Resources
Links
Committee

The Silicon Valley Leadership Group and its 285 member companies are dedicated to leading the country out of economic recession and building the industries of the future. Many policies on the federal level can help create the environment to enable American businesses to flourish.  We highly caution Congress and the Administration, however, to avoid policies that stifle job growth and innovation, such as the regulation of venture capital firms under the SEC.  While the Administration’s intention is to mitigate risks, this sector does not pose a threat to the stability of the financial system and such action would eliminate the incentives that created the Silicon Valley and its entrepreneurial culture.

International Tax Deferral
Congress and the Administration are considering a proposal which would severely limit, and possibly eliminate entirely, U.S. multinational businesses’ ability to "defer" U.S. tax on active foreign business income. The loss of deferral would immediately increase taxes for U.S. businesses with worldwide operations and have a negative impact on employees and suppliers. The additional tax burden would ultimately force U.S. companies to surrender lucrative markets to foreign competitors. In addition, the additional cash drain on many U.S. companies could make them acquisition targets of foreign competitors. We support deferral and oppose attempts to eliminate the ability of U.S. businesses to defer taxes on internationally held interests. 

Research & Development Tax Credit
R&D is critical to the nation’s economic competitiveness in the global marketplace. The R&D credit spurs investments in new technologies and is an important incentive used by U.S., California and Silicon Valley employers to help them do what they do best: innovate and create jobs. For every dollar increase in research spending on the margin, a return has been achieved up to as much as $2.96, for each dollar of the credit claimed. In Silicon Valley alone, last year, employers invested more than $41 billion in research and development. We strongly support a seamless transition to extend and improve the R&D tax credit. U.S. employers and universities are developing new innovations right now. Any future decisions on research and development investments are determined based on a typical lifecycle of a product and knowing that this important economic stimulus ingredient is in place.  Therefore, we support proposals by Congress and the Administration to make the R&D permanent as well as enhancing the R&D credit to encourage companies to increase R&D spending.

Repatriation of Foreign Earnings
The nation’s recession is fueled in part by credit restraint and severe limits on liquidity. Many companies have significant financial assets overseas due to the high-tax cost of bringing those funds back (repatriation) to the U.S. These assets could be invested in restoring the economy at virtually no cost to the federal government. When a U.S. firm conducts its foreign business through a foreign-chartered subsidiary corporation, its overseas earnings are not subject to U.S. tax as long as the income remains in the hands of the foreign subsidiary and is thus reinvested abroad. The income is subject to tax only when it is ultimately brought back or “repatriated” to the U.S. parent corporation as dividends. Unfortunately, these earnings remain trapped overseas due to U.S. tax rates (in some cases 20-25%) that many foreign competitors do not face. This prevents employers from investing these revenues in U.S. operations and limits the ability to create jobs, build infrastructure and develop R&D. Existing profits earned by foreign subsidiaries of U.S. companies could be repatriated at a reduced tax rate and immediately injected to bring considerably more cash flow into the U.S. economy. Also, the increased flow of capital otherwise trapped overseas is otherwise unrealized tax revenue. We support the repatriation of foreign earnings as an incentive centerpiece to free up urgently needed capital.

Comprehensive Health Care Reform
Comprehensive health care reform is critical and necessary for the survival of our companies and our ability to provide good paying jobs in today’s economy. As employers, we are committed to providing affordable health care benefits for our workers, but sky-rocketing premiums threaten our ability to do so. Any reform measures should focus on investments in prevention and wellness to address costly chronic diseases, research for new treatments and innovations in health care delivery, health IT development, and reviewing and streamlining of regulations. We urge Congress and the Obama Administration to negotiate fundamental system reform with shared responsibility.

Cybersecurity
The Leadership Group recognizes the importance of cyber-security for economic growth, public safety and national security.  Leadership in the information economy requires a commitment to ensure that data be stored and transmitted securely.  Furthermore, as our infrastructure is increasingly digitally managed, it is imperative that those networks be resistant to cyber intrusions that could pose significant public safety hazards and potential national security risks.  The Leadership Group strives to bridge the gap between policy makers and industry experts in order to develop effective cyber-security policies that address these concerns.  As the federal government makes cyber-security a high priority, the Leadership Group advocates appropriate regulations on data storage security and information privacy; legal frameworks and international cooperation to fight cybercrime; increased funding for cyber-security research; and public-private partnerships to improve transparency, awareness and training. 

COMPETES Act funding
The Silicon Valley Leadership Group was greatly encouraged by amount of funding for both education and research in the ARRA.  We support a number of initiatives and policy reforms aimed at improving public education and the environment for US companies, as illustrated in the omnibus America COMPETES authorization.  In particular, this initiative was designed to expand opportunities for educator professional development; provide research support for innovative technologies as well as coordination for research infrastructure requirements at universities and federal laboratories; and maximize loan eligibility for small business loans. While ARRA will provide a needed boost in some of these areas, we believe that full appropriations funding for America COMPETES will go even further in strengthening our ability to compete long term in a global economy.

Immigration Reform & Access to Talent
Despite general layoffs and a decrease in demand for these visas, the need for specialized skills that cannot be filled solely by American citizens still exists. These workers do not displace but fill gaps in our workforce.  At the same time, we recognize the importance of having a home grown skilled local workforce, and members of the Silicon Valley Leadership Group individually devote millions of dollars to improving student performance in math and science, supporting teacher professional development, and bolstering college access.

As part of this 2-pronged strategy, we believe that allowing skilled individuals to work in the U.S. maintains and grows innovation; produces American jobs; contributes to our nation’s economy; and boosts competitiveness. To that end, we support legislative and regulatory efforts to:

1. Raise the H-1B cap and allow demand-based fluctuation
2. Exempt U.S. advanced degree graduates from H-1B cap
3. Apply existing 20,000 H-1B set-aside to foreign university advanced degree STEM graduates
4. Increase employment-based Green Card cap to reduce and prevent future backlogs
5. Exempt U.S. advanced degree graduates, as well as foreign advanced degree STEM with US work experience, from the Green Card Cap
6. Exempt from the Green Card Cap those spouses and children of green card recipients

Reduction of green house gases
The Leadership Group was one of a few business organizations in California that supported the state’s Global Warming Solutions Act of 2006, AB 32, which requires the state to reduce its greenhouse gas emissions. We did so because we believe reducing greenhouse gas emissions and our dependence on imported fossil fuels is essential.  At the national level, the Leadership Group supports legislation that focuses on a market-based cap-and-trade system that encourages innovation, spurs economic growth and the creation of large numbers of high-paying jobs.  Such a broad economy-wide emissions trading system should cover all major sources of emissions, either directly or indirectly, and support the state of California’s objectives by establishing targets to reduce emissions to 1990 levels by 2020 and to 80 percent below that level by 2050, which is what scientists tell us is needed to avoid the worst effects of climate change. Furthermore, the system should include strict criteria for cost-containment mechanisms such as offsets and borrowing. 

The United States has the chance to take a leadership role in addressing climate change, positioning the country to aggressively reduce its greenhouse gas emissions and seize the innovation high ground as the demand for new technologies to reduce greenhouse gas emissions creates a multibillion-dollar global market.  It is not too late to tackle climate change, but it will be unless the world takes action soon, and the U.S. needs to lead the way. We urge the U.S. Congress to take advantage of this opportunity.

Investing in Clean Tech, Energy Efficiency & Renewables
The adoption of a National Renewable Energy Standard (RES), modeled after California’s approach would pump tens of billions of dollars annually into our economy, create hundreds of thousands of US clean tech jobs, and help build US leadership in the clean tech sector.  With the influx of stimulus dollars, the federal and state governments are well positioned to partner with the private sector to fund the deployment of renewable energy sources throughout the nation.  Solar and other clean energy areas are well positioned to play a leading role in this endeavor.  We encourage DOE to:
1. Adopt a more effective delegated lending program to ensure stimulus dollars are lent quickly, prudently and effectively to entrepreneurial companies deploying innovative technologies. Under such an approach, patterned after the Export-Import Bank program, DOE would be able to ensure stimulus dollars are not only lent to large scale projects, but are used to stimulate smaller, more entrepreneurial companies.
2. Expand R&D funding for early stage commercial-ready renewable energy technologies to help cash strapped companies do critical redesigns on production and installation that exponentially improve performance while lowering costs.
3. Fund programs to develop best practices and standards for municipal permitting and inspection processes based on pilots by SolarTech, an initiative of the Leadership Group.
4. Fund new energy efficiency programs for commercial facilities and data centers patterned after proven models managed by the Leadership Group in collaboration with Pacific Gas & Electric. 

Include BART Extension to Silicon Valley in the Federal Transportation Reauthorization Bill
Last November, voters in Santa Clara County reaffirmed their desire to extend Bay Area Rapid Transit to Silicon Valley with a 66.78% yes vote on Measure B.  The 16.1 mile extension will carry nearly 100,000 passengers per day, adding thousands of jobs both before and after construction of the line.  The Valley Transportation Authority (VTA), our regional transportation agency, will be reentering the project in the New Starts program in August to secure at least $750 million in Federal funds.  However, the current Federal transportation bill (SAFETEA-LU) expires in September.  As part of the successor legislation to SAFETEA-LU, the BART project will need to be re-authorized in the new starts program to remain eligible for federal funds.   The Leadership Group strongly encourages Congress to support the re-authorization of BART to Silicon Valley in the next Federal Transportation bill.

Support $400,000 Federal Appropriation for Santa Clara County Housing Trust
Several years ago, public and private sector leaders in Santa Clara County, under the leadership of the Leadership Group, created a unique, voluntarily-funded housing trust fund to assist working families secure a home. This partnership has become a national model of success. The Trust’s funds are dispersed equally in three areas of critical need: 1) first time homebuyers, 2) affordable rental homes and 3) homeless assistance and transitional housing. Nearly two of every three dollars raised for the Trust are donated by businesses and citizens. Every jurisdiction in the county participates, as well as the state and federal government.

In the past 8-plus years, an investment of $30.11 million has leveraged $1.34 billion in private development (or $50 for every dollar contributed), which has already assisted 7,371 families including: 2,043 first time homebuyers and 1,584 rental homes and helping 3,744 families/individuals with homeless assistance. Despite this record, housing continues to be a challenge in Silicon Valley. As a result, the Board of Directors of the Housing Trust intends to seek a $400,000 appropriation in the fiscal year 2010 HUD Appropriations bill. The Housing Trust’s track record of leveraging dollars will multiply that investment to $17.8 million in private development.