Sen. John Kennedy, a Louisiana Republican, on January 13, 2022, introduced a bipartisan measure that would broaden the mandate of the SEC’s Office of the Advocate for Small Business Capital Formation (OASB) to include rural small businesses. Kennedy introduced S. 3503, the Expanding Access to Capital for Rural Job Creators Act, alongside Democratic Sens. Tina Smith of Minnesota and Gary Peters of Michigan.
The bill would amend the Securities Exchange Act of 1934 to add “rural-area small businesses” to the categories where the OASB must identify problems with securing access to capital. That list already includes minority- and women-owned small businesses and those affected by hurricanes or other natural disasters. The bill also directs the OASB to summarize the most serious issues encountered by rural small businesses in its annual report.
“Rural small businesses often face disproportionate obstacles when trying to secure capital to develop and grow their businesses,” Smith said in a statement. “This legislation would help rural small businesses overcome these hurdles and strengthen our rural economies.”
The SEC Small Business Advocate Act of 2016 created the OASB as well as a new advisory panel — the Small Business Capital Formation Advisory Committee — to generate recommendations on capital formation issues for private businesses and publicly traded companies with less than $250 million in market value.
Rep. Cindy Axne, an Iowa Democrat, introduced the House version of the Expanding Access to Capital for Rural Job Creators Act (H.R. 5128) in August 2021 alongside a bipartisan group of cosponsors. Axne and one of those cosponsors, Reps. Cheri Bustos of Illinois, are co-chairs of the Rural Reinvestment Task Force, created by the centrist New Democrat Coalition.
Lawmakers have pushed for years to advance the bill, which was part of the House’s “Jobs Act 3.0” package that passed the chamber in 2018 but stalled in the Senate. A standalone version of the measure also passed the House in 2019.
The SEC in late 2018 named Martha Legg Miller, an Alabama-based attorney and start-up company advocate, as director of the OASB.
This article originally appeared in the January 18, 2022 edition of Accounting & Compliance Alert, available on Checkpoint.
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