[Congressional Record Volume 164, Number 46 (Thursday, March 15, 2018)]
[House]
[Pages H1634-H1642]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
REGULATION A+ IMPROVEMENT ACT OF 2017
Mr. HENSARLING. Mr. Speaker, pursuant to House Resolution 773, I call
up the bill (H.R. 4263) to amend the Securities Act of 1933 with
respect to small company capital formation, and for other purposes, and
ask for its immediate consideration in the House.
The Clerk read the title of the bill.
The SPEAKER pro tempore. Pursuant to House Resolution 773, the
amendment printed in part D of House Report 115-595 is adopted, and the
bill, as amended, is considered read.
The text of the bill, as amended, is as follows:
H.R. 4263
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Regulation A+ Improvement
Act of 2017''.
SEC. 2. JOBS ACT-RELATED EXEMPTION.
Section 3(b) of the Securities Act of 1933 (15 U.S.C.
77c(b)) is amended--
(1) in paragraph (2)(A), by striking ``$50,000,000'' and
inserting ``$75,000,000, adjusted for inflation by the
Commission every 2 years to the nearest $10,000 to reflect
the change in the Consumer Price Index for All Urban
Consumers published by the Bureau of Labor Statistics''; and
(2) in paragraph (5)--
(A) by striking ``such amount as'' and inserting: ``such
amount, in addition to the adjustment for inflation provided
for under such paragraph (2)(A), as''; and
(B) by striking ``such amount, it'' and inserting ``such
amount, in addition to the adjustment for inflation provided
for under such paragraph (2)(A), it''.
The SPEAKER pro tempore. The bill, as amended, shall be debatable for
1 hour equally divided and controlled by the chair and ranking minority
member of the Committee on Financial Services.
The gentleman from Texas (Mr. Hensarling) and the gentlewoman from
California (Ms. Maxine Waters) each will control 30 minutes.
The Chair recognizes the gentleman from Texas.
General Leave
Mr. HENSARLING. Mr. Speaker, I ask unanimous consent that all Members
have 5 legislative days to revise and extend their remarks and submit
extraneous material on the bill under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Mr. HENSARLING. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I rise in very strong support of H.R. 4263, the
Regulation A+ Improvement Act.
I want to thank the sponsor of this bipartisan legislation, the
gentleman from New Jersey (Mr. MacArthur). He has been a huge leader on
all capital formation issues within our committee and in this Congress.
He is a real asset. His business acumen is well positioned to help
serve us, and his leadership on this bill should be commended.
Mr. Speaker, although small companies are at the forefront of
technological innovation and job creation, they often face significant
obstacles in obtaining funding in our capital markets. These obstacles
generally stem from the disproportionately larger burden that
securities regulations, written principally for large public companies,
instead place on small companies when they seek to go public.
In 2012, the Jumpstart Our Business Startups Act, known as JOBS Act,
sought to modernize and better tailor some of these regulations,
including Reg. A, under our securities law. Reg.
[[Page H1635]]
A is a longstanding exemption from SEC registration that permits public
offerings without formal registration as long as certain conditions are
met.
Prior to the JOBS Act, a small company seeking to use Reg. A was
limited to raising $5 million of securities in a 12-month period. As
you can imagine, over time, Mr. Speaker, Reg. A offerings became
increasingly rare due to the relatively small offering size that was
available and a requirement that Reg. A securities still comply with 50
different State securities law registration and qualification
requirements.
Title IV of the JOBS Act attempted to address the antiquated
Regulation A by directing the SEC to update it, which the SEC did in
2015, under the moniker Reg. A+, by creating two tiers of Regulation A
offerings and allowing certain securities to qualify for preemption
from State securities law.
Under the second tier, the SEC increased the amount companies can
offer from $5 million to $50 million. Mr. MacArthur's legislation only
pertains to the Tier 2 limit.
Since Reg. A+ was implemented in 2015, small businesses have
increasingly been able to use this tool to raise much-needed capital to
expand their businesses and create new jobs in our economy. According
to the SEC Office of Small Business Policy, as of November 2017, 69
completed Reg. A+ offerings had raised a total of $611 million.
Unfortunately, the $50 million cap leaves significant opportunity on
the table for our startups, opportunity that could be better realized
if the limit were increased to $75 million, which the Treasury
Department has recommended as a potentially less costly alternative for
startups to raise capital. Moreover, increasing the Reg. A+ limit will
better position companies that want to use the exemption as an on-ramp
to list publicly to bear the corresponding compliance burdens and still
invest in jobs and growth.
Mr. Speaker, more and more, we have seen IPOs of companies with
products that we use every day--Uber, Facebook, Spotify, Snapchat--come
after the company is already valued over $1 billion. For everyday
investors, this often means missing out on some of the most dynamic
growth stages of the company that would provide the highest rate of
returns for them and their family, all while the wealthy, accredited
investors and venture capital firms can invest early, and they get to
rake in the better rates of return.
With regulations disproportionately stacked against them, it isn't
surprising that small companies so often are choosing to stay private.
Many have no other choice. Again, after all, the SEC has estimated that
the costs of going public, on average, are $2.5 million in regulatory
costs for undergoing an IPO and annual compliance costs averaging $1.5
million thereafter.
Those costs stand in stark contrast to the $111,000 the SEC says is
the average legal and auditing cost for Reg. A+ offerings. In other
words, by utilizing Reg. A+, small businesses can raise significant
capital while saving more than $2 million--$2 million that can be
invested in jobs and research and other growth opportunities. This is
why Reg. A+ is so important: it provides a more cost-effective way to
raise equity capital early on in the growth stages of these companies.
Additionally, Reg. A offerings enjoy preemption from State securities
laws. Mr. Speaker, I hope every Member pays close attention to this.
They may not know it.
In 1980, when a startup computer company, by the way, called Apple
decided to go public, the Commonwealth of Massachusetts decided the
stock was too risky and barred its sale to individual investors in the
State. Today, Apple's market valuation is almost $1 trillion. It is an
American iconic brand and one of the largest companies in the world.
And it is, again, potentially going to be the first public company with
a trillion-dollar market cap. If you had bought 45 shares of Apple when
it was offered at its IPO, by the end of last year you would have over
$394,000. That is hardly crumbs, Mr. Speaker.
In short, I strongly urge my colleagues to support this legislation.
It is a very smart but modest improvement in a popular JOBS Act
provision.
Mr. Speaker, I reserve the balance of my time.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such
time as I may consume.
Mr. Speaker, H.R. 4263, the so-called Regulation A+ Improvement Act,
is a solution in search of a problem that threatens to undermine
protections for mom-and-pop investors and the integrity of our capital
markets. The bill would arbitrarily and prematurely increase the
maximum amount of securities that private companies can sell each year
to the public from $50 million to $75 million under the Securities and
Exchange Commission's Regulation A+ exemption from registration.
Mr. Speaker, such a change makes no sense. First, the SEC only
recently implemented Regulation A+ pursuant to the Jumpstart Our
Business Startups, the JOBS Act. Effective June 19, 2015, that rule now
allows private companies to raise either $20 million under Tier 1 or
$50 million under Tier 2 from the public with less investor protections
and oversight than a public securities offering registered with the
SEC.
What little data we have since it became effective suggests that
there is no need to raise that $50 million limit. As of December 31,
2017, only 39 percent of the 172 companies using Tier 2 of Regulation
A+ sought the maximum amount of $50 million; and only three issuers, or
5 percent, of the 61 issuers that have reported proceeds in Tier 2
offerings actually raised the maximum amount.
Second, in the JOBS Act, Congress specifically directed the SEC to
review the Regulation A+ limit every 2 years and report its reasons for
not raising it to Congress. On April 5, 2016, the SEC sent Congress its
report, stating: ``Given the short period of time that the final rules
have been in effect and in light of the limited number of Regulation A+
offerings qualified and completed to date, the Commission does not
believe that the information currently reported by companies on the
amount of capital raised pursuant to Regulation A+ is sufficient to
determine whether it would be appropriate to propose an increase in the
Tier 2 $50 million offering limit.''
If my Republican colleagues think that the SEC should be doing more,
they only have to wait a few more weeks for the SEC's next review and
report on the Regulation A+ offering limit. There is no reason why
Congress shouldn't acknowledge the SEC's existing efforts to study the
empirical evidence instead of making arbitrary decisions devoid of any
real analysis.
Finally, and most importantly, the bill may harm retail investors and
our markets. What my Republican colleagues fail to acknowledge is that
the purpose of Regulation A+ is to provide small private businesses
with access to financing from mom-and-pop investors, many of whom are
in their community, so that they can grow and eventually enter the
public markets as full SEC reporting companies traded on a national
securities exchange.
As public companies, they are subject to the full set of investor
protections under the securities laws, but also gain access to much
deeper sources of capital. Indeed, under the current system, eight
Regulation A+ issuers have already listed their shares on an exchange,
becoming true public companies. This positive development suggests that
Regulation A+ is working as Congress intended, and expanding it could
discourage companies from becoming truly public.
However, it is also clear that additional study of the existing
Regulation A+ exemption is warranted. A series of recent press articles
highlight the high risk of loss that investors face in investing in
companies that have used Regulation A+ even when those companies later
list their securities for trading on an exchange.
According to a February 2018 article in The Wall Street Journal,
seven out of the eight companies that listed their securities for
trading on an exchange in 2017 following a Regulation A+ offering are
trading an average of 42 percent below their offering prices. By
comparison, companies that engaged in a traditional initial public
offering, or an IPO, in 2017 are trading an average of 22 percent above
their offering prices. Moreover, those Regulation A+ companies were
trading lower, even as the S&P 500, which tracks 500 large publicly
traded companies, has risen 18 percent since the start of 2017.
Congress should better understand why Regulation A+ companies that
have gone public fared so poorly compared to the rest of the market
before
[[Page H1636]]
we go ahead and expand Regulation A+ through legislation like H.R.
4263.
Now, Mr. Speaker, I joined with my friends on the opposite side of
the aisle, and Mr. McHenry in particular, and supported the JOBS Act,
and of course I had some questions about the risk that would be
involved with our mom-and-pop investors. I wasn't sure, but I decided
to support the JOBS Act and Mr. McHenry even with my concerns because I
certainly wanted the opportunity for these small businesses to have
access to capital that perhaps they would not be able to get otherwise.
{time} 1430
Along with that bill, we talked about the review that would be done
to determine whether or not we should be increasing, particularly, Tier
2, that would expand the ability for the small businesses to have
access to more than $50 million. So I don't know why we just don't
stick with what we did.
I think that, despite whatever we are learning about the A+
regulation, we need to understand thoroughly what the advantages are,
what the disadvantages are, and what the risks are to investors, et
cetera.
So I am going to ask my colleagues to oppose this legislation.
Mr. Speaker, I reserve the balance of my time.
Mr. HENSARLING. Mr. Speaker, I yield 5 minutes to the gentleman from
New Jersey (Mr. MacArthur), the sponsor of this legislation and a
hardworking member of the Financial Services Committee.
Mr. MacARTHUR. Mr. Speaker, I am proud to advance this bill--this
bipartisan bill. I am grateful for my Democratic cosponsor,
Congresswoman Sinema; Democratic Congressman Gottheimer; and Republican
Congressman Hollingsworth, for joining me in this effort.
The purpose of this bill is pretty simple and pretty narrow. Seven
out of ten new jobs in this country come from our Nation's 28 million
small businesses. When we help those businesses grow, we help them
create new jobs.
I think of the biopharmaceutical companies in my home State of New
Jersey as an example of companies that desperately need capital to
continue to grow, and that growth creates new jobs. The Federal
Government cannot do everything, but we can surely help these companies
grow in our country.
The 1933 Securities Act laid the groundwork that all interstate
security offerings have to be registered with the SEC. It was
cumbersome, it was expensive, so that Congress made some exceptions.
Regulation A allowed a limited amount of offerings for Main Street
investors, and Regulation D allowed unlimited offerings for accredited
investors. This bill is working at Regulation A.
Over time, those limits have gone up periodically. The last time it
was lifted was effective 2015. It was raised to $50 million, and it has
been helpful. It has created growth. It has created new jobs.
This bill is a modest improvement, raising that $50 million to $75
million. This was contemplated in the original JOBS Act, where we
raised it to $50 million. In that law, the SEC was required to either
increase the $50 million or to explain to us why they weren't doing it.
Their deadline for doing that expired at the end of 2017. So this is an
overdue increase, and I think it is high time that we do it.
I could offer a lot of anecdotes of how this benefits companies. I
thought I would offer the one that is closest to home, my own story.
I was fortunate enough to buy a fairly small business in 2002. I did
three capital raises in the years that followed. The first was for $12
million, the second was for $75 million, the third was for $500
million. And those capital raises continued during my period of
ownership of the company.
I can tell you, without any question, the smallest capital raises
were the hardest for me. It is much harder to raise this much money
than it is to raise this much. When I was raising a lot of money, I had
a lot of interested parties. When I was raising the smaller amount, it
was difficult.
What this bill does is allow growing companies to have another point
in the market where they can raise money. It is not just banks or
private equity funds; it is regular, Main Street investors.
I heard the remarks that this creates risk. I can tell you that there
are dozens of people in my old company who became shareholders, who are
living a better life today, them and their families, because they had
an opportunity to buy stock in a growing company.
Mr. Speaker, this bill is good for businesses. It is good for
employees. It is good for Main Street investors. It is a win, win, win.
And, ultimately, it is good for the American economy. I urge my
colleagues to support it. Let's not be afraid of making a commonsense
change. I urge my colleagues to support it.
Ms. MAXINE WATERS of California. Mr. Speaker, I reserve the balance
of my time.
Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from
Michigan (Mr. Huizenga), the chairman of the Capital Markets,
Securities, and Investments Subcommittee.
Mr. HUIZENGA. Mr. Speaker, I want to commend my friend from New
Jersey and the work that he has put into this.
I rise today in support of this much-needed legislation that would
increase the limit that small companies looking for additional
investments and investors can solicit under Reg. A+. These deals would
increase from $50 million to $75 million. This will enhance capital
formation for growing small companies that are exploring crowdfunding
as a method to raise capital.
The JOBS Act has proven to be wildly successful, and this program has
proven itself successful as well. Yet it can be even more so with this
modest increase.
So, specifically, the legislation further strengthens the ability for
small- to mid-sized companies to attract more traditional underwriters
and more sophisticated investors into the Reg. A+ process.
Reg. A+ has been termed a ``Mini IPO'' or an ``IPO to go,'' and for
good reason. While the cost of doing a full-blown IPO has skyrocketed,
and the crowdfunding industry has been adopting Reg. A+ and leveraging
it to raise growth capital for a fraction of what a traditional full-
blown IPO would be, would cost, while still having access to the
capital markets.
Like the chairman, I and many others on the committee have been
concerned about the decrease in these initial public offerings, or
IPOs, over the last number of years. Reg. A+ has been able to step in
and help fill that gap. It provides much greater flexibility and
marketing to potential investors, both accredited an non-accredited,
while maintaining important consumer protections that everybody agrees
needs to be there.
Despite Reg. A+ being cheaper and faster, however, major underwriters
and broker dealers have been slow to fully adopt Reg. A+ because the
size of the increase up to that $50 million has really been minimal
compared to a traditional IPO.
Raising the Reg. A+ limit to $75 million is certainly a step in the
right direction to alleviate this problem, as it opens Reg. A+ to
larger companies that may be considering doing a full-blown traditional
IPO.
Additionally, this increased limit will have a positive impact for
smaller companies because it can attract some of the more traditional
underwriters to the process.
So, again, I want to congratulate my friend from New Jersey on his
work on this, and the chairman for really trying to push this issue
forward. It is an important piece that we have been dealing with on the
capital markets as we are trying to maintain and make sure that our
markets are the most liquid and deep in the world, and that maintains
that.
So I urge my colleagues to support this important bill.
Ms. MAXINE WATERS of California. Mr. Speaker, I continue to reserve
the balance of my time.
Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from
Illinois (Mr. Hultgren), the vice chairman of the Financial Services
Subcommittee on Capital Markets, Securities, and Investments.
Mr. HULTGREN. Mr. Speaker, this is an exciting, important debate. I
rise today to speak in support of H.R. 4263, the Regulation A+
Improvement Act.
Congressman MacArthur's bipartisan legislation would increase the
offering amount that companies can offer
[[Page H1637]]
under Tier 2 of Reg. A from $50 million to $75 million, adjusted for
inflation by the SEC every 2 years.
This type of legislation, modeled after the bipartisan JOBS Act,
typically enjoys strong bipartisan support in Congress. I hope that
will be the case again today.
Title IV of the JOBS Act directed the SEC to issue rules to update
Reg. A, which exempts small offerings of up to $5 million within a 12-
month period from Federal registration. The updated exemption, now
known as Reg. A+, increased the amount companies could offer from $5
million to $50 million within a 12-month period of time, and preempts
State registration and qualification requirements to make it easier for
small- and medium-sized businesses to undertake Reg. A+ offerings by
avoiding the oftentimes prohibitively expensive complexities of
complying with up to 50 State regulators, all providing different
regulations.
Some opponents of this legislation have argued that it is unnecessary
because the SEC is required to review this threshold and has the
authority to increase it.
On April 5, 2016, SEC staff informed the Financial Services Committee
that the $50 million threshold would remain in place throughout 2018
because of a lack of information available on Reg. A+ offerings since
the rule was finalized in 2015.
However, during the comment period for implementing Reg. A+, the SEC
received a significant number of comments that Reg. A+ should be
expanded beyond the $50 million threshold. Furthermore, since the
amendment to Reg. A became effective, the rate of Reg. A+ securities
offerings has increased.
Last year, the U.S. Chamber of Commerce testified before the Capital
Markets, Securities, and Investments Subcommittee, noting this
legislation ``is a way to help make it easier for a small business to
access capital to get deals done. To do that, even with the bump up to
$50 million, people are still finding their sea legs. But in terms of
driving liquidity, we thought the $75 million number was important.''
Former SEC Commissioner Dan Gallagher has stated: ``The SEC should
have exercised our clear authority under the JOBS Act to raise the
offering limit to $75 million.''
Hester Peirce, now an SEC Commissioner, testified during a hearing of
the Financial Services Committee that, ``Prior to the JOBS Act's
changes to Regulation A, that provision languished unused by companies,
so it is important to revisit different avenues for raising capital
frequently to ensure their continued usefulness.''
Congressman MacArthur's legislation will help ensure that the SEC
focuses on its mission of capital formation, especially for small
businesses. This is vital if we are going to continue on the course of
economic growth.
And at the end of the day, after all of our debate on the merits of
this legislation, let's make sure we remember it is simply an inflation
adjustment for the amount of shares that can be issued under this
exemption. Congressman MacArthur is simply proposing to make this
financing tool available to more startup companies and their investors.
This should not be controversial.
I urge support for Congressman MacArthur's bipartisan legislation.
Ms. MAXINE WATERS of California. Mr. Speaker, I continue to reserve
the balance of my time.
Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from
Arkansas (Mr. Hill), the majority whip of the committee.
Mr. HILL. Mr. Speaker, I, too, want to add my congratulations to Mr.
MacArthur for continuing to find ways to improve Mr. Obama's and this
committee's excellent work on the JOBS Act from some 8 years ago. We
have learned a lot. We have seen the benefits of the JOBS Act, and
today we have a chance to make it even better by improving Reg. A+.
I appreciate Mr. MacArthur's personal story about his
entrepreneurship and how this is an opportunity for more investors in
our country and more capital for our entrepreneurs.
Mr. Speaker, this week I attended a meeting where people asked: Why
do we need more public companies?
Gosh, that is an easy rhetorical question.
Because we have half the number of public companies we had during the
Reagan administration, and we need them for our young people to invest
in. We need them for our union workers to have an earning asset in
their pension fund.
So we need more public companies in this Nation to share the growth
and prosperity of this Nation. That is what this legislation is all
about.
I thank Mr. MacArthur for his very straightforward, bipartisan,
commonsense increase in the authority from $50 million to $75 million
for young, growing companies to raise money under Reg. A+.
Former SEC Commissioner Dan Gallagher advocated the increase in the
offering threshold to even $100 million before the SEC adopted their
final rule.
{time} 1445
Mr. Gallagher expressed his disappointment that this offering
threshold was not raised in the final rule from that original statutory
cap of $50 million.
We have support through the commission and through the staff for
raising this amount, Mr. Speaker, to help our entrepreneurs. Expanding
Reg. A+ to include offerings up to $75 million will allow private
companies to consider a mini-IPO under Reg. A+. This will give us more
competition for capital, driving down cost of capital, driving up the
number of opportunities for people to take advantage of going public,
growing a prosperous company, and sharing that equity with investors
through their exchange-traded fund, through their pension plan, through
their 401(k) plan. We want more opportunities to share our Nation's
prosperity.
I thank my friend, Mr. MacArthur, for his thoughtful work, and I
thank our chairman for his leadership on the committee.
Ms. MAXINE WATERS of California. Mr. Speaker, I continue to reserve
the balance of my time.
Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from
Maine (Mr. Poliquin), from the land of moose and maple syrup, a
hardworking member of the Financial Services Committee.
Mr. POLIQUIN. Mr. Speaker, I appreciate this opportunity very much.
You notice, Mr. Speaker, those who do not live in the great State of
Maine are very envious of those who do; so I take full advantage of the
moose, bear, and other critters that we have in the State of Maine.
Right now, today, Mr. Speaker, I am talking about H.R. 4263, the
Regulation A+ Improvement Act, and I want to congratulate the gentleman
from New Jersey (Mr. MacArthur) for the great work he has done on this
bill, and I want to thank Chairman Hensarling for bringing this bill to
the floor. It is very important for all of us to consider this.
Now, Mr. Speaker, we all know what we want in this country, which are
more opportunities and more jobs for our kids--better opportunities for
our kids so they will have better lives and more freedom. This cannot
happen, Mr. Speaker, unless our businesses are able to grow and hire
more individuals and pay them more.
Now, that mostly can only happen, Mr. Speaker, if businesses are able
to more easily borrow money. The chairman and I both know that the
government's job is to help our economy grow, not get in the way.
That is why Reg. A+ cuts through the red tape such that more small-
and medium-sized businesses are able to access capital, grow their
operations, and hire more people. In a sense, Reg. A+ has implemented,
Mr. Speaker, billions of dollars of new financing and has led economic
growth in small to medium businesses to grow and present more
opportunities for their workers. So Reg. A+ works. We know that because
the evidence is there.
With that, Mr. Speaker, I would like to close by saying, Mr.
MacArthur's bill is a commonsense technical adjustment to a bill--a
rule, rather, that works. It simply increases the amount that companies
are able to borrow under this rule that works.
Please, everybody, Republicans and Democrats, support Mr. MacArthur's
bill.
Ms. MAXINE WATERS of California. Mr. Speaker, I continue to reserve
the balance of my time.
Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from
[[Page H1638]]
Ohio (Mr. Davidson), a hardworking member of the Financial Services
Committee.
Mr. DAVIDSON. Mr. Speaker, I rise today to offer my support for H.R.
4263, the Regulation A+ Improvement Act. I greatly appreciate my
colleague, Representative MacArthur, for this bill and for our chairman
for moving it through our committee, and, frankly, my colleagues from
across the aisle who came together to recognize the need for this bill.
As has already been stated, this has broad implications for small
capital companies. I spent the past 15 years, prior to coming to
Congress, growing small manufacturing companies, and I can greatly
appreciate the challenge of raising capital. This is another means of
doing that, but I want to highlight another area that it might be
suitable.
With approximately $4 billion of capital raised worldwide in 2017, it
is fair to say that initial coin offerings are just another great way
for startups to raise capital and grow their businesses. ICOs in
Regulation A+ could work great together, and with Mr. MacArthur's bill,
they can work even better.
An example of this harmonization is the investor-based Reg. A+ allows
investors of any wealth to participate. This Democratic process is a
pillar for ICOs in terms of the premise behind distributed ledger
technology.
Another provision is anti-money laundering. Reg. A+ requires the
validation of investors, as well as background checks on the principles
of offering companies. This goes hand in hand with improving the
credibility of ICO business practices and reducing the risk of loss.
Compliance with Reg. A+ would mean a disclosure memorandum, not just
a white paper. Reg. A+ provides ICO entrepreneurs and their startups
with a viable path to compliance with SEC security regulation. So it is
important that we have guardrails established in this explosive new
industry, while not hampering the ability to grow the business. I urge
my colleagues to support this vital legislation.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such
time as I may consume.
Mr. Speaker, I have extensive information here about what is
happening with Regulation A+. At first, I decided that some of this
information I wouldn't share because I am so anxious for these small
businesses to be able to access capital, but I think that, you know,
some of my earlier concerns, perhaps, may have been justified.
H.R. 4263, the so-called Regulation A+ Improvement Act, is opposed by
consumer and investor advocates. I would like to take a moment to read
some of their statements in opposition to this bill.
Consumer Federation of America:
``This bill would increase the offering limit, despite the fact that
the SEC already has unlimited authority to raise the cap as it deems
appropriate. Moreover, the SEC is required to review the offering limit
every 2 years, with its next analysis expected to be released next
month. . . . A vote for this bill, before the SEC has had a chance to
complete its analysis, is a vote against evidence-based policymaking.
``If Congress were to take the time to consider the research that the
SEC has conducted on the Regulation A markets since the Regulation A+
rules were adopted, it would find that there currently is no need to
raise the limit . . . data suggest that issuers generally are not
clamoring for more capital than is currently allowed to them under the
rules. . . .
``The market's tepid reaction to Regulation A offerings is surely
also related to the largely abysmal performance of Regulation A
offerings to date. . . . A recent Barron's article provided an in-depth
review of the Regulation A market, describing the `woeful performance'
of the few dozen companies that are currently exchange-listed and the
difficulty trading or getting a price quote for the vast majority of
companies that aren't exchange listed. The Barron's article further
described how `most Reg. A+ businesses haven't gotten beyond the
startup phase known as the pipedream.' Some examples that the article
cites include businesses seeking capital for cannabis paraphernalia,
flying cars, studying UFOs, telepathy, and light-speed travel. We
wonder why the backers of this legislation would spend so much time and
effort seeking to artificially prop up businesses of this sort.
``And while Regulation A's supporters have touted Regulation A's job
creating potential, the Barron's article states that the only people
Regulation A clearly has created jobs for are Regulation A underwriters
and promoters on Wall Street, many of whom have `checkered stock market
histories.'''
Are these really the sort of jobs Congress is intending to promote?
``In conclusion, because this bill arbitrarily increases the offering
limit without evidence that doing so is either necessary or beneficial,
and in the face of evidence that Regulation A offerings to date largely
have been market failures, we urge you to vote `no.'''
Let me just continue to quote. Americans for Financial Reform: ``This
is an unwarranted increase in the threshold. Most fundamentally,
Congress should not be undermining public securities markets by
expanding the ability of larger companies to make offerings while being
exempt from core disclosure and investor protection requirements.
Private offerings were designed to permit early stage capital raising
from sophisticated investors by small companies, but the current cap of
$50 million per year in private capital raising already permits fairly
large companies to take advantage of this route. Additionally, the
Securities and Exchange Commission, SEC, already has regulatory
authority to increase the current threshold, which they examine on a
biannual basis. . . .
``Seven of the eight companies with Regulation A+ offerings in 2017
are down 42 percent from their offer prices, as compared to
conventional offerings made during the same period, which are up 22
percent from offer prices. This is to be expected, given that
Regulation A+ permits companies to avoid requirements such as
disclosures that were designed to protect investors. If it expanded
such exemptions, Congress would facilitate increased harm to investors.
``Members should also take notice that with the blockchain and
cryptocurrency fever, SEC filing and disclosure exemptions like
Regulation A+ are becoming a popular avenue for initial coin offerings,
ICOs. . . .
``In the middle of this SEC crackdown on fraudulent ICOs, H.R. 4263
would potentially expose a larger number of investors--including
nonaccredited, unsophisticated investors--to shady companies, Ponzi
schemes, and exit scams.
``The widespread use of private offerings reduces transparency and
investor protections in capital markets. Raising capital under
Regulation A+ should be used as an on-ramp to a true public offering
and not as an end in itself for larger issuers. Increasing the annual
threshold for exempted Regulation A+ offerings goes in the opposite
direction.''
Public Citizen had this to say:
``Evidence shows little demand for this measure. A study by the SEC
of Regulation A+ offerings found that the average issuer sought only
$18 million. Moreover, these firms pose risk for investors, as the
issuers had only an average of $50,000 in cash; no property, plants,
and equipment; no revenues; and no net income. Increasing access to
capital with no additional investor protections exacerbates the
problem.''
And so, yes, I do oppose the bill. Let me just say this. I would like
small businesses to do well. I would like our small businesses to have
access to the capital that they need to support, you know, good ideas
that have been given the kind of research that is necessary to
determine the potential for some of these businesses.
You just heard this information from the Barron report. This is
serious. What we have seen, despite the fact what we want to happen, is
that it is not happening. The fact that we would like very much--and we
have done everything that we could do with the JOBS Act to give support
to our small businesses because we want them to thrive. We believe that
they are job intensive, if they can get up and get going. It is not
happening.
What we are doing is we are exposing these little mom-and-pop
investors to situations where they are going to lose what small amounts
of money they are investing. So let's just be cool, let's be calm, and
let's give the SEC the opportunity to do its analysis. There is no
reason to push this now.
[[Page H1639]]
I would ask my Members on the opposite side of the aisle to rethink
and to join with me, oppose the bill so that we can give the SEC the
opportunity, again, to do the kind of analysis it needs to do, and
let's think about what else can we do to help small businesses, rather
than continue down the road of failure, because this is exactly what is
being exposed.
Mr. Speaker, I reserve the balance of my time.
{time} 1500
Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentlewoman
from New York (Ms. Tenney), a hardworking member of the Financial
Services Committee.
Ms. TENNEY. Mr. Speaker, I thank the chairman for yielding me time.
Mr. Speaker, I rise to support this bipartisan legislation, H.R.
4263, the Regulation A+ Improvement Act, introduced by my colleague
from New Jersey (Mr. MacArthur).
Congratulations to Mr. MacArthur and the chairman for bringing this
great legislation to the floor.
This legislation would increase, from $50 million to $75 million, the
offering exemption amount that companies can offer under the Securities
and Exchange Commission's, the SEC, Tier 2 of Regulation A, an
amendment to the 2012 JOBS Act.
As the owner of a small business, I understand firsthand the vital
importance of making our Nation's business climate competitive at all
levels. Small businesses create nearly 70 percent of the new jobs in
our country. Yet small businesses are only starting to see a resurgence
from the struggling ecosystem created in the last Presidential era.
Thanks to the recent tax cuts and regulatory changes, we have seen
continued growth.
H.R. 4263 would be the next step toward helping small companies raise
necessary equity capital to enable them to grow and compete in a
changing and dynamic marketplace. This will result in more jobs and
more opportunities for our communities.
This bill would expand the SEC's Regulation A+ from $50 million to
$75 million, and it would allow companies to consider mini IPOs or mini
initial public offerings at a less costly alternative to raising
capital.
In my district, it is difficult to raise capital and secure a steady
line of credit for developing and sustaining small businesses. I have
experienced this very difficulty and struggle with clients I have
represented in my own legal practice.
This bill would help tremendously in improving access to capital for
small companies that ultimately are the drivers of job growth in New
York and across the Nation.
Mr. Speaker, I want to again thank Mr. MacArthur and the bipartisan
group of cosponsors for their hard work, and I urge my colleagues to
support this great legislation.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself the
balance of my time.
Mr. Speaker, H.R. 4263 is just another reckless partisan bill that
could harm mom-and-pop investors and weaken the integrity of the U.S.
capital markets. It continues the efforts to repeal or weaken important
regulatory protections under the guise of supporting jobs.
Not only have my Republican colleagues failed to come up with any
real data or analysis to support this claim, but they also completely
substitute their own judgment for that of the SEC, the agency with the
expertise over these issues.
As I have already said, we only have to wait a few more weeks to see
if the SEC decides to expand the Regulation A+ exemption and to
understand its rationale for the decision. But I suppose a few weeks is
a few weeks too long for my friends on the opposite side of the aisle
who are currently pushing for as many of these kinds of bills as
possible to be included in the Senate's Dodd-Frank rollback.
Those bad bills would cause further harm to investors by allowing
newly public companies to avoid audits of their controls over financial
reporting for a decade; by hampering investors' ability to get
independent, reliable information ahead of a shareholder meeting; and
by making it easier for fraudsters to swindle unsophisticated investors
into buying stock in a fake or failing company.
It should come as no surprise that these same harmful provisions show
up in the CHOICE Act, which is 10 times worse than the Senate's
deregulatory bill.
Mr. Speaker, both Democrats and Republicans want to help small
businesses grow and create jobs, but as Members of Congress, we also
have the responsibility to protect investors, particularly retail
investors, who are looking to save for retirement, to buy a house, or
to support our children's education.
As I have repeatedly said, any regulation must strike the right
balance between capital formation in our securities markets and
investor protection. This bill fails to do that, and that is why it is
opposed by consumer and investor advocates like Americans for Financial
Reform, Consumer Federation of America, and Public Citizen.
Mr. Speaker, I would urge all Members to join me in standing up for
investors and vote ``no'' on H.R. 4263, and I yield back the balance of
my time.
Mr. HENSARLING. Mr. Speaker, may I inquire as to how much time I have
remaining.
The SPEAKER pro tempore (Mr. Ferguson). The gentleman from Texas has
5\1/2\ minutes remaining.
Mr. HENSARLING. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, I again want to thank the gentleman from New Jersey (Mr.
MacArthur), an entrepreneur, someone who brings years and years of
experience in capital formation of building a business to help grow
jobs and our economy.
H.R. 4263, again, is, in part, an expansion of the JOBS Act,
something that was signed into law by President Barack Obama. I didn't
agree with that particular President on many occasions, but he got this
right, and this has been something good for the American economy.
But what I fear is that, if we don't go forward, we end up going
backwards. And what we hear from our friends on the other side of the
aisle is: Let's keep the status quo.
But, Mr. Speaker, the status quo is what brought us a 1.6 percent
economy. The status quo is what brought paychecks to become stagnant.
The status quo ensured that Americans did not recover their savings
from the great financial crisis.
Now we have the Tax Cuts and Jobs Act, and now we have 3 percent
economic growth; now we have the lowest unemployment rate in 17 years;
now we have seen the greatest growth in paychecks in almost a decade;
now we are seeing 90 percent--90 percent--of wage earners seeing a
bigger paycheck, better take-home pay, because of the economic policies
of this Republican Congress and of the Trump administration.
So the gentleman from New Jersey has brought us, really, in some
respects, an important but modest proposition: that we ought to
increase the threshold for Reg A+ to $75 million.
Again, we don't know where the next Uber is coming from. We don't
know where the next Spotify is coming from. We don't know where the
next Apple is coming from. But do you know what, Mr. Speaker? We all
know they need capital. And this is a valuable alley, chain, path in
order to bring capital into our startup businesses.
Now, a constant theme we hear from our friends on the other side of
the aisle is consumer protection. Do you know what? Back in the 1980s,
the Commonwealth of Massachusetts decided to protect their people from
this fly-by-night company called Apple, which now is looking at an
almost $1 trillion market cap valuation, and had you invested at the
IPO, you would have a 45,000 percent rate of return. You could buy a
home; your children could buy a home; your great-grandchildren could
buy a home. You could achieve your American Dream. But a government
decided: No, you are too stupid to make this investment decision on
your own. We must protect you.
Nothing--nothing--in the bill from the gentleman from New Jersey
alters the vast, vast array of consumer protection laws that are
already on the books. Nothing in H.R. 4263 prevents the Department of
Justice from pursuing criminal prosecutions of fraud. Nothing in the
bill impacts the SEC's ability to pursue civil actions for those
[[Page H1640]]
who engage in fraud, negligent misrepresentations, negligent
transactions.
Nothing in this bill prevents the SEC from entering into cease and
desist orders and imposing civil liabilities for those who violate SEC
rules. Investors get to pursue Federal civil actions against those who
defraud them, those who make untrue statements. So there are plenty of
very important laws that are on our books.
What we shouldn't do, though, is protect our hardworking constituents
from the ability to make decisions for themselves and participate in
these early growth companies that now are only restricted to accredited
investors. It is only the wealthiest who get to make these decisions.
Well, in the land of the free, maybe a few more should, and maybe we
ought to have a few more Apples, a few more Ubers, a few more Spotifys.
I want to thank, again, the gentleman from New Jersey (Mr.
MacArthur), who has been a great leader in capital formation and job
creation on our committee and in this Congress, and I want to urge all
Members to adopt H.R. 4263.
I yield back the balance of my time.
The SPEAKER pro tempore. All time for debate has expired.
Pursuant to House Resolution 773, the previous question is ordered on
the bill, as amended.
The question is on the engrossment and third reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
Motion to Recommit
Mrs. BEATTY. Mr. Speaker, I have a motion to recommit at the desk.
The SPEAKER pro tempore. Is the gentlewoman opposed to the bill?
Mrs. BEATTY. Mr. Speaker, I am opposed to it in its present form.
The SPEAKER pro tempore. The Clerk will report the motion to
recommit.
The Clerk read as follows:
Mrs. Beatty moves to recommit the bill H.R. 4263 to the
Committee on Financial Services with instructions to report
the same back to the House forthwith with the following
amendment:
Page 3, line 10, strike ``$75,000,000'' and insert
``$50,000,000''.
Page 3, line 23, insert the following new section:
SEC. 3. EFFECT OF INCREASE IN OFFERING LIMIT.
The amendments made by this Act shall take effect on the
date that the Securities and Exchange Commission revises
regulations promulgated pursuant to subparagraphs (B) through
(G) of paragraph (2) of subsection (b) of section 3 of the
Securities Act of 1933 (15 U.S.C. 77c) as necessary to
protect investors before increasing the aggregate offering
amount described in subparagraph (A) of such paragraph to an
amount that is greater than $50,000,000.
Mrs. BEATTY (during the reading). Mr. Speaker, I ask unanimous
consent to dispense with the reading of the motion.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from Ohio?
There was no objection.
The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from
Ohio is recognized for 5 minutes in support of her motion.
Mrs. BEATTY. Mr. Speaker, this is the final amendment to the bill,
which will not kill the bill or send it back to committee. If adopted,
the bill will immediately proceed to final passage, as amended.
Mr. Speaker, this motion to recommit is simple and should be able to
garner the support of every Member of this body who seeks to enhance
our robust public and private markets while, at the same time, ensuring
there are adequate safeguards in place for the benefit of Main Street
investors.
Specifically, this motion will accomplish two simple things: one, it
will strike the increase in the offering limit to $75 million; and,
two, it will require the SEC to review and revise their bad actor
disqualification regulations prior to future increases in the offering
threshold.
Unfortunately, as currently written, with all due respect to my
Republican colleagues, raising the offering threshold is a solution in
search of a problem. Congress designated the SEC with regulating the
offering. Congress decided the SEC would administer the offering. The
SEC is the expert on Regulation A+, and it should be the one to raise
the offering threshold, assuming the data supports such an increase.
Under the law, the SEC will be reporting to Congress whether or not
they will raise the threshold just next month. This bill is premature,
and for the lawyers in the room, it is not ripe for review. So why
wouldn't we wait?
Right now there is zero data to suggest Congress needs to raise the
threshold, and it seems prudent to wait until next month to see what
the SEC has to say before rushing to increase it.
The majority argues this bill will allow companies to raise more
money. I say this bill is a solution in search of a problem because
only less than a handful of companies have ever actually raised the
current maximum amount of $50 million.
With regard to updating the bad actor disqualification regulation,
Bloomberg recently published an article on Regulation A+ and the
companies using the offering and found one executive of a company was
convicted for filing false tax returns, another for obstructing
justice, and another was accused of selling unregistered stock. For the
sake of time, these are just a few examples. Are these really the types
of individuals we want selling securities to Main Street mom-and-pop
investors?
Another article, appearing in Barron's, studied the hundreds of
companies that have used Regulation A+ to raise funds, and I quote
them: ``We were supposed to get new jobs and new industries. Instead,
we've gotten GoFundMe-style websites hawking penny stocks and
professional wrestlers shilling shares on TV.''
They went on to highlight some of the companies and the products
availing themselves of the lightly regulated Regulation A+ offering,
which included companies trying to make cannabis paraphernalia, flying
cars, guns, and my personal favorite, the founder of a rock band
seeking to raise money to study UFOs and light-speed travel.
Now, I am not trying to persuade Members that all companies seeking
to raise money through Regulation A+ are Wolf of Wall Street or UFO
chasers, because back in my home district, a Scottish-based company
successfully used Regulation A+ to open their first brewery and
restaurant in the United States. That example is exactly what Congress
had in mind when it called for the creation of Regulation A+, and it is
precisely the type of opportunity for investors that the law was
intended to create.
{time} 1515
This is why we need to ensure that we maintain the integrity of the
Regulation A+ offering and that we prevent bad actors from using it in
a way to rip off and scam all of our constituents.
That is why I urge Congress to adopt this motion, to stand up for
strong public and private markets, to wait the 30 days when the SEC can
come back to us, and to stand up for strong protections for Main Street
investors.
Mr. Speaker, I yield back the balance of my time.
Mr. HENSARLING. Mr. Speaker, I rise in opposition to the motion to
recommit.
The SPEAKER pro tempore. The gentleman from Texas is recognized for 5
minutes.
Mr. HENSARLING. Mr. Speaker, when I have said something incorrect, I
wish to correct myself in front of my colleagues in the public. I
earlier said that my colleagues were trying to give us status quo. I
wish to correct myself. This motion to recommit is worse than status
quo. It would take us back even further.
The gentlewoman from Ohio should admit when she is wrong. She is
wrong when she says this will not kill the bill. This will kill it. It
will gut it. It will bury it 6 feet under. I think she knows that. So
she is entitled to her opinion about what Reg. A+ should be, but she
absolutely eviscerates the bipartisan bill that is before the House.
Because many who are watching this may somehow think, ``Oh, my Lord,
there are no consumer protections for Reg. A+ offerings,'' the basic
requirements that are applicable to both Tier 1 and tier offerings
include company eligibility requirements, bad actor disqualification
requirements, issuer disclosure requirements, ongoing reporting
requirements.
And then for Tier 2 offerings, additional requirements: providing
audited financial statements; requirement to file annual, semiannual,
and current event reports; and limitation on the amount of security
nonaccredited and accredited investors can purchase.
[[Page H1641]]
Then those that are offered on an exchange have to adhere to the
exchange's listing standards, including corporate governance
requirement, background checks on the management and board, shareholder
approval of certain corporate actions, and the list goes on.
Mr. Speaker, I think there is a good case here. Anybody who picked up
a newspaper recently would find out that, yesterday, the SEC charged
Theranos with raising more than $700 million from investors through
exaggerated and false statements about the company's technology.
Guess what. In announcing the enforcement decision, here is what the
SEC noted:
The charges make clear that there is no exemption--no
exemption--from the antifraud provisions of the Federal
securities laws simply because a company is nonpublic,
development-stage, or the subject of exuberant media
attention.
In other words, the SEC was thoroughly able to do their job, and they
were ready and willing to investigate and bring enforcement actions, as
they well should. This is part of their job, investor protection. But
guess what. So is capital formation. Capital formation is part of the
mission of the SEC. That is why it is so important that we not protect
our constituents against great investment opportunities, like Apple,
like Uber, and like Spotify.
So when we have so many Americans who are still living paycheck to
paycheck, when they finally get a little savings together, shouldn't
they be able to invest in great opportunities of early growth
companies? Shouldn't these early growth companies have access to
capital?
I think so.
You can't have capitalism without capital. Let's get more capital
circulating in the system. The Tax Cuts and Jobs Act has done so much
good, but we need so much more. We need capital circulating the system,
particularly for our startups and our early growth stage companies.
We need to reject the MTR, and we need to vote in support of H.R.
4263.
Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. Without objection, the previous question is
ordered on the motion to recommit.
There was no objection.
The SPEAKER pro tempore. The question is on the motion to recommit.
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Mrs. BEATTY. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 and clause 9 of rule
XX, and the order of the House of today, this 15-minute vote on the
motion to recommit will be followed by 5-minute votes on:
Passage of H.R. 4263, if ordered;
Adoption of the amendment to H.R. 4545;
A motion to recommit on H.R. 4545, if ordered;
Passage of H.R. 4545, if ordered;
Ordering the previous question on House Resolution 780; and
Adoption of House Resolution 780, if ordered.
The vote was taken by electronic device, and there were--yeas 182,
nays 235, not voting 13, as follows:
[Roll No. 109]
YEAS--182
Adams
Aguilar
Barragan
Bass
Beatty
Bera
Beyer
Bishop (GA)
Blumenauer
Blunt Rochester
Bonamici
Boyle, Brendan F.
Brady (PA)
Brown (MD)
Brownley (CA)
Bustos
Butterfield
Capuano
Carbajal
Cardenas
Carson (IN)
Cartwright
Castor (FL)
Castro (TX)
Chu, Judy
Cicilline
Clark (MA)
Clarke (NY)
Clay
Cleaver
Clyburn
Cohen
Connolly
Cooper
Correa
Courtney
Crist
Crowley
Cuellar
Davis (CA)
DeFazio
DeGette
Delaney
DeLauro
DelBene
Demings
DeSaulnier
Deutch
Dingell
Doggett
Doyle, Michael F.
Duncan (TN)
Engel
Eshoo
Espaillat
Esty (CT)
Evans
Foster
Frankel (FL)
Fudge
Gabbard
Gallego
Garamendi
Gomez
Gottheimer
Green, Al
Green, Gene
Grijalva
Gutierrez
Hanabusa
Hastings
Heck
Higgins (NY)
Himes
Hoyer
Huffman
Jackson Lee
Jayapal
Jeffries
Johnson (GA)
Johnson, E. B.
Jones
Kaptur
Keating
Kelly (IL)
Kennedy
Khanna
Kihuen
Kildee
Kilmer
Kind
Krishnamoorthi
Kuster (NH)
Langevin
Larsen (WA)
Larson (CT)
Lawrence
Lawson (FL)
Lee
Levin
Lewis (GA)
Lieu, Ted
Loebsack
Lofgren
Lowenthal
Lowey
Lujan Grisham, M.
Lujan, Ben Ray
Lynch
Maloney, Carolyn B.
Maloney, Sean
Matsui
McCollum
McEachin
McGovern
McNerney
Meeks
Meng
Moore
Moulton
Murphy (FL)
Nadler
Napolitano
Neal
Nolan
Norcross
O'Halleran
O'Rourke
Pallone
Panetta
Pascrell
Payne
Pelosi
Perlmutter
Peters
Pingree
Pocan
Polis
Price (NC)
Quigley
Raskin
Richmond
Roybal-Allard
Ruiz
Ruppersberger
Rush
Ryan (OH)
Sanchez
Sarbanes
Schakowsky
Schiff
Schneider
Schrader
Scott (VA)
Scott, David
Serrano
Sewell (AL)
Shea-Porter
Sherman
Sires
Smith (WA)
Soto
Speier
Suozzi
Swalwell (CA)
Takano
Thompson (CA)
Thompson (MS)
Titus
Tonko
Torres
Tsongas
Vargas
Veasey
Vela
Velazquez
Visclosky
Wasserman Schultz
Waters, Maxine
Watson Coleman
Welch
Yarmuth
NAYS--235
Abraham
Aderholt
Allen
Amash
Amodei
Arrington
Babin
Bacon
Banks (IN)
Barletta
Barr
Barton
Bergman
Biggs
Bilirakis
Bishop (MI)
Bishop (UT)
Black
Blackburn
Blum
Bost
Brady (TX)
Brat
Bridenstine
Brooks (AL)
Brooks (IN)
Buchanan
Buck
Bucshon
Budd
Burgess
Byrne
Calvert
Carter (GA)
Chabot
Cheney
Coffman
Cole
Collins (GA)
Collins (NY)
Comer
Comstock
Conaway
Cook
Costello (PA)
Cramer
Crawford
Culberson
Curbelo (FL)
Curtis
Davidson
Davis, Rodney
Denham
Dent
DeSantis
DesJarlais
Diaz-Balart
Donovan
Duffy
Duncan (SC)
Dunn
Emmer
Estes (KS)
Farenthold
Faso
Ferguson
Fitzpatrick
Fleischmann
Flores
Fortenberry
Foxx
Frelinghuysen
Gaetz
Gallagher
Garrett
Gianforte
Gibbs
Gohmert
Gonzalez (TX)
Goodlatte
Gosar
Gowdy
Granger
Graves (GA)
Graves (LA)
Graves (MO)
Griffith
Grothman
Guthrie
Handel
Harper
Harris
Hartzler
Hensarling
Herrera Beutler
Hice, Jody B.
Higgins (LA)
Hill
Holding
Hollingsworth
Hudson
Huizenga
Hultgren
Hunter
Hurd
Issa
Jenkins (KS)
Jenkins (WV)
Johnson (LA)
Johnson (OH)
Johnson, Sam
Jordan
Joyce (OH)
Kelly (MS)
Kelly (PA)
King (IA)
King (NY)
Kinzinger
Knight
Kustoff (TN)
Labrador
LaHood
LaMalfa
Lamborn
Lance
Latta
Lewis (MN)
LoBiondo
Long
Love
Lucas
Luetkemeyer
MacArthur
Marchant
Marino
Marshall
Massie
Mast
McCarthy
McCaul
McClintock
McHenry
McKinley
McMorris Rodgers
McSally
Meadows
Meehan
Messer
Mitchell
Moolenaar
Mooney (WV)
Mullin
Newhouse
Noem
Norman
Nunes
Olson
Palazzo
Palmer
Paulsen
Pearce
Perry
Peterson
Pittenger
Poe (TX)
Poliquin
Posey
Ratcliffe
Reed
Reichert
Renacci
Rice (SC)
Roby
Roe (TN)
Rogers (AL)
Rogers (KY)
Rohrabacher
Rokita
Rooney, Francis
Rooney, Thomas J.
Rosen
Roskam
Ross
Rothfus
Rouzer
Royce (CA)
Russell
Rutherford
Sanford
Scalise
Schweikert
Scott, Austin
Sensenbrenner
Sessions
Shimkus
Shuster
Simpson
Sinema
Smith (MO)
Smith (NE)
Smith (NJ)
Smith (TX)
Smucker
Stefanik
Stewart
Stivers
Taylor
Tenney
Thompson (PA)
Thornberry
Tipton
Trott
Turner
Upton
Valadao
Wagner
Walberg
Walden
Walker
Walorski
Walters, Mimi
Weber (TX)
Webster (FL)
Wenstrup
Westerman
Williams
Wilson (SC)
Wittman
Womack
Woodall
Yoder
Yoho
Young (AK)
Young (IA)
Zeldin
NOT VOTING--13
Carter (TX)
Costa
Cummings
Davis, Danny
Ellison
Katko
Lipinski
Loudermilk
Rice (NY)
Ros-Lehtinen
Slaughter
Walz
Wilson (FL)
{time} 1548
Messrs. OLSON, RUTHERFORD, ABRAHAM and STEWART changed their vote
from ``yea'' to ``nay.''
Messrs. LARSEN of Washington, Mses. SHEA-PORTER and BLUNT ROCHESTER
changed their vote from ``nay'' to ``yea.''
So the motion to recommit was rejected.
The result of the vote was announced as above recorded
The SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. HENSARLING. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. This is a 5-minute vote.
The vote was taken by electronic device, and there were--yeas 246,
nays 170, not voting 14, as follows:
[[Page H1642]]
[Roll No. 110]
YEAS--246
Abraham
Aderholt
Allen
Amash
Amodei
Arrington
Babin
Bacon
Banks (IN)
Barletta
Barr
Barton
Bergman
Biggs
Bilirakis
Bishop (MI)
Bishop (UT)
Black
Blackburn
Blum
Bost
Brady (TX)
Brat
Bridenstine
Brooks (AL)
Brooks (IN)
Buchanan
Buck
Bucshon
Budd
Burgess
Byrne
Calvert
Carter (GA)
Chabot
Cheney
Coffman
Cole
Collins (GA)
Collins (NY)
Comer
Comstock
Conaway
Cook
Correa
Costello (PA)
Cramer
Crawford
Cuellar
Culberson
Curbelo (FL)
Curtis
Davidson
Davis, Rodney
Denham
Dent
DeSantis
DesJarlais
Diaz-Balart
Donovan
Duffy
Duncan (SC)
Duncan (TN)
Dunn
Emmer
Eshoo
Estes (KS)
Farenthold
Faso
Ferguson
Fitzpatrick
Fleischmann
Flores
Fortenberry
Foxx
Frelinghuysen
Gaetz
Gallagher
Garamendi
Garrett
Gianforte
Gibbs
Gohmert
Goodlatte
Gosar
Gottheimer
Gowdy
Granger
Graves (GA)
Graves (LA)
Graves (MO)
Griffith
Grothman
Guthrie
Handel
Harper
Harris
Hartzler
Hensarling
Herrera Beutler
Hice, Jody B.
Higgins (LA)
Hill
Holding
Hollingsworth
Hudson
Huizenga
Hultgren
Hunter
Hurd
Issa
Jenkins (KS)
Jenkins (WV)
Johnson (LA)
Johnson (OH)
Johnson, Sam
Jordan
Joyce (OH)
Kelly (MS)
Kelly (PA)
King (IA)
King (NY)
Kinzinger
Knight
Kustoff (TN)
Labrador
LaHood
LaMalfa
Lamborn
Lance
Latta
Lewis (MN)
LoBiondo
Long
Loudermilk
Love
Lucas
Luetkemeyer
MacArthur
Maloney, Sean
Marchant
Marino
Marshall
Massie
Mast
McCarthy
McCaul
McClintock
McHenry
McKinley
McMorris Rodgers
McSally
Meadows
Meehan
Messer
Mitchell
Moolenaar
Mooney (WV)
Mullin
Newhouse
Noem
Norman
Nunes
Olson
Palazzo
Palmer
Paulsen
Pearce
Perlmutter
Perry
Peters
Peterson
Pittenger
Poe (TX)
Poliquin
Polis
Posey
Ratcliffe
Reed
Reichert
Renacci
Rice (SC)
Roby
Roe (TN)
Rogers (AL)
Rogers (KY)
Rohrabacher
Rokita
Rooney, Francis
Rooney, Thomas J.
Rosen
Roskam
Ross
Rothfus
Rouzer
Royce (CA)
Russell
Rutherford
Sanford
Schneider
Schweikert
Scott, Austin
Sensenbrenner
Sessions
Shimkus
Shuster
Simpson
Sinema
Smith (MO)
Smith (NE)
Smith (NJ)
Smith (TX)
Smucker
Stefanik
Stewart
Stivers
Suozzi
Taylor
Tenney
Thompson (PA)
Thornberry
Tipton
Trott
Turner
Upton
Valadao
Wagner
Walberg
Walden
Walker
Walorski
Walters, Mimi
Weber (TX)
Webster (FL)
Wenstrup
Westerman
Williams
Wilson (SC)
Wittman
Womack
Woodall
Yoder
Yoho
Young (AK)
Young (IA)
Zeldin
NAYS--170
Adams
Aguilar
Barragan
Bass
Beatty
Bera
Beyer
Bishop (GA)
Blumenauer
Blunt Rochester
Bonamici
Boyle, Brendan F.
Brady (PA)
Brown (MD)
Brownley (CA)
Bustos
Butterfield
Capuano
Carbajal
Cardenas
Carson (IN)
Cartwright
Castor (FL)
Castro (TX)
Chu, Judy
Cicilline
Clark (MA)
Clarke (NY)
Clay
Cleaver
Clyburn
Cohen
Connolly
Cooper
Courtney
Crist
Crowley
Davis (CA)
DeFazio
DeGette
Delaney
DeLauro
DelBene
Demings
DeSaulnier
Deutch
Dingell
Doggett
Doyle, Michael F.
Engel
Espaillat
Esty (CT)
Evans
Foster
Frankel (FL)
Fudge
Gabbard
Gallego
Gomez
Gonzalez (TX)
Green, Al
Green, Gene
Grijalva
Gutierrez
Hanabusa
Hastings
Heck
Higgins (NY)
Himes
Hoyer
Huffman
Jackson Lee
Jayapal
Jeffries
Johnson (GA)
Johnson, E. B.
Jones
Kaptur
Keating
Kelly (IL)
Kennedy
Khanna
Kihuen
Kildee
Kilmer
Kind
Krishnamoorthi
Kuster (NH)
Langevin
Larsen (WA)
Larson (CT)
Lawrence
Lawson (FL)
Lee
Levin
Lewis (GA)
Lieu, Ted
Loebsack
Lofgren
Lowenthal
Lowey
Lujan Grisham, M.
Lujan, Ben Ray
Lynch
Maloney, Carolyn B.
Matsui
McCollum
McEachin
McGovern
McNerney
Meeks
Meng
Moore
Moulton
Murphy (FL)
Nadler
Napolitano
Neal
Nolan
Norcross
O'Halleran
O'Rourke
Pallone
Panetta
Pascrell
Payne
Pelosi
Pingree
Pocan
Price (NC)
Quigley
Raskin
Richmond
Roybal-Allard
Ruiz
Ruppersberger
Rush
Ryan (OH)
Sanchez
Sarbanes
Schakowsky
Schiff
Schrader
Scott (VA)
Scott, David
Serrano
Sewell (AL)
Shea-Porter
Sherman
Sires
Smith (WA)
Soto
Swalwell (CA)
Takano
Thompson (CA)
Thompson (MS)
Titus
Tonko
Torres
Tsongas
Vargas
Veasey
Vela
Velazquez
Visclosky
Wasserman Schultz
Waters, Maxine
Watson Coleman
Welch
Yarmuth
NOT VOTING--14
Carter (TX)
Costa
Cummings
Davis, Danny
Ellison
Katko
Lipinski
Rice (NY)
Ros-Lehtinen
Scalise
Slaughter
Speier
Walz
Wilson (FL)
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore (during the vote). There are 2 minutes
remaining.
{time} 1555
So the bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
____________________