[Congressional Record Volume 171, Number 124 (Monday, July 21, 2025)]
[House]
[Pages H3500-H3501]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SMALL ENTITY UPDATE ACT
Mr. HILL of Arkansas. Mr. Speaker, I move to suspend the rules and
pass the bill (H.R. 3382) to require the Securities and Exchange
Commission to carry out a study and rulemaking on the definition of the
term ``small entity'' under the securities laws for purposes of chapter
6 of title 5, United States Code, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 3382
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 Entity Update Act''.
SEC. 2. STUDIES, REPORTS, AND RULES REGARDING SMALL ENTITIES.
(a) Definitions.--In this section--
(1) the term ``Commission'' means the Securities and
Exchange Commission; and
(2) the term ``small entity''--
(A) has the meaning given the term in section 601 of title
5, United States Code, with respect to the activities of the
Commission; and
(B) includes any definition established by the Commission
of the term ``small business'', ``small organization'',
``small governmental jurisdiction'', or ``small entity''
under paragraph (3), (4), (5), or (6), respectively, of
section 601 of title 5, United States Code, with respect to
the activities of the Commission.
(b) Studies and Reports.--Not later than 1 year after the
date of enactment of this Act, and again 5 years thereafter,
the Commission shall--
(1) conduct a study of the definition of the term ``small
entity'' with respect to the activities of the Commission for
the purposes of chapter 6 of title 5, United States Code,
which shall consider--
(A) the extent to which the definition of the term ``small
entity'', as in effect during the period in which the study
is conducted, aligns with the findings and declarations made
under section 2(a) of the Regulatory Flexibility Act (5
U.S.C. 601 note);
(B) the amount by which financial markets in the United
States have grown since the last time the Commission amended
the definition of the term ``small entity'', if applicable;
and
(C) how the Commission should define the term ``small
entity'' to ensure that a meaningful number of entities would
fall under that definition; and
(2) submit to Congress a report that includes--
(A) the results of the applicable study conducted under
paragraph (1); and
(B) specific and detailed recommendations on the ways in
which the Commission could amend the definition of the term
``small entity'' to--
(i) be consistent with the results described in
subparagraph (A); and
(ii) expand the number of entities covered by such
definition.
(c) Rulemaking.--Concurrently with, or after the completion
of, each study required under subsection (b), the Commission
shall, subject to public notice and comment, revise the rules
of the Commission consistent with the results of such study.
(d) Inflation Adjustments.--After the Commission issued the
final rule revisions required under subsection (c), and every
5 years thereafter, the Commission shall adjust any dollar
figures under the definition of small entity established by
the Commission to reflect the change in the Consumer Price
Index for All Urban Consumers published by the Bureau of
Labor Statistics of the Department of Labor.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Arkansas (Mr. Hill) and the gentleman from New Jersey (Mr. Gottheimer)
each will control 20 minutes.
The Chair recognizes the gentleman from Arkansas.
General Leave
Mr. HILL of Arkansas. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative days in which to revise and extend their
remarks and include extraneous material in the Record.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Arkansas?
There was no objection.
Mr. HILL of Arkansas. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I rise in strong support of this bill, H.R. 3382, the
Small Entity Update Act.
Small businesses are the backbone of this country. Everyone on both
sides of the aisle knows that. They drive innovation and job creation
in our districts, but they are often limited from reaching their full
capacity or capability because of overregulation.
The bill introduced by our subcommittee chair, Ann Wagner, addresses
this challenge by directing the SEC to carry out a study and a
rulemaking to modernize the definition of a small entity and ensure
that small firms are given tailored, proportional oversight.
{time} 1650
Mr. Speaker, years ago I had the privilege of serving as a
nonexecutive chairman for a small-cap public company board of
directors. I know firsthand the critical need for attention for what we
are dealing with here today.
The bipartisan bill of the gentlewoman from Missouri (Mrs. Wagner)
will empower our small businesses to focus on growth, hiring, and
innovation, rather than unnecessary red tape.
Mr. Speaker, I urge all of my colleagues to join me in supporting
this bill, and I reserve the balance of my time.
Mr. GOTTHEIMER. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, if appropriate, this bill directs the SEC to carry out a
study in rulemaking on its definitions of small entities under the
Regulatory Flexibility Act. This study in rulemaking would ensure that
the commission more carefully accounts for impacts on small businesses
when engaging in rulemaking.
The Regulatory Flexibility Act provides small entities with a greater
opportunity to participate in the development of certain regulations
and will result in more small businesses being included in the
definition of small entities under the act. In effect, it gives them a
louder voice when it comes to development of SEC regulations that
directly apply to them.
Democrats worked to secure important language, ensuring investor
protection remains a key focus of the bill. It balances the needs of
facilitating capital formation and, of course, protecting our small
businesses, which are so critical and are the lifeblood of our country
and the jobs in our country.
Mr. Speaker, I thank the gentlewoman from Missouri (Mrs. Wagner) for
agreeing to these changes when this bill was marked up in committee.
Mr. Speaker, I urge my colleagues to vote ``yes'' on this bill, and I
reserve the balance of my time.
Mr. HILL of Arkansas. Mr. Speaker, I include in the Record the CBO
estimate on this bill.
H.R. 3382, SMALL ENTITY UPDATE ACT, AS REPORTED BY THE HOUSE COMMITTEE
ON FINANCIAL SERVICES ON JUNE 3, 2025
------------------------------------------------------------------------
By fiscal year, millions of
dollars--
-------------------------------
2025 2025-2030 2025-2035
------------------------------------------------------------------------
Direct Spending (Outlays)............... 0 0 0
Revenues................................ 0 0 0
Increase or Decrease (-) in the Deficit. 0 0 0
Spending Subject to Appropriation * * **
(Outlays)..............................
------------------------------------------------------------------------
* = between -$500,000 and $500,000.
** = not estimated.
[[Page H3501]]
Increases net direct spending in any of the four
consecutive 10-year periods beginning in 2036? No.
Increases on-budget deficits in any of the four consecutive
10-year periods beginning in 2036? No.
Statutory pay-as-you-go procedures apply? No.
Mandate Effects:
Contains intergovernmental mandate? No.
Contains private-sector mandate? Yes, Under Threshold.
H.R. 3382 would require the Securities and Exchange
Commission (SEC) to study its current definition of ``small
entity'' under the Regulatory Flexibility Act (RFA) and
revise its rules based on the results of the study. Under
current law, agencies subject to the RFA need to determine if
their rules have a significant economic effect on small
entities, including businesses, nonprofit organizations, and
governmental jurisdictions. If so, agencies must consider
alternatives that minimize that effect.
Using information about the cost of similar provisions, CBO
estimates that implementing the bill would cost $2 million
over the 2025-2030 period. CBO expects that the SEC would
need about five employees, at an average annual cost of
$330,000 for each employee, to carry out the study and amend
the rules. Because the SEC is authorized to collect fees each
year to offset its annual appropriation, CBO expects that the
net effect on discretionary spending over the 2025-2030
period would be negligible, assuming appropriation actions
consistent with that authority.
If the SEC increases fees to offset the costs associated
with implementing the bill, H.R. 3382 would increase the cost
of an existing mandate on private entities required to pay
those assessments. CBO estimates that the incremental cost of
the mandate would be small and would fall well below the
threshold established in the Unfunded Mandates Reform Act
(UMRA) for private-sector mandates ($206 million in 2025,
adjusted annually for inflation).
H.R. 3382 contains no intergovernmental mandates as defined
in UMRA.
The CBO staff contacts for this estimate are Aurora Swanson
(for federal costs) and Rachel Austin (for mandates). The
estimate was reviewed by H. Samuel Papenfuss, Deputy Director
of Budget Analysis.
Phillip L. Swagel,
Director, Congressional Budget Office.
Mr. HILL of Arkansas. Mr. Speaker, I yield such time as she may
consume to the gentlewoman from Missouri (Mrs. Wagner), the chairwoman
of our Subcommittee on Capital Markets and the author of this bill.
Mrs. WAGNER. Mr. Speaker, I rise in support of H.R. 3351, the
Improving Access to Small Business Information Act.
Mr. Speaker, I thank my colleagues on both sides of the aisle,
Representatives Kim and Gottheimer, for their work on this commonsense,
bipartisan piece of legislation that will give Americans, small
businesses, and entrepreneurs a stronger voice at the SEC.
H.R. 3351 offers a straightforward solution to empower the SEC's
Office of the Advocate for Small Business Capital Formation, the
advocate, making it a more effective champion for American
entrepreneurs.
Mr. Speaker, I also rise today in support of my bill, H.R. 3382, the
Small Entity Update Act. I thank my colleagues across the aisle,
Congressmen Casten, Himes, Scott, and Torres, for their support of this
impactful bipartisan legislation. It ensures that the SEC fairly weighs
in its rulemaking the regulatory burdens faced by small businesses.
This bipartisan bill would direct the SEC to assess the costs of
compliance for small and growing businesses, ensuring that regulations
placed on these businesses are not overly burdensome.
Specifically, the bill would direct the Commission to conduct a
study, followed by a rulemaking consistent with the results of such
study every 5 years, including defining the term ``small entity'' under
the Regulatory Flexibility Act.
Simply put, small businesses can't afford the extensive legal and
regulatory expertise that large, multinational firms employ to comply
with every regulation while still managing their operating costs.
Recognizing that company sizes and market dynamics constantly evolve,
my bill requires the SEC to update its definition of ``small entity''
every 5 years.
For our economy to flourish, Congress and regulators must ensure that
all policies consider their impact on America's millions of small
businesses.
Mr. Speaker, by creating a more focused regulatory approach for small
entities, the Small Entity Update Act will make it easier for
entrepreneurs across the country to achieve the American Dream.
Mr. Speaker, I urge all of my colleagues to vote for this bill, H.R.
3382.
Mr. GOTTHEIMER. Mr. Speaker, I yield myself the balance of my time.
Again, I thank the gentlewoman from Missouri (Mrs. Wagner) for her
leadership. I also thank the gentleman from Arkansas (Mr. Hill), the
chairman, for his leadership and friendship. I am very grateful.
Small businesses make up the backbone of our Nation's economy.
Congress and the SEC should do everything within their power to support
small businesses and to ensure that the laws and rules they draft
adequately take their capital needs into consideration.
This bill gives small businesses a bigger say in how SEC rules and
regulations impact them and will allow them to continue to thrive.
Mr. Speaker, I urge my colleagues to support this bill, and I yield
back the balance of my time.
Mr. HILL of Arkansas. Mr. Speaker, I yield myself the balance of my
time.
Mr. Speaker, I rise in full support of Mrs. Wagner's work. This is
exactly the kind of commonsense, bipartisan legislation that our
constituents expect us to pass. To lower costs and encourage companies
to be public is a good thing for our Nation. It will grow the economy
faster. Companies can go public sooner in their growth period.
Mr. Speaker, for all the reasons I have explained, I urge my
colleagues to support this bill, and I yield back the balance of my
time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Arkansas (Mr. Hill) that the House suspend the rules and
pass the bill, H.R. 3382, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
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