Small business incentives : hearings before the Subcommittee on Telecommunications and Finance of the Committee on Energy and Commerce, House of Representatives, One Hundred Third Congress, second session, including S. 479, the Small Business Incentive Act of 1993, June 14 and July 26, 1992

United States. Congress. House. Committee On Energy And Commerce. Subcommittee On Telecommunications And Finance

Sujets

• Small business
• United States

Informations

• Publié par: les_archives_du_savoir
• Nombre de lectures: 7
• Langue: English
• Poids de l'ouvrage: 11 Mo

Extrait

' U.S. GOVERNMENT PRINTING OFFICE 85751CC WASHINGTON : 1995 For sale the U.S. Government Officeby Printing of Sales DC 20402Documents, Office,Superintendent Congressional Washington, ISBN 0-16-046521-4 85-751 95-1 V SMALL BUSINESS INCENTIVES EN4. 2/3: 103-148 AEINGS 'Efore theill Business Incentives/ Serial H. . . ONoui^^OMMITTEE T^ AND FINANCEELECOmiUNICATIONS OF THE COMMITTEE ON ANDENERGY COMMERCE HOUSE OF REPRESENTATIVES HUNDRED THIRD CONGRESSONE SECOND SESSION INCLUDING S. 479 1993THE BUSINESS INCENTIVE ACT OFSMALL 1994JUNE 14 and JULY 26, Serial No. 103-148 Committee on and CommercePrinted for the use of the Energy FrS 2 / ?0; PRINTING OFFICEU.S. GOVERNMENT 85751CC WASHINGTON : 1995 For sale the U.S. Government Officeby Printing DC 20402ofDocuments, Sales Office,Superintendent Congressional Washington, ISBN 0-16-046521-4 85-751 95-1 COMMITTEE ON ENERGY AND COMMERCE JOHN D. ChairmanDINGELL, Michigan, J. CaliforniaHENRY A. California CARLOS MOORHEAD,WAXMAN, THOMAS J.PHILIP R. Indiana BLILEY, Jr., VirginiaSHARP, JACK TexasEDWARD J." />

9
SMALL BUSINESS INCENTIVES
i EN 2/3: 103-148
^^^^^
the'EFORe11 Business Incentives, Serial «...
ONOUOV.OMMITTEE
AND FINANCETELECOMMUNICATIONS
OF THE
COMMITTEE ON
ENERGY AND COMMERCE
HOUSE OP REPRESENTATIVES
HUNDRED THIRD CONGRESSONE
SECOND SESSION
INCLUDING
S. 479
THE BUSINESS INCENTIVE ACT OF 1993SMALL
JUNE 14 and JULY 199426,
SeHal No. 103-148
and CommercePrinted for the use of the Committee on Energy
5?
-^^^ 2 1 *D?("-.• >
'
U.S. GOVERNMENT PRINTING OFFICE
85751CC WASHINGTON : 1995
For sale the U.S. Government Officeby Printing
of Sales DC 20402Documents, Office,Superintendent Congressional Washington,
ISBN 0-16-046521-4
85-751 95-1V
SMALL BUSINESS INCENTIVES
EN4. 2/3: 103-148
AEINGS
'Efore theill Business Incentives/ Serial H. . .
ONoui^^OMMITTEE
T^ AND FINANCEELECOmiUNICATIONS
OF THE
COMMITTEE ON
ANDENERGY COMMERCE
HOUSE OF REPRESENTATIVES
HUNDRED THIRD CONGRESSONE
SECOND SESSION
INCLUDING
S. 479
1993THE BUSINESS INCENTIVE ACT OFSMALL
1994JUNE 14 and JULY 26,
Serial No. 103-148
Committee on and CommercePrinted for the use of the Energy
FrS 2 / ?0;
PRINTING OFFICEU.S. GOVERNMENT
85751CC WASHINGTON : 1995
For sale the U.S. Government Officeby Printing
DC 20402ofDocuments, Sales Office,Superintendent Congressional Washington,
ISBN 0-16-046521-4
85-751 95-1COMMITTEE ON ENERGY AND COMMERCE
JOHN D. ChairmanDINGELL, Michigan,
J. CaliforniaHENRY A. California CARLOS MOORHEAD,WAXMAN,
THOMAS J.PHILIP R. Indiana BLILEY, Jr., VirginiaSHARP,
JACK TexasEDWARD J. Massachusetts FIELDS,MARKEY,
MICHAEL G. OhioAL OXLEY,SWIFT, Washington
lUinois FloridaCARDISS COLLINS, BILIRAKIS,
Oklahoma DAN ColoradoMIKE SCHAEFER,SYNAR,
"BILLY" Louisiana JOE TexasW.J. TAUZIN, BARTON,
RON ALEX North CarohnaWYDEN, McMillan,Oregon
DENNIS IlUnoisRALPH M. Texas J. HASTERT,HALL,
BILL New Mexico FRED UPTON,RICHARDSON. Michigan
CLIFF FloridaJIM Kansas STEARNS,SLATTERY,
BILL New YorkJOHN Texas PAXON,BRYANT,
PAUL E. OhioRICK GILLMOR,BOUCHER, Virginia
SCOTT WisconsinJIM Tennessee KLUG,COOPER,
ROY GARY A. ConnecticutJ. ROWLAND, FRANKS,Georgia
J. New York JAMES C.THOMAS MANTON, GREENWOOD, Pennsylvania
EDOLPHUS New York MICHAEL D. IdahoTOWNS, CRAPO,
GERRY E. MassachusettsSTUDDS,
RICHARD H. CaliforniaLEHMAN,
FRANK NewPALLONE, Jr., Jersey
CRAIG A. TexasWASHINGTON,
LYNN CaliforniaSCHENK,
SHERROD OhioBROWN,
MIKE KREIDLER, Washington
MARJORIE MARGOLIES-MEZVINSKY,
Pennsylvania
M. ArkansasBLANCHE LAMBERT,
Alan J. Director and CounselRoth, Staff Chief
Dennis B. DirectorFitzgibbons, Deputy Staff
Margaret A Counsel and DirectorDurbin, Minority Chief Staff
on Telecommunications and FinanceSubcommittee
EDWARD J. ChairmanMARKEY, Massachusetts,
W.J. "BILLY" Louisiana JACK TexasTAUZIN, FIELDS,
RICK THOMAS J. BLILEY, Jr.,BOUCHER, Virginia Virginia
OhioTHOMAS J. New York MICHAEL G. OXLEY,MANTON,
DAN ColoradoRICHARD H. California SCHAEFER,LEHMAN,
TexasLYNN CaUfomia JOE BARTON,SCHENK,
ALEX North CaroUnaMARJORIE MCMILLAN,MARGOLIES-MEZVINSKY,
J. DENNIS IlUnoisHASTERT,Pennsylvania
PAUL E. OhioMIKE Oklahoma GILLMOR,SYNAR,
CARLOS J. CaliforniaRON WYDEN, MOORHEAD,Oregon
M. Texas Officio)RALPH HALL, (Ex
BILL New MexicoRICHARDSON,
JIM KansasSLATTERY,
JOHN TexasBRYANT,
JIM TennesseeCOOPER,
JOHN D. DINGELL, Michigan
(Ex Officio)
DirectorDavid H. Counsel /StaffMoulton, Chief
CounselTimothy J. Forde,
N. AssistantGayatri Bhalla, Legislative
Peter D. CounselRich, Minority
CounselStephen A. Blumenthal, Minority
(II)CONTENTS
Page
held on:Hearings
June 1994 114,
1994 12526,July
Text of S. 479 128
of:Testimony
Csirter Securities and Commis-Beese, J., Jr., Commissioner, Exchange
sion 14428,
Richard Assistant for Financial De-Camell, S., Secretary Institutions,
ofthe 5partment Treasury
Robert Futiires Association 180Easton, G., chairman. Managed
Investment Institute 185Fink, Matthew, president, Company
on behalf of the National Association of Small BusinessGladstone, Davia,
Investment 178Companies
North American Securities AdministratorsGoettsch, Craig A., president,
Association 60
on behalf of the North AmericanC, Securities Adminis-Guthary, Barry
trators Association 162
Prudential on behalfKatz, Adrian, director.managing Securities, Inc.,
of the Public Securities Association 84
of Harvard 199Kraakman, Reinier, professor law. University
John Board of Federal Reserve 10LaWare, P., Governor, Governors, System
William American Bankers Association 95McNinch, G., member,
Edwin Beacon 75Sidman, N., chairman. F*roperties Corp
Jan Kinnevik Sweden 201Stenbeck, chairman, AB, Stockholm,Hugo,
Hon. Paul a former U.S. Senator from the State of Massa-E.,Tsongas,
chusetts 203
Material submitted for the record by:
D.E. Shaw & Inc.: Statement 236Co.,
Division ofInvestment Statement 255Management:
Robert senior Gotshal & Statement ... 228Lang, Todd, Weil,partner, Manges:
(III)mCENTIVESSMALL BUSINESS
JUNE 1994TUESDAY, 14,
House of REPRESE>rrATivES,
on Energy andCommittee Commerce,
on Telecommunications andSubcommittee Finance,
DC.Washington,
in roomto at 9:40The subcommittee notice, a.m.,met, pursuant
Office Hon. Edward J.House MarkeyBuilding,2123, Raybum
(chairman) presiding.
and welcome to the SubcommitteeMr. Markey. Good morning
Finance. will addresson Telecommunications and Today's hearing
intended to facilitate a secondaryseveral helplegislative proposals
The word that describes thatmarket for commercial loans. process
is "securitization."and therefore our word du jour
noun derived from an obscure verb.is anSecuritization opaque
has a effect onone of those Wall Street words thatIt is numbing
that will not us from re-most Nevertheless stopintelligent people.
for a of hoursof times as we sit hereit hundreds couplepeating
this morning.
to the that en-securitization refersIn processpractical terms,
loans or other assets to aand other lenders to sellables banks
the loan within market. The thenthe poolssecondary buyerbuyer
that have alsothousands of other similar loanshundreds or even
offrom banks or lenders. Thisbeen single poolpurchased
and Ex-is then with the Securitiesnear-identical loans registered
means of a and lessoften expen-Commission, by simplifiedchange
in aand interests or sharessive shelf process,registration
investors. The cash flowsecuritized are sold to bygeneratedpool
investors. And what was oncethe loans finances the topayments
becomes adebt instrument with fixed and termsa securityparties
on antraded daily by strangers exchange.
all bethis arcanediscuss now, may askingprocess youWhy
can intell us that securitizationbecauseWell, expertsyourself.
investors.to borrowers orofier crucial benefits lenders,theory
ac-borrowers can more reliableLenders can make more loans, get
offered new of invest-cess to needed credit and investors are types
ments to consider for their portfolios.
can be achieved.We have evidence that these benefits actually
Market En-This committee draft the Secondary Mortgagehelped
and facilitatehancement which was enacted in 1984 helpedAct,
market for residentialthe of a secondarydevelopment private
Lewis Raniere onand us the to meetgave opportunitymortgages
Andbasis for one entire before this subcommittee.an yearongoing
(1)us that it was a we to thatconvincing good idea, passed legislation
effect.
In its here this the re-testimony morning, Treasury Department
that this bill unlocked a of demand forports large pool potential
residential securities and that this demand hasmortgage-related
since 1984.grown rapidly
we consider whether the benefits of as evi-Today, securitization,
denced its success when to residential canby applied mortgages,
to business and commercial real estate loans as well.extend small
the two before the HouseThese are Senate Con-proposals formally
which the and Commerce Committee 24ference for hasEnergy
conferees. Both were added the Senate to H.R.proposals by 3474,
the version of the President's communityHouse-passed develop-
ment and the subcommittee has also been asked to re-bill,banking
view H.R. a bill that has not been the House2600, yet reported by
which to securitize all commercialBanking Committee, proposes
loans. This bill would also establish new methods for ac-entirely
securitization.complishing
It is to think about the benefits that ac-certainly exciting might
if becrue to small businesses their couldborrowings successfully
securitized. It for small businessesmight, example, help protect
from the effects of restrictions on credits such as those thatcyclical
around the in the late 1980's and 1990's.prevailed country early
This credit crunch took a harsh toll ondevastating particularly
and small businesses from home State of Massa-entrepreneurs my
that almost on access to bank inchusetts, depend entirely capital
order to and there are thousands of such 98.2survive, businesses;
of the in Massachusetts are consideredpercent 136,000 companies
small businesses the Smsdl Business andby Administration, they
52 of the State's workers.employ percent
thes