19–008 

112TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 112–265 

PROVIDING FOR CONSIDERATION OF THE BILL (H.R. 2930) TO AMEND THE 

SECURITIES LAWS TO PROVIDE FOR REGISTRATION EXEMPTIONS FOR 

CERTAIN CROWDFUNDED SECURITIES, AND FOR OTHER PURPOSES, 

AND PROVIDING FOR CONSIDERATION OF THE BILL (H.R. 2940) TO DIRECT THE SECURITIES AND EXCHANGE COMMISSION TO ELIMINATE 

THE PROHIBITION AGAINST GENERAL SOLICITATION AS A REQUIREMENT FOR A CERTAIN EXEMPTION UNDER REGULATION D 

NOVEMBER 2, 2011.—Referred to the House Calendar and ordered to be printed 

Mr. SESSIONS, from the Committee on Rules, 

submitted the following 

R E P O R T 

[To accompany H. Res. 453] 

The Committee on Rules, having had under consideration House 

Resolution 453, by a nonrecord vote, report the same to the House 

with the recommendation that the resolution be adopted. 

SUMMARY OF PROVISIONS OF THE RESOLUTION

The resolution provides for consideration of H.R. 2930, the Entrepreneur Access to Capital Act, under a structured rule. The resolution provides one hour of general debate equally divided and controlled by the chair and ranking minority member of the Committee on Financial Services. The resolution waives all points of 

order against consideration of the bill. The resolution provides that 

the amendment in the nature of a substitute recommended by the 

Committee on Financial Services now printed in the bill shall be 

considered as original text for the purpose of amendment and shall 

be considered as read. The resolution waives all points of order 

against the committee amendment in the nature of a substitute. 

The resolution makes in order only those further amendments to 

H.R. 2930 printed in part A of this report. Each such amendment 

may be offered only in the order printed in this report, may be offered only by a Member designated in this report, shall be considered as read, shall be debatable for the time specified in this report 

equally divided and controlled by the proponent and an opponent, 

shall not be subject to amendment, and shall not be subject to a 

demand for division of the question in the House or in the Committee of the Whole. The resolution waives all points of order 

against the amendments printed in part A of this report. The resoVerDate Mar 15 2010 03:42 Nov 03, 2011 Jkt 019008 PO 00000 Frm 00001 Fmt 6659 Sfmt 6602 E:\HR\OC\HR265.XXX HR265

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lution provides one motion to recommit H.R. 2930 with or without 

instructions. 

The resolution further provides for consideration of H.R. 2940, 

the Access to Capital for Job Creators Act, under a structured rule. 

The resolution provides one hour of debate equally divided and controlled by the chair and ranking minority member of the Committee on Financial Services. The resolution waives all points of 

order against consideration of the bill. The resolution provides that 

the amendment in the nature of a substitute recommended by the 

Committee on Financial Services now printed in the bill shall be 

considered as adopted, and the bill, as amended, shall be considered as read. The resolution waives all points of order against the 

provisions in the bill, as amended. The resolution makes in order 

the further amendment to H.R. 2940 printed in part B of this report, if offered by Representative Miller of North Carolina or his 

designee, which shall be considered as read and shall be separately 

debatable for 10 minutes equally divided and controlled by the proponent and an opponent. The resolution waives all points of order 

against the amendment printed in part B of this report. Finally, 

the resolution provides one motion to recommit H.R. 2940 with or 

without instructions. 

EXPLANATION OF WAIVERS

The waiver of all points of order against consideration of H.R. 

2930 includes a technical waiver of clause 2(h) of rule XI, which 

prohibits a committee from improperly reporting a measure without a quorum present. The Committee on Financial Services did 

not formally order the measure reported because the chair did not 

properly put the question on reporting the measure to the committee. 

Although the rule waives all points of order against the committee amendment in the nature of a substitute, the Committee is 

not aware of any points of order. The waiver is prophylactic in nature. 

Although the rule waives all points of order against the amendments printed in part A of this report, the Committee is not aware 

of any points of order. The waiver is prophylactic in nature. 

Although the rule waives all points of order against consideration 

of H.R. 2940, the Committee is not aware of any points of order. 

The waiver is prophylactic in nature. 

Although the rule waives all points of order against provisions in 

the bill, as amended, the Committee is not aware of any points of 

order. The waiver is prophylactic in nature. 

Although the rule waives all points of order against the amendment printed in part B of this report, the Committee is not aware 

of any points of order. The waiver is prophylactic in nature. 

COMMITTEE VOTES

The results of each record vote on an amendment or motion to 

report, together with the names of those voting for and against, are 

printed below: 

Rules Committee record vote No. 145 

Motion by Mr. McGovern to report an open rule for both H.R. 

2930 and H.R. 2940. Defeated: 3–7. 


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Majority Members Vote Minority Members Vote 

Mr. Sessions ..................................................... Nay Mr. McGovern ................................................... Yea 

Ms. Foxx ............................................................ Nay Mr. Hastings of Florida ................................... Yea 

Mr. Bishop of Utah .......................................... Nay Mr. Polis ........................................................... Yea 

Mr. Nugent ....................................................... Nay 

Mr. Scott of South Carolina ............................. Nay 

Mr. Webster ...................................................... Nay 

Mr. Dreier, Chairman ....................................... Nay 

SUMMARY OF AMENDMENTS IN PART A MADE IN ORDER

1. McHenry (NC): Would make technical corrections. Would also 

require the issuer to state a target offering amount and a deadline 

to reach the target offering amount. Would require that the Securities and Exchange Commission is provided a notice upon completion of the offering, which shall include the aggregate offering 

amount and the number of purchasers. Would clarify the disqualification provision to ensure that both issuers and intermediaries, 

as well as their predecessors, affiliates, officers, directors, or persons fulfilling similar roles, are disqualified from the exemption established in this bill should they have a history of committing securities fraud. (10 minutes) 

2. Fincher (TN), Sherman (CA): Would index to inflation the $1 

million and $2 million aggregate annual amounts raised through 

the issue of the securities as authorized in the bill. The index for 

inflation would be measured by the annual change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics. (10 minutes) 

3. Quayle (AZ): Would index the $10,000 individual investment 

cap to inflation. (10 minutes) 

4. Vela ́zquez (NY): Would require crowdfunding intermediaries to 

disclose their method of compensation to potential investors. (10 

minutes) 

5. Barrow (GA): Would require the Commission to establish a 

website that provides the public with crowdfunding website safety 

tips for investing in securities described under section 4(6). (10 

minutes) 

6. Perlmutter (CO), McHenry (NC): Would preserve a state’s 

right to enforce securities laws with respect to fraud, deceit or unlawful conduct. (10 minutes) 

SUMMARY OF AMENDMENT IN PART B MADE IN ORDER

Miller, Brad (NC): Would require disclosure of bonus compensation structures and ‘‘golden parachute’’ arrangements in advertising materials associated with an exempted offering. (10 minutes) 

PART A—TEXT OF AMENDMENTS MADE IN ORDER

1. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE MCHENRY

OF NORTH CAROLINA OR HIS DESIGNEE, DEBATABLE FOR 10 MINUTES

Page 5, line 5, strike ‘‘issuance’’ and insert ‘‘offer or sale’’. 

Page 5, line 6, strike ‘‘for which’’ and insert ‘‘by an issuer, provided that’’. 


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Page 5, beginning on line 7, strike ‘‘annual amount raised 

through the issue of the securities’’ and insert ‘‘amount sold within 

the previous 12-month period in reliance upon this exemption’’. 

Page 5, beginning on line 13, strike ‘‘individual investments in 

the securities are limited to an aggregate annual amount equal to’’ 

and insert ‘‘the aggregate amount sold to any investor in reliance 

on this exemption within the previous 12-month period does not exceed’’. 

Page 5, line 17, strike ‘‘the’’ and insert ‘‘such’’. 

Page 6, line 8, strike ‘‘issuance’’ and insert ‘‘offer or sale’’. 

Page 6, line 12, after ‘‘website’’ insert ‘‘used for the offer and sale 

of such securities’’. 

Page 6, line 24, strike ‘‘person’’ and insert ‘‘intermediary’’. 

Page 7, line 4, strike ‘‘competency in’’. 

Page 7, line 5, strike ‘‘recognition’’ and insert ‘‘an understanding’’. 

Page 7, line 8, before ‘‘risk’’ insert ‘‘an understanding of the’’. 

Page 7, line 10, before the semicolon insert ‘‘by rule or regulation’’. 

Page 7, strike lines 11 through 15 and insert the following: 

‘‘(7) requires the issuer to state a target offering amount and 

a deadline to reach the target offering amount and ensure the 

third party custodian described under paragraph (10) withholds offering proceeds until aggregate capital raised from investors other than the issuer is no less than 60 percent of the 

target offering amount;’’. 

Page 7, line 18, strike ‘‘with basic’’ and insert ‘‘and potential investors with’’. 

Page 7, beginning on line 19, strike ‘‘funds are solicited from’’ 

and insert ‘‘securities are offered to’’. 

Page 8, line 2, strike ‘‘capital formation funds’’ and insert ‘‘proceeds of the offering’’. 

Page 8, line 4, before the semicolon insert ‘‘and the deadline to 

reach the target offering amount’’. 

Page 8, beginning on line 6, strike ‘‘traditional broker or dealer 

or’’ and insert ‘‘broker or dealer registered under section 15(b)(1) of 

the Securities Exchange Act of 1934 or an’’. 

Page 8, line 13, strike ‘‘and’’ and insert after such line the following: 

‘‘(13) provides the Commission with a notice upon completion 

of the offering, which shall include the aggregate offering 

amount and the number of purchasers; and’’. 

Page 8, line 14, strike ‘‘(13)’’ and insert ‘‘(14)’’. 

Page 8, line 17, before ‘‘securities’’ insert ‘‘or sells’’. 

Page 9, line 13, strike ‘‘competency in’’. 

Page 9, line 14, strike ‘‘recognition’’ and insert ‘‘an understanding’’. 

Page 9, line 17, before ‘‘risk’’ insert ‘‘an understanding of the’’. 

Page 9, line 19, before the semicolon insert ‘‘by rule or regulation’’. 

Page 9, beginning on line 20, strike ‘‘withholds capital formation’’ 

and insert ‘‘ensures that the third party custodian described under 

paragraph (9) withholds offering’’. 

Page 10, line 1, strike ‘‘basic’’. 


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Page 10, beginning on line 2, strike ‘‘funds are solicited from’’ 

and insert ‘‘securities are offered to’’. 

Page 10, line 5, strike ‘‘capital formation funds’’ and insert ‘‘proceeds of the offering’’. 

Page 10, line 7, before the semicolon insert ‘‘and the deadline to 

reach the target offering amount’’. 

Page 10, beginning on line 9, strike ‘‘traditional broker or dealer 

or’’ and insert ‘‘broker or dealer registered under section 15(b)(1) of 

the Securities Exchange Act of 1934 or an’’. 

Page 10, line 16, strike ‘‘and’’ and insert after such line the following: 

‘‘(13) provides the Commission with a notice upon completion 

of the offering, which shall include the aggregate offering 

amount and the number of purchasers; and’’. 

Page 10, line 17, strike ‘‘(13)’’ and insert ‘‘(14)’’. 

Page 10, line 22, strike ‘‘provided by an investor’’ and insert ‘‘as 

to annual income provided by the person to whom the securities 

are sold’’. 

Page 11, line 1, strike ‘‘(a)(9) and (b)(8)’’ and insert ‘‘(a)(9), 

(a)(13), (b)(8), and (b)(13)’’. 

Page 11, line 5, strike ‘‘an investor may not sell’’ and insert ‘‘a 

purchaser may not transfer’’. 

Page 11, strike lines 11 through 15 and insert the following: 

‘‘(1) NO REGISTRATION AS BROKER.—With respect to a transaction described under section 4(6) involving an intermediary, 

such intermediary shall not be required to register as a broker 

under section 15(a)(1) of the Securities Exchange Act of 1934 

solely by reason of participation in such transaction.’’. 

Page 11, line 21, strike ‘‘90’’ and insert ‘‘180’’. 

Page 12, beginning on line 1, strike ‘‘carry out the cost-benefit 

analysis required under section 2(b) of such Act’’ and insert ‘‘consider the costs and benefits of the action’’. 

Page 12, line 3, strike ‘‘90’’ and insert ‘‘180’’. 

Page 12, line 6, strike ‘‘a person’’ and insert ‘‘an issuer’’. 

Page 12, beginning on line 8, strike ‘‘or to participate in the affairs of an intermediary facilitating the use of that exemption.’’ and 

insert ‘‘based on the disciplinary history of the issuer or its predecessors, affiliates, officers, directors, or persons fulfilling similar 

roles. The Commission shall also establish disqualification provisions under which an intermediary shall not be eligible to act as 

an intermediary in connection with an offering utilizing the exemption under section 4(6) of the Securities Act of 1933 based on the 

disciplinary history of the intermediary or its predecessors, affiliates, officers, directors, or persons fulfilling similar roles.’’. 

Page 13, beginning on line 1, strike ‘‘the term ‘held of record’ 

shall not include holders of securities issued pursuant to transactions described under section 4(6) of the Securities Act of 1933.’’ 

and insert ‘‘securities held by persons who purchase such securities 

in transactions described under section 4(6) of the Securities Act of 

1933 shall not be deemed to be ‘held of record’.’’. 


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2. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE FINCHER

OF TENNESSEE OR HIS DESIGNEE, DEBATABLE FOR 10 MINUTES

Page 5, line 9, insert after ‘‘$1,000,000’’ the following: ‘‘, as such 

amount is adjusted by the Commission to reflect the annual change 

in the Consumer Price Index for All Urban Consumers published 

by the Bureau of Labor Statistics,’’. Page 5, line 12, insert after ‘‘$2,000,000’’ the following: ‘‘, as such 

amount is adjusted by the Commission to reflect the annual change 

in the Consumer Price Index for All Urban Consumers published 

by the Bureau of Labor Statistics,’’. 

3. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE QUAYLE OF

ARIZONA OR HIS DESIGNEE, DEBATABLE FOR 10 MINUTES

Page 5, line 16, insert before the semicolon the following: ‘‘, as 

such amount is adjusted by the Commission to reflect the annual 

change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics’’. 

4. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE VELA ́ ZQUEZ

OF NEW YORK OR HER DESIGNEE, DEBATABLE FOR 10 MINUTES

Page 8, line 13, strike ‘‘and’’. 

Page 8, line 14, strike the period and insert ‘‘; and’’. 

Page 8, after line 14, insert the following: 

‘‘(14) discloses to potential investors the intermediary’s compensation structure for participation in the security offering.’’. 

5. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE BARROW

OF GEORGIA OR HIS DESIGNEE, DEBATABLE FOR 10 MINUTES

Page 11, after line 9, insert the following: 

‘‘(f) WEBSITE FOR CROWDFUNDING INVESTMENT SAFETY TIPS.— 

‘‘(1) IN GENERAL.—The Commission shall establish a website 

that provides the public with safety tips for investing in securities described under section 4(6). 

‘‘(2) LINKS TO WEBSITE.—The intermediary in a transaction 

involving the issuance of securities described under section 4(6) 

or, in the case of such transaction not involving an intermediary, the issuer, shall place a link to the website described 

under paragraph (1) in a prominent location on the main page 

of the website of such intermediary or issuer that is used to facilitate such transaction.’’. 

Page 11, line 10, strike ‘‘(f)’’ and insert ‘‘(g)’’. 

6. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE PERLMUTTER OF COLORADO OR HIS DESIGNEE, DEBATABLE FOR 10 

MINUTES

In section 4, strike ‘‘Section’’ and insert the following: 

(a) IN GENERAL.—Section 

In section 4, add at the end the following: 

(b) CLARIFICATION OF THE PRESERVATION OF STATE ENFORCEMENT AUTHORITY.— 


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(1) IN GENERAL.—The amendments made by subsection (a) 

relate solely to State registration, documentation, and offering 

requirements, as described under section 18(a) of Securities 

Act of 1933 (15 U.S.C. 77r(a)), and shall have no impact or limitation on other State authority to take enforcement action 

with regard to an issuer, intermediary, or any other person or 

entity using the exemption from registration provided by section 4(6) of such Act. 

(2) CLARIFICATION OF STATE JURISDICTION OVER UNLAWFUL

CONDUCT OF INTERMEDIARIES, ISSUERS, AND CUSTODIANS.—Section 18(c)(1) of the Securities Act of 1933 is amended by striking ‘‘with respect to fraud or deceit, or unlawful conduct by a 

broker or dealer, in connection with securities or securities 

transactions.’’ and inserting the following: ‘‘, in connection with 

securities or securities transactions, with respect to— 

‘‘(A) fraud or deceit; 

‘‘(B) unlawful conduct by a broker or dealer; and 

‘‘(C) with respect to a transaction described under section 4(6), unlawful conduct by an intermediary, issuer, or 

custodian.’’. 

PART B—TEXT OF AMENDMENT MADE IN ORDER

AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE MILLER OF

NORTH CAROLINA OR HIS DESIGNEE, DEBATABLE FOR 10 MINUTES

Page 4, line 9, insert before the period the following: ‘‘and the 

person offering or selling such securities utilizing the general advertising or general solicitation permitted by such rules discloses in 

any advertising materials connected with such offering or selling 

any bonus compensation structures and ‘golden parachute’ severance packages that the person has provided to executive officers, 

directors, or other principals of the person’’. 

Æ 


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