By MJ Lee
The implementation of the JOBS Act that President Barack Obama signed into law more than a year ago is far from finished, but House Republicans already have their sights set on JOBS Act 2.0.
The House Financial Services Committee on Wednesday will begin setting the stage for the introduction of legislation this fall that would build on last year's effort to make it easier for small companies and entrepreneurs to raise capital.
Capital Markets Subcommittee Chairman Scott Garrett (R-N.J.) is spearheading the effort and lawmakers will start soliciting ideas from witnesses at a Wednesday afternoon hearing on ways to build on the bipartisan bill that landed on Obama's desk in April 2012.
"First you have the ability of raising capital for your business, and that's what we helped facilitate with 1.0," Garrett said in an interview with POLITICO on Tuesday. "Now, the next development for any business from there is actually having the ability to trade your stocks."
The New Jersey Republican said one focus will be to make it easier for small businesses to trade their stocks but declined to say what else may be included in JOBS Act 2.0, saying the discussions among members are only in the early stages. House leadership is "certainly on board" with the idea, Garrett said, noting that he's also open to working with his colleagues in the Senate.
The Financial Services Committee plans to hold a second hearing in July, according to a Hill aide.
Rep. David Schweikert (R-Ariz.), who authored some provisions included in the JOBS Act package, also plans to be involved in the discussions, his spokeswoman Rachel Semmel said. Schweikert will ask the committee to include in the JOBS Act 2.0 package a "tick size" bill he introduced last month -- which would allow shares in small companies to be traded in wider increments than the current system that prices shares in one cent increments. Schweikert and other supporters of the idea say it would increase investor interest in small companies.
The Jumpstart Our Business Startups Act was a rare bipartisan accomplishment to come out of Capitol Hill last year, but its implementation by the SEC has been a far rockier process.
Investor advocates and some members of Congress have warned that the law will leave small investors vulnerable to fraud and the agency has struggled to finish rules required by the law, much to the consternation of Garrett and other House Republicans.
SEC Chairwoman Mary Jo White, who was sworn in earlier this year, has said finishing JOBS Act rulemakings will be one of her top priorities.
Rhett Buttle, vice president of external affairs at the advocacy group Small Business Majority, said while the group has received plenty of positive feedback from the industry about the JOBS Act, small businesses still need more help.
"Anything that's going to get access to capital flowing to small businesses in a responsible way is a good thing," he said.
Garrett said he sees no downside to getting the process started on a JOBS Act 2.0 before the SEC has finished implementing last year's law.
"In a perfect world, Jobs Act 1.0 would have been done and we would be seeing the fruits of it, the benefits, today," Garrett said. "But that's no reason why we should go slow. Now we're moving on to the next one. We're waiting on the SEC to do their job there and I hope that's sooner rather than later."