Enhancing Entrepreneurship for the 21st Century Act

II Calendar No. 633 116TH CONGRESS 2D SESSION S. 2535 To require the Secretary of Commerce to conduct an assessment and analysis relating to the decline in the business formation rate in the United States. IN THE SENATE OF THE UNITED STATES SEPTEMBER 24, 2019 Ms. KLOBUCHAR (for herself, Mr. SCOTT of South Carolina, Ms. SINEMA, and Mr. YOUNG) introduced the following bill; which was read twice and re- ferred to the Committee on Commerce, Science, and Transportation DECEMBER 15, 2020 Reported by Mr. WICKER, with an amendment [Omit the part struck through and insert the part printed in italic] A BILL To require the Secretary of Commerce to conduct an assess- ment and analysis relating to the decline in the business formation rate in the United States. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Enhancing Entrepre- 4 neurship for the 21st Century Act’’. 5 VerDate Sep 11 2014 01:27 Dec 16, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2535.RS S2535 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 2535 RS SEC. 2. FINDINGS. 1 Congress finds the following: 2 (1) Recent research has demonstrated that— 3 (A) new businesses (commonly referred to 4 as ‘‘startups’’)— 5 (i) are disproportionately responsible 6 for the innovations that drive economic 7 growth; and 8 (ii) account for virtually all net new 9 job creation; 10 (B) the rate of formation of United States 11 businesses has fallen significantly in recent 12 years; and 13 (C) as determined by widely cited research, 14 the decline in the rate described in subpara- 15 graph (B) is occurring in all 50 States, in all 16 but a handful of 360 metro areas examined, 17 and across a broad range of industry sectors. 18 (2) Before policymakers can identify ways in 19 which the decline in the rate described in paragraph 20 (1)(B) may be counteracted, the underlying causes 21 of the decline must be identified. 22 (3) Economists have identified several factors 23 that may explain the decline in the rate described in 24 paragraph (1)(B), including— 25 VerDate Sep 11 2014 01:27 Dec 16, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2535.RS S2535 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 2535 RS (A) demographic changes caused by an 1 aging workforce and slowing population growth; 2 (B) increased industry concentration that 3 may make it more difficult for new market en- 4 trants to compete with established companies; 5 (C) increased risk-aversion following the fi- 6 nancial crisis and recession that occurred in 7 2008 and 2009 and deterioration of household 8 balance sheets; 9 (D) difficulties relating to access to cap- 10 ital, particularly difficulties encountered by un- 11 derserved populations, women, and members of 12 minority groups; 13 (E) the concentration of venture capital in 14 only a few cities; 15 (F) record levels of student debt; and 16 (G) inefficiencies or other difficulties relat- 17 ing to the commercialization of federally funded 18 research and innovation. 19 SEC. 3. DEFINITIONS. 20 In this Act: 21 (1) APPROPRIATE COMMITTEES OF CON- 22 GRESS.—The term ‘‘appropriate committees of Con- 23 gress’’ means— 24 VerDate Sep 11 2014 01:27 Dec 16, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2535.RS S2535 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 2535 RS (A) the Committee on Commerce, Science, 1 and Transportation of the Senate; and 2 (B) the Committee on Energy and Com- 3 merce of the House of Representatives. 4 (2) ENTREPRENEUR.—The term ‘‘entre- 5 preneur’’ means an individual who founded, or is a 6 member of a group that founded, a United States 7 business. 8 (3) SECRETARY.—The term ‘‘Secretary’’ means 9 the Secretary of Commerce. 10 (4) UNITED STATES BUSINESS.—The term 11 ‘‘United States business’’ means a corporation, part- 12 nership, association, joint-stock company, business 13 trust, unincorporated organization, or sole propri- 14 etorship that— 15 (A) has its principal place of business in 16 the United States; or 17 (B) is organized under the laws of a State 18 of the United States or a territory, possession, 19 or commonwealth of the United States. 20 SEC. 4. ASSESSMENT AND ANALYSIS. 21 (a) ASSESSMENT AND ANALYSIS REQUIRED.—Not 22 later than 2 years after the date of enactment of this Act, 23 the Secretary, in consultation with the Director of the Bu- 24 reau of the Census and the Director of the Bureau of Eco- 25 VerDate Sep 11 2014 01:27 Dec 16, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2535.RS S2535 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 2535 RS nomic Analysis of the Department of Commerce, shall con- 1 duct an assessment and analysis regarding the reasons for 2 the state of the formation of new United States businesses 3 during a period— 4 (1) that the Secretary determines appropriate 5 based on the data described in subsection (b)(1)(A); 6 and 7 (2) ending on the date on which the assessment 8 and analysis is conducted. 9 (b) CONSIDERATIONS AND CONSULTATION.— 10 (1) IN GENERAL.—In conducting the assess- 11 ment and analysis required under subsection (a), the 12 Secretary shall— 13 (A) notwithstanding any other provision of 14 Federal law, and subject to paragraph (2), re- 15 view data collected and maintained by— 16 (i) the Bureau of the Census; 17 (ii) the Bureau of Economic Analysis; 18 (iii) the Bureau of Labor Statistics; 19 (iv) the Small Business Administra- 20 tion; 21 (v) the Department of the Treasury; 22 (vi) the Board of Governors of the 23 Federal Reserve System; and 24 VerDate Sep 11 2014 01:27 Dec 16, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2535.RS S2535 pamtmann on DSKBC07HB2PROD with BILLS 6 •S 2535 RS (vii) any other Federal or State agen- 1 cy, or public or private sector organization, 2 that the Secretary determines appropriate; 3 (B) with respect to the formation of new 4 United States businesses, consider the impact 5 of— 6 (i) demographic changes caused by an 7 aging workforce and slowing population 8 growth; 9 (ii) increased industry concentration 10 and whether such concentration may make 11 it more difficult for new market entrants 12 to compete with established companies; 13 (iii) increased risk-aversion following 14 the financial crisis and recession that oc- 15 curred in 2008 and 2009 and deterioration 16 of household balance sheets; 17 (iv) difficulties relating to access to 18 capital, particularly difficulties encountered 19 by underserved populations, women, and 20 members of minority groups; 21 (v) the concentration of venture cap- 22 ital in only a few cities; 23 (vi) record levels of student debt; 24 VerDate Sep 11 2014 01:27 Dec 16, 2020 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2535.RS S2535 pamtmann on DSKBC07HB2PROD with BILLS 7 •S 2535 RS (vii) inefficiencies or other difficulties 1 relating to the commercialization of feder- 2 ally funded research and innovation; 3 (vii) the utilization of federally funded 4 research and innovation in the commercial 5 market; 6 (viii) regulatory burden, overlap, com- 7 plexity, and uncertainty at the Federal and 8 State levels; 9 (ix) aspects of the Internal Revenue 10 Code of 1986 that penalize, obstruct, or 11 otherwise disadvantage new businesses, or 12 investors in new businesses, relative to in- 13 cumbent businesses, or investors in incum- 14 bent businesses, respectively; 15 (x) foreign-born entrepreneurs and 16 the impact of those entrepreneurs on job 17 creation; and 18 (xi) any other factor that the Sec- 19 retary determines appropriate; and 20 (C) consult with— 21 (i) the heads of any agencies and of- 22 fices of the Federal Government that the 23 Secretary determines appropriate, includ- 24 ing— 25 VerDate Sep 11 2014 01:27 Dec 16, 2020 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2535.RS S2535 pamtmann on DSKBC07HB2PROD with BILLS 8 •S 2535 RS (I) the Secretary of the Treasury; 1 (II) the Secretary of Labor; 2 (III) the Administrator of the 3 Small Business Administration; 4 (IV) the Chief Counsel of the Of- 5 fice of Advocacy of the Small Busi- 6 ness Administration; and 7 (V) the Board of Governors of 8 the Federal Reserve System; 9 (ii) entrepreneurs, including entre- 10 preneurs who are women or members of 11 minority groups, especially those entre- 12 preneurs who founded United States busi- 13 nesses that experienced rapid growth; and 14 (iii) representatives from consumer, 15 community, and entrepreneurship advocacy 16 organizations. 17 (2) CONFIDENTIALITY.—With respect to data 18 reviewed by the Secretary under paragraph (1)(A), 19 the Secretary shall ensure that the data is subject 20 to the same confidentiality requirements and protec- 21 tions as the confidentiality requirements and protec- 22 tions of the agency or entity, as applicable, providing 23 the data. 24 VerDate Sep 11 2014 01:27 Dec 16, 2020 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2535.RS S2535 pamtmann on DSKBC07HB2PROD with BILLS 9 •S 2535 RS (c) REPORT.—The Secretary shall submit to the ap- 1 propriate committees of Congress a report regarding the 2 findings of the Secretary with respect to the assessment 3 and analysis conducted under subsection (a). 4 VerDate Sep 11 2014 01:27 Dec 16, 2020 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S2535.RS S2535 pamtmann on DSKBC07HB2PROD with BILLS Calendar No. 633 116TH CONGRESS 2D SESSION S. 2535 A BILL To require the Secretary of Commerce to conduct an assessment and analysis relating to the de- cline in the business formation rate in the United States. DECEMBER 15, 2020 Reported with an amendment VerDate Sep 11 2014 01:27 Dec 16, 2020 Jkt 019200 PO 00000 Frm 00010 Fmt 6651 Sfmt 6651 E:\BILLS\S2535.RS S2535 pamtmann on DSKBC07HB2PROD with BILLS