Owens Votes for Bipartisan Jobs Package

WASHINGTON – Congressman Bill Owens voted in favor of legislation today that would build on six consecutive months of private sector job creation. The Jumpstart Our Business Startups (JOBS) Act is supported by the White House and includes six pieces of legislation designed to help small businesses raise capital, hire and expand.  The bills package passed the U.S. House of Representatives today by a vote of 390-23.

“Right now, there are small businesses in our region poised to take advantage of new opportunities to raise capital,” Owens said. “Since September, the private sector has steadily expanded and this legislation will help us to continue that momentum in New York and across the country. I look forward to seeing swift passage of this legislative package through the Senate and it is my hope that Democrats and Republicans can continue to work together like this for the good of the nation.”

The JOBS Act includes the following legislation:

H.R. 3606: The Reopening American Capital Markets to Emerging Growth Companies Act of 2012 establishes a new category of issuers, identified as “Emerging Growth Companies” (EGCs), which will be exempt from certain regulatory requirements until the earliest of three conditions: (1) five years from the date of the initial public offering; (2) the date an EGC has $1 billion in annual gross revenue; or (3) the date an EGC becomes what is defined by the Securities and Exchange Commission (SEC) as a “large accelerated filer,” which is a company with a  worldwide market value of outstanding voting and non-voting common equity held by non-affiliates (also known as “public float”) of $700 million or more).  The regulatory relief provided by H.R. 3606 is designed to be temporary and transitional, encouraging small companies to go public but ensuring they transition to full conformity with regulations over time or as they grow large enough to have the resources to sustain the type of compliance infrastructure associated with more mature enterprises.

H.R. 2940: The Access to Capital for Job Creators Act would enable businesses to make greater use of the internet to advertise securities to accredited investors. Under current law, securities may be sold through private offerings without being registered with the SEC.  Issuers of securities through such offerings are prohibited from using general solicitation or advertising to market the securities. By eliminating the ban on solicitations and advertisements by issuers and broker-dealers, H.R. 2940 would also enable offline and online forums that bring together investors with companies that need funding to play an increasingly important role in facilitating capital investment in small companies.

H.R. 2930: The Entrepreneur Access to Capital Act eases restrictions on the use of “crowdfunding,” an increasingly popular method of capital formation where entrepreneurs are able to raise equity capital from a large pool of small investors who may or may not be considered accredited by the SEC.  Specifically, the bill would exempt securities from registration requirements if the aggregate amount raised through the issuance is $1 million or less each year and the individual who invests in the securities does not invest, in any year, more than the lesser of $10,000 or 10 percent of the investor’s annual income.

H.R. 1070: The Small Company Capital Formation Act is intended to increase the use of Regulation A offerings and help make capital available to small companies.  The bill would raise the offering threshold for companies exempted from registration with the SEC from $5 million to $50 million.  The bill also provides the SEC with the authority to increase the threshold in the future.

H.R. 2167: The Private Company Flexibility and Growth Act raises the threshold for mandatory registration under the Securities Exchange Act of 1934 from 500 shareholders to 1,000 shareholders for all companies and excludes securities held by shareholders who received such securities under employee compensation plans from the calculation.  Raising the shareholder threshold would eliminate one impediment to capital formation for small companies.

H.R. 4088: The Capital Expansion Act raises the threshold for mandatory registration under the Securities Exchange Act of 1934 from 500 shareholders to 2,000 shareholders for all banks and bank holding companies and raises the shareholder deregistration threshold from 300 shareholders to 1,200 shareholders.  Raising the shareholder threshold for these small financial institutions will reduce their regulatory burdens and eliminate an impediment of raising equity capital from new shareholders without triggering SEC oversight in addition to prudential regulation.