[Congressional Record Volume 169, Number 16 (Wednesday, January 25, 2023)]
[House]
[Pages H304-H307]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
INVESTING IN MAIN STREET ACT OF 2023
Mr. WILLIAMS of Texas. Mr. Speaker, I move to suspend the rules and
pass the bill (H.R. 400) to amend the Small Business Investment Act of
1958 to increase the amount that may be invested in small business
investment companies.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 400
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 ``Investing in Main Street Act
of 2023''.
SEC. 2. INVESTMENT IN SMALL BUSINESS INVESTMENT COMPANIES.
Section 302(b) of the Small Business Investment Act of 1958
(15 U.S.C. 682(b)) is amended--
(1) in paragraph (1), by striking ``5 percent'' and
inserting ``15 percent''; and
(2) in paragraph (2), by striking ``5 percent'' and
inserting ``15 percent''.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Texas (Mr. Williams) and the gentlewoman from New York (Ms. Velazquez)
each will control 20 minutes.
The Chair recognizes the gentleman from Texas.
General Leave
Mr. WILLIAMS of Texas. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative days to revise and extend their remarks
and submit extraneous materials on this measure.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Mr. WILLIAMS of Texas. Mr. Speaker, I yield myself such time as I may
consume.
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Small businesses are the engines of our economy. Over half of the
country's payroll is made from small businesses, and when we work to
find solutions to help these entities, we are strengthening the
economic foundation of our country.
So before we start debating these bills, I thank our leadership team
for recognizing the importance of small businesses and bringing these
bills to the floor quickly so we can help build up Main Street America.
Mr. Speaker, I rise in support of H.R. 400, better known as the
Investing in Main Street Act.
Last Congress, the Subcommittee on Capital Access held a hearing on
the small business investment company program, otherwise known as the
SBIC program. During this hearing, our members heard from witnesses
about how this program attracts private equity investments to small
businesses to hire more people and expand their operations.
This is a self-sustaining program that supports our Nation's job
creators without costing taxpayers any money. In order to expand on
this success, H.R. 400 looks to increase the maximum allowable
investments by SBICs from 5 percent to 15 percent of their excess
capital to small businesses.
This change will allow for greater amounts of private equity dollars
to go toward small businesses. Additionally, this will align the SBIC
program to other financial regulations coming out of the OCC and will
help jumpstart growth of small businesses across this country.
As we look for ways to continually improve on this program, this
change will have an immediate impact for our jobs and our Nation's job
creators.
I thank my colleagues from California and New York for, once again,
introducing this bipartisan solution to expand successful programs that
empower the private sector to invest in small businesses.
Mr. Speaker, I reserve the balance of my time.
Ms. VELAZQUEZ. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I rise in support of the bill before us today, H.R. 400,
the Investing in Main Street Act of 2023.
The SBA's Small Business Investment Company program is a multi-
billion-dollar investment program designed to bridge the gap between a
small business owner's need for capital and traditional sources of
financing. It achieves this purpose by partnering private and public
investments in early-stage startup businesses.
It also gives America's small, high-growth companies an opportunity
to fund and grow their innovative ideas and create jobs.
The success of this program can be seen with companies like Apple,
Intel, and FedEx, which all received early stage financing from the
SBICs.
In fiscal year 2021, the combined private capital and SBA-backed
funds totaled $34 billion, which was the highest in program history,
and helped support more than 126,000 jobs. The number of financings to
women-owned, minority-owned, and veteran-owned small businesses
increased by 36 percent.
Yet, we can do more to ensure the program continues to meet demand.
The Investing in Main Street Act, introduced by my colleagues,
Representatives Chu and Garbarino, will strengthen and grow the SBIC
program by allowing banks and Federal savings associations to invest up
to 15 percent of their capital and surplus into SBICs.
This change brings the Small Business Investment Act of 1958 in line
with the Office of the Comptroller of the Currency's national bank
charter percentage requirements. It will increase the investment
capital available to SBICs and allow them to invest more in small
businesses.
I applaud Representatives Chu and Garbarino's continued work on this
issue and this bill, and I ask all my colleagues to support this bill.
Mr. Speaker, I reserve the balance of my time.
Mr. WILLIAMS of Texas. Mr. Speaker, I yield such time as he may
consume to the gentleman from New York (Mr. Garbarino), a person who
loves this country, and who understands Main Street America and small
businesses.
Mr. GARBARINO. Mr. Speaker, I am pleased to rise today to share my
support for H.R. 400, the Investing in Main Street Act of 2023, a bill
which I am proud to co-lead with Congresswoman Judy Chu.
I also thank the chairman and the ranking member for bringing this up
today.
We often talk about small businesses being the backbone of the U.S.
economy. It is not just a talking point, but a statement of fact. Small
businesses are major contributors to our Nation's overall prosperity;
and in my district on Long Island, small businesses are what fuels
local economic growth.
As we face economic uncertainty due to inflation, labor shortages,
and other ongoing challenges, we look to our small businesses to be
leaders in the private sector and to help revitalize our communities.
For over 60 years, the SBIC program has injected capital into small
businesses by allowing financial institutions or Federal savings
associations to invest in SBICs up to 5 percent. But times change;
programs need updating and, now more than ever, small businesses need
access to additional capital.
The increase from 5 percent to 15 percent stipulated in this bill is
a necessary reform that will help small businesses get back on their
feet.
I thank my colleague, Congresswoman Chu, for her leadership on this
issue, and I urge my colleagues to vote ``yes'' on this bill.
Ms. VELAZQUEZ. Mr. Speaker, I yield 2 minutes to the gentlewoman from
California (Ms. Chu).
Ms. CHU. Mr. Speaker, I rise in strong support of my bill, H.R. 400,
the Investing in Main Street Act, which would make commonsense changes
to the small business investing laws to maximize the amount that banks
may invest in SBA-certified small business investment companies or
SBICs.
Even though banking rules allow financial institutions to invest up
to 15 percent of their capital and surplus in SBICs, small business
investing rules cap these same investments far lower, at just 5
percent.
The Investing in Main Street Act simply fixes this outdated
inconsistency to allow banks to invest the full 15 percent in SBICs.
Raising this cap will dramatically increase the amount of investment
capital available to our country's small businesses for whom even small
investments can mean so much.
Already, SBICs have helped companies like Costco, Apple, and Intel
get off the ground back when they were just starting out; and SBICs
fill a gap in the investment ecosystem and level the playing field for
the smallest businesses which often face the highest barriers to
securing investments from traditional private investors.
The nearly 300 certified SBICs in operation today have invested or
committed $38 billion in small businesses nationwide; and last year
alone, SBICs provided $7.9 billion in funding to over 1,200 small
businesses and startups.
By raising the investment cap from 5 percent to 15 percent, we could
potentially triple those numbers in the years to come. The growth will
be especially important as America's entrepreneurship rates continue to
soar as we emerge from the COVID-19 pandemic.
I thank Representative Garbarino for his partnership on this
legislation, and Chairman Williams and Ranking Member Velazquez for
their strong support. I urge a ``yes'' vote on this bill.
Mr. WILLIAMS of Texas. Mr. Speaker, I have no further speakers, and I
am prepared to close.
Mr. Speaker, I reserve the balance of my time.
{time} 1345
Ms. VELAZQUEZ. Mr. Speaker, I yield 2 minutes to the gentlewoman from
Texas (Ms. Jackson Lee).
Ms. JACKSON LEE. Mr. Speaker, I thank the ranking member of the Small
Business Committee for astute work on issues dealing with small
businesses; Mr. Williams, a colleague from Texas; and the bipartisan
sponsors of this legislation.
I have always said that small businesses are the backbone of the
economic engine of America, so I rise in support of H.R. 400, the
Investing in Main Street Act of 2023, for the wiseness of providing
more investment in small businesses.
As a strong supporter of small businesses, I believe that this bill
will improve the livelihood of many small
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businesses that have continuously been impacted by the COVID-19
pandemic. The bill is designed to release more capital investment into
small businesses in America. If my colleagues have interacted with the
small business community, that is one of the number one issues that
they raise consistently.
The bill would allow certain banks and savings associations to invest
more into small business investment companies by increasing the
statutory cap from 5 percent to 15 percent--I can't even imagine the
number 5 percent--and the growing amount of small businesses and the
ones that really stayed the course in desperate times, which was COVID-
19.
According to the U.S. Bureau of Labor Statistics, 2020 had the
highest total number of applications for new businesses by far compared
to all other years. From 2019 to 2021, there was a 20 percent increase
in the number of small businesses. The Kauffman Foundation says that
the highest amount was among Blacks, Latinos, and immigrants.
People know that small businesses allow them to create jobs in their
own neighborhoods and to build future conglomerates, but obviously,
small businesses reported negative impacts due to COVID.
It is important for this bill to become law immediately. Pass it in
the Senate and ensure that we have the opportunity to keep our small
businesses from closing. When small businesses have ideas, we need to
be able to give them the investment to focus on.
The Biden-Harris administration has laid the foundation and has
helped create the conditions for businesses and job creation. We have
had increasing job creation every month, but we do know that cities
like New Orleans and Honolulu have seen the highest rate of small
business closures. Other cities are right behind.
The fact that we can have a Small Business Administration that
reforms and works with the Paycheck Protection Program, to improve
that, if we had another circumstance like that that held up some of our
small businesses, this investment is going to be a lifeline.
I am delighted to rise to support this legislation because, again, as
I opened my remarks, small businesses are the economic engine of
America and give women, minorities, and others the opportunity to build
an economic engine.
Mr. Speaker, I rise in support of H.R. 400, the Investing in Main
Street Act of 2023, to amend the Small Business Investment Act of 1958
to increase the amount that may be invested in small business
investment companies.
As a strong supporter of small businesses, I believe that this bill
will improve the livelihood of many small businesses that have
continuously been impacted by the COVID-19 pandemic.
This bill is designed to release more capital investment into small
businesses in America.
The bill would allow certain banks and savings associations to invest
more into small business investment companies by increasing the
statutory cap from 5 percent to 15 percent.
During the COVID-19 pandemic, the United States saw a significant
rise in small businesses.
According to the U.S. Bureau of Labor Statistics, 2020 had the
highest total number of applications for new businesses by far compared
to all years that data was available.
From 2019 to 2021, there was a 20 percent increase in the number of
small businesses created. That is more than double the average growth
rate year to year.
According to the Kauffman Foundation, the increase in the rate of
entrepreneurship during the pandemic was highest amongst Blacks,
Latinos, and immigrants.
Even though there has been a significant rise in the number of small
businesses during the pandemic, many businesses report negative impacts
due to COVID.
In April 2020, the U.S. Census Bureau launched the Small Business
Pulse Survey to produce data in real-time on the challenges small
businesses were facing due to the pandemic.
When the first survey was collected in April of 2020, 90 percent of
businesses surveyed stated that the pandemic had a negative effect on
business.
When the last survey was collected in April of 2022, 70 percent of
businesses surveyed stated that the pandemic had a negative effect on
business.
Almost three years into the pandemic, small businesses are still
struggling with getting back on their feet.
Cities such as New Orleans and Honolulu had some of the highest rates
of small business closures in the country because their economies are
largely built around serving visitors.
In large cities like San Francisco and Austin, the food industry was
largely impacted because those who would typically eat out on their
lunch break were now working from home.
The time for small business recovery is now.
The Biden-Harris administration has laid the foundation and has
helped create the conditions for business and job creation.
With the evolution of almost 5.4 million small businesses in 2021, we
must work to maintain and support these growing businesses.
The Biden-Harris administration partnered with the Small Business
Administration (SBA) to reform the Paycheck Protection Program (PPP).
The policy changes targeted small business and companies that were left
out of previous relief efforts.
The data shows that these PPP policy changes provided more support in
minority communities than the rounds under the previous administration.
The Small Business Relief under the American Rescue Plan included
targeted grant relief and tax credits for small businesses hit by the
pandemic.
The Small Business Relief produced immediate relief to more than
600,000 of the hardest hit small businesses.
The Biden-Harris administration was able to provide more than 6
million small businesses with $450 billion in emergency relief via the
Small Business Administration.
Investing more in our small businesses has had a profound impact on
the job market in the United States.
In the first three quarters of 2021, small businesses with 50
employees or less created almost 2 million jobs in the United States,
the fastest start to small business job growth in any year on record.
Investing in main street should continue to be a priority for
Congress.
Through this bipartisan bill, certain financial institutions would
have the ability to invest more into small business investment
companies by raising the statutory cap.
I urge my colleagues to join me and support this important
legislation that will expand access to capital, increase the number of
small businesses, and create jobs at home.
We must show the American public that improving the economy is a
priority in Congress. This bill is a good first step at doing so.
Mr. WILLIAMS of Texas. Mr. Speaker, I reserve the balance of my time.
Ms. VELAZQUEZ. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, the SBIC program fills the gap between the availability
of venture and private equity capital and the needs of small businesses
in startup and growth situations.
For decades, this program has channeled capital to leading-edge,
high-growth companies. Without it, some of the Nation's most successful
corporations would not be the companies they are today.
H.R. 400 raises the investment cap for banks and Federal savings
associations from 5 percent to 15 percent. This will lead to
significant small business investment by SBICs, which will result in
economic growth in our local communities and job creation.
I applaud Ms. Chu and Mr. Garbarino for their bipartisan work on this
bill.
Mr. Speaker, I encourage all of my colleagues to vote ``yes,'' and I
yield back the balance of my time.
Mr. WILLIAMS of Texas. Mr. Speaker, I yield myself the balance of my
time.
Mr. Speaker, the SBIC program has delivered for small businesses for
many years. It is time we update the program to match other Federal
rules and ensure the program continues to serve our communities in the
future. This is a commonsense step to increase the amount of investment
that an SBIC can receive.
Mr. Speaker, I urge my colleagues to support H.R. 400, and I yield
back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Texas (Mr. Williams) that the House suspend the rules
and pass the bill, H.R. 400.
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. WILLIAMS of Texas. 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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