WASHINGTON (AP) — The Senate is set to come out with its version of legislation to help small businesses raise capital, paralleling a measure that cleared the House in a somewhat different form last week by a large bipartisan margin.
Senate Majority Leader Harry Reid, D-Nev., said Monday he planned to work with his Republican counterpart, Sen. Mitch McConnell of Kentucky, "to finalize a path forward" on the legislation, which primarily relaxes Securities and Exchange Commission regulations to make it easier for small businesses and startups to attract investors.
Both Republicans and Democrats are eager to show that Congress is capable of coming together on legislation to boost the economy and promote job growth, and President Barack Obama supported the House bill which passed on a 390-23 vote.
It remained to be seen whether Senate changes to the House version, expected to be introduced as early as Tuesday, would bog down the legislation in partisan battles. The main difference is that the Senate bill would also give new legislative authority to the Export-Import Bank, an independent agency that assists U.S. companies trying to sell abroad with financing. Inclusion of the Ex-Im Bank could be a sticking point for some conservatives.
No date has been set for the package to reach the Senate floor for debate.
The House packages six bills that eases the way for small businesses to raise money and go public without being burdened by costly SEC regulations. The Senate version takes up three of those bills, in slightly different forms.
One would create a new emerging growth companies classification that phases in certain SEC regulations over a five-year period, reducing the costs of going public. Companies could retain this status for five years or until they exceed $1 billion in annual gross revenue. The Senate bill is sponsored by Sen. Charles Schumer, D-N.Y., and Patrick Toomey, R-Pa.
The second bill, sponsored by Sen. Jon Tester, D-Mont., raises from $5 million to $50 million the ceiling for shares a private company can sell as part of a public offering before having to register with the SEC. The $5 million threshold was set in 1992 and small businesses say it is too low to make going public worthwhile.
The third, introduced by Oregon Democrat Jeff Merkley, removes SEC restrictions on "crowdfunding," the raising of capital from a larger pool of small-scale investors who are not necessarily classified as "accredited" by the SEC.
The Senate bills are expected to include provisions that provide additional investor protections.
Obama last month called on Congress to extend the Ex-Im Bank's authorization, saying it was crucial to promoting U.S. exports. The White House has pointed out that the bank will reach its $100 billion lending limit at the end of March.
But the Club for Growth, a group that holds considerable sway with conservatives, has urged lawmakers to vote against reauthorizing the agency, and said that the vote will go on its annual scorecard of lawmaker voting records.
"The Export-Import Bank's actions are nothing more than market-distorting subsidies that pick winners and losers in the private sector," the group said.
Toomey, speaking to reporters last week, urged Reid to take up the House bill, saying that's the best way to get legislation to the president quickly. "I can't think of a reason why this isn't a terrific vehicle" to begin the Senate debate, he said of the House bill.
The Senate package also contains several other bills related to small businesses, including one raising the lending cap for the Small Business Administration's Small Business Investment Company.