Jeb Hensarling

Mr. HENSARLING

Mr. HENSARLING. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise in strong support today of H.R. 4498, the Helping Angels Lead Our Startups Act, known as the HALOS Act. This is yet another bipartisan bill that has been passed out of the Financial Services Committee that I know will help create jobs and grow our economy. We all know from listening to our constituents that jobs and the economy continue to be the number one issue of concern because this economy is still not working for working Americans. After many years, they still see their paychecks have stagnated. They have seen their savings evaporate. They are losing hope. We see entrepreneurship is at a generational low. The HALOS Act is a step in the right direction. It is one of many solutions that we need to enact in this body. I commend the bipartisan sponsor of the bill, Mr. Chabot, the chairman of the Small Business Committee; Mr. Hurt of Virginia and Ms. Sinema of Arizona, the latter two who serve with me on the Financial Services Committee. I want to thank all of my colleagues on the Financial Services Committee for voting overwhelmingly in favor of this bill. Almost 80 percent of the membership of the committee voted to advance it to the floor. I am proud that our committee has a strong record of bipartisanship. Since the beginning of the 114th Congress, Mr. Speaker, the House has passed 56 of our measures--30 have been signed into law--and each one of these measures received bipartisan support. In an era of divided government, that is not a bad record. I believe that most Americans also believe that our economy works better for all Americans when small businesses can focus on creating jobs rather than navigating meaningless bureaucratic red tape. The HALOS Act provides an important fix to regulations so it will be easier for our small businesses to attract investments. Again, Mr. Speaker, so critical when entrepreneurship is at a generational low and our economy limps along at even less than 2 percent of economic growth. The HALOS Act provides a clearer path for startup businesses to connect with angel investors and allows investors to make their own informed decisions. Angel investors play an incredibly active role in helping small businesses open their doors and grow so they can open their doors even wider and hire more workers. We should remember--and many of our colleagues are now aware--that companies like Amazon, Costco, Google, Facebook, and Starbucks were all first funded by angel investors. Now, today, not only the services they provide in our economy, but approximately 600,000 employees earn their paychecks and provide for their families working for companies that were started with angel investors. Unfortunately, as so often happens, when Washington regulators get out of control, they step into the picture and we have yet more unintended consequences. Four years ago, Congress passed a bipartisan JOBS Act to make it easier for business startups to gain access to capital, but the Securities and Exchange Commission issued misguided regulations on angel investors that had exactly the opposite effect. By inappropriately classifying events where entrepreneurs showcased their business models to angel investors as general solicitations, the SEC regulations are causing innovative startups to lose access to capital, which means our economy loses jobs. This is counter to Congress' intent when we passed the JOBS Act, and it is certainly counter to what our economy needs now. Mr. Speaker, what is so ironic is that the practice was legal and proper before the passage of the JOBS Act. It should remain legal and proper after the passage of the JOBS Act. This is a problem that Congress can easily fix by approving the HALOS Act. It is not a complicated bill, Mr. Speaker. It is four pages long. It simply ensures that funding from angel investors remains available to business startups. The bipartisan bill makes sure that events where entrepreneurs and angel investors get together are not classified as general solicitations because they are not. Instead of onerous bureaucratic red tape that deters investors from backing new business startups, the four-page HALOS Act will help new businesses gain investor support when they need it most. Mr. Speaker, as I mentioned earlier, this bill sailed through the House Financial Services Committee with strong bipartisan support. Out of 57 members voting in committee that day, only 13 opposed the bill. In other words, 80 percent of the committee voted in favor of the HALOS Act. The bill has strong bipartisan support because it is common sense. It is about jobs; it is about helping small businesses overcome misguided regulation; and it is about making sure that Congress makes the law-- not the regulators, who are unelected and who are unaccountable. Mr. Speaker, I reserve the balance of my time.

Mr. HENSARLING. Mr. Speaker, pursuant to House Resolution 701, I call up the bill (H.R. 4498) to clarify the definition of general solicitation under Federal securities law, and ask for its immediate consideration in the House.

Mr. HENSARLING. Mr. Speaker, I yield 1 minute to the gentleman from California (Mr. McCarthy), the distinguished Republican leader and a leader in the JOBS Act and in innovation.

Mr. HENSARLING. Mr. Speaker, I rise in opposition to the amendment.

Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from Colorado (Mr. Polis), a member of the Committee on Rules.

Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from Arizona (Mr. Schweikert).

Mr. HENSARLING. Mr. Speaker, I yield myself the balance of my time. Mr. Speaker, again, I am very, very happy that yet another bipartisan bill has come out of the Financial Services Committee to try to get this economy working for working people. I took note that there were more Democrats coming to the floor in favor of the bill than against the bill, and that almost 80 percent of the members of the Financial Services Committee reported this bill favorably. Now, the ranking member spoke passionately about trying to help the most vulnerable. She cares about investor protection. But, Mr. Speaker, the only people who can buy these securities in a private offering are millionaires. So the question is: Who do you care more about, the millionaire investors or the working poor who need better jobs? You can't have capitalism without capital, and yet the ranking member would put one more burden in front of small businesses and entrepreneurs trying to create businesses so that people can have better jobs and a better future for themselves and their families. I am glad we have millionaire investors. I wish we had more of them. But they are already protected. You must be an accredited investor in order to partake, to actually buy the security. All we are debating now is whether you are going to have to prescreen, as the gentleman from Arizona said, the caterer or the security guard at the door, to be part of the demo day--something, Mr. Speaker, that was perfectly legal and had gone on for years and years and years prior to this SEC rule. Yet we have an agency, the Securities and Exchange Commission, creating law out of thin air, making it more difficult for the working poor to find better jobs, to make sure that people have a better career path, to make sure that we can find the next Facebook. They are making it more difficult. I believe this will have strong bipartisan support on the floor. We all need to support the HALOS Act, H.R. 4498. At the end of the day, who are you going to come down in favor of, the working poor or millionaire investors who are already protected? This side of the aisle will come down in favor of the working poor who need jobs in an economy that has been hurt by Obamanomics. Mr. Speaker, I yield back the balance of my time.

Mr. HENSARLING. Mr. Speaker, may I inquire how much time I have remaining?

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

Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from Michigan (Mr. Huizenga), chairman of Monetary Policy and Trade Subcommittee.

Mr. HENSARLING. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from New Jersey (Mr. Garrett), the chairman of our Capital Markets and Government Sponsored Enterprises Subcommittee.

Mr. HENSARLING. Mr. Speaker, the amendment from the ranking member of the Financial Services Committee effectively repeals the HALOS Act. We are having the same debate that we just had. It would effectively outlaw demo days as they are currently practiced. The whole idea of the HALOS Act is to ensure that demo days, which existed prior to this SEC rule, will continue and that startups can continue to have access to capital without the additional burden of having to screen those who actually come in to demo days. Mr. Speaker, again, a private offering. The security can only be purchased by an accredited investor. Those are the existing rules. So there is almost a mythical group that the ranking member is attempting to protect. At the end of the day, these are millionaire investors who are the angel investors, who are the accredited investors whom we need to help fund these startups. What the gentlewoman from California's amendment does, again, is guts the bill. It basically just simply codifies this SEC rule, and that absolutely overturns the congressional intent to make sure that we have greater access to capital. In addition, there is an entire new defined term of ``issuer'' in her amendment, notwithstanding the fact that this is already defined in section 3(aa) of the Securities and Exchange Act of 1934. So we have undefined, vague terms that are being introduced here. I would also remind the gentlewoman from California and all that the HALOS Act already prohibits a sponsor from engaging in investment negotiations between the issuer and investors, charging event attendees any fees other than administrative fees, and receiving any compensation that would require the sponsor to register with the SEC as a broker- dealer or investment adviser. So these are ill-placed concerns that at the end of the day put up yet another hurdle for angel investors funding the next new Facebook, the next new Costco, the next new Starbucks, and putting tens of thousands of Americans back to work. It is time that we affirm the JOBS bill, not gut the JOBS bill, and I would urge all Members to reject the amendment of the gentlewoman from California. Mr. Speaker, I yield back the balance of my time.

Mr. HENSARLING

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

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

Mr. HENSARLING

Mr. HENSARLING. Mr. Speaker, I insist on my point of order because the instruction contains matter in the jurisdiction of a committee to which the bill was not referred, thus violating clause 7 of rule XVI which requires an amendment to be germane to the measure being amended. Committee jurisdiction is a central test of germaneness, and I must insist on my point of order.

Mr. HENSARLING. Mr. Speaker, I move to lay the appeal on the table.

Mr. HENSARLING. Mr. Speaker, I reserve a point of order.

Mr. HENSARLING

Mr. HENSARLING. Mr. Speaker, I move to lay the appeal on the table.

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

Mr. HENSARLING. I object.

Mr. HENSARLING. Mr. Speaker, I am happy to yield 2 minutes to the gentleman from Texas (Mr. Neugebauer) who is chairman of our Financial Institutions and Consumer Credit Subcommittee.

Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from Colorado (Mr. Tipton).

Mr. HENSARLING. Mr. Speaker, I yield the gentleman from Maine an additional 30 seconds.

Mr. HENSARLING. Mr. Speaker, I yield the gentleman from Maine an additional 10 seconds.

Mr. HENSARLING

Mr. HENSARLING. Mr. Speaker, I ask unanimous consent that the question of adopting amendment No. 1 on H.R. 3791 may be subject to postponement as though under clause 8 of rule XX.