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WASHINGTON – Financial Services Committee Chairman Jeb Hensarling (R-TX) today delivered the following remarks on the House Floor during consideration of H.R. 4498, the Helping Angels Lead Our Startups (HALOS) Act:
Mr. Speaker, I rise in strong support 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. And we all know from listening to our constituents, their jobs and the economy continues 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 and 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 sponsors of this bill -- Mr. Chabot, the Chairman of the Small Business Committee; and Mr. Hurt of Virginia and Ms. Sinema of Arizona, who serve with me on the House 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. And so I am proud that our committee has a strong track record of bipartisanship.
Since the beginning of the 114th Congress, the House has passed 56 of our measures and 30 have been signed into law. Each one has received bipartisan support. In an era of divided government, it’s not a bad record.
I believe most Americans would agree 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 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. The HALOS Act provides a clearer path for start-up 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 then 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. And now today, not only the services they provide in our economy, but approximately 600,000 employees earn their paychecks and provide for their families by working for companies that were started with angel investors.
But unfortunately, as so often happens when Washington regulators get out of control, they step into the picture and yet we have even more “unintended consequences.” Four years ago, Congress passed the bipartisan JOBS Act to make it easier for businesses startups to gain access to capital. But the Securities and Exchange Commission issued misguided regulations on angel investors that have the opposite effect.
By inappropriately classifying events where entrepreneurs showcase their business models to angel investors as general solicitations, the SEC’s regulations are causing innovative startups to lose access to capital, which means our economy loses jobs. This is counter to Congress’s intent when we passed the JOBS Act, and it is certainly counter to what our economy needs now. And Mr. Speaker, what is so ironic is that the practice was legal and proper before the passage of the JOBS Act, and it should remain legal and proper after passage of the JOBS Act.
But this is a problem that Congress can easily fix by approving the HALOS Act. It’s not a complicated bill, Mr. Speaker. It is four pages long. It simply ensures that funding from angel investors remains available to small 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, almost 80 percent of the committee voted in favor of the HALOS Act.
This bill has such 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 Congress makes the law, not the regulators who are unelected and who are unaccountable.
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