[Congressional Record Volume 162, Number 18 (Monday, February 1, 2016)]
[House]
[Pages H382-H384]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SMALL BUSINESS CAPITAL FORMATION ENHANCEMENT ACT
Mr. GARRETT. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 4168) to amend the Small Business Investment Incentive Act
of 1980 to require an annual review by the Securities and Exchange
Commission of the annual government-business forum on capital formation
that is held pursuant to such Act.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 4168
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 Capital
Formation Enhancement Act''.
SEC. 2. ANNUAL REVIEW OF GOVERNMENT-BUSINESS FORUM ON CAPITAL
FORMATION.
Section 503 of the Small Business Investment Incentive Act
of 1980 (15 U.S.C. 80c-1) is amended by adding at the end the
following:
``(e) The Commission shall--
``(1) review the findings and recommendations of the forum;
and
``(2) each time the forum submits a finding or
recommendation to the Commission, promptly issue a public
statement--
``(A) assessing the finding or recommendation of the forum;
and
``(B) disclosing the action, if any, the Commission intends
to take with respect to the finding or recommendation.''.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New
Jersey (Mr. Garrett) and the gentleman from Delaware (Mr. Carney) each
will control 20 minutes.
The Chair recognizes the gentleman from New Jersey.
General Leave
Mr. GARRETT. Mr. Speaker, I ask unanimous consent that all Members
have 5 legislative days in which to revise and extend their remarks and
to include any extraneous material on this bill.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from New Jersey?
There was no objection.
Mr. GARRETT. Mr. Speaker, I yield myself such time as I may consume.
I rise in support of H.R. 4168, the Small Business Capital Formation
Enhancement Act.
I would like to thank the gentleman from Maine (Mr. Poliquin) and the
gentleman from California (Mr. Vargas) for their bipartisan work on
this bill. I go off script here just to say thank you very much to Mr.
Poliquin, who has been a very active member on this committee from the
very beginning and has been very active in making sure this legislation
has come to the floor today. I thank the gentleman.
As I said before, this bill came out of committee, due much in part
to the gentleman's work, with an overwhelming bipartisan vote. I
believe it was 55-1; so the gentleman just has that one to work on for
his next piece of legislation that comes out of committee.
Mr. Speaker, Congress created the SEC Government-Business Forum on
Small Business Capital Formation--to do what?--to provide a platform to
identify unnecessary impediments to small business capital formation
and to find ways to eliminate or to reduce them. Each forum seeks to
develop recommendations for government and private action to improve
and provide the
[[Page H383]]
environment for small business capital formation, thereby providing
small businesses the opportunity--to do what?--to grow economically
and, most importantly, as we have been talking all day, to create more
jobs.
Unfortunately, the SEC's default position over these several years
has been to simultaneously and summarily ignore many of the
recommendations made by the various forum participants, which include
small businesses, venture capitalists, trade association
representatives, accountants, academics, and other small business
academics.
Despite the claims of which we hear every year from the Commission
about the importance of this forum, it seems that the only time the SEC
actually implements one of these capital formation agenda items that
comes out of it is when Congress tells it to do so. This was certainly
the case with several provisions of the JOBS Act, many of which, as one
will recall, were original recommendations from that very same forum. I
will give two examples. There was the crowdfunding and the Regulation
A-Plus provisions of the JOBS Act. They basically mirrored the forum's
recommendations years earlier.
The Small Business Capital Formation Enhancement Act, which is before
us today, provides an answer. It basically provides a simple solution
to making the SEC more responsive. It requires the SEC to respond
publicly and in writing to each forum recommendation and to simply
explain whether it plans to take action on that item or not.
It really shouldn't take an act of Congress for the SEC to fulfill
its basic capital formation mission. Quite honestly, it shouldn't take
an act of Congress for the SEC to simply respond in writing to any of
the forum recommendations. Unfortunately, this is the position we find
ourselves in today; so we have H.R. 4168, which is the gentleman from
Maine's work, which will ensure that the SEC no longer ignores these
recommendations and will be able to help fulfill its statutory mission
to facilitate capital formation in this country.
Mr. Speaker, I reserve the balance of my time.
{time} 1545
Mr. CARNEY. Mr. Speaker, I yield myself such time as I may consume.
I would like to add my thanks and congratulations as well to the
gentleman from Maine (Mr. Poliquin) and the gentleman from California
(Mr. Vargas) for their bipartisan work on this bill. This legislation,
as was pointed out, passed out of the Financial Services Committee with
all but one vote.
The SEC's Government-Business Forum on Capital Formation brings
together academics, government officials, legal experts, and business
stakeholders to make recommendations to improve and facilitate small-
business capital formation.
By directly addressing the recommendations of the forum, the SEC will
help refine ideas and provide future forums with opportunities to
address the SEC's views or concerns, ultimately leading to a more
constructive and valuable process.
This legislation will enhance the role of the forum and assist the
SEC to focus on the capital needs of small businesses, which, as we
have discussed several times today, are the main drivers of job
creation in our economy, while simultaneously encouraging participants
to substantively engage in the forum.
Mr. Speaker, I ask my colleagues to support this bipartisan piece of
legislation and thank the sponsors for their hard work.
I reserve the balance of my time.
Mr. GARRETT. Mr. Speaker, I have already given him compliments, as
many as I am going to give on the floor. I yield such time as he may
consume to the gentleman from Maine (Mr. Poliquin) because he has been
an outstanding member of the committee and is the sponsor of the bill.
Mr. POLIQUIN. Mr. Speaker, I thank Chairman Garrett for bringing this
very important bill to the floor. I also want to extend my
congratulations to Congressman Juan Vargas of California. He has done a
terrific job being the lead cosponsor of the Small Business Capital
Formation Enhancement Act.
All of us in this Chamber who also are small-business owners
understand how important it is to have access to money, to funds, to
capital, in order for our businesses to be successful, to grow, and
ultimately to hire more people. This is true in Maine's Second District
that I represent and also across the country.
It is all about jobs. Unless your business grows and expands, then
you don't have jobs. So it is very, very important to have that key
ingredient to small-business growth, which is access to capital or to
money.
Now, if you are one of the greatest papermakers in the world--and we
have a lot, Mr. Speaker, up in Maine's Second District--and you work
for a paper company up in Madawaska, Maine, or Madison, Maine, you
still depend on your company--it might not be a small company--to make
sure you have access to the stock and bond markets, to be able to
borrow the funds they need to expand and be successful, and to make
sure we can secure your job.
Now, if you are a small-business owner, which really dominates the
landscape in Maine and across the country--let's say you are a
boatbuilder in Ellsworth, Maine--you still need access to capital in
order to grow. If you are a biotech startup company in Lewiston, Maine,
the same holds true.
You know, 80 percent of the new jobs created in our country today are
not large companies, but they are small companies. That is where the
problem lies as far as access to funding is concerned. I am not worried
as much about the big companies having access to the capital markets,
but I do worry about our small businesses.
Now, as both Mr. Carney and Mr. Garrett have mentioned, during each
of the past 35 years, the Securities and Exchange Commission, by law,
has been required and has put together an annual government-business
forum.
During this annual meeting, they get the most experienced
professionals they can find--businessowners, SEC attorneys, private
sector attorneys--to review the current laws we have on the books today
to make sure they are not impeding our small businesses' ability to
borrow money and have access to capital in other ways.
Now, these forums also are a tremendous incubator of coming up with
new ideas to make sure our laws evolve. Our capital markets, Mr.
Speaker, in our economy are very dynamic. Businesses grow and they
change, and new products are offered and sold.
So there are new needs for capital going forward. We have to make
sure that the actual laws that are the underpinning of our capital
markets, the underpinning of our economy, also evolve. So these annual
business-government forums are very important venues for this to
happen.
Now, as has been said here earlier, unfortunately, the SEC has no
legal requirement to make sure all the terrific recommendations that
come out of these annual forums are acted upon or not. In fact, it is
very common for the SEC not to comment at all on all of the work done
to bring these new ideas to the forefront.
So my legislation, I am proud to say, comes up with a very
commonsense fix. It simply requires the SEC to make a public statement
on what it is going to do to embrace these recommended changes or not.
It is very simple. Otherwise, these ideas, Mr. Speaker, sit on the
shelf.
Now, my bill also has the ancillary benefit of making sure that each
new forum each year doesn't repeat what we just did the year before. By
having a benchmark every year, by addressing the recommendations that
come out of these meetings, then we are able to spring forward and move
down the path where we left off the year before.
I want to thank the Speaker and the chairman very much for bringing
this important bill to the floor. I am delighted to work with Mr.
Vargas on this. He has done one heck of a job.
It is so important for everybody in this Chamber to please stand up
for small businesses across the country, to make sure they have access
to the money they need to grow, be successful, and hire more workers.
It is all about jobs.
Mr. CARNEY. Mr. Speaker, I thank and congratulate the sponsor and
cosponsor again. I have no further requests for time.
I yield back the balance of my time.
[[Page H384]]
Mr. GARRETT. Mr. Speaker, I yield such time as he may consume to the
gentleman from Minnesota (Mr. Emmer).
Mr. EMMER of Minnesota. Mr. Speaker, small businesses are critical to
job creation and sustainable economic growth in America.
In my home State of Minnesota, 1.2 million workers--nearly half of
our State's private workforce--is employed by a small business. When
one of the more than 500,000 small businesses in Minnesota contacts our
office, it is most often about how well-intended, yet short-sighted,
regulations are inhibiting their ability to utilize the financial
products they rely on.
In order to ensure the creation and growth of small business, it is
imperative that we do our job in Washington to make certain they have
access to the capital they need.
Since 1980, the Securities and Exchange Commission has been required
to conduct a government-business forum each year to present and discuss
ways to improve small business capital formation. However, the SEC is
under no legal obligation, as we have heard several times today, to
respond to any of the findings or recommendations that come out of
these forums.
That is why the Small Business Capital Formation Enhancement Act is
so important. The proposed legislation will require the SEC to respond
to the findings and recommendations made at these annual government-
business forums. This will ensure that the ideas formulated at these
government-business forums will be carefully considered at the SEC and
possibly even implemented.
I want to thank Representatives Bruce Poliquin and Juan Vargas for
their hard work on behalf of consumers and small business.
I urge my colleagues to support the Small Business Capital Formation
Enhancement Act.
Mr. GARRETT. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from New Jersey (Mr. Garrett) that the House suspend the
rules and pass the bill, H.R. 4168.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. POLIQUIN. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this motion will be postponed.
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