News and Notes from the Virginia General Assembly

Points of Contact: Ira Agricola, Senior Vice President &
Candace Reid, Manager, Governmental Affairs
Representing: Hampton Roads Chamber of Commerce &
Greater Williamsburg Chamber &Tourism Alliance

 Monday, February 8, 2010

No portion of this communication may be retransmitted or reproduced without the expressed permission of the
Hampton Roads Chamber of Commerce.

Tax and Budget - SB 545 (Colgan D-29^th) and HB 614 (Purkey R-82^nd) are the yearly IRS conformity/de-conformity bills.  These measures remove section 199 of the Internal Revenue Code that allowed a key deduction available to manufacturers for the last six years.  This represents a $30 million dollar tax increase annually. 

SB 239 (Watkins R-10^th) was reported from committee.  This bill is OPPOSED by the Chamber.  Senator Wagner and Senator Newman voted correctly and voted NAY.  Senators Saslaw, Colgan, Y. Miller, Wampler, Norment, Stosch, Edwards, Watkins, Puckett, Puller, Herring, McEachin and Deeds voted to extend benefits to those who are not looking for work and to those who voluntarily quit work for a “compelling reason.”

Efforts continue to have the Senate vote against this measure; however, this may be a bill where the business community has a better opportunity to prevail in the House.

Workers Compensation – HB 1326 (Merricks R-16^th) and SB 367 (Puckett D-38^th) are SUPPORTED by the Chamber.  These bills take steps to get workers compensation medical costs under control.

Tort Reform bills Referred to Small Business Commission – Two TORT reform bills (HB 309 O’Bannon (R-73^rd) and HB 310 O’Bannon (R-73^rd) have been referred to the Small Business Commission for further study.

Offshore Energy Production – A number of bills have been introduced in the area of offshore energy production including:  HB 389, SB 577, HB 787, HB 805, and HB 1037.

Early School Opening/Tourism -Your Chamber is OPPOSED to all bills that allow for school opening prior to the Labor Day holiday.  We have now issued two Legislative Alerts on these bills and are continuing efforts to defeat all measures that allow schools to open prior to Labor Day.

Four bills that your Chamber has directed opposition to are:  SB 203, SB 253, SB 412, SB 498.  All of these measures are before the Senate Commerce and Labor Committee.

BPOL - House Finance reported out HB 713 (Peace R-97^th) that requires a taxpayer applying for a business license to furnish a state license or certification.

Another bill (HB-57) limits BPOL to those localities already imposing BPOL and prohibits increasing the BPOL tax rate after January 1, 2010.  This bill has passed the House and will next be considered by Senate Finance.

Fees Considered to Balance Budget - Several fee increases that will increase the cost of doing business in the Commonwealth are under consideration by the General Assembly and the Governor.  McDonnell’s Director of Communications Tucker Martin said, “The governor is focused on working with legislators in both parties to pass a budget on time that is balanced and does not increase taxes on Virginians.  As part of the process, the governor is reviewing every fee in the budget on a case-by-case basis to evaluate their justification for being included.”

Governor McDonnell’s Jobs and Opportunities Legislative Agenda - Following is the status of Governor Bob McDonnell’s jobs and opportunity bills:

• Opportunity Fund – Grant and loan criteria HB 380, SB 475 - Includes job creation, capital investment, and new tax revenue as criteria to be used in awarding grants and loans.  HB 380 is on House floor.  SB 475 passed the Senate

• Opportunity Fund – Authority to grant awards HB 1244, SB 554 – Governor’s decision may include a requirement for local match in cash or in-kind; or may waive match for certain projects.  HB 1244 is in committee.  SB 554 passed the Senate.

• Enterprise Zones-HB 555 – Changes eligibility for EZ job grants based on unemployment rates; designates job grants as higher priority than real property investment grants; lowers from 175 percent to 150 percent of federal minimum wage jobs eligible for grants.  HB 555 is in committee.

• Historically Underutilized Business Zones HB 1228, SB 658 – Supports companies in rural and economically distressed urban areas by requiring at least 15 percent of state procurement contracts be awarded to qualified small businesses in these areas.  Both bills are in committee.

• Major Business Facility Job Tax Credit – Lowers threshold for qualifying jobs HB 624, SB 472, HB 853, SB 481 – Lowers threshold from 100 new full-time positions to 50 (and to 25 jobs in enterprise zones); permits tax credit to be taken in 2 years rather than over 3 years.  All 4 bills are in committee.

• Permit Fees – Veterans Waiver HB 262, SB 455 – Waives state agency administrative fees for issuing permits for veterans to establish and operate a small business.  Both bills are in committee.

• Income Taxes:Capital Gains HB 523, SB 428 – Grants tax exemption for any gain taxed as a capital gain for federal income tax purposes if qualified investment is related to technology and science start-up business.  Both bills are in committee.

•  Motion Picture Film Production Tax Credits HB 861, SB 257 – Provides credits to production companies with qualifying expenses of at least $250,000.  Both bills are in committee.

•  Specialized Biotechnology Research Grants HB 677, SB 644 – Provides grants for nonprofits engaged in R&D and production related to molecular diagnostics and drug development.  Both bills are in committee.

•  PPEA SB 181 – For approved public-private partnership projects, bill allows private entities be paid from a portion of the growth in state taxes attributable to the project’s development; Allows localities to join in agreements entered into between private entities and the state.  Reported from Senate Finance.

• Small Business Investment Company Credit – Provides for creation of private investment funds that will invest in small businesses in Virginia.  Not yet introduced.

• Mega-site Fund – Establishes a mega-site fund of $5 million for FY12 to improve site location development for large businesses locating in the state.  Not yet introduced.

• Wine Liter Tax HB 588, SB 237 – Requires portion of tax collected from sale of wine produced by farm wineries be deposited in VA Wine Promotion Fund.  Both bills are in committee.

• Temporary Business Licenses HB 792, SB 474 – Allows companies operating in good standing in another state to receive a temporary business license to operate in Virginia.  Both bills are in committee.

• Clean Energy Development HB 928, SB 326 – Creates the Virginia Universities Clean Energy Development and Economic Stimulus Foundation.  Both bills are in committee.

• Offshore Drilling Royalties HB 756, SB 601 – Requires 80 percent of any revenues and royalties paid to Virginia be used for transportation; remaining 20 percent to be used for renewable energy R&D.  Both bills were reported and headed to House & Senate floors.

• Green Jobs Tax Credit HB 803, HB 1132, SB 623 – Allows a $500 credit for creating green jobs for up to 350 new jobs.  HB 1132 was rolled into HB 803 in committee.  SB 623 is in committee.

During the General Assembly session, please feel free to contact the Chamber’s governmental affairs team. Ira Agricola can be reached at 664-2570 or at iagricola@hrccva.com.You may contact Candace Reid at 664-2572 or at creid@hrccva.com to bring any business issue or concern to the attention of the Chamber.