New Economic Development & Job Creation Measures Take Effect

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RICHMOND – Virginia Governor Bob McDonnell today highlighted economic development and job creation measures that will become law July 1st. Each of these measures were part of Governor McDonnell’s “Jobs and Opportunity” legislative agenda that passed with broad bipartisan support during the 2010 General Assembly session.

Speaking about the economic development initiatives taking effect July 1st, Governor McDonnell remarked, “The most important issue this legislative session was by far jobs and the economy. We worked diligently to ensure that measures were passed to get more Virginians back to work, attract new business and new revenue to the Commonwealth, improve Virginia’s business climate, and support vital industries in this state. We did all this while also closing an historic budget shortfall virtually on time without a burdensome tax increase on the hardworking people of Virginia. Through aggressive economic development initiatives taking effect July 1st, we’ve made it easier for new businesses to open by allowing for temporary business licenses to be issued to applicants in good standing in other states. We passed a measure that will encourage businesses to open or expand in Virginia by lowering the threshold for the Major Job Facility Tax Credit from 100 to 50 full-time jobs, and from 50 to 25 jobs in Virginia’s most economically distressed areas. We strengthened the Governor’s Opportunity Fund, both through legislation and a budget amendment, allowing there to be more incentives available for businesses looking to open or grow in the Commonwealth. We also passed measures to support film and wine in the state by dedicating, for the first time, existing revenue sources to tax credits for the film industry and funds for promotion of the rapidly growing Virginia wine industry. While there is more hard work to be done to get Virginia out of a recession, cut our unemployment numbers, and raise new revenue for the state, the economic development measures going into effect on Thursday are a critical step to turning Virginia’s economy around."

Lieutenant Governor and Chief Jobs Creation Officer Bill Bolling said, “The economic development legislation passed during the 2010 General Assembly session betters the state’s pro-business environment, get the economy moving again and create the jobs Virginia's families need. These initiatives are part of our commitment to helping existing businesses grow and recruiting new businesses to Virginia.”

Secretary of Commerce and Trade Jim Cheng commented, “The economic development initiatives passed this session will equip us with the tools needed to attract new businesses to Virginia and provide incentives for already-established businesses to grow. We have a great story to tell as a business friendly state, and the best place to do business, visit and film a movie - and the investment in economic development will allow us to reach more individuals and businesses to tell the Virginia story.”

Secretary of Agriculture and Forestry Todd Haymore also noted, “Agriculture and forestry is the largest industry in Virginia. It is important that we provide the necessary incentives so that our farmers and producers can be successful. Dedicating a portion of the existing wine liter tax from the sale of Virginia wines to research and marketing will enable continued growth in this agricultural sector. It’s just one example of what we can do to support agriculture and forestry, which employs one in every ten Virginians.”

Economic Development and Job Creation Laws Taking Effect July 1st:

SB475 (Watkins)/ HB380 (Edmunds) – Strengthens the criteria for Governor’s Opportunity Fund

• Provides that criteria to be used in awarding grants and loans from the Governor's Development Opportunity Fund shall include (i) job creation, (ii) private capital investment, and (iii) anticipated additional state tax revenue expected to accrue to the state and affected localities as a result of the capital investment and jobs created.

SB554 (Puckett)/ HB1244 (D. Marshall) – Allows the Governor discretion regarding the local match for the Governor’s Opportunity Fund

• Provides that the guidelines for the Governor's Development Opportunity Fund may require an affected locality or localities to provide matching funds, which may be cash or in-kind, at the discretion of the Governor. In addition, the Governor may waive the cap on the amount of money that may be provided to any individual project if the project for which the waiver is granted is of regional or statewide interest.
• Incorporates HB602 (O’Bannon) and HB1371 (Lewis)

SB472 (Watkins)/ HB624 (Kilgore) – Expands the Major Jobs Facilities tax credit

• Amends the Major Business Facility Job Tax Credit, lowering the threshold to 50 full-time jobs (Current law provides a $1,000 tax credit for major business facilities that create at least 100 qualified full-time jobs).
• In enterprise zones or economically distressed areas, the base or threshold is lowered from 50 newly created jobs to 25.
• Incorporates SB481 (Hurt) and HB853 (Morefield)

SB739 (Stosch/Whipple)/ HB1396 (Putney) – Expands economic development incentive programs to attract major businesses to locate in Virginia

• Allows the use of funds from the Governor’s Development Opportunity Fund for construction or build-out of privately owned buildings
• Changes the caps for eligible projects awarded a Virginia Economic Development Incentive Grant (VEDIG) as follows: for eligible projects awarded grants prior to July 1, 2010, the aggregate amount of economic development incentive grants payable under this section in any fiscal year shall not exceed $6 million, and the aggregate amount of such grants outstanding at any time shall not exceed $30 million; and for eligible projects awarded grants on or after July 1, 2010, the aggregate amount of economic development incentive grants payable under this section in any fiscal year shall not exceed $6 million and the aggregate amount of such grants outstanding at any time shall not exceed $30 million.

SB 730 (Reynolds)/ HB1381 (Armstrong) – Establishes a major employment/investment project site planning grant fund

• Establishes the Major Employment and Investment Project Site Planning Grant Fund to award grants to political subdivisions to assist in site development work for certain prospective projects.
• This fund will support efforts to improve site location development to encourage large businesses to locate to the Commonwealth and create new jobs.

HB555 (D. Marshall) – Expands Enterprise Zones and reinvests surplus into real property grants

• Changes the eligibility for enterprise zone job grants in areas with an unemployment rate that is one and one-half times or more than the state average to positions paying at least 150 percent of the federal minimum wage including health benefits.
• Currently positions paying less than 175 percent of the federal minimum wage are not eligible for the job grants.
• Also provides that when the sum of grants for job creation and real property investment exceeds the total annual appropriation for payments, allocations shall be prioritized to fully fund the grants for job creation with any remaining funds to be allocated to the real property investment grants.
• Incorporates HB660 (Armstrong) and HB1299 (Crockett-Stark)

SB623 (Hanger)/ HB803 (Poindexter) – Creates a Green Jobs tax credit

• Allows a $500 tax credit for the creation of "green" jobs for taxable years beginning on and after January 1, 2010.
• Each taxpayer is allowed a credit for up to 350 new green jobs and may qualify for the Enterprise Zone Grant program if the job is located in an enterprise zone.
• Incorporates HB268 (Englin) and HB1132 (Keam)

SB257 (Lucas)/ HB861 (Cline) – Creates a motion picture film production tax credit

• Provides a refundable credit for any motion picture production company with qualifying expenses of at least $250,000, in an amount equal to 15 percent of the production company's qualifying expenses or 20 percent of such expenses if the production is filmed in an economically distressed area of the Commonwealth.

SB474 (Watkins)/ HB792 (LeMunyon) – Provides for temporary business licenses

• Authorizes the regulatory boards within the Department of Professional and Occupational Regulation to issue a temporary license or certification to an applicant who holds a comparable license or certification issued by another state. A temporary license or certification shall be valid for not more than 45 days.

SB237 (Watkins)/ HB588 (Landes) – Dedicates a portion of the wine liter tax to wine promotion

• Requires the portion of the wine liter tax collected from the sale of wine produced by farm wineries to be deposited in the Virginia Wine Promotion Fund for use by the Wine Board.
• This is the first time Virginia has had an ongoing dedicated source of revenue for wine marketing, research, and education efforts that is linked to the growing success of the industry.

SB428 (Herring)/ HB523 (Nixon)– Grants income tax exemption on capital gains related to investments in science based or bio-tech start-ups

• Grants an income tax deduction for any income taxed as a long-term capital gain for federal income tax purposes or any income taxed as investment services partnership interest income that is related to a qualified investment in a technology and science start-up business having a principal office or facility in the Commonwealth and less than $3 million in annual revenues in the fiscal year prior to the investment. The deduction would relate to investments made between July 1, 2010, and June 30, 2013.

HB928 (Bell) – Creates the Universities Clean Energy Development and Economic Stimulus Foundation

• Creates the Virginia Universities Clean Energy Development and Economic Stimulus Foundation as a body corporate and a political subdivision of the Commonwealth.
• The Foundation shall identify, obtain, disburse, and administer funding for (i) research and development of alternative fuels, clean energy production, and related technologies; (ii) support of economic development projects in disadvantaged rural areas; and (iii) the provision of assistance in the commercialization of alternative fuels and clean energy technologies.
• Funding shall be awarded only to those proposed projects that best meet the established criteria and purposes of this act.

SB473 (Watkins)/ HB604 (Merricks) – Adds the Lieutenant Governor and Commerce and Trade Secretary to Center for Rural Virginia Board of Trustees

• Would add the Lt. Governor (or designee) and Secretary Of Commerce & Trade (or designee) as ex-officio members to the Board of Trustees of the Center for Rural Virginia.
• Lt. Governor and Secretary of Commerce & Trade would have voting privileges.
• Increases total membership from 18 members to 20 members.
• With the Lt. Governor taking an increased role in job creation and economic development, particularly in Southside and Southwest Virginia, it’s important for him to be as engaged as possible in boards and commissions that deal with economic development. Adding the Secretary of Commerce & Trade who has a vested interest, and actual experience in job growth and creation is an asset this Board could fully utilize.

HB1372 (Comstock) – Changes the title of VEDP Executive Director to CEO

• Changes the title of the Executive Director of the Virginia Economic Development Partnership to the Chief Executive Officer.
• This change is important because when VEDP is engaged in negotiations with companies, having VEDP represented by someone with the same title as the person with whom he is negotiating enhances Virginia’s bargaining position instead of a title that could contribute to the appearance that he is governmental and does not understand their business concerns. Often in such negotiations, subtle things like this can make a significant impact and we expect this legislation to help VEDP recruit new jobs and investment to Virginia.

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SOURCE: Office of the Governor Bob McDonnell