[Congressional Record Volume 171, Number 107 (Monday, June 23, 2025)]
[House]
[Pages H2871-H2872]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ENCOURAGING LOCAL EMERGING VENTURES AND ECONOMIC GROWTH ACT OF 2025
Mrs. WAGNER. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 3301) to amend the Securities Exchange Act of 1934 to
specify certain registration statement contents for emerging growth
companies, to permit issuers to file draft registration statements with
the Securities and Exchange Commission for confidential review, and for
other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 3301
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Encouraging Local Emerging
Ventures and Economic Growth Act of 2025'' or the ``ELEVATE
Act of 2025''.
SEC. 2. REGISTRATION STATEMENTS.
Section 12(b) of the Securities Exchange Act of 1934 (15
U.S.C. 78l(b)) is amended--
(1) in paragraph (1)(K), by striking ``years,'' and
inserting ``years (or, in the case of an emerging growth
company, not more than the two preceding years),''; and
(2) by adding at the end the following:
``Any issuer may confidentially submit to the Commission a
draft registration statement for confidential nonpublic
review by the staff of the Commission prior to public filing,
provided that the initial confidential submission and all
amendments thereto shall be publicly filed with the
Commission not later than 10 days before listing on a
national securities exchange. Notwithstanding any other
provision of this title, the Commission shall not be
compelled to disclose any information provided to or obtained
by the Commission pursuant to this subsection. For purposes
of section 552 of title 5, this subsection shall be
considered a statute described in subsection (b)(3)(B) of
such section 552. Information described in or obtained
pursuant to this subsection shall be deemed to constitute
confidential information for purposes of section 24.''.
The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from
Missouri (Mrs. Wagner) and the gentleman from California (Mr. Sherman)
each will control 20 minutes.
The Chair recognizes the gentlewoman from Missouri.
General Leave
Mrs. WAGNER. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days to revise and extend their remarks and
include extraneous material on this bill.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from Missouri?
There was no objection.
Mrs. WAGNER. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise today in strong support of H.R. 3301, the ELEVATE
Act, and thank Congressman Nunn for his leadership on this forward-
looking and bipartisan bill.
One of the key successes of the JOBS Act of 2012 was the creation of
emerging growth companies, or EGCs, small and midsized firms given
tailored disclosure requirements to encourage them to go public. These
companies are a major source of innovation, job creation, and economic
growth.
Today, over 90 percent of initial public offerings are filed by EGCs,
but when an EGC spins off part of its business to create a new public
company, that spinoff does not currently get the same treatment,
despite originating
[[Page H2872]]
from a company already recognized as an emerging growth company.
H.R. 3301 fixes this inconsistency. It ensures that spinoffs from
EGCs are allowed to provide 2 years of audited financials, just like
when a standard EGC goes public. This helps reduce redundant compliance
costs while maintaining full investor protections.
This is a smart and targeted update to our securities laws. It honors
the original intent of the JOBS Act: to make it easier, not harder, for
innovative companies to enter the public markets.
Mr. Speaker, I urge my colleagues to support Mr. Nunn's ELEVATE Act,
and I reserve the balance of my time.
Mr. SHERMAN. Mr. Speaker, I yield myself such time as I may consume.
This bill illustrates what I said earlier today, that the most
fascinating issues are those that involve accounting and auditing.
Mr. Speaker, I rise in support of H.R. 3301, the ELEVATE Act of 2025,
sponsored by the gentlewoman from Iowa (Mr. Nunn).
Emerging growth companies, also known as EGCs, are a special type of
public company that we created during the bipartisan JOBS Act of 2012.
Unlike full-fledged public companies, EGCs only need to provide 2 years
of audited financials when they conduct their initial public offering,
also known as an IPO.
Despite this special 2-year accommodation, there are some instances
where an EGC, emerging growth company, is still required to provide 3
years of financials, still required under present law. One such
instance is when the EGC conducts a spinoff, which is a transaction in
which one company creates a new, independent company by selling new
shares of its existing business. So the one company becomes two
separate companies through a spinoff transaction.
Mr. Nunn's bill reduces this obligation for EGC spinoffs to 2 years.
That is only 2 years of audited financials, keeping in line with what
is required when the EGC itself goes public.
In doing so, this bill streamlines the financial disclosure
obligations for emerging growth companies across the board making it
easier for them to raise capital from the public.
Mr. Speaker, I urge my colleagues to vote ``yes'' on this important
bill, and I reserve the balance of my time.
{time} 1700
Mrs. WAGNER. Mr. Speaker, I yield such time as he may consume to the
gentleman from Iowa (Mr. Nunn), my friend.
Mr. NUNN of Iowa. Mr. Speaker, I thank Chairwoman Wagner for leading
this charge on a bipartisan effort.
I rise today to support our bipartisan ELEVATE Act. I helped lead
this Small Business effort to help not only the heartland but also our
entrepreneurs and innovators across the country.
Let me start by saying we all know this to be true: The American
capital markets are the envy of the world. Part of that strength comes
from the bipartisan work of this very Chamber, particularly with the
passage of the JOBS Act 13 years ago.
One of the biggest successes of that law was the creation of the
emerging growth companies, or EGCs, to encourage smaller companies to
go public here right in the United States.
The JOBS Act didn't expand just that opportunity, it created new
jobs. In the 4 years after that change, EGCs made up 90 percent of our
initial public offerings. Moreover, it created 82,000 new jobs, new
careers, right here in the U.S.
I believe we can't stop there. Across Iowa's Third District, my home
district, I hear from small business owners who want to reinvest in new
equipment, help expand their workforce, and give back to their
communities through new innovation.
The question remains: What is holding them back? Well, Mr. Speaker,
it is quite simply a deck that has been stacked against them by SEC
rules that make accessing investment capital complex, more expensive,
and harder for those who don't live on the East or West Coast who snap
up the lion's share of investment dollars before it can even get to the
heart of the heartland.
Iowa's businesses, America's businesses, deserve an equal opportunity
to access the capital they need to grow right on Main Street. These
businesses are not backed by billion-dollar valuations or teams of
high-powered lawyers. What they do have is grit, innovation, and the
drive to succeed. They are not asking for special treatment, Mr.
Speaker, just a fair chance to compete.
Imagine the economic momentum we could unleash right here if we made
it easier for those businesses to connect with investors and bring them
to the rest of America.
That is why I introduced the ELEVATE Act. This bill makes a simple,
commonsense fix to help level the playing field for growing businesses.
In Iowa, you know baseball is big business. When you have the
opportunity to build it, Mr. Speaker, they will come, just like ``Field
of Dreams.''
It allows EGC spinoffs to file confidentially with the SEC, requiring
24 months of audited financials rather than the historic 36 months that
had red tape and additional costs. This ensures quality while
minimizing the impact.
These changes align to the rules so that all EGCs, whether standalone
or part of a larger spinoff, can compete.
Mr. Speaker, quite simply, this is about fairness. It allows small
businesses in rural America to play by the same rules as companies on
Wall Street. It is about giving a startup in Pella the same shot as a
company in Palo Alto.
It is about jobs, real jobs right here at home.
We know the JOBS Act worked. Now, we have a chance to build on that
success. By passing the ELEVATE Act, we make it easier for Main Street
businesses to get access to the capital they need.
I thank my colleagues on the other side of the aisle, particularly
Representative Bynum, for working with me to ensure that we give every
American business a fair chance at success. I thank Chairman Hill for
his leadership on the Financial Services Committee, and I thank
subcommittee chairwoman Ann Wagner who knows capital markets probably
better than anyone on this House floor.
Mr. Speaker, I urge my colleagues to support the bipartisan ELEVATE
Act.
Mr. SHERMAN. Mr. Speaker, I yield myself the balance of my time.
I commend the gentleman from Iowa (Mr. Nunn) on this bill. I urge my
colleagues to support the ELEVATE Act of 2025, which would streamline
accounting disclosure requirements and auditing requirements for
emerging growth companies, also known as EGCs, so those EGCs only need
to provide 2 years of audited financial statements across the board.
Like other bills that Democrats and Republicans have come to
bipartisan agreement on, this bill balances the concern of those trying
to raise capital while also maintaining disclosures and financial
transparency that benefit and protect investors and thereby protect our
capital markets, which so many speakers have pointed out are the envy
of the world.
Mr. Speaker, I ask my colleagues to vote ``yes'' on this bill, and I
yield back the balance of my time.
Mrs. WAGNER. Mr. Speaker, Mr. Nunn's ELEVATE Act is a smart, targeted
update to our securities law.
I urge all my colleagues to support H.R. 3301, and I yield back the
balance of my time.
The SPEAKER pro tempore (Mr. Williams of Texas). The question is on
the motion offered by the gentlewoman from Missouri (Mrs. Wagner) that
the House suspend the rules and pass the bill, H.R. 3301, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
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