The U.S. House of Representatives passed bipartisan legislation on September 19 that allows small businesses to spend capital toward creating jobs instead of compliance.
H.R. 4, known as the Jobs for America Act, contains two Financial Services Committee bills designed to provide regulatory relief: H.R. 1105, known as the Small Business Capital Access and Jobs Preservation Act, and H.R. 2274, the Small Business Mergers, Acquisitions, Sales, and Brokerage Simplification Act.
“With millions of our fellow Americans unemployed and underemployed in this struggling economy, job number one for the Financial Services Committee is job creation and economic growth," Financial Services Committee Chairman Jeb Hensarling (R-Texas) said.
The Small Business Capital Access and Jobs Preservation Act (H.R. 1105) was introduced by Representative Robert Hurt (R-Virginia) and makes a correction to the Dodd-Frank Act; the revised statue allows small and medium-sized businesses to use capital toward creating jobs instead of unnecessary compliance costs. Also under the new law, private equity fund advisers are exempt from Securities and Exchange Commission (SEC) registration if the outstanding principal amount of the funds under management does noes not exceed twice their funded capital commitments.
"At a time when Virginia’s Fifth District and many communities across the country continue to face an unacceptably high unemployment rate, the House of Representatives remains committed to increasing access to capital for small businesses and removing the government as a barrier to job creation," Hurt said. "The Small Business Capital Access and Job Preservation Act would reduce unnecessary federal regulations and restore certainty to the marketplace – allowing our Main Street businesses to access the capital necessary to hire and expand."
The Small Business Mergers, Acquisitions, Sales, and Brokerage Simplification Act (H.R. 2274) was introduced by Representative Bill Huizenga (R-Michigan). It is similar to H.R. 1105 in that it eliminates expensive compliance costs and SEC registration requirements for certain specialized brokers and allows the capital saved to go toward the creation of jobs. The specialized brokers do not sell securities to the public, so they pose no threat to investors. This bill passed by a unanimous vote in both the Financial Services Committee (57-0 in November 2013) and the House (422-0 in January 2014).
"It has been estimated that approximately $10 trillion of privately owned, small, and family-run businesses will be sold or closed in the coming years as baby boomers retire," Huizenga said. "Closure of these small businesses will cost countless jobs across the nation. By reducing overly burdensome regulations on business brokerage services, we can create an environment where these small businesses are smoothly transferred to the next generation of entrepreneurs. H.R. 2274 preserves jobs currently in existence while helping create the opportunity for future economic expansion and job creation."
The two bipartisan pro-jobs Financial Services Committee bills approved were the 22nd and 23rd passed by the House during the 113th Congress.