H.R.2940 -- Access to Capital for Job Creators Act (Introduced in House - IH)

HR 2940 IH

To direct the Securities and Exchange Commission to eliminate the prohibition against general solicitation as a requirement for a certain exemption under Regulation D.

September 15, 2011

Mr. MCCARTHY of California introduced the following bill; which was referred to the Committee on Financial Services

To direct the Securities and Exchange Commission to eliminate the prohibition against general solicitation as a requirement for a certain exemption under Regulation D.

SECTION 1. SHORT TITLE.

This Act may be cited as the `Access to Capital for Job Creators Act'.

SEC. 2. MODIFICATION OF EXEMPTION.

Not later than 90 days after the date of the enactment of this Act, the Securities and Exchange Commission shall revise its rules issued in section 230.506 of title 17, Code of Federal Regulations, to provide that the prohibition against general solicitation or general advertising contained in section 230.502(c) of such title shall not apply to offers and sales of securities made pursuant to section 230.506, provided that all purchasers of the securities are accredited investors.

Subtitle A—Small Business Relief

PART I—PROVIDING ACCESS TO CAPITAL

SEC. 2011. TEMPORARY EXCLUSION OF 100 PERCENT OF GAIN ON CERTAIN SMALL BUSINESS STOCK.

(a) IN GENERAL.—Subsection (a) of section 1202 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

‘‘(4) 100 PERCENT EXCLUSION FOR STOCK ACQUIRED DURING CERTAIN PERIODS IN 2010.—In the case of qualified small business stock acquired after the date of the enactment of the Creating Small Business Jobs Act of 2010 and before January 1, 2011—

‘‘(A) paragraph (1) shall be applied by substituting ‘100 percent’ for ‘50 percent’,

‘‘(B) paragraph (2) shall not apply, and

‘‘(C) paragraph (7) of section 57(a) shall not apply.’’.

(b) CONFORMING AMENDMENT.—Paragraph (3) of section 1202(a) of the Internal Revenue Code of 1986 is amended—

(1) by inserting ‘‘CERTAIN PERIODS IN’’ before ‘‘2010’’ in the heading, and 

(2) by striking ‘‘before January 1, 2011’’ and inserting ‘‘on or before the date of the enactment of the Creating Small Business Jobs Act of 2010’’.

(c) EFFECTIVE DATE.—The amendments made by this section shall apply to stock acquired after the date of the enactment of this Act.

See http://www.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00003402----000-.html#FN-1REF

See also:  http://www.agc.org/cs/advocacy/legislative_activity/3_percent_withholding_tax

(t) Extension of withholding to certain payments made by Government entities

SEC. 9006. EXPANSION OF INFORMATION REPORTING REQUIREMENTS.

(a) IN GENERAL.—Section 6041 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsections:

‘‘(h) APPLICATION TO CORPORATIONS.—Notwithstanding any regulation prescribed by the Secretary before the date of the enactment of this subsection, for purposes of this section the term ‘person’ includes any corporation that is not an organization exempt from tax under section 501(a).

‘‘(i) REGULATIONS.—The Secretary may prescribe such regulations and other guidance as may be appropriate or necessary to carry out the purposes of this section, including rules to prevent duplicative reporting of transactions.’’.

(b) PAYMENTS FOR PROPERTY AND OTHER GROSS PROCEEDS.—

Subsection (a) of section 6041 of the Internal Revenue Code of 1986 is amended—

(1) by inserting ‘‘amounts in consideration for property,’’ after ‘‘wages,’’,

(2) by inserting ‘‘gross proceeds,’’ after ‘‘emoluments, or other’’, and

(3) by inserting ‘‘gross proceeds,’’ after ‘‘setting forth the amount of such’’.

(c) EFFECTIVE DATE.—The amendments made by this section shall apply to payments made after December 31, 2011.

SEC. 413. ADJUSTING THE ACCREDITED INVESTOR STANDARD.

(a) IN GENERAL.—The Commission shall adjust any net worth standard for an accredited investor, as set forth in the rules of the Commission under the Securities Act of 1933, so that the individual net worth of any natural person, or joint net worth with the spouse of that person, at the time of purchase, is more than $1,000,000 (as such amount is adjusted periodically by rule of the Commission), excluding the value of the primary residence of such natural person, except that during the 4-year period that begins on the date of enactment of this Act, any net worth standard shall be $1,000,000, excluding the value of the primary residence of such natural person.

(b) REVIEW AND ADJUSTMENT.—

(1) INITIAL REVIEW AND ADJUSTMENT.—

(A) INITIAL REVIEW.—The Commission may undertake a review of the definition of the term ‘‘accredited investor’’, as such term applies to natural persons, to determine whether the requirements of the definition, excluding the requirement relating to the net worth standard described in subsection (a), should be adjusted or modified for the protection of investors, in the public interest, and in light of the economy.

(B) ADJUSTMENT OR MODIFICATION.—Upon completion of a review under subparagraph (A), the Commission may, by notice and comment rulemaking, make such adjustments to the definition of the term ‘‘accredited investor’’, excluding adjusting or modifying the requirement relating to the net worth standard described in subsection (a), as such term applies to natural persons, as the Commission may deem appropriate for the protection of investors, in the public interest, and in light of the economy.

(2) SUBSEQUENT REVIEWS AND ADJUSTMENT.—

(A) SUBSEQUENT REVIEWS.—Not earlier than 4 years after the date of enactment of this Act, and not less frequently than once every 4 years thereafter, the Commission shall undertake a review of the definition, in its entirety, of the term ‘‘accredited investor’’, as defined in section 230.215 of title 17, Code of Federal Regulations, or any successor thereto, as such term applies to natural persons, to determine whether the requirements of the definition should be adjusted or modified for the protection of investors, in the public interest, and in light of the economy.

(B) ADJUSTMENT OR MODIFICATION.—Upon completion of a review under subparagraph (A), the Commission may, by notice and comment rulemaking, make such adjustments to the definition of the term ‘‘accredited investor’’, as defined in section 230.215 of title 17, Code of Federal Regulations, or any successor thereto, as such term applies to natural persons, as the Commission may deem appropriate for the protection of investors, in the public interest, and in light of the economy.

The Dodd-Frank Wall Street Reform and Consumer Protection Act

What are the best justifications for a lower capital gains tax rate?

1. the lower rate is an acknowledgment that much of the "gain" in capital assets is nominal or inflationary gain, and not real gain.
2. to encourage investments in certain types of assets (stocks)
3. an acknowledgement that the basis recovery methods for capital assets are poor and inadequate, thus warranting a lower tax rate on disposition (meaning, no depreciation).

"The legislation would for the first time apply Medicare taxes to investment income received by these households, beginning in 2013. The 3.8 percent rate would apply to unearned income such as realized capital gains, dividends, interest, rents and royalties. It wouldn’t apply to other income subject to income taxes, including interest from municipal bonds and retirement accounts such as 401(k) plans until funds are withdrawn."

See this link.