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A recent running joke has been that the “Bill” from Schoolhouse Rock would have gotten awfully bored in Washington over the last several years as much of the legislative process ground to a halt. After all, what can you teach the young people about our Constitutional system of government when you’re just hanging out in a House or Senate cloak room, or get stuck in committee for months on end?
But if 2016 was the year of surprises, 2017 is shaping up to be the year that the legislative gears once again begin to grind on Capitol Hill.
This week, the Senate Banking Committee and the House Financial Services Committee simultaneously marked up a number of pro-growth bills that the Chamber has long supported and worked with policymakers to advance. Many of these bills build off of the success of the 2012 Jumpstart our Business Startups (“JOBS”) Act, which created unprecedented opportunities for businesses to raise capital through both public and private channels.
But it’s not just about businesses being able to raise funds. Middle-class wages have stagnated while costs for health care and college have skyrocketed, Washington needs to find more ways to help working Americans create wealth for themselves and their families. That’s exactly what one of the bills both committees advanced – the “Encouraging Employee Ownership Act of 2017” – would do. The bill would raise an outdated threshold under what’s called SEC Rule 701 and allow more private businesses to offer stock in the company as part of employee compensation packages. There are few things more rewarding for hard-working employees than to participate financially in the success of their company, and this bill help create wealth and financial security for thousands of Americans.
The two committees also advanced the “Supporting America’s Innovators Act,” which would modernize a nearly eight-decade old registration requirement for venture capital funds. While the JOBS Act has been successful in increasing the amount of capital raised through private channels, it has also caused more venture funds to come closer to an SEC registration tripwire. Layering a costly regulatory regime on venture funds – which play a critical role in helping startup businesses get off the ground – will have long term detrimental effects on our economy.
There’s also a bill to allow for greater research of exchange traded funds (ETFs), an increasingly popular product with retail investors. And on the House side, the Financial Services Committee approved up the “Small Business Capital Formation Enhancement Act,” which would simply require that the Securities and Exchange Commission (SEC) actual respond to recommendations made at its annual small business capital formation forum.
As big supporters of the JOBS Act, the Chamber has continued to work closely with Congress and the SEC to find additional ways to help innovative companies get off the ground before they die on the vine due to lack of capital. This has led to dozens of “JOBS Act 2.0” bills that have been introduced in Congress, but it’s been very difficult to get many of them over the goal line.
But if this week’s coordinated action by the Senate Banking Committee and House Financial Services Committee is a sign of things to come, small business capital formation has a bright future in the 115th Congress. The Chamber urges the full House and Senate to take up these measures as swiftly as possible so the President can sign them into law.