U.S. Senators Chris Coons (D-Del.), Marco Rubio (R-Fla.), Mark R. Warner (D-Va.), and Jerry Moran (R-Kan.) introduced bipartisan legislation, Startup Act 2.0, on Tuesday to help jumpstart the economy through the creation and growth of new businesses and jobs. It is based upon research showing that for close to three decades, companies less than five years old have created almost all of the net new jobs in America, averaging about three million new jobs each year.
Startup Act 2.0 seeks to help move university-based research from the laboratory to the marketplace more quickly. It also makes targeted changes to the tax code to encourage investments in younger, smaller startup companies, and the bill also seeks to ease regulatory requirements that could make it more difficult for smaller businesses to expand and create jobs. Startup Act 2.0 also creates new opportunities for American-educated, entrepreneurial immigrants to remain in the U.S., where their talent and ideas can fuel growth and create American jobs.
Startup Act 2.0 builds upon the original Startup Act introduced by Sens. Warner and Moran in December, and it has been strengthened by including widely-supported provisions of S. 1866, the AGREE Act, introduced by Sens. Coons and Rubio in November. Startup Act 2.0 picks up where the JOBS Act left off by doing more to create an environment in which entrepreneurs can succeed.
"A central tenet of the AGREE Act, which Senator Rubio and I introduced last fall, was that there is not a shortage of good ideas for helping our economy create jobs, but a shortage of political will to come together and advance them," Senator Coons said. "Startup Act 2.0 builds on that philosophy, containing an array of smart ideas for supporting our innovative entrepreneurs. I am proud to join Senators Moran, Warner and Rubio in introducing those ideas today, and look forward to working with them to help Startup Act 2.0 become law."
Startup Act 2.0 includes the following provisions:
Creates a new STEM visa so that U.S.-educated foreign students, who graduate with a master's or Ph.D. in science, technology, engineering or mathematics, can receive a green card and stay in this country where their talent and ideas can fuel growth and create American jobs. It also creates an Entrepreneur's Visa for legal immigrants so they can remain in the United States, launch businesses and create jobs, and eliminates the per-country caps for employment-based immigrant visas, which hinders U.S. employers from recruiting the top-tier talent they need to grow.
Makes permanent the exemption of capital gains taxes on the sale of startup stock held for at least five years, so investors can provide financial stability at a critical juncture of firm growth.
Creates a targeted research and development tax credit for young startups less than five years old and with less than $5 million in annual receipts. This R&D credit is designed to allow startups to offset employee taxes, freeing up resources to help these young companies expand and create jobs.
Uses existing federal R&D funding to better support university initiatives designed to bring cutting-edge R&D to the marketplace more quickly, where it can propel economic growth.
Requires government agencies to conduct a cost-benefit analysis of proposed "major rules" with an economic impact of $100 million or more. This new requirement will help determine the potential impact of proposed regulations on the formation and growth of new businesses.
And Startup Act 2.0 directs the U.S. Department of Commerce to assess state and local policies that aid in the development of new businesses. Through the publication of reports highlighting these "best practices" from across the country, policymakers will be better equipped to encourage entrepreneurship by adopting the most effective and successful policies.
"When Senator Coons and I introduced the AGREE Act last fall, we hoped it would lead to greater cooperation on job creation policies that already enjoy broad bipartisan support," Senator Rubio said. "Teaming up with Senators Moran, Warner and Coons on Startup Act 2.0 is a worthy effort to break through Washington's gridlock and help entrepreneurs create new jobs through key reforms to our tax, visa and regulatory systems. Startup Act 2.0 is built on ideas that have bipartisan support and could become law tomorrow if Washington stopped playing games and started working for the people."
"Startup 2.0 offers smart, commonsense steps to support and encourage America's innovators and entrepreneurs," Senator Warner said. "Working together, we have put together bipartisan proposals that will help us compete and win the global contest for talent. We also propose responsible steps that will help our colleges and universities move taxpayer-funded R&D out of the lab and into the marketplace. Startup 2.0 the logical "next step' following enactment of the bipartisan JOBS Act earlier this year."
"Our bipartisan economic growth plan sets out to prove the critics wrong: Congress can get something done during an election year by coming together to strengthen the economy and create jobs," Senator Moran said. "To get America's economic engine roaring once again, entrepreneurs -- both American and foreign-born -- must be free to pursue their ideas, form companies in the United States, and hire employees. Startup Act 2.0 will create jobs for Americans by creating a circumstance in which entrepreneurs can succeed and the United States can win the global battle for talent."
Many of the principles included in Startup Act 2.0 are endorsed by the President's Council on Jobs and Competitiveness, which was represented at today's announcement by Steve Case, a co-founder of AOL.
"The passage of the JOBS Act demonstrated that despite a tough political climate, Democrats and Republicans can come together around policies that will help entrepreneurs innovate and create jobs," Steve Case said. "Startup Act 2.0 builds on that momentum and its passage will help solidify America's position as the world's most entrepreneurial nation. I am particularly pleased the bill includes a provision that will enable highly skilled engineers and entrepreneurs to start companies in the United States, as winning the global battle for talent is essential if we are going to keep our entrepreneurial economy moving forward. I commend Senators Moran, Warner, Rubio and Coons for their leadership and their willingness to come together in a bipartisan manner to focus on what unites us: a desire to create jobs, accelerate economic growth, and ensure our nation remains competitive globally."
Startup Act 2.0 had been endorsed by TechAmerica, Financial Services Forum, National Small Business Association, CONNECT, CEA and the Computer and Communications Industry Association.