Enhancing Entrepreneurship for the 21st Century Act

II 117TH CONGRESS 1ST SESSION S. 329 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 FEBRUARY 12, 2021 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 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 SEC. 2. FINDINGS. 6 Congress finds the following: 7 (1) Recent research has demonstrated that— 8 VerDate Sep 11 2014 19:13 Feb 27, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S329.IS S329 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 329 IS (A) new businesses (commonly referred to 1 as ‘‘startups’’)— 2 (i) are disproportionately responsible 3 for the innovations that drive economic 4 growth; and 5 (ii) account for virtually all net new 6 job creation; 7 (B) the rate of formation of United States 8 businesses has fallen significantly in recent 9 years; and 10 (C) as determined by widely cited research, 11 the decline in the rate described in subpara- 12 graph (B) is occurring in all 50 States, in all 13 but a handful of 360 metro areas examined, 14 and across a broad range of industry sectors. 15 (2) Before policymakers can identify ways in 16 which the decline in the rate described in paragraph 17 (1)(B) may be counteracted, the underlying causes 18 of the decline must be identified. 19 (3) Economists have identified several factors 20 that may explain the decline in the rate described in 21 paragraph (1)(B), including— 22 (A) demographic changes caused by an 23 aging workforce and slowing population growth; 24 VerDate Sep 11 2014 19:13 Feb 27, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S329.IS S329 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 329 IS (B) increased industry concentration that 1 may make it more difficult for new market en- 2 trants to compete with established companies; 3 (C) increased risk-aversion following the fi- 4 nancial crisis and recession that occurred in 5 2008 and 2009 and deterioration of household 6 balance sheets; 7 (D) difficulties relating to access to cap- 8 ital, particularly difficulties encountered by un- 9 derserved populations, women, and members of 10 minority groups; 11 (E) the concentration of venture capital in 12 only a few cities; 13 (F) record levels of student debt; and 14 (G) inefficiencies or other difficulties relat- 15 ing to the commercialization of federally funded 16 research and innovation. 17 SEC. 3. DEFINITIONS. 18 In this Act: 19 (1) APPROPRIATE COMMITTEES OF CON- 20 GRESS.—The term ‘‘appropriate committees of Con- 21 gress’’ means— 22 (A) the Committee on Commerce, Science, 23 and Transportation of the Senate; and 24 VerDate Sep 11 2014 19:13 Feb 27, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S329.IS S329 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 329 IS (B) the Committee on Energy and Com- 1 merce of the House of Representatives. 2 (2) ENTREPRENEUR.—The term ‘‘entre- 3 preneur’’ means an individual who founded, or is a 4 member of a group that founded, a United States 5 business. 6 (3) SECRETARY.—The term ‘‘Secretary’’ means 7 the Secretary of Commerce. 8 (4) UNITED STATES BUSINESS.—The term 9 ‘‘United States business’’ means a corporation, part- 10 nership, association, joint-stock company, business 11 trust, unincorporated organization, or sole propri- 12 etorship that— 13 (A) has its principal place of business in 14 the United States; or 15 (B) is organized under the laws of a State 16 of the United States or a territory, possession, 17 or commonwealth of the United States. 18 SEC. 4. ASSESSMENT AND ANALYSIS. 19 (a) ASSESSMENT AND ANALYSIS REQUIRED.—Not 20 later than 2 years after the date of enactment of this Act, 21 the Secretary, in consultation with the Director of the Bu- 22 reau of the Census and the Director of the Bureau of Eco- 23 nomic Analysis of the Department of Commerce, shall con- 24 duct an assessment and analysis regarding the reasons for 25 VerDate Sep 11 2014 19:13 Feb 27, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S329.IS S329 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 329 IS the state of the formation of new United States businesses 1 during a period— 2 (1) that the Secretary determines appropriate 3 based on the data described in subsection (b)(1)(A); 4 and 5 (2) ending on the date on which the assessment 6 and analysis is conducted. 7 (b) CONSIDERATIONS AND CONSULTATION.— 8 (1) IN GENERAL.—In conducting the assess- 9 ment and analysis required under subsection (a), the 10 Secretary shall— 11 (A) notwithstanding any other provision of 12 Federal law, and subject to paragraph (2), re- 13 view data collected and maintained by— 14 (i) the Bureau of the Census; 15 (ii) the Bureau of Economic Analysis; 16 (iii) the Bureau of Labor Statistics; 17 (iv) the Small Business Administra- 18 tion; 19 (v) the Department of the Treasury; 20 (vi) the Board of Governors of the 21 Federal Reserve System; and 22 (vii) any other Federal or State agen- 23 cy, or public or private sector organization, 24 that the Secretary determines appropriate; 25 VerDate Sep 11 2014 19:13 Feb 27, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S329.IS S329 pamtmann on DSKBC07HB2PROD with BILLS 6 •S 329 IS (B) with respect to the formation of new 1 United States businesses, consider the impact 2 of— 3 (i) demographic changes caused by an 4 aging workforce and slowing population 5 growth; 6 (ii) increased industry concentration 7 and whether such concentration may make 8 it more difficult for new market entrants 9 to compete with established companies; 10 (iii) increased risk-aversion following 11 the financial crisis and recession that oc- 12 curred in 2008 and 2009 and deterioration 13 of household balance sheets; 14 (iv) difficulties relating to access to 15 capital, particularly difficulties encountered 16 by underserved populations, women, and 17 members of minority groups; 18 (v) the concentration of venture cap- 19 ital in only a few cities; 20 (vi) record levels of student debt; 21 (vii) inefficiencies or other difficulties 22 relating to the commercialization of feder- 23 ally funded research and innovation; 24 VerDate Sep 11 2014 19:13 Feb 27, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S329.IS S329 pamtmann on DSKBC07HB2PROD with BILLS 7 •S 329 IS (viii) the use of federally funded re- 1 search and innovation in the commercial 2 market; 3 (ix) regulatory burden, overlap, com- 4 plexity, and uncertainty at the Federal and 5 State levels; 6 (x) aspects of the Internal Revenue 7 Code of 1986 that penalize, obstruct, or 8 otherwise disadvantage new businesses, or 9 investors in new businesses, relative to in- 10 cumbent businesses, or investors in incum- 11 bent businesses, respectively; 12 (xi) foreign-born entrepreneurs and 13 the impact of those entrepreneurs on job 14 creation; and 15 (xii) any other factor that the Sec- 16 retary determines appropriate; and 17 (C) consult with— 18 (i) the heads of any agencies and of- 19 fices of the Federal Government that the 20 Secretary determines appropriate, includ- 21 ing— 22 (I) the Secretary of the Treasury; 23 (II) the Secretary of Labor; 24 VerDate Sep 11 2014 19:13 Feb 27, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S329.IS S329 pamtmann on DSKBC07HB2PROD with BILLS 8 •S 329 IS (III) the Administrator of the 1 Small Business Administration; 2 (IV) the Chief Counsel of the Of- 3 fice of Advocacy of the Small Busi- 4 ness Administration; and 5 (V) the Board of Governors of 6 the Federal Reserve System; 7 (ii) entrepreneurs, including entre- 8 preneurs who are women or members of 9 minority groups, especially entrepreneurs 10 who founded United States businesses that 11 experienced rapid growth; and 12 (iii) representatives from consumer, 13 community, and entrepreneurship advocacy 14 organizations. 15 (2) CONFIDENTIALITY.—With respect to data 16 reviewed by the Secretary under paragraph (1)(A), 17 the Secretary shall ensure that the data is subject 18 to the same confidentiality requirements and protec- 19 tions as the confidentiality requirements and protec- 20 tions of the agency or entity, as applicable, providing 21 the data. 22 (c) REPORT.—The Secretary shall submit to the ap- 23 propriate committees of Congress a report regarding the 24 VerDate Sep 11 2014 19:13 Feb 27, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S329.IS S329 pamtmann on DSKBC07HB2PROD with BILLS 9 •S 329 IS findings of the Secretary with respect to the assessment 1 and analysis conducted under subsection (a). 2 Æ VerDate Sep 11 2014 19:13 Feb 27, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6301 E:\BILLS\S329.IS S329 pamtmann on DSKBC07HB2PROD with BILLS