Access to Small Business Investor Capital Act
- Bill Number
- H.R. 2225
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Finance and Financial Sector
- Status
- Passed House
- Latest Action
- 2025-06-24: Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- Last Updated
- 2026-07-11T03:38:23Z
AI-Generated Summary
Purpose of the Legislation
The "Access to Small Business Investor Capital Act" (H.R. 2225) aims to simplify fee disclosures for investment funds by allowing certain fees related to investments in business development companies (BDCs) to be excluded from required calculations. BDCs are specialized investment vehicles that provide capital to small and mid-sized businesses. This change is intended to make it easier for larger investment funds to invest in BDCs without inflating their reported fees, potentially increasing capital flow to smaller businesses.
Key Provisions
- Definitions: The bill defines key terms, including:
- Acquired Fund: A fund in which another investment company invests (as per SEC forms N-1A, N-2, and N-3).
- Acquired Fund Fees and Expenses: Indirect fees from investing in other funds, shown in a fund's fee table.
- Business Development Company (BDC): A type of investment company regulated under the Investment Company Act of 1940 that focuses on financing small businesses.
- Fee Table Disclosure: The section in SEC registration forms where funds list their expenses.
- Registered Investment Company: A fund registered with the SEC under federal securities laws.
- Exclusion of BDC Fees: Registered investment companies can exclude fees and expenses from investments in BDCs when calculating and reporting Acquired Fund Fees and Expenses on their SEC registration statements (Forms N-1A, N-2, or N-3).
- Application: This applies to statements filed under Section 8(b) of the Investment Company Act of 1940.
Significant Changes to Existing Law
- Under current SEC rules, fees from all acquired funds (including BDCs) must be included in the Acquired Fund Fees and Expenses line of a fund's fee table, which can make total reported expenses appear higher.
- The bill creates a statutory exception specifically for BDCs, overriding or supplementing SEC disclosure requirements. This is the first targeted exclusion for a specific type of acquired fund in fee calculations, potentially leading the SEC to update its forms accordingly.
Potential Impacts
- On Government Agencies: The Securities and Exchange Commission (SEC) will need to align its forms and guidance with this change, possibly through rulemaking, but without major new enforcement burdens.
- On Citizens/Investors: Investors in mutual funds or closed-end funds may see lower reported fees in disclosure tables, improving transparency and potentially reducing perceived costs, which could encourage more investment in diversified portfolios including BDCs.
- On International Relations: No direct impact, as the bill focuses on domestic U.S. securities regulation.
- Broader Economy: By facilitating investments in BDCs, it could increase funding availability for small businesses, supporting job creation and economic growth in underserved sectors.
Main Stakeholders Affected
- Registered Investment Companies: Benefit from simplified fee reporting, potentially attracting more investors to funds that hold BDC shares.
- Business Development Companies (BDCs): Likely to receive more capital inflows, as their inclusion in other funds becomes less burdensome on fee disclosures.
- Investors and Retail Participants: Gain clearer, less inflated fee information, aiding better decision-making.
- Securities and Exchange Commission (SEC): Must implement and oversee the changes in registration forms and disclosures.
- Small and Mid-Sized Businesses: Indirectly benefit through increased BDC financing for loans, equity, or other capital needs.
Notable Legal, Constitutional, or Political Implications
- Legal: Reinforces the Investment Company Act of 1940 by adding a narrow amendment, balancing investor protection with economic policy goals. It may prompt SEC interpretations or future litigation if exclusions lead to disputes over disclosure accuracy.
- Constitutional: No apparent issues, as it involves Congress's authority over interstate commerce and securities regulation under the Commerce Clause.
- Political: Supports pro-small business initiatives, potentially appealing across party lines by promoting capital access without broad deregulation. Passed by the House in June 2025 and referred to the Senate Committee on Banking, Housing, and Urban Affairs, indicating bipartisan interest in financial innovation.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (25)
Rep. Huizenga, Bill [R-MI-4], Rep. Garbarino, Andrew R. [R-NY-2], Rep. Bynum, Janelle [D-OR-5], Rep. Scott, David [D-GA-13], Rep. Meuser, Daniel [R-PA-9], Rep. Fields, Cleo [D-LA-6], Rep. Fitzpatrick, Brian K. [R-PA-1], Rep. Strickland, Marilyn [D-WA-10], Rep. Steil, Bryan [R-WI-1], Rep. Boyle, Brendan F. [D-PA-2], Rep. Barr, Andy [R-KY-6], Rep. Wagner, Ann [R-MO-2], Rep. Pettersen, Brittany [D-CO-7], Rep. Foster, Bill [D-IL-11], Rep. Nunn, Zachary [R-IA-3], Rep. Velázquez, Nydia M. [D-NY-7], Rep. Casten, Sean [D-IL-6], Rep. Himes, James A. [D-CT-4], Rep. Cleaver, Emanuel [D-MO-5], Rep. Meeks, Gregory W. [D-NY-5], Rep. Gottheimer, Josh [D-NJ-5], Rep. Torres, Ritchie [D-NY-15], Rep. Gonzalez, Vicente [D-TX-34], Rep. Kim, Young [R-CA-40], Rep. Meng, Grace [D-NY-6]
Recent Actions
- 2025-06-24: Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- 2025-06-23: Motion to reconsider laid on the table Agreed to without objection.
- 2025-06-23: On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote. (text: CR H2868)
- 2025-06-23: Passed/agreed to in House: On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote. (text: CR H2868)
- 2025-06-23: DEBATE - The House proceeded with forty minutes of debate on H.R. 2225.
- 2025-06-23: Considered under suspension of the rules. (consideration: CR H2868-2869)
- 2025-06-23: Mrs. Wagner moved to suspend the rules and pass the bill, as amended.
- 2025-06-03: Placed on the Union Calendar, Calendar No. 96.
- 2025-06-03: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-126.
- 2025-06-03: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-126.
- 2025-05-20: Ordered to be Reported (Amended) by Voice Vote.
- 2025-05-20: Committee Consideration and Mark-up Session Held
- 2025-03-18: Referred to the House Committee on Financial Services.
- 2025-03-18: Introduced in House
- 2025-03-18: Introduced in House
Bill Versions
- Access to Small Business Investor Capital Act — issued 2025-06-23 — PDF (6 pages)
- Access to Small Business Investor Capital Act — issued 2025-03-18 — PDF (3 pages)
- Access to Small Business Investor Capital Act — issued 2025-06-24 — PDF (4 pages)
- Access to Small Business Investor Capital Act — issued 2025-06-03 — PDF (6 pages)