Fitzpatrick Jobs Bill Passes House
WASHINGTON, D.C. – Bipartisan legislation introduced by Congressman Mike Fitzpatrick (PA-8) to encourage economic growth for small businesses passed the House Wednesday. One of the first bills taken up by the 114th Congress, the Promoting Job Creation and Reducing Small Business Burdens Act [H.R. 37] includes several bipartisan measures which make it easier for small and emerging businesses to access capital, reduce regulatory burdens and create new jobs.
“It is clear that smart regulations allow the private sector to innovate and create more jobs while protecting taxpayers and consumers. However, it is equally clear that one-size-fits-all regulations hurt the economy by treating small and medium sized companies as if they are large, multinational corporations,” said Fitzpatrick. “No Main Street small business, manufacturer, farmer or rancher caused the financial crisis. Yet they are subject to thousands of new pages of regulations that were supposedly designed for big Wall Street firms. That’s not fair.”
Featured in Fitzpatrick’s bill are 11 bills which were introduced and passed through either committee or the House in the previous Congress – most with bipartisan co-sponsorship and support.
“Dodd-Frank’s target may have been Wall Street, but its regulatory burden falls most heavily on Main Street. That’s what this bill seeks to fix,” added Fitzpatrick. “These legislative prescriptions represent serious, bipartisan commitments to make our regulatory system more responsive to the needs of the workers and local businesses we represent.
“The American people want Republicans and Democrats to work together to strengthen our economy and help the private sector create jobs like only it can.”
Speaking prior to the vote, Fitzpatrick said it was critical for members of both parties to enter this new Congress focused on cooperation and areas of agreement and reject partisan demagoguery.
“There is a lot of talk about bipartisanship and finding ‘middle ground’ here in our nation’s capital, yet at this very moment groups on both the far left and the far right stand in the way of even incremental progress by pulling members of both parties to the extremes,” said Fitzpatrick. “I know that if things are going to get done in this body, it will be with strong bipartisan support from principled – yet pragmatic – lawmakers willing to put politics to the side and work together for the common good. As someone who seeks out that course, I’d like to recognize those members of both parties willing to stand up and support this bill.”
In the 113th Congress, the passage of the bipartisan Promoting Job Creation and Reducing Small Business Burdens Act was praised by a number of groups, including the Small Business & Entrepreneurial Council and the Small Business Investor Alliance.
"The Fitzpatrick jobs legislation reduces duplicative red tape for investors in domestic small businesses," said Steven Hobman of NewSpring Mezzanine Capital at the time of its original passage. "Fitzpatrick's bill really targets areas in the law that are filled with unnecessary red tape, and Congress needs to pass these provisions to move capital more freely in our financial system."
Fitzpatrick has been a tireless advocate for efforts to responsibly reduce burdensome regulation on businesses and create an environment that fosters innovation. Last year, he outlined his Better Jobs, More Opportunity plan - a collection of bipartisan legislation aimed at supporting a healthy economy through common sense regulatory relief, workforce investment and fairer tax structure.
Measures included in Fitzpatrick’s Promoting Job Creation and Reducing Small Business Burdens Act are:
- The Business Risk Mitigation and Price Stabilization Act (formerly H.R. 634) clarifies that Congress did not intend for manufacturers, ranchers and small companies that buy and sell derivatives to hedge against business risk to be impacted by Dodd-Frank’s burdensome margin and capital requirements. The bill passed the House by a vote of 411-12, with 181 House Democrats, including Ranking Member Maxine Waters, voting in favor.
- Legislation sponsored by Rep. Gwen Moore (D-WI) (formerly H.R. 5471) clarifies Dodd-Frank’s treatment of affiliates of non-financial firms that use a central treasury unit (CTU) as a risk-reducing, best practice to centralize and net the hedging needs of affiliates. Without a clear legislative exemption, non-financial companies may either have to eliminate the CTU function, be subjected to increased regulatory costs, or retain more risk on their balance sheets and pass along that risk to customers in the form of higher prices. This bipartisan bill would enable non-financial companies with affiliates to continue employing best practices to manage internal and external trading in order to mitigate risk within a commercial entity. The bill passed the House by voice vote.
- The Holding Company Registration Threshold Equalization Act (formerly H.R. 801), introduced by Reps. Steve Womack (R-AR), James Himes (D-CT), and Ann Wagner (R-MO)amends Title VI of the Jumpstart Our Business Startups Act (“JOBS Act”). Title VI raised the shareholder registration threshold with the SEC from 500 to 2,000 and increased the deregistration threshold from 300 to 1,200 for banks and bank holding companies. This legislation extends the same flexibility to savings and loan holding companies, ensuring that they can deploy capital throughout the communities they serve. The bill passed the House 417-4.
- Legislation sponsored by Rep. Bill Huizenga (R-MI) and Rep. Brian Higgins (D-NY) (formerly H.R. 2274) will streamline and simplify regulations so that small business owners can more easily sell their businesses when they retire and, in turn, create opportunities for new entrepreneurs to take over small and emerging companies that might otherwise have been shut down. The bill passed the House 422-0.
- The Swap Data Repository and Clearinghouse Indemnification Act of 2013 (formerly H.R. 742), introduced by Reps. Rick Crawford (R-AR), Sean Patrick Maloney (D-NY), Bill Huizenga (R-MI) and Gwen Moore (D-WI), removes an indemnification requirement imposed on foreign regulators by the Dodd-Frank Act as a condition of obtaining access to data repositories. Sections 728 and 763 of the Dodd-Frank Act require swap data repositories and security-based swap data repositories to make data available to non-U.S. financial regulators, including foreign financial supervisors, foreign central banks, and foreign ministries. Before a U.S. data repository can share data with a foreign regulator, however, the foreign regulator must agree that it will abide by applicable confidentiality requirements and that it will indemnify the data repository and the SEC or the Commodity Futures Trading Commission (CFTC) for litigation expenses that may result from the sharing of data with the foreign regulator. Section 725 imposes similar requirements for data sharing between derivatives clearing organizations and foreign regulators, including the requirement that foreign regulators indemnify derivatives clearing organizations and U.S. regulators for litigation expenses that may result from the sharing of data with foreign regulators. The bill passed the House 420-2.
- The Improving Access to Capital for Emerging Growth Companies Act (formerly H.R. 3623), introduced by Rep. Stephen Fincher (R-TN) and Rep. John Delaney (D-MD), builds on the successes of Title I of the JOBS Act, which created a new class of publicly traded companies known as Emerging Growth Companies (EGCs). The bill reduces burdensome SEC registration and disclosure requirements to help EGCs access the capital markets more efficiently, streamline the Initial Public Offering process and allow EGCs to deploy their assets to grow and create jobs. The committee approved the bill by a vote of 56-0.
- The Small Company Disclosure Simplification Act (formerly H.R. 4164), introduced by Rep. Robert Hurt (R-VA) and Rep. Terri Sewell (D-AL), provides a voluntary exemption for all EGCs and other issuers with annual gross revenues under $250 million from the SEC’s onerous requirements to file their financial statements in an interactive data format knows as eXtensible Business Reporting Language (XBRL). The bill also requires the SEC to conduct a cost-benefit analysis on the XBRL requirement and report to Congress within one year after enactment. The legislation allows small businesses to spend more time focusing on expanding and creating jobs rather than on redundant SEC compliance requirements. The bill was approved by the committee 51-5.
- The Restoring Proven Financing for American Employers Act (formerly H.R. 4167), introduced by Rep. Andy Barr, amends the Bank Holding Company Act to provide banks with investments in Collateralized Loan Obligations (CLOs) issued before January 31, 2014, until July 21, 2019 to be in compliance with the Volcker Rule. CLOs provide nearly $300 billion in financing to U.S. companies and the legislation will prevent a “fire-sale” of CLOs that were unexpectedly captured by the final rule to implement the Volcker Rule. The bill passed the House by voice vote.
- The Small Business Investment Companies (SBICs) Advisers Relief Act (formerly H.R. 4200), introduced by Rep. Blaine Luetkemeyer (R-MO), amends the Investment Advisers Act of 1940 to reduce unnecessary regulatory costs and eliminate duplicative regulation of advisers to SBICs. Eliminating duplicative regulation will allow the private equity fund money that currently goes to pay for regulatory compliance and fees to flow directly to job-creating small businesses. The bill passed the House by voice vote.
- The Disclosure Modernization and Simplification Act (formerly H.R. 4569), introduced by Rep. Scott Garrett (R-NJ), directs the SEC to simplify its disclosure regime for issuers and help investors more easily navigate very lengthy and cumbersome public company disclosures. Permitting issuers to submit a summary page would enable companies to concisely disclose pertinent information to investors without exposing them to liability. This summary page would also enable investors to more easily access the most relevant information about a company. The bill passed the House by voice vote.
- The Encouraging Employee Ownership Act of 2014 (formerly H.R. 4571), introduced by Rep. Randy Hultgren (R-IL), modernizes SEC Rule 701, which was last updated in 1996. Updating this rule gives private companies more flexibility to reward employees with a company’s securities and thereby retain valuable employees without having to use other methods to compensate them, such as borrowing money or selling securities. The bill was approved 36-23 by the Committee.
Congressman Mike Fitzpatrick is serving his fourth term in the U.S. House of Representatives. He represents Pennsylvania’s 8th district which includes all of Bucks County as well as a portion of Montgomery County. He serves as the Vice Chairman of the House Financial Services Subcommittee on Oversight and Investigations.