VA Gov Signs Bills Supporting TBED

Five bills in support of Gov. Bob McDonnell's "Jobs and Opportunity Agenda" were signed into law this week, including a measure to exempt the capital gains tax on investments in science-based or biotech startups, designed to provide a significant incentive for investors in technology start-ups.

Under the bill (SB 428/HB 523), qualified investments in a technology, biotechnology, or science-based startup company in the Commonwealth with less than $3 million in annual revenues will be exempt from capital gains tax. Investments must be made between July 1, 2010 and June 30, 2013.

The governor also signed a measure (SB 644/HB 677) establishing the Specialized Biotechnology Research Performance Grant Program for nonprofit entities engaged in R&D related to molecular diagnostics and drug development that enter into a performance-based memorandum of understanding with the Commonwealth. Beginning in FY12, grants of up to $22 million will be paid in $5.5 million increments. Additional measures supporting the governor's agenda were signed into law earlier this month (see the Feb. 24, 2010 Digest for more information on the legislative package).

The 2010-2012 budget approved by the legislature provides additional funding and incentives to support technology-based economic development, including $4.5 million in FY11 and $5 million in FY12 for the Innovation and Entrepreneurship Investment Authority, the parent authority of the Center for Innovative Technology (CIT). This includes $500,000 in FY11 and $1 million in FY12 to fund the GAP program, which provides financing for technology and life science companies administered by CIT. CIT also generates non-state funding from federal and private sources and projects total funding of up to $12 million for FY11-12.

The Virginia Economic Development Partnership will receive $18.9 million in FY11 and $19.25 million in FY12, which includes $3 million over the biennium to establish a Virginia Biotechnology Wet-Laboratory Program. The enrolled version of the 2010-12 budget is available at: http://leg1.state.va.us/101/bud/budsum/bud30e.pdf.

Last week, Gov. McDonnell issued an executive order establishing the Governor's Commission on Higher Education Reform, Innovation and Investment. The council, consisting of up to 30 members appointed by the governor, is charged with developing a comprehensive strategy for increased educational attainment and skills development. Findings and recommendations are due Sept. 30, 2010. More information is available at: http://www.governor.virginia.gov/news/viewRelease.cfm?id=92.