WASHINGTON, D.C. – U.S. Sen. John Kennedy (R-La.) today announced the final passage of legislation that he and U.S. Sen. Doug Jones (D-Ala.) introduced to remove unnecessary compliance costs hampering the ability to create jobs and encourage economic development in rural communities. S.2765, RBIC Advisers Relief Act of 2018, now has cleared the House and the Senate.
“We have to ensure the long-term stability of our rural businesses and entrepreneurs. To create jobs and bolster Louisiana’s economy, they need access to capital,” said Sen. Kennedy. “There were a number of unintended consequences to Dodd-Frank. One of those consequences was the creation of unnecessary compliance costs for investment advisers working to create opportunities in rural communities. Our bill fixes that.”
“It is a top priority to ensure that the entrepreneurs and businesses in our rural communities have a fair shot at success,” said Sen. Jones. “This bill is evidence that we can find bipartisan solutions to help promote economic growth in rural America. This is common sense legislation that helps put rural business on an equal playing field and help them access the capital they need to succeed.”
RBICs are licensed under the Rural Business Investment Program (RBIP), a venture capital program created as a joint initiative between the U.S. Department of Agriculture and the Small Business Administration. The RBIP was designed to promote economic development and job creation in rural communities by investing in companies involved in the production, processing and supply of food and agriculture-related products.
An unintended consequence of Dodd-Frank forced investment advisors to register with the Securities and Exchange Commission if they advised both an RBIC and a venture capital fund. Congress already fixed this burden for Small Business Investment Companies (SBICs) in 2015. This bill offers the same crucial relief to RBICs.