U.S. Senators Jerry Moran (R-Kan.) and Mark Warner (D-Va.), along with Marco Rubio (R-Fla.) and Chris Coons (D-Del.), today introduced Startup Act 2.0 -- bipartisan legislation that picks up where the JOBS Act left off by doing more to jumpstart the economy through the creation and growth of new businesses. Startup Act 2.0 builds upon the original Startup Act, introduced by Sens. Moran and Warner in December 2011, and the AGREE Act, introduced by Sens. Coons and Rubio in November 2011.
"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," Sen. 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."
"Startup 2.0 offers smart, commonsense steps to support and encourage America's innovators and entrepreneurs," Sen. 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 Act 2.0 the logical "next step' following enactment of the bipartisan JOBS Act earlier this year."
"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," Sen. 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."
"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," Sen. 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 them today, and look forward to working with them to help Startup Act 2.0 become law."
Startup Act 2.0 creates new opportunities for American-educated and entrepreneurial immigrants to remain in the United States where their talent and ideas can fuel economic growth and create American jobs. The bill also alleviates regulatory burdens that make it more difficult for businesses to expand and create jobs. Finally, Startup Act 2.0 makes changes to the tax code to encourage investment in startup companies.
Research shows 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 3 million jobs each year. Additionally, more than a quarter of technology and engineering companies started in the United States from 1995 to 2005 had at least one key founder who was foreign-born. These companies produced $52 billion in sales and employed 450,000 workers in 2005.
Many of the principles included in Startup Act 2.0 are based on the research and analysis by the Ewing Marion Kauffman Foundation, and have been endorsed by President Obama's Council on Jobs and Competitiveness.
"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," said Steve Case, Revolution LLC CEO and member of President Obama's Council on Jobs and Competitiveness. "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."
Kauffman's research solidifies the wealth of contributions new firms make to job creation and the economy, and the time is ripe for legislative action that will fuel our nation's entrepreneurial engine," said Robert E. Litan, Kauffman Foundation Vice President of Research and Policy. "We need reforms such as better access to capital, visas for STEM graduates and foreign-born entrepreneurs, and regulatory improvements for new firms to start, hire and innovate."
Startup Act 2.0 had been endorsed by CEA, TechAmerica, Financial Services Forum, the National Small Business Association, CONNECT, CTIA, Computer and Communications Industry Association, the Greater Kansas City Chamber of Commerce, and the Austin Chamber of Commerce.
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;
Creates an Entrepreneur's Visa for legal immigrants, so they can remain in the United States, launch businesses and create jobs;
Eliminates the per-country caps for employment-based immigrant visas -- which hinder 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 support university initiatives designed to bring cutting-edge research to the marketplace more quickly where it can propel economic growth;
Requires all government agencies to conduct a cost-benefit analysis of all proposed "major rules" with an economic impact of $100 million or more. This new requirement will help determine the efficacy of regulations and their potential impact on the formation and growth of new businesses; and
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 on new business formation and the entrepreneurial environment, lawmakers will be better equipped to encourage entrepreneurship with the most successful policies.