Reps. Grimm, Sanchez Introduce Startup Act 3.0 to Create U.S. Jobs and Reform High-Skilled Visa Policy

Feb 14, 2013 Issues: Economy and Jobs, Education, Tax Reform

WASHINGTON, DC – Today, Reps. Michael G. Grimm (R-NY) and Loretta Sanchez (D-CA), introduced the Startup Act 3.0 in the House of Representatives, with Reps. Kevin Yoder (R-KS), Jared Polis (D-CO), Devin Nunes (R-CA), Gerald Connolly (D-VA), and Steve Chabot (R-OH). The Startup Act 3.0 is a bill to create and keep jobs in America; increase America’s access to talent in the fields of science, technology, engineering, and math (STEM) by reforming high-skilled visa policies; and create opportunities for startup businesses with tax incentives and access to resources for innovation.

“Startup 3.0 will provide a boost to America’s new and innovative companies, propelling them forward to compete globally and hire locally. Too often we educate the world’s best and brightest in STEM fields, only to send them back to countries like India and China to open businesses and compete against us. This bill will keep top talent here in the U.S. to build businesses that hire Americans, and drive U.S. innovation and competitiveness. I am proud to reintroduce this new and improved version of the Startup Act with my colleagues in the House and Senate,” said Rep. Grimm.

“I’m proud to author this legislation to help American companies. Business leaders need Startup 3.0 so they can hire highly-skilled entrepreneurs and engineers who will innovate and grow our economy.  Often these individuals are educated in the United States and then sent away to work in their home countries.  American businesses should be able to hire them here – their work will grow our economy and help to create jobs,” said Rep. Sanchez.

“Small businesses are the engines that drive the American economy. Retaining the best and brightest American-educated entrepreneurs in the U.S. is vital to the prosperity and global competitiveness of our economy. I will continue my efforts in the 113th Congress to help these innovators and small business owners thrive, especially those in the science, technology, engineering, and math fields.  I look forward to working on the Startup Act 3.0 with my colleagues on both sides of the aisle, and in both chambers,” said Rep. Yoder.

“Americans need more jobs now, which means we should be doing everything possible to encourage the launch of great new American companies. By helping startups grow and succeed, we unleash the creative energies of entrepreneurs and innovators to take their great ideas and turn them into new job creating businesses. This is exactly the kind of bipartisan, job-creating legislation that Congress should act on immediately,” said Rep. Polis.

“There is no reason for the United States to educate needed high-skilled workers, only for them to leave America and use their talents in other nations. Making it easier for these workers to stay here, create businesses here, and contribute their expertise to the American economy is a common-sense measure that could result in thousands of new jobs and major technological breakthroughs,” said Rep. Nunes.

“Cincinnati is quickly becoming a new hub for technology and innovation, and to continue this trend, lawmakers must do everything in their power to remove obstacles faced by startups and entrepreneurs, and encourage new businesses to create, invest, and grow right here at home. Startup 3.0 takes an important step in that direction,” said Rep. Chabot.

Startup 3.0 helps increase America’s access to talent by creating a new set of conditional visas for 75,000 immigrant entrepreneurs and 50,000 foreign STEM graduate student that together will create half a million new American jobs. Research has demonstrated the positive impact of immigrants on American job creation:  More than 40 percent of all Fortune 500 companies were founded by an immigrant or the child of an immigrant, and each foreign-born advanced degree holder who stays in the U.S. to work in a STEM occupation created an estimated 2.6 American jobs. 

Research shows that startups create 3 million jobs per year, on average. In addition, over the past 30 years, companies less than five years old have created almost all the new net jobs in America.

This bill builds upon those successes by using tax incentives to spur continued growth and innovation.  In an important change from the previous bill, Startup 3.0 allows qualified companies to apply research and development tax credits to their payroll tax liability, up to $250,000.  For small startups, it also makes permanent the 100 percent capital gains tax exemption on investments that are held for more than 5 years, in addition to the 28 percent exemption on qualified small business stock. These provisions will unlock over $7.5 billion in new investments which will result in more innovation and jobs.  Finally, the bill helps cut red tape, by requiring a cost-benefit analysis of any significant rule being proposed by a federal or independent agency.

The bill has previously received industry support from Microsoft, Google, National Small Business Association (NSBA), CTIA, Consumer Electronics Association (CEA), Financial Services Forum, Computer and Communications Industry Association (CCIA), TechAmercia, Information Technology Industry (ITI), Compete America, Silicon Valley Leadership Group, and TechNet.

The Startup Act 3.0 was also introduced in the Senate on February 13, 2012 by Senators Jerry Moran (R-KS), Mark Warner (D-VA), and Christopher Coons (D-DE).

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