FLC News

Startup Act 2.0 Introduced in the Senate and House

DConT2

Greetings from D.C. In early May, legislation was introduced in the Senate with potential implications for retaining immigrant entrepreneurial talent, as well as accelerating federally funded, university-based technology transfer. A similar bill was introduced in the House shortly thereafter. Startup Act 2.0 (S. 3217; H.R. 5893) follows on the heels of the recently passed JOBS (Jumpstart Our Business Startups) Act, and is designed to support job creation and entrepreneurship through a variety of immigration, tax, and federal funding initiatives.

While the primary focus appears to be on immigration policy— specifically, targeting ways to retain foreign technical talent— there are also provisions for tax policy and federal funding efforts to support the commercialization of federally funded, university-created technology.

As stated in a press release issued by U.S. Senator Mark Warner (D-Va.), “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.”

The press release also notes that the proposed legislation will (among other things):

  • Create 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.
  • Create an Entrepreneur’s Visa for legal immigrants so they can remain in the United States, launch businesses and create jobs; and eliminate the per-country caps for employment-based immigrant visas …
  • Make permanent the exemption of capital gains taxes on the sale of startup stock held for at least five years.
  • Create a targeted R&D tax credit for young startups less than five years old and with less than $5 million in annual receipts.
  • Use existing federal R&D funding to better support university initiatives designed to bring cutting-edge R&D to the marketplace more quickly.

With regard to the final bullet (about using federal R&D funding to support university initiatives in technology commercialization), the language in the legislation calls for federal agencies having greater than $100,000,000 in annual extramural R&D budgets for 2013 through 2017 to transfer 0.15 percent of that budget to the Secretary of Commerce for grants to universities that support efforts to commercialize technology resulting from federally funded research.

At the ceremony introducing the bill, U.S. Senator Jerry Moran (R-Kan.) noted that the legislation will “prove the critics wrong [by showing that] Congress can get something done during an election year by coming together to strengthen the economy and create jobs.” That remains to be seen, but anything is possible—especially in an election year.

Read the press releases concerning the legislation from Senator Moran and Senator Warner, as well as the bill (S. 3217).

Gary can be reached here.

Category: 
FLC News