[Congressional Record Volume 169, Number 19 (Monday, January 30, 2023)]
[House]
[Pages H502-H504]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
EXPANDING ACCESS TO CAPITAL FOR RURAL JOB CREATORS ACT
Mr. McHENRY. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 298) to amend the Securities Exchange Act of 1934 to expand
access to capital for rural-area small businesses, and for other
purposes.
[[Page H503]]
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 298
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Expanding Access to Capital
for Rural Job Creators Act''.
SEC. 2. ACCESS TO CAPITAL FOR RURAL-AREA SMALL BUSINESSES.
Section 4(j) of the Securities Exchange Act of 1934 (15
U.S.C. 78d(j)) is amended--
(1) in paragraph (4)(C), by inserting ``rural-area small
businesses,'' after ``women-owned small businesses,''; and
(2) in paragraph (6)(B)(iii), by inserting ``rural-area
small businesses,'' after ``women-owned small businesses,''.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
North Carolina (Mr. McHenry) and the gentlewoman from California (Ms.
Waters) each will control 20 minutes.
The Chair recognizes the gentleman from North Carolina.
General Leave
Mr. McHENRY. 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 this bill.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from North Carolina?
There was no objection.
Mr. McHENRY. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in strong support of H.R. 298, the Expanding
Access to Capital for Rural Job Creators Act.
I thank Congressman Mooney and my colleagues on the other side of the
aisle for their work on this issue last Congress and this Congress.
In the Financial Services Committee, we continually highlight the
importance of capital formation for entrepreneurs and job creators in
underbanked rural communities. That means their ability to get a loan,
their ability to get investment capital. We want to enhance every
American's ability to get access to capital to take their ideas to
market.
I can speak from experience about the struggles emerging
entrepreneurs face when starting or growing their own small business.
My father started a business in our backyard, mowing grass for other
people. He and his buddy both had five kids. I am the youngest of five
kids. My dad's business partner had five kids. They had plenty of free
labor. What they didn't have access to was capital or investment
capital. So his first piece of lending was done because he had a Toro,
which was the best lawnmower you could get at the time. A Toro
salesperson so wanted to make the sale that he let him use the
equipment until my father and his business partner could get paid from
the hospital where they were mowing the grass. That was the first piece
of equipment they got, because the sales guy wanted to make the sale.
The second piece of equipment they got was a truck, to put that lawn
mower in the back of, that they got using a Master Charge, which is now
Mastercard. They used a credit card to buy a truck. They put a rope
around this very expensive riding lawnmower in the back of this beat-up
pickup truck.
That was the dream for both families that put five kids through
college. Both families, five kids. Ten kids total put through college.
Now, my brother runs that business that my father started in our
backyard.
The question of access to capital, if you don't have friends that
have personal wealth, it is very difficult in this country. It is in
rural communities. It is in urban communities. We have areas of this
country that are underbanked and resource starved. It doesn't mean that
they have less good ideas because of where they are born. They don't.
That is not connected with this. They are starved for capital.
What we need to do, in a bipartisan way, and what we have had
conversations on in a bipartisan way on our committee, is how to fix
that problem. We are trying because we have communities across this
country that are being left behind. That is completely unacceptable.
This is a bipartisan bill that tries to get at that and help small
businesses that are vulnerable in rural communities.
Research shows that after the last financial crisis, small businesses
and startups were less likely to form in rural areas than in urban
areas. Now, these same small businesses are facing record inflation and
supply chain disruptions.
In recent years, the SEC's Small Business Advocate found that rural
businesses that seek investor capital are raising higher amounts.
However, rural businesses are still raising less capital than their
urban counterparts relative to the size of the affected population.
But even the urban numbers misrepresent what is happening in urban
areas in this country. Just because a big business is headquartered in
an urban area doesn't mean they are serving the urban area or that they
are employing in that urban area. So we have got huge challenges.
In rural areas, which this bill deals with, every small business and
entrepreneur counts. They are the lifeblood of the local economy, and
their success is critical to the success of their community. This bill
is just one example of how Congress can help solve one of the issues
that rural small businesses face: access to capital.
Mr. Speaker, I thank Congressman Mooney for his work on this bill. I
urge my colleagues to support this bipartisan legislation, and I
reserve the balance of my time.
Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume.
I rise in support of H.R. 298, the Expanding Access to Capital for
Rural Job Creators Act, sponsored by Representative Mooney of West
Virginia. Last Congress, this bill was led by Democrats and introduced
by my good friend, former Representative Axne of Iowa. The bill passed
the House last year, and I continue to support it.
While small businesses in the big cities may enjoy easier access to
capital to grow their businesses, hire and support their employees, and
serve their communities, the businesses in rural America often
struggle.
Rural America's job growth is half the rate than that of big cities.
Rural America's poverty rate is also higher than that of the big
cities, even though it has dropped under President Biden's leadership
and as a result of the Inflation Reduction Act passed by Democrats last
Congress.
To better understand these issues in rural America, H.R. 298 would
require the SEC's Small Business Advocate to report to Congress on
particular challenges that rural businesses face in accessing our
capital markets.
I am very much in support of this bill. I have always advocated that
we should work together, the rural legislators and the small town
legislators, to be able to do more in rural communities. Of course,
that takes resources.
So while my colleagues on the opposite side of the aisle may be in
the cutting mode, based on what I am learning about the debt limit
discussions that are going on, I would urge them to take a look at
these rural communities so that we can begin to close that gap that
exists.
Mr. Speaker, I say to my colleagues: It is not only when we are
talking about businesses and small businesses, whether we are talking
about that or healthcare or any of the other issues, the rural
communities need more advocacy. They need more legislation. They need
more of the Representatives on the opposite side of the aisle dealing
with us so that we can correct these gaps that have lasted for far too
long.
Mr. Speaker, I urge my colleagues to support this bill, and I reserve
the balance of my time.
Mr. McHENRY. Mr. Speaker, I agree with the words of the ranking
member.
Mr. Speaker, I yield such time as he may consume to the gentleman
from Arkansas (Mr. Hill), the vice chair of the Financial Services
Committee and the chair of the Digital Assets Subcommittee.
Mr. HILL. Mr. Speaker, I certainly thank the chairman of the
Financial Services Committee, and I thank the ranking member in the
118th Congress, Ms. Waters, for her work on this bipartisan bill, H.R.
298, Expanding Access to Capital for Rural Job Creators Act, sponsored
by Alex Mooney, our Member from West Virginia, certainly a very rural
place, mountainous, tough to get around, a lot like Arkansas.
Small businesses, as the chairman said, are the backbone of the
economy in Arkansas, as they are across the country. Almost 50 percent
of jobs in
[[Page H504]]
this Nation are with traditional small businesses. Yet, they face
obstacles in getting the capital they need to grow and create jobs
under the best of circumstances, in Los Angeles or in Charlotte, the
financial capital of the east. These greater challenges are really
tough when you get out in the country. In Arkansas, almost all but two
counties in our State are deeply rural.
I was a bank president in a town of 100 people, in a county of 7,000.
When you talk about capital needs, that was certainly the case. That is
why I can support this wholly bipartisan legislation that would direct
the Securities and Exchange Commission's Office of the Advocate for
Small Business Capital Formation to study the problems faced by those
small businesses, entrepreneurs, owners, and family businesses, that
want to access capital to grow.
This bill passed this House last July with bipartisan support, and so
it should do it again today. It sends a message that Congress is
fighting to help our small businesses out in rural areas. It is
critical. We want them to thrive.
{time} 1730
Sadly, this Securities and Exchange Commission and its chairman, Gary
Gensler, don't have this as a priority, Mr. Speaker. Their priority is
not helping capital formation or helping small businesses thrive. In
fact, they are trying to choke it off with their regulatory burden.
I am glad to see that Congress is weighing in to say this is
important. Our young people in rural communities are also facing an
additional crisis, which is, how do we create opportunities for high
school students in rural counties that can't afford a 4-year college
degree or don't want to saddle themselves with debt, and that means
creating a path to pursue a skilled trade--something that is in
desperate need in all of our counties, urban and rural.
Workforce education must go hand in hand with helping small capitals
get the capital to grow. Entrepreneurs have to have the investment, but
they have also got to have a skilled workforce to help them grow their
company and expand for other people.
I am fully in support of this bill because I think it speaks to the
heart of the vast majority of our country, which are small companies
working in rural areas.
I agree with the ranking member when she says that they need
investment in healthcare and other things in rural areas, and that is
why in my State there are 172 community health centers, Federal
community health centers, spread across our entire State. We have a
really capable, good local hospital system throughout our rural
counties.
We are blessed by that. We are blessed by good CTE schools, classic
trade workforce schools, but we could use more. Of course, we have got
to have capital to grow, and it can't just come from the banking
sector.
That is why I support so fully our chair's emphasis on crowdsourcing
funding for small businesses. Think how much more straightforward that
is in a rural area to try to do something good by bringing together
people from all over, all works of life to help somebody build a
business.
Mr. Speaker, I thank the chair for his leadership. I thank the
ranking member.
Mr. Speaker, I urge all our colleagues to support this bill.
Ms. WATERS. Mr. Speaker, H.R. 298 directs the SEC Small Business
Advocate to focus on the challenges rural small businesses face. I,
again, urge my colleagues to support this bill.
Again, I would like to reiterate how anxious I am to work with the
opposite side of the aisle so that we could close this gap and deal
with the concerns of rural America. It is not only in small business;
again, it is healthcare and it is in housing.
You all know that housing is one of my top priorities. I am looking
forward to an urban-rural Renaissance of some kind. I want to say to
Mr. Hill, I am looking forward to what can be done in Arkansas.
My mother was born in Cotton Plant, Arkansas, in his district, and I
know that there are a lot of needs there, but it is going to cost
money. It is going to cost time. I want the gentleman to know I believe
in capital formation, and I think we can work together on capital
formation.
Mr. Speaker, I urge my colleagues to support this bill, and I yield
back the balance of my time.
Mr. McHENRY. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, I thank the ranking member for her words and comments
here. It is true we have worked together on capital formation
initiatives in previous Congresses and I would hope that we will be
able to do the same.
I know of her upbringing in Missouri and her career in California.
She has both rural and urban experiences that she can bring to this and
I, likewise, have mainly rural upbringing to bring to this, but I think
together we can craft a smart agenda, address the needs of the American
people, and that is my intention with a focus on capital formation
across the country, with the needs of a modern economy to digitize so
many of our processes in the world of financial services, and the need
to give architecture to a new range of assets that are in the financial
services world around cryptocurrency and digital assets.
There is a lot that is happening here that we have to embrace and
allow that prosperity to be spread across the country. Working
together, I think we can do that.
Mr. Speaker, I urge adoption of this piece of legislation, and I
yield back the balance of my time.
Ms. JACKSON LEE. Mr. Speaker, I rise today in support of H.R. 298--
the Expanding Access to Capital for Rural Job Creators Act.
H.R. 298 requires the Advocate for Small Business Capital Formation,
an entity within the Securities and Exchange Commission to submit an
annual report on the various challenges small businesses in rural areas
face when attempting to secure capital.
This bill was first introduced in 2017 and continues to be
reintroduced into congress with the sole hope of helping the small
businesses that truly are the backbone of our economies.
The Securities Exchange Act of 1934 was originally created to
regulate securities transactions in the secondary market in order to
promote more financial integrity, transparency and to reduce fraud and
manipulation.
Over the years, the Securities Exchange Act of 1934 has been amended
in response to various needs of our capital markets.
The Office of the Advocate for Small Business Capital Formation was
established in January 2019 as an independent SEC office.
Among other things, this office is responsible for advancing the
interests of small businesses and their investors at the SEC.
The office also facilitates the expanded access to capital for rural
area small businesses.
Rural businesses in Texas and around the nation frequently encounter
significant challenges when attempting to raise funds to expand and
improve their operations.
Lack of capital or funding, a faulty infrastructure or business
model, and ineffective marketing efforts are a frequent cause of
failure for small businesses.
This legislation would support our rural economies by assisting rural
small businesses in overcoming these obstacles.
It is crucial for Congress to support small and rural businesses if
it wants to help this country continue to prosper and grow.
In 2022 Texas had a population of about 30 million, with 3.8 million
of them residing in rural areas.
And in 2022, between 13 and 14 percent of all jobs in the United
States could be found in rural areas, a rate that is only anticipated
to increase over time.
These continuing increases in employment and population indicate a
developing trend and the requirement for new businesses to develop in
rural areas with easier access to capital which provides new employment
opportunities.
With more than 13,000 unemployed Texans and 6 million Americans
throughout the USA, it is essential that we, as elected members of
Congress, support the economic growth of our rural populations.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from North Carolina (Mr. McHenry) that the House suspend the
rules and pass the bill, H.R. 298.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill was passed.
A motion to reconsider was laid on the table.
____________________