[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 3217 Introduced in Senate (IS)]

112th CONGRESS
  2d Session
                                S. 3217

To jump-start economic recovery through the formation and growth of new 
                  businesses, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 22, 2012

   Mr. Moran (for himself, Mr. Warner, Mr. Coons, Mr. Rubio, and Mr. 
Blunt) introduced the following bill; which was read twice and referred 
                      to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To jump-start economic recovery through the formation and growth of new 
                  businesses, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Startup Act 2.0''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Conditional permanent resident status for immigrants with an 
                            advanced degree in a STEM field.
Sec. 4. Immigrant entrepreneurs.
Sec. 5. Elimination of the per-country numerical limitation for 
                            employment-based visas.
Sec. 6. Capital gains tax exemption for startup companies.
Sec. 7. Research credit for startup companies.
Sec. 8. Accelerated commercialization of taxpayer-funded research.
Sec. 9. Economic impact of major Federal agency rules.
Sec. 10. Biennial State startup business report.
Sec. 11. New business formation report.
Sec. 12. Rescission of unspent Federal funds.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) Achieving economic recovery will require the formation 
        and growth of new companies.
            (2) Between 1980 and 2005, companies less than 5 years old 
        accounted for nearly all net job creation in the United States.
            (3) New firms in the United States create an average of 
        3,000,000 jobs per year.
            (4) To get Americans back to work, entrepreneurs must be 
        free to innovate, create new companies, and hire employees.

SEC. 3. CONDITIONAL PERMANENT RESIDENT STATUS FOR IMMIGRANTS WITH AN 
              ADVANCED DEGREE IN A STEM FIELD.

    (a) In General.--Chapter 2 of title II of the Immigration and 
Nationality Act (8 U.S.C. 1181 et seq.) is amended by inserting after 
section 216A the following:

``SEC. 216B. CONDITIONAL PERMANENT RESIDENT STATUS FOR ALIENS WITH AN 
              ADVANCED DEGREE IN A STEM FIELD.

    ``(a) In General.--Notwithstanding any other provision of this Act, 
the Secretary of Homeland Security may adjust the status of not more 
than 50,000 aliens who have earned a master's degree or a doctorate 
degree at an institution of higher education in a STEM field to that of 
an alien conditionally admitted for permanent residence and authorize 
each alien granted such adjustment of status to remain in the United 
States--
            ``(1) for up to 1 year after the expiration of the alien's 
        student visa under section 101(a)(15)(F)(i) if the alien is 
        diligently searching for an opportunity to become actively 
        engaged in a STEM field; and
            ``(2) indefinitely if the alien remains actively engaged in 
        a STEM field.
    ``(b) Application for Conditional Permanent Resident Status.--Every 
alien applying for a conditional permanent resident status under this 
section shall submit an application to the Secretary of Homeland 
Security before the expiration of the alien's student visa in such form 
and manner as the Secretary shall prescribe by regulation.
    ``(c) Ineligibility for Federal Government Assistance.--An alien 
granted conditional permanent resident status under this section shall 
not be eligible, while in such status, for--
            ``(1) any unemployment compensation (as defined in section 
        85(b) of the Internal Revenue Code of 1986); or
            ``(2) any Federal means-tested public benefit (as that term 
        is used in section 403 of the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996 (8 U.S.C. 1613)).
    ``(d) Effect on Naturalization Residency Requirement.--An alien 
granted conditional permanent resident status under this section shall 
be deemed to have been lawfully admitted for permanent residence for 
purposes of meeting the 5-year residency requirement set forth in 
section 316(a)(1).
    ``(e) Removal of Condition.--The Secretary of Homeland Security 
shall remove the conditional basis of an alien's conditional permanent 
resident status under this section on the date that is 5 years after 
the date such status was granted if the alien maintained his or her 
eligibility for such status during the entire 5-year period.
    ``(f) Definitions.--In this section:
            ``(1) Actively engaged in a stem field.--The term `actively 
        engaged in a STEM field'--
                    ``(A) means--
                            ``(i) gainfully employed in a for-profit 
                        business or nonprofit organization in the 
                        United States in a STEM field;
                            ``(ii) teaching 1 or more STEM field 
                        courses at an institution of higher education; 
                        or
                            ``(iii) employed by a Federal, State, or 
                        local government entity; and
                    ``(B) includes any period of up to 6 months during 
                which the alien does not meet the requirement under 
                subparagraph (A) if such period was immediately 
                preceded by a 1-year period during which the alien met 
                the requirement under subparagraph (A).
            ``(2) Institution of higher education.--The term 
        `institution of higher education' has the meaning given the 
        term in section 101(a) of the Higher Education Act of 1965 (20 
        U.S.C. 1001(a)).
            ``(3) STEM field.--The term `STEM field' means any field of 
        study or occupation included on the most recent STEM-Designated 
        Degree Program List published in the Federal Register by the 
        Department of Homeland Security (as described in section 
        214.2(f)(11)(i)(C)(2) of title 8, Code of Federal 
        Regulations).''.
    (b) Clerical Amendment.--The table of contents for the Immigration 
and Nationality Act (8 U.S.C. 1101 et seq.) is amended by inserting 
after the item relating to section 216A the following:

``Sec. 216B. Conditional permanent resident status for aliens with an 
                            advanced degree in a STEM field.''.
    (c) Government Accountability Office Study.--
            (1) In general.--Not later than 3 years after the date of 
        the enactment of this Act, the Comptroller General of the 
        United States shall submit to Congress a report on the alien 
        college graduates granted immigrant status under section 216B 
        of the Immigration and Nationality Act, as added by subsection 
        (a).
            (2) Contents.--The report described in paragraph (1) shall 
        include--
                    (A) the number of aliens described in paragraph (1) 
                who have earned a master's degree, broken down by the 
                number of such degrees in science, technology, 
                engineering, and mathematics;
                    (B) the number of aliens described in paragraph (1) 
                who have earned a doctorate degree, broken down by the 
                number of such degrees in science, technology, 
                engineering, and mathematics;
                    (C) the number of aliens described in paragraph (1) 
                who have founded a business in the United States in a 
                STEM field;
                    (D) the number of aliens described in paragraph (1) 
                who are employed in the United States in a STEM field, 
                broken down by employment sector (for profit, 
                nonprofit, or government); and
                    (E) the number of aliens described in paragraph (1) 
                who are employed by an institution of higher education.
            (3) Definitions.--The terms ``institution of higher 
        education'' and ``STEM field'' have the meaning given such 
        terms in section 216B(f) of the Immigration and Nationality 
        Act, as added by subsection (a).

SEC. 4. IMMIGRANT ENTREPRENEURS.

    (a) Qualified Alien Entrepreneurs.--
            (1) Admission as immigrants.--Chapter 1 of title II of the 
        Immigration and Nationality Act (8 U.S.C. 1151 et seq.) is 
        amended by adding at the end the following:

``SEC. 210A. QUALIFIED ALIEN ENTREPRENEURS.

    ``(a) Admission as Immigrants.--The Secretary of Homeland Security, 
in accordance with the provisions of this section and section 216A, may 
issue a conditional immigrant visa to not more than 75,000 qualified 
alien entrepreneurs.
    ``(b) Application for Conditional Permanent Resident Status.--Every 
alien applying for a conditional immigrant visa under this section 
shall submit an application to the Secretary of Homeland Security in 
such form and manner as the Secretary shall prescribe by regulation.
    ``(c) Revocation.--If, during the 4-year period beginning on the 
date that an alien is granted a visa under this section, the Secretary 
of Homeland Security determines that such alien is no longer a 
qualified alien entrepreneur, the Secretary shall--
            ``(1) revoke such visa; and
            ``(2) notify the alien that the alien--
                    ``(A) may voluntarily depart from the United States 
                in accordance to section 240B; or
                    ``(B) will be subject to removal proceedings under 
                section 240 if the alien does not depart from the 
                United States not later than 6 months after receiving 
                such notification.
    ``(d) Removal of Conditional Basis.--The Secretary of Homeland 
Security shall remove the conditional basis of the status of an alien 
issued an immigrant visa under this section on that date that is 4 
years after the date on which such visa was issued if such visa was not 
revoked pursuant to subsection (c).
    ``(e) Definitions.--In this section:
            ``(1) Full-time employee.--The term `full-time employee' 
        means a United States citizen or legal permanent resident who 
        is paid by the new business entity registered by a qualified 
        alien entrepreneur at a rate that is comparable to the median 
        income of employees in the region.
            ``(2) Institution of higher education.--The term 
        `institution of higher education' has the meaning given the 
        term in section 101(a) of the Higher Education Act of 1965 (20 
        U.S.C. 1001(a)).
            ``(3) Qualified alien entrepreneur.--The term `qualified 
        alien entrepreneur' means an alien who--
                    ``(A) at the time the alien applies for an 
                immigrant visa under this section--
                            ``(i) is lawfully present in the United 
                        States; and
                            ``(ii)(I) holds a nonimmigrant visa 
                        pursuant to section 101(a)(15)(H)(i)(b); or
                            ``(II) has completed or will complete a 
                        graduate level degree in a STEM field from an 
                        institution of higher education;
                    ``(B) during the 1-year period beginning on the 
                date the alien is granted a visa under this section--
                            ``(i) registers at least 1 new business 
                        entity in a State;
                            ``(ii) employs, at such business entity in 
                        the United States, at least 2 full-time 
                        employees who are not relatives of the alien; 
                        and
                            ``(iii) invests, or raises capital 
                        investment of, not less than $100,000 in such 
                        business entity; and
                    ``(C) during the 3-year period beginning on the 
                last day of the 1-year period described in paragraph 
                (2), employs, at such business entity in the United 
                States, an average of at least 5 full-time employees 
                who are not relatives of the alien.
            ``(4) STEM field.--The term `STEM field' means any field of 
        study or occupation included on the most recent STEM-Designated 
        Degree Program List published in the Federal Register by the 
        Department of Homeland Security (as described in section 
        214.2(f)(11)(i)(C)(2) of title 8, Code of Federal 
        Regulations).''.
            (2) Table of contents amendment.--The table of contents in 
        the first section of the Immigration and Nationality Act (8 
        U.S.C. 1101 et seq.) is amended by adding after the item 
        relating to section 210 the following:

``Sec. 210A. Qualified alien entrepreneurs.''.
    (b) Conditional Permanent Resident Status.--Section 216A of the 
Immigration and Nationality Act (8 U.S.C. 1186b) is amended--
            (1) by striking ``Attorney General'' each place such term 
        appears and inserting ``Secretary of Homeland Security'';
            (2) in subsection (b)(1)(C), by striking ``203(b)(5),'' and 
        inserting ``203(b)(5) or 210A, as appropriate,'';
            (3) in subsection (c)(1), by striking ``alien entrepreneur 
        must'' each place such term appears and inserting ``alien 
        entrepreneur shall'';
            (4) in subsection (d)(1)(B), by striking the period at the 
        end and inserting ``or 210A, as appropriate.''; and
            (5) in subsection (f)(1), by striking the period at the end 
        and inserting ``or 210A.''.
    (c) Government Accountability Office Study.--
            (1) In general.--Not later than 3 years after the date of 
        the enactment of this Act, the Comptroller General of the 
        United States shall submit to Congress a report on the 
        qualified alien entrepreneurs granted immigrant status under 
        section 210A of the Immigration and Nationality Act, as added 
        by subsection (a).
            (2) Contents.--The report described in paragraph (1) shall 
        include information regarding--
                    (A) the number of qualified alien entrepreneurs who 
                have received immigrant status under section 210A of 
                the Immigration and Nationality Act, as added by 
                subsection (a), listed by country of origin;
                    (B) the localities in which such qualified alien 
                entrepreneurs have initially settled;
                    (C) whether such qualified alien entrepreneurs 
                generally remain in the localities in which they 
                initially settle;
                    (D) the types of commercial enterprises that such 
                qualified alien entrepreneurs have established; and
                    (E) the types and number of jobs created by such 
                qualified alien entrepreneurs.

SEC. 5. ELIMINATION OF THE PER-COUNTRY NUMERICAL LIMITATION FOR 
              EMPLOYMENT-BASED VISAS.

    (a) In General.--Section 202(a)(2) of the Immigration and 
Nationality Act (8 U.S.C. 1152(a)(2)) is amended--
            (1) in the paragraph heading, by striking ``and employment-
        based'';
            (2) by striking ``(3), (4), and (5),'' and inserting ``(3) 
        and (4),'';
            (3) by striking ``subsections (a) and (b) of section 203'' 
        and inserting ``section 203(a)'';
            (4) by striking ``7'' and inserting ``15''; and
            (5) by striking ``such subsections'' and inserting ``such 
        section''.
    (b) Conforming Amendments.--Section 202 of the Immigration and 
Nationality Act (8 U.S.C. 1152) is amended--
            (1) in subsection (a)(3), by striking ``both subsections 
        (a) and (b) of section 203'' and inserting ``section 203(a)'';
            (2) by striking subsection (a)(5); and
            (3) by amending subsection (e) to read as follows:
    ``(e) Special Rules for Countries at Ceiling.--If it is determined 
that the total number of immigrant visas made available under section 
203(a) to natives of any single foreign state or dependent area will 
exceed the numerical limitation specified in subsection (a)(2) in any 
fiscal year, in determining the allotment of immigrant visa numbers to 
natives under section 203(a), visa numbers with respect to natives of 
that state or area shall be allocated (to the extent practicable and 
otherwise consistent with this section and section 203) in a manner so 
that, except as provided in subsection (a)(4), the proportion of the 
visa numbers made available under each of paragraphs (1) through (4) of 
section 203(a) is equal to the ratio of the total number of visas made 
available under the respective paragraph to the total number of visas 
made available under section 203(a).''.
    (c) Country-Specific Offset.--Section 2 of the Chinese Student 
Protection Act of 1992 (8 U.S.C. 1255 note) is amended--
            (1) in subsection (a), by striking ``subsection (e))'' and 
        inserting ``subsection (d))''; and
            (2) by striking subsection (d) and redesignating subsection 
        (e) as subsection (d).
    (d) Effective Date.--The amendments made by this section shall take 
effect as if enacted on September 30, 2011, and shall apply to fiscal 
years beginning with fiscal year 2012.
    (e) Transition Rules for Employment-Based Immigrants.--
            (1) In general.--Subject to the succeeding paragraphs of 
        this subsection and notwithstanding title II of the Immigration 
        and Nationality Act (8 U.S.C. 1151 et seq.), the following 
        rules shall apply:
                    (A) For fiscal year 2012, 15 percent of the 
                immigrant visas made available under each of paragraphs 
                (2) and (3) of section 203(b) of such Act (8 U.S.C. 
                1153(b)) shall be allotted to immigrants who are 
                natives of a foreign state or dependent area that was 
                not one of the two states with the largest aggregate 
                numbers of natives obtaining immigrant visas during 
                fiscal year 2010 under such paragraphs.
                    (B) For fiscal year 2013, 10 percent of the 
                immigrant visas made available under each of such 
                paragraphs shall be allotted to immigrants who are 
                natives of a foreign state or dependent area that was 
                not one of the two states with the largest aggregate 
                numbers of natives obtaining immigrant visas during 
                fiscal year 2011 under such paragraphs.
                    (C) For fiscal year 2014, 10 percent of the 
                immigrant visas made available under each of such 
                paragraphs shall be allotted to immigrants who are 
                natives of a foreign state or dependent area that was 
                not one of the two states with the largest aggregate 
                numbers of natives obtaining immigrant visas during 
                fiscal year 2012 under such paragraphs.
            (2) Per-country levels.--
                    (A) Reserved visas.--With respect to the visas 
                reserved under each of subparagraphs (A) through (C) of 
                paragraph (1), the number of such visas made available 
                to natives of any single foreign state or dependent 
                area in the appropriate fiscal year may not exceed 25 
                percent (in the case of a single foreign state) or 2 
                percent (in the case of a dependent area) of the total 
                number of such visas.
                    (B) Unreserved visas.--With respect to the 
                immigrant visas made available under each of paragraphs 
                (2) and (3) of section 203(b) of such Act (8 U.S.C. 
                1153(b)) and not reserved under paragraph (1), for each 
                of fiscal years 2012, 2013, and 2014, not more than 85 
                percent shall be allotted to immigrants who are natives 
                of any single foreign state.
            (3) Special rule to prevent unused visas.--If, with respect 
        to fiscal year 2012, 2013, or 2014, the operation of paragraphs 
        (1) and (2) of this subsection would prevent the total number 
        of immigrant visas made available under paragraph (2) or (3) of 
        section 203(b) of such Act (8 U.S.C. 1153(b)) from being 
        issued, such visas may be issued during the remainder of such 
        fiscal year without regard to paragraphs (1) and (2) of this 
        subsection.
            (4) Rules for chargeability.--Section 202(b) of the 
        Immigration and Nationality Act (8 U.S.C. 1152(b)) shall apply 
        in determining the foreign state to which an alien is 
        chargeable for purposes of this subsection.

SEC. 6. CAPITAL GAINS TAX EXEMPTION FOR STARTUP COMPANIES.

    (a) Permanent Full Exclusion.--
            (1) In general.--Subsection (a) of section 1202 of the 
        Internal Revenue Code of 1986 is amended to read as follows:
    ``(a) Exclusion.--In the case of a taxpayer other than a 
corporation, gross income shall not include 100 percent of any gain 
from the sale or exchange of qualified small business stock held for 
more than 5 years.''.
            (2) Conforming amendments.--
                    (A) The heading for section 1202 of such Code is 
                amended by striking ``partial''.
                    (B) The item relating to section 1202 in the table 
                of sections for part I of subchapter P of chapter 1 of 
                such Code is amended by striking ``Partial exclusion'' 
                and inserting ``Exclusion''.
                    (C) Section 1223(13) of such Code is amended by 
                striking ``1202(a)(2),''.
    (b) Repeal of Minimum Tax Preference.--
            (1) In general.--Subsection (a) of section 57 of the 
        Internal Revenue Code of 1986 is amended by striking paragraph 
        (7).
            (2) Technical amendment.--Subclause (II) of section 
        53(d)(1)(B)(ii) of such Code is amended by striking ``, (5), 
        and (7)'' and inserting ``and (5)''.
    (c) Repeal of 28 Percent Capital Gains Rate on Qualified Small 
Business Stock.--
            (1) In general.--Subparagraph (A) of section 1(h)(4) of the 
        Internal Revenue Code of 1986 is amended to read as follows:
                    ``(A) collectibles gain, over''.
            (2) Conforming amendments.--
                    (A) Section 1(h) of such Code is amended by 
                striking paragraph (7).
                    (B)(i) Section 1(h) of such Code is amended by 
                redesignating paragraphs (8), (9), (10), (11), (12), 
                and (13) as paragraphs (7), (8), (9), (10), (11), and 
                (12), respectively.
                    (ii) Sections 163(d)(4)(B), 854(b)(5), 857(c)(2)(D) 
                of such Code are each amended by striking ``section 
                1(h)(11)(B)'' and inserting ``section 1(h)(10)(B)''.
                    (iii) The following sections of such Code are each 
                amended by striking ``section 1(h)(11)'' and inserting 
                ``section 1(h)(10)'':
                            (I) Section 301(f)(4).
                            (II) Section 306(a)(1)(D).
                            (III) Section 584(c).
                            (IV) Section 702(a)(5).
                            (V) Section 854(a).
                            (VI) Section 854(b)(2).
                    (iv) The heading of section 857(c)(2) is amended by 
                striking ``1(h)(11)'' and inserting ``1(h)(10)''.
    (d) Effective Date.--The amendments made by this section apply to 
stock acquired after December 31, 2012.

SEC. 7. RESEARCH CREDIT FOR STARTUP COMPANIES.

    (a) In General.--
            (1) In general.--Section 41 of the Internal Revenue Code of 
        1986 is amended by adding at the end the following new 
        subsection:
    ``(i) Treatment of Credit to Qualified Small Businesses.--
            ``(1) In general.--For purposes of subsections (b) and (c) 
        of section 6401, the amount of the credit determined under this 
        section which is attributable to a qualified small business 
        shall be treated as a credit allowed under subpart C of part IV 
        of subchapter A for the taxable year (and not under any other 
        subpart). For purposes of section 6425, any amount treated as 
        so allowed shall be treated as a payment of estimated income 
        tax for the taxable year.
            ``(2) Per taxpayer limitation.--The amount of overpayment 
        by reason of paragraph (1) for any qualified small business for 
        any taxable year shall not exceed the lesser of--
                    ``(A) $250,000, or
                    ``(B) 20 percent of the W-2 wages (as defined in 
                section 199(b)(2), determined without regard to 
                subparagraphs (B) and (D) thereof) of the qualified 
                small business for the taxable year.
            ``(3) Temporal limitation.--Paragraph (1) shall not apply 
        with respect to a qualified small business if there has been an 
        overpayment by such qualified small business by reason of 
        paragraph (1) with respect to 5 or more preceding taxable 
        years.
            ``(4) Qualified small business.--For purposes of this 
        subsection the term `qualified small business' means, with 
        respect to any taxable year, any person if--
                    ``(A) the gross receipts (as determined under 
                subsection (c)(7)) of such person for the taxable year 
                is less than $5,000,000, and
                    ``(B) such person did not have gross receipts for 
                any period preceding the 5-taxable-year period ending 
                with such taxable year.
            ``(5) Aggregation rules.--For purposes of determining the 
        limitation under paragraph (2) and determining gross receipts 
        under paragraph (4)(A), all members of the same controlled 
        group of corporations (within the meaning of section 267(f)) 
        and all persons under common control (within the meaning of 
        section 52(b) but determined by treating an interest of more 
        than 50 percent as a controlling interest) shall be treated as 
        1 person.
            ``(6) Regulations.--The Secretary shall prescribe such 
        regulations as may be necessary to carry out the purposes of 
        this subsection, including--
                    ``(A) regulations to prevent the avoidance of the 
                purposes of paragraph (4)(B) through the use of 
                successor companies or other means, and
                    ``(B) regulations to minimize compliance and 
                recordkeeping burdens under this subsection for start-
                up companies.''.
            (2) Conforming amendments.--
                    (A) Subsection (g) of section 41 of the Internal 
                Revenue Code of 1986 is amended by adding at the end 
                the following new sentence: ``This subsection shall not 
                apply with respect to any amount determined under 
                subsection (a) to which subsection (i) applies.''.
                    (B) Section 1324(b)(2) of title 31, United States 
                Code, is amended by inserting ``41(i),'' after 
                ``36A,''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2011.

SEC. 8. ACCELERATED COMMERCIALIZATION OF TAXPAYER-FUNDED RESEARCH.

    (a) Definitions.--In this section, the following definitions shall 
apply:
            (1) Council.--The term ``Council'' means the Advisory 
        Council on Innovation and Entrepreneurship of the Department of 
        Commerce established pursuant to section 25(c) of the 
        Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 
        3720(c)).
            (2) Extramural budget.--The term ``extramural budget'' 
        means the sum of the total obligations minus amounts obligated 
        for such activities by employees of the agency in or through 
        Government-owned, Government-operated facilities, except that 
        for the Department of Energy it shall not include amounts 
        obligated for atomic energy defense programs solely for weapons 
        activities or for naval reactor programs, and except that for 
        the Agency for International Development it shall not include 
        amounts obligated solely for general institutional support of 
        international research centers or for grants to foreign 
        countries.
            (3) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning given the 
        term in section 101(a) of the Higher Education Act of 1965 (20 
        U.S.C. 1001(a)).
            (4) Research or research and development.--The term 
        ``research'' or ``research and development'' means any activity 
        that is--
                    (A) a systematic, intensive study directed toward 
                greater knowledge or understanding of the subject 
                studied;
                    (B) a systematic study directed specifically toward 
                applying new knowledge to meet a recognized need; or
                    (C) a systematic application of knowledge toward 
                the production of useful materials, devices, and 
                systems or methods, including design, development, and 
                improvement of prototypes and new processes to meet 
                specific requirements.
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of Commerce.
    (b) Grant Program Authorized.--
            (1) In general.--Each Federal agency that has an extramural 
        budget for research or research and development that is in 
        excess of $100,000,000 for each of fiscal years 2013 through 
        2017, shall transfer 0.15 percent of such extramural budget for 
        each of such fiscal years to the Secretary to enable the 
        Secretary to carry out a grant program in accordance with this 
        subsection.
            (2) Grants.--
                    (A) Awarding of grants.--
                            (i) In general.--From funds transferred 
                        under paragraph (1), the Secretary shall use 
                        the criteria developed by the Council to award 
                        grants to institutions of higher education, 
                        including consortia of institutions of higher 
                        education, for initiatives to improve 
                        commercialization and transfer of technology.
                            (ii) Request for proposals.--Not later than 
                        30 days after the Council submits the 
                        recommendations for criteria to the Secretary 
                        under subsection (c)(4)(B), and annually 
                        thereafter for each fiscal year for which the 
                        grant program is authorized, the Secretary 
                        shall release a request for proposals.
                            (iii) Applications.--Each institution of 
                        higher education that desires to receive a 
                        grant under this subsection shall submit an 
                        application to the Secretary not later than 90 
                        days after the Secretary releases the request 
                        for proposals under clause (ii).
                            (iv) Council review.--
                                    (I) In general.--The Secretary 
                                shall submit each application received 
                                under clause (iii) to the Council for 
                                Council review.
                                    (II) Recommendations.--The Council 
                                shall review each application received 
                                under subclause (I) and submit 
                                recommendations for grant awards to the 
                                Secretary, including funding 
                                recommendations for each proposal.
                                    (III) Public release.--The Council 
                                shall publicly release any 
                                recommendations made under subclause 
                                (II).
                                    (IV) Consideration of 
                                recommendations.--In awarding grants 
                                under this subsection, the Secretary 
                                shall take into consideration the 
                                recommendations of the Council under 
                                subclause (II).
                    (B) Commercialization capacity building grants.--
                            (i) In general.--The Secretary shall award 
                        grants to support institutions of higher 
                        education pursuing specific innovative 
                        initiatives to improve an institution's 
                        capacity to commercialize faculty research that 
                        can be widely adopted if the research yields 
                        measurable results.
                            (ii) Content of proposals.--Grants shall be 
                        awarded under this subparagraph to proposals 
                        demonstrating the capacity for accelerated 
                        commercialization, proof-of-concept 
                        proficiency, and translating scientific 
                        discoveries and cutting-edge inventions into 
                        technological innovations and new companies. In 
                        particular, grant funds shall seek to support 
                        innovative approaches to achieving these goals 
                        that can be replicated by other institutions of 
                        higher education if the innovative approaches 
                        are successful.
                    (C) Commercialization accelerator grants.--The 
                Secretary shall award grants to support institutions of 
                higher education pursuing initiatives that allow 
                faculty to directly commercialize research in an effort 
                to accelerate research breakthroughs. The Secretary may 
                prioritize those initiatives that have a management 
                structure that encourages collaboration between other 
                institutions of higher education or other entities with 
                demonstrated proficiency in creating and growing new 
                companies based on verifiable metrics.
            (3) Assessment of success.--Grants awarded under this 
        subsection shall use criteria for assessing the success of 
        programs through the establishment of benchmarks.
            (4) Termination.--The Secretary shall have the authority to 
        terminate grant funding to an institution of higher education 
        in accordance with the process and performance metrics 
        recommended by the Council.
            (5) Limitations.--
                    (A) Project management costs.--A grant recipient 
                may use not more than 10 percent of grant funds awarded 
                under this subsection for the purpose of funding 
                project management costs of the grant program.
                    (B) Supplement, not supplant.--An institution of 
                higher education that receives a grant under this 
                subsection shall use the grant funds to supplement, and 
                not supplant, non-Federal funds that would, in the 
                absence of such grant funds, be made available for 
                activities described in this section.
            (6) Unspent funds.--Any funds transferred to the Secretary 
        under paragraph (1) for a fiscal year that are not expended by 
        the end of such fiscal year may be expended in any subsequent 
        fiscal year through fiscal year 2017. Any funds transferred 
        under paragraph (1) that are remaining at the end of the grant 
        program's authorization under this subsection shall be 
        transferred to the Treasury for deficit reduction.
    (c) Council.--
            (1) In general.--Not later than 120 days after the date of 
        the enactment of this Act, the Council shall convene and 
        develop recommendations for criteria in awarding grants to 
        institutions of higher education under subsection (b).
            (2) Submission to commerce and publicly released.--The 
        Council shall--
                    (A) submit the recommendations described in 
                subparagraph (A) to the Secretary; and
                            (i) release the recommendations to the 
                        public.
                    (B) Majority vote.--The recommendations submitted 
                by the Council, as described in this paragraph, shall 
                be determined by a majority vote of Council members.
                    (C) Performance metrics.--The Council shall develop 
                and provide to the Secretary recommendations on 
                performance metrics to be used to evaluate grants 
                awarded under subsection (b).
            (3)  Evaluation.--
                    (A) In general.--Not later than 180 days before the 
                date that the grant program authorized under subsection 
                (b) expires, the Council shall conduct an evaluation of 
                the effect that the grant program is having on 
                accelerating the commercialization of faculty research.
                    (B) Inclusions.--The evaluation shall include--
                            (i) the recommendation of the Council as to 
                        whether the grant program should be continued 
                        or terminated;
                            (ii) quantitative data related to the 
                        effect, if any, that the grant program has had 
                        on faculty research commercialization; and
                            (iii) a description of lessons learned in 
                        administering the grant program, and how those 
                        lessons could be applied to future efforts to 
                        accelerate commercialization of faculty 
                        research.
                    (C) Availability.--Upon completion of the 
                evaluation, the evaluation shall be made available on a 
                public website and submitted to Congress. The Secretary 
                shall notify all institutions of higher education when 
                the evaluation is published and how it can be accessed.
    (d) Construction.--Nothing in this section may be construed to 
alter, modify, or amend any provision of chapter 18 of title 35, United 
States Code (commonly known as the ``Bayh-Dole Act'').

SEC. 9. ECONOMIC IMPACT OF MAJOR FEDERAL AGENCY RULES.

    Section 553 of title 5, United States Code, is amended by adding at 
the end the following:
    ``(f) Required Review Before Issuance of Major Rules.--
            ``(1) In general.--Before issuing a notice of proposed 
        rulemaking in the Federal Register regarding the issuance of a 
        proposed major rule, the head of the Federal agency or 
        independent regulatory agency seeking to issue the rule shall 
        complete a review that--
                    ``(A) analyzes the problem that the proposed rule 
                intends to address, including--
                            ``(i) the specific market failure, such as 
                        externalities, market power, or lack of 
                        information, that justifies such rule; or
                            ``(ii) any other specific problem, such as 
                        the failures of public institutions, that 
                        justifies such rule;
                    ``(B) analyzes the expected impact of the proposed 
                rule on the ability of new businesses to form and 
                expand;
                    ``(C) identifies the expected impact of the 
                proposed rule on State, local, and tribal governments, 
                including the availability of resources--
                            ``(i) to carry out the mandates imposed by 
                        the rule on such government entities; and
                            ``(ii) to minimize the burdens that 
                        uniquely or significantly affect such 
                        governmental entities, consistent with 
                        achieving regulatory objectives;
                    ``(D) identifies any conflicting or duplicative 
                regulations;
                    ``(E) determines--
                            ``(i) if existing laws or regulations 
                        created, or contributed to, the problem that 
                        the new rule is intended to correct; and
                            ``(ii) if the laws or regulations referred 
                        to in clause (i) should be modified to more 
                        effectively achieve the intended goal of the 
                        rule; and
                    ``(F) includes the cost-benefit analysis described 
                in paragraph (2).
            ``(2) Cost-benefit analysis.--A cost-benefit analysis 
        described in this paragraph shall include--
                    ``(A)(i) an assessment, including the underlying 
                analysis, of benefits anticipated from the proposed 
                rule, such as--
                            ``(I) promoting the efficient functioning 
                        of the economy and private markets;
                            ``(II) enhancing health and safety;
                            ``(III) protecting the natural environment; 
                        and
                            ``(IV) eliminating or reducing 
                        discrimination or bias; and
                    ``(ii) the quantification of the benefits described 
                in clause (i), to the extent feasible;
                    ``(B)(i) an assessment, including the underlying 
                analysis, of costs anticipated from the proposed rule, 
                such as--
                            ``(I) the direct costs to the Federal 
                        Government to administer the rule;
                            ``(II) the direct costs to businesses and 
                        others to comply with the rule; and
                            ``(III) any adverse effects on the 
                        efficient functioning of the economy, private 
                        markets (including productivity, employment, 
                        and competitiveness), health, safety, and the 
                        natural environment; and
                    ``(ii) the quantification of the costs described in 
                clause (i), to the extent feasible;
                    ``(C)(i) an assessment, including the underlying 
                analysis, of costs and benefits of potentially 
                effective and reasonably feasible alternatives to the 
                proposed rule, which have been identified by the agency 
                or by the public, including taking reasonably viable 
                nonregulatory actions; and
                    ``(ii) an explanation of why the proposed rule is 
                preferable to the alternatives identified under clause 
                (i).
            ``(3) Report.--Before issuing a notice of proposed 
        rulemaking in the Federal Register regarding the issuance of a 
        proposed major rule, the head of the Federal agency seeking to 
        issue the rule shall--
                    ``(A) submit the results of the review conducted 
                under paragraph (1) to--
                            ``(i) Congress; and
                            ``(ii) the Office of Information and 
                        Regulatory Affairs in the Office of Management 
                        and Budget; and
                    ``(B) post the results of the review conducted 
                under paragraph (1) on a publicly available website.
            ``(4) Judicial review.--Any determinations made, or other 
        actions taken, by an agency or independent regulatory agency 
        under this subsection shall not be subject to judicial review.
            ``(5) Defined term.--In this subsection the term `major 
        rule' has the meaning given the term in section 804.''.

SEC. 10. BIENNIAL STATE STARTUP BUSINESS REPORT.

    (a) Data Collection.--The Secretary of Commerce shall regularly 
compile information from each of the 50 States and the District of 
Columbia on State laws that affect the formation and growth of new 
businesses within the State or District.
    (b) Report.--Not later than 18 months after the date of the 
enactment of this Act, and every 2 years thereafter, the Secretary, 
using data compiled under subsection (a), shall prepare a report that--
            (1) analyzes the economic effect of State and District laws 
        that either encourage or inhibit business formation and growth; 
        and
            (2) ranks the States and the District based on the 
        effectiveness with which their laws foster new business 
        creation and economic growth.
    (c) Distribution.--The Secretary shall--
            (1) submit each report prepared under subsection (b) to 
        Congress; and
            (2) make each report available to the public on the 
        Department of Commerce's website.
    (d) Inclusion of Large Metropolitan Areas.--Not later than 90 days 
after the submission of the first report under this section, the 
Secretary of Commerce shall submit to Congress a study on the 
feasibility and advisability of including, in future reports, 
information about the effect of local laws and ordinances on the 
formation and growth of new businesses in large metropolitan areas 
within the United States.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this section.

SEC. 11. NEW BUSINESS FORMATION REPORT.

    (a) In General.--The Secretary of Commerce shall regularly compile 
quantitative and qualitative information on businesses in the United 
States that are not more than 1 year old.
    (b) Data Collection.--The Secretary shall--
            (1) regularly compile information from the Bureau of the 
        Census' business register on new business formation in the 
        United States; and
            (2) conduct quarterly surveys of business owners who start 
        a business during the 1-year period ending on the date on which 
        such survey is conducted to gather qualitative information 
        about the factors that influenced their decision to start the 
        business.
    (c) Random Sampling.--In conducting surveys under subsection 
(b)(2), the Secretary may use random sampling to identify a group of 
business owners who are representative of all the business owners 
described in subsection (b)(2).
    (d) Benefits.--The Secretary shall inform business owners selected 
to participate in a survey conducted under this section of the benefits 
they would receive from participating in the survey.
    (e) Voluntary Participation.--Business owners selected to 
participate in a survey conducted under this section may decline to 
participate without penalty.
    (f) Report.--Not later than 18 months after the date of the 
enactment of this Act, and every 3 months thereafter, the Secretary 
shall use the data compiled under subsection (b) to prepare a report 
that--
            (1) lists the aggregate number of new businesses formed in 
        the United States;
            (2) lists the aggregate number of persons employed by new 
        businesses formed in the United States;
            (3) analyzes the payroll of new businesses formed in the 
        United States;
            (4) summarizes the data collected under subsection (b); and
            (5) identifies the most effective means by which government 
        officials can encourage the formation and growth of new 
        businesses in the United States.
    (g) Distribution.--The Secretary shall--
            (1) submit each report prepared under subsection (f) to 
        Congress; and
            (2) make each report available to the public on the 
        Department of Commerce's website.
    (h) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this section.

SEC. 12. RESCISSION OF UNSPENT FEDERAL FUNDS.

    (a) In General.--Notwithstanding any other provision of law, of all 
available unobligated funds for fiscal year 2012, the amount necessary 
to carry out this Act and the amendments made by this Act in 
appropriated discretionary funds are hereby rescinded.
    (b) Implementation.--The Director of the Office of Management and 
Budget shall determine and identify from which appropriation accounts 
the rescission under subsection (a) shall apply and the amount of such 
rescission that shall apply to each such account. Not later than 60 
days after the date of the enactment of this Act, the Director of the 
Office of Management and Budget shall submit a report to the Secretary 
of the Treasury and Congress of the accounts and amounts determined and 
identified for rescission under the preceding sentence.
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