One of the most significant accomplishments of the Financial Services Committee during the 112th Congress is passage of the JOBS Act. The Jumpstart Our Business Startups Act (JOBS Act) removes government barriers to job creation and economic activity. The JOBS Act, comprised of six bills that originated in and were originally approved by the Committee, is designed to help startups and entrepreneurs get off the ground, access capital and create jobs. These initiatives all received strong bipartisan support in Congress and from the President’s Jobs Council and the business community.
The JOBS Act was signed into law on April 5, 2012.
Information about the six bills that comprise the JOBS Act:
- H.R. 3606, the Reopening American Capital Markets to Emerging Growth Companies Act, introduced by Reps. Stephen Fincher and John Carney, makes it easier for more companies to access the capital markets by reducing the cost of going public for small and medium size companies.
- H.R. 2940, introduced by Rep. Kevin McCarthy, removes the regulatory ban that prevents small, privately held companies from using advertisements to solicit investors.
- H.R. 2930, introduced by Rep. Patrick McHenry, removes SEC restrictions that prevent “crowdfunding” so entrepreneurs can raise equity capital from a large pool of small investors who may or may not be considered “accredited” by the SEC.
- H.R. 1070, the Small Company Capital Formation Act, which was introduced by Representative Schweikert, makes it easier for small businesses to go public by increasing the offering threshold for companies exempted from SEC registration from $5 million to $50 million.
- H.R. 2167, the Private Company Flexibility and Growth Act, which was also introduced by Representative Schweikert, removes an impediment to capital formation for small companies by raising the shareholder threshold for mandatory registration with the SEC from 500 to 1,000 shareholders.
- H.R. 4088, the Capital Expansion Act, which was introduced by Representative Ben Quayle, is a modified version of legislation previously approved by the Committee. It 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.
The JOBS Act Will Help Get Americans Back To Work. House Republicans have consistently offered solutions to create an environment that promotes job creation and allows our small businesses to grow. Republicans are focused on eliminating government barriers to an economic recovery. The JOBS Act will jumpstart our economy and restore opportunities for America’s primary job creators: our small businesses, startups and entrepreneurs.
Small Businesses Are The Engine Of Our Economy Yet Government Regulations Stand In Their Way. Small businesses are the driving force for innovation and job growth in our economy. According to the Kauffman Foundation, startups have created nearly 40 million jobs since 1980 and the Small Business Administration reports that small businesses generate over 60% of new jobs . Unfortunately, government policies make it harder for small businesses to start up and grow. The World Bank’s annual “Doing Business” report found that the U.S. fell to number 13 in rankings for “ease of starting a business.” Government policies should encourage the entrepreneurial spirit that has defined our economic competitiveness. We must remember that one of the greatest assets of our economy is innovation; it continues to set the U.S. apart. Innovation goes hand in hand with individual freedom. Innovation must be allowed to thrive in order for an economic recovery to be achieved.
Promoting Jobs By Facilitating Small Business Capital Formation. Capital formation is essential for any lasting economic recovery. Without access to capital, businesses cannot expand. Without regulatory certainty, capital disappears. We need to do everything we can to ensure that America remains a country of opportunity, where jobs are created, risks are taken, and startups and small businesses flourish without being stifled by costly regulations. The JOBS Act improves access to the capital markets for small companies. Revitalizing the IPO market is important to maintaining our economic competitiveness, promoting American innovation and ensuring workers are hired and businesses can grow.