosure outlining the nature of the event and the risks of investing in the securities for sale. It is not an offering that is happening at those demo days. I would ask my colleagues to oppose this amendment.

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

Mr. Chairman, once again, we are seeing an unnecessary, duplicative amendment here. The amendment, as it is laid out, creates a new definition of an issuer. The Securities Exchange Act already defines an issuer, and Ms. Waters' definition is vague, confusing and, frankly, unnecessary.

Demo days are opportunities for startup companies to present their ideas to potential investors that are accredited. Again, accredited. At this point, all of America is shouting back at C-SPAN, saying, $300,000 in income

per year with $1 million net worth, excluding their home. We get this out there. This is not a solicitation or offering a security.

So what I am, quite honestly, concerned about and maybe a little confused about is the point of the HALOS Act trying to fix a problem. It is trying to fix a problem.

Remember, we want to expose entrepreneurs and their ideas to the broadest pool of potential investors that includes angel investment community, again, of accredited investors. This requirement raises serious compliance concerns for angel investors. It would require entrepreneurs and startups to perform a compliance function that they may not have the physical or financial means to do so. Again, it is just an additional burden and barrier to entry for entrepreneurs.

Again, these are--the entrepreneurs typically aren't the ones that have $300,000 of annual income or $1 million net worth because, frankly, then they wouldn't have to be at the pitch. They could fund it themselves.

The idea is to make sure that those ideas, those people who are looking for an opportunity are given the broadest opportunity possible. And I think what we are seeing here is a reaction to the notion that, you know what? Maybe people can handle this on their own instead of the government needing to step in and be so overly prescriptive and control every decision that they are making.

You are seeing a reaction on the other side to that, to that notion of freedom, that idea of an entrepreneurial spirit; this idea that we all need to be wrapped in bubble wrap as we go out into the world. That is not government's role or job.

Outside of those prescriptions that are already in place, again, we are talking about a narrow group of investors with $300,000 of net income annually, and $1 million net worth who would even qualify to invest in those.

Why we would wall this off from others seeking to learn and to see an opportunity, I just simply don't understand.

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

Mr. Chairman, in closing, I cannot support an amendment that makes it more difficult for startups to receive the crucial funding that they need to grow and create new jobs. Again, these are people pursuing their dreams, their hopes. They need capital and credit. They need cash and credit to go fulfill those.

Mr. Chairman, I actually believe in the SEC. I believe that the rules that they operate under are sufficient. I believe in the JOBS Act. I believe in the HALO Act that will provide the proper protections to investors, again, qualified investors with a $300,000 income and a $1 million net worth.

There are proper protections in place. This amendment does nothing but add additional burden to those seeking the investment and those seeking to invest. I request opposition from my colleagues.

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

Mr. Chairman, I move that the Committee do now rise.

Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 33 and ask for its immediate consideration.

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

General Leave

Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days to revise and extend their remarks and to include extraneous material on H. Res. 33, currently under consideration.

Mr. Speaker, I am pleased to bring forward this rule on behalf of the Rules Committee. The rule provides for the consideration of H.R. 5, the Regulatory Accountability Act, and H.R. 79, the Helping Angels Lead Our Startups, or HALOS, Act.

The rule provides for 1 hour of debate for each bill, equally divided between the majority leader and the minority leader and the chairman and the ranking member of the Financial Services Committee, respectively. The rule also provides for a motion to recommit for both pieces of underlying legislation.

Yesterday, the Rules Committee had the opportunity to hear from Congressman Tom Marino and Congressman Hank Johnson, on behalf of the Judiciary Committee, and from Congressman Huizenga, on behalf of the Financial Services Committee. We also heard from several Members on both sides of the aisle who testified on their amendments. The Rules Committee made in order both amendments submitted for the HALOS Act and 16 amendments from Members on both sides of the aisle for the Regulatory Accountability Act.

Mr. Speaker, I spoke from this podium last week about the positive, pro-growth agenda we in the majority are advancing. The bills before us today are additional pieces of that puzzle, and they help us to return to commonsense governance that fosters economic success.

H.R. 79, the HALOS Act, was introduced by my friend from Ohio, the chairman of the Small Business Committee, Mr. Steve Chabot. Last Congress, very similar legislation passed the House with my support and by an overwhelming bipartisan majority. The HALOS Act ensures that so- called angel investors, who serve as the largest funding source for startups in the United States, are able to effectively hold educational economic development events, like ``demo days.'' The bill also helps to ensure that startups can connect with angel investors who can serve as funding sources, mentors, or outside directors.

In plain English, the HALOS Act helps to ensure that small, innovative companies and startups have access to the necessary capital. This, in turn, enables these companies to expand and generate jobs that put Americans back to work while fueling our economy as a global hub of innovation.

Mr. Speaker, in order to keep America's market competitive, we must relieve American job creators and employees from suffocating regulations. We can move toward this by helping government function as our Founders intended. Our Constitution lays out a system of three coequal branches of government, which is meant to fulfill unique roles and to provide checks and balances for one another.

Over time, we have allowed cracks to form in that system, and we have gradually seen executive agencies usurp power from the elected officials of the legislative branch--to the detriment of hardworking Americans and the separation of powers. We, too often, see unelected bureaucrats handing down regulations that have enormous impacts on small businesses, family farmers, individuals, and families. In an unfortunate irony, these bureaucrats are isolated from the very entities they are trying to regulate.

Congress must stop ceding authority to the executive and reassert the power of the legislative branch to write law. The Regulatory Accountability Act helps us do just that. It helps us to ensure that burdensome rules that handcuff American business with red tape aren't crushing our economy, our competitiveness, or our future. It also restores common sense to the rulemaking process.

H.R. 5, the Regulatory Accountability Act, combines six bills that have previously passed the House. I am a proud cosponsor of this legislation.

I thank Chairman Chabot, Chairman Goodlatte, and Chairman Marino for their thoughtful and diligent work on this legislation. Additionally, Congressman Ratcliffe and Congressman Luetkemeyer contributed important provisions to this package.

The bill reforms the process by which Federal agencies analyze and formulate new regulations and guidance documents, clarifies the nature of judicial review of agency interpretation, and calls for more complete analysis of the potential impact of rules on small entities.

H.R. 5 includes the text of the Separation of Powers Act, which amends the Administrative Procedures Act to overturn two doctrines that call for judicial deference to agency interpretations of statutory and regulatory provisions: the Chevron and Auer doctrines.

In plain English, the Separation of Powers Restoration Act prevents Federal bureaucrats from interpreting the legality of their own regulations at the expense of hardworking Americans and the constitutional separation of powers.

Title I of the Regulatory Accountability Act requires agencies, when establishing new rules, to consider the lowest cost option that meets statutory requirements. The bill also provides for more public input in the rulemaking process. Title IV of the bill, the Providing Accountability through Transparency Act, requires agencies to publish plain-language summaries of new proposed rules online. These proposals are not farfetched. Instead, they provide more information and a voice to the American people while reining in agencies that have gotten drunk on their rulemaking power.

Mr. Speaker, our current administration issued over 600 major regulations with an economic impact of over $740 billion. These numbers show the staggering number of rules put forth by the executive branch, but nowhere are the true costs of regulations highlighted better than in the stories that I hear from my constituents. I know other Members hear similar stories, and all across the Nation, we are seeing the toll that overregulation has taken on growth and competitiveness.

Back home in northeast Georgia, Elbert County is known as the granite

capital of the world, but a rule put forth by OSHA that is related to silica levels threatens to jeopardize that industry; and, of course, there is the waters of the United States rule, which could negatively impact everyone from farmers to ranchers to Realtors. The menu labeling rule is yet another example of a misguided regulation that the administration has put forth without impunity. That rule would raise costs for businesses, from restaurants to convenience stores, leading to higher costs for consumers--in actuality, hurting the very ones that it proclaims to help.

This is the irony of many of these regulations. Sadly, they are borne out in the costs to the American people.

Last year, the EPA finalized a rule that established Federal standards for residential wood heaters. In rural districts like mine, many individuals may count on wood heaters to keep their families warm. This EPA rule will raise costs for consumers and undermine families' decisions about what type of heater may work the best for them.

Mr. Speaker, is this really where we want to go, having the Federal Government decide things like this, away from the scrutiny of the elected body? I think not.

The examples from this administration are numerous, but, importantly, this problem of overregulation is not unique to this administration. This is not a Republican or a Democratic problem. This is a balance of power problem; this is a problem between branches not doing what they are supposed to be doing and staying within that.

The Regulatory Accountability Act helps ensure that this administration and future administrations do not ignore Congress by writing law through regulation. It returns transparency to the process. It restores Congress' rightful place as the legislative branch and reins in the unelected fourth branch that regulators have become.

Mr. Speaker, many of the bills in this package have previously passed with bipartisan support. I hope my colleagues can continue to agree that Congress should make the laws and that we should do so in such a way that encourages growth, innovation, and American ingenuity.

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

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

Mr. Speaker, I think there is no better way to start this Congress fresh but with some understanding. It is very clear, and it has become obvious to Members here on the floor, that there is a discussion going on. And, Mr. Speaker, if Members would like to see the difference that is being portrayed here on the floor today, it is very obvious. There is one party that is really concerned about tying the hands of bureaucrats; and there is one party, the majority, that is looking to untie the hands of the American people. I think I will side on the side of the American people and job creators and job promoters, and those who go out every day and earn a living.

We worked on this last Congress, and I will talk about it again here. Let's not start the strongman that Republicans are wanting to do away with all regulations. We do not. We want government to operate in the most efficient manner possible and do what it needs to do, but also get out of the way.

The problem with government, many times the government has overstepped where it needs to be, and it needs to be out of the way to start with.

Also, I would like to at least clear the record and make something understood. At the beginning of the year, we are bringing a rule. We had a full Rules Committee hearing yesterday, and Members were able to offer amendments. Not all amendments were made in order. Sixteen amendments were made in order on both sides of the aisle. I would like to remind Members, Mr. Speaker, as we go back in history, we are promoting discussion here in the Rules Committee and bringing to the floor and allowing Members to talk about amendments and give them the opportunity.

I will just remind Members, Mr. Speaker, in the 111th Congress, which was controlled by my friends on the other side of the aisle, in the very first rule bill they brought, the rules for the House, they put two major bills in the rules package that did not even get a rules hearing, that did not get anything except just pushed to the floor. I think we will stand firm that we are pushing to the floor stuff that Americans care about, and also doing it in a way that Members can participate.

Speaking of that, the American people, especially the good folks of Nebraska, have sent to us a new Member, and I have gotten the chance to know him.

Mr. Speaker, it is a privilege to yield 3 minutes to the gentleman from Nebraska (Mr. Bacon), and I welcome him to the floor.

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

Mr. Speaker, are there any more speakers the gentleman from Colorado has?

I am prepared for the gentleman to close. I reserve the balance of time.

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

I serve a wonderful part of the world. With all due respect to all the other Members of Congress, I do believe it is one of the fairest in the country.

As I go around and travel, one of the things I have not heard, Mr. Speaker--and I am not sure if you have or other Members sitting here--I have never been hit, when I run into something saying the fact that government is efficient, and I am really wanting it to be efficient in a sense that it is working for me.

It is a very obvious statement here, and what we see time after time after time after time is rules and regulations that most of the American folks are saying: Government, do what you are supposed to be doing. Get us back on a fiscal financial path that is solid, that balances, that gets us back in understanding that we can't spend more than what we make or bring in, and that we have to have a strong national defense. Let's get back to the things that make America the shining light all around the world.

One of the things I do not hear them asking me to do, Mr. Speaker, is make it easier on bureaucrats in Washington. I have not had them beg and bring petitions to my table and say: Please make it easier on bureaucrats to run our lives.

That is not what we do. What we are trying to do is simply say: Let's get up, go out to work, do the regulations that matter. Make sure that government does what it is supposed to do. Make sure that the balance of power is honored and not looked upon with disgrace. It is looked upon as something that should be taken care of. Let the legislative body be the legislative body. Let the executive be the executive, and let the judicial be the judicial.

I have no problem putting before the American people the choice: Do you want a party that will defend a bureaucracy that stifles them? Or a party of the majority, like we are, that are putting forward regulation reform that says, We want to help you; we are concerned about you?

Obvious choice, Mr. Speaker. Today we have two opportunities to this rule. They both look at our economic engines in the country and reviving it again.

The HALOS Act helps us ensure that small businesses have access to the capital necessary to grow and succeed. Small business is the backbone of our economy, and it makes sense to enact policies that promote the viability and growth.

The Regulatory Accountability Act restores simple checks and balances so that Congress, once again, makes laws so they work better for those who elected us.

It is time we demand the voice of the American people be heard rather than letting the others up here, separated in cubicles, decide what is best. When we look at that, the obvious choice is clear. You pass this rule, you vote ``yes'' on these bills, and you say to the American people: I agree with the majority.

We are looking after those that get up every day and have the American Dream in front of them and get up and say: I want to be better and I want my government to be out of the way.

When we understand that, Mr. Speaker, I urge my colleagues to support this rule and the underlying bill.

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 from Colorado, and I thank my good friend from Georgia. It is important to take note of the value of democracy and the discourse on this floor, and my friendship with the gentleman from Georgia, but absolute disagreement with him on our purposes here.

Yes, regulation should be fair, and it should cede to the administrative process and the administrative laws that dictate how they should be formulated, and that fairness should be their underpinnings. But I think my constituents, in terms of the regulatory scheme, are far more interested in clean water and clean air. They are far more interested in making sure that consumer products that impact toddlers and babies are enforced. They are far more interested in ensuring that there is competition to the FTC, and that there are fair energy laws to the Federal Energy Regulatory Commission.

Having said that, I am disappointed as well that we are moving forward on H.R. 5, which is a bill that went through the Judiciary Committee, and, as my colleague from Colorado said, with 56 new Members, it did not go through regular order. We are recycling the same bad bill again.

I rise today to express concern over the number of amendments that were presented that were good amendments that did not get in. Before I speak to the amendment I am concerned about, first, I want to speak to the previous question. I support the gentleman from California (Mr. Swalwell) and the gentleman from Maryland (Mr. Cummings) on a very important statement, and that is in the tragedy and the heinousness of 9/11, we formulated the 9/11 Commission.

Mr. Speaker, there is no more heinousness than a foreign nation interfering with the just and fair voting of every American. There are many who lost their life in the name of one vote, one person. For that reason, I would make the argument that it is imperative that this bill be amended to create the commission that will address the question of foreign intrusion, particularly Russian intrusion and hacking in our election.

I believe this election was skewed, in spite of the peaceful democratic transfer of government, which we will all adhere to, but there is no doubt. This does not compete to 2001 with President Bush in Florida. It does not compete to 2004 with Mr. Kerry. It is beyond any kind of comprehension of what happened in this election, a direct intrusion and skewing of this election. But, more importantly, protecting the systems of election and the voting rights, the preciousness of the voting rights, is crucial to democracy.

This commission, independent of any of the committees that should be working--and I agree, Congress should be working. Senator McCain has already begun working--a Republican--but this commission would be a vital asset. So I am certainly disappointed that the amendment I had that was crucial as relates to cybersecurity to deal with the question of cyber intrusion was not made in order. It would have been appropriate for us to have an amendment that would have spoken directly to the idea of identifying new tactics or techniques that a malicious actor might deploy, or detect and disrupt an ongoing intrusion, in addition to protecting the data that enables cybersecurity firms and other network defenders to identify certain malware that the Russian intelligence services use.

I thank the gentleman.

This amendment would have been vital to have not only a vigorous discussion on the floor but also to recognize that cybersecurity has now become a potential weapon. I have worked on this issue for a decade as the former chairwoman of the Transportation and Infrastructure Subcommittee. It was under my subcommittee that we began to look at electric grids and began to see the enormous power of the cyber world. My amendment should have been included because we are now faced with what the cyber world used as a weapon can do. I am disappointed that that amendment was not made in order. I am disappointed that H.R. 5 is again before us without regular order, and would hope that we have the opportunity to vote for and support the previous question to find out what happened and who conspired to alter our elections in 2016.

Mr. Speaker, I rise in strong opposition to the rule and the underlying bill.

I strongly oppose this rule because it makes in order H.R. 5, the Regulatory Accountability Act of 2017, which is a radical measure that could make it impossible to promulgate safety regulations to protect the public.

I oppose this rule because it would effectively shut down the entire U.S. regulatory system, amending in one fell swoop every bedrock existing regulatory statute.

My opposition to H. Res. 33 is amplified by the Rules Committee's decision to decline to make in order the Jackson Lee Amendment, ``to provide an exception for regulations that help prevent cyberattacks on election processes or institutions.''

Apparently, House Republicans are still reluctant to debate the subject--undisputed by our Intelligence community--of Russian cyberattacks on American cyber networks and infrastructure.

Key Judgments in the Intelligence Community Assessment's declassified version of a highly classified report entitled, ``Assessing Russian Activities and Intentions in Recent U.S. Elections,'' have confirmed that 2016 witnessed the first American presidential election that was the subject of cyberattacks.

These and other subversive activities have been confirmed to have been perpetrated by entities allied with the Government of Russia and were undertaken for the express purpose of influencing the presidential contest to secure the election of its preferred candidate, Donald Trump, who made history by becoming the first presidential candidate to invite a hostile foreign power to launch cyberattacks against his political opponent.

All three agencies, CIA, FBI and NSA, agree with this judgment.

The so-called Regulatory Accountability Act (RAA), in addition to this rule, demonstrates the deceptive design of the majority to make it harder to establish regulations to protect the public by tilting the entire regulatory system significantly toward special interests.

The bill allows Federal courts without expertise on technical issues to substitute their judgment for those of the expert federal agencies.

These agencies are staffed with career subject matter experts that are deeply knowledgeable of the background, context, and history of agency actions and policy rationale.

For this reason, courts have long deferred to agency experts who are in the best position to carry out the statutes.

The RAA would end this well-established practice and allow far less experienced judges to second-guess expert opinion--essentially sanctioning judicial activism.

The Jackson Lee Amendment, however, would have attuned this dangerous legislation to provide an exception for regulation upon which Americans so greatly rely on their government to help prevent cyberattacks on our highly coveted and esteemed election processes and institutions.

The bill promoted by the majority, calling for accountability from our Administrative Agencies--fails to answer in accountability to the threat posed by foreign and domestic invaders on our national cyber networks.

As the new Congress commences in the People's House, obstructionist Republicans are circumventing the very procedures by which elected officials answer the cries of outrage and dismay of desperately concerned constituents.

To the obstructionist majority perpetuating this restrictive rule, let me stand firm in the American convictions laid bare by the Jackson Lee amendment--the system of Checks and Balances established by the Separation of Powers clause of the Constitution will not be thwarted.

The spirit of the H.R. 5 is clearly designed to stop all regulation dead in its tracks--no matter the threat to cyber networks, national security, economy, or the very health and safety of the American people.

We know that Russia's cyber activities were intended to influence the election, erode faith in U.S. democratic institutions, sow doubt about the integrity of our electoral process, and undermine confidence in the institutions of the U.S. government. These actions are unacceptable and will not be tolerated.

The mission of the Intelligence Community is to seek to reduce the uncertainty surrounding foreign activities, capabilities, or leaders' intentions.

On these issues of great importance to U.S. national security, the goal of intelligence analysis is to provide assessments to decision makers that are intellectually rigorous, objective, timely, and useful, and that adhere to tradecraft standards.

Applying these standards helps ensure that the Intelligence Community provides U.S. policymakers, warfighters, and operators with the best and most accurate insight, warning, and context, as well as potential opportunities to advance U.S. national security.

This objective is difficult to achieve when seeking to understand complex issues on which foreign actors go to extraordinary lengths to hide or obfuscate their activities.

My amendment would have improved H.R. 5 by exempting only those regulations critical to making cyber networks invulnerable to attack from foreign and domestic agencies and individuals.

Specifically, the amendment that the Rules committee disallowed for presentation on a vote here on the floor today would have provided the American people an exemption to allow for the prevention of tampering, alteration, or misappropriation of information by agents of foreign countries with the purpose or effect of interfering with or undermining election processes or institutions.

In particular, restrictions put forth in H.R. 5 could result in further delay to agencies attempting to take action to help network defenders better identify new tactics or techniques that a malicious actor might deploy or detect and disrupt an ongoing intrusion, in addition to protecting data that enables cybersecurity firms and other network defenders to identify certain malware that the Russian intelligence services use.

The Regulatory Accountability Act provides no accountability to the American public.

Instead, it allows polluting industries and special interests to game the system and escape accountability for any harm they inflict.

It makes it incredibly difficult, if not impossible, to secure new public protections and arms industry with numerous tools to avoid their legal obligations.

The increasing use of cyber-enabled means to undermine democratic processes at home and abroad, as exemplified by Russia's recent activities, has made clear that a tool explicitly targeting attempts to interfere with elections is also warranted.

We cannot afford to let global terroristic threats, in the form of cyber activities, erode faith in U.S. democratic institutions, sow doubt about the integrity of our electoral process, influence elections, or undermine confidence in the institutions of the U.S. government.

My amendment would have offered protections guarding the integrity of our cyber networks, while at the same time allowing the bill to achieve the proponents' major purposes.

The exceptional Americans we serve deserve a Congress that does its job and keeps our time-honored institutions functioning.

For these reasons and more, I oppose this rule and the underlying bill.

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

Mr. Chairman, I rise in opposition to H.R. 79, the Helping Angels Lead Our Startups Act. This bill, under the guise of helping angel groups attract additional investors for small businesses and startups, would alter the balance between capital formation and investor protection that we sought to achieve in the JOBS Act.

Let me remind my colleagues of what we did in the wake of the financial crisis when bank lending was scarce. Our Nation's startups had trouble getting off the ground and attracting new capital. Previously, they had done so using rule 506, which allows companies to sell private securities to accredited investors who are financially savvy and have the means to bear their heightened risks and lack of SEC oversight. As a condition to using rule 506, however, companies could not solicit purchasers from or advertise to the general public.

This condition was viewed as a barrier to capital formation for startups. Therefore, Democrats worked with Republicans to provide companies in the JOBS Act with an alternative so that they could broadly advertise and solicit new investors.

Recognizing the need to balance investor protection with this expansion, Ranking Member Waters offered an amendment requiring companies to take reasonable steps to verify that the ultimate purchaser was an accredited investor. This verification requirement is a necessary investor protection designed to prevent unsophisticated investors from purchasing--either accidentally or by fraudulent means-- risky, illiquid, and lightly regulated Rule 506 securities.

I would remind my Republican colleagues that this amendment was agreed to unanimously, in part because the amended provision struck the appropriate balance between capital formation and investor protection. Nevertheless, here we are today seeking to alter it in H.R. 79.

This bill would remove the verification requirement and allow companies to broadly solicit and advertise their private stock at any event sponsored by a college, nonprofit, government organization, angel investor group, or other group. That means that America's college students can walk into an event on campus and be talked into buying stock that they don't understand and may not ever be able to sell. Having created this initial relationship, the company can then sell the students stock without ever checking if they are accredited investors.

What is more, the bill would make it much easier for fraudsters to swindle unsophisticated investors by, for example, encouraging the unsophisticated investors to buy stock in a fake or failing company, only to sell off their own stock at artificially inflated prices.

Republicans claim that the bill is merely a clarification; that these demo days are not merely solicitations or advertisements in and of themselves and can be used by companies to generally discuss investment opportunities along with their products and services with the general public. But that is not the case.

Companies can already go to a broadly advertised, widely attended demo day and discuss their businesses and not implicate the securities laws if they don't offer securities for sale or otherwise condition the market for their security, but the bill would allow them to offer securities or condition the market by describing the type and amount of stock they are offering, the intended use of the proceeds, or any of the other information in subsection (a)(4) of the bill.

Therefore, today, a company discussing such information would have two options: one, to ensure that the event is limited to persons with whom they or the event organizer has a preexisting, substantive relationship or have been contacted through an informal personal network; or two, verify at the time of purchase that their investors are accredited by, for example, looking at bank statements, W-2s, or third-party verification letters.

The bill would allow companies to avoid both options and broadly advertise their stock, solicit purchases from the general public, and never check to make sure they are financially sophisticated, accredited investors. The only limitation--that the stock offerings only be at events sponsored by certain groups--does not provide a meaningful investor protection. Phony private universities or nonprofits that may be guilty of fraud themselves can hardly be held accountable for policing it in stock offerings.

So rather than clarify existing law and preserve the compromise we struck in the JOBS Act, H.R. 79 provides a potential loophole that is overbroad and harmful to investors.

Mr. Chairman, I am even more troubled that Republicans have brought this bill and another Financial Services Committee bill to the floor this week without a hearing or a committee markup. In fact, there are 10 new Republican Members and 4 new Democratic Members on our committee that have never even considered this bill.

Collectively, they represent millions of Americans that are being denied the right to better understand this legislation. It is deeply troubling that Republicans have decided to use their newfound power to rush through changes under cover of night without the benefits of an open, public process.

For these reasons, I oppose H.R. 79.

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

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

Mr. Chair, I continue to reserve the balance of my time.

Mr. Chairman, I have no further speakers, and I reserve the balance of my time.

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

Mr. Chairman, both Democrats and Republicans want to help facilitate capital formation, particularly for groups such as angel investors, who have substantial experience in the private securities market, and for small companies like startups who are seeking funding to innovate and grow. But as Members of Congress, we also have the responsibility to protect investors and ensure that the rules of the road are reasonable and appropriate. This is especially important for retail investors, those of us who are looking to save for retirement or to buy a house or to support our children's education.

That is what concerns me about the bill we have before us today. We cannot create loopholes in the securities laws that could have a serious negative impact on Americans' nest eggs, so we must strike the right balance between capital formation in our securities markets and investor protection.

It is with these goals in mind that Democrats supported the current rules in place. Companies can raise money to grow and support their businesses in our securities markets under the purview of the SEC and State regulators. The regulatory framework we have set up allows for different activities and oversight depending on the nature of the security offering.

For example, public offerings provide robust information to investors about the risks and rewards of a particular securities purchase. They require the SEC or State securities regulator to preapprove and review an offering, and they provide legal recourse to investors that may be deceived. This is a strong regulatory framework that ensures our markets are safe and sound. In exchange for complying with these rules, companies can advertise and sell their stock to anyone in the general public.

On the other hand, private offerings do not come with the same regulatory requirements and protections, which can make it easier and less costly for firms to raise money. This means less information for investors, less legal recourse, and little to no scrutiny by regulators. So we put in place procedures to ensure these private offerings, which are inherently riskier, are only sold to accredited investors.

Private offerings now play a significant role in the market. Unregistered securities have surpassed registered securities in terms of capital formation. They have accounted for more than $2 trillion in new capital. Moreover, $71 billion has been raised since 2012 through the general solicitation and advertising exemption that we put in place in the JOBS Act. This is clearly an important and growing segment of our market, and, as such, I believe we need to be even more cautious about who is participating in it.

In fact, the SEC's Investor Advisory Committee said we should do more, not less, to protect investors in the general solicitation and advertising market for private offerings. They think we don't have enough guardrails in place. And yet this bill would do the opposite, by expanding the exemptions on general solicitation without similarly protecting the investor.

The bill also undercuts an important amendment Ranking Member Waters offered to the JOBS Act, which was approved unanimously. It required companies to verify that the purchaser is an accredited investor and is financially sophisticated enough to bear the risks involved in private offerings. By effectively allowing purchasers to ``self-certify'' at or after demo days sponsored by certain groups, the bill could open the door to financial ruin for a retail investor who may not have understood the consequences of his or her investment. So I oppose this bill.

I yield back the balance of my time.

Mr. Chairman, I rise as the designee for Ms. Waters' amendment to improve H.R. 79.

Mr. Chair, I move for the adoption of the amendment. This amendment, combined with Velazquez amendment, if adopted, would ensure that the bill strikes the appropriate balance between capital formation and investor protection.

First, the Waters amendment would prohibit event sponsors from collecting finders' fees for connecting potential investors to companies. This prohibition helps ensure that event sponsors, including colleges, nonprofits, and trade associations, don't have perverse incentives to drum up sales of stock.

Second, the Waters amendment would require the company selling securities to be a company operating in the real economy, not a hedge fund, shell company, or company going through bankruptcy. Not only does this provision protect investors from purchasing shares of an opaque or speculative firm, but it also ensures that the bill is targeted to provide relief to our Nation's startups and small businesses.

These two provisions are commonsense changes that I hope will receive bipartisan support. I move for the adoption of the amendment.

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

Mr. Chair, just in closing, let me say that, again, this amendment will bring some balance to the legislature and ensure that the bill is targeted to provide relief to our Nation's startup and small businesses, and I urge its adoption.

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

Mr. Chairman, I demand a recorded vote.