House to Consider Bills to Expand Access to Capital for Small Businesses

Press Release

The House next week is scheduled to debate two bills approved by the Financial Services Committee that will reduce regulatory burdens so small businesses can better access capital and create jobs.

"It's unacceptable that our economy is barely growing. If we want to ignite strong and lasting growth, help create more jobs and build a healthy economy for all Americans, the answer is not more debt, more spending and more regulations from Washington. Instead, we need more entrepreneurs and more small businesses on Main Street," said Financial Services Committee Chairman Jeb Hensarling (R-TX). "These bills are solutions that will more appropriately balance rules with the urgent need to provide small businesses with greater access to capital so they can start up, hire workers and grow."

The two bills that the House is scheduled to consider next week are:

H.R. 5424, the Investment Advisers Modernization Act

Sponsors: Reps. Robert Hurt (R-VA), Juan Vargas (D-CA), Steve Stivers (R-OH) and Bill Foster (D-IL)

The bill updates portions of a 76-year-old law, the Investment Advisers Act of 1940, by removing duplicative regulations affecting federally registered investment advisers that impose an unnecessary burden on small business' access to capital. The bill preserves the registration regime for private fund advisers while modernizing the more burdensome requirements that serve only to drive up the costs for funds and investors and hinder the efficient allocation of capital.

The bill passed the Financial Services Committee by a vote of 47-12 on June 16.

H.R. 2357, the Accelerating Access to Capital Act

As scheduled for House consideration, H.R. 2357 will also consist of two other bills approved by the Financial Services Committee -- H.R. 4850, the Micro Offering Safe Harbor Act, and H.R. 4852, the Private Placement Improvement Act.

H.R. 2357 sponsor: Rep. Ann Wagner (R-MO)

The bill simplifies the Securities and Exchange Commission's (SEC) registration regime for smaller companies, lowering compliance costs associated with redundant paperwork so companies can direct more resources to growing their businesses.

The bill passed the Financial Services Committee by a vote of 33-24 on May 20, 2015.

H.R. 4850 sponsor: Rep. Tom Emmer (R-MN)

The bill amends the Securities Act of 1933 to allow for small businesses to utilize "micro offerings" to raise capital without overly burdensome registration requirements. This change will allow small business to operate with confidence that they are not in violation of the law when doing a micro offering if the following requirements are met:

Each investor has a substantive pre-existing relationship with an owner,
There are 35 or fewer purchasers, and
The amount does not exceed $500,000
The bill passed the Financial Services Committee by a vote of 34-25 on June 16.

H.R. 4852 sponsor: Rep. Scott Garrett (R-NJ)

The bill will increase the use of private placement offerings for companies to raise capital that will spur economic growth. Title II of the JOBS Act removed the ban on general solicitation or advertising for SEC Regulation D offerings. Unfortunately, the SEC proposed rules that will have a chilling effect on the positive changes made by the JOBS Act. H.R. 4852 directs the SEC to revise Regulation D to ensure that small businesses do not face complicated and unnecessary regulatory burdens when attempting to raise capital through Regulation D offerings.

The bill passed the Financial Services Committee by a vote of 33-26 on June 16.

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