Legislation will create jobs, grow Arizona businesses in biomedicine, science
“The goal of this bill is to ensure that more dollars continue to go to R&D and job creation and less to unnecessary red tape” ~ Joan Koerber-Walker, President & CEO, AZBio
Feb 14, 2018
WASHINGTON, D.C. – Today, Congresswoman Kyrsten Sinema (AZ-09) and Congressman Trey Hollingsworth (IN-09) passed the Fostering Innovation Act [H.R.18645] through the U.S. House of Representatives. The legislation provides commonsense regulatory relief for companies on the cutting edge of scientific and medical research, allowing them to save lives and bring more high-tech, high-wage jobs to Arizona.
For businesses that aren’t yet large companies, extensive government reporting requirements force them to spend money on expensive audits rather than hiring and R&D. These audits provide little added value but present significant obstacles to growth, coming at a time when companies are often on the cusp of life-saving medical breakthroughs and innovations.
“Companies from Flagstaff to Tempe to Tucson tell me Washington’s red tape is holding them back,” said Congresswoman Sinema. “In Arizona, these burdensome rules keep life-saving breakthroughs off the market and Arizonans from good-paying jobs. We’ve worked across the aisle to pass the Fostering Innovation Act, a commonsense fix to allow companies to grow and hire more Arizonans.”
Currently, emerging growth companies (EGCs) are exempt from certain regulatory requirements for five years after their initial public offering (IPO). 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.
“We greatly appreciate Congresswoman Sinema’s leadership in addressing this key issue and for all of her efforts to remove obstacles from the path of our innovators so they can move American innovations forward faster,” said Joan Koerber-Walker, President and CEO of the Arizona Bioindustry Association.
The Fostering Innovation Act is a narrowly-tailored fix that temporarily extends the Sarbanes-Oxley Section 404(b) exemption for an additional five years for a small subset of EGCs with annual average revenue of less than $50 million and less than $700 million in public float.
“HTG Molecular Diagnostics, Inc. is an example of a company that is now bringing their life saving technology to market,” continued Joan Koerber-Walker. HTG Molecular Diagnostics is a Tucson-based company whose mission is to empower precision medicine at the local level.
The Fostering Innovation Act is part of Opportunity for Arizona, Sinema’s commonsense, Arizona-focused plan to create good-paying jobs, strengthen Arizona’s economy, and ensure businesses have every chance to succeed. Read the full plan here.