119-hr4431

[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