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[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1070 Reported in House (RH)]

                                                 Union Calendar No. 135
112th CONGRESS
  1st Session
                                H. R. 1070

                          [Report No. 112-206]

  To amend the Securities Act of 1933 to authorize the Securities and 
 Exchange Commission to exempt a certain class of securities from such 
                                  Act.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             March 14, 2011

Mr. Schweikert (for himself, Mr. Garrett, Mr. Westmoreland, Mr. Jones, 
and Mrs. Biggert) introduced the following bill; which was referred to 
                  the Committee on Financial Services

                           September 14, 2011

     Additional sponsors: Mr. Canseco, Mr. Manzullo, Mr. Duncan of 
 Tennessee, Ms. Eshoo, Mrs. Bachmann, Mr. Stivers, Mr. David Scott of 
   Georgia, Mr. Neugebauer, Mr. Walsh of Illinois, Mr. Paulsen, Mr. 
 Marchant, Mr. Quayle, Mr. Culberson, Mr. Price of Georgia, Mr. Roe of 
                      Tennessee, and Ms. Hayworth

                           September 14, 2011

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
 [For text of introduced bill, see copy of bill as introduced on March 
                               14, 2011]

_______________________________________________________________________

                                 A BILL

 
  To amend the Securities Act of 1933 to authorize the Securities and 
 Exchange Commission to exempt a certain class of securities from such 
                                  Act.

 

    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 ``Small Company Capital Formation Act 
of 2011''.

SEC. 2. AUTHORITY TO EXEMPT CERTAIN SECURITIES.

    (a) In General.--Section 3(b) of the Securities Act of 1933 (15 
U.S.C. 77c(b)) is amended--
            (1) by striking ``(b) The Commission'' and inserting the 
        following:
    ``(b) Additional Exemptions.--
            ``(1) Small issues exemptive authority.--The Commission''; 
        and
            (2) by adding at the end the following:
            ``(2) Additional issues.--The Commission shall by rule or 
        regulation add a class of securities to the securities exempted 
        pursuant to this section in accordance with the following terms 
        and conditions:
                    ``(A) The aggregate offering amount of all 
                securities sold within the prior 12-month period in 
                reliance on the exemption added in accordance with this 
                paragraph shall not exceed $50,000,000.
                    ``(B) The securities may be offered and sold 
                publicly.
                    ``(C) The securities shall not be restricted 
                securities within the meaning of the Federal securities 
                laws and the regulations promulgated thereunder.
                    ``(D) The civil liability provision in section 
                12(a)(2) shall apply to any person offering or selling 
                such securities.
                    ``(E) The issuer may solicit interest in the 
                offering prior to filing any offering statement, on 
                such terms and conditions as the Commission may 
                prescribe in the public interest or for the protection 
                of investors.
                    ``(F) The Commission shall require the issuer to 
                file audited financial statements with the Commission 
                annually.
                    ``(G) Such other terms, conditions, or requirements 
                as the Commission may determine necessary in the public 
                interest and for the protection of investors, which may 
                include--
                            ``(i) a requirement that the issuer prepare 
                        and electronically file with the Commission and 
                        distribute to prospective investors an offering 
                        statement, and any related documents, in such 
                        form and with such content as prescribed by the 
                        Commission, which shall include a description 
                        of the issuer's business operations, its 
                        financial condition, its corporate governance 
                        principles, its use of investor funds, and 
                        other appropriate matters; and
                            ``(ii) disqualification provisions under 
                        which the exemption shall not be available 
                        based upon the disciplinary history of the 
                        issuer or its predecessors, affiliates, 
                        officers, directors, underwriters, or other 
                        related persons, which shall be substantially 
                        similar to the disqualification provisions 
                        contained in the regulations adopted in 
                        accordance with section 926 of the Dodd-Frank 
                        Wall Street Reform and Consumer Protection Act 
                        (15 U.S.C. 77d note).
            ``(3) Limitation.--Only the following types of securities 
        may be exempted under a rule or regulation adopted pursuant to 
        paragraph (2): equity securities, debt securities, and debt 
        securities convertible or exchangeable to equity interests, 
        including any guarantees of such securities.
            ``(4) Periodic disclosures.--Upon such terms and conditions 
        as the Commission determines necessary in the public interest 
        and for the protection of investors, the Commission by rule or 
        regulation may require an issuer of a class of securities 
        exempted under paragraph (2) to make available to investors 
        periodic disclosures regarding the issuer, its business 
        operations, its financial condition, its corporate governance 
        principles, its use of investor funds, and other appropriate 
        matters, and also may provide for the suspension and 
        termination of such a requirement with respect to that issuer.
            ``(5) Adjustment.--Not later than 2 years after the date of 
        enactment of the Small Company Capital Formation Act of 2011 
        and every 2 years thereafter, the Commission shall review the 
        offering amount limitation described in paragraph (2)(A) and 
        shall increase such amount as the Commission determines 
        appropriate. If the Commission determines not to increase such 
        amount, it shall report to the Committee on Financial Services 
        of the House of Representatives and the Committee on Banking, 
        Housing, and Urban Affairs of the Senate on its reasons for not 
        increasing the amount.''.
    (b) Treatment as Covered Securities for Purposes of NSMIA.--Section 
18(b)(4) of the Securities Act of 1933 (15 U.S.C. 77r(b)(4)) is 
amended--
            (1) in subparagraph (C), by striking ``; or'' at the end 
        and inserting a semicolon; and
            (2) by redesignating subparagraph (D) as subparagraph (E), 
        and inserting after subparagraph (C) the following:
                    ``(D) a rule or regulation adopted pursuant to 
                section 3(b)(2) and such security is--
                            ``(i) offered or sold through a broker or 
                        dealer;
                            ``(ii) offered or sold on a national 
                        securities exchange; or
                            ``(iii) sold to a qualified purchaser as 
                        defined by the Commission pursuant to paragraph 
                        (3).''.
    (c) Conforming Amendment.--Section 4(5) of the Securities Act of 
1933 is amended by striking ``section 3(b)'' and inserting ``section 
3(b)(1)''.
                                                 Union Calendar No. 135

112th CONGRESS

  1st Session

                               H. R. 1070

                          [Report No. 112-206]

_______________________________________________________________________

                                 A BILL

  To amend the Securities Act of 1933 to authorize the Securities and 
 Exchange Commission to exempt a certain class of securities from such 
                                  Act.

_______________________________________________________________________

                           September 14, 2011

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
```