Improving Capital Allocation for Newcomers Act of 2025

Floor Speech

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Mr. DAVIDSON. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 4431) to amend the Investment Company Act of 1940 with respect to the definition of qualifying venture capital funds, and for other purposes, as amended.

The Clerk read the title of the bill.

The text of the bill is as follows: H.R. 4431 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 ``Improving Capital Allocation for Newcomers Act of 2025''. SEC. 2. QUALIFYING VENTURE CAPITAL FUNDS. Section 3(c)(1) of the Investment Company Act of 1940 (15 U.S.C. 80a-3(c)(1)) is amended-- (1) in the matter preceding subparagraph (A), by striking ``250 persons'' and inserting ``500 persons''; and (2) in subparagraph (C)(i)-- (A) by striking ``$10,000,000'' and inserting ``$50,000,000''; and (B) by striking ``beginning from a measurement made by the Commission on a date selected by the Commission'' and inserting ``beginning from a measurement made on the date of the enactment of the Improving Capital Allocation for Newcomers Act of 2025''. SEC. 3. STUDY AND RULEMAKING. (a) Study Required.-- (1) In general.--Beginning 5 years after the date of enactment of this Act, the Advocate for Small Business Capital Formation, in consultation with the Investor Advocate, shall conduct a study on the effect of the amendments made by section 2 on the businesses and startup entities in which qualifying venture capital funds invest, specifically including, with respect to such businesses and startup entities, changes or trends relating to-- (A) the geographic distribution of capital to portfolio companies; (B) the socio-economic characteristics of founders or controlling persons; (C) the veteran status of founders or controlling persons; (D) the industry sector, size, stage of development, and related details; and (E) other factors or metrics determined by the Advocate for Small Business Capital Formation. (2) Authorities related to required study.--For purposes of conducting the study required by paragraph (1), the Advocate for Small Business Capital Formation and the Investor Advocate shall have authority to-- (A) obtain from the Securities and Exchange Commission (in this section referred to as the ``Commission'') and utilize any data or information necessary to carry out the study; (B) request and receive assistance from any division or office of the Commission, including the Division of Economic and Risk Analysis; and (C) enter into agreements with third parties to assist in data analysis. (b) Report.--The Advocate for Small Business Capital Formation shall issue a report to the Congress containing all findings and determinations made in carrying out the study required by subsection (a)(1), and make such report available to the public on the website of the Commission. (c) Public Comment.--During the 180-day period beginning on the date the report is issued under subsection (b), the Commission shall solicit feedback from the public on the findings and determinations contained in the report. (d) Rulemaking.-- (1) In general.--The Commission, in consultation with the Investor Advocate and the Advocate for Small Business Capital Formation, may, after considering all comments received under subsection (c) and only if the Commission determines in such report that the amendments made by section 2 have had a demonstrable effect on increasing the geographic distribution of capital to portfolio companies, increasing the variety of the socio-economic characteristics of founders or controlling persons, or increasing the number of founders or controlling persons who are veterans, issue rules to-- (A) increase or decrease the 500 person threshold described in the matter preceding subparagraph (A) of section 3(c)(1) of the Investment Company Act of 1940, but such threshold may not exceed 750 persons or be reduced below 250 persons; and (B) increase or decrease the $50,000,000 dollar figure in section 3(c)(1)(C)(i) of the Investment Company Act of 1940, but such dollar figure may not exceed $100,000,000 or be reduced below $10,000,000. (2) Deadline for rulemaking.--The rulemaking authority in paragraph (1) only applies to a rule with respect to which the proposed rule was issued during the 180-day period beginning at the end of the public comment period described in subsection (c). (3) No effect on inflation adjustments.--A rule issued under this subsection shall have no effect on the requirement under clause (i) of section 3(c)(1)(C) of the Investment Company Act of 1940 (15 U.S.C. 80a-3(c)(1)(C)), as amended by section 2, to index the first dollar amount in such clause for inflation.

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Mr. DAVIDSON. Mr. Speaker, I include in the Record the CBO estimate for this bill. Legislation Considered Under Suspension of the Rules

The Majority Leader of the House of Representatives announces bills that will be considered under suspension of the rules in that chamber. Under suspension, floor debate is limited, all floor amendments are prohibited, points of order against the bill are waived, and final passage requires a two-thirds majority vote.

At the request of the Majority Leader and the House Committee on the Budget, CBO estimates the effects of those bills on direct spending and revenues. CBO has limited time to review the legislation before consideration. Although it is possible in most cases to determine whether the legislation would affect direct spending or revenues, time may be insufficient to estimate the magnitude of those effects. Tf CBO has prepared estimates for similar or identical legislation, a more detailed assessment of budgetary effects, including effects on spending subject to appropriation, may be included. EFFECTS ON DIRECT SPENDING AND REVENUES OF LEGISLATION CONSIDERED UNDER SUSPENSION OF THE RULES IN THE HOUSE OF REPRESENTATIVES ---------------------------------------------------------------------------------------------------------------- Additional Effect on Direct Effect on Information on Bill Number Title Spending Revenues Direct Spending and Revenue Effects ---------------------------------------------------------------------------------------------------------------- H.R. 176....................... No Immigration Reduce by Less None............. .................... Benefits for Than $500K. Hamas Terrorists Act of 2025, as amended. H.R. 225....................... HUD Transparency None.............. None............. .................... Act, as amended. H.R. 1262...................... Mikaela Naylon Increase by at Increase by at Section 3 would Give Kids a Least $500K. Least $500K. increase revenues Chance Act, as by an insignificant amended. amount. Section 10 would reduce direct spending and increase revenues for a net $1.219 billion reduction in the deficit. Section 11 would appropriate $1.219 billion to the Medicare Improvement Fund. On net, the bill would reduce the deficit by an insignificant amount over the 2026-2035 period. H.R. 2066...................... Investing in All None.............. None............. .................... of America Act of 2025, as amended. H.R. 2159...................... Count the Crimes Increase by Less None............. Includes to Cut Act, as Than $500K. insignificant costs amended. for Postal Service Fund, which are classified as off- budget direct spending. H.R. 3174...................... Made in America None.............. None............. .................... Manufacturing Finance Act, as amended. H.R. 3716...................... Systemic Risk Increase by Less Reduce by Less .................... Authority Than $500K. Than $500K. Transparency Act. H.R. 4313...................... Hospital Inpatient Change by Less None............. .................... Services Than $500K, Modernization Direction Unknown. Act, as amended. H.R. 4323...................... Trafficking None.............. None............. .................... Survivors Relief Act, as amended. H.R. 4423...................... No New Burma Funds None.............. None............. .................... Act, as amended. H.R. 4429...................... Developing and None.............. None............. .................... Empowering our Aspiring Leaders Act of 2025, as amended. H.R. 4430...................... Expanding WKSI None.............. None............. .................... Eligibility Act, as amended. H.R. 4431...................... Improving Capital None.............. None............. .................... Allocation for Newcomers Act of 2025, as amended. H.R. 4491...................... SBA IT None.............. None............. .................... Modernization Reporting Act. H.R. 4495...................... SBA Fraud Reduce by at Least Increase by Less .................... Enforcement $500K. Than $500K. Extension Act. H.R. 4549...................... Office of Rural None.............. None............. .................... Affairs Enhancement Act. H.R. 5284...................... Claiming Age None.............. None............. .................... Clarity Act, as amended. H.R. 5345...................... Improving Social None.............. None............. .................... Security's Service to Victims of Identity Theft Act, as amended. H.R. 5346...................... Fair and None.............. Increase by at Would increase Accountable IRS least $500K. revenues by $117 Reviews Act, as million over 2026- amended. 2036. H.R. 5348...................... Social Security None.............. None............. .................... Child Protection Act of 2025, as amended. H.R. 5349...................... Tax Court None.............. Increase by at Would increase Improvement Act, Least $500K. revenues by $6 as amended. million over 2026- 2036. S. 616......................... Foundation of the None.............. None............. .................... Federal Bar Association Charter Amendments Act of 2025. ---------------------------------------------------------------------------------------------------------------- Source: Congressional Budget Office; Joint Committee on Taxation

For the reasons I explained earlier, I urge all of my colleagues to support this bill, and I yield back the balance of my time.

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