Economic Development

The following highlights the DRCC's focus and activity in the area of Economic Development from a legislative standpoint.

• HB 1447 (Cline)/SB 1326 (Herring) – Refundable Research and Development Tax Credit - $5 million. Per our previous reports, this legislation creates a Refundable Research and Development Tax Credit for start-ups and early stage firms in targeted industries, including additional incentives to companies accessing research and development services through Virginia colleges and universities, strengthening our business competitiveness. The DRCC worked actively with the Northern Virginia Technology Council (NVTC), Sen. Mark Herring and other interested stakeholders to ensure this legislation passed in its original form. You may recall, a substitute to the House version of this bill was passed that included an enactment clause that stated that the tax credit shall not be allowed if the taxpayer applying for the credit, “performs, pays for, or incurs expenses for research in the Commonwealth on human cells or tissue derived from induced abortions or from stem cells obtained from human embryos, nor shall any such tax credit be allowed for expenses paid or incurred for such research…”  This amendment considerably changed the dynamic on this legislation.  We were very pleased that the legislation that was ultimately approved by both the House and the Senate did NOT include this language. The legislation is now before the Governor for his signature.  As described above, the $5 million in funding for this tax credit was also included in the approved budget. (Updated 03/11)
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  HB 2324 (Lingamfelter)/SB 1485 (Martin/Herring) – Virginia Research and Technology Innovation Program (VRTIP) - $25 million.  The DRCC expressed strong support for this legislation, which creates a comprehensive structure to grow Virginia’s innovation economy.  The VRTIP will serve as a catalyst for leveraging the entrepreneur, Virginia higher education research assets and private-sector funding to encourage evolving technologies that create the industries, businesses and jobs of the future.  The differences between the House and Senate were resolved by the Committee of Conference that was established in the final days of the session, and $10 million of the $25 million requested was included in the approved budget. (Updated 03/11)
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  HB 2122 (Greason) – Sales and use tax exemption; certain computer equipment and enabling software (i.e., data centers).  The DRCC actively supported this important bill given the positive economic development impact we believe it would have had in our communities, as well as the competitive disadvantage we believe the limits in the current statute create for our data center businesses. Unfortunately, VEDP and the Governor’s Administration actively opposed this legislation, which proved to be a hurdle that could not be overcome. The bill was ultimately defeated in a House Finance subcommittee by a vote of 6-4. We actually had a second opportunity to advance this issue through language that was added to the Senate budget that would have achieved the same goal.  However, this language was not included in the final budget that was passed at the end of the session. (Updated 03/11) 

The experience we faced in working on both this bill and the related budget amendment brought to light the disconnect that seems to exist between northern Virginia and VEDP at the state level.  As we consider issues to continue to focus on in the off-session, we recommend that the business community work with members of our delegation, as well as our local economic development officials, to have a discussion with the Administration and VEDP focused on helping them to better understand and support our economic development priorities and the tools we need to support them.

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  HB 1951 (Villanueva) – Virginia Public Procurement Act; bid, performance, and payment bonds.  The DRCC decided to support this legislation given the positive impact we believe it will have on those smaller employers who seek to work with the Commonwealth. It raises the minimum contract amount required for bid, performance, or payment bonds to $1 million. Currently, the minimum contract amounts are generally $100,000 for non-transportation-related construction contracts and $250,000 for transportation-related projects partially or wholly funded by the Commonwealth.  We were very pleased that this legislation was successfully passed by the House and Senate this session. (Updated 03/11)
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  SB 1365 (McWaters)/HB 2283 (Merricks/Comstock) – Credit against insurance license tax for investments in Virginia small business investment companies. These bills would have provided a tax credit against the state license tax liability on certain insurance companies for investments in Virginia small business investment companies. The tax credit would have been capped at one sixth of $100 million per year and could not exceed $100 million for the life of the program.  The DRCC has supported this concept for the past two sessions, but it has run into challenges each year given the complexity of the proposal.  For this reason, the patron of the Senate bill, Sen. Jeff McWaters asked that his bill be stricken from the docket in the Senate Finance Committee, along with a request that the Committee work on this concept in the off-session. The House version of this bill also failed to advance. Given the Partnership’s interest in this concept, we communicated to Sen. McWaters that we would be very interested in continuing to work with him in the off-session on this, as appropriate. (Updated 03/11)