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I
116TH CONGRESS
1ST SESSION H. R. 3886
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
JULY 23, 2019
Mr. MCADAMS (for himself 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.
Be it enacted by the Senate and House of Representa-
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tives of the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE.
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This Act may be cited as the ‘‘Fostering Innovation
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Act of 2019’’.
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SEC.
2.
TEMPORARY
EXEMPTION
FOR
LOW-REVENUE
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ISSUERS.
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Section 404 of the Sarbanes-Oxley Act of 2002 (15
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U.S.C. 7262) is amended by adding at the end the fol-
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lowing:
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•HR 3886 IH
‘‘(d) TEMPORARY EXEMPTION FOR LOW-REVENUE
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ISSUERS.—
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‘‘(1) LOW-REVENUE
EXEMPTION.—Subsection
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(b) shall not apply with respect to an audit report
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prepared for an issuer that—
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‘‘(A) ceased to be an emerging growth
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company on the last day of the fiscal year of
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the issuer following the fifth anniversary of the
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date of the first sale of common equity securi-
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ties of the issuer pursuant to an effective reg-
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istration statement under the Securities Act of
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1933;
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‘‘(B) had average annual gross revenues of
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less than $50,000,000 as of its most recently
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completed fiscal year; and
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‘‘(C) is not a large accelerated filer.
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‘‘(2) EXPIRATION
OF
TEMPORARY
EXEMP-
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TION.—An issuer ceases to be eligible for the exemp-
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tion described under paragraph (1) at the earliest
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of—
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‘‘(A) the last day of the fiscal year of the
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issuer following the tenth anniversary of the
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date of the first sale of common equity securi-
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ties of the issuer pursuant to an effective reg-
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•HR 3886 IH
istration statement under the Securities Act of
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1933;
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‘‘(B) the last day of the fiscal year of the
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issuer during which the average annual gross
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revenues of the issuer exceed $50,000,000; or
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‘‘(C) the date on which the issuer becomes
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a large accelerated filer.
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‘‘(3) DEFINITIONS.—For purposes of this sub-
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section:
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‘‘(A) AVERAGE
ANNUAL
GROSS
REVE-
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NUES.—The term ‘average annual gross reve-
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nues’ means the total gross revenues of an
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issuer over its most recently completed three
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fiscal years divided by three.
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‘‘(B) EMERGING GROWTH COMPANY.—The
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term ‘emerging growth company’ has the mean-
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ing given such term under section 3 of the Se-
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curities Exchange Act of 1934 (15 U.S.C. 78c).
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‘‘(C) LARGE
ACCELERATED
FILER.—The
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term ‘large accelerated filer’ has the meaning
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given that term under section 240.12b–2 of title
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17, Code of Federal Regulations, or any suc-
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cessor thereto.’’.
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Æ
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