NVTC's 2013 General Assembly Session Wrap-Up: General Assembly Approves NVTC Priorities Including Transportation Funding, Data Center Incentives, Cybersecurity Accelerator, Increased Funding for Angel Investment Tax Credit

On Sat., Feb. 23, the Virginia General Assembly adjourned sine die concluding its 2013 legislative session. The General Assembly approved a number of NVTC priorities including comprehensive transportation funding legislation, new data center incentives, funding to launch the nation's first cybersecurity accelerator at the Center for Innovative Technology, and increased funding for the oversubscribed Angel Investment Tax Credit. These legislative initiatives will ensure that Virginia remains a top state for business and a global technology center.

During the 46-day short session, the General Assembly tackled more than 2,500 bills and resolutions related to a broad array of important issues, including Gov. Bob McDonnell's legislative initiatives addressing transportation funding, K-12 education reform, and job creation and economic development.

The General Assembly is scheduled to convene for a one-day Veto Session on Wednesday, April 3. In the interim, Gov. McDonnell will be reviewing more than 1,500 bills that were passed by the General Assembly. When the Veto Session convenes, legislators will have an opportunity to act on bills that may be vetoed or amended by the governor.

NVTC maintained a full-time presence in Richmond throughout the legislative session to actively advocate on behalf of Northern Virginia's technology community. NVTC's Public Policy Advocacy Team included NVTC Vice President of Policy Josh Levi, NVTC Public Policy Manager Joe Vidulich, and Myles Louria, director of government affairs of Hunton & Williams LLP.

NVTC's public policy advocacy was supplemented by strong participation from NVTC Board members and other leaders with many NVTC members providing ongoing advice and feedback through NVTC's weekly legislative conference calls, the NVTC TechPolitic Twitter feed and NVTC's online LinkedIn Public Policy Forum.

While NVTC's Four Year Vision drives the organization's overall advocacy efforts, NVTC's specific legislative priorities for the 2013 Legislative Session were outlined in a letter to policymakers before the session began.

Issues of specific interest to NVTC members that were passed by the General Assembly this session include:
Comprehensive Transportation Funding Package
Addressing Virginia's transportation funding shortfalls has long been a top NVTC priority. Through the strong leadership of Gov. Bob McDonnell and the tireless bipartisan efforts of legislative leaders in the Virginia General Assembly, a bipartisan majority of legislators approved comprehensive transportation funding legislation that Gov. McDonnell has referred to as "the first sustainable long-term transportation funding plan in 27 years." The legislation provides $3.5 billion for statewide construction and maintenance over the next five years. The legislation also provides an additional regional funding component for Northern Virginia that, when fully phased-in, will raise $350 million each year to fund regional transportation priorities, including $300 million to support Phase II of Dulles Rail.

NVTC had announced its support for Gov. McDonnell's transportation plan on January 18, commending the governor for his leadership in elevating transportation funding as a priority issue before the General Assembly this year and for proposing "new, long-term, sustainable and dedicated funding sources that will keep pace with Virginia's economic growth."

House Speaker Bill Howell (R-Fredericksburg) championed this legislation, which reflected a bipartisan compromise that was supported by the following Northern Virginia Senators and Delegates:

  • Sen. George Barker (D-Alexandria)
  • Sen. Chuck Colgan (D-Manassas)
  • Sen. Barbara Favola (D-Arlington)
  • Sen. Mark Herring (D-Leesburg)
  • Sen. Janet Howell (D-Reston)
  • Sen. Dave Marsden (D-Burke)
  • Sen. Toddy Puller (D-Mount Vernon)
  • Sen. Dick Saslaw (D-Springfield)
  • Del. Dave Albo (R-Springfield)
  • Del. Bob Brink (D-Arlington)
  • Del. David Bulova (D-Fairfax Station)
  • Del. Eileen Filler-Corn (D-Springfield)
  • Del. Tag Greason (R-Lansdowne)
  • Del. Charniele Herring (D-Alexandria)
  • Del. Patrick Hope (D-Arlington)
  • Del. Mark Keam (D-Vienna)
  • Del. Kaye Kory (D-Falls Church)
  • Del. Rob Krupicka (D-Alexandria)
  • Del. Jim LeMunyon (R-Chantilly)
  • Del. Alfonso Lopez (D-Arlington)
  • Del. Joe May (R-Loudoun)
  • Del. Randy Minchew (R-Leesburg)
  • Del. Ken Plum (D-Reston)
  • Del. Tom Rust (R-Herndon)
  • Del. Jim Scott (D-Merrifield)
  • Del. Mark Sickles (D-Fairfax)
  • Del. Luke Torian (D-Dumfries)
  • Del. Vivian Watts (D-Annandale)

NVTC President and CEO Bobbie Kilberg Speaks at Press Conference in Support of Gov. McDonnell's Transportation Plan

Cybersecurity Accelerator
The budget approved by the General Assembly and sent to the governor includes $2.5 million in funding to support the launch of the nation's first cybersecurity accelerator at the Center for Innovative Technology. CIT's cybersecurity accelerator will focus exclusively on cybersecurity company formation and initially will produce more than 10 new companies per year to add to Virginia's cyber assets and capabilities. Sen. Ryan McDougle (R-Mechanicsville) and Del. Tag Greason (R-Loudoun) sponsored the cybersecurity accelerator budget amendments, which also were included in the governor's introduced budget. Funding to launch the accelerator was a top NVTC priority.

Data Center Incentives
In 2012, NVTC successfully advocated for legislation, sponsored by Sen. Ryan McDougle and Del. Barbara Comstock (R-McLean), which expanded Virginia's data center sales tax exemption to also include data center tenants. This year, McDougle and Comstock sponsored legislation (HB1699; SB1133) to further enhance Virginia's competitiveness in attracting data center jobs and investment by providing local governments with the authority to adopt a separate personal property tax rate for computers and peripherals used in data centers. NVTC strongly supported this legislation which was approved by the General Assembly.

Increased Funding for Angel Investment Tax Credit
The approved budget includes amendments sponsored by Sen. Ryan McDougle and Del. Steve Landes (R-Weyers Cave) which increase funding for Virginia's oversubscribed angel investment tax credit from $4 million to $4.5 million in 2013 and to $5 million in 2014. The growth in investor applications for this credit is a positive indicator that the credit is succeeding in growing and diversifying Virginia's technology economy by encouraging entrepreneurs to locate in Virginia and by encouraging investors to invest in Virginia startups. NVTC strongly advocated for increased funding to meet growing demand and maintain investor confidence in the credit by ensuring current and future investors receive the value of the incentive they are expecting.

The General Assembly approved HB1872, sponsored by Del. Jennifer McClellan (D-Richmond) and supported by NVTC, which clarifies that crowdfunding investments will qualify for Virginia's angel investment tax credit and other investment oriented tax incentives.

One Stop Business Registration
The General Assembly approved HB1760, sponsored by Del. David Ramadan (R-Dulles), and SB1137, sponsored by Sen. Jeff McWaters (R-Virginia Beach), which require the State Corporation Commission (SCC) to enhance Virginia's one stop business permitting portal by fully integrating processes and forms into the Business Permitting Center administered by the Department of Business Assistance. The legislation also requires the SCC to process all forms within 48 business hours from the time the applicant submits the form electronically.

Digital Accounts of Deceased Minors
The General Assembly approved HB1752, introduced by Dels. David Bulova (D-Fairfax Station) and Tommy Wright (R-Victoria), and SB914, introduced by Sen. Frank Ruff (R-Clarksville), which allow the personal representatives of deceased minors to request and receive the minors' digital account information and assets from online technology and telecommunications businesses. The bill sponsors substantially narrowed this legislation from its introduced version in response to concerns from technology businesses about conflicting criminal and civil federal laws that prohibit disclosure of subscriber information in most circumstances.

Federal Action Contingency Trust (FACT) Fund
Last year, the legislature established a $30 million Federal Action Contingency Trust (FACT) Fund which was intended to provide the governor with resources he can utilize to help Virginia respond to federal budget cuts. The FACT Fund was intended to assist localities impacted by Base Realignment and Closure (BRAC) Commission decisions, to continue statutorily required, federally mandated services at the present level if federal budget reductions are imposed, and to address unique economic development opportunities to attract businesses in targeted sectors to help transition industries negatively affected by federal budget reductions or BRAC recommendations. The budget sent to the Governor narrows the use of the fund solely to offset federal spending cuts and forecloses the use of the fund to address unique economic development opportunities to attract businesses in targeted sectors. This would preclude policymakers from adopting an NVTC recommendation to allocate $5 million from the fund to Virginia's Commonwealth Research Commercialization Fund (CRCF) to stimulate multi-university and industry cooperative cyber research projects focused on developing new cybersecurity solutions to enable new scientific discovery for industry application. NVTC will be encouraging Gov. McDonnell to suggest adjustments to this language for consideration during the General Assembly's Veto Session in April.

Issues of specific interest to NVTC members that did not pass the General Assembly this session include:
Computer Search and Seizure
HB2050, introduced by Del. Michael Webert (R-Marshall), and SB1030, introduced by Sen. Bryce Reeves (R-Fredericksburg), would have provided that any search warrant issued for the search and seizure of a computer, computer network or other device containing electronic or digital information shall be deemed to include the search and seizure of the physical components and the electronic or digital information contained in any such device or network. The bills also provided that the search of the contents of any such device or network may be done in any location and is not limited to the location where such device or network was seized.

NVTC raised constitutional concerns regarding this legislation and also concerns that the legislation could unnecessarily lead to the disruption of mission critical computers and networks of Virginia businesses. The sponsors of this legislation agreed to send the bills to the General Assembly's Joint Commission on Technology and Science (JCOTS) where they will be studied by a working group once the legislative session ends.

Computer Trespass
Sen. Mark Obenshain (R-Harrisonburg) introduced SB1173 at the request of Attorney General Ken Cuccinelli to remove the malicious intent requirement from Virginia's computer trespass statutes. NVTC shared concerns that this legislation would criminalize legitimate technology business activity and the attorney general and bill sponsor agreed to strike the bill and send it to JCOTS where it will be studied by a working group once the legislative session ends.

In-State Procurement Preferences
Del. David Yancey (R-Newport News) and Sen. John Miller (D-Newport News) introduced HB1951 and SB990, legislation that authorized state agencies to award procurement contracts to the lowest in-state bidder, if the bid of a Virginia business is within a certain percentage or dollar amount of the lowest bid of an out-of-state bidder. NVTC met with the bill sponsors and shared concerns that this legislation would trigger reciprocal treatment from other states/localities, escalate preference "wars" with other states and raise the cost of procurement. The bill sponsors both agreed to strike their bills.

New Intermediary Liability Standards for Virginia Internet Companies
Del. Tim Hugo (R-Centreville) introduced HB2135 at the request of the attorney general to make the misleading, deceptive or fraudulent use of a trademark, service mark or other mark, as defined in Virginia's code, a prohibited practice under the Virginia Consumer Protection Act and to impose liability on third party technology businesses for violations by their advertisers.

While NVTC strongly supports protecting consumers from deceptive or fraudulent advertising, whether it occurs online or offline, NVTC shared concerns that this legislation would harm Virginia Internet-related businesses by going far beyond well-understood standards and remedies imposed under federal intellectual property laws, impose a new vague standard and also subject Virginia businesses to frivolous lawsuits by plaintiffs' lawyers for hefty statutory damages. The sponsor of the bill and the attorney general agreed to strike it and send it to JCOTS where a working group will study it once the legislative session ends.

Trade Secrets
Del. Joe May (R-Loudoun) introduced HB2064, legislation that would have removed Virginia from the Uniform Trade Secrets Act provisions shared by more than 45 states and altered the balanced approach most states employ in protecting trade secrets. The sponsor of the bill agreed to strike it and send it to JCOTS where a working group will study it once the legislative session ends.