UPDATE: House to pass bipartisan bill aimed at start-ups

Posted at 12:31 PM, Mar 08, 2012
and last updated 2012-03-08 12:31:22-05

Jennifer Liberto, CNN

WASHINGTON (CNNMoney) – In a rare moment of bipartisanship, the House was expected to overwhelmingly pass a bill Thursday aimed at making it easier for small companies to grow and go public.

The bill would ease certain rules that the Securities and Exchange Commission enforces on small companies going through the process of becoming a publicly traded company. The Senate is working on a similar version of the bill, and President Obama has indicated he supports it.

The package is en route to becoming one of the few pieces of legislation aimed at boosting job creation and the economy to be signed into law in the past few years.

The bill is named the Jumpstart Our Business Startups Act and Republicans have been referring to it as the JOBS Act, the same acronym as a different and more ambitious White House initiative aimed at spurring jobs.

“Let’s build on this bipartisan momentum,” said House Majority Leader Eric Cantor on Thursday. “With the JOBS Act, we have an opportunity for both parties to come together and get some results.”

The bill would phase in SEC rules on small companies with less than a billion dollars in gross revenue that go public, putting them into effect over five years instead of all at once. After five years, or if the company’s gross revenue exceeds $1 billion, the company would have to abide by all SEC deadlines and rules.

The bill would also allow small companies to advertise and solicit investors when going public, which is currently prohibited. And it would allow them to raise more money from larger numbers of small, less sophisticated investors.

Republicans took turns on the House floor making promises that the bill would help jump start the economy. The measure would be “creating new growth opportunities for America’s small businesses, for start-up companies and for entrepreneurs,” said Rep. Spencer Bachus, an Alabama Republican who chairs the Financial Services Committee.

Democrats groused about the legislation’s “JOBS” acronym, and they tried to introduce an amendment that would have forced bigger companies to detail how many employees they have in the United States versus abroad.

“We have one of the foolish acronyms that’s not very helpful,” said Rep. Barney Frank, a Massachusetts Democrat.

The Senate Banking Committee has been working on a similar piece of legislation and Majority Leader Harry Reid indicated the Senate would take up the bills next week. If the Senate passes the bill, then the two chambers would work out the difference in a conference committee, according to a Senate aide.

“We’ve been working on this bill for months,” said Adam Jentleson, a Reid spokesman. “We’re all for (House Majority Leader) Cantor coming around to working with us after him blocking us at every turn.”

Copyright 2012 Cable News Network, Inc., a Time Warner Company. All rights reserved.