Helping Startups Continue To Grow Act

I 117TH CONGRESS 1ST SESSION H. R. 3448 To provide for a 5-year extension of certain exemptions and reduced disclosure requirements for companies that were emerging growth companies and would continue to be emerging growth companies but for the 5-year restriction on emerging growth companies, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MAY 20, 2021 Mr. STEIL (for himself, Mr. HOLLINGSWORTH, and Mr. HILL) introduced the following bill; which was referred to the Committee on Financial Services A BILL To provide for a 5-year extension of certain exemptions and reduced disclosure requirements for companies that were emerging growth companies and would continue to be emerging growth companies but for the 5-year restriction on emerging growth companies, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Helping Startups Con- 4 tinue To Grow Act’’. 5 VerDate Sep 11 2014 05:34 Jun 22, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3448.IH H3448 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 3448 IH SEC. 2. ON-RAMP EXTENSION. 1 (a) DEFINITION OF A RECENT EMERGING GROWTH 2 COMPANY.— 3 (1) SECURITIES ACT OF 1933.—Section 2(a) of 4 the Securities Act of 1933 (15 U.S.C. 77b(a)) is 5 amended by adding at the end the following: 6 ‘‘(20) RECENT EMERGING GROWTH COM- 7 PANY.—The term ‘recent emerging growth company’ 8 means an issuer that— 9 ‘‘(A) was, but is no longer, an emerging 10 growth company; 11 ‘‘(B) would continue to be an emerging 12 growth company but for the application of sub- 13 paragraph (B) of paragraph (19); and 14 ‘‘(C) ceased to be an emerging growth 15 company within the previous 5-year period.’’. 16 (2) SECURITIES EXCHANGE ACT OF 1934.—Sec- 17 tion 3(a) of the Securities Exchange Act of 1934 18 (15 U.S.C. 78c(a)) is amended— 19 (A) by redesignating the second paragraph 20 (80) as paragraph (81); and 21 (B) by adding at the end the following: 22 ‘‘(82) RECENT EMERGING GROWTH COM- 23 PANY.—The term ‘recent emerging growth company’ 24 means an issuer that— 25 VerDate Sep 11 2014 05:34 Jun 22, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3448.IH H3448 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 3448 IH ‘‘(A) was, but is no longer, an emerging 1 growth company; 2 ‘‘(B) would continue to be an emerging 3 growth company but for the application of sub- 4 paragraph (B) of paragraph (80); and 5 ‘‘(C) ceased to be an emerging growth 6 company within the previous 5-year period.’’. 7 (b) STREAMLINED FINANCIAL DISCLOSURES.— 8 (1) SECURITIES ACT OF 1933.—Section 7(a)(2) 9 of the Securities Act of 1933 (15 U.S.C. 77g(a)(2)) 10 is amended— 11 (A) by inserting after ‘‘An emerging 12 growth company’’ the following: ‘‘and a recent 13 emerging growth company’’; and 14 (B) in subparagraph (A)— 15 (i) by striking ‘‘such emerging growth 16 company’’ and inserting ‘‘such company’’; 17 and 18 (ii) by striking ‘‘an emerging growth 19 company’’ and inserting ‘‘such company’’. 20 (2) SECURITIES EXCHANGE ACT OF 1934.—Sec- 21 tion 13(a) of the Securities Exchange Act of 1934 22 (15 U.S.C. 78m(a)) is amended by adding at the 23 end the following: ‘‘The previous sentence shall 24 apply, to the same extent as such sentence applies 25 VerDate Sep 11 2014 05:34 Jun 22, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3448.IH H3448 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 3448 IH to an emerging growth company, to a recent emerg- 1 ing growth company.’’. 2 (3) OTHER DISCLOSURES.—A recent emerging 3 growth company (as defined under section 2 of the 4 Securities Act of 1933) may comply with section 5 229.303(a) of title 17, Code of Federal Regulations, 6 or any successor thereto, by providing information 7 required by such section with respect to the financial 8 statements of the company for each period presented 9 pursuant to section 7(a) of the Securities Act of 10 1933 (15 U.S.C. 77g(a)). Such a company may com- 11 ply with section 229.402 of title 17, Code of Federal 12 Regulations, or any successor thereto, by disclosing 13 the same information as any issuer with a market 14 value of outstanding voting and nonvoting common 15 equity held by non-affiliates of less than 16 $75,000,000. 17 (c) DRAFT REGISTRATION STATEMENTS.—Section 18 6(e)(1) of the Securities Act of 1933 (15 U.S.C. 77f(e)(1)) 19 is amended— 20 (1) by striking ‘‘emerging growth company’’ 21 each place such term appears and inserting ‘‘emerg- 22 ing growth company or recent emerging growth com- 23 pany’’; and 24 VerDate Sep 11 2014 05:34 Jun 22, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3448.IH H3448 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 3448 IH (2) by striking ‘‘emerging market growth com- 1 pany’’ and inserting ‘‘emerging growth company or 2 recent emerging growth company’’. 3 (d) EXECUTIVE COMPENSATION DISCLOSURES.— 4 (1) CERTAIN SHAREHOLDER DISCLOSURES.— 5 Section 14A(e)(2) of the Securities Exchange Act of 6 1934 (15 U.S.C. 78n–1(e)) is amended— 7 (A) in subparagraph (A), by striking ‘‘An 8 emerging growth company’’ and inserting the 9 following ‘‘Any emerging growth company or re- 10 cent emerging growth company’’; and 11 (B) in subparagraph (B)— 12 (i) in the heading, by striking ‘‘TER- 13 MINATION OF EMERGING GROWTH COM- 14 PANY TREATMENT’’ and inserting ‘‘EXEMP- 15 TION’’; 16 (ii) by striking ‘‘an emerging growth 17 company but is no longer an emerging 18 growth company’’ and inserting ‘‘exempt 19 under subparagraph (A) but is no longer 20 exempt’’; and 21 (iii) in clause (ii), by inserting before 22 the period the following: ‘‘or a recent 23 emerging growth company’’. 24 VerDate Sep 11 2014 05:34 Jun 22, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3448.IH H3448 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 3448 IH (2) PAY RATIO DISCLOSURES.—Section 1 953(b)(1) of the Investor Protection and Securities 2 Reform Act of 2010 (15 U.S.C. 78l note) is amend- 3 ed, by striking ‘‘, as that term is defined in’’ and in- 4 serting ‘‘or a recent emerging growth company, as 5 such terms are defined, respectively, under’’. 6 (3) PAY VS. PERFORMANCE DISCLOSURES.— 7 Section 14(i) of the Securities Exchange Act of 1934 8 (15 U.S.C. 78n(i)) is amended by inserting after 9 ‘‘emerging growth company’’ the following: ‘‘or a re- 10 cent emerging growth company’’. 11 (4) SIMPLIFIED EXECUTIVE COMPENSATION 12 DISCLOSURES.—The Securities and Exchange Com- 13 mission shall amend section 229.402(l) of title 17, 14 Code of Federal Regulations, to permit a recent 15 emerging growth company (as defined under section 16 2 of the Securities Act of 1933) to make use of the 17 same scaled disclosures for executive compensation 18 that are available pursuant to such section for small- 19 er reporting companies and emerging growth compa- 20 nies. 21 Æ VerDate Sep 11 2014 05:34 Jun 22, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\H3448.IH H3448 kjohnson on DSK79L0C42PROD with BILLS