[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4431 Referred in Senate (RFS)]
<DOC>
119th CONGRESS
1st Session
H. R. 4431
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
December 2, 2025
Received; read twice and referred to the Committee on Banking, Housing,
and Urban Affairs
_______________________________________________________________________
AN ACT
To amend the Investment Company Act of 1940 with respect to the
definition of qualifying venture capital funds, and for other purposes.
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.
Passed the House of Representatives December 1, 2025.
Attest:
KEVIN F. MCCUMBER,
Clerk.