[Congressional Record (Bound Edition), Volume 157 (2011), Part 12]
[House]
[Pages 16465-16469]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              {time}  1320
              SMALL COMPANY CAPITAL FORMATION ACT OF 2011

  Mr. BACHUS. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 1070) to amend the Securities Act of 1933 to authorize the 
Securities and Exchange Commission to exempt a certain class of 
securities from such Act, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 1070

       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 Company Capital 
     Formation Act of 2011''.

     SEC. 2. AUTHORITY TO EXEMPT CERTAIN SECURITIES.

       (a) In General.--Section 3(b) of the Securities Act of 1933 
     (15 U.S.C. 77c(b)) is amended--
       (1) by striking ``(b) The Commission'' and inserting the 
     following:
       ``(b) Additional Exemptions.--
       ``(1) Small issues exemptive authority.--The Commission''; 
     and
       (2) by adding at the end the following:
       ``(2) Additional issues.--The Commission shall by rule or 
     regulation add a class of securities to the securities 
     exempted pursuant to this section in accordance with the 
     following terms and conditions:
       ``(A) The aggregate offering amount of all securities 
     offered and sold within the prior 12-month period in reliance 
     on the exemption added in accordance with this paragraph 
     shall not exceed $50,000,000.
       ``(B) The securities may be offered and sold publicly.
       ``(C) The securities shall not be restricted securities 
     within the meaning of the Federal securities laws and the 
     regulations promulgated thereunder.
       ``(D) The civil liability provision in section 12(a)(2) 
     shall apply to any person offering or selling such 
     securities.
       ``(E) The issuer may solicit interest in the offering prior 
     to filing any offering statement, on such terms and 
     conditions as the Commission may prescribe in the public 
     interest or for the protection of investors.
       ``(F) The Commission shall require the issuer to file 
     audited financial statements with the Commission annually.
       ``(G) Such other terms, conditions, or requirements as the 
     Commission may determine necessary in the public interest and 
     for the protection of investors, which may include--
       ``(i) a requirement that the issuer prepare and 
     electronically file with the Commission and distribute to 
     prospective investors an offering statement, and any related 
     documents, in such form and with such content as prescribed 
     by the Commission, including audited financial statements, a 
     description of the issuer's business operations, its 
     financial condition, its corporate governance principles, its 
     use of investor funds, and other appropriate matters; and
       ``(ii) disqualification provisions under which the 
     exemption shall not be available to the issuer or its 
     predecessors, affiliates, officers, directors, underwriters, 
     or other related persons, which shall be substantially 
     similar to the disqualification provisions contained in the 
     regulations adopted in accordance with section 926 of the 
     Dodd-Frank Wall Street Reform and Consumer Protection Act (15 
     U.S.C. 77d note).
       ``(3) Limitation.--Only the following types of securities 
     may be exempted under a rule or regulation adopted pursuant 
     to paragraph (2): equity securities, debt securities, and 
     debt securities convertible or exchangeable

[[Page 16466]]

     to equity interests, including any guarantees of such 
     securities.
       ``(4) Periodic disclosures.--Upon such terms and conditions 
     as the Commission determines necessary in the public interest 
     and for the protection of investors, the Commission by rule 
     or regulation may require an issuer of a class of securities 
     exempted under paragraph (2) to make available to investors 
     and file with the Commission periodic disclosures regarding 
     the issuer, its business operations, its financial condition, 
     its corporate governance principles, its use of investor 
     funds, and other appropriate matters, and also may provide 
     for the suspension and termination of such a requirement with 
     respect to that issuer.
       ``(5) Adjustment.--Not later than 2 years after the date of 
     enactment of the Small Company Capital Formation Act of 2011 
     and every 2 years thereafter, the Commission shall review the 
     offering amount limitation described in paragraph (2)(A) and 
     shall increase such amount as the Commission determines 
     appropriate. If the Commission determines not to increase 
     such amount, it shall report to the Committee on Financial 
     Services of the House of Representatives and the Committee on 
     Banking, Housing, and Urban Affairs of the Senate on its 
     reasons for not increasing the amount.''.
       (b) Treatment as Covered Securities for Purposes of 
     NSMIA.--Section 18(b)(4) of the Securities Act of 1933 (15 
     U.S.C. 77r(b)(4)) is amended--
       (1) in subparagraph (C), by striking ``; or'' at the end 
     and inserting a semicolon; and
       (2) by redesignating subparagraph (D) as subparagraph (E), 
     and inserting after subparagraph (C) the following:
       ``(D) a rule or regulation adopted pursuant to section 
     3(b)(2) and such security is--
       ``(i) offered or sold on a national securities exchange; or
       ``(ii) offered or sold to a qualified purchaser, as defined 
     by the Commission pursuant to paragraph (3) with respect to 
     that purchase or sale.''.
       (c) Conforming Amendment.--Section 4(5) of the Securities 
     Act of 1933 is amended by striking ``section 3(b)'' and 
     inserting ``section 3(b)(1)''.

     SEC. 3. STUDY ON THE IMPACT OF STATE BLUE SKY LAWS ON 
                   REGULATION A OFFERINGS.

       The Comptroller General shall conduct a study on the impact 
     of State laws regulating securities offerings, or ``Blue Sky 
     laws'', on offerings made under Regulation A (17 C.F.R. 
     230.251 et seq.). The Comptroller General shall transmit a 
     report on the findings of the study to the Committee on 
     Financial Services of the House of Representatives, and the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate not later than 3 months after the date of enactment of 
     this Act.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Alabama (Mr. Bachus) and the gentleman from Michigan (Mr. Peters) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Alabama.


                             General Leave

  Mr. BACHUS. Mr. Speaker, I ask unanimous consent that all Members 
have 5 legislative days in which to revise and extend their remarks and 
to add extraneous materials on the bill.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Alabama?
  There was no objection.
  Mr. BACHUS. At this time I would like to yield such time as he may 
consume to the gentleman from Arizona (Mr. Schweikert), the main 
sponsor of this bill.
  Mr. SCHWEIKERT. Mr. Speaker, first, I would like to start this with a 
heartfelt thank you to both Spencer Bachus of Alabama, the chairman of 
the Financial Services Committee, for both his kindness to me as a 
freshman and also for the guidance he has provided me, and to the 
gentlewoman from California, who I hope will speak next, who partially 
helped spearhead this idea and helped us move it forward.
  One of the reasons I stand here right now with these boards is just 
to sort of help get through the concept of this piece of legislation, 
H.R. 1070. So often around here, we refer to it as the reg A bill. But 
what does that mean to people? Well, to try to make it as simple as 
possible, it is when a company has an opportunity to do a filing with 
the Securities and Exchange Commission for a simplified process to go 
public. The problem is, in today's world, that's limited to $5 million. 
Well, no one is going public at $5 million.
  And we can actually see some of our history of this. This was 
actually first done in 1933 when at that time, in the Securities 
Exchange Act, it was understood that there needed to be a path to go 
public. Well, at that time, it was $100,000, and I think 1992 is when 
it was moved up to $5 million.
  Well, in 19 years, the world has changed a lot. But one of the 
changes that I consider almost a crisis is the number of our companies 
that aren't going public anymore. And you're going to see on a couple 
of these boards here that the fact of the matter is we actually have 
fewer, substantially fewer companies that are publicly traded today 
than we did even a decade ago.
  Now, the first slide here is somewhat simple. It is just sort of 
trying to demonstrate how many years we have been sitting here at this 
$5 million level, and it's been 19 years. But as we go on to the next 
board--and I know this is a little busy to try to read. The staff got a 
little colorful on this one. But what we were trying to point out is 
that the number of IPOs that are less than $50 million today are almost 
nothing.
  My understanding is last year we had only three companies--only three 
companies in the entire country take a look at filing in that $5 
million and under space. And if you actually look from 1995 to 2004, 
some of the latest data I was able to find from that entire time frame, 
I think there were only 78 companies that actually pursued this 
process. Well, in a country our size, this is a crisis, particularly if 
we're looking for that path of equity, that path of financing, that 
path of raising capital for these growing companies. This is one of the 
reasons we stand here with this reg A bill, H.R. 1070.
  Let's go on to this next board. And I know this is a little busy. But 
this is also to try to make the point of what's going on from a 
competitive standpoint when you look around the world. All those lines, 
those are other companies that are listing on exchanges, that are 
becoming publicly traded, that are reaching out to the world and 
raising capital. Well, you will happen to notice a small problem: the 
line with the dots, that's us. That's our country. We actually are 
going in the other direction.
  If I remember my numbers here, we actually today have 5,091 publicly 
traded companies on the big exchanges. So we've got 5,000-some today. 
In 1997, we had 8,823. Does anyone see the real problem there? 
Literally in a little over a decade, we've gone down dramatically in 
the number of publicly listed companies. And my great hope here is, by 
raising this limit from the $5 million up to $50 million--which $50 
million is chosen for quite a reason. That is the minimum threshold for 
a couple of the large exchanges to be publicly traded. And that's why 
we're doing this, because we're trying to create jobs, we're trying to 
move equity, and we're trying to be competitive around the world.
  Mr. PETERS. Mr. Speaker, I yield myself such time as I may consume.
  The American people need to see our Congress taking meaningful action 
to help grow our economy. America is tired of too much partisanship out 
of Washington, and they want to see Republicans and Democrats working 
together on bipartisan solutions to create jobs and grow American 
businesses. As Chairman Bachus said earlier today, this is exactly what 
we are doing.
  But before I go any further, I would like to thank the gentleman from 
Arizona (Mr. Schweikert) for introducing H.R. 1070, the Small Company 
Capital Formation Act, and I would also like to thank the gentleman 
from Arizona for working across the aisle to ensure that the concerns 
of both Republicans and Democrats were met in this very commonsense 
bill.
  Mr. Speaker, this bill would permit a small company to raise up to 
$50 million through a security offering process that balances both 
streamlined registration with adequate investor protections. As of 
right now, the current exemption under the SEC's regulation A is little 
used due to the small size of issuances permitted. As a result, there 
were only three offerings last year.
  The current offering limit of $5 million hasn't been raised since 
1992, almost 20 years; and it's long past time for us to do something 
about it. In the last Congress, Democrats sent a letter to the SEC 
recommending that it raise the exemption limits. Today we can fix this 
problem by passing this bill.

[[Page 16467]]

  Additionally, H.R. 1070 would also provide small and medium companies 
with the ability to offer securities of up to $50 million publicly 
without the full cost of a registered offering, potentially expanding 
their access to capital beyond private offerings that many use.
  In the spirit of bipartisanship, Democrats also added important 
investor protections to this bill, such as requiring companies to 
provide investors with audited financial statements annually. In 
addition, Democrats offered investors legal recourse for misstatements 
companies make in their prospectus documents in order to prevent 
potential abuses.
  Finally, the gentleman from Arizona has also worked with Democrats on 
the remaining issue of contention, and that was the preemption of State 
law. The gentleman from Arizona's substitute amendment to H.R. 1070 
removes the exemption from State level review that was previously 
provided to an issuer using a broker-dealer to distribute and issue. 
Regulation A securities can be high-risk offerings that may also be 
susceptible to fraud, making protections provided by the State 
regulators an essential future.
  Mr. Speaker, it's clear that we must pass this bipartisan legislation 
to help our small companies grow and create jobs. I urge adoption of 
this bill.
  I reserve the balance of my time.
  Mr. BACHUS. I yield 2 minutes to the gentlelady from Illinois (Mrs. 
Biggert).
  Mrs. BIGGERT. I thank the gentleman for yielding.
  Mr. Speaker, small businesses are the engine of the American economy, 
and our legislation will help to provide the boost that they need to 
create jobs. When I talk to small business leaders in my district, they 
consistently site burdensome government regulations, restrictions, and 
their difficulty accessing capital as the primary barriers to growth.

                              {time}  1330

  Currently, outdated Federal rules dampen both innovation and 
investment because the cost of regulatory compliance is just too high 
for the up-and-coming firms. H.R. 1070, the Small Company Capital 
Formation Act, will help change that.
  The subject of this bill, regulation A, was enacted during the Great 
Depression to help small businesses access financing. However, these 
rules have not been properly adjusted over time to reflect the rising 
cost associated with taking a small company public. As a result, 
regulation A prohibits smaller companies from taking advantage of a 
crucial capital-raising vehicle.
  H.R. 1070 will reopen the capital markets for small businesses, 
allowing them to invest and hire new employees. This legislation will 
jump-start the IPO market and revitalize public capital-raising 
opportunities that have been severely suppressed over the last decade.
  At a time when capital is harder to find than ever, this bipartisan, 
commonsense proposal will make our financial system work to the benefit 
of small businesses and promote greater competition in the marketplace.
  I thank the gentleman from Arizona for his hard work on this 
legislation, and I ask my colleagues for their support.
  Mr. BACHUS. Mr. Speaker, I yield myself 1 minute.
  Earlier I said that the American citizens, our American citizens, 
would like to see Republicans and Democrats work together to tackle the 
challenges facing our country, and this bill is a great example of 
that. Congresswoman Anna Eshoo from California introduced this bill, 
along with my colleague Mr. Schweikert from Arizona, and they are 
meeting that challenge. As I said, it's a bipartisan effort. I know she 
deserves much credit for this legislation.
  I reserve the balance of my time.
  Mr. PETERS. I certainly appreciate the comments of the chairman.
  Mr. Speaker, I yield 2 minutes to the gentlelady from California (Ms. 
Eshoo), who has been an incredible leader on this issue.
  Ms. ESHOO. I thank the gentleman from Michigan for yielding time, and 
I want to thank my Republican colleagues for both what they are doing 
today on the floor and for what you have said.
  These are really difficult economic times for the people in our 
country, and that's why it's so critical for Congress to bolster 
American innovation. That, in my view, is really what this legislation 
is about. It's an important way to facilitate capital formation, which 
is really one of the important pillars of our national economy, capital 
formation. I know how important this is for small businesses because my 
congressional district, which is Silicon Valley, is the innovation hub 
of our Nation and it thrives on capital formation.
  In December of last year, almost a year ago, I came to the Financial 
Services Committee at the invitation of then-Chairman Barney Frank, and 
I want to recognize and thank him today for what he did then, as well 
as the present chairman, Chairman Bachus, urging the committee to 
renovate essentially regulation A, which was created, as others have 
said, during the Great Depression to facilitate the flow of capital 
into small businesses. It's really quite extraordinary that FDR and 
Members of Congress in 1933 recognized the importance of capital 
formation at that time, and we have honored that since then.
  Now, reg A was established as a part of the 1933 Securities Act, and 
it was designed to provide regulatory relief for small firms that want 
to sell shares of company stock.
  The SPEAKER pro tempore. The time of the gentlewoman has expired.
  Mr. PETERS. I yield the gentlelady 1 additional minute.
  Ms. ESHOO. These many offerings have been used to help small 
companies raise capital and test the waters for IPOs, initial public 
offerings. Unfortunately, the regulation A threshold became stuck, as 
others said, at a 1992 level of $5 million. At that low level, the 
benefit of a regulation A offering is extremely limited. In fact, only 
three companies, as has been said this afternoon, have taken advantage 
of it in 2010. So this threshold, the $5 million threshold, falls far 
short of what companies need to develop the cutting-edge technologies 
in today's economy. It's outdated. It fails to serve its intended 
purpose, and it's why this legislation is needed and why I'm so pleased 
that, on a bipartisan basis, we are taking action today.
  We need to raise the initial public offering limit to help provide 
capital to small businesses.
  The SPEAKER pro tempore. The time of the gentlewoman has again 
expired.
  Mr. PETERS. I yield the gentlelady an additional minute.
  Ms. ESHOO. Very importantly, we look forward to spurring hiring and 
business development. That's what we are here for, and I think it's 
what the American people want us to do.
  I'm proud to be a cosponsor of H.R. 1070, to raise the regulation 
offering limit from $5 million to $50 million, once again creating a 
meaningful offering limit. What better time than now when our economy 
needs this important boost.
  So I thank the chairman of the full committee. I thank the ranking 
member. I thank my colleague from Michigan, and I thank the gentleman 
from Arizona for his very kind words, and I urge all of our colleagues 
to support this. I think when we do later on today, it will be a source 
of pride and encouragement to the American people.
  Mr. BACHUS. Mr. Speaker, I yield myself the balance of my time.
  You've heard from a member of the Commerce Committee, Ms. Eshoo, who 
I think said it well when she said that we're modernizing, we're 
updating a rule which had come to restrict job growth.
  Secondly, she mentioned technology. We know that small businesses are 
the innovators. In fact, you look at Google, you look at Apple, you 
look at Facebook, these companies just in the past two or three decades 
started off as small businesses and they were able to grow. With the 
passage of this legislation, we believe that path will be an easier 
path. Sixty-five percent of the jobs created over the last 15 years 
have

[[Page 16468]]

been in small business. As every speaker has acknowledged, if there is 
a time to encourage job creation and capital formation, that time is 
here.
  I urge the Members to vote in favor of this legislation, and I yield 
back the balance of my time.
  Mr. PETERS. Mr. Speaker, I want to thank my friends Mr. Schweikert 
and Ms. Eshoo for their work on this bipartisan bill to help small 
companies grow and expand. As we all know, the American people want to 
see Congress working together to strengthen our economy and to create 
jobs. This bill will help companies access the capital they need to 
pull our Nation out from these tough economic times and put Americans 
back to work.
  Additionally, this bill provides the necessary protections investors 
need to have in order to ensure that they will not be subjected to 
potential abuses.
  Mr. Speaker, I urge my colleagues to vote for H.R. 1070, a 
commonsense, bipartisan bill to improve our economy, and I yield back 
the balance of my time.
  Mr. GEORGE MILLER of California. Mr. Speaker, I rise in support of 
the Small Company Capital Formation Act, which will help restore the 
purpose of the ``Regulation A'' exemption that was designed to make it 
easier for growing small businesses to access capital.
  It is critical that we ensure that innovative, growing small 
companies have access to the capital that they need to continue to grow 
and hire, because these companies play such an important role in our 
economy.
  Regulation A offers these small companies a unique chance to raise 
money through small offerings under a streamlined and less costly 
registration process. This opportunity is especially important in 
today's economy, in which access to capital has been greatly reduced as 
many banks hesitate to lend.
  Unfortunately, in recent years, few companies have been able to take 
advantage of the Regulation A exemption because the offering limit of 
$5 million is too low and has not been updated in the last 30 years.
  In fact, there have only been an average of eight filings per year 
under the exemption in recent years.
  By increasing the offering limit, this bill will ensure that more 
growing companies can take advantage of Regulation A in order to access 
the capital that they need to expand and thrive.
  I'm glad that this bill has come to the floor in a bipartisan way. 
This proposal is an important component of President Obama's American 
Jobs Act and has the potential to benefit small businesses across the 
country. It is the sort of commonsense solution that both parties 
should be able to agree on.
  I particularly want to thank the rest of the San Francisco Bay Area 
delegation, as we have been working since early last year to enact this 
long-needed change.
  Once again, I urge my colleagues to support this bill.
  Mr. DINGELL. Mr. Speaker, I rise in opposition to H.R. 1070, the 
Small Company Capital Formation Act, and H.R. 1965, the Increase 
Shareholder Threshold for SEC Registration Act. While I applaud the 
bipartisan efforts of my colleagues to help small businesses grow and 
create jobs, the sting of the effects of financial deregulation is 
still too strong to allow me to support these bills.
  With respect to H.R. 1070, I note that Congress has raised the 
Securities and Exchange Commission's Regulation A threshold five times. 
Each time, however, was a modest increase that was in my mind relative 
to the rate of inflation and the purchasing power of the dollar. H.R. 
1070 would mandate an unprecedented tenfold increase in the current 
threshold of $5 million to $50 million. Such an increase strikes me as 
grotesquely large, especially since inflation has risen only 165 
percent since 1980, and in my view constitutes a tremendous incitement 
to perpetrate fraud on investors.
  I take a dimmer view of H.R. 1965, which increases the number of 
shareholders a bank can have before having to register with the SEC. 
Under current law, that number is 500, and H.R. 1965 would increase it 
four times to 2,000. I am not at all satisfied this increase is 
justified and furthermore consider it a sly way to skirt federal 
reporting requirements that are in place to protect the American 
public.
  Mr. Speaker, I share my colleagues' concern that not enough jobs are 
being created and that Congress must take swift action. Where I part 
ways with them is voting for seemingly innocuous measures like these 
that unfortunately will decrease transparency for investors and create 
incentives for all manner of financial rascality.
  Ms. JACKSON LEE of Texas. Mr Speaker, I rise in support of H.R. 1070, 
``Small Company Capital Formation Act of 2011'' which would require the 
Securities and Exchange Commission (SEC) to create a new and larger 
exemption, effectively raising the limit from $5 million to $50 million 
for its Regulation A security offerings and permitting a more stream-
lined approach for smaller issuers. Presently, the limit for Regulation 
A security offerings is $5 million; however, this avenue is rarely 
pursed due to the small size of issuances permitted. The bill would 
permit SEC to impose conditions on issuance under the rule, and would 
require periodic review of the limit.
  Regulation A was enacted during the Great Depression to stimulate the 
economy by improving small businesses' access to equity capital. While 
the initial offering threshold of $100,000 has been increased over the 
years to the current $5 million set by the Commission in 1992, it has 
not been increased to reflect the rising costs associated with bringing 
a small company public over the last two decades.
  In this day and age, a small to medium company simply cannot afford 
to go public at a cost of $5 million. For the last 19 years we have had 
substantially fewer companies that have chosen to go public. The $5 
million threshold has resulted in a chilling effect. In the last year, 
only 3 companies have utilized this process. Going public allows a 
growing company to have access to capital, equity, and additional 
financial resources. They need to raise capital in order to grow their 
business. Currently, there are 5,100 public traded companies. In 1997, 
there were 8,873 publicly traded companies. This legislation is 
intended to reverse a downward trend.
  Due to the low offering threshold, and without a corresponding state 
``Blue Sky'' exemption for Regulation A offerings, Regulation A has not 
provided a viable capital-raising vehicle for smaller companies in 
recent years. Amplified by increased difficulties for smaller companies 
resulting from the recent financial crisis, these shortcomings of 
Regulation A have invited renewed focus on this regulation.
  The legislation before us today is designed to encourage small 
companies to attract additional capital which will allow them to invest 
and hire additional employees. As part of a broader effort to tie the 
financial regulatory environment to U.S. job creation and economic 
competitiveness.
  Small and medium companies would be able to offer securities up to 
$50 million publicly without the full cost of a registered offering, 
potentially expanding their access to capital beyond the private 
offerings many now use. Additional protections for investors were added 
to this bill. Companies utilizing Regulation D are required to provide 
investors with audited financial statements annually.
  We must implement policies that achieve the right balance between the 
competing objectives of promoting valid investment business 
opportunities and protecting citizens from inappropriate risk and 
fraudulent schemes. This bill allows States to retain their ability to 
review these generally high risk offers as a means for protecting 
investors. Additional protections include giving investors legal 
recourse for misstatements made by companies in the prospectus 
documents. Regardless of an investors sophistication level, when a 
company is dishonest, the investor must be protected.
  Small businesses need access to loans and other lines of credit in 
order to build their businesses and create jobs. Before us is a measure 
that would allow small businesses to get the support they need. This 
bill will provide small businesses with increased access to capital.
  According to the U.S. Small Business Administration, small businesses 
account for 52 percent of all U.S. workers. They are the life blood of 
our economy. Small businesses in the U.S. produced three-fourths of the 
economy's new jobs between 1990 and 1995, and represent an entry point 
into the economy for new groups. Women, for instance, participate 
heavily in small businesses.
  The number of female-owned businesses climbed by 89 percent, to an 
estimated 8.1 million, between 1987 and 1997, and women-owned sole 
proprietorships were expected to reach 35 percent of all such ventures 
by the year 2000. They were hindered in large part because of lack of 
access to traditional forms of credit. Before us today, is a measure 
that would help businesses grow. Small firms also tend to hire a 
greater number of older workers and people who prefer to work part-
time.
  We must always remember that American small businesses are the heart 
beat of our nation. I believe that small businesses represent more than 
the American dream--they represent the American economy. Small 
businesses account for 95 percent of all employers, create half of our 
gross domestic product,

[[Page 16469]]

and provide three out of four new jobs in this country.
  Although I support the bill before us today, it is important to 
highlight that having an opportunity to invest in small businesses is 
important. However, given the risky nature of such investments, these 
opportunities should be made available to investors who understand the 
risk and have the financial wherewithal to handle any losses that may 
come as a result of the investment. Small business needs access to 
capital in order to grow and flourish. Individuals who invest in these 
companies and startup should understand the unique risk associated with 
such investments.
  The success of small business is America's success. This success can 
be achieved by encouraging small business growth and entrepreneurship. 
Especially, as our nation is facing a prolonged period of high 
unemployment and slow economic growth. Many of us have seen businesses 
disappear since the financial crisis. These businesses did not fail 
because of their inability to compete, or due to shortcomings in their 
business plan or because of the goods and services they produced. They 
failed because they could not get loans from banks.
  Without access to capital, Houston native Michael Dell would not have 
been able to start one of the most successful computer retail 
businesses in the world. His $1,000 dollar initial investment in the 
198os allowed Dell Computers to become a household name. Without this 
capital, America would not have had one of its premier innovators.
  The economic impact of this legislation is encouraging because 
businesses require capital in order to expand and flourish. When 
businesses are presented with this opportunity, jobs are created that 
in turn, will stimulate economic growth. Dell's headquarters alone 
employs roughly 16,000 people.
  I urge my colleagues to join me in supporting H.R. 1965, ``To amend 
the securities laws to establish certain thresholds for shareholder 
registration, and for other purposes.''
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Alabama (Mr. Bachus) that the House suspend the rules 
and pass the bill, H.R. 1070, as amended.
  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. BACHUS. 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 question will be postponed.

                          ____________________