Yesterday, Senators Chris Coons (D-DE), Jerry Moran (R-KS), Marco Rubio (R-FL), and Mark Warner (D-VA) unveiled the Startup Act 2.0, bipartisan legislation that builds on the Startup Act introduced by Senators Moran and Warner last December. The new variant – which the Senators describe at length in a Politico piece – includes key provisions of the old bill that were highlighted in a previous blog post, such as creating STEM and entrepreneur immigrant visas to attract and retain human talent. A new provision, however, makes the Startup Act 2.0 even more potentially beneficial to the national clean energy innovation agenda.
Just as political circumstances compelled the original act’s sponsors to promote it as a vehicle for job creation, the new act has been characterized in some quarters as an “immigration bill”. To be sure, it does include several high-skill immigration reforms that would be a boon to the economy in general and the clean economy in particular. After all, immigrants with advanced degrees in science, technology, engineering, or mathematics (STEM) and/or an entrepreneurial spirit are essential to driving innovation at clean companies. Section 7 of the bill, however, deserves greater notice.
It would extend a research and development (R&D) tax credit amounting to up to $250,000 – or 20 percent of W-2 wages, whichever is less – for startup companies with less than $5 million in annual receipts and less than five years old. The new provision would go a long way in helping capital-starved clean tech startups bridge the two “valleys of death” between R&D and building a prototype and project demonstration and commercialization, respectively. It also complements the provision appearing in both the old and new iterations that would attempt to aid the commercialization of university-based research.
Although the Startup Act 2.0 may face long odds given that it’s an election year, its backers are undeterred. Senator Warner pointed out at the news conference accompanying the bill unveiling that reforms could be necessary for the U.S. to remain globally competitive: “We didn’t get the memo you’re supposed to take election years off. Clearly, China’s not taking this year off. Brazil’s not taking this year off. India’s not taking this year off.”
Photo credit: Website of U.S. Senator Mark Warner