Small Business Mergers, Acquisitions, Sales, and Brokerage Simplification Act of 2014

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 2274) to amend the Securities Exchange Act of 1934 to provide for a notice-filing registration procedure for brokers performing services in connection with the transfer of ownership of smaller privately held companies and to provide for regulation appropriate to the limited scope of the activities of such brokers, as amended.

Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days within which to revise and extend their remarks and to submit extraneous materials for the Record on H.R. 2274, as amended, currently under consideration.

Mr. Speaker, at this point, I yield myself such time as I may consume.

I rise in support of this good piece of legislation, H.R. 2274. It is the Small Business Mergers, Acquisitions, Sales, and Brokerage Simplification Act. It is introduced by the gentleman from Michigan (Mr. Huizenga), who will be speaking momentarily.

Mr. Speaker, during the period of overly burdensome Big Government-- of ObamaCare and of Dodd-Frank and thousands and thousands more regulations costing Americans literally trillions of dollars--it is really no surprise that the economic growth and job creation in this country remain sluggish.

America's small businesses are the primary engine of job creation, for they are the ones who are disproportionately affected by simply a deluge of new rules and regulations coming out of Washington daily. In fact, according to a recent survey, small businesses continue to identify government regulation and red tape as the single most important problem facing them.

While our colleagues in the Senate appear unwilling these days to pass any legislation to help create jobs, well, we have H.R. 2274 in the House that we take up, and it is done in a bipartisan manner. It is a commonsense piece of legislation that will remove some of these unnecessary regulations and obstacles to small business development, growth, and job creation.

What it would do is exempt brokers who perform services in connection with the transfer of ownership of small, privately held companies--that are also known as M&A brokers--from the SEC's costly one-size-fits-all registration requirements that we have right now.

While terms that we sometimes hear in the press and elsewhere-- mergers, acquisitions, brokers--may give you the image of big Wall Streets and what have you, make no mistake about it, this bill is about helping Main Street.

M&A brokers play a very, very important role helping small businesses and small business owners successfully navigate their way through and transfer their company, or sell their company, to new owners, new enterprises, instead of simply closing up their shop and going out of business.

Yet under the current SEC one-size-fits-all registration regime, M&A brokers face a myriad of costly regulations. Unfortunately, M&A brokers have to pass these costs on to, well, other small businesses and, of course, eventually the public.

It is no wonder this legislation has now received widespread and bipartisan support. In fact, this bill was unanimously approved by the committee 57-0. Let me get that straight: 57-0.

I would like to thank the sponsor, Mr. Huizenga, for all his hard work on this legislation and bringing it to the floor at a time like this when America's small businesses are struggling through a mire of regulation and red tape. This type of bipartisan pro-small business, pro-jobs legislation is exactly the type of thing we need.

I urge my colleagues on both sides to pass it, as we did in the committee, in a bipartisan manner.

Mr. Speaker, I reserve the balance of my time.

I thank the gentlelady for working with us on this, as she says, sensible piece of legislation.

And with that, I yield such time as the gentleman may consume to the gentleman from Michigan (Mr. Huizenga), the sponsor of the legislation before the House at this time.

Mr. Speaker, the gentleman from Connecticut has the unique ability, in order to come to the floor and work in a manner where both sides said we had a bipartisan joint piece of legislation, a jobs-creating legislation, to turn this moment into a partisan attack.

No, I never once said I am against a blanket condemnation of all regulations. In fact, if the gentleman from Connecticut had listened closely, he would have heard that we are, I think, in a bipartisan manner, opposed to overly excessive regulation, regulation that does not make sense, regulation that hurts jobs. I think that is what his colleague also said. She is opposed to those unnecessary regulations, and that is what this bill is about. We are in favor--I think the gentlelady and I both said this--of smart regulation. That is what this bill before us is about trying to achieve.

If he wants to take a look at bad regulation, all we need to do is look at the excessive and the inappropriate regulation that we had prior to the '08 crisis, the fact that we had examiners and regulators in each and every one of the major failed institutions that led up to this crisis, and those individuals failed to do their jobs. Those individuals failed to find the problems before they came to a head. Those individuals failed to find situations even when they were told about them in such cases as Stanford or Madoff or a list of other ones I could go down here as well.

We had regulators who did not perform their job. Even though they had the authority, the ability, the financing, the money and everything else necessary to do it, they turned a blind eye to it and failed to do so. This is not a time for a partisanship. This a time to commend both the sponsor of the legislation and the gentlelady who joins with me on this to say that we can get together; we can find commonality when we want to have smart legislation and smart regulation. And I think that is what we should be commending and moving forward on this legislation today.

With that, I don't believe we have any other speakers; but I reserve the balance of my time to close, unless the minority have other speakers.

Mr. Speaker, I begin by thanking the gentlelady for her leadership on this legislation, adopting the word I just used, which is smart regulation is smart legislation, but also the words you used as well as far as reducing barriers and streamlining, which is really what the gentleman from Michigan has accomplished in this legislation that is before us.

The other takeaway I am going to take from the gentlewoman's comment as well is twofold: A, this is being done in a bipartisan manner; but B, we need to move this thing forward. By that, I

mean the House of Representatives today, in a bipartisan manner, is going to be moving a good piece of job-creating legislation.

The next step, we know, of course, is just across the Capitol, in the U.S. Senate. We want to make sure that this legislation, in a bipartisan manner, also moves there as well. Hopefully, we can link arms and join in getting them to move this legislation there as well.

With that, I thank the gentlelady. I thank the gentleman from Michigan (Mr. Huizenga) for all of his leadership in the committee and his work on this legislation and the other legislation he is leading on as well.

With that, I encourage the passage of H.R. 2274, and I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, I yield myself such time as I may consume.

Today, I rise in support of H.R. 2274, the Small Business Mergers, Acquisitions, Sales, and Brokerage Simplification Act of 2013.

H.R. 2274 provides a much-needed exemption and clarification for current M&A brokers who perform services in connection with the transfer and ownership of small- and medium-sized businesses in privately negotiated transactions.

Small- and medium-sized businesses play a critical role in our economy. They provide jobs, they spur innovation, and they strengthen our overall economy. In fact, over the past decade and a half, America's small businesses and entrepreneurs have created 65 percent of all new jobs in this country.

As businesses grow, many small- and medium-sized businesses reach a point where they want to and need to expand their businesses. They turn to mergers and acquisition professionals to facilitate such sales.

Currently, M&A brokers who facilitate the private sale of small- and medium-sized privately owned companies must register with the SEC. SEC registration as a broker also requires membership in FINRA--the Financial Industry Regulatory Authority.

The burdens and costs of initial broker-dealer registration and ongoing compliance with both SEC and FINRA requirements are substantial. These costs adversely impact and unnecessarily increase the costs that business owners incur to sell, buy, or grow their small- and medium-sized businesses.

H.R. 2274 is a legislative acknowledgement that one size does not, indeed, fit all when it comes to transactions. Prior to my election, I was a securities lawyer with over a decade of experience working in capital markets for a Wall Street law firm. I had the opportunity to work on a variety of transactions.

Not all mergers and acquisitions are alike, and so not all require the same type of registration and requirements. Some transactions are privately negotiated transmissions of relatively small dollar amounts with sophisticated investors, not for public sale. By streamlining and simplifying the regulatory structures of these small- and medium-sized businesses, we allow them to safely, efficiently, and effectively sell their companies while preserving growth and protecting jobs in these companies.

This bill, H.R. 2274, allows smaller privately held companies to save time and money on the services rendered during the transfer of ownership allowing for smooth sale and transfer. To qualify for the exemption, the transaction would have to involve a business with less than $250 million in gross revenues and/or pre-tax earnings of less than $25 million with no securities, and the buyer of the business is someone who will actively manage and control the business, either directly or indirectly.

I fully support this bipartisan legislation and its efforts to simplify the regulatory structure in the sale and transfer of ownership of small- and medium-sized businesses in privately negotiated transactions.

This reform was welcomed by regulators and passed, as the chairman of the subcommittee so accurately noted, by a vote of 57-0, unanimously, with full bipartisan support. The ABA Private Placement Broker-Dealer Task Force recommended this change in its 2005 report, which is available on the SEC Web site. Similar recommendations to simplify broker-dealer registration for M&A brokers were made in the final report by the advisory committee to the SEC on small business companies in 2006.

I think appropriately scaling Federal registration of M&A brokers is a good thing. It is something that I would not only support, but encourage my colleagues to support as well.

H.R. 2274 would amend the Exchange Act by adding a new subsection, section 15, which would govern broker-dealer registration. The amendment would cut regulatory costs incurred by sellers and buyers of small-and mid-sized privately held companies in privately negotiated transactions.

Federal law would continue to provide important investor protections through the SEC registration and SEC regulation of the capital, custody, margin, recordkeeping, bonding, and operational reporting requirements applicable to M&A brokers, and existing State security laws will continue to apply.

I think that this is sensible legislation that should be supported by both sides of the aisle. I am indeed honored to stand with my colleagues in support of H.R. 2274.

Mr. Speaker, I yield such time as he may consume to the gentleman from Connecticut (Mr. Himes).

Mr. Speaker, I yield such time as he may consume to the gentleman from Illinois (Mr. Schneider).

Mr. Speaker, I yield myself such time as I may consume.

Right-sizing Federal regulation on M&A brokers in these small business transactions I believe makes good sense. All of us have small- and medium-size business owners in our districts who sooner or later will want to sell or grow their businesses through acquisition or transfer of ownership. They will seek advice and hire highly trained professionals to help them find and screen potential targets. These buyers and sellers are represented by lawyers and accountants who will conduct the due diligence. They will rely on written representations and warranties in these negotiated transactions for their protections.

We should reduce the barriers to capital formation, and this bill is an important step towards that. This bill, by streamlining small private transactions, will free up SEC resources to protect the public against public markets and passive investors.

As baby boomers age, there is a tremendous transfer of wealth and streamlining that will occur over the next generation. As my colleagues so aptly said, it is estimated that over $10 trillion of privately owned businesses will be sold or closed as baby boomers retire.

Jobs are preserved and created when existing businesses are acquired by entrepreneurs or other companies. In Main Street, typically business brokers play a vital role in facilitating these private business mergers and acquisitions. This bill will encourage such business growth.

Helping our small businesses is not a partisan issue. We all benefit when small businesses grow and flourish. I look forward to continuing to work with my colleagues on both sides of the aisle to make strategic and economically beneficial policy decisions that will be smart regulations, that will strengthen our economy and create jobs.

I urge my colleagues to vote ``yes'' on H.R. 2274, and I yield back the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

I am afraid the bill before the House today, H.R. 3362, the Exchange Information Disclosure Act, is simply an effort by Republicans to continue to impede the efforts of the administration to implement the Affordable Care Act.

Transparency and enrollment information is important for Members of this body to receive. But this bill's requirements on the Secretary go way above and beyond what I think is necessary and valuable information. This is just an attempt to pile so many requirements on the administration that they are taking away from the true job of enrolling people in the law.

Enrollment numbers and visitors to the site are important pieces of information, and we certainly all know that, but this bill is simply unnecessary. There is already extensive disclosure of data on health insurance enrollments being provided. The administration releases enrollment data monthly, just like they do with Medicare and the children's health insurance program and other Federal programs. The monthly HHS enrollment reports are excellent, detailed reports. In fact, the newest HHS monthly enrollment report, which was issued this Monday, which covers enrollment through December, has even more extensive data than the two earlier monthly reports.

Mr. Speaker, in addition to providing data on total enrollments nationally

and in the States, the latest report includes data both for the Nation and the States on, first, greater breakdown of those who have selected marketplace plans; second, age breakdown--I stress, age breakdown--of those who have selected marketplace plans; third, financial assistance status of those who have selected marketplace plans; and, lastly, a breakdown of the coverage level--or metal level--of the plans people have selected.

So these numbers show that there is a very strong demand for the quality, affordable coverage options now available to Americans because of the Affordable Care Act. More than 6 million Americans have now either signed up for a private health insurance plan or for Medicaid, including the nearly 2.2 million who signed up for private insurance through the marketplace. Nearly 1.8 million of these consumers signed up for private plans in December, and that is nearly five times as many people as signed up in October and November combined.

Frankly, Mr. Speaker, I am encouraged and excited by these numbers. Americans aren't going to the Web site because they are forced to, like the Republicans claim. They are going to the Web site because they want and need access to health insurance. This should be no surprise. Thirty percent--nearly one in three--of people who have enrolled in a marketplace plan are younger than age 35; 24 percent are between 18 and 34 years old; and there was a more than eightfold increase in December enrollments in the Federal marketplace. In addition, more than 3 million young adults have gained coverage because the Affordable Care Act allows them to stay on their parents' plan until they turn 26. So we are getting more of the younger people as well.

Meanwhile, healthcare.gov and State Web sites have received more than 53 million visits, and State and Federal call centers have received more than 11 million calls.

The administration has committed to release this information monthly, the way they have done with every other Federal program to date. So I am sorry to say that I simply do not believe this is a serious effort in any sense of the word by Republicans. This bill is nothing but a weak effort to smear the law.

I urge Members to oppose the bill. There are only so many resources out there. Why would we want HHS to have to provide this excessive information? I would rather they spent their time trying to enroll people, doing more outreach, and encouraging people to sign up so that they actually have health insurance.

So again, Mr. Speaker, I urge Members to oppose this legislation, and I reserve the balance of my time.

Mr. Speaker, I yield 3 minutes to the gentleman from North Carolina, G.K. Butterfield, a member of the Energy and Commerce Committee.

Mr. Speaker, I yield the gentleman an additional minute.

Mr. Speaker, I yield 4 minutes to the gentleman from California (Mr. Waxman), the ranking member of the Energy and Commerce Committee.

Mr. Speaker, I yield 3 minutes to the gentleman from Maryland (Mr. Sarbanes), a member of the Energy and Commerce Committee.

Mr. Speaker, may I just ask how much time remains.

Mr. Speaker, I yield 3 minutes to my colleague from New Jersey (Mr. Andrews), who has spent so much effort in passing and drafting the Affordable Care Act.

(Mr. ANDREWS asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 1 minute to the gentleman from Minnesota (Mr. Ellison).

Mr. Speaker, again, this GOP bill is designed to harass the Department, preventing it from doing its job. It is an unworkable, unnecessary bill that places onerous, unrealistic, and costly reporting requirements on HHS, with no benefit to the general public.

I heard my colleagues say over and over again, Oh, nobody is going to enroll. Now people are enrolling, and they say they want to know whether they paid or not.

Where does it end? Why don't you spend your time trying to get people to enroll, trying to give people information and do more outreach so people actually are able to get health insurance? That is what we are trying to do with the Affordable Care Act--make people who don't have insurance get insurance, make people who do have it, have it more affordable and have a better benefit package.

All these things are wonderful. This is what people want. That is why so many people are, in fact, signing up. And I just cannot help but think that this is nothing but another effort to make it more burdensome, to scare people to make it less likely that people actually enroll.

Mr. Speaker, I wanted to mention that the administration opposed the bill. The administration said that they oppose the passage because it would require unfunded, unprecedented, and unnecessary reporting requirements that exceed those of other public and private programs.

I urge a ``no'' vote, and I yield back the balance of my time.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days to revise and extend their remarks and to include extraneous material on H.R. 3362.

Mr. Speaker, pursuant to House Resolution 455, I call up the bill (H.R. 3362) to amend the Patient Protection and Affordable Care Act to require transparency in the operation of American Health Benefit Exchanges, and ask for its immediate consideration in the House.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise in support of H.R. 3362, the Exchange Information Disclosure Act. This bill is fundamentally about transparency. Since healthcare.gov's disastrous launch, the public has received confusing and conflicting information about the site's functionality and the number of individuals actually able to purchase insurance through the Web site.

States trying to enroll individuals in Medicaid and insurance companies trying to sign people up for private insurance have received incomplete and inaccurate applications from the Web site.

H.R. 3362 would require the Secretary of HHS to provide a State-by- State breakdown of the number of unique Web site visits, the number of individuals who create an account, the number of individuals who select a qualified health plan, and the number of individuals who enrolled in a qualified health plan or Medicaid. The report must also describe the problems Americans are encountering with the Web site and how HHS is addressing them.

The American people have a right to firm data and an accurate picture of the exchanges. I urge my colleagues to support this bill.

I reserve the balance of my time.

Mr. Speaker, at this time, I am pleased to yield 3 minutes to the gentleman from Michigan (Mr. Upton), the chairman of the Energy and Commerce Committee.

Mr. Speaker, at this time, I am pleased to yield 3 minutes to the gentleman from Nebraska (Mr. Terry), the prime sponsor of the legislation.

I yield the gentleman an additional 1 minute.

Mr. Speaker, just to clarify, we hear the words ``sign up,'' ``signed up,'' ``equal to enrollment.'' We may know how many people have signed up. We do not know how many have actually enrolled and have paid their first month's premiums. Secondly, we are stewards of the taxpayers--we are not shareholders--and the lack of data is precisely what led the chairman of the Senate Finance Committee to declare this law as a train wreck in that there are no metrics, no data, to determine whether this law is working and on track.

With that, I reserve the balance of my time.

Mr. Speaker, opponents of the Exchange Information Disclosure Act have argued that requiring weekly reports on the health care law to the American people is too burdensome, too costly for the Department of Health and Human Services. Yet, somehow, HHS managed to find money in its budget for taxpayer-funded grants spent on such things as bike lane signs, dog neutering campaigns, promoting a sport called ``pickleball,'' and lobbying campaigns for soda taxes. Clearly, HHS does not suffer from a lack of resources.

I reserve the balance of my time.

Mr. Speaker, at this time, I am pleased to yield 3 minutes

to the gentlelady from Tennessee (Mrs. Blackburn), the vice chairman of the Energy and Commerce Committee.

I yield the gentlewoman an additional 1 minute.

Mr. Speaker, at this time I am pleased to yield 3 minutes to the gentleman from Louisiana, Dr. Cassidy, a very active member of the Health Subcommittee.

Mr. Speaker, I am prepared to close, and I reserve the balance of my time.

Mr. Speaker, as Secretary Sebelius acknowledged at an Energy and Commerce hearing in December, enrollment in an exchange plan is not complete until the first month's premium has been paid.

The administration, so far, has refused to tell the American people how many people are actually enrolled by paying their first month's premium in the health care law's exchanges.

Asking the Department to provide the American people regular updates is simply a matter of transparency. Given that HHS officials were so blatantly wrong about the readiness of the health care law's exchanges, they don't deserve the benefit of the doubt.

Regular disclosure is necessary to assess the status of the law, and that is all this bill requires. Let's make the administration, who has continually held back facts regarding implementation of the health care law, meet their pledge to be the most transparent in history.

I urge my colleagues to vote for this bill, and I yield back the balance of my time.

Mr. Speaker, I reserve a point of order against the motion to recommit.

Mr. Speaker, I withdraw my point of order, and I claim the time in opposition to the motion.

Mr. Speaker, opponents of the Exchange Information Disclosure Act argue that HHS is already reporting data. Yet more than 3 months after the disastrous launch of the exchanges, we simply do not know how many Americans have actually completed enrollment by paying their first month's premium. As Secretary Sebelius acknowledged at an Energy and Commerce Committee hearing in December, enrollment in an exchange is not complete until the first month's premium has been paid.

The administration so far has refused to tell the American people how many people are actually enrolled in the health care law's exchanges. Either the administration is refusing to tell us how many people are actually enrolled or they simply do not know. Neither answer should instill confidence in a law that puts over 2 trillion taxpayer dollars on the line.

This underlying bill would require the administration to give us real and actual enrollment data. The American people deserve transparency, and this is what the Exchange Information Disclosure Act would deliver. I urge all Members to oppose this motion to recommit and vote for the underlying bill.

I yield back the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise today in support of H.R. 3362, the Exchange Information Disclosure Act. There is widespread agreement that the ObamaCare rollout was a failure. Most of us believe the administration's lack of transparency and candor with Congress and the American people caused most of the problems.

Since the beginning of the rollout, I have pressed the administration to release enrollment data to Congress. That data, including who is actually enrolling and what the mix of those who signed up looks like, are the kinds of hard facts we need before us to evaluate how this fundamental restructuring of our health care is really operating.

Yet the administration did not provide that long-promised transparency. Instead, I was forced to subpoena the administration to get any information. While I received some of what I requested, it is not enough for Congress to understand the true impact of this law.

It is clear that, more than halfway through the enrollment, the administration is failing to meet its own goal of 7 million enrollees by March 31.

Last week, the administration released data that showed it has failed to meet an even more important goal--the right mix of young and healthy enrollees. The reality is that you need a good balance of young and healthy individuals in order to offset the more expensive costs of those who are older and less healthy.

Without enough young and healthy enrollees, millions of Americans, including those who have had their plan canceled as a result of the President's broken promise, will see higher costs and fewer choices. With the little data we have, we can see this is actually what is happening.

The American people deserve better than the administration's empty promises. They deserve to know what is really going on. Additionally, the administration has not provided any information on the number of people who have completed enrollment. We don't know how many people have paid their premium.

Taxpayers don't know how many people are receiving tax credits. There is no harm to national security if the administration provides this information to Congress, the media, and the American people; but there may be harm to an individual's health security if their interests aren't protected.

Frankly, I believe this administration cares more about implementing this law than protecting the health care of American families.

The American people have every right to know this information and the future of their health care. Having this data will not change the President's broken promise that ``if you like your plan, you can keep it,'' or his promise that families will see a $2,500 reduction in their premiums.

However, it will undoubtedly affect Americans' health care future. This is not just arbitrary data. This information will determine how much premiums will increase next year, whether access to care will become more limited, how many insurers may no longer offer coverage, and whether or not you can keep seeing your current doctor.

This administration's failed rollout has given the American people little confidence that they can effectively oversee the overhaul of one-sixth of the economy. What possible reason, other than politics, could there be for the administration not releasing this information? This is data that Congress and the American people deserve to know and that the administration should readily and willingly provide.

I urge my colleagues on both sides of the aisle to support this bill today, and I call on the Senate to take quick action to move this commonsense legislation forward.

I reserve the balance of my time.

I thank the Chair for that admonition, and I yield 3 minutes to the gentleman from Indiana (Mr. Young), the distinguished member of the Ways and Means Committee.

Mr. Speaker, I reserve the balance of my time.

I yield myself the balance of my time.

Mr. Speaker, the reason this legislation is important is that, from what little information we do have, we know the administration is not meeting their stated goals, and they are not on track to meet 7 million people by March 31. We don't know the mix of people that have enrolled. We don't know how many of them are young and healthy. We don't know how many of them have paid a premium. The reason these things are important for us to know and to track is, this is a big deal. This is one-sixth of the American economy. There is probably no legislative area that affects people more than their health care.

The reason we have to know this information is because if they aren't meeting their stated goals and their projections in terms of the cost of this bill, it could mean that people's premiums skyrocket next year. It could mean that the physician that they are used to seeing and being treated by, many times for an ongoing illness, may not be available to them under their insurance plan.

So these are important issues. These are important benchmarks for us to know. It is important for the American people to know. It is important for the media to know. Because then, if we can understand what is really happening as we are in the middle of this, constructive changes could be made to this bill. What they want to do is keep us in the dark. They say vote ``no.'' Make sure we don't know what is going on, and then we will have a health care crisis even greater than the one we have now.

So I urge a ``yes'' vote on this bill, and I yield back the balance of my time.