[Congressional Record (Bound Edition), Volume 157 (2011), Part 14]
[Extensions of Remarks]
[Page 19294]
[From the U.S. Government Publishing Office, www.gpo.gov]




THE REOPENING AMERICAN CAPITAL MARKETS TO EMERGING GROWTH COMPANIES ACT 
                                OF 2011

                                  _____
                                 

                        HON. STEPHEN LEE FINCHER

                              of tennessee

                    in the house of representatives

                       Thursday, December 8, 2011

  Mr. FINCHER. Mr. Speaker, unemployed Americans are crying out for 
more jobs and urging Congress to review rules and regulations that 
stifle innovation, economic growth, and job creation. I am introducing 
the Reopening American Capital Markets to Emerging Growth Companies Act 
of 2011 for one reason: to increase job creation on Main Street. 
Burdensome costs are discouraging companies from going public, which 
deprives firms of the capital needed to expand their businesses and 
hire more American workers.
  During the last fifteen years, fewer and fewer start-up companies 
have pursued Initial Public Offerings (IPOs) to access the capital 
needed to expand their businesses, develop innovative products, and 
hire new employees. The number of IPOs in the United States is slipping 
behind the rest of the world in terms of growing our markets. Other 
markets are growing or holding steady, while the United States 
continues to decline. This is especially true in the Asian markets, 
which have seen an explosion of new public companies in recent years.
  Since 2010, the Asian markets have had nearly 700 new IPOs compared 
to less than 300 in the United States during the same time-frame. 
Unfortunately, federal regulatory burdens are a major contributing 
factor in the steep drop of IPOs in the United States.
  This decline is of concern because going public provides 
opportunities for companies to raise badly needed capital in order to 
expand, reinvest, and create jobs. From 2008-2010, 21 percent of the 
United States GDP was generated by venture capital-backed start-up 
companies. In addition, an August 2011 survey of CEOs conducted by the 
IPO Task Force found that over 90 percent of job growth occurs after a 
company goes public.
  Unfortunately, a series of ``one-size-fits-all'' laws and regulations 
have changed the nature of the United States' capital markets and had a 
disproportionate cost on smaller American public companies. 
Washington's regulatory oversteps have harmed American workers by 
eliminating jobs that are created when a start-up company decides to go 
public. Instead, to avoid costly regulatory requirements, many 
companies decide to merge with others, which usually results in job 
cuts.
  To help solve this problem, my bill would create a new category of 
issuers, called ``Emerging Growth Companies'' that have less than $1 
billion in annual revenues when they register with the SEC and less 
than $700 million in public float after the IPO. These companies will 
have as many as five years to transition to full compliance with a 
variety of federal regulations that are expensive and burdensome to new 
companies. This ``on-ramp'' status will allow small and midsize 
companies the opportunity to save on expensive compliance costs and 
create cash needed to successfully grow their businesses and create new 
American jobs.
  I am proud to have Mr. Carney from Delaware and 26 additional co-
sponsors from both sides of the aisle join me in introducing this bill 
today. With unemployment holding steady just under 9 percent, this bill 
would help bring investments back to the United States and help our 
best job creators put Americans back to work.

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