SBIA Scores Significant Wins Less Than Two Weeks into the New Congress

First Advocate of Small Business Capital Formation Appointed by SEC

Martha Legg Miller began her duties in January as the SEC’s first head of its Office of the Advocate for Small Business Capital Formation. SBIA was instrumental in the creation of the Office of the Advocate for Small Business Capital Formation, which is a strong, independent voice for small businesses and small business investors at the SEC designed to promote innovative solutions and improve the regulatory environment for capital formation.

The Office of the Advocate for Small Business Capital Formation was created by H.R. 3784, the SEC Small Business Advocate Act of 2016, which was signed into law into law by President Obama on December 16, 2016. The bill, which was a major legislative priority for SBIA during the 114th Congress, also created a Small Business Capital Formation Advisory Committee comprised of industry professionals that must meet at least four times annually to provide a valuable brain trust for the Advocate. Important goals advanced by the legislation include:

  • Developing and leading initiatives for innovative new ideas to promote small business capital formation;
  • Providing a small business perspective and voice on proposed SEC rules: The Advocate will assist small businesses and small business investors in resolving concerns at the SEC with proposed rules and regulations that may harm small business and encourage changes to those rules to help small businesses access capital; and
  • Establishing a champion and a conduit to elevate small business concerns at the SEC. The legislation provides someone small businesses and small business investors can count on to champion their concerns, as these groups are currently underrepresented in having an impact on SEC policies and regulations.

Miller holds two bachelor’s degrees from Vanderbilt University and a J.D. from the Georgetown University Law Center and was formerly a partner at the Birmingham, Alabama firm Balch & Bingham LLP, where she represented private companies and their investors in a range of transactions. The appointment of Ms. Miller is a positive step toward furthering capital formation for America’s small businesses, and SBIA looks forward to working with the Office to achieve those goals.


Two SBIC Bills Pass the House of Representatives

The 116th Congress started off with a bang for SBIA, as two SBIC bills passed the House of Representatives in the first 11 days of the new session. H.R. 116, the Investing in Main Street Act, passed by an overwhelming majority of 403-2. H.R. 206, the Encouraging Small Business Innovation Act, passed unanimously by voice vote. Both bills seek to spur more SBIC investments nationwide.

On the first day of the new Congress, as Members were being sworn in, SBIA Champion Rep. Judy Chu (D-CA-27) introduced H.R. 116, the Investing in Main Street Act. Rep. Chu was also the lead sponsor of the bill during the 115th Congress. She is joined on the bill this Congress by House Small Business Committee Member Rep. Ralph Norman (R-SC-5).

The Investing in Main Street, which would raise the amount of capital that banks can invest in SBICs from 5% to 15% (subject to regulatory approval), passed the House unanimously last Congress and was included in several other larger legislative vehicles that ultimately failed in the Senate. SBIA worked to get the bill to the goal line via these vehicles, but last-minute breakdowns over government funding between Congress and the White House at the end of 2018 halted any chance of the bill’s passage.

H.R. 206, introduced by Rep. Harley Rouda (D-CA-48), is designed to encourage investment in SBIR and STTR businesses by allowing SBICs to exclude a percentage of their SBIR and STTR investments from their leverage calculation.

The passage of two SBIC-related bills in the first month of the new Congress is a big win for our association and hopefully signals more positive things to come during this Congress. The bills now go to the Senate, where SBIA is building support to get them passed, and ultimately, signed into law by the President.

SBIA advocates for nonpartisan solutions to increase access to capital for American small businesses. We have had great success working on both sides of the aisle to advance SBIA priorities and have developed significant relationships with Members across the political and ideological spectrums. We look forward to continuing that work throughout this Congress and finding more ways to strengthen the SBIC program.

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