On Saturday, March 10, the Virginia General Assembly adjourned sine die concluding its 2012 legislative session. The General Assembly approved a number of legislative initiatives, including several NVTC priorities, that will ensure that Virginia remains a top state for business and a global technology center, including passing legislation that expands data center incentives and extends a technology investment tax exemption and telework tax credit.
During the 60-day long session, the General Assembly tackled more than 2,000 bills and resolutions related to a broad array of important issues, including Gov. Bob McDonnell's legislative initiatives addressing job creation and economic development, research and innovation, government reform and education. Legislators were unable, however, to reach consensus on a new, two-year budget prior to the conclusion of the session. The 2012 Special Session 1 convened immediately upon adjournment sine die of the 2012 Regular Session, for the purpose of considering budget bills. The General Assembly is scheduled to meet Wednesday, March 21, 2012, at 3 p.m. in a pro forma session, and budget discussions between House and Senate negotiators will be ongoing.
The General Assembly is scheduled to convene for a one-day Veto Session on Wednesday, April 18. In the interim, Gov. McDonnell will be reviewing more than 850 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 during NVTC’s Board Advocacy Day on February 16, 2012. Participating NVTC Board members included NVTC President and CEO Bobbie Kilberg, NVTC Chair and Salient Federal Solutions President and CEO Brad Antle, NVTC TechPAC Chairman Dendy Young of McLean Capital, David Lucien of DCL Associates, Mike Maiorana of Verizon Wireless, Duffy Mazan of Second Venue LLC, John Mendonca formerly of KPMG, Alan Merten of George Mason University, Rob Quartel of NTELX and Robert Templin of the Northern Virginia Community College. NVTC TechPAC Trustees and other leaders also participated including Tim Cook of Alion Science and Technology, Michelle Frank of Orbital Sciences Corporation, Joel Hinzman of Oracle, Todd House of Micron Technology, Rob Omberg of Comcast and Keith Wine formerly of ACS, A XEROX Company.
In addition, many more NVTC members provided ongoing advice and feedback through NVTC's weekly legislative conference calls, Twitter feed (@NVTCTechPolitic) 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 2012 Legislative Session were outlined in a letter to policymakers before this session began. During the 2012 session, the General Assembly approved many of NVTC's specific legislative priorities and other technology-related bills that have been sent to Gov. McDonnell for action. The outcome of NVTC’s efforts related to the tech community’s funding and budget priorities, including funding for research, innovation and commercialization, targeted business incentives and STEM education, will not be known until the legislature approves a two-year budget.
Issues of specific interest to NVTC members that were passed by the General Assembly this session include:
Data Center Incentives
Extension of Capital Gains Tax Credit
Extension of Telework Tax Credit
Increased Representation on MWAA
Workforce Initiatives for Veterans
Virginia Economic Development Partnership (VEDP)
Local Incentives for Defense Contractors
Virginia’s Commercial Spaceport Reforms
Expanding Virginia’s Data Center Sales Tax Exemption to Include Tenants
HB 216 – Delegate Barbara Comstock
SB 112 – Sens. Mark Herring and Ryan McDougle
Following a year-long advocacy effort by NVTC, legislation to enhance Virginia's statewide competitiveness in attracting data center jobs and investment passed both the House and Senate and now head to Gov. Bob McDonnell for his signature. The bills, which expand Virginia's current data center sales tax exemption to also include data center tenants, were sponsored by Delegate Barbara Comstock (R-McLean), Sen. Mark Herring (D-Loudoun) and Sen. Ryan McDougle (R-Mechanicsville). NVTC’s Data Center and Critical Technology Infrastructure Task Force, which was launched in 2010 to provide a strong, collective voice for the region's data center community, played a pivotal role in educating legislators, Gov. McDonnell and his cabinet on the economic contributions of data centers leading up to this legislative session.
Virginia law currently provides for a sales tax exemption for data centers that invest $150 million, create 50 jobs and enter into a memorandum of understanding (MOU) with the Virginia Economic Development Partnership. This new legislation extends the exemption to data centers and their tenants when they collectively create 50 jobs at a data center facility. The exemption will sunset in 2020.
"This legislation has been a top-priority for NVTC this year and will enhance Virginia's statewide competitiveness in attracting data center jobs and investment," said NVTC Vice President of Policy Josh Levi. “We thank the bills’ sponsors, the many legislative leaders who provided bipartisan support for this important initiative, and Gov. McDonnell and Secretary of Technology Jim Duffey for their support of this legislation."
Extending Virginia’s Capital Gains Exemption for Investments in Technology Startups
HB 1013 – Delegate Barbara Comstock
SB 226 – Sen. Mark Herring
In 2010, NVTC and VaBIO took the lead in promoting legislation to encourage and stimulate high-potential startup companies by providing a three-year 100 percent state capital gains tax exclusion for founders of and investors (individual, corporate or institutional) in qualified technology, energy and biotechnology startups. The exemption promotes immediate investment in new company formation and job creation in Virginia and provides the Commonwealth with a tax favorability competitive advantage compared to other states, so that entrepreneurs will consider launching or expanding their startups in Virginia.
This year the General Assembly approved legislation sponsored by Delegate Barbara Comstock and Sen. Mark Herring and supported by Gov. Bob McDonnell to extend the capital gains exemptions for individuals and corporations that invest in tech startups through June 30, 2015. The credit was set to expire on June 30, 2013. This legislations has been signed by the governor.
Extending Virginia’s Telework Tax Credit
HB 551 – Delegate Barbara Comstock
SB 238 – Sen. Mark Herring
In 2011, the General Assembly approved an NVTC policy priority when they enacted into law a telework tax credit to assist companies in defraying costs associated with establishing or expanding a telework program. Under the 2011 bill, the Commonwealth provides a tax credit to employers for expenses incurred in allowing employees to take advantage of modern technology to telework, expanding a telework program or conducting a telework assessment. An employer would be eligible for a credit of up to $1,200 per teleworking employee, with a maximum of $50,000 per employer.
This year the General Assembly approved legislation sponsored by Delegate Barbara Comstock and Sen. Mark Herring and supported by Gov. Bob McDonnell to extend the telework tax credit for employers through December 31, 2016. The credit was set to expire December 31, 2013.
NVTC has been a long-time proponent of telework, recognizing that Virginia and Virginia taxpayers are beneficiaries of new and expanded private sector telework programs. Telework programs help take cars off Virginia's already overused roads and thus reduce the Commonwealth's terrible traffic congestion. Telework also helps Virginia's businesses attract a talented workforce in a competitive market because of the added flexibility. Telework programs help save businesses money by reducing overhead, space requirements and other related expenses, and provide operational continuity for public and private sector organizations in the event of an emergency.
Changing the Composition of the Metropolitan Washington Airports Authority (MWAA) to Provide Virginia Greater Representation
HB 252 – Delegate Joe May Emergency Legislation (requiring a 4/5 vote of each chamber)
HB 1245 – Delegate Joe May
SB 237 – Sen. Chuck Colgan
Delegate Joe May (R-Loudoun) and Sen. Chuck Colgan (D-Manassas) introduced legislation to bring Virginia law in line with recently enacted federal legislation changing the makeup of the Metropolitan Washington Airports Authority (MWAA) and providing Virginia greater representation on MWAA. The legislation, which was supported by NVTC, increases the MWAA board from 13 members to 17 members, with two new members coming from Virginia and one each coming from the District of Columbia and Maryland. The legislation also authorizes the governor of Virginia to remove his own appointed members “for cause.”
The bill, which was supported by Gov. Bob McDonnell, was initially introduced as emergency legislation and if passed by a 4/5 vote of each chamber would go into effect immediately upon the governor’s signature. Failing to meet the 4/5 threshold in the House of Delegates, the emergency clause was removed and the bill passed. The legislation will go into effect on July 1, 2012.
Addressing Virginia’s Veteran Workforce
The 2012 General Assembly approved two bills to assist Virginia’s veteran workforce.
- HB 938 – Delegate Scott Lingamfelter (R- Woodbridge)
The General Assembly passed legislation permitting service members to count their military training, education or experience in qualifying for occupational licenses or certification for state-regulated professions.
- HB 195 – Delegate Lynwood Lewis (D- Accomac)
Legislators passed a bill requiring public colleges and universities in Virginia to award academic credit for educational experience gleaned from military service. This legislations has been signed by the governor.
NVTC will be actively participating this year in a gubernatorial work group, which will determine how best to address the needs of returning veterans and help them transition into Virginia’s workforce.
Adding the Secretary of Technology and Agriculture to the Board of Directors for the Virginia Economic Development Partnership (VEDP)
HB 292 – Delegate Ed Scott
The General Assembly expanded the board of directors for the Virginia Economic Development Partnership (VEDP) and provided the governor with increased direction over VEDP by adding the Secretary of Agriculture and Forestry and the Secretary of Technology as voting members to the board.
Authorizing Local Government to Provide Regulatory Flexibility to Defense Contractors
HB 406 – Delegate Luke Torian
The General Assembly passed legislation this year that authorizes a local government to provide local incentives and regulatory flexibility to defense contractors located within a defense production and support services zone established by the local government. The bill defines defense contractors as businesses primarily engaged in providing services in support of national defense. This legislations has been signed by the governor.
Reforming and Establishing Funding Mechanism for the Mid-Atlantic Regional Spaceport
HB 813 – Delegate Joe May
SB 284 – Sen. Mark Herring
Legislators passed legislation supported by Gov. Bob McDonnell that institutes board and governance reforms for the Virginia Commercial Space Flight Authority and provides a mechanism for funding improvements through the Virginia Transportation Trust Fund.
Issues of specific interest to NVTC members that did not pass the General Assembly this session include:
Application of Foreign Law
HB 825 – Delegate Bob Marshall
The House of Delegates reviewed legislation this year intended to prohibit any Virginia court or administrative agency from applying the law of any jurisdiction outside of the United States and its territories unless the application is required by the United States Constitution, the Constitution of Virginia, or any federal or state law.
NVTC successfully opposed this legislation because it suggests a hostility to foreign businesses who want to do business with Virginia companies and may undermine the ability of parties to choose applicable law and venue in commercial contracts. It also interjects uncertainty into business contracts and negatively impacts Virginia’s reputation as a global technology business center. The bill did not pass the House of Delegates.
NVTC opposed – Passed House Courts Committee (10-6); Sent back to committee from House floor.
Procurement Preference Bills
The 2012 General Assembly Session saw many procurement preference bills that would raise the cost of procurement, trigger reciprocal treatment from other states/localities and escalate preference “wars” with other states. These forms of procurement preference included:
- Local preference – Authorizes localities to apply a preference for bidders located in the locality of up to a certain percentage.
- State preference – Authorizes state agencies to apply a preference for bidders located in Virginia.
- Bid Price Match preference – Authorizes state agencies to award procurement contract to low 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 opposed – Most bills defeated in House, Senate Committees, Bid Price Match Preference legislation was carried over for additional study.
Allowing the Governor to Appoint the Director of the Virginia Economic Development Partnership (VEDP)
HB 1234 – Delegate Terry Kilgore
Legislation was introduced that would provide the governor with the authority to appoint the Virginia Economic Development Partnership (VEDP) executive director rather than the VEDP board. The bill further provides that the executive director shall serve at the pleasure of the governor. The legislation was intended to provide the governor with greater authority over Virginia’s primary economic development agency.
NVTC supported – Passed the House 59– 41, Senate Committee Referred to Government Reform Commission for Further Study (10-3).