[Congressional Record Volume 153, Number 62 (Wednesday, April 18, 2007)]
[Senate]
[Pages S4693-S4694]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. SNOWE (for herself and Mr. Coleman):
  S. 1153. A bill to require assessment of the impact on small business 
concerns of rules relating to internal controls, and for other 
purposes; to the Committee on Banking, Housing, and Urban Affairs.
  Ms. SNOWE. Mr. President, I rise today with my colleague Senator 
Coleman, to introduce the ``Small Business Regulatory Review Act.'' 
This is a targeted, non-controversial measure. It would ensure that the 
Securities and Exchange Commission (SEC) and the Public Company 
Accounting Oversight Board (PCAOB) fully consider the impacts of their 
final rules mandating how small public companies must comply with the 
internal control requirements of the Sarbanes-Oxley Act.
  Our Nation's small stock companies are the cornerstone of our 
entrepreneurial economy, and it is essential that we carefully address 
the regulatory barriers that impede their growth.
  The Sarbanes-Oxley Act was essential in restoring investor confidence 
after accounting fraud and massive company deceptions shook the 
public's trust in U.S. markets. The horrendous debacle of corporate 
greed from companies like Enron and Worldcom forced not only thousands 
of employees to lose their jobs, but also wiped out the life savings of 
many retirees. Now, as we refine Sarbanes-Oxley's regulations, we must 
carefully preserve investor protections and ensure company transparency 
and accountability.
  In my home State of Maine, small publicly-traded companies are 
indispensable to the strength and renewal of our economy. However, the 
fact is that many of these small stock companies are struggling 
mightily with the cost and regulatory burden imposed by Sarbanes-Oxley 
compliance, regardless of

[[Page S4694]]

their industry. Whether it's a utility company, a dairy pharmaceutical 
company that makes large animal vaccines, or a community bank that 
fears being smothered by the combined weight of Sarbanes-Oxley and 
banking regulations, it is crucial that Maine's home grown companies 
focus their energies on developing new products, entering new markets, 
and creating jobs--not on compliance.
  This is why I rise today, with Senator Coleman, to introduce the 
``Small Business Regulatory Review Act of 2007.'' Our bill would 
require the SEC to conduct a small business analysis, consistent with 
the Regulatory Flexibility Act (RFA), before the SEC publishes its 
final rules on small business internal controls compliance. This non-
controversial provision simply restates existing law, ensuring that the 
SEC conducts a final RFA analysis. As the SEC should already be 
conducting this analysis as part of its final rulemaking process, this 
bill will impose no additional delay.
  Our bill would also require the SEC to publish a small business 
compliance guide, consistent with the Small Business Regulatory 
Enforcement Fairness Act (SBREFA). This compliance guide would explain, 
in plain language, the small business requirements under the rule. The 
SEC should publish this small businesses compliance guide when it 
publishes its final rule, so that small business understand the new 
requirements. As this non-controversial provision also restates 
existing law, this measure would impose no additional delay on the 
SEC's rulemaking process.
  Regulations disproportionately affect small businesses and 
significantly hinder their competitiveness. In 2004, Senator Enzi and I 
jointly requested that the Government Accountability Office (GAO) study 
the effects of the Sarbanes-Oxley Act on small public companies' access 
to capital. The study found that the costs for complying with Sarbanes-
Oxley were nine times greater for smaller companies than for large 
stock companies. We must reduce the burden imposed by Sarbanes-Oxley so 
that our small stocks in Maine, Minnesota, and across the country can 
continue to be some of the world's fastest growing and most innovative 
companies.
  Finally, to address this disproportionate regulatory burden on small 
businesses, our bill would require that the GAO re-analyze the impact 
of these rules on small public companies two years after final rules 
are published. The GAO's report would include an assessment of the 
costs and time commitments the SEC and PCAOB requirements impose on 
small businesses and whether these costs are expected to decrease or 
increase in the future. Additionally, the final report would include 
recommendations, and regulatory alternatives, on how to simplify or 
improve the process of complying with SEC and PCAOB small company stock 
requirements. This provision simply ensures that the rules do not 
impose unintended, undue burdens on small businesses.
  The ``Small Business Regulatory Review Act of 2007'' will help to 
ensure that small stock companies do not suffer from additional 
unintended consequences which harm their ability to compete, innovate, 
and grow--and, most importantly, create jobs.
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