Today, a bipartisan group of members of the U.S. House of Representatives introduced companion legislation to the U.S. Senate's 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. Senate sponsors U.S. Senators Roy Blunt (R-Mo.), Jerry Moran (R-Kan.), Mark Warner (D-Va.), Marco Rubio (R-Fla.), Chris Coons (D-Del.), and Scott Brown (R-Mass.) released the following statement on today's introduction in the House:
"We thank our colleagues in the House of Representatives for joining our efforts to jumpstart the economy and create jobs for Americans. Congress proved that it could work together successfully when it passed the JOBS Act, and we must keep that momentum going with Startup Act 2.0. Now is the time to act -- not after the election, not next year. Other countries are not taking this year off. Neither should we. These are bipartisan ideas with bicameral support -- it's time for Washington to come together to pass Startup Act 2.0, strengthen the economy, and create jobs."
Startup Act 2.0 makes changes to the tax code to encourage investment in startup companies. The bill also 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. Finally, Startup Act 2.0 alleviates regulatory burdens that make it more difficult for businesses to expand and create jobs. The House version was introduced by Reps. Michael Grimm (R-N.Y.), Loretta Sanchez (D-Calif.), Kevin Yoder (R-Kan.), Jared Polis (D-Colo.), Devin Nunes (R-Calif.), Russ Carnahan (D-Mo.) and Robert Dold (R-Ill.).
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 are supported by President Obama's Council on Jobs and Competitiveness. 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.
Startup Act 2.0 had been endorsed by Google, CEA, TechAmerica, Financial Services Forum, the National Small Business Association, CONNECT, CTIA, Information Technology and Innovation Foundation, Computer and Communications Industry Association, TechNet, the Silicon Valley Leadership Group, Compete America, the Information Technology Industry Council, 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.