I 

115TH CONGRESS 

1ST SESSION H. R. 1645 

To amend the Sarbanes-Oxley Act of 2002 to provide a temporary exemption 

for low-revenue issuers from certain auditor attestation requirements. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 21, 2017 

Ms. SINEMA (for herself and Mr. HOLLINGSWORTH) introduced the following 

bill; which was referred to the Committee on Financial Services 

A BILL 

To amend the Sarbanes-Oxley Act of 2002 to provide a 

temporary exemption for low-revenue issuers from certain 

auditor attestation requirements. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Fostering Innovation 

5 Act of 2017’’. 

6 SEC. 2. TEMPORARY EXEMPTION FOR LOW-REVENUE 

7 ISSUERS. 

8 Section 404 of the Sarbanes-Oxley Act of 2002 (15 

9 U.S.C. 7262) is amended by adding at the end the fol10 lowing: 


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1 ‘‘(d) TEMPORARY EXEMPTION FOR LOW-REVENUE

2 ISSUERS.— 

3 ‘‘(1) LOW-REVENUE EXEMPTION.—Subsection 

4 (b) shall not apply with respect to an audit report 

5 prepared for an issuer that— 

6 ‘‘(A) ceased to be an emerging growth 

7 company on the last day of the fiscal year of 

8 the issuer following the fifth anniversary of the 

9 date of the first sale of common equity securi10 ties of the issuer pursuant to an effective reg11 istration statement under the Securities Act of 

12 1933; 

13 ‘‘(B) had average annual gross revenues of 

14 less than $50,000,000 as of its most recently 

15 completed fiscal year; and 

16 ‘‘(C) is not a large accelerated filer. 

17 ‘‘(2) EXPIRATION OF TEMPORARY EXEMP18 TION.—An issuer ceases to be eligible for the exemp19 tion described under paragraph (1) at the earliest 

20 of— 

21 ‘‘(A) the last day of the fiscal year of the 

22 issuer following the tenth anniversary of the 

23 date of the first sale of common equity securi24 ties of the issuer pursuant to an effective regVerDate Sep 11 2014 00:59 Mar 23, 2017 Jkt 069200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1645.IH H1645

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1 istration statement under the Securities Act of 

2 1933; 

3 ‘‘(B) the last day of the fiscal year of the 

4 issuer during which the average annual gross 

5 revenues of the issuer exceed $50,000,000; or 

6 ‘‘(C) the date on which the issuer becomes 

7 a large accelerated filer. 

8 ‘‘(3) DEFINITIONS.—For purposes of this sub9 section: 

10 ‘‘(A) AVERAGE ANNUAL GROSS REVE11 NUES.—The term ‘average annual gross reve12 nues’ means the total gross revenues of an 

13 issuer over its most recently completed three 

14 fiscal years divided by three. 

15 ‘‘(B) EMERGING GROWTH COMPANY.—The 

16 term ‘emerging growth company’ has the mean17 ing given such term under section 3 of the Se18 curities Exchange Act of 1934 (15 U.S.C. 78c). 

19 ‘‘(C) LARGE ACCELERATED FILER.—The 

20 term ‘large accelerated filer’ has the meaning 

21 given that term under section 240.12b–2 of title 

22 17, Code of Federal Regulations, or any suc23 cessor thereto.’’. 

Æ 


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