[Congressional Record (Bound Edition), Volume 153 (2007), Part 6]
[Extensions of Remarks]
[Page 8518]
[From the U.S. Government Publishing Office, www.gpo.gov]




                     SMALL BUSINESS PROTECTION ACT

                                 ______
                                 

                         HON. MARK STEVEN KIRK

                              of illinois

                    in the house of representatives

                        Thursday, March 29, 2007

  Mr. KIRK. Madam Speaker, today I introduced the bipartisan Small 
Business Securities Protection Act with my colleague, Representative 
Steve Israel. This bill follows the recommendations of the SEC's own 
advisory committee to help small businesses with the costs of 
implementing just one section of Sarbanes-Oxley--Section 404.
  Section 404 requires publicly traded companies to document all of 
their internal controls, While this is helpful with 90 percent of the 
companies offering stock in America, it has cost the average small 
company half of its profit margin. America has lost 90 percent of its 
foreign securities business as markets in Hong Kong and London 
advertise themselves as ``Sarbanes-Oxley-free.'' SEC Chairman Cox 
warned that Section 404's implementation on small businesses has led to 
an instinct to ``go for the capillary,'' focusing millions of dollars 
on micro-accounting issues rather than expanding employment. The Chief 
Finance Officer of Whole Foods recently said ``. . . we spent even more 
time drilling into insignificant details . . . spending millions on 
accounting research--not on new stores, new products, and new jobs.''
  Our bill follows the recommendations of the SEC's Advisory Committee 
to clearly define key accounting terms like ``material,'' 
``reasonable,'' ``significant,'' and ``sufficient''--terms that if left 
undefined lead to millions spent in pointless litigation. The bill 
would allow consultants advising on Sarbanes-Oxley compliance to 
actually talk to accountants so differences could be resolved. Finally, 
the bill provides relief to small enterprises and companies less than 
one year old to revive the business sector hit hardest by Section 404.
  Much of the new foreign securities work has already left our country. 
Many publicly-traded companies are going private to eliminate millions 
in Sarbanes-Oxley costs. Our reforms would keep 95 percent of companies 
under full Section 404 rules. It would relieve the burden on only the 
newest and smallest companies--who are the most dynamic and innovative 
parts of our economy.
  While other bills offer more far reaching proposals, this one is 
soundly grounded in the work of the SEC's own Advisory Committee.

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