[Congressional Record (Bound Edition), Volume 158 (2012), Part 3]
[House]
[Pages 4124-4125]
[From the U.S. Government Publishing Office, www.gpo.gov]




              LETTING THE ENTREPRENEURIAL SPIRIT TAKE HOLD

  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
North Carolina (Mr. McHenry) for 5 minutes.
  Mr. McHENRY. Mr. Speaker, today I want to talk about something that 
is very important, a great opportunity for this Congress to lift the 
red tape from Washington and allow the entrepreneurial spirit of 
America to take hold.
  We know that, 3 years into an economic recovery, America's labor and 
capital markets continue with unprecedented challenges. 
Entrepreneurship is at a 17-year low. Deeply troubling, as we know, is 
that 40 million jobs since 1980 have been created by small businesses 
or start-ups. What is interesting about this is that those are the 
folks that are likely to fail when you create a small business. But 
still, we have netted 40 million new jobs out of this one sector over 
the last 30 years.
  Fixing this mess that we've seen in this recent downturn won't happen 
overnight, and there is no silver bullet for fixing it; but we have to 
recognize that America has seen the world catch up, catch up to what 
once was the most vibrant capital market on the planet here in the 
United States. The world has caught up because they see what that does 
in terms of job creation. They have caught up in terms of regulation, 
and they allow capital to flow more easily in other jurisdictions 
around the world.
  We also know, according to the World Bank, that the Doing Business 
report found that the U.S. fell from third to 13th in the ease of 
starting new businesses. It's fallen that quickly just in

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the last 5 years. And because of Dodd-Frank, credit is less available 
and more costly than it was before. We have restricted the opportunity 
for businesses to get the lending that they need.
  At the same time, we haven't updated our securities regulations in 
the United States in 80 years. There has been no significant rewrite 
since the Securities Act of 1933 and the Securities and Exchange Act of 
1934. They put in place restrictions that were right at the time. You 
had this new technology called the telephone. You had folks hawking 
securities on street corners in New York, and so they wrote regulations 
at the time that were applicable to the time.
  We know that the Internet is a fully mature ecosystem now. We know 
that billions of dollars are transacted just on eBay alone. People have 
an online reputation with social networks that they can utilize. We 
want to take that power and actually allow businesses to use that power 
of the Internet and social networks. That's why I filed, and this House 
passed, the Entrepreneur Access to Capital Act that provides those 
updates, so you can actually have crowdfunding.
  What is crowdfunding? Crowdfunding is the best of microfinancing and 
crowdsourcing. You use a wide network of individuals and you can raise 
capital for your new business, your start-up, or your small business. 
We passed that and sent it to the Senate.
  The Senate didn't do anything, they didn't act, so we repackaged the 
bill and put it within the JOBS Act. This House passed it with an 
overwhelming majority of nearly 400 votes. We sent it to the Senate and 
the Senate changed a few small provisions and is sending it back this 
week. We hope to pass that bill this week and send it to the 
President's desk.
  What the legislation for crowdfunding does is remove that restriction 
on communicating, which the Securities Act of 1933 puts in place, and 
lifts the cap on investors that the Securities Exchange Act of 1934 
provides for.

                              {time}  1040

  So, crowdfunding is a great opportunity for small businesses to raise 
equity. Unfortunately, the Senate decided to amend a few small 
provisions within this crowdfunding act that we were able to pass here 
in the House, I believe a few misguided, ill-informed provisions: one, 
expanding liability provisions for issuances of crowdfunding 
securities, and, number 2, banning general solicitation, which means 
that a company can't put up on their Facebook or post on their Twitter 
account, they can't tweet the fact that they're trying to raise 
capital. I think those restrictions are flawed and misguided, and I 
would ask the Senate to come around to fixing these provisions.
  I think it's very important the House pass the JOBS Act this week so 
we can make capital formation more democratic, more in touch with the 
market as it is today. And so I ask my colleagues to vote for the JOBS 
Act, and I ask the President to sign this bill so that we can help 
capital formation in the United States and get people working again.

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