FOR IMMEDIATE RELEASE
March 22, 2017
REPRESENTATIVE TREY HOLLINGSWORTH INTRODUCES FOSTERING INNOVATION ACT
Legislation cuts red tape and empowers companies to move innovations forward
Washington, D.C. — Representative Trey Hollingsworth, along with Representative Kyrsten Sinema (AZ-09), introduced the Fostering Innovation Act yesterday afternoon. This bipartisan legislation slashes burdensome regulations that hinder companies that operate on the very edge of scientific and medical breakthroughs.
“Indiana is leading the way in medical device and bio-tech innovation,” said Rep. Trey Hollingsworth. “This bipartisan, commonsense reduction of burdensome regulations will empower many industries throughout the Hoosier state to devote more resources to product innovation, research, and development.”
“We’ve heard from companies throughout Arizona that burdensome regulations continue to stifle their ability to grow and succeed,” added Rep. Kyrsten Sinema. “The Fostering Innovation Act allows innovative companies to spend valuable resources on product research and development instead of costly and unnecessary external audits. This commonsense solution cuts red tape and allows companies to move life-saving innovations forward.”
At this time, emerging growth companies (ECGs) are exempt from certain regulatory requirements for five years after their initial public offering. One of the requirements EGCs are exempt from is Sarbanes-Oxley Section 404(b) which requires public companies to obtain an external audit on the effectiveness of their internal controls for financial reporting.
The Fostering Innovation Act provides a narrow fix that temporarily extends the Sarbanes-Oxley Section 404(b) exemption for an additional five years for a small subset of ECGs with an annual average revenue less than $50 million and less than $700 million in public float.