WASHINGTON, D.C. — Today the House Financial Services Committee passed with strong bipartisan support legislation that would make it easier for growing firms to access the public markets so they can expand and create jobs. The proposal, co-sponsored in the Senate by Sens. Charles Schumer (D-NY), Pat Toomey (R-PA), Mark Warner (D-Va.), Mike Crapo (R-Idaho) and Tom Carper (D-Del.), passed a major legislative hurdle last night, being voted out of the House Financial Services Committee on a strong, bipartisan vote, 54 - 1. The House version of the senators’ bill, the Reopening American Capital Markets to Emerging Growth Companies Act of 2011, is led by U.S. Representatives Steven Lee Fincher (R-Tenn.) and John Carney (D-Del.), and has 49 additional co-sponsors.

The senators’ initial public offering bill would make it easier for small and medium-sized companies to raise capital through public markets. Studies show that more than 90 percent of job growth occurs after companies go public, but fewer small and medium-sized companies are taking this step in recent years, often citing the administrative and compliance burdens as the main obstacles to going public. The Schumer-Toomey bill, the Reopening American Capital Markets to Emerging Growth Companies Act of 2011, would reduce the hurdles of an IPO offering by phasing in many of the costliest obligations over time while maintaining key investor protections.

“This plan to create an ‘on-ramp’ to make it easier for growing firms to go public is a smart one that will help turn raw talent into business success,” said Sen. Schumer. “I am pleased to see such strong bipartisan support for our IPO bill on the House side, which is a promising sign for this bill as it moves forward in the Senate. During difficult economic times, it is critical that we give growing businesses, innovators, inventors and entrepreneurs the room to breathe, flourish and create jobs, the vast majority of which occurs after companies go public. I look forward to working with my Senate colleagues to make this plan a job-creating reality.”

“I am heartened by the bipartisan support this job-creating legislation,” Sen. Toomey said. “In this struggling economy, Congress should do everything it can to make it easier for small businesses to grow and create new jobs. This legislation will make it easier for firms to go public and in turn, create many more jobs. This legislation offers a bipartisan path for Congress to help get our economy moving again."

“It is gratifying to see bipartisan and bicameral support for this effort to boost the vibrancy and competitiveness of the American economy,” said Sen. Warner. “This proposal will encourage the sort of innovation and entrepreneurial activity that creates jobs and can help to turn this economy around. Smarter regulation will improve our markets and ultimately make them more attractive for both investors and entrepreneurs, and this legislation clearly moves us in that direction.”

“The IPO Task Force estimates that the average cost for a company to go public is $2.5 million, and the annual cost to stay public is $1.5 million,” said Sen. Crapo. “This bipartisan legislation would help reduce these costs and open the IPO process to a greater number of private companies, making it easier for young companies to access the public markets and capital they need to create jobs.”

In a recent survey conducted by Nasdaq and the National Venture Capital Association, 86 percent of chief executive officers cited “accounting and compliance costs” and 80 percent cited “regulatory risks” as key concerns about going public. With companies taking longer than ever to go public – on average 9.4 years, compared to fewer than five years in the 1980s – rapid expansion and job growth is being delayed, and the senators’ legislation aims to accelerate the expansion and job growth made possible by accessing public markets.

The Schumer-Toomey bill would establish a new category of issuers, called emerging growth companies, that have less than $1 billion in annual revenues at the time they register with the U.S. Securities and Exchange Commission and less than $700 million in publicly-traded shares after the IPO. The legislation creates a transitional on-ramp status for these companies to encourage them to go public. The on-ramp period would last as many as five years, or until a company reaches $1 billion in annual revenue or $700 million in publicly-traded shares. Full compliance with certain obligations would be phased in during that period.