Improving Access to Capital Act

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 2864) to direct the Securities and Exchange Commission to allow certain issuers to be exempt from registration requirements, and for other purposes, as amended.

Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days in which to revise and extend their remarks and include extraneous material on this bill.

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

Mr. Speaker, I rise in strong support of H.R. 2864, the Improving Access to Capital Act. I want to start by thanking the Democrat and the Republican who are the chief sponsors of this bill, the gentlewoman from Arizona (Ms. Sinema) and the gentleman from Indiana (Mr. Hollingsworth). It is always a pleasure to bring good bipartisan legislation to the House floor, especially when the bill is sponsored by my colleagues on the Financial Services Committee.

To continue this job growth and ensure that we have a stronger and healthier economy with opportunities for all Americans, we must encourage small business growth, and this starts with ensuring that they have access to the capital and credit that they need to grow.

This bipartisan bill will help the American economy. It will make it easier for companies, particularly small businesses, to access capital. This is incredibly important because small businesses are the heart and soul of the American economy.

In fact, they help to create more than 60 percent of the Nation's net new jobs over the past 2 decades. This bipartisan bill before us today carries forward the mission of another bipartisan bill, the JOBS Act of 2012, to increase capital formation in our U.S. markets so more American workers would be able to find good paying jobs.

As part of the JOBS Act, the Securities and Exchange Commission was directed to expand something called Regulation A, which is a critical tool for companies that are trying to raise small amounts of money. And the aptly named ``Regulation A-Plus'' the SEC came up with has been effective.

With Regulation A-Plus, prospective issuers have publicly filed 147 offerings seeking up to $2.6 billion in financing. As a comparison, in the 12 months leading up to Regulation A-Plus, there were only about 50 filings seeking to raise $159 million.

As we are seeing, Regulation A-Plus has opened up an avenue for these small companies to seek financing through the capital markets that will help grow their businesses.

And according to the SEC, these companies are small, early-stage businesses with median assets of $100,000 in limited collateral, which often restricts their ability to obtain a bank loan or other financing.

Unfortunately, not all are able to benefit from Regulation A-Plus. As part of its final rule implementing the JOBS Act, the SEC excluded some small companies. This was contrary to the intent of Congress when we approved the JOBS Act.

As a result of the SEC's final rule, some smaller and midsize companies have been shut out from the benefits of Regulation A-Plus.

Additionally, smaller investors also suffer by not having the opportunity to participate in the public markets for early-stage companies and share in their growth.

H.R. 2864 is a simple bill that fixes the problem I just described. H.R. 2864 would amend Regulation A-Plus to direct the SEC to include companies that are fully reporting under the Securities Exchange Act. This will help more small businesses gain access to capital so they can grow and hire more workers. At the same time, it will give small investors greater investment opportunities.

H.R. 2864 was approved by the Financial Services Committee with the overwhelming support of both Republicans and Democrats. In fact, the vote in committee to favorably report H.R. 2864 was 59-0.

Mr. Speaker, I urge adoption of H.R. 2864, and I reserve the balance of my time.

Mr. Speaker, I yield 5 minutes to the gentleman from Indiana (Mr. Hollingsworth), a sponsor of this legislation and a member of the Financial Services Committee.

Mr. Speaker, I have no further requests for time, and I reserve the balance of my time.

Mr. Speaker, again, I thank Congresswoman Sinema and Congressman Hollingsworth for their great work on this. This is an important step that will help our small businesses access the capital that they need to grow and to hire more workers.

Mr. Speaker, I encourage support on this legislation, 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.

Mr. Speaker, I would like to start off by thanking Representative Sinema and Representative Hollingsworth for working together to craft bipartisan legislation that will help smaller public companies raise the funds necessary to grow and thrive.

Specifically, H.R. 2864, the Improving Access to Capital Act, would narrowly expand the relief that we provided in the Jumpstart Our Business Startups Act, the JOBS Act, to allow public companies to raise money under Regulation A-Plus.

Currently, Regulation A-Plus allows private companies to raise up to $50 million in capital by selling unregistered but freely tradable stock to the public as a quicker and less expensive alternative to a fully registered securities offering.

Extending Regulation A-Plus eligibility to public companies would provide them with an additional efficient method of raising a small fixed amount of capital. To be eligible to use this faster and cheaper fundraising alternative, public companies must be up to date in their public filings with the Securities and Exchange Commission.

In addition, public companies must comply with all of the other regulatory requirements in Regulation A-Plus, including SEC approval or qualification of the offering, disclosure of the offering information to investors, and limitations on sales per investor.

Importantly, bad actors who have committed certain felonies, misdemeanors, or other misconduct within the past 5 years are disqualified from using Regulation A-Plus.

These restrictions help ensure that investors in Regulation A-Plus offerings are informed about their purchases and protected from fraud.

Mr. Speaker, I support H.R. 2864 for providing targeted relief to public companies that balances their need to raise capital with the protection of their investors.

I remain concerned that the Financial Services Committee has adopted a piecemeal approach to private and public market regulation.

Going forward, I hope that we thoughtfully review the securities laws to ensure that our legislative efforts appropriately incentivize companies to become public.

Again, I want to thank the bill's sponsors, especially Ms. Sinema, for their work on this bipartisan piece of legislation.

Mr. Speaker, I encourage my colleagues to join me in supporting H.R. 2864, and I reserve the balance of my time.

Mr. Speaker, again, I would like to thank the cosponsors for their vision, for their work, and for the bipartisan effort that they so successfully put together.

Mr. Speaker, I yield such time as she may consume to the gentlewoman from Arizona (Ms. Sinema), the lead sponsor of this bill.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I spent the last 30 days traveling Indiana's best district--that is the Ninth District--and I had many memorable conversations with many Hoosiers. But one thing came through, and that was we need to work together right here in D.C. in order to get better outcomes for our businesses back home.

Nowhere is this better exemplified than this bill, the Improving Access to Capital Act. It is about getting small businesses engaged and empowered with the capital that they need in order to grow, in order to hire, in order to invest. That is exactly what we want them to do.

And on the second point, it is exciting to me to be able to reach across the aisle and work with Representative Sinema, who has been nothing but great in her leadership in her fervent desire to help small businesses all the way across this country.

The Improving Access to Capital Act sounds like it might be something esoteric, and sounds like it might be something that isn't immediately practical to the small businesses across the Ninth District and across this country, but, in fact, it is something that they can use tomorrow. This creates another avenue for small businesses across the country to be able to raise the money that they need in order to innovate, in order to grow, in order to expand, in order to hire more Americans. This is just simply another arrow in the quiver for them to be able to grow and develop.

Small businesses account for the bulk of hiring across this country, they account for the bulk of innovation across this country, and we need to be doing everything we can to continue to promote them. That is exactly what Representative Sinema and I have done with this particular legislation, is work hard to develop a bipartisan solution, one that was supported unanimously out of the Financial Services Committee in order to provide those companies with more options and more opportunities to be able to grow.

Mr. Speaker, I encourage all of my colleagues to vote in favor of this legislation and let's get America back to work again.

Mr. Speaker, I thank Chairmen Hultgren and Hensarling, Ranking Member Waters, and Congressman Hollingsworth for working with me on this bipartisan legislation to improve our capital markets and help more small companies succeed.

As part of the JOBS Act, Congress directed the Securities and Exchange Commission to amend Regulation A to allow small companies to raise up to $50 million in offerings exempt from full SEC registration. These amendments, known as Regulation A-Plus, exclude certain potential issuers, including Exchange Act reporting companies.

As a result, thousands of companies that already meet the SEC's high disclosure requirements are ineligible to use Regulation A-Plus to cost-effectively raise the funds they need to grow and hire employees.

That is why I have introduced this legislation with Congressman Hollingsworth to allow SEC reporting companies access to Regulation A- Plus. It is a valuable pathway for small businesses to raise money in an efficient, public, and transparent manner.

I am committed to working with my colleagues on both sides of the aisle to ensure that Arizona's innovative small businesses have every opportunity to thrive, and I hope that Members will join us today in support of this bipartisan legislation.

Again, I thank Congressman Hollingsworth for working with me on this commonsense, bipartisan bill.

Mr. Speaker, I was unable to be in Washington, D.C. on September 5, 2017 because my flight from Oregon was delayed due to weather. Had I been present, I would have voted in favor of H.R. 2864, the Improving Access to Capital Act, and H.R. 3110, the Financial Stability Oversight Council Insurance Member Continuity Act.