VA Legislature Approves $15M for R&D Initiatives
The 2011 Virginia General Assembly is being hailed as one of the most productive legislative sessions for the bioscience industry in the last decade. After months of preparation, outreach and dogged advocacy, volunteers and representatives from the Virginia Biotechnology Association scored victories for emerging bioscience companies on every item on its ambitious legislative agenda.
“Governor Bob McDonnell, Lieutenant Governor Bill Bolling, Speaker of the House Bill Howell and a bipartisan team of leaders from both chambers of the General Assembly deserve our sincere thanks for passing new job-creating new programs such as the R&D Tax Credit,” said Thomas Thorpe, chairman of the Virginia Biotechnology Association and President of Afton Scientific, a Charlottesville-based bioscience company. “Investments in high-growth, high-wage, 21st Century industries, such as the biomedical sciences, are key to Virginia’s future as a reliable destination for innovators, entrepreneurs and skilled workers.”
Despite a difficult budget climate, the Virginia General Assembly passed numerous measures that will be critical to the development of advanced technology companies across Virginia, such as:
Virginia Refundable Research and Development Tax Credit: Virginia had been one of only twelve states not to provide an R&D tax credit. This new tax incentive, sponsored by Delegate Ben Cline (R-Rockbridge) and Senator Mark Herring (D-Leesburg), will provide a 15% refundable R&D credit for qualified research and 20% if that research is done in partnership with a Virginia university. If a company is not yet profitable, the value of the credit is refundable in cash to the company. The fund is capped at $5 Million per year.
SBIR Matching Grants: For the first time, Virginia has dedicated $2 Million for matching grants for winners of Phase I Small Business Innovation Research (SBIR) Awards from the National Institutes of Health.
CIT “Gap” Fund: The approved budget includes $4 million in additional new funding for the Center for Innovative Technology’s “GAP” Fund that makes seed –stage equity investments in Virginia-based technology and life science firms.
CRCF Funding: The budget provides $4 Million in new funding for the Commonwealth Research and Commercialization Fund (CRCF) that authorizes grants to technology firms, loans to construct wet-labs and the SBIR matching program.
Additionally, the new state budget also provides an additional $8 Million in funding for cancer research and clinical trials at Virginia Commonwealth University’s Massey Cancer Center and at the University of Virginia.
“We are grateful to the House and Senate budget leaders who made certain that innovative technology programs such as the SBIR matching grants and the CIT Gap Fund were a priority even in this tough economic climate,” said Mark A. Herzog, executive director of the Virginia Biotechnology Association. “We want young Virginians to be able to work in competitive, high-wage careers right here in the Commonwealth. These new measures are examples of common sense, technology-based economic development policies that will keep Virginia competitive in the race for the future.”
This was the third year in a row that the Virginia Biotechnology Association (VABIO) worked in partnership with the Northern Virginia Technology Council (NVTC) succeeding on key legislative items such as the Angel Investor Tax Credit in 2009 and the Capital Gains Tax Exclusion for investments in technology firms in 2010. The budget bill and the R&D Tax Credit legislation now await the signature of the governor.
For more information on these legislative initiatives, please contact VABIO at 804-643-6360 or via the web at http://www.vabio.org.
