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Access to Capital for Job Creators Act

Floor Speech

By:
Date:
Location: Washington, DC

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

I rise today in support of H.R. 2940, the Access to Capital for Job Creators Act.

Before I begin my remarks, I would like to thank Chairman Bachus, Chairman Garrett, Congressman McCarthy, and Ranking Member Frank for their assistance and support with this bill. We were able to work in a bipartisan manner on this bill in our committee, passing it on a voice vote.

H.R. 2940 amends the Securities Act of 1933 to remove the prohibition on general solicitation or general advertising for offers of securities made under rule 506 of regulation D, if those securities are only sold to accredited investors. In other words, investors will be able to advertise their private, unregistered securities offerings if those securities are only sold to accredited investors.

As you know, accredited investors are individuals, companies, or organizations that generally have the sophistication needed to make complex financial decisions. These folks are thought to need less protection than average retail investors.

Because this lifting of the ban on general solicitation and advertising would only apply when securities were sold to accredited investors, I am sympathetic to the goals of the gentleman from California's bill.

The current ban on general advertising has been interpreted to mean that companies can only raise capital from investors with whom they have had a preexisting relationship. This requirement would hamper their ability to obtain capital and it's, therefore, appropriate to modernize this provision.

However, during the hearing on this bill in September, the North American Securities Administrators Association and others noted that one problem with the original bill was that it would be difficult to limit the sale of these securities to only accredited investors when issuers advertise to everyone, particularly since accredited investors were able to self-certify their status.

An amendment I offered in subcommittee, which was accepted, directs the SEC to write rules requiring issuers to verify that purchasers are accredited investors. I think this will substantially improve the potential fraud issues identified by the State regulators.

Given this improvement, I'd like to offer my support for this legislation. This bill will make it just a bit easier for some companies to raise funds in the private market, enabling them to grow their businesses.

But make no mistake. I believe that we still need to pass the American Jobs Act in order to truly get people back to work in this Nation. In addition to this small change to enable capital formation, we need to keep teachers, police officers and firefighters on the job, extend unemployment insurance for laid-off workers, and revitalize neighborhoods devastated by foreclosures. A truly comprehensive approach is needed to get Americans working again. And I hope my colleagues are willing to work with me on passing the American Jobs Act.

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

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Ms. WATERS. I yield myself such time as I may consume.

I am very pleased that we have bipartisan support for this legislation. It has been stated over and over again that access to capital is extremely important to our businesses, and small businesses in particular.

Mr. Speaker and Members, we talk a lot about our support for small businesses; but I know there's a long way to go in order to make sure that they have not only access to capital, but we have one-stop shops and other kinds of efforts that will help them not only to grow their businesses and expand their businesses but to hire people. And really, that's what this is all about.

This is about how do we stimulate our economy, how do we get it working, how do we create jobs. This is one way that we can do this.

While we're talking about small businesses, let me remind you that, in the American Jobs Act that is being debated by this Congress, we have similar efforts for small businesses. We have tax credits for small businesses; we have tax credits when they hire workers, when they hire veterans. So I am very pleased that both sides of the aisle are showing more and more support. These small businesses need this capital to acquire inventory. Many of them need to get up to speed with their computer equipment to be able to market their services, their goods, and their products. As we do this, let us keep in mind that this is one aspect of how we stimulate the economy, of how we grow our small businesses, of how we give support to them.

Let's look at the other ways we're talking about stimulating the economy. Don't forget that many small businesses will benefit from the repair of our infrastructure. Just think about it. When we're repairing our roads and our bridges and our water systems, small business persons will have many opportunities to grow their small businesses, whether or not they are wholesalers and people in the middle who will be providing supplies and materials to those contractors or whether or not they are subcontracting for some aspect of this development and growth and repair of our infrastructure. So we're on the right track here when we talk about assistance to small businesses and job creation, but let us open up our minds and really think about how the infrastructure repair will certainly be a big boon for small businesses.

I can point to other things in the American Jobs Act. Just think about the construction and repair of our schools. We have schools that still need a lot of repair. They don't have science labs. The laboratories and much of what is involved in the whole construction of schools is very much needed. Again, our small businesses will benefit from this. Just think about it. When they go to their local boards of education and when they get involved in supplying goods and services as we repair these schools and build more schools, that's how you stimulate the economy. You cannot separate small businesses from jobs. Small businesses create jobs. Jobs allow people the ability to spend money and to stimulate our economy.

I am just so pleased that we see bipartisan support in the effort for small businesses. Let's not stop here. Let's keep going. Let's keep creating these opportunities so that we can say that we're a country that not only respects small businesses but that we're going to put our money where our mouths are, and we're going to give them the opportunity again to create and grow and expand.

With that, Mr. Speaker, I have no further requests for time, and I yield back the balance of my time.

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