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I thank the gentleman for yielding me the customary 30 minutes.

Mr. Speaker, over 6 months ago, the Obama administration actually identified the Zika virus as a public health crisis. It is well reported on. My constituents are aware of it. It has already affected many Americans in States like Florida, Texas, and Louisiana. The Obama administration requested additional resources to combat the virus.

The White House and the CDC correctly predicted that the virus would soon spread to the Southern United States. In fact, just as Congress left for its 7-week break, there were several reports of Zika transmission in south Florida. In fact, just last week, the Director of the CDC warned that, without congressional action, they will soon run out of money for combating Zika.

Now, in a moment, I will talk about the bills we are considering, but I think the American people expect Congress to react to a public health crisis. Had we reacted 7 weeks ago, perhaps we wouldn't be where we are today. I need and call upon this body to act today so that we are in a better situation 7 weeks hence.

In fact, the House is only in session for 15 more days before taking at least a 6-week break in October and November. In the handful of days we have left, it is critical to provide an emergency package to fight back against Zika. That is not currently on the calendar, Mr. Speaker. Instead, we are considering these bills. I will be going into the merits and lack thereof of them; but certainly, I think my colleagues on the other side of the aisle would agree with the objective assessment that these bills do nothing to combat Zika or address the public health concerns around Zika.

The Senate did pass a partisan Zika funding bill to provide emergency resources. It doesn't have unrelated poison pills unrelated to Zika. Obviously, issues like where or if the flag of the rebel States, the Confederate flag, is displayed, or whether Planned Parenthood is funded, these are contentious issues here, but I think we all agree they have nothing to do with Zika. The Confederate flag does not have an impact on Zika. Planned Parenthood has at least a related aspect to it--reproductive health.

Of course, one of the symptoms or one of the effects of Zika is a higher rate of microcephaly among children that are born to women who suffer from Zika while they are pregnant. So certainly the family planning aspect of it is relevant, but not central, to the issues affecting public health around Zika. We need to make sure that there aren't any of those poison pill provisions and move forward.

Instead, we have different bills here. We have bills related to financial markets.

The first one is the Accelerating Access to Capital Act of 2016. That one brings together several different bills that had been offered.

First, it includes a bill that affects microcap companies, or pink sheet companies, and removes many of the SEC transparency regulations around how they sell stock and how they are listed. It is not a step forward for transparency. In fact, this kind of effort is likely to decrease confidence in our public marketplace. It is likely to hurt the very stock market that presumably it was designed to help.

This would effectively allow microcap companies worth less than $75 million with one class of securities to issue an unlimited number of shares using shelf registration in a 12-month period, not even notifying the SEC ahead of the issuance, and permit unlisted microcap companies to sell up to one-third of the aggregate market value of their common equity using shelf registration in a 12-month period.

In many ways, these provisions are at odds with the other bills that I will talk about, which provides some regulatory relief towards private equity by favoring small cap public companies. It is hard for a small company to be public. It is questionable whether small cap companies should be public.

When we talk about private equity in a moment, we will see that one of the features of that is: A, they have, of course, a more sophisticated ownership; and, B, they have a more concentrated ownership. So, for instance, the issues like runaway executive pay, CEO pay, is less of a problem with private equity and a significant problem with public companies, and, again, in particularly small cap companies with diffuse ownership, which this bill would likely lead to more of.

It would also remove exchange protections like corporate governance requirements. Again, these kinds of measures reduce confidence in the public marketplace, they hurt the stock market, and, in the immediate and long term, they hurt the ability of companies to go public and access public capital because of the reputation of the pink sheets and the reputation of microcap.

It is a fine line. I am sure that we would probably agree on some regulatory relief around small cap companies, but this package is not it. This package would hurt the stock market, hurt access to capital, and hurt the very legitimate players that it is designed to help.

The second bill in here is the Micro Offering Safe Harbor Act. It would eliminate Federal and State investor protection around crowdfunding in regulation A under certain conditions.

First, I was an original sponsor of the JOBS bill. I worked with many of my colleagues on both sides of the aisle to get that through. I will be among the first to say that I was disappointed with the way that that has been implemented by the administration. Crowdfunding should be easy. It should not have 900 pages of regulations.

The main consumer safeguard that we have in there is that nonaccredited investors are only allowed to invest up to $10,000. That is a very important protection that we have. This would eliminate that protection under several circumstances. One, if there are 35 or fewer purchasers; or, two, the aggregate amount of securities sold by the issuer is $500,000 or less in a 1-year period. It basically does away with one of the legislatively imposed consumer protections in the JOBS Act.

Now, I would agree. I think there has been some regulatory-imposed inhibitions in the JOBS Act that I wish that we could strike out in a laser-like way with a scalpel. In fact, many States, including my own State of Colorado, have implemented more sensible bipartisan crowdfunding legislation that enables it to occur at least within a State in a much easier way than the very cumbersome Federal law which does inhibit both the use of crowdfunding as well as the presence of crowdfunding as part of an overall capital strategy because of the difficulties concerning other types of capital investors and capital partners.

I would love to see reform of the JOBS Act or reform around micro offering, but this particular answer really undermines the entire concept of the consumer protections. It is not targeted. It removes the protections for smaller of the smallest of the small offerings. And again, what you would find and the danger here is folks--we can call them scam artists or folks trying to make a buck off of this and not build legitimate businesses--can simply set up a number of companies each raising under $500,000 to meet the criteria of this exemption. There is not any consumer protection around that. There is nothing to stop a bad actor from asking for significant investments for each of those companies, even from the same individual depleting the savings of that individual rather than sticking to the $10,000 cap, which was in our JOBS Act.

So again, I would like, and many of my colleagues on my side of the aisle would like, crowdfunding to be easier, to be done quicker, to remove some of the excess paperwork and regulation A requirements, but maintaining that basic consumer safeguard and not providing exemptions just because there are 35 or fewer purchasers or $500,000 or less over a 1-year period. It doesn't even address overlapping ownership or related status between, again, multiple companies that might each raise $500,000, might substantially have the same external owners, but would get around the JOBS Act consumer protection provisions by effectively cloning a bunch of small companies and offering them up separately for individual investors. These things need to be thought through.

There is a kernel of an idea in there. I agree that the administration has gone beyond the legislative intent of the JOBS Act in its implementation of the JOBS Act. There is, hopefully, a way that we can work together to empower crowdfunding to play a more central role in capital development in entrepreneurship in our country. This bill is not it.

The final component of that bill, the Private Placement Improvement Act of 2016, would make it very difficult for the SEC to finalize investor protections that it proposed back in 2013. The title would require issuers selling securities under an exemption that allows companies to raise an unlimited amount of money to file within 15 days of sale a single notice of sale, which the SEC would then be required to make available to State and other regulators.

This relates to some current rules that the SEC is moving forward with. I think that, again, there is a way to tweak those rules, but I don't think that this is the way to do it, to allow for unlimited capital to be raised under a single notice of sale. And, of course, this also affects the prerogative of State regulators, and there are a variety of practices there, by requiring the SEC to make it available to State and other regulators.

I think that there is room for improvement in that area, but, again, the bill falls short.

Now, the other bill, the Investment Advisers Modernization Act of 2016, a majority of Democrats on the committee support it. Many also voiced concerns. Some were the concerns of the Obama administration about some of those provisions. But I am glad to say that many of those concerns have been addressed by my colleague's, Mr. Foster's, amendment.

First, a little bit about private equity and what this bill does and doesn't do.

My State and my district, like, probably, every other district in the country, has seen the benefits and the impact of private equity investment in its providing growth capital to companies, providing stability in ownership. There are over 100 private equity-backed companies headquartered in Colorado that we know of that support close to 100,000 jobs in Colorado. In 2015, private equity firms invested $12 billion in Colorado-based companies. They are real jobs, and they have contributed to the economic growth that Colorado has seen over the last few years and that the country will see over the next few years.

Private equity has helped to create and sustain thousands of jobs and has made substantial investments in every State in the country. It provides returns to public pensions, to university endowments, to many people as part of their own individual retirement plans and savings. It is important both from a capital perspective and from an operating perspective--a very important sector. Firms that are owned by private equity--at least, because, again, there could be some that are not part of this--employ over 8 million people. The private equity industry invested over $600 billion into these companies. For physical infrastructure, for additional hires, for expansion, private equity has been a source of capital for Main Street businesses across our country, in my State, and everywhere else in the country.

That is why the bill passed the Financial Services Committee with a majority of Democrats--with strong bipartisan support--and I think it will pass this body with strong bipartisan support as well.

Of course, there have been stories about bad actors in private equity just as there could be bad actors among any type of ownership entity. That is what private equity is. It is a type of entity that may own a local company.

What are the other kinds of ownership that a company may have?

It may have public ownership. It may be public. We talked about that in the microcap bill. In many ways, that is a worse form of ownership in that there is additional administrative overhead that is associated with being public. Even if the regulatory relief were to become the law, there is still significant additional overhead with being public. It is very difficult for a $20 million or a $50 million company.

Two, because of the diffuse ownership, frequently, there is no one watching the shop, meaning that management runs it. We have the problems of excess CEO pay, of excess executive pay. There are horror stories of CEOs making hundreds of times the pay of the line workers. Those kinds of things don't happen in private equity-backed companies. There is someone minding the shop, and the entity that is minding the shop is an entity that is looking for long-term growth, for long-term stability. They are not in and out.

There has been some confusion among Members of this body in discussing hedge funds versus private equity. Private equity is not a hedge fund. Hedge funds have liquidity, and they make transactions rapidly. They don't participate in governance and growth. Private equity is very, very different. It is more analogous to venture capital. They are in there for 5 years, 6 or 7 years, 10 years--long- term investors who are building the companies, serving on boards, recruiting others to serve on boards, providing sound corporate governance, making sure that CEOs and executives aren't paid too much, making sure that talent is in the company, making sure that growth capital is available.

H.R. 5424 just takes a scalpel approach to existing regulations by focusing on aspects of SEC adviser registration that impede the capital formation in the private equity industry. For instance, there are provisions in the bill that would make reporting to the SEC more efficient and effective for their purposes and less costly and burdensome for private equity firms.

Keep in mind that private equity firms do not represent, in any way, shape, or form, a systemic risk to our Nation's financial security. They are simply a type of ownership that Main Street companies have. If a private equity firm invests poorly, runs companies poorly, they will deliver a very poor return for their investors. That does not impact in any systemic way the economy in the way that a hedge fund--placing highly leveraged bets on derivatives or on some other financial instrument--can cause an entire economic meltdown, as we saw during the mortgage-backed security crisis in 2008 and in 2009.

Private equity firms provide patient, stable, long-term capital to privately owned businesses across the country. In fact, they help take the emphasis off of the quarterly financial reports that are so important for public companies.

One of the failures of public company governance is that there is too much emphasis on the short term at the expense of the long term--too much emphasis to pump up the quarter at the expense of medium- and long-term growth--2 years, 3 years, 4 years--in underinvestment in research and in underinvestment in long-term growth. Having a private equity ownership of an operating company addresses that kind of moral hazard that exists with regard to the incentives of the public marketplace.

Private equity firms have a long-term outlook that results in lower volatility. While the public company model may not perform as well as private equity firms, it, obviously, can provide access to capital, to additional liquidity that private equity doesn't have. The two are related in that, for some private equity investors, their goal is a public offering exit in the 5-to 10-year time frame. That is not always the case, but that can be the case; and having an operable public market in addition to a private equity market is, of course, of interest and importance to the private equity industry as well, which is why the reforms in the other bill are so bad, because they deteriorate confidence in the stock market. They ultimately will result in decreasing liquidity for the good actors, meaning some of the private equity-backed or owner-operator-owned companies that want to have a public partial exit or exit through the public marketplace.

Again, the bill isn't perfect. The White House identified a number of issues. But, fortunately, my colleague, Representative Foster, offered an amendment, which has been accepted and, hopefully, that will address a number of these issues.

The amendment removes a provision of the bill that would have allowed certain ancillary or minor funds or entities that are affiliated with a private equity firm to also be exempt from annual audits or surprise inspections. It addresses concerns around transparency by continuing the current requirement that advisers provide information about fees and services in a brochure. It restores the transparency elements while maintaining the concept of the regulatory relief of redundant regulations with regard to capital formation and private equity.

The goal is to enact this commonsense bill that will make it more efficient for private equity firms to operate and continue to grow businesses on Main Street in districts like mine and across the country while simultaneously maintaining the regulatory regime to make sure that nothing untoward is occurring.

The bill does not, as some have falsely argued, allow private equity firms to escape regulation by any stretch. In fact, most private equity firms have embraced the changes that have been implemented under Dodd- Frank. They have compliance teams to make sure they are operating properly under the new regulatory scheme. In any form, they do not represent a systemic risk, but to protect investors, many of them agree with the sensible regulations that have been imposed with the exception of those that we are seeking to remove that are redundant and that create overhead. When you create overhead for private equity firms, that results in less investment in our Main Street businesses. If they have to divert funds to comply with unnecessary regulations for the sake of regulations, it is that much less money and that many fewer jobs in your Main Street businesses located in your districts.

The substitute amendment makes positive changes to the legislation. It addresses many of the concerns that have been raised about the bill. I and many of my colleagues plan to support its passage and also take this occasion to make sure that our colleagues are aware of the contributions of this particular model of ownership to our Main Street businesses. It has been a growth sector, in fact, largely due to showing, over time, superior performance to companies that have a public governance model, in fact, in large part, due to their dissipated owner base and lack of concentration in ownership.

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Mr. POLIS. Mr. Speaker, I do have a speaker, but I can't locate her right now.

The gentleman talked about the Micro Offering Safe Harbor Act. Again, I think that there is the kernel of a good idea there, if the good idea would be to streamline the excess regulation above and beyond the consumer safeguards that were put in the JOBS Act; if the bill, for instance, were to take some of the best practices from the States, including my home State of Colorado, around crowdfunding and put them into a revised version of Federal direction.

To be clear, I would join my colleagues in agreeing that the administration went well beyond the expressed legislative intent and legislative language of the JOBS Act in creating barriers to micro financing across the country. Unfortunately, that is not what this bill does.

It cuts back by providing gaping loopholes on the consumer protections that Congress very thoughtfully intended to put in the JOBS Act. So these are not the unintended regulatory aspects that the administration added to the JOBS Act. These are cutting away at the very consumer protections which Congress deliberately--including, as one of the coauthors of the bill along with my Republican colleagues, Mr. Issa and many others, the protections that we actually put into the bill, this would gut. So, again, a kernel of a good idea.

Perhaps the inception of this bill is, hey, we messed up on the implementation of crowdfunding. Let's fix it. Unfortunately, that is not what this bill does. I wish it was what this bill does. It is something I am certainly interested in doing. I think many of my Democratic colleagues are, and we would be happy to work on a bipartisan basis to address the poor implementation of the JOBS Act.

Of course, if there was something expressly provided legislatively, we would be happy to go back and look at that. But this glaring loophole that is opened is simply not it, with regard to if there are fewer than 35 purchasers, under $500,000, some kind of preexisting relationship. These loopholes are simply too broad and would effectively remove the consumer protections that we have in crowdfunding.

Mr. Speaker, if we defeat the previous question, I will offer an amendment to the rule to bring up the bipartisan no fly, no buy legislation, which I am proud to support. It would allow the Attorney General to bar the sale of firearms and explosives to those on the FBI's terrorist watch list.

If somebody is on the FBI terrorist watch list, they should not be allowed to quietly assemble an arsenal to commit a terrorist act. In fact, the FBI should immediately be on top of the situation, find out their intent, and see what is going on. It is a commonsense bill that would help keep America safe. My amendment would give the House an opportunity to simply vote on this commonsense bill, which so far, unfortunately, the Republicans have not even allowed us to debate. We cannot wait any longer for Congress to take meaningful action to reduce the risk of terrorism in our own country, and this bill would do that.

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Mr. POLIS. Mr. Speaker,

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Mr. POLIS. Mr. Speaker, I would like to inquire if the gentleman has any remaining speakers.

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Mr. POLIS. Mr. Speaker,

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Mr. POLIS. Mr. Speaker, is the gentleman from Texas prepared to close?

Mr. Speaker, again, while I do applaud Democrats and Republicans for coming together around H.R. 5424, the Investment Advisers Modernization Act, I wish that we had come together around the pressing public health crisis of Zika. I wish we had come together to prevent terrorists from assembling arsenals to commit terrorist acts in our country. Unfortunately, while the Senate has acted in a bipartisan way to address Zika, House Republicans continue to sit on their hands and ignore this critical public health issue. The CDC is quickly running out of money to combat Zika. We have yet to even begin serious discussions on comprehensive immigration reform, with only a couple months left in this session, not to mention the crisis of lead in the pipes in Flint, Michigan. And, of course, in the weeks after the deadliest mass shooting in our Nation's history, Congress has not acted on anything around preventing violence, as well.

We should be voting on those kinds of bills. Many of those are also bipartisan, just as this private equity bill is, but I would argue that they are more timely, more important. Instead of focusing on policies that help save lives, Republicans are instead spending time on two bills, one of which will almost certainly receive a veto from the President. The other one, we hope that Mr. Foster's amendment addresses the issues the President had with it, but both of which are not likely to pass the United States Senate.

We are spending more of our time and taxpayer money ignoring the most pressing issues before us, issues that could move through the Senate, issues that I hear about from my constituents every day back home.

Again, I applaud the Democrats and Republicans coming together around the H.R. 5424 bill. This bill, if it were to become law, would absolutely encourage greater investment in mainstream businesses in our communities. It might make the difference of them making that additional hire or two. That might be your neighbor; that might be your cousin; that might be your spouse; it might even be you, that extra job or two or three that is created by encouraging private capital resources to be put into our communities.

Again, private equity had nothing to do with the financial meltdown in 2008 and 2009. There is nothing systemic about it. It is simply ownership groups of companies, and whether those owners are local ownership groups, whether they are founders, whether they are family offices, whether they are private equity, whether they are publicly traded, they all have pros and cons.

We, of course, like to think of the very idealized vision of a mainstream business where it is owned by your neighbor and somebody who is accountable that you know, but those kinds of businesses have transition issues as well. When their owner-operator gets ill or passes on, what is to become of those businesses? What is the route to sustainability? How can we make sure they continue to add value in the community? For many, for transition planning, private equity can provide that answer.

I urge my colleagues to vote ``no'' on the bill and defeat the previous question so we can reduce the risk of a terrorist attack in our country, and vote ``no'' on this restrictive, misguided rule.

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Mr. POLIS. Mr. Speaker, I demand a recorded vote.

A recorded vote was ordered.

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Mr. POLIS. Mr. Speaker, I demand a recorded vote.

A recorded vote was ordered.

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