SBA IT Modernization Reporting Act

Mr. Speaker, I also rise in support of H.R. 4429, the Developing and Empowering our Aspiring Leaders Act, or DEAL Act, which is a critical bill to support innovation, entrepreneurship, and capital formation.

The venture capital industry provides vital funding for early-stage startups at points in their life cycle when they are generally deemed to be too risky for traditional bank financing or for raising money on the public market. This basically means that if we are going to have a growing and innovative economy, then we have to have a healthy venture capital sector.

Historically, venture capital earns investor returns and frees up more capital to recycle in other companies by selling their mature portfolio companies to strategic investors or taking them public on public markets.

For a variety of reasons, including public company reporting obligations, economic uncertainty, and the rise of private equity, U.S. companies today are staying private much longer, which has reduced the opportunities for venture capital firms to recycle their investment dollars.

Some venture capital firms have sought to create new liquidity options through secondary acquisitions and investments in other VC funds. This is what Congresswoman Wagner was referring to, but that option right now is constrained by provisions in the Dodd-Frank Act of 2010 that limit venture capital funds' ability to invest in these so- called fund of funds to only 20 percent of their commitments.

That rule was very well-intentioned when passed, and the intent was to ensure that VC firms remained focused on direct investments in early-stage startups. However, it was crafted for a very different financial market than we have today.

I would also note that that constraint is irrelevant to the larger, more well-known VC funds who have the resources to shoulder the compliance burdens associated with registering with the SEC as registered investment advisers. They can already do this, but they are the big ones. They are the ones based in San Francisco and New York. That option isn't available for these emerging regional fund managers located in the middle of the country. Many of those funds increasingly depend on that fund-of-funds model.

What the DEAL Act does is just provides greater flexibility to those smaller VC funds while still ensuring that investors are protected and that fund managers continue to prioritize direct funding in small businesses. It does this by revising the existing rules to raise the cap from 20 percent in fund of funds up to 49 percent but still requiring that the majority of their investments are directly in portfolio companies.

In other words, the DEAL Act supports growth in the startup economy and ensures that capital reaches the communities and innovators who need it most.

I thank my fellow Midwesterner and friend, Congresswoman Wagner, for her leadership on this. I am proud to lead this important legislation, and I urge all my colleagues to support it.

Mr. Speaker, I thank my friend from Ohio for yielding.

Mr. Speaker, I am proud to sponsor H.R. 4429, the Developing and Empowering our Aspiring Leaders, or DEAL, Act.

This bill, which passed with almost unanimous support out of the Financial Services Committee, seeks to ensure the United States remains the most entrepreneurial country in the world, where the next great companies are founded and funded.

It is often said that small businesses are the engine of the American economy, and that is an absolute truth. Small businesses make up 99 percent of U.S. employers, and they are the driving force behind the creation of a majority of new jobs.

The entrepreneurs leading these companies are building something new, taking real risks, and driving growth in communities across the Nation, but too often, they can't get a fair shot at investment.

Right now, our capital markets suffer from an extreme geographic imbalance. The data is stark. Nearly 70 percent of venture capital flows to three States, Mr. Speaker: California, New York, and Massachusetts.

This leaves entire regions of the country struggling to access funding. It leaves communities in the Midwest and the South without the capital they need to build and scale businesses. Access to capital is not just a coastal issue. It is a national economic necessity.

This capital divide is why the DEAL Act is so critically important. This bill is a targeted, forward-looking effort to modernize outdated rules and channel investment to where it is needed most.

The DEAL Act fundamentally strengthens the ability of capital to reach more founders and more communities. It achieves this by allowing larger venture funds to invest directly in smaller, regional funds, a fund-of-funds investment.

This mechanism is a game changer, Mr. Speaker. It means more funding for startups, more opportunities for businesses that might otherwise be overlooked, and more innovation happening everywhere, not just in a handful of elite ZIP Codes.

Newer, regional venture funds are often best positioned to back the entrepreneurs who are building businesses on Main Street. The DEAL Act ensures that these funds can expand that important work, giving them the flexibility to partner with larger institutions to reach a wider base of early-stage companies.

H.R. 4429 ensures our policies are helping capital move efficiently and effectively, empowering those taking risks to build something new, and helping good ideas grow into great companies.

I thank Chairman Hill for his support, and also I thank Congressman Casten for joining me and co-leading this commonsense and bipartisan piece of legislation.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 4491) to require the Administrator of the Small Business Administration to implement certain recommendations relating to information technology modernization, and for other purposes.

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

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

Mr. Speaker, I rise today in support of H.R. 4491, the SBA IT Modernization Reporting Act, introduced by Representative Cisneros from the great State of California and Representative Jack from the great State of Georgia.

The SBA is charged with certifying small businesses to participate in certain government contract opportunities.

Last year, the Biden-Harris SBA sought to implement a new certification portal. Unfortunately, this portal's lackluster planning, creation, and rollout left the SBA with a ticking time bomb.

The Biden administration's failed Unified Certification Portal rollout resulted in delays, errors, and cybersecurity risks, shutting out small businesses from vital government contracting opportunities.

While this committee shared bipartisan concerns with the Biden-Harris SBA over its rollout plan, or lack thereof, former Administrator Guzman failed to listen, and the results were damaging. Small businesses were delayed for months, sometimes longer, to get approval from the SBA to compete for governmental contracts.

To make matters worse, the SBA allowed small businesses to use the new portal without conducting minimum cyber threat assessments. Entrepreneurs didn't just face delays, but their sensitive personal and business information was put at risk of cybercrime.

The SBA IT Modernization Reporting Act ensures that this will not happen at the SBA again. This bill requires the SBA to implement the GAO's recommendations to establish stronger safeguards and improve oversight of IT initiatives so small businesses can rely on an efficient contract certification system.

Small businesses should not be held back by government mismanagement. This bipartisan, commonsense bill restores accountability and helps Main Street focus on what it does best--innovate.

Mr. Speaker, I urge my colleagues to support this bill, and I reserve the balance of my time.

Mr. Speaker, I urge my colleagues to support this commonsense legislation to protect both the SBA and small businesses alike. I yield back the balance of my time.

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

I rise today in support of my bill, the SBA IT Modernization Reporting Act, and I thank the chairman for his support. I also thank Representative Jack for joining me in introducing this bill, which will go a long way to help SBA modernize its IT infrastructure and improve its services to small businesses.

Billions of dollars in Federal contracts are awarded to small businesses every year, and the SBA plays a vital role in promoting small business participation; however, over the years the SBA's outdated and inefficient IT systems have made it harder for entrepreneurs to access the resources they need.

After repeated unsuccessful attempts to develop and deploy a platform that would be a one-stop-shop for contracting certifications, the committee requested the GAO review the SBA's efforts to figure out why they failed. The report identified the critical gaps in the SBA's modernization efforts from risk management to cybersecurity and budgeting.

My bill directly addresses these issues by requiring the SBA administrator to implement the 11 recommendations in the GAO report, mandating a clear plan of action and ensuring Congress is kept in the loop. This means better oversight, better execution, and most importantly, better services by the SBA for all small businesses.

An efficient and fully operational IT platform is critical for the SBA to conduct the certifications that allow for so many small businesses to participate in the Federal marketplace. The SBA IT Modernization Reporting Act will ensure that the SBA addresses the root causes that lead IT projects to fall behind schedule, increasing costs, or outright fail.

I am grateful for the partnership of Representative Jack to introduce this commonsense, bipartisan legislation which shows that modernizing how the SBA works is not a partisan issue. Together, we can ensure that the SBA is prepared to meet the evolving needs of small businesses.

Mr. Speaker, I urge my colleagues to support this bill to ensure we give the SBA the modern tools it needs to support the success of America's small businesses.

Mr. Speaker, I close by once again thanking my colleague Representative Jack for partnering with me on this important legislation.

By bolstering SBA's IT infrastructure, we can improve services to small businesses and open up doors to thousands of new entrants in the Federal marketplace. I encourage my colleagues to support this legislation, and I yield back the balance of my time.

Mr. Speaker, I thank my colleague Mr. Davidson for his broad work in the capital market space and for leading us here on the floor today.

I rise to urge my colleagues to support the Expanding WKSI Eligibility Act. I thank my co-leads, Mr. Fields, as well as Chairman Hill and Ranking Member Waters, for their support.

We have far too many regulations in the United States, and this bill is about rightsizing our regulations in support of investments and jobs.

This commonsense bill will help more well-run companies responsibly raise money in the public markets. It rightsizes regulatory burdens and frees up more resources for companies to invest in American jobs and American innovation.

The well-known seasoned issuer--also known as WKSI--status was first implemented around 20 years ago. It allows qualified public companies in good standing to use automatic shelf registration. This reduces the cost and complexity of a public offering and allows companies to be more responsive to market conditions.

The WKSI construct has a track record of success in expanding access to public markets while protecting investors.

According to Joel Trotter, one of the authors of the JOBS Act, ``Decades of successful experience show that the well-known seasoned issuer category is long overdue for expansion.''

I couldn't agree more, and this bill does exactly that. It lowers the size threshold for WKSI qualification while maintaining all the existing good governance requirements.

In other words, more small and midsized American public companies will be able to benefit from the privileges that already exist for larger businesses with similar compliance records.

The Expanding WKSI Eligibility Act also includes a helpful reporting requirement for the Securities and Exchange Commission. This report will provide Congress and the public with a better understanding of how many previously ineligible companies are trying to regain their WKSI status. Doing so will gain the insight needed to make future legislative adjustments.

The Expanding WKSI Eligibility Act is a tailored, regulatory improvement

that will support small and midsized businesses, job creators, and investments.

Mr. Speaker, I ask my colleagues to support this legislation.