[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4431 Reported in House (RH)]
<DOC>
Union Calendar No. 205
119th CONGRESS
1st Session
H. R. 4431
[Report No. 119-248]
To amend the Investment Company Act of 1940 with respect to the
definition of qualifying venture capital funds, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 16, 2025
Mr. Timmons introduced the following bill; which was referred to the
Committee on Financial Services
September 8, 2025
Additional sponsor: Ms. Pettersen
September 8, 2025
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed
in italic]
[For text of introduced bill, see copy of bill as introduced on July
16, 2025]
_______________________________________________________________________
A BILL
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), by striking ``$10,000,000'' and
inserting ``$50,000,000''.
SEC. 3. STUDY AND RULEMAKING.
(a) 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--
(1) the geographic distribution of capital to portfolio
companies;
(2) the socio-economic characteristics of founders or
controlling persons;
(3) the veteran status of founders or controlling persons;
(4) the industry sector, size, stage of development, and
related details; and
(5) other factors or metrics determined by the Advocate for
Small Business Capital Formation.
(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 in subsection
(a), 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)) to index the
first dollar amount in such clause for inflation.
Union Calendar No. 205
119th CONGRESS
1st Session
H. R. 4431
[Report No. 119-248]
_______________________________________________________________________
A BILL
To amend the Investment Company Act of 1940 with respect to the
definition of qualifying venture capital funds, and for other purposes.
_______________________________________________________________________
September 8, 2025
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed