Senators Carper, Toomey Introduce Bipartisan Bill to Create Jobs
WASHINGTON, D.C. – Senators Tom Carper (D-Del.) and Pat Toomey (R-Pa.) introduced bipartisan legislation today that will reduce the regulatory burdens on small businesses and community banks, enhancing their ability to create jobs and lend in their local communities.
Under current law, a 1964 regulation, known as the “500 shareholder rule,” requires small businesses and community banks with more than 499 shareholders and $10 million in assets to comply with Securities and Exchange Commission reporting requirements. For more than four decades, this onerous regulation has saddled small businesses, community banks and startups with costly regulatory requirements or forced them to restrict the number of shareholders and assets, thereby limiting growth.
The bipartisan Private Company Flexibility and Growth Act would raise the shareholder limit from 500 to 2,000 for community banks and non-banks and would exempt employees from this cap. As a result, small businesses will have the flexibility they need to focus on long-term growth, job creation and creating better environments for their employees. This legislation will be especially helpful to start-ups and young companies who need to raise capital in order to grow but cannot afford the compliance costs of the current regulations.
“Small businesses and community banks are vital to bringing jobs and economic recovery back to our nation,” said Sen. Carper. “If we want our economy to continue to recover, we have to help local businesses grow. This bipartisan bill would modernize out-of-date legislation to help our small businesses and community banks hire new workers and thrive in today’s challenging economy. I will continue to work with Senator Toomey and the rest of our Senate colleagues to support initiatives that aid small businesses in Delaware and throughout the nation.”
“This legislation will bring our outdated regulations governing small businesses and community banks into the modern era and encourage job creation and economic growth in the process,” Sen. Toomey said. “In these challenging economic times, we need to do everything we can to make it easier for businesses to expand and hire new workers. I am thankful to Sen. Carper for his help on this legislation and look forward to working with the rest of my Senate colleagues to get it passed quickly.”
Many companies, such as Wawa in Pennsylvania will be able to grow and add jobs because of this legislation. Philadelphia-based Wawa has grown in the five states it serves and has added crucial jobs in the Mid-Atlantic region, including Pennsylvania and Delaware. The regulatory reform provided by this legislation will allow Wawa to continue to grow and create new jobs.
This legislation will also help companies like W.L. Gore & Associates in Delaware continue to take a long-term view in investing in the development of innovative products. W.L Gore & Associates is recognized for its unique culture and for creating innovative, technology-driven solutions, from medical devices that treat aneurysms to high-performance GORE-TEX fabrics.
“At Wawa, we strongly believe that our private ownership structure has been a major factor in our success and that having the flexibility to remain private is critical to our ongoing growth and ability to add jobs” said Howard Stoeckel, president & chief executive officer of Wawa. “We appreciate the efforts of Sens. Toomey and Carper to introduce Senate legislation updating the Securities Exchange Act of 1934 to increase the 500 shareholder limit, which will foster continued growth for private companies, like Wawa, enabling continued job growth and investment in our communities.”
“We appreciate Senator Carper’s and Toomey’s leadership in introducing legislation that will help privately held companies remain privately held,” said Terri L. Kelly, president and chief executive officer of W.L. Gore & Associates. “For Gore and other privately held companies, remaining private is essential to attracting and retaining talented associates, nurturing a vibrant culture and continuing to produce innovative products. Privately held companies are able take a long term view as we make investments in the development of the next generation of products over many years.”
Sens. Mike Johanns (R-Neb.) and Mark Warner (D-Va.) are co-sponsors of the bill.