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cations as to annual income provided by the person to 
whom the securities are sold to verify the investor’s in-
come. 
‘‘(d) INFORMATION AVAILABLE
TO STATES.—The 
Commission shall make the notices described under sub-
sections (a)(9), (a)(13), (b)(8), and (b)(13) and the infor-
mation described under subsections (a)(4) and (b)(4) 
available to the States. 
‘‘(e) RESTRICTION ON SALES.—With respect to a 
transaction involving the issuance of securities described 
under section 4(6), a purchaser may not transfer such se-
curities during the 1-year period beginning on the date 
of purchase, unless such securities are sold to— 
‘‘(1) the issuer of such securities; or 
‘‘(2) an accredited investor. 
‘‘(f) CONSTRUCTION.— 
‘‘(1) NO REGISTRATION AS BROKER.—With re-
spect to a transaction described under section 4(6) 
involving an intermediary, such intermediary shall 
not be required to register as a broker under section 
15(a)(1) of the Securities Exchange Act of 1934 
solely by reason of participation in such transaction. 
‘‘(2) NO PRECLUSION OF OTHER CAPITAL RAIS-
ING.—Nothing in this section or section 4(6) shall 
be construed as preventing an issuer from raising 
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capital through methods not described under section 
4(6).’’. 
(c) RULEMAKING.—Not later than 180 days after the 
date of the enactment of this Act, the Securities and Ex-
change Commission shall issue such rules as may be nec-
essary to carry out section 4A of the Securities Act of 
1933. In issuing such rules, the Commission shall consider 
the costs and benefits of the action. 
(d) DISQUALIFICATION.—Not later than 180 days 
after the date of the enactment of this Act, the Securities 
and Exchange Commission shall by rule or regulation es-
tablish disqualification provisions under which an issuer 
shall not be eligible to utilize the exemption under section 
4(6) of the Securities Act of 1933 based on the discipli-
nary history of the issuer or its predecessors, affiliates, 
officers, directors, or persons fulfilling similar roles. The 
Commission shall also establish disqualification provisions 
under which an intermediary shall not be eligible to act 
as an intermediary in connection with an offering utilizing 
the exemption under section 4(6) of the Securities Act of 
1933 based on the disciplinary history of the intermediary 
or its predecessors, affiliates, officers, directors, or persons 
fulfilling similar roles. Such provisions shall be substan-
tially similar to the disqualification provisions contained 
in the regulations adopted in accordance with section 926 
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of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (15 U.S.C. 77d note). 
SEC. 302. EXCLUSION OF CROWDFUNDING INVESTORS 
FROM SHAREHOLDER CAP. 
Section 12(g)(5) of the Securities Exchange Act of 
1934 (15 U.S.C. 78l(g)(5)) is amended— 
(1) by striking ‘‘(5) For the purposes’’ and in-
serting: 
‘‘(5) DEFINITIONS.— 
‘‘(A) IN
GENERAL.—For the purposes’’; 
and 
(2) by adding at the end the following: 
‘‘(B) EXCLUSION FOR PERSONS HOLDING 
CERTAIN
SECURITIES.—For purposes of this 
subsection, securities held by persons who pur-
chase such securities in transactions described 
under section 4(6) of the Securities Act of 1933 
shall not be deemed to be ‘held of record’.’’. 
SEC. 303. PREEMPTION OF STATE LAW. 
(a) IN GENERAL.—Section 18(b)(4) of the Securities 
Act of 1933 (15 U.S.C. 77r(b)(4)) is amended— 
(1) by redesignating subparagraphs (C) and 
(D) as subparagraphs (E) and (F), respectively; and 
(2) by inserting after subparagraph (B) the fol-
lowing: 
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‘‘(C) section 4(6);’’. 
(b) CLARIFICATION
OF
THE
PRESERVATION
OF 
STATE ENFORCEMENT AUTHORITY.— 
(1) IN GENERAL.—The amendments made by 
subsection (a) relate solely to State registration, doc-
umentation, and offering requirements, as described 
under section 18(a) of Securities Act of 1933 (15 
U.S.C. 77r(a)), and shall have no impact or limita-
tion on other State authority to take enforcement 
action with regard to an issuer, intermediary, or any 
other person or entity using the exemption from reg-
istration provided by section 4(6) of such Act. 
(2) CLARIFICATION
OF
STATE
JURISDICTION 
OVER
UNLAWFUL
CONDUCT
OF
INTERMEDIARIES, 
ISSUERS, AND CUSTODIANS.—Section 18(c)(1) of the 
Securities Act of 1933 is amended by striking ‘‘with 
respect to fraud or deceit, or unlawful conduct by a 
broker or dealer, in connection with securities or se-
curities transactions.’’ and inserting the following: ‘‘, 
in connection with securities or securities trans-
actions, with respect to— 
‘‘(A) fraud or deceit; 
‘‘(B) unlawful conduct by a broker or deal-
er; and 
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‘‘(C) with respect to a transaction de-
scribed under section 4(6), unlawful conduct by 
an intermediary, issuer, or custodian.’’. 
TITLE IV—SMALL COMPANY 
CAPITAL FORMATION 
SEC. 401. 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 in-
serting 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 condi-
tions: 
‘‘(A) The aggregate offering amount of all 
securities offered and sold within the prior 12- 
month period in reliance on the exemption 
added in accordance with this paragraph shall 
not exceed $50,000,000. 
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