[Congressional Record Volume 161, Number 108 (Monday, July 13, 2015)]
[House]
[Pages H5095-H5096]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         SMALL BUSINESS INVESTMENT COMPANY CAPITAL ACT OF 2015

  Mr. CHABOT. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 1023) to amend the Small Business Investment Act of 1958 to 
provide for increased limitations on leverage for multiple licenses 
under common control.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 1023

       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 ``Small Business Investment 
     Company Capital Act of 2015''.

     SEC. 2. INCREASED LIMITATIONS ON LEVERAGE FOR MULTIPLE 
                   LICENSES UNDER COMMON CONTROL.

       Section 303(b)(2)(B) of the Small Business Investment Act 
     of 1958 (15 U.S.C. 683(b)(2)(B)) is amended by striking 
     ``$225,000,000'' and inserting ``$350,000,000''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Ohio (Mr. Chabot) and the gentlewoman from New York (Ms. Velazquez) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Ohio.


                             General Leave

  Mr. CHABOT. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days to revise and extend their remarks and include 
extraneous materials on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Ohio?
  There was no objection.
  Mr. CHABOT. Mr. Speaker, I yield myself such time as I may consume.
  When an entrepreneur starts a business, one of the first challenges 
they face is getting the money they need to produce their new product 
or patent their great idea.
  For small businesses, this has remained a constant struggle. However, 
we also know that small businesses are vital to our economic growth 
and, since the recession, have accounted for 60 percent of new net jobs 
in this country.
  For these reasons, over 60 years ago Congress created the Small 
Business Administration, the SBA, and tasked it with the vital mission 
of ensuring that small businesses can get the capital they need.
  The Small Business Investment Company, or SBIC, program is a public-
private partnership that provides small businesses access to equity and 
debt financing.
  It has been extremely successful over the years providing billions in 
private capital to help promising businesses grow into household names. 
Pandora, Whole Foods, Apple, even Nike, were all small businesses that 
received early financing from the SBIC program.
  In fiscal year 2014 alone, SBICs invested $5.46 billion in small 
firms that employ approximately 113,000 workers all across America. In 
my home State of Ohio, more than 2,000 people have jobs today because 
the SBIC program helped small businesses there in Ohio access the 
resources that they needed to grow.
  Under current law, successful SBICs under common control, frequently 
called the family of funds, are limited in the amount of funds they can 
provide to small businesses.
  By merely raising this cap from $225 million to $350 million, as this 
legislation would do, we could stimulate up to $750 million a year in 
capital that would be available to the next Nike or Apple. Given the 
volatile fiscal climate, we can all agree that small businesses would 
benefit from such a valuable increase in private investment.
  H.R. 1023 increases this flow of private funds to small businesses at 
no cost--let me repeat--no cost to the taxpayer. The committee passed 
this bill with bipartisan support, both Republican and Democrat 
support.
  I want to thank several members of the Committee on Small Business 
for their support and work on this bill, including Representatives 
Bost, Chu, Curbelo, Gibson, Hahn, Hanna, Knight, Lawrence, Luetkemeyer, 
and Meng.
  I would urge my colleagues to support H.R. 1023.
  I want to thank Ileana--I want to thank Nydia Velazquez for her 
strong leadership on this bill and much of the other bipartisan work 
that we have done in the committee. Ileana is another Member who I 
strongly support and admire greatly.
  At this point, I reserve the balance of my time.
  Ms. VELAZQUEZ. Mr. Speaker, I yield myself as much time as I may 
consume.
  I, too, want to thank the chairman of the Small Business Committee 
for working in a bipartisan way to craft this legislation.
  Indeed, Ileana Ros-Lehtinen is a good friend of mine from Florida. So 
I don't take any offense.
  Small business investment companies have assisted thousands of high-
growth companies over the years, providing nearly $75 billion in 
capital.
  By design, the program fills the gap in the capital markets for 
business that has outgrown the SBA's 7(a) guaranteed loan program, but 
remain too small or too risky for traditional private equity markets to 
bear.
  SBICs operate in a unique public-private partnership with SBA. Once 
managers raise enough private capital, the

[[Page H5096]]

agency provides matching funds, which are pooled together and invested 
in high-growth small businesses.
  To maximize the impact of the program, the most successful fund 
managers are permitted to hold more than one SBIC license at a time, 
known as a family of funds, with the benefit of drawing additional SBA 
leverage.
  The current leverage caps, implemented in 2010, allow single 
licensees to draw $175 million and family-of-fund licensees to draw 
$225 million. H.R. 1023, the Small Business Investment Company Capital 
Act of 2015, would increase that cap by an additional 55 percent to 
$350 million.
  According to SBA data, only seven SBICs would be able to take 
advantage of the increase, limiting the actual amount of capital that 
will reach our small business community. The roughly 150 other SBIC 
families are unlikely to ever need this increase.
  Similarly, concentrating additional taxpayer-backed leverage in just 
a few asset managers necessitates the need for more oversight. I look 
forward to working with the chairman to strike the right balance 
ensuring this capital is deployed efficiently, but with less risk.
  The SBIC program has done a lot of good for the small business 
community over the years. In fact, since 2010, SBICs have quadrupled 
their output to over $3.4 billion last year alone, but it is still 
coming up short in its assistance to women, minorities, and veterans.
  These groups receive just 6 percent of total SBIC capital. It is my 
hope, as we work with the Senate on finalized language, steps can be 
taken to address this inequity.
  Providing ways to get more capital into the hands of small business 
owners is a top priority for both sides of the aisle in this committee.
  I want to thank Chairman Chabot for introducing this legislation, and 
I am hopeful the increase in leverage will provide new capital 
opportunities to entrepreneurs from every walk of life.
  Mr. Speaker, I reserve the balance of my time.
  Mr. CHABOT. Mr. Speaker, I yield such time as he may consume to the 
gentleman from New York (Mr. Collins).
  Mr. COLLINS of New York. Mr. Speaker, I rise today in support of H.R. 
1023, the Small Business Investment Company Capital Act of 2015.
  Small businesses serve as America's economic engine, driving 
essential job creation. In my Western New York district, small 
businesses provide the good-paying jobs that people need to support 
their families. However, we need to do more to encourage small business 
growth.
  This legislation aids the SBIC program, which utilizes private 
investment funds to provide long-term loans and capital to small 
businesses in need. Without this vital program, many of the small 
businesses in our country would not be able to succeed.
  Since inception, the SBIC program has invested $73 billion in more 
than 118,000 U.S. small businesses. In western New York, this program 
has supported companies like Gemcor in West Seneca and Synacor in 
Buffalo and is critical to the jobs they provide.
  This crucial investment is why I urge my colleagues to join me in 
supporting H.R. 1023.
  Ms. VELAZQUEZ. Mr. Speaker, I am prepared to close, and I yield 
myself the balance of my time.
  Since its creation in 1958, the SBIC program has injected billions of 
dollars into promising startups and small businesses.
  With the help of the SBIC, some of these small businesses grow into 
Fortune 500 companies. Apple, Inc., was once an SBIC client. Today it 
is one of the largest companies in the world by market capitalization.
  By providing businesses with capital to grow, the SBIC program has 
also been a driver of job creation. In 2014 alone, the program helped 
create or retain 113,000 jobs.
  I look forward to working with the chairman and our colleagues in the 
Senate on this legislation. I urge a ``yes'' vote.
  I yield back the balance of my time.
  Mr. CHABOT. Mr. Speaker, I yield myself such time as I may consume.
  In closing, Mr. Speaker, let me just reiterate the impact this minor 
change could have on small businesses all across this country.
  H.R. 1023 would increase the amount of capital available to small 
business and enable well-managed SBICs, at no cost to the taxpayer, to 
increase investment in small businesses.
  This legislation is a commonsense, bipartisan reform, and I urge my 
colleagues to vote ``yes'' on H.R. 1023.
  I yield back the balance of my time.
  Ms. MENG. Mr. Speaker, I rise today in support of H.R. 1023, the 
Small Business Investment Company Capital Act. As a co-sponsor of this 
bi-partisan legislation and a member of the Small Business Committee, I 
recognize the importance of supporting small businesses and providing 
them with resources for success. This bill provides small businesses 
with such tools by raising the maximum debt that the Small Business 
Administration can guarantee to borrowers in the Small Business 
Investment Company, or SBIC program, from $225 million to $350 million.
  Currently, 30% of SBICs in the program are hitting or approaching the 
$225 million cap, thus restricting them from further investment. This 
bill will allow SBICs to increase its cap by $125 million, allowing it 
to invest in many underserved companies, including those led by 
minorities, women, and veterans.
  The Congressional Budget Office has stated that by adopting this 
bill, there is no expected additional cost to administer the program, 
nor will there be an additional cost to the taxpayer as businesses 
participating in the program pay fees that would offset such costs.
  In the last five years, SBICs have invested more than $1.6 billion in 
my home state of New York. Last year alone, over $5.46 billion was 
invested in 1,085 companies and SBICs supported over 113,000 jobs. As 
we continue to work to get our economy back on track, we must join 
together to support small businesses, which drive our nation's economy.
  This bill previously passed in the House of Representatives as H.R. 
6504 in the 112th Congress. I urge my colleagues to, once again, vote 
in support of this bill that supports our nation's small businesses.
  The SPEAKER pro tempore (Mr. Collins of New York). The question is on 
the motion offered by the gentleman from Ohio (Mr. Chabot) that the 
House suspend the rules and pass the bill, H.R. 1023.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

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