On March 22, 2016, Congressman French Hill introduced a bill, HR 4831, that would amend the 100-holder restriction on S corporations in the limited case of shares acquired through crowdfunded offerings or Regulation A offerings. The text of the proposed bill is available here: https://hill.house.gov/sites/hill.house.gov/files/wysiwyg_uploaded/HILLAR_027_xml%20-%20S-Corp_0.pdf.

On March 23, 2016, Congressman Tom Emmer introduced a bill, HR 4850, called the Micro Offering Safe Harbor Act, which would amend the Securities Act to create a limited exemption for non-public offerings that would allow a “non-public,” micro-offering provided that each investor has a pre-existing substantive relationship with the issuer, there are fewer than 35 purchasers, and the amount raised does not exceed $500,000. The text of the proposed bill is available here: https://emmer.house.gov/sites/emmer.house.gov/files/Micro%20Offering%20Safe%20Harbor%20Act%20%281%29.pdf. It is not clear why this safe harbor would be needed in light of the existing statutory Section 4(a)(2) exemption, and the Regulation D safe harbors.

Also on March 23rd, Congressman Scott Garrett introduced a bill, HR 4852, which would appear to address various provisions that were contained in the Securities and Exchange Commission’s proposed amendments of Regulation D and Rule 156, which have not been advanced by the Commission. In any event, the proposed bill would require the Commission to amend Regulation D in order to simplify the Form D filing requirements, prohibit the availability of the Rule 506 safe harbor to be conditioned on the filing of Form D, prohibit the Commission from requiring issuers relying on Rule 506(c) to submit written general solicitation materials to the Commission, prohibit the Commission from extending the requirements contained in Rule 156 to private funds, and revise Rule 501(a) of Regulation D to provide that a person who is a ‘knowledgeable employee’ of a private fund or the fund’s investment adviser, as defined in Rule 3c-5(a)(4), to be considered an “accredited investor” for purposes of a Rule 506 offering of a private fund with respect to which the person is a knowledgeable employee.

Finally, also on March 23rd, Congressman Timothy McHenry introduced a bill, HR 4855, titled the Fix Crowdfunding Act, which would, among other things, increase the maximum crowdfunding offering threshold to $5 million, clarify the investment caps, and allow single-purpose funds to avail themselves of the exemption. The text of the proposed bill is available here: https://www.govtrack.us/congress/bills/114/hr4855/text.