[Congressional Record (Bound Edition), Volume 160 (2014), Part 12]
[House]
[Pages 16356-16357]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              {time}  1345
                    SBIC ADVISERS RELIEF ACT OF 2014

  Mr. LUETKEMEYER. Mr. Speaker, I move to suspend the rules and pass 
the bill (H.R. 4200) to amend the Investment Advisers Act of 1940 to 
prevent duplicative regulation of advisers of small business investment 
companies.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 4200

       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 ``SBIC Advisers Relief Act of 
     2014''.

     SEC. 2. ADVISERS OF SBICS AND VENTURE CAPITAL FUNDS.

       Section 203(l) of the Investment Advisers Act of 1940 (15 
     U.S.C. 80b-3(l)) is amended--
       (1) by striking ``No investment adviser'' and inserting the 
     following:
       ``(1) In general.--No investment adviser''; and
       (2) by adding at the end the following:
       ``(2) Advisers of sbics.--For purposes of this subsection, 
     a venture capital fund includes an entity described in 
     subparagraph (A), (B), or (C) of subsection (b)(7) (other 
     than an entity that has elected to be regulated or is 
     regulated as a business development company pursuant to 
     section 54 of the Investment Company Act of 1940).''.

     SEC. 3. ADVISERS OF SBICS AND PRIVATE FUNDS.

       Section 203(m) of the Investment Advisers Act of 1940 (15 
     U.S.C. 80b-3(m)) is amended by adding at the end the 
     following:
       ``(3) Advisers of sbics.--For purposes of this subsection, 
     the assets under management of a private fund that is an 
     entity described in subparagraph (A), (B), or (C) of 
     subsection (b)(7) (other than an entity that has elected to 
     be regulated or is regulated as a business development 
     company pursuant to section 54 of the Investment Company Act 
     of 1940) shall be excluded from the limit set forth in 
     paragraph (1).''.

     SEC. 4. RELATIONSHIP TO STATE LAW.

       Section 203A(b)(1) of the Investment Advisers Act of 1940 
     (15 U.S.C. 80b-3a(b)(1)) is amended--
       (1) in subparagraph (A), by striking ``or'' at the end;
       (2) in subparagraph (B), by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding at the end the following:
       ``(C) that is not registered under section 203 because that 
     person is exempt from registration as provided in subsection 
     (b)(7) of such section, or is a supervised person of such 
     person.''.

  The SPEAKER pro tempore (Mr. Hultgren). Pursuant to the rule, the 
gentleman from Missouri (Mr. Luetkemeyer) and the gentlewoman from 
Wisconsin (Ms. Moore) each will control 20 minutes.
  The Chair recognizes the gentleman from Missouri.


                             General Leave

  Mr. LUETKEMEYER. Mr. Speaker, I ask unanimous consent that all 
Members have 5 legislative days within which to revise and extend their 
remarks and submit extraneous materials for the Record on H.R. 4200, 
currently under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Missouri?
  There was no objection.
  Mr. LUETKEMEYER. Mr. Speaker, I yield myself such time as I may 
consume.
  The legislation we consider today is a bipartisan, noncontroversial, 
and commonsense change that will ultimately allow for greater small 
business capital formation and job creation.
  H.R. 4200, the SBIC Advisers Relief Act, streamlines reporting 
requirements for advisers to small business investment companies, or 
SBICs. These are advisers to investment funds who make long-term 
investments in U.S. small businesses and who have to the tune of more 
than $63 billion since 1958.
  Under current law and for more than 55 years, SBICs have been 
regulated and closely supervised by the Small Business Administration. 
The existing regulatory regime surrounding SBICs includes an in-depth 
examination of management, strong investment rules, operational 
requirements, recordkeeping, examination and reporting mandates, and 
conflict of interest rules. These entities and the management of these 
entities are anything but unregulated.
  The need for exemptions for SBICs and their advisers has been well-
recognized by Congress. Congress' intent by including some of these 
exemptions in previous legislation was to reduce the regulatory burdens 
facing smaller funds and SBICs. This bill fixes some unintended 
consequences that have arisen and need to be addressed.
  The SBIC Advisers Relief Act does so by doing three things: number 
one, it allows advisers who jointly advise SBICs and venture funds to 
be exempt from registration, combining two separate exemptions that 
already exist; number two, it excludes SBIC assets from the SEC's 
assets under management threshold calculation; number three, it allows 
SBIC funds with less than $90 million in assets under management to be 
regulated solely by the SBA, as they are today.
  The Financial Services Committee has thoroughly examined the 
bipartisan legislation in both a legislative hearing and a markup. H.R. 
4200 garnered praise from members on both sides of the aisle and from 
witnesses who testified on the bill in an April hearing. This 
noncontroversial legislation passed the committee by a vote of 56-0 in 
May.
  It is also important to note that the legislation includes 
suggestions made by the SEC. Most importantly, this legislation 
includes sensible provisions that prevent redundant regulatory mandates 
and allow for a greater investment in America's small businesses.
  I want to thank Congresswoman Maloney for her help on this bill, and 
I ask my colleagues for their support.
  Mr. Speaker, I reserve the balance of my time.
  Ms. MOORE. Mr. Speaker, I yield myself such time as I may consume.
  This bill, as has been indicated, is a bipartisan bill. We support 
the bill. I have no requests for time; therefore, I would urge my 
colleagues to support the bill.
  I yield back the balance of my time.
  Mr. LUETKEMEYER. Mr. Speaker, I have no other speakers, and I yield 
back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Missouri (Mr. Luetkemeyer) that the House suspend the 
rules and pass the bill, H.R. 4200.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

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