Congressman Edolphus "Ed" Towns today praised the near unanimous passage of H. R. 3606--the Reopening American Capital Markets to Emerging Growth Companies Act of 2011--in the House of Representatives. The bill passed by a vote of 309-23. "This is banner day in the House of Representatives," stated Rep. Towns, "and an even better day for the American people. Finally, we were able to put aside our differences and get some important work done for the American people."
The legislation will provide small companies a temporary reprieve from Security and Exchange Commission (SEC) regulations which will facilitate these companies' ability to go public. The bill will also remove SEC restrictions preventing small businesses from using advertising to solicit investors and remove restrictions on "crowdfunding" which will allow entrepreneurs to raise equity capital from a large pool of small investors.
The bill also raises the ceiling for shares a private company can sell as part of a public offering without having to register with the SEC from $5 million to $50 million and raises the SEC registration threshold from 500 to 1,000 shareholders. President Barack Obama has voiced his support for the bill.
The bill should have an impact on Brooklyn's small business community. According the Brooklyn Chamber of Commerce, there are approximately 30,000 small businesses in the borough and 83,000 self-employed people and, according to Business Insider magazine, Brooklyn is listed among the top 10 global startup hubs.
"We need to get capital in the hands of entrepreneurs with ideas about creating businesses and providing jobs," Rep. Towns stated. "I continue to hold out hope that we can bridge the divide between our parties and generate legislation to solve our lingering economic problems."