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Hensarling Floor Statement on Main Street Jobs Legislation
“By enacting H.R. 1675 we will ease the burdens on small businesses and job creators – and isn’t that what we ought to be about? We will help to foster capital formation so Americans can go back to work, have good careers, pay their mortgages, pay their healthcare premiums, and ultimately give their families a better life.”

 

Washington, February 3, 2016 -

WASHINGTON- Financial Services Committee Chairman Jeb Hensarling (R-TX) delivered the following statement on the House floor today in support of H.R. 1675, the Encouraging Employee Ownership Act:

I rise in strong support of H.R. 1675, the Encouraging Employee Ownership Act. I do this because, as you know Mr. Chairman, regrettably we saw that in the last quarter this economy grew at a paltry seven-tenths of one percent. On an annualized basis, this economy is limping along at roughly half the normal growth rate.

That means that this economy is not working for working families under eight years of Obamanomics. They have found themselves with smaller paychecks, smaller bank accounts and greater anxiety about how they are going to make their mortgage payments, how are they going to make their car payments, and how are they going to be able to save enough to send somebody to college. This economy is still underperforming for American families.

And so it’s incredibly important that we help our small businesses which are truly the job engine in our economy. So I want to commend the sponsors of the five bills that make up H.R. 1675 – Representatives Hultgren, Hill, Huizenga, and Hurt.

Their work has resulted in this bipartisan bill that we think will help create a healthier economy. Again, we know that 60 percent of the nation’s new jobs over the past couple of decades have come from our small businesses.

So if we are going to have a healthier economy that offers more opportunity, then we have to offer more opportunities for small business growth and small business startups.We have to ensure they have the capital and credit they need to grow. You can’t have capitalism without capital.

Yet as we’ve heard from countless witnesses in our Committee, from community banks and credit unions -the primary source of small business loans – are drowning in a sea of complex, complicated, expensive regulations, many of them emanating from the Dodd-Frank Act which is causing a huge burden on the economy and working families. The same is true with many of of our burdensome securities regulations as well. Many of them are well intentioned but they were written with the largest public companies in mind but they end up hurting our smaller companies.

It’s time that we help level the playing field for small businesses with smarter regulations that will still maintain fair and efficient markets, protect investors, but allow small competitors the chance to succeed.

We can make progress today on this bipartisan bill, H.R. 1675. It is a modest bill, only 20 pages long; anyone can read it. But, it provides many overdue improvements that will help spur capital formation. The legislation gives companies options and choices on how best to attract investment capital. In a free society, isn’t that where we should be?

It updates rules to allow small businesses to better compensate their employees with ownership in the business; let them have a chance at the American dream.In doing so, it strengthens provisions enacted into law in the bipartisan JOBS Act and the FAST Act to give employees a greater opportunity to share in the success of their employer.

It codifies no-action relief issued by the SEC to remove regulatory burdens for individuals who assist with the transfer of ownership of small and mid-sized privately held companies.

It will provide investors with more research on exchange traded funds, or ETFs, by extending a liability safe harbor consistent with other securities offerings.

It provides a voluntary exemption from reporting in an XBRL data format for emerging growth companies and smaller public companies – the cost and use of which have continually been questioned in our Committee. The Committee received testimony from a biotechnology executive who said that his outreach to analysts and investors yielded a consensus response that they were not even aware of XBRL. The witness further testified that his company’s $50,000 annual compliance costs that could obviously be better spent on productivity and job creation.

And finally, it requires the SEC to conduct a retrospective review every 10 years to update or eliminate outdated, unnecessary, and duplicative regulations. This is also known as common sense. The Administration claims that this provision is duplicative because the SEC is already “encouraged” to review their regulations. Well, “encouragement” doesn’t quite get the job done. We need to ensure that these regulations are looked at, and at least looked at on a decade basis.

You will hear some say the SEC resources are stretched too thin. Well I’m happy to go back and amend Dodd-Frank so they have more resources to vote for capital formation. And by the way, they just got a big, fat raise in the latest Omnibus. So, I don’t think that argument holds much water.

By enacting H.R. 1675, we will ease the burdens on small businesses and job creators. Isn’t that what we ought to be about? We will help to foster capital formation so Americans can go back to work, have better careers, pay their mortgages, pay their healthcare premiums, and ultimately give their families a better life.

I urge my colleagues to join me in supporting H.R. 1675.

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