Small Business Access to Capital After a Natural Disaster Act

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

Mr. Speaker, I want to start off by thanking both Chairman Hensarling and Ranking Member Waters for working with me on this legislation and moving it onto the floor. This has truly been a bipartisan effort.

My bill, H.R. 4792, the Small Business Access to Capital After a Natural Disaster Act, is simple and straightforward.

One of the most important functions of the SEC's Office of the Advocate for Small Business Capital Formation is to develop proposals and recommend changes to Congress that will promote the interests of small businesses and their investors, mitigate their problems, and help them secure access to credit.

When we created the Advocate's Office in 2016, we specifically charged it with looking into the unique challenges facing minority- and women-owned small businesses. My bill requires the advocate to now also consider the unique challenges that small businesses affected by hurricanes or other natural disasters have with securing access to credit and work to promote their interests.

I developed this legislation because, as ranking member of the House Small Business Committee, I understand that small businesses are the lifeblood of many communities around the country, and I have witnessed firsthand the terrible impact hurricanes and other natural disasters can have on the economic outlook for small businesses.

For example, in 2012, Superstorm Sandy ripped through the tristate area and decimated many communities along the New Jersey and New York coasts. Toms River, New Jersey, was considered ground zero for the storm.

Half a decade later, the Greater Toms River Chamber of Commerce reports that the small businesses in that community are still trying to recover at a cost of $600 million in lost ratables, even at this point.

For small businesses in Puerto Rico and the Virgin Islands trying to recover from the effects of Hurricane Maria, the situation is much worse.

2017 was the costliest year on record for weather and climate disasters in the United States, and the effects of Hurricane Maria on Puerto Rico's small businesses are unprecedented.

Nelson Ramirez, the president of the Centro Unido de Detallistas, a small business advocacy group in San Juan, estimates two-thirds of the island's roughly 45,000 small and midsize businesses have closed at least temporarily, and as many as 10,000 will never reopen.

Small and midsized businesses represent 90 percent of the private companies on the island and about one-third of the workforce. In October, the Puerto Rican Retail Trade Association revealed that a study conducted by economists estimated that the island's small business sector will lose $8.9 billion in a period of 6 months due to a lack of electricity on the island.

But while the situation in Puerto Rico is unprecedented, this legislation is about more than just Puerto Rico or the Virgin Islands. This legislation will serve to drive capital to other areas of our Nation impacted by hurricanes and other natural disasters this past season including Texas; Florida; the U.S. Virgin Islands; and California, which is facing the effects of devastating wildfires and mudslides.

Ninety-nine percent of the companies in Houston are considered small businesses, and most of them do not have the same economic resources as the State's massive oil and medical industries. As a result, these businesses face

a long and expensive road to recovery. This legislation seeks to shorten that distance for those businesses as well.

FEMA estimates that nearly 40 percent of small businesses never reopen after a disaster. Therefore, developing strategies to drive private capital to a community's small business is one of the most efficient uses of private sector capital and one of the most effective ways we in the Federal Government can help an area recover.

Nearly 4 months after Hurricane Maria, the Puerto Rican economy is at a near standstill and thousands of the island's small businesses are teetering towards insolvency. The businesses in southeast Texas, Florida, the Virgin Islands, and California face tough situations as well, and we must do all that we can to help them recover.

Mr. Speaker, I again want to thank Chairman Hensarling and Ranking Member Waters for working with me on this important legislation, which passed our committee earlier this month on a wide bipartisan basis, 57- 0. I also want to thank Representatives Green, Sinema, and Plaskett for cosponsoring this legislation with me.

Mr. Speaker, I urge Members to vote ``yes'' and I yield back the balance of my time.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 4792) to amend the Securities Exchange Act of 1934 to expand access to capital for small businesses affected by hurricanes or other natural disasters, and for other purposes.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within 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, small businesses across the country are especially vulnerable to natural disasters. Recent natural disasters like Hurricane Harvey in Texas and the wildfires in California have left small businesses torn apart in their wake.

Nationally, there has been a survey of 500 small businesses. In 2015, they found that 75 percent of small businesses do not develop plans to be able to prepare for disasters. This means that small businesses are nationally unprepared for natural disasters and are likely to experience a fair amount of difficulty in reopening their doors, a concerning economic challenge in the aftermath of an already challenging time.

Ms. Velazquez's bill, the Small Business Access to Capital After a Natural Disaster Act, would help alleviate some of these challenges by requiring the Securities and Exchange Commission's Advocate for Small Business Capital Formation to identify any unique challenges in securing access to capital for small businesses that have been affected by hurricanes or natural disasters.

As a former small-business owner and co-chair of the Small Business Caucus, I know firsthand the positive economic impact a small business can have on regional and local economies that they serve. In the wake of a natural disaster, small businesses that reopen and rebuild can have a major impact on helping the local economy recover.

Mr. Speaker, as the small business advocate is already involved in communicating with small businesses, requiring the SEC to study issues with access to capital after a natural disaster and report annually on its finding is common sense.

Mr. Speaker, I commend Ms. Velazquez for taking the initiative on this important issue, and I encourage my colleagues to support her legislation.

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

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