,i  #aac? ,,congress  #b;d ,session  ,h4
 ,r4 #defe  ,,9 ,,! ,,h\se ,,(          
,,repres5tatives  ,may #f1 #bjad ,mr4   
,mc,henry 7= himself & ,mr4 ,g>rett7    
introduc$ ! foll[+ bill2 :i* 0 ref]r$ to
 ! ,committee on ,f9ancial ,s]vices  ,a 
,,bill  ,to am5d ! securities laws to   
improve ! small company capital =mation 
provisions1 & = o!r purposes4  #a4 ,%ort
 title ,?is ,act may be cit$ z ! ,/>tup 
,capital ,mod]nization ,act ( #bjad4    
#b4 ,increase 9 small issues exemptive  
au?ority ,section #c7;b77#a7 ( !        
,securities ,act ( #aicc 7#ae ,u4,s4,c4 
#gg;c7b77#a77 is am5d$ by /rik+         
#e1jjj1jjj & ins]t+ #aj1jjj1jjj4  #c4   
,preemption ( ,/ate laws  7a7 ,9 g5]al  
,! fir/ subp>agraph 7,d7 ( section      
#ah7;b77#d7 ( ! ,securities ,act ( #aicc
 7#ae ,u4,s4,c4 #ggr7b77#d77 7relat+ to 
a rule or regulation adopt$ pursuant to 
section #c7;b77#b77 is am5d$ by ins]t+  
section #c7;b77#a7 or be=e section      
#c7;b77#b74  7b7 ,cl>ification ( !      
pres]vation ( ,/ate en=cem5t au?ority   

7#a7 ,9 g5]al ,! am5dm5t made by        
subsection 7a7 relates solely to ,/ate  
regi/ration1 docum5tation1 & (f]+       
requirem5ts1 z describ$ "u section      
#ah7;a7 ( ! ,securities ,act ( #aicc    
7#ae ,u4,s4,c4 #ggr7a771 & %all h no    
impact or limitation on o!r ,/ate       
au?ority to take en=cem5t action ) reg>d
 to an issu]1 int]m$i>y1 or any o!r     
p]son or entity us+ ! exemption f       
regi/ration provid$ by section          
#c7;b77#a7 ( su* ,act4  7#b7            
,cl>ification ( ,/ate jurisdiction ov]  
unlawful conduct ( int]m$i>ies1 issu]s1 
& cu/odians ,section #ah7;c77#a7 ( !    
,securities ,act ( #aicc is am5d$--     
7,a7 9 subp>agraph 7,a71 by /rik+ & at !
 end2  7,b7 9 subp>agraph 7,b71 by /rik+
 ! p]iod at ! end & ins]t+ 2 &2 &  7,c7 
by add+ at ! end ! foll[+3  7,c7 )      
respect to a transaction describ$ "u    
section #c7;b71 unlawful conduct by an  
issu] or cu/odian4  4  #d4 ,exclusion f 
%>ehold] cap  7a7 ,9 g5]al ,section     
#ab7;g7 ( ! ,securities ,ex*ange ,act ( 

#aicd 7#ae ,u4,s4,c4 #ghl7g77 is am5d$  
by add+ at ! end ! foll[+3  7#g7        
,exclusion = securities issu$ "u        
,regulation ,a pursuant to section      
#c7;b7 ( ! ,securities ,act ( #aicc ,all
 securities issu$ "u ,regulation ,a 7#ag
 ,c4,f4,r4 #bcj4bea et seq47 pursuant to
 section #c7;b7 ( ! ,securities ,act (  
#aicc %all be exempt f ! provisions (   
?is subsection if ! issu] has fil$      
audit$ f9ancial /atem5ts ) ! ,commission
 & ! issu] is 9 compliance ) all p]iodic
 disclosures requir$ by ! ,commission   
pursuant to section #c7;b77#d7 ( !      
,securities ,act ( #aicc4  4  7b7       
,rulemak+ ,! ,securities & ,ex*ange     
,commission %all issue a rule to c>ry   
out section #ab7;g77#g7 ( ! ,securities 
,ex*ange ,act ( #aicd 7#ae ,u4,s4,c4    
#gh;c71 z add$ by ?is section1 n lat]   
?an #ahj days aft] ! date ( enactm5t (  
?is section4  7c7 ,rule ( applicability 
,! exclusion provid$ "u section         
#ab7;g77#g7 ( ! ,securities ,ex*ange    
,act ( #aicd 7#ae ,u4,s4,c4 #gh;c71 z   

add$ by ?is section1 %all apply to      
securities issu$ be=e1 on1 or aft] !    
date ( ! enactm5t ( ?is ,act4  #e4      
,exempt$ transactions  7a7 ,exempt$     
transactions ,section #d ( ! ,securities
 ,act ( #aicc 7#ae ,u4,s4,c4 #gg;d7 is  
am5d$--  7#a7 9 subsection 7a71 by add+ 
at ! end ! foll[+ new p>agraph3  7#g7   
transactions meet+ ! requirem5ts (      
subsection 7d74  2  7#b7 by r$esignat+ !
 second subsection 7b7 7relat+ to       
securities (f]$ & sold 9 compliance )   
,rule #ejf ( ,regulation ,d7 z          
subsection 7c72 &  7#c7 by add+ at ! end
 ! foll[+3  7d7  7#a7 ,! transactions   
ref]r$ to 9 subsection 7a77#g7 are      
transactions :]e--  7,a7 ea* pur*as] is 
an accr$it$ inve/or1 z t t]m is def9$ 9 
section #bcj4eja7;a7 ( title #ag1 ,code 
( ,f$]al ,regulations 7or any successor 
!reto72 &  7,b7 if any securities sold 9
 reliance on subsection 7a77#g7 are (f]$
 by means ( any g5]al solicitation or   
g5]al adv]tis+1 ! sell] takes reasonable
 /eps to v]ify1 9 ! mann] set =? 9      

section #bcj4ejf7;c77ii7 ( title #ag1   
,code ( ,f$]al ,regulations 7or any     
successor regulation71 t ea* pur*as] is 
an accr$it$ inve/or4  7#b7 ,securities  
sold 9 reliance on subsection 7a77#g7   
%all be deem$ to h be5 acquir$ 9 a      
transaction n involv+ any public (f]+4  
7#c7 ,! exemption provid$ by ?is        
subsection %all n be available = a      
transaction :]e ! sell] is--  7,a7 an   
issu]1 its subsidi>ies or p>5t2  7,b7 an
 und]writ] act+ on behalf ( ! issu]1 its
 subsidi>ies or p>5t1 :i* receives      
comp5sation f ! issu] ) respect to su*  
sale2 or  7,c7 a deal]4  7#d7 ,a        
transaction meet+ ! requirem5ts ( ?is   
subsection %all be deem$ n to be a      
di/ribution = purposes ( section        
#b7;a77#aa74  4  7b7 ,exemption 9       
connection ) c]ta9 exempt (f]+s ,section
 #ah7;b77#d7 ( ! ,securities ,act (     
#aicc 7#ae ,u4,s4,c4 #ggr7b77#d77 is    
am5d$--  7#a7 by r$esignat+ ! second    
subp>agraph 7,d7 & subp>agraph 7,e7 z   
subp>agraphs 7,e7 & 7,f71 respectively2 

7#b7 9 subp>agraph 7,e71 z s r$esignat$1
 by /rik+ 2 or & ins]t+ a semicolon2    
7#c7 9 subp>agraph 7,f71 z s r$esignat$1
 by /rik+ ! p]iod & ins]t+ 2 or2 &  7#d7
 by add+ at ! end ! foll[+ new          
subp>agraph3  7,g7 section #d7;a77#g74  
4