Governor McDonnell Signs Legislation Supporting Virginia’s Growing Innovation Economy

~Legislation is First Part of Governor’s 2011 “Opportunity at Work” Agenda~ RICHMOND – Governor Bob McDonnell today ceremonially signed the first part of his “Opportunity at Work” legislative package, along with other economic development legislation, at a morning event at the Virginia Biotechnology Research Park in Richmond. The 10 measures signed today are designed to help attract new businesses to Virginia and help existing businesses grow and expand.  The Governor was joined at today’s signing ceremony by Lieutenant Governor Bill Bolling, Secretary of Commerce and Trade Jim Cheng, Senior Economic Advisor Bob Sledd, Secretary of Technology Jim Duffey, Secretary of Education Gerard Robinson and members of the General Assembly.

             Speaking about the legislation signed today, Governor McDonnell remarked, “The key to turning our economy around and getting Virginians back to work is ensuring that businesses continue to choose the Commonwealth of Virginia to locate, grow and expand.  Our economic success is dependent on good jobs, a well educated workforce and a strong business climate.  The legislation I ceremonially signed today positions us to continue to be the best state in America in which to start or grow a business.   It includes measures that establish research and development tax credits, streamlines the criteria for the Governor’s Development Opportunity Fund and creates Local Defense Production Zones that qualify businesses for tax breaks on tools and machinery created for national defense when they locate within those Zones.  In today’s global economy, it is essential that we not only stay competitive with our fellow states, but also with nations around the world, and this legislation will help us do just that.”

             Lieutenant Governor Bill Bolling, Virginia’s Chief Jobs Creation Officer, said, “I am gratified to stand beside Governor McDonnell as he signs part of the economic development legislation passed during the 2011 General Assembly Session. I applaud the broad, bipartisan support that these initiatives received from members of the General Assembly. These new innovative economic development initiatives will allow us to aggressively build upon the successes of the past and compete for new business in a wide range of emerging industries. They will help ensure that key sectors of Virginia’s economy will thrive and grow.”

             Speaking about his legislation establishing research and development tax credits, Senator Mark Herring (D-Leesburg) commented, “The key to growing Virginia's innovative economy is incentivizing research and development in the Commonwealth.  The tax credits we will now be able to offer for early-stage firms in targeted, rapidly growing industries will enable us to grow and keep more businesses here.  Companies have recognized that Virginia is perfectly situated for research and development and these tax credits will foster growth and make Virginia and our universities even more competitive.”

            Delegate Terry Kilgore (R-Gate City), who patroned legislation adjusting the criteria for the Governor’s Development Opportunity Fund, noted, “The Governor’s Development Opportunity Fund is one of the best tools we have to recruit companies to Virginia.  The legislation we passed streamlines this incentive and creates the opportunity for new jobs and investment for projects - especially in localities with high unemployment or high poverty.  By making this adjustment we will be better able to bring new jobs to areas of the state that have been most affected by the economic downturn.”

             Legislation bolstering the Commonwealth Research and Commercialization Fund was co-patroned by Delegate Scott Lingamfelter (R-Woodbridge), who added, “By bolstering the Commonwealth Research and Commercialization Fund we are laying the groundwork for a long-term economic strategy for emerging technology innovation in Virginia. This is just the beginning of what will be a game-changer for the Commonwealth and our economic prosperity. The collaboration between the private sector and the research universities is essential to this - and I am thrilled and invigorated about the potential outcomes in emerging technologies.”

 “Opportunity at Work: Virginia’s Innovation Economy” Legislation Signed Today

 SB1326 (Herring)/ HB1447 (Cline) – Creates the Research and Development Tax Credit

•           Creates a Research and Development Tax Credit for start ups and early stage firms in targeted industries, especially those companies accessing research and development services through Virginia colleges and universities to strengthen our business competitiveness

 SB1379 (Stanley)/ HB1982 (Kilgore) – Adjusts criteria for the Governor's Development Opportunity Fund

•           This initiative establishes a state-wide level of 50 new jobs and $5 million in capital investment, and it reduces the level of required new jobs and capital investment for those localities that have a high unemployment rate and/or high poverty

•           Since 2006, the jobs and capital investment qualification criteria for awards from the Governor's Development Opportunity Fund (GOF) have been primarily based on the size of the locality where the project may locate, with nine tiers of qualification. Population is not an indicator of fiscal stress or need for employment, so this is not the best criteria to use to ensure this incentive can be deployed where needed most

 SB1485 (Newman and Herring)/ HB2324 (Lingamfelter) – Bolsters the Commonwealth Research and Commercialization Fund to create a comprehensive structure to grow Virginia's innovation economy

•           This program 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

 Other Economic Development Bills

 SB999 (Stosch/McEachin)/ HB1822 (Peace) – Local Defense Production Zone

•           This legislation creates a separate classification of machinery and tools designed and used directly in manufacturing or processing materials, components, or equipment for national defense

•           Localities are authorized to create Local Defense Production Zones and to tax such machinery and tools at a rate that is less than the rate generally applicable to machinery and tools.

 SB1408 (Ruff) – Local BPOL tax exemption for unprofitable businesses

•           Allows localities to exempt from the BPOL tax businesses that lose money and are unprofitable during the taxable year, for taxable years beginning on or after January 1, 2012.

 HB1437 (Cole) – Provides a choice for localities on how to impose BPOL tax

•           Allows localities to decide whether to impose the BPOL tax on a business's gross receipts or its Virginia taxable income.

 About the Virginia BioTechnology Research Park

The Virginia BioTechnology Research Park is currently home to a unique mix of over 60 public and private bioscience companies, research institutes affiliated with the VCU Medical Center, and major state and national medical laboratories. These companies are housed in nine buildings totaling more than 1.1 million square feet of space, representing an employee base that exceeds 2,000. The Park’s nationally recognized biosciences business incubation program, the Virginia Biosciences Development Center (VBDC), has successfully graduated more than 40 client companies, including three publicly traded firms.