Steil Introduces the Coronavirus EGC Extension Act
WASHINGTON, D.C.—House Financial Services Committee member, Rep. Bryan Steil (WI-01), introduced H.R. 7661, the Coronavirus EGC Extension Act to extend the initial public offering (IPO) on-ramp for Emerging Growth Companies (EGCs) during the ongoing coronavirus pandemic. This on-ramp gives EGCs the opportunity to access public capital markets to fund critical investment and growth by granting them appropriately tailored exemptions from certain costly regulatory requirements. Congressmen Steve Stivers (OH-15) and French Hill (AR-02) are original cosponsors of the bill. Senator Thom Tillis (R-NC) introduced the Senate companion bill.
“We depend on American ingenuity and workers to help us solve crises. Many businesses at the forefront of the coronavirus pandemic are EGCs in the health care industry. Others are working to grow, adapt, and create jobs during this challenging time. My bill allows EGCs to continue to focus on fighting this crisis and supporting their workers, rather than worrying about immediate regulatory compliance costs that are more appropriate for larger, more mature firms. We must ensure EGCs continue to innovate and help thousands of workers during these difficult times,” said Rep. Steil.
“Manufacturers are leading America’s economic renewal. By temporarily reducing regulatory costs for small businesses during the COVID-19 pandemic, the Coronavirus EGC Extension Act will allow small manufacturers to protect their workers’ jobs and keep their businesses up and running as they continue to respond to the ongoing crisis,” said Chris Netram, Vice President of Tax and Domestic Economic Policy, National Association of Manufacturers.
The Biotechnology Innovation Organization (BIO) wrote a letter in support of Steil’s bill. In part, President and CEO Dr. Michele McMurry-Heath writes, “The ability to go public as an Emerging Growth Company and save valuable capital by using a scaling system for disclosure has been a welcome boon for biotechs. A temporary extension of 404(b) compliance requirements will support these companies and their development of novel therapeutics during this public health crisis.”
The Coronavirus EGC Extension Act preserves EGC status for current issuers that are at risk of losing their status for the duration of the presidentially-declared coronavirus emergency or one year, whichever is longer. This ensures that current EGCs – many of which are in the life sciences industry – can continue to invest in growth and innovation during this challenging economic and public health crisis rather than dedicate additional resources to compliance burdens better suited to more mature businesses.
Earlier this year, Steil introduced H.R. 4918, the Helping Startups Continue to Grow Act which provides a five-year extension of certain exemptions and reduced disclosure requirements for certain current EGCs.
Steil is a member of the following House Financial Services Committee subcommittees: Investor Protection, Entrepreneurship, and Capital Markets; Housing, Community Development, and Insurance; and Diversity and Inclusion. Steil is also a member of the Financial Services Committee Task Force on Financial Technology.