[Congressional Record (Bound Edition), Volume 162 (2016), Part 1]
[House]
[Pages 910-912]
[From the U.S. Government Publishing Office, www.gpo.gov]




            SMALL BUSINESS CAPITAL FORMATION ENHANCEMENT ACT

  Mr. GARRETT. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 4168) to amend the Small Business Investment Incentive Act 
of 1980 to require an annual review by the Securities and Exchange 
Commission of the annual government-business forum on capital formation 
that is held pursuant to such Act.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 4168

       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 Business Capital 
     Formation Enhancement Act''.

     SEC. 2. ANNUAL REVIEW OF GOVERNMENT-BUSINESS FORUM ON CAPITAL 
                   FORMATION.

       Section 503 of the Small Business Investment Incentive Act 
     of 1980 (15 U.S.C. 80c-1) is amended by adding at the end the 
     following:
       ``(e) The Commission shall--
       ``(1) review the findings and recommendations of the forum; 
     and
       ``(2) each time the forum submits a finding or 
     recommendation to the Commission, promptly issue a public 
     statement--
       ``(A) assessing the finding or recommendation of the forum; 
     and
       ``(B) disclosing the action, if any, the Commission intends 
     to take with respect to the finding or recommendation.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New 
Jersey (Mr. Garrett) and the gentleman from Delaware (Mr. Carney) each 
will control 20 minutes.
  The Chair recognizes the gentleman from New Jersey.


                             General Leave

  Mr. GARRETT. Mr. Speaker, I ask unanimous consent that all Members 
have 5 legislative days in which to revise and extend their remarks and 
to include any extraneous material on this bill.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New Jersey?
  There was no objection.
  Mr. GARRETT. Mr. Speaker, I yield myself such time as I may consume.
  I rise in support of H.R. 4168, the Small Business Capital Formation 
Enhancement Act.
  I would like to thank the gentleman from Maine (Mr. Poliquin) and the 
gentleman from California (Mr. Vargas) for their bipartisan work on 
this bill. I go off script here just to say thank you very much to Mr. 
Poliquin, who has been a very active member on this committee from the 
very beginning and has been very active in making sure this legislation 
has come to the floor today. I thank the gentleman.
  As I said before, this bill came out of committee, due much in part 
to the gentleman's work, with an overwhelming bipartisan vote. I 
believe it was 55-1; so the gentleman just has that one to work on for 
his next piece of legislation that comes out of committee.
  Mr. Speaker, Congress created the SEC Government-Business Forum on 
Small Business Capital Formation--to do what?--to provide a platform to 
identify unnecessary impediments to small business capital formation 
and to find ways to eliminate or to reduce them. Each forum seeks to 
develop recommendations for government and private action to improve 
and provide the environment for small business capital

[[Page 911]]

formation, thereby providing small businesses the opportunity--to do what?--to 
grow economically and, most importantly, as we have been talking all 
day, to create more jobs.
  Unfortunately, the SEC's default position over these several years 
has been to simultaneously and summarily ignore many of the 
recommendations made by the various forum participants, which include 
small businesses, venture capitalists, trade association 
representatives, accountants, academics, and other small business 
academics.
  Despite the claims of which we hear every year from the Commission 
about the importance of this forum, it seems that the only time the SEC 
actually implements one of these capital formation agenda items that 
comes out of it is when Congress tells it to do so. This was certainly 
the case with several provisions of the JOBS Act, many of which, as one 
will recall, were original recommendations from that very same forum. I 
will give two examples. There was the crowdfunding and the Regulation 
A-Plus provisions of the JOBS Act. They basically mirrored the forum's 
recommendations years earlier.
  The Small Business Capital Formation Enhancement Act, which is before 
us today, provides an answer. It basically provides a simple solution 
to making the SEC more responsive. It requires the SEC to respond 
publicly and in writing to each forum recommendation and to simply 
explain whether it plans to take action on that item or not.
  It really shouldn't take an act of Congress for the SEC to fulfill 
its basic capital formation mission. Quite honestly, it shouldn't take 
an act of Congress for the SEC to simply respond in writing to any of 
the forum recommendations. Unfortunately, this is the position we find 
ourselves in today; so we have H.R. 4168, which is the gentleman from 
Maine's work, which will ensure that the SEC no longer ignores these 
recommendations and will be able to help fulfill its statutory mission 
to facilitate capital formation in this country.
  Mr. Speaker, I reserve the balance of my time.

                              {time}  1545

  Mr. CARNEY. Mr. Speaker, I yield myself such time as I may consume.
  I would like to add my thanks and congratulations as well to the 
gentleman from Maine (Mr. Poliquin) and the gentleman from California 
(Mr. Vargas) for their bipartisan work on this bill. This legislation, 
as was pointed out, passed out of the Financial Services Committee with 
all but one vote.
  The SEC's Government-Business Forum on Capital Formation brings 
together academics, government officials, legal experts, and business 
stakeholders to make recommendations to improve and facilitate small-
business capital formation.
  By directly addressing the recommendations of the forum, the SEC will 
help refine ideas and provide future forums with opportunities to 
address the SEC's views or concerns, ultimately leading to a more 
constructive and valuable process.
  This legislation will enhance the role of the forum and assist the 
SEC to focus on the capital needs of small businesses, which, as we 
have discussed several times today, are the main drivers of job 
creation in our economy, while simultaneously encouraging participants 
to substantively engage in the forum.
  Mr. Speaker, I ask my colleagues to support this bipartisan piece of 
legislation and thank the sponsors for their hard work.
  I reserve the balance of my time.
  Mr. GARRETT. Mr. Speaker, I have already given him compliments, as 
many as I am going to give on the floor. I yield such time as he may 
consume to the gentleman from Maine (Mr. Poliquin) because he has been 
an outstanding member of the committee and is the sponsor of the bill.
  Mr. POLIQUIN. Mr. Speaker, I thank Chairman Garrett for bringing this 
very important bill to the floor. I also want to extend my 
congratulations to Congressman Juan Vargas of California. He has done a 
terrific job being the lead cosponsor of the Small Business Capital 
Formation Enhancement Act.
  All of us in this Chamber who also are small-business owners 
understand how important it is to have access to money, to funds, to 
capital, in order for our businesses to be successful, to grow, and 
ultimately to hire more people. This is true in Maine's Second District 
that I represent and also across the country.
  It is all about jobs. Unless your business grows and expands, then 
you don't have jobs. So it is very, very important to have that key 
ingredient to small-business growth, which is access to capital or to 
money.
  Now, if you are one of the greatest papermakers in the world--and we 
have a lot, Mr. Speaker, up in Maine's Second District--and you work 
for a paper company up in Madawaska, Maine, or Madison, Maine, you 
still depend on your company--it might not be a small company--to make 
sure you have access to the stock and bond markets, to be able to 
borrow the funds they need to expand and be successful, and to make 
sure we can secure your job.
  Now, if you are a small-business owner, which really dominates the 
landscape in Maine and across the country--let's say you are a 
boatbuilder in Ellsworth, Maine--you still need access to capital in 
order to grow. If you are a biotech startup company in Lewiston, Maine, 
the same holds true.
  You know, 80 percent of the new jobs created in our country today are 
not large companies, but they are small companies. That is where the 
problem lies as far as access to funding is concerned. I am not worried 
as much about the big companies having access to the capital markets, 
but I do worry about our small businesses.
  Now, as both Mr. Carney and Mr. Garrett have mentioned, during each 
of the past 35 years, the Securities and Exchange Commission, by law, 
has been required and has put together an annual government-business 
forum.
  During this annual meeting, they get the most experienced 
professionals they can find--businessowners, SEC attorneys, private 
sector attorneys--to review the current laws we have on the books today 
to make sure they are not impeding our small businesses' ability to 
borrow money and have access to capital in other ways.
  Now, these forums also are a tremendous incubator of coming up with 
new ideas to make sure our laws evolve. Our capital markets, Mr. 
Speaker, in our economy are very dynamic. Businesses grow and they 
change, and new products are offered and sold.
  So there are new needs for capital going forward. We have to make 
sure that the actual laws that are the underpinning of our capital 
markets, the underpinning of our economy, also evolve. So these annual 
business-government forums are very important venues for this to 
happen.
  Now, as has been said here earlier, unfortunately, the SEC has no 
legal requirement to make sure all the terrific recommendations that 
come out of these annual forums are acted upon or not. In fact, it is 
very common for the SEC not to comment at all on all of the work done 
to bring these new ideas to the forefront.
  So my legislation, I am proud to say, comes up with a very 
commonsense fix. It simply requires the SEC to make a public statement 
on what it is going to do to embrace these recommended changes or not. 
It is very simple. Otherwise, these ideas, Mr. Speaker, sit on the 
shelf.
  Now, my bill also has the ancillary benefit of making sure that each 
new forum each year doesn't repeat what we just did the year before. By 
having a benchmark every year, by addressing the recommendations that 
come out of these meetings, then we are able to spring forward and move 
down the path where we left off the year before.
  I want to thank the Speaker and the chairman very much for bringing 
this important bill to the floor. I am delighted to work with Mr. 
Vargas on this. He has done one heck of a job.
  It is so important for everybody in this Chamber to please stand up 
for small businesses across the country, to 


[[Page 912]]

make sure they have access 
to the money they need to grow, be successful, and hire more workers. 
It is all about jobs.
  Mr. CARNEY. Mr. Speaker, I thank and congratulate the sponsor and 
cosponsor again. I have no further requests for time.
  I yield back the balance of my time.
  Mr. GARRETT. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Minnesota (Mr. Emmer).
  Mr. EMMER of Minnesota. Mr. Speaker, small businesses are critical to 
job creation and sustainable economic growth in America.
  In my home State of Minnesota, 1.2 million workers--nearly half of 
our State's private workforce--is employed by a small business. When 
one of the more than 500,000 small businesses in Minnesota contacts our 
office, it is most often about how well-intended, yet short-sighted, 
regulations are inhibiting their ability to utilize the financial 
products they rely on.
  In order to ensure the creation and growth of small business, it is 
imperative that we do our job in Washington to make certain they have 
access to the capital they need.
  Since 1980, the Securities and Exchange Commission has been required 
to conduct a government-business forum each year to present and discuss 
ways to improve small business capital formation. However, the SEC is 
under no legal obligation, as we have heard several times today, to 
respond to any of the findings or recommendations that come out of 
these forums.
  That is why the Small Business Capital Formation Enhancement Act is 
so important. The proposed legislation will require the SEC to respond 
to the findings and recommendations made at these annual government-
business forums. This will ensure that the ideas formulated at these 
government-business forums will be carefully considered at the SEC and 
possibly even implemented.
  I want to thank Representatives Bruce Poliquin and Juan Vargas for 
their hard work on behalf of consumers and small business.
  I urge my colleagues to support the Small Business Capital Formation 
Enhancement Act.
  Mr. GARRETT. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from New Jersey (Mr. Garrett) that the House suspend the 
rules and pass the bill, H.R. 4168.
  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. POLIQUIN. 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 motion will be postponed.

                          ____________________