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Virginia Jobs Plan Advances; $50M Econ. Dev. Increase Requested

February 24, 2010

Nearly all components of a comprehensive legislative package set forth by Gov. Bob McDonnell that would provide tax credits for green jobs, invest in renewable energy R&D, and support the biotechnology and life sciences industries have passed at least one chamber in the legislature at this point. The governor also introduced amendments to the 2010-12 budget proposed by former Gov. Tim Kaine that would provide an additional $50 million for economic development initiatives.

The "Jobs and Opportunity Agenda" was announced during the governor's first weeks in office and focuses on job creation and tax incentives to grow the state's economy. Last week, the governor's office announced that 30 of the 34 measures within the package received legislative approval. Highlights of the legislation as it relates to tech-based economic development are listed below:

  • SB 623/HB 803 — Creates a $500 income tax credit for each green job created (up to 350).
  • SB 644/HB 677 — Establishes the Specialized Biotechnology Research Performance Grant Program for nonprofit entities engaged in research, development, and production related to molecular diagnostics and drug development that enter into a performance-based memorandum of understanding with the Commonwealth.
  • SB 428/HB 523 — Grants an income tax exemption on capital gains for qualified investments in technology and science startup companies.
  • SB 326/HB 928 — Creates the Virginia Universities Clean Energy Development and Economic Stimulus Foundation to identify and administer funding for R&D of alternative fuels and clean energy production.

A measure requiring 20 percent of any revenues and royalties from offshore natural gas and oil drilling to be invested in renewable energy R&D passed both chambers of the legislature and is awaiting the governor's signature.

Last week, Gov. McDonnell presented amendments to the 2010-12 budget proposed by former Gov. Kaine in December, and although many of the governor's proposals call for spending reductions, an additional $50 million is proposed for economic development and recruitment initiatives. This includes:

  • $12.1 million in additional funding for the Governor's Development Opportunity Fund to recruit and retain businesses;
  • $8.5 million to increase Virginia Jobs Investment, Virginia Small Business Finance Authority's Loan Guarantee, and Business One-Stop programs;
  • $3 million to establish a competitive grant program to assist localities in developing wet lab space for biotechnology companies; and,
  • $2 million to establish state economic development offices through the Virginia Economic Development Partnership in China, India and the United Kingdom.

Funding for the Eminent Scholars program, which attracts and retains eminent scholars at Virginia's colleges and universities, would be eliminated in the governor's proposal ($6.8 million reduction).

Gov. McDonnell's proposed amendments to the 2010-12 budget are available at: http://www.governor.virginia.gov/docs/10-02-17_Gov_Recs.pdf/.