Date: 2012-03-07
Speaker: JACKSON LEE (democrat)
Chamber: H
State: Texas

The gentleman is very kind. So let me just say. as my leader on the floor was trying to get an inquiry about itand you always take a gift quickly and you say "thank you"-I think that this will add to the confidence of this legislation. And as I indicated. though this is not specifically to this point. I want to make sure that were helping community banks provide more lending and access to small businesses. I want to make sure that we. under the definition of this bill. help emerging growth companies. as well. be stronger and. as well. to be part of the creation of jobs putting Americans back to work. With that. I ask my colleagues to support the Jackson Lee amendment. Mr. Chair. I rise today to offer my amendment No. 4 to H.R. 3606 "The Reopening American Capital Markets to Emerging Growth Companies Act of 2011." My amendment would create a fiveyear "onramp" for smaller companies to comply with certain provisions of SarbanesOxley and DoddFrank. In the bill. Emerging Growth Companies are exempted from certain regulatory requirements until the earliest of three dates: (1) five years from the date of the EGCs initial public offering. (2) the date an EGC has $1 billion in annual gross revenue. or (3) the date an EGC becomes a "large accelerated filer. which is defined by the Securities and Exchange Commission (SEC) as a company that has a worldwide public float of $700 million or more. H.R. 3606 thus provides temporary regulatory relief to small companies. which encourages them to go public. yet ensures their eventual compliance with regulatory requirements as they grow larger. I agree in principle that it is important to modernize and improve the ability of a company to raise capital in todays environment. but I am concerned H.R. 3606 goes beyond what is necessary at the expense of protecting the investor. My amendment adds a requirement that a company would NOT be considered an "emerging growth company" (EGC) if it has issued more than $1 billion in nonconvertible debt over the prior three years. As a matter of fact. it is not uncommon for a company to be financed with debt as opposed to equity. and that while $1 billion dollars is not what it used to be--it is still a pretty substantial sum of money. Frankly. Mr. Chair. a company that size needs to have some oversight to protect the public. For years. both Wall Street and big banks lacked the requisite government oversight and accountability. Relying on Wall Street and big banks to police themselves resulted in the worst financial crisis since the Great Depression. the loss of 8 million jobs. failed businesses. a drop in housing prices. and wiped out personal savings. We must restore responsibility and accountability in our financial system to give Americans confidence that there is a system in place that works for and protects them. We must create a sound foundation to grow the economy and create jobs. To witthis debt financing might be tax deductible. whereas the equity financing typically is notwhich gives debt financing a distinct advantage. H.R. 3606 encourages emerging growth companies (EGCs) to access the public capital markets by temporarily exempting EGCs from some registration procedures. prohibitions on initial public offering (IPO) communications. and independent audits of internal controls over financial reporting. among other exemptions. I encourage my colleagues to vote for this amendment to H.R. 3606 that adds a requirement that a company not be considered to be as an "emerging growth company." if it has issued more than $1 billion in nonconvertible debt over the prior three years. Mr. Chair. lets continue to protect the investing public. I yield back the balance of my time.