Providing for consideration of the bill (H.R. 1219) to amend the Investment Company Act of 1940 to expand the investor limitation for qualifying venture capital funds under an exemption from the definition of an investment company, and providing for proceedings during the period from April 7, 2017, through April 24, 2017.

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

(Mr. McGOVERN asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I want to thank the gentleman for yielding me the customary 30 minutes.

Mr. Speaker, this is the 28th closed rule we are considering in Congress. Let me repeat that. This is the 28th closed rule that we are considering in this Congress. That means that 64 percent of the rules that the Republican leadership has brought to the floor this year have been completely closed, with no opportunity for Democrats or Republicans to offer their ideas to expand upon or improve the legislation.

Under a closed rule, you can't even offer an amendment to fix a typo. If somebody is in their office listening to the debate on this bill and has an idea on how to improve it, they are denied that opportunity to offer any amendments on the floor--in short, no amendments.

Mr. Speaker, this place is called the people's House. Maybe it should be called the Russia House because this is the way they legislate in Russia, completely closed, no opportunity for different ideas to be brought before the Congress and debated.

I have never, in all my years in Congress, experienced a more authoritarian approach to legislating than I have in this Congress. I have never encountered a more closed Congress than this Congress is.

This is not right, and it should not be considered normal. Not only Democrats should be outraged, but Republicans ought to be outraged as well.

You know, I wish my Republican friends had learned something from the collapse of their healthcare bill a few weeks ago. They rushed to the floor a bill cobbled together in the dark of night, filled with bribes and backroom deals. In fact, to strong-arm Members into voting for the bill and to correct for all the technical drafting errors that occurred thanks to their secretive process, there were not one, not two, not even three, but five--that is right, five--separate manager's amendments filed with the Rules Committee.

Now, let me explain that.

Only the people who wrote the bill were allowed to amend it. They wrote it so quickly, so sloppily, that they had to amend their amendments. I mean, this would be laughable if it weren't so tragic. And even after all of that, they were not able to piece together votes within their own Conference, and the bill imploded.

Well, it was a mess from beginning to end; and, to put it bluntly, the process was a disaster. Don't take it from me. Listen to Sean Hannity of FOX News. Now, don't adjust your television set. I am actually going to quote FOX News--and Sean Hannity, at that. I can't believe that he and I agree on something.

Here is what he said. According to a CNN report, he said: ``Now, this legislation was flawed from the beginning. It was created behind closed doors. Not one single Member saw the bill until it was rolled out. And that made it a disaster.''

That is Sean Hannity, one of President Trump's biggest cheerleaders, one of the biggest cheerleaders of my Republican friends. Here he is trashing the Republican health bill. And if that is not a wake-up call for Republicans, I don't know what is. You know, if Republicans are being criticized on their process by Sean Hannity, they have a serious problem.

Now we are reading that Republicans are again huddling in back rooms in the Capitol in an effort to resurrect their terrible plan to repeal the Affordable Care Act, strip important protections away from our constituents, and put insurance companies in charge of our health care. There it is on the front page of today's Washington Post: ``GOP Presses for New Health Plan.''

Now, I haven't been invited to any of these secret backroom negotiations, but from what we are hearing, it isn't good. It seems that things are not looking good for hospitals. MassDevice alerted us to the fact that: ``Hospital Stocks Fall as GOP Looks to Revive TrumpCare Bill.''

It appears as though Republicans are still working to make their bill even more devastating. Mother Jones reported: ``TrumpCare 2.0 Still Isn't Cruel Enough to Satisfy Conservatives.''

Yesterday, Tribune Media Wire wrote about: ``How the Revised TrumpCare Plan Could Hit Americans with Preexisting Conditions.''

I include in the Congressional Record, Mr. Speaker, an article that appears in today's New York Times about how the latest health proposal weakens coverage for preexisting conditions.

[From the New York Times, Apr. 4, 2017]

Republican Health Proposal Would Undermine Coverage for Pre-Existing

Conditions

(By Margot Sanger-Katz)

Throughout the debate to repeal and replace the Affordable

Care Act, President Trump and Republican congressional

leaders have insisted they would retain a crucial, popular

part of the health law: the promise that people can buy

insurance even if they've had illnesses in the past.

Their efforts foundered last month, when a House health

bill had to be pulled from the floor after it failed to

attract enough support. Late Monday night, word emerged that

the White House and the group of conservative lawmakers known

as the Freedom Caucus had discussed a proposal to revive the

bill. But the proposed changes would effectively cast the

Affordable Care Act's pre-existing conditions provision

aside.

The terms, described by Representative Mark Meadows,

Republican of North Carolina and the head of the Freedom

Caucus, are something like this: States would have the option

to jettison two major parts of the Affordable Care Act's

insurance regulations. They could decide to opt out of

provisions that require insurers to cover a standard, minimum

package of benefits, known as the essential health benefits.

And they could decide to do away with a rule that requires

insurance companies to charge the same price to everyone who

is the same age, a provision called community rating.

The proposal is not final, but Mr. Meadows told reporters

after the meeting that his members would be interested in

such a bill. To pass the House, any bill would need to find

favor not just with the Freedom Caucus, but also with more

moderate Republicans. It would also need to attract the

support of nearly every Republican in the Senate to become

law.

The ability to opt out of the benefit requirements could

substantially reduce the value of insurance on the market. A

patient with cancer might, for example, still be allowed to

buy a plan, but it wouldn't do her much good if that plan was

not required to cover chemotherapy drugs.

The second opt-out would make the insurance options for

those with pre-existing conditions even more meaningless.

Technically, the deal would still prevent insurers from

denying coverage to people with a history of illness. But

without community rating, health plans would be free to

charge those patients as much as they wanted. If both of the

Obamacare provisions went away, the hypothetical cancer

patient might be able to buy only a plan, without

chemotherapy coverage, that costs many times more than a

similar plan costs a healthy customer. Only cancer patients

with extraordinary financial resources and little interest in

the fine print would sign up.

There is a reason that many conservatives want to do away

with these provisions. Because they help people with

substantial health care needs buy relatively affordable

coverage, they drive up the price of insurance for people who

are healthy. An insurance market that did not include cancer

care--or even any cancer patients--would be one where

premiums for the remaining customers were much lower. The

result might be a market that is much more affordable for

people with a clean bill of health. But it would become

largely inaccessible to anyone who really needs help paying

for medical care.

We do not have to speculate to know what the world looks

like without essential health benefits and community rating.

It was how most state insurance markets worked before

Obamacare. Back in 2009, most sick people who did not get

insurance through work or a government program were excluded

from coverage if they had a history of health problems like

allergies or arthritis. Plans that did not cover pregnancy

care or drug addiction treatment were widespread. (The data

about individual market insurance premiums is a little

spotty, but it appears that they were substantially lower in

most states.)

One idea Republicans have about how to care for the sick

was also in effect pre-Obamacare. Many states had ``high-risk

pools,'' where people shut out of the traditional insurance

markets could buy special plans with the help of state

subsidies. The Freedom Caucus proposal is likely to include

some money that states could use to set up such pools.

``The fundamental idea is that marginally sick people would

pay with risk associated with their coverage,'' Mr. Meadows

said Monday. ``Those that have, you know, premiums that would

be driven up because of catastrophic illness or long-term

illnesses, we've been dealing with that for a long time with

high-risk pools.''

But insurance in the old high-risk pools tended to be

expensive, and often came with long waiting periods or

benefit limitations, even for the very sick.

The main difference between the policy environment in 2009

and today is that the federal government would now be

offering tax credits to help healthy people buy what would

probably be relatively skimpy plans. That would mean that

more middle-income Americans would probably have health

coverage than before the Affordable Care Act, since the

combination of policies would tend to make insurance much

more affordable for people who are young and healthy.

What states would choose to do with this set of options is

hard to predict. Before Obamacare, few states required

community rating of health plans. And few states required

insurers to cover all of the benefits deemed essential under

Obamacare, though most did require a few types of treatments

to be covered. State governments would face a difficult

choice: either take away the requirements, and leave sick

patients without insurance options, or keep them and see

people unable to afford coverage under the new subsidy

system.

Under Obamacare, states can already waive many of the law's

insurance rules if they can show that an alternative program

would cover as many people with comprehensive coverage at a

lower cost to the government. But that standard is difficult

to meet. Mr. Meadows suggested that the waivers under

discussion should be ``very easily granted'' to states.

The politics of health care in the United States have

shifted since the Affordable Care Act was passed seven years

ago. In recent months, the law has grown more popular, and

the pre-existing conditions policy is among its best-known

protections. That could create political pressure for states

to keep the insurance rules, even if they are not required by

law. But it is likely that at least some states might decide

to eliminate them if they are made optional. Shifting norms

about health insurance regulation may also affect the idea's

reception in Congress.

Mr. Meadows said that the proposal presented to the Freedom

Caucus would retain the pre-existing conditions policy. But

that would be true in only the most literal sense. The mix of

policies could allow insurance companies to charge sick

people prices that few of them could pay. And it could allow

them to exclude benefits that many healthy people need when

they get sick. The result could be a world where people with

pre-existing conditions would struggle to buy comprehensive

health insurance--just like before Obamacare.

Thomas Kaplan contributed reporting.

Mr. Speaker, I mean, preexisting conditions. Oh, my God. What are my friends thinking about?

And we are reading that essential health benefits are still on the chopping block.

You know, these are some of the main provisions of the ACA that people like, that people need, and that people deserve.

Protecting essential health benefits in people with preexisting conditions is our moral obligation. Taking these protections away from people would be cruel and unjust and immoral. I would say to my Republican friends: You don't have to do it.

But I guess we will have to wait and see until these secret negotiators emerge from their back rooms with details to share. And I will start getting ready for the next emergency Rules Committee. I am looking forward to that meeting because that will probably be the only time we will have to talk about the bill because I think it is probably too much to expect that my Republican friends would actually, this time around, hold a hearing. Maybe they will bypass a markup, but they will have to go to the Rules Committee in an emergency meeting, and we will probably look forward to another martial law rule.

But we are doing this bill today that no one has ever heard of. It was a noncontroversial suspension bill last year, but now we lift it up like it is the most important piece of business that we are facing in America today. You know, what about the urgent priorities facing our country?

I think it is clear that Speaker Ryan and the majority leader are grasping for filler legislation to keep us busy on the House floor so that the American people really don't see really how dysfunctional this majority really is.

Representative Mario Diaz-Balart, a Member of the Republican Conference, said, and I think he said it best last week when he said: ``It's pretty evident that we don't have the votes among Republicans to do, in essence, anything that's real.''

Maybe that is why we are wasting our time this week on these bills instead of moving an infrastructure package or finishing the FY17 appropriations process, which should have been finalized last year.

I will remind my Republican colleagues that our government runs out of funding on April 28. That is 5 legislative days from now, since we are going on break at the end of this week. Now, maybe, again, this is a radical idea, but maybe we should be dealing with that today.

I am beginning to give up hope for regular order in the appropriations process under the Republican leadership, but I would have thought we would at least have some insight about a funding bill by now. Again, 5 legislative days from now, the government potentially could be shut down.

Maybe some of you think that the underlying legislation that this rule would allow us to consider, a bill to increase the number of companies that are exempted from certain SEC regulations, is vitally important. Maybe you are being inundated with calls about this issue. I don't know. Maybe your townhalls are overflowing with people

demanding this SEC suspension bill, but I am certain that no Member of this body could say with a straight face that this is somehow more important than keeping the entire Federal Government open.

For the life of me, I don't understand why we always have to get right up to the edge of the cliff, but here we are again. Today is just the latest example that the priorities of this Republican leadership do not serve the American people.

I would urge my colleagues to think about this as we spend time in our districts over the next 2 weeks. Maybe, when we get back, Congress can actually do its job and fund the government and focus on things that are important like a jobs bill or an infrastructure bill instead of more of the same Republican messaging bills.

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

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

I am glad the gentleman from Michigan believes that closed rules are regular order--maybe in Russia, but that is not supposed to be the norm here in the people's House. We have an obligation to actually debate serious bills.

Right now, my Republican friends are behind closed doors somewhere in the Capitol debating healthcare legislation. And what I am against is this whole process. This is backwards. My Republican friends ought to be out in the open debating health care. They ought to be doing hearings. This is what I am objecting to.

In the scheme of things, this is a relatively minor piece of legislation, compared to my Republican friends' plans to repeal the Affordable Care Act.

Yes, we should be debating Russia and all the ties that the Trump administration has with Russia. The question

used to be: Who in the administration has ties with Russia? Now the question is: Who in this administration doesn't have ties with Russia? Yes, those are important things we ought to be talking about. But, come on.

What we are objecting to is you bringing filler to the floor while, in secret, you are trying to dismantle health care in a way that we believe will harm millions and millions of Americans; that will take away their protections, those who have preexisting conditions; that will throw millions of people off of their insurance; that will take away essential health benefits. Yeah, that is important to us, and it is important to the American people.

What we are objecting to is a process where you debate these issues in secret and you bring stuff like this to the floor.

Mr. Speaker, this week, President Trump signed a bill to allow internet service providers to sell their customers' sensitive information. This information includes location, financial and health data, information about customers' children, Social Security numbers, web browsing history, app usage history, and the content of their customers' communications, such as emails and video chats.

Yet, amazingly, President Trump's tax return information is still off limits to the American people. Every President since Gerald Ford has disclosed his tax return information. These returns have provided a basic level of transparency that has helped to ensure the public's interest is placed first.

So the message from President Trump and the Republican Party is clear: It is okay for companies to profit off your medical and financial information, or information contained in your private emails, but the American voter is not allowed to know if the President has any conflicts of interest. That is right. Donald Trump's privacy matters, but your privacy doesn't.

Internet companies can auction off your private, personal information to the highest bidder. But information related to Donald Trump's business life must be kept secret.

Mr. Speaker, the American people deserve better, and it is incumbent upon us, as the people's elected Representatives, to hold the executive branch accountable.

So I am going to ask people to vote ``no'' on the previous question. And if we defeat the previous question, I will offer an amendment to the rule to bring up Representative Eshoo's bill, which will require Presidents and major party nominees for the Presidency to release their tax returns.

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, this is a big deal. The American people have a right to know because the American people are concerned that this White House is on a collision course with corruption. It is time to let a little light shine on the President's tax returns so the American people know what his dealings have been and know what, quite frankly, they have been able to know about every other President and every other major party nominee.

I yield 5 minutes to the distinguished gentlewoman from California (Ms. Eshoo) to discuss our proposal.

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

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

Mr. Speaker, I just want to be clear so that my good friend from Colorado understands where I am coming from.

I don't really care about this bill. I think it is a noncontroversial bill that, quite frankly, probably could be approved by voice vote if it were brought up that way.

The point I am trying to make is that this is a relatively minor bill compared to some of the important issues that we need to deal with. It is troublesome to me that, on this bill, which my friend from Colorado said involved years of hearings and where the sponsor of the bill consulted with Democratic colleagues--I favor all of that. But what I am really outraged about is that, while we are talking about this relatively inconsequential bill and about how wonderful this process around this bill is, there are meetings going on in secret, right now, with my Republican colleagues, on dismantling health care in this country, conversations that might result in tens of millions of Americans losing their health insurance, conversations involving taking away essential benefits from insurance packages, conversations that would basically remove protections for people who have preexisting conditions.

All of this is going on in secret. We are reading about it in the press. I am sure my colleagues know about it because they are reading about it. Maybe they are proud of these secret meetings. I want to know where these secret meetings are.

I am simply saying to my friends on the other side of the aisle, on something as big as health care, you ought to be having these meetings out in the open. There ought to be hearings. You ought to bring in patients and patient advocate groups. You ought to bring in doctors, nurses, and heads of hospitals. You ought to bring in people who are going to be affected by any kind of changes you make in our healthcare policy.

Instead, it is being done behind closed doors, in secret, and I think the American people are outraged by that. That is one of the reasons why the bill you brought to the floor recently only had 17 percent support amongst the American people.

So what we are objecting to is the fact that we are not bringing to the floor matters that are urgent, like keeping the government running and like an infrastructure bill. We are also objecting to the fact that we are reading that my Republican friends are, once again, behind closed doors negotiating another healthcare bill that we think will do great damage to the health care of a lot of people in this country.

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

Mr. Speaker, I yield myself the balance of my time, and I will close for our side.

Mr. Speaker, I want to alert my Republican colleagues to some recent polls that came out today. There is a poll that Qinnipiac did that said that Trump is more unpopular than Obama ever was, and, today, President Trump's approval rating is at 35 percent. That is down from 37 percent, and that is the lowest, I think, of any President this early on in his Presidency. I think the lowest rating ever was President George W. Bush. It was at 28 percent, but it took 8 years, two unpopular wars, and a staggering economy to get to that point. But with President Trump, we are already at 35 percent. The Gallup Poll says his approval is at 39 percent.

By the way, the Affordable Care Act, according to Kaiser, now polls at 55 percent approval rating, and the Republican Congress is about as low as President Trump is right now.

I am trying to think of the words to help my colleagues understand what these polls mean. I guess ``not good'' comes to mind, or ``very, very bad.'' I don't think, even if you tried, you could get poll numbers so low so early on in a new Congress or so early on in a new administration.

I would say to my friends the reason for this unpopularity is the way you are conducting business in our government, that the closed processes that are being used with regard to legislation I think are unprecedented. There has never been a more closed Congress than this one. You were pretty closed last session as well. This is a terrible pattern.

I agree with my friend, Mr. Buck, on one thing he said. The gentleman said yesterday that good process produces good policy, but perhaps equally as important, good process helps instill faith in this institution. I agree with that. I could have said those remarks here today.

My question is: If that is the case, why are my Republican friends tolerating a process on healthcare reform that is now going on that is being done behind closed doors in some back room somewhere in this building with no input from patients or patient advocate groups or doctors or nurses or hospitals or anybody who has anything to do with health care? Why, on something so important, is the process so closed and so restrictive and so secretive?

I will tell you, just as this closed process led to a disastrous Republican healthcare bill recently, this continued closed process will lead to more disaster. This is not the way we should be doing the people's business. So we

strongly object to the way the Republicans are running this House and, in fact, the way the President is handling this issue as well.

It is always nice to see Vice President Pence in the hallway when he is walking back and forth, but it would be better to see him in a public setting talking about what the administration's priorities are, not rushing from one back room to another back room to another back room trying to make secret deals to get more people to vote for something when they have no idea what is in the legislation. That is not the way of doing business. So we object to the process.

Again, I urge my colleagues to also vote ``no'' on the previous question so we can have an opportunity to see President Trump's tax returns. Every President since Gerald Ford has disclosed their tax returns, every major Presidential candidate, and every day we read in the newspaper about more and more potential conflicts of interest between the President and his family. I have to tell you, we are on a collision course with corruption. The President has promised to drain the swamp. He has created a cesspool, and it should be of concern to every single person in this Chamber, Democrat and Republican alike.

I don't think it is too much to ask for transparency when it comes to the person who is our Commander in Chief. I shudder to think if Hillary Clinton had won the Presidency and didn't release her tax returns, the outrage that would be coming from the other side of the aisle. I can't even imagine how much outrage would be coming from them.

Yet when Donald Trump hides his financial information from Congress and the American people, there is silence; people don't want to know. Well, the majority of people do. Poll after poll show the overwhelming majority of Americans want to know what is in his tax returns.

Why is this such a state secret? Why can't people see what they want to see and what they have been given with every other President?

So this is an opportunity to put this issue behind us, and if there is nothing controversial in his taxes, well, then this issue goes away and we can talk about something else. But maybe there is something he is hiding. Maybe there is something that we should be concerned about. Maybe there are conflicts of interest that might be constitutionally questionable. Maybe there are ties to Russia that would cause my colleagues on the other side of the aisle more concern.

This idea of hiding this has to stop. I urge my colleagues to vote ``no'' on the previous question and vote ``no'' on the underlying rule.

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

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

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

Mr. Speaker, H.R. 1219, the Supporting America's Innovators Act, is legislation that certainly shows that sometimes we can get together and we can support a good idea. This act is such a thing. It shows how well we can work together to craft bipartisan solutions that support our Nation's innovators and the jobs that they create.

Last Congress, Mr. McHenry came to me with a problem: Sophisticated angel investors who fund promising startup businesses want to pool their money together, but the law effectively caps them at 100 investors per fund. If more than 100 people want to invest, the fund is forced to exclude some of them from the deal to avoid registration and regulation as an ``investment company'' under the securities laws. That means investors willing to commit capital are being turned away and startups are losing out on important early-stage funding.

Because of Congresswoman Nydia Velazquez and Mr. Patrick McHenry working together, working out any concerns that had been identified on either side of the aisle, we now, today, have a piece of legislation, a bill, that would narrowly increase the investor limitation from 100 to 250 persons for certain venture capital funds, provided that the fund does not have more than $10 million in total investor capital.

This type of fund structure is used today by AngelList, an angel investing platform that connects investors meeting certain income and asset thresholds with one another so they can pool their money into special-purpose funds which then invest them in a particular startup company. Importantly, both the companies and the investors benefit from this structure.

Compared with making hundreds of smaller direct investments, a company, for example, only has as a single point of contact, the angel fund advised by a fiduciary, rather than hundreds of investors who must all individually approve corporate actions such as mergers and acquisitions and expanding ownership.

Investors also like this structure because they can delegate monitoring the startups they invest in to the investment adviser to the fund. Such monitoring may be significant, considering that investors, recognizing that most early-stage companies fail, typically diversify their investments among 30 to 80 companies.

H.R. 1219 reasonably promotes this fund structure for startup investments by providing a narrowly tailored exemption for certain venture capital funds which must invest at least 80 percent of their funds in small businesses. Under the bill, the venture capital funds must have no more than 250 investors and no more than $10 million in investor capital, ensuring that they are small enough that investors are able to monitor and manage their investments.

The bill's limits also ensure that we aren't creating a loophole for other investment companies, like mutual funds, to avoid regulation; nor are we providing relief to other private funds, like hedge funds or private equity funds, that have very little restriction and investor protection.

Mr. Speaker, too often Congress seeks to help small businesses by repealing sensible guardrails and rules of the road with little to no thought of the impact on investors or market integrity. This is a mistake since it is investors that provide the money necessary for small businesses to grow. If investors don't trust the markets to operate fairly, they will decline to invest or raise costs on the very businesses we want to help. H.R. 1219 is different and reflects a measured, bipartisan approach to promoting our Nation's startups and the investors who take a chance on them.

I thank Mr. McHenry and Ms. Velazquez for their leadership on this bill. I urge all of my colleagues to vote ``yes.''

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

Mr. Speaker, I yield as much time as she may consume to the gentlewoman from New York (Ms. Velazquez).

Mr. Speaker, I yield 4 minutes to the gentlewoman from New York (Mrs. Carolyn B. Maloney), the ranking member of the Financial Services Committee's Subcommittee on Capital Markets, Securities, and Investments.

Mr. Speaker, I yield 3 minutes to the gentleman from Illinois (Mr. Foster), a member of the Subcommittee on Capital Markets, Securities, and Investments.

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

Mr. Speaker, we have received tremendous support for this legislation, and we are extremely hopeful that we will be able to come together on both sides of the aisle and continue to give support to our small businesses. As a matter of fact, we have a lot of those in the Congress of the United States--a lot of Members, rather--who talk about supporting small businesses, but we don't often see real legislation that can do that. This is such legislation, and I cannot thank Ms. Velazquez and Mr. McHenry enough for the way that they have worked on this legislation together.

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

Center for

American Entrepreneurship,

April 25, 2016.

Hon. Jeb Hensarling,

Chairman, Committee on Financial Services, House of

Representatives, Washington, DC.

Hon. Maxine Waters,

Ranking Member, Committee on Financial Services, House of

Representatives, Washington, DC.

Dear Chairman Hensarling and Ranking Member Waters: On

behalf of the Center for American Entrepreneurship, I write

today to express our strong support for legislation offered

by Rep. Patrick McHenry: H.R. 4854, the ``Supporting

America's Innovators Act of 2016,'' and H.R. 4855, the ``Fix

Crowdfunding Act of 2016.'' Both bills will significantly

enhance American entrepreneurs' access to the capital they

need to launch and grow new businesses and, in doing so,

accelerate economic growth and job creation.

CAE is a nonpartisan policy and advocacy organization whose

mission is to engage policymakers in Washington and across

the nation regarding the critical importance of entrepreneurs

and start-ups to innovation, economic growth, and job

creation, and to pursue a comprehensive policy agenda

intended to significantly enhance the circumstances for new

business formation, survival, and growth.

As you may know, recent research has demonstrated that

start-ups are disproportionately responsible for the

innovations that drive economic growth and account for

virtually all net new job creation. Alarmingly, recent

research has also demonstrated that, despite impressive

strength in certain cities around the country, rates of new

business formation in America have been declining for 30

years, and the decline is occurring in all 50 states, in all

but a handful of the 360 metro areas examined, and across a

broad range of industry sectors, including high-technology.

Given the importance of thriving entrepreneurship to

innovation, economic growth, and job creation, such

circumstances amount to nothing less than a national

emergency.

When asked or surveyed, entrepreneurs across the country

report that access to sufficient capital on affordable terms

remains among their principal challenges. The legalization of

crowdfunding by way of the Jumpstart Our Business Start-ups

(JOBS) Act in 2012 was a major step forward in meaningfully

enhancing innovators' access to investment capital. But

further reforms are necessary to realize the Act's full

potential to promote entrepreneurship, growth, greater

opportunity, and job creation.

H.R. 4854, the ``Supporting America's Innovators Act''

would amend an exemption

under the Investment Company Act of 1940 by increasing the

investor limitation from 100 to 500 persons for qualifying

venture capital funds that purchase no more than $10 million

in securities in any one issuer, adjusted for inflation.

Lifting the current arbitrary cap would not only increase

entrepreneurs' access to additional investors, but will

protect investors through a greater diversification of risk.

H.R. 4855, the ``Fix Crowdfunding Act'' would amend the

crowdfunding aspects of the JOBS Act in a number of important

ways:

Raising the annual issuance amount from $1 million to $5

million;

Exempting the beneficial owners of crowdfunding securities

from counting towards the Exchange Act 12(g) requirement

triggering public reporting;

Exempting special purpose vehicles (SPVs) created for the

purpose of investing in a single issuer of crowdfunding

securities from registration as investment companies under

the Investment Company Act, and permitting SPVs considered as

``venture capital funds'' to offer crowdfunding securities;

Revising the investment cap so that investors earning

$100,000 or less may invest up to 5 percent of their annual

income or net worth, and investors earning more than $100,000

to invest up to 10 percent of their annual income or net

worth;

Defining the requirements for a crowdfunding intermediary

to disqualify an issuer when the intermediary, through a

background check or other means, determines that the issuer

knowingly made untrue statements or omissions related to

material facts, or engaged in fraud;

Defining a crowdfunding intermediary's potential liability

to include only instances when the intermediary knowingly

makes untrue statements or omissions related to material

facts or knowingly engages in fraud;

Permitting an issuer to ``test the waters'' by soliciting

non-binding commitments of interest from potential investors

without filing information with the SEC, provided that no

funds are accepted by the issuer and any material changes

that occur between the solicitation and the offer are

highlighted to potential investors; and,

Providing a 5-year grace period for portals to make a good-

faith effort to comply with all crowdfunding rules, and

prohibits the SEC from bringing any enforcement actions

during that period.

Both bills help strike a more appropriate balance between

the twin priorities of capital formation and investor

protection. In doing so, these reforms significantly enhance

the prospects for new business formation, survival, and

growth at a time when faster economic growth is necessary to

address challenges such as underemployment, stagnant middle-

class wages, the income and wealth gaps, and alarmingly high

levels of poverty and dependence.

CAE commends you for your leadership to promote American

entrepreneurship and innovation and greatly appreciates your

thoughtful consideration of the reforms in H.R. 4854 and H.R.

4855. We look forward to continuing to work with you, the

bills' sponsors, and the Committee's distinguished members on

behalf of American entrepreneurs and start-ups.

Sincerely,

Robert E. Litan,

Chairman, Center for American

Entrepreneurship.

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

Madam Speaker, I continue to reserve the balance of my time.

Madam Speaker, I have no further requests for time, and I yield myself the balance of my time.

Madam Speaker, I am pleased that, for the first time this Congress, committee Republicans have brought to the House floor a bill that has broad bipartisan support. Oftentimes, the opposite side of the aisle on our committee take a partisan approach to legislation and sometimes do not express a lot of interest in the views of the opposite side of the aisle or the millions of Americans whom they represent. However, in contrast, this bill before us today is the product of thoughtful, bipartisan compromise and will help startup companies and their investors equally. Madam Speaker, this is how laws should be made.

Indeed, last Congress, Mr. McHenry and I worked together to promote liquidity in the secondary market for startup company stock by creating a clearer path for startup investors to resell their stock. The result of our bipartisan efforts was the Reforming Access for Investments in Startup Enterprises Act, which became law in 2015, along with seven other bipartisan, financial services bills included in the Fixing America's Surface Transportation Act.

Going forward, I hope that my friends on the opposite side of the aisle will remember what we can achieve when we work together. So, again, I thank both Mr. McHenry for reaching across the aisle and Ms. Velazquez for working with me on H.R. 1219, the Supporting America's Innovators Act of 2017. I urge all of my colleagues to join me and vote ``yes.''

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

Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 242 and ask for its immediate consideration.

Mr. Speaker, for the purpose of debate only, I yield the customary 30 minutes to the gentleman from Massachusetts (Mr. McGovern), 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.

Mr. Speaker, I rise today in support of the rule and the underlying legislation. H.R. 1219, the Supporting America's Innovators Act of 2017, will allow America's small businesses to thrive, creating jobs, developing incredible products and services, and growing our Nation's economy.

Starting a business, designing a product, developing a service, these projects often require upfront capital. For entrepreneurs and startups in this country, access to capital is one of the biggest hurdles they will face. Without it, they may not have the cash on hand for research and development, the funds to make payroll at the end of the month, or the raw material needed to start production.

Mr. Speaker, H.R. 1219 seeks to provide more sources of funding for our small businesses by raising the cap that requires a group of investors to register as an investment company. This change in the law is important. It allows angel funds, which are basically a pool of accredited investors, to permit up to 250 investors in one fund as opposed to the 100 permitted by current law.

As long as the fund does not exceed $10 million in capital commitments, it would be considered a qualified venture capital fund that is exempt from costly registration with the SEC.

Angel funds allow individuals who may not otherwise invest in startups to join together and direct their investment dollars to promising young companies. Without raising the cap on the size of these funds, we may be pushing potential investors out of the market.

Small businesses, in their earliest stages, often have nowhere to turn for credit. While banks have historically been a source of funds, in recent years, small business loans from banks have declined. That is where these groups of individual investors come in. In many cases, they are providing just enough cash to push businesses off the ground to the next level of funding; but by overregulating groups of angel investors, we are blocking significant sources of capital from ever reaching startups.

We need to wisely regulate in this country, and this legislation doesn't eliminate the need for larger investment funds to register with the SEC. It simply raises the cap for smaller groups of individuals to contribute a limited amount of funds to the American small business community. For businesses on the receiving end, these funds may be the difference between success and bankruptcy.

Thankfully, the Jumpstart Our Business Startups Act has already raised the cap requiring companies to register with the SEC from 500 investors to 2,000 investors. By allowing small companies

to seek more individual investors, these businesses can expand the number of individuals who have a stake in the company's future, the number of individuals who will ensure the venture succeeds.

H.R. 1219 is a natural complement to the JOBS Act, allowing those potential investors to more easily join their resources to efficiently and successfully invest in America's small businesses. In fact, the current limit on the number of investors who can join together, set by the Investment Company Act of 1940, is a relic from nearly 80 years ago. In the past 80 years, our financial market and our economy have drastically changed. The barriers to entry for small businesses in many industries are lower than ever.

Just yesterday, I spent time with Etash Kalra. Etash is a young man from my district who won the Congressional App Challenge. Already, in high school, he takes computer science classes and codes smartphone apps. He even started a club to teach others programming.

He and students like him have many of the skills needed to start a small business. They have the ability to create software programs that consumers want and need. They may start small, they may start in high school, but they hold great potential.

Many individual investors may see that potential. This bill allows those investors to make a down payment on the future of these young entrepreneurs. Without growing the sources and amount of capital available to these businesses, we will end up stifling the innovation and entrepreneurial spirit that our country is known for.

Our Nation is successful because Americans are innovators and hard workers. Those Americans who start businesses embody this spirit. We are not here asking for the government to help these people succeed. No, these individuals are fully capable of building businesses on their own. But we are here asking the government to step out of the way so that our fellow citizens can help American small businesses succeed.

This rule and the underlying legislation should not be controversial. Last Congress, similar legislation passed the Financial Services Committee by a vote of 57-2. It then passed the House by a vote of 388- 9.

Yesterday, I came to the House floor and spoke about the importance of passing bipartisan bills. Many Americans see their Capital awash in partisanship and bickering. They suffer under poorly crafted policies, while politicians in D.C. fail to find consensus on legislation that would help. They wonder why politicians who talk about bipartisanship on the campaign trail can't come together in Washington to pass commonsense legislation.

The challenge before us is to find solutions to our Nation's problems that overlap the principles held by both parties. That is why this bill is refreshing. It stands as an exemplar of the sort of consensus-driven legislation that can earn America's trust.

Everyone can agree that innovative companies help the American economy grow and add to the quality of life in our Nation. Everyone recognizes how important access to capital is for small businesses.

This bill was reported out of the Financial Services Committee with overwhelming support. I ask now that the entire House support the rule and this underlying legislation.

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

Mr. Speaker, I have an inquiry for the Speaker, if I may. What is the title of this bill?

That is all right, Mr. Speaker. I appreciate it.

I yield 5 minutes to the gentleman from Michigan (Mr. Huizenga), my friend.

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

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

Mr. Speaker, I am reminded of an old Western movie, ``The Man Who Shot Liberty Valance,'' and a line in that movie: ``When the legend becomes fact, print the legend.''

It turns out, Mr. Speaker, that this bill was marked up without any amendments on March 9, 2017, in the Senate Banking Committee and was favorably reported unanimously and without any amendments offered. It was also marked up on March 9, 2017, in the Financial Services Committee and was reported out with a 54-2 vote.

There were no amendments offered on this particular legislation, Mr. Speaker, in the Rules Committee; and, as a matter of practice, it is considered a closed rule because there were no amendments offered. So the idea that somehow this legislation has been hidden and that we are engaging in some sort of subterfuge is not accurate.

Mr. Speaker, I yield 2 minutes to the gentleman from Illinois (Mr. Hultgren), my good friend.

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

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

Mr. Speaker, I appreciate my friend from Massachusetts quoting me yesterday, and I would love to just emphasize a few of the words that he said a moment ago: I also shudder to think if Hillary Clinton won the Presidency.

My friend was kind enough to focus his half hour on H.R. 1219, Supporting America's Innovators Act of 2017. It is, in fact, a great piece of legislation, and I am proud to close now on that bill.

We have the opportunity today to improve access to capital for America's entrepreneurs and startups. The men and women who start companies in this Nation put everything on the line. They give of their time and their financial resources. They give of their weekends and evenings and vacations.

Our economy relies on the small businesses that these men and women create. Small businesses are the backbone of the American economy. They provide jobs and important products and services. They contribute to the life of their communities.

If we want to grow our economy, if we want to increase hiring, if we want to improve our quality of life, then we need to unleash America's entrepreneurs and startups. That is why we need to support this bill.

We must expand access to credit for small-business owners. We need to make it easier for angel investors to take a risk on young companies. We are not asking the American taxpayer to take a risk or spend any money on this. We are simply asking the Federal Government to allow angel investors to join together in larger groups to invest in promising young American companies.

I am encouraged that this bill represents a bipartisan effort to make small-business owners in this country more rewarding. When the cost of starting a small business is outweighed by the reward, our country will benefit from the resulting innovation and job creation. We simply need to give entrepreneurs the tools they need to succeed, and one of those tools is access to capital.

America's entrepreneurs and startups need H.R. 1219. Americans who want to work for small businesses need H.R. 1219. Americans who want to buy great products, access incredible services, and visit amazing websites all need H.R. 1219.

I thank Chief Deputy Whip McHenry for introducing this important bill, and I thank Chairman Hensarling for bringing this legislation before us. I also thank Representative Velazquez, Representative Hollingsworth, Representative Sherman, and Representative Gottheimer for cosponsoring this legislation.

I ask my colleagues to vote ``yes'' on the rule and vote ``yes'' on the bill.

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

Mr. Speaker, pursuant to House Resolution 242, I call up the bill (H.R. 1219) to amend the Investment Company Act of 1940 to expand the investor limitation for qualifying venture capital funds under an exemption from the definition of an investment company, and ask for its immediate consideration in the House.

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

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

Mr. Speaker, we all know that small businesses and entrepreneurs are the heartbeat of the American economy. Access to financial capital is vital for entrepreneurs seeking to start up, operate, or expand their businesses. However, gaining access to capital has remained an enduring challenge for many small businesses.

The financial crisis and the Great Recession made the situation worse, frankly, as capital became increasingly hard to access from institutional banks and various capital market players. While conditions have improved somewhat in recent years, many entrepreneurs continue to struggle with accessing the capital they need to compete and to grow.

In order to succeed, these companies need capital and credit, the lifeblood for growth, expansion, and job creation. Yet the government continues to construct arbitrary walls that cut them off from essential financing, as smaller companies are caught in a sea of regulatory red tape created by Washington bureaucrats.

We know that 60 percent of all net new jobs that have come into this country, that have been created here in the United States, come from these small businesses. They are oftentimes S corporations, LLCs, sole proprietorships. Small companies often have such owners also be operators. They are working alongside their fellow employees.

That 60 percent of those jobs that have been created here in the United States isn't just a one-time blip. That is over the last 20 years, the last two decades, that we have seen that trend.

Congress has made strides in tailoring the regulatory environment for smaller companies, no doubt, most notably when we passed, with strong bipartisan support, the Jumpstart Our Business Startups, or JOBS, Act in 2012. This was a bipartisan bill that was signed into law by President Obama. The JOBS Act's benefits are notable as more and more companies use its provisions to raise investment capital in both the public and private markets.

The JOBS Act has raised the cap on investors in a privately held company from 500 to 2,000 investors, but the limit on the number of investors acting as a coordinated group to invest in a company remained at 100, where it has been since 1940, some 77 years ago.

As noted by Kevin Laws of AngelList in his written testimony before our Capital Markets Subcommittee: ``With online fundraising and general solicitation becoming more common because of the JOBS Act, companies are bumping up against the limit more frequently. The current limit . . . now acts as a brake on the amount of money the company wanted to raise, leaving tens of millions of dollars on the table that did not go into startups.''

While H.R. 1219, the Supporting America's Innovators Act, a bipartisan bill introduced by the vice chairman of our Financial Services Committee, Representative Patrick McHenry, and Nydia Velazquez of New York, would amend the cap currently contained in the Investment Company Act to allow 250 investors for a ``qualified venture capital fund,'' therefore enhancing angel investors' ability to provide important funding to small businesses.

This bill is a very modest increase to the current exemption that has been in place for nearly 77 years. Modernizing this cap is long overdue and reflects today's capital markets and the reality of the increasingly important role that angel investors and others play as they commit the funds necessary to help small businesses grow.

The Securities and Exchange Commission, unfortunately, continues to ignore the backlog of good ideas to spur capital formation, which is recommended by entrepreneurs, small businesses, and market participants from their annual SEC Government-Business Forum on Capital Formation. This is a forum that is put together annually. They take and solicit ideas. They want to hear from people that are in the marketplace to figure out what ways they could go to improve that. Unfortunately, they have not acted on

this, and in the SEC's absence, Congress must act to promote market efficiency and capital formation.

I think we can all agree that we support smart regulation that protects investors and maintains orderly and efficient markets. But outdated, excessive, and unnecessary regulation whose costs outweigh benefits is dumb regulation that overburdens smaller companies. Let's provide some regulatory relief by enacting the bipartisan bill that will ease the burdens on small businesses and job creators and help foster capital formation and get Americans back to work.

Mr. Speaker, I would also like to note, in a hearing that we had on this bill last Congress, it passed our committee 52-2, including the ranking member voting for it. There were no dissenting minority views that were offered, and no amendments were offered at the Rules Committee on this. We have got a lot of consensus. I believe this is the right thing to do to move forward.

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

Mr. Speaker, I yield 2 minutes to the gentleman from North Carolina (Mr. McHenry), our vice chairman and the sponsor of this bill.

Mr. Speaker, I yield 2 minutes to the gentleman from Ohio (Mr. Chabot), the chairman of the Committee on Small Business here in the House of Representatives and a strong supporter of this bill.

Mr. Speaker, I yield 2 minutes to the gentleman from Illinois (Mr. Hultgren), the vice chairman of our Subcommittee on Capital Markets, Securities, and Investments.

Mr. Speaker, I yield 2 minutes to the gentleman from Maine (Mr. Poliquin).

Mr. Speaker, I yield 2 minutes to the distinguished gentleman from Arkansas (Mr. Hill).

Madam Speaker, I yield 2 minutes to the gentleman from Minnesota (Mr. Emmer).

Madam Speaker, may I inquire as to the balance of time each side has left?

Madam Speaker, I yield 2 minutes to the gentleman from Ohio (Mr. Davidson).

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

Madam Speaker, I yield as much time as he may consume to the gentleman from Texas (Mr. Hensarling), chairman of the Financial Services Committee.

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

Madam Speaker, as I close on this very important bill that we have been talking about, H.R. 1219, I just want to say congratulations to our sponsors, Congressman McHenry and Congresswoman Velazquez, for their leadership on this, as well as my Capital Markets, Securities, and Investments Subcommittee ranking member, Representative Maloney, for working together to advance this commonsense bill.

As was pointed out by both the chairman and the ranking member, there is strong bipartisan consensus that this bill is a winner for the American people. Some people today, as they tee off the Masters, we might say it is a 6-inch putt for the American people knowing that this is good for them and good for the economy.

I want to encourage all of my colleagues on both sides of the aisle to support this bill, H.R. 1219.

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

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

Mr. Speaker, I appreciate the opportunity to rise, and I do feel like, to clarify, the bill title of H.R. 1219 is Supporting America's Innovators Act.

Our colleagues have seen time and time and time again that the other side has wanted to come to the floor and talk about everything other than what we are dealing with. But I do want to lay out, as one of the senior members of the committee, what has happened in Financial Services when we have dealt with this.

Last Congress, this exact bill passed 52-2 in the committee, with the ranking member supporting the bill. There were no dissenting minority views that were offered. And now, with this particular piece of legislation, H.R. 1219, there were no amendments even offered at the Rules Committee.

So which is it? My friends across the aisle complain when we don't do regular order. They complain if this had gone on suspension. I am kind of reminded of Groucho Marx in his movie, ``Horse Feathers.'' Whatever that is, I am against it. That seems to be their attitude.

But I do look forward to working with my colleagues across the aisle to make sure that they join me in supporting government funding when we are going to be dealing with that here shortly.

So on to our bill here, H.R. 1219, unless the opposition, the other side of the aisle, would like to continue to talk about a lot of nongermane things; I will keep bringing up Susan Rice and her illegally unmasking people if they would like to do that. We can continue with that conversation.

I would prefer to talk about H.R. 1219. So we know that small businesses and entrepreneurs are the heartbeat of the American economy, and access to financial capital is vital for entrepreneurs seeking startup money, or to operate, or to expand their businesses. However, gaining access to capital has remained an enduring challenge for small businesses.

The financial crisis and the Great Recession made the situation worse as capital became increasingly hard to access from institutional banks and various capital players. And while conditions have improved somewhat in the recent years, many entrepreneurs continue to struggle with accessing the capital that they need to compete and to grow.

In order to succeed, these companies need capital and credit, which is the lifeblood for growth, expansion, and job creation. Yet the government continues to construct arbitrary walls that cut them off from essential financing as smaller companies are caught in a sea of regulatory red tape created by Washington bureaucrats oftentimes.

As we had a similar bill yesterday, I made the point at that time as well. We know that 60 percent of all net new jobs that have been created here in the United States, 60 percent of all net new jobs that have been created here over the last 2 decades, have come from these small businesses.

Congress has made strides in tailoring the regulatory environment for these smaller companies--most notably when we passed, with strong bipartisan support, the Jumpstart Our Business Startups Act, or JOBS Act, in 2012. That was a bipartisan bill that was signed by President Obama.

The JOBS Act's benefits are notable as more and more companies use its provisions to raise investment capital in both the public and the private markets. And the JOBS Act raised the cap on investors in a privately held company from 500 to 2,000 investors, but the limit on the number of investors acting as a coordinated group to invest in a company remained at 100, where it has been since 1940, some 77 years ago. I think it is about time that we update that.

As noted by Kevin Laws, of AngelList in his written testimony before the Capital Markets Subcommittee: ``With online fundraising and general solicitation becoming more common because of the JOBS Act, companies are bumping up against the limit more frequently. The current limit . . . now acts as a brake on the amount of money the company wanted to raise, leaving tens of millions of dollars on the table that did not go into startups.''

Well, H.R. 1219, the Supporting America's Innovators Act, a bipartisan bill introduced by Representatives Patrick McHenry and Nydia Velazquez, would amend the cap currently contained in the Investment Company Act to allow 250 investors, instead of that 100, for a qualified venture capital fund, and, therefore, enhance angel investors' ability to provide important funding to our small businesses.

This bill is a very modest increase to the current exemption which has been in place for nearly 77 years, since 1940. Modernizing the cap is long overdue and reflects today's capital markets realities and the increasingly important role that angel investors play as they commit the funds necessary to help these small businesses grow.

The Securities and Exchange Commission continues to ignore the backlog of good ideas to spur capital formation recommended by entrepreneurs, small businesses, and market participants at the SEC's annual government-business forum on capital formation. So in the SEC's absence, Congress must act to promote market efficiency and capital formation. That is what we are here to do today, and I do think that that is an extremely important thing for us to do here in Congress.

I think that we can all agree that we support smart regulation that protects investors and maintains orderly and efficient markets.

I think we can all agree that we need to support smart regulation that protects investors and maintains orderly and efficient markets. But outdated, excessive, and unnecessary regulation where costs outweigh the benefits is just dumb regulation that overly burdens smaller companies.

So let's provide some regulatory relief by enacting this bipartisan bill that will ease the burdens on small businesses and job creators to help foster capital formation and get Americans back to work.