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Mr. CHABOT. Mr. Speaker, I yield myself such time as I may consume.
I rise today in support of H.R. 6504, the Small Business Investment Company Modernization Act of 2012. This is a bipartisan bill I introduced along with Representative Renee Ellmers and Representative David Cicilline that will increase the leverage limit for a family of SBIC funds from $225 million to $350 million.
I introduced this legislation because the need for increasing small business access to capital is something universally agreed upon, and this legislation does exactly that. Specifically, this bill will increase investments to small businesses by $500 million per year without requiring an appropriation.
In addition to having bipartisan Member support, this bill has the support of the Small Business Investor Alliance, the association that represents SBICs and other small business investors, as well as the support of the U.S. Chamber of Commerce, the world's largest business organization. Additionally, the Obama administration recommended this provision as a part of the President's Startup America initiative.
The Small Business Investment Company program was created in 1958 and provides leverage to highly regulated private investors. These private investment funds are called small business investment companies, or SBICs for short. SBICs raise private capital from institutions like banks and pension funds, and they also borrow Federal capital to invest in our country's most promising small businesses. As required by law, 100 percent of the money is invested in American companies. Small businesses need capital to grow and create jobs to support our local and regional economies.
SBICs have invested in over 110,000 businesses since the creation of this program. Twenty-three percent of the investments are made in the manufacturing sector of our economy, and 18 percent of the investments are made in the transportation sector.
The manufacturing economy is very important to my State in particular, Ohio, and we need to continue committing to this. In the past 6 years, Ohio's businesses have benefited from an investment of over $307 million from SBICs.
Last year, representatives of one of the SBIC funds in Ohio testified before the House Small Business Committee about the benefits of the SBIC program and in support of the legislation we have in front of us here today. Northcreek Mezzanine, which is located in Cincinnati, Ohio, has successfully invested in five companies since it became an SBIC a little more than 3 years ago. Northcreek understands the importance of supporting successful managers through this program.
It's important for my colleagues to know that this bill does not cost the taxpayers' money, nor does it increase the risk of the program. The SBIC debenture program will remain a zero subsidy program. That means that the SBICs that participate must pay an up-front fee to cover any losses. It's good public policy like this that truly helps business grow and access capital at no cost to taxpayers.
This legislation assists proven fund managers, like Northcreek Mezzanine, as I mentioned before, that have a track record of success by allowing them access to additional funds that they can then use to assist small businesses. We have here a bill that increases the leverage to $350 million for successful investors.
The SBA, the Small Business Administration, will continue to determine whether funds receive additional leverage after meeting certain licensure requirements. Investment decisions will be made by proven private sector fund managers, not the SBA, thus ensuring that the amount of new capital used by this bill will go to qualified small business investors.
H.R. 6045 is the perfect gift this Christmas season as it is the gift that keeps on giving. The increase in the flow of capital to small businesses will have a ripple effect throughout the economy as businesses will expand, create jobs, and invest in research and development. Congress can take an important step in getting the capital to businesses that need it the most.
I would urge my colleagues to vote for H.R. 6504 on the floor today, and I reserve the balance of my time.
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Mr. CHABOT. Mr. Speaker, I would urge my colleagues to support the Small Business Investment Company Modernization Act of 2012, and I yield back the balance of my time.
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