Obama Admin Seeks Input on Commercialization of University Research

The Office of Science and Technology Policy and the National Economic Council have issued a request for information (RFI) on how best to encourage the commercialization of university research and on whether proof of concept centers are an effective tool in early-stage commercialization. The RFI asks for models, strategies and metrics that can help universities contribute to economic development. Responses are due by April 26.
Read the request for information:http://www.gpo.gov/fdsys/pkg/FR-2010-03-25/pdf/2010-6606.pdf

Governor Signs Bioscience and Technology Bills

From 2010 Bioscience Legislation Bill Signing

Flanked by Democratic and Republican lawmakers and Northern Virginia technology and business leaders, Governor Bob McDonnell today signed into law a number of bills from his successful "Jobs and Opportunity" legislative agenda that received broad bipartisan backing in the recent General Assembly session. The signing ceremony was held at the Center for Innovative Technology and Northern Virginia Technology Council in Herndon.

McDonnell's "Jobs and Opportunity" legislative agenda consisted of measures designed to spur job creation and promote economic development in Virginia. The bills signed today included tax deductions on capital gains derived from investments in technology, energy, biotech and science-based companies operating in the Commonwealth; granting temporary business licenses to individuals who already have a business license or certification from another state; broadening the allowable uses of the Governor's Development Opportunity Fund to assist in attracting major employers to the Commonwealth; designating the head of the Virginia Economic Development Partnership as CEO; and establishing a biotech research performance grant program.

Speaking about the bill signing, Governor McDonnell stated The number one job of our Administration is to help create good jobs for the citizens of Virginia. We will do that by investing in proactive policies that help private sector companies expand and grow in the Commonwealth. The states that help lead this country out of this economic downturn will be those that move aggressively to promote job creation and make it easier for entrepreneurs and business owners to be successful. That is what we are doing in Virginia. The bills we are signing today gained broad bipartisan support because job-creation and economic development are bipartisan objectives. I thank the legislative leaders from both parties who helped carry this legislation, and the members of the Virginia technology and business communities who advocated effectively for its passage."

McDonnell also used the bill signing to comment on budget amendments successfully advanced by the Administration to further assist in the job-creation effort, "We also successfully promoted changes in the introduced budget to invest more in critically important economic development tools. These include the CIT GAP Fund which will provide critical and immediate first financing for 20 new early-stage companies, and position Virginia as a leader in next-generation company formation in the areas of technology, biosciences, and energy. We expanded funding for Virginia's wet labs so that they can increase lab space to the benefit of growing biotechnology companies. And working together we continued to fund the Virginia Leaders in Export Trade (VALET) Program and provided additional funding for the DBA Loan Guarantee Program which helps finance small businesses at a time when credit markets are tight."

Lawmakers joining the Governor this afternoon included Senator Mark Herring (D-Loudoun); Senator Janet Howell (D-Fairfax); Senator Walter Stosch (R-Henrico); Delegate Dave Albo (R- Fairfax); Delegate Tom Rust (R- Fairfax); Delegate Tim Hugo (R- Fairfax); Delegate Barbara Comstock (R- Fairfax); Delegate Mark Sickles (D- Fairfax); Delegate Rich Anderson (R-Prince William); Delegate Joe May (R-Loudoun); Delegate Jackson Miller (R-Prince William) and Delegate Mark Keam (D-Fairfax). Among the many leaders from the Northern Virginia technology and business communities in attendance were Bobbie Kilberg, President and CEO of the Northern Virginia Technology Council; Pete Jobse, President and CEO of the Center for Innovative Technology; Mark Herzog, Executive Director of the Virginia Biotechnology Association; John Backus, Managing Partner of New Atlantic Ventures; Spencer Williamson, President and CEO of Intelliject LLC; and Michael Grisham the President of GPB Scientific.

Speaking about his bill to grant an income tax deduction for capital gains derived from investments in technology, science-based or bio-tech start ups in Virginia, Senator Mark Herring remarked, "This legislation tells Virginia investors that if you support the entrepreneurs in this dynamic sector of our economy, state government will support you. Science, technology and biotech-based jobs are good-paying and fast-growing, and we must take every action possible to make sure they are created in the Commonwealth. This legislation will encourage more investors to put their private capital to work creating good work for Virginians."

Medicare agency adds ex-Va. official, plans reorganization - The Hill's Blog Briefing Room

Virginia's Marilyn Tavenner Joins CMS...

Medicare agency adds ex-Va. official, plans reorganization
By Jeffrey Young
The Centers for Medicare and Medicaid Services (CMS) has tapped a former top health official from Virginia for a senior leadership position and plans its first structural reorganization in nearly 10 years.

Marilyn Tavenner, who was secretary of Health and Human Resources in the administration of then-Virginia Gov. Tim Kaine (D) from 2006 until Gov. Bob McDonnell (R) took office this year, has joined CMS as principal deputy administrator, a newly created position that makes Tavenner the second-ranking official at the agency -- and the Obama administration's most senior appointment to the agency.

Prior to her tenure under Kaine, Tavenner was a nurse and an executive at the Hospital Corporation of America, where she ran two facilities in suburban Richmond and served as chairwoman of the Virginia Hospital Association and a trustee at the American Hospital Association.

Obama, however, has yet to nominate anyone to serve as administrator of CMS. The agency has not had a confirmed chief executive since Mark McClellan resigned in Oct. 2006. President George W. Bush's last nominee for CMS administrator, Kerry Weems, served on the job in an acting capacity for more than a year but the Senate never took action on his confirmation. Since Obama took office, CMS's chief operating officer Charlene Frizzera, a veteran civil servant, has been acting administrator.

Medicare agency adds ex-Va. official, plans reorganization - The Hill's Blog Briefing Room

Delegate Steve Landes Wins “Virginia Bioscience Legislative Leadership Award”

Richmond, VA--- The Virginia Biotechnology Association (VaBIO), today announced that Steve Landes, a member of the Virginia House of Delegates from Augusta County, won the Virginia Bioscience Legislative Leadership Award for his exemplary efforts on behalf of the biotechnology and medical device industry in the Commonwealth.

“Delegate Landes receiving this award will not surprise anyone who knows Steve or is familiar with his legislative achievements in support of economic development and job creation,” said Mark A. Herzog, executive director of VaBIO. “Our members are generally small start-up companies that are attempting to turn a discovery in a lab into a usable treatment for disease or suffering. These companies face huge challenges and it helps to know that we have a legislator like Delegate Landes who understands the challenges small technology businesses face every day.”

The Virginia Biotechnology Association has only recognized a handful of state legislators with this special distinction.

“The technology industry in Virginia knows that Steve Landes takes the time to understand the complexity of the development process for new drugs or technologies,” continued Herzog. “If it means new, high growth jobs for the community, Delegate Landes always goes above and beyond the call of duty.”

The Virginia Biotechnology Association (VaBIO) is the statewide non-profit organization that promotes the scientific and economic impact of the life sciences industry in the Commonwealth of Virginia. Approximately 300 biotechnology, pharmaceutical and medical device companies are based in Virginia, mainly clustered around universities in Blacksburg, Charlottesville, Richmond, Norfolk and Northern Virginia.

According to a recent study by Archstone LLC, the bioscience industry has a profound impact on the state’s economy:
• According to a study in 2006, the bioscience industry supported nearly 80,000 direct and indirect jobs in the Commonwealth.
• The value of the industry’s products and services was approximately $12.6 billion in 2006.
• The biopharmaceutical industry grew by 8.1% between 1996 and 2006.
• The industry paid employees about $1.8 billion in wages in 2006, resulting in $81.6 million in state taxes and $433.3 million in federal taxes.
• Biopharmaceutical employees paid, on average, $4,091 in state taxes, compared to the much more modest $1,501 paid by the average worker.
• In 2008, Virginia’s biomedical researchers conducted nearly 1,900 clinical tests of new medicines, including 678 trials for cancer drugs, 102 tests for heart disease medicines, 232 rare disease treatment trials and 80 tests for HIV/AIDS drugs.

For more information, please visit www.vabio.org.

US House GOP Whip Eric Cantor on Biotech

"Simply put, we have to stop borrowing and spending so much money! As government shrinks, the private sector will grow, creating droves of new jobs. Think of the biotech park right across the street and the growth engine it has been for our region, and think of the potential there that remains untapped."

Capital Gains Exclusion on Technology Investments Goes to VA Governor

The Virginia Biotechnology Association's (VaBIO) legislation to provide incentives for investments in biotech and other advanced technology companies is on the way to Governor Robert McDonnell's desk for signature. VaBIO and NVTC, the Northern Virginia Technology Council, are encouraging the Governor to amend the bill with an "emergency clause" so that it will take immediate effect upon his signature. Otherwise, there would actually be an unintended disincentive to invest until July 1st.

This legislation will make Virginia the most welcoming home for advanced technology companies seeking capital for growth. The new law will exclude capital gains from state taxes for all investors--private, angels, venture funds, and corporations, as long as the investment was made in a qualified, biotech or advanced technology firm. Our congratulations to the Virginia Bioscience Legislative Caucus for championing this legislation and to our two chief patrons, Senator Mark Herring (D-Loudoun) and Delegate Sam Nixon (R-Chesterfield). The concept was also highlighted by Governor McDonnell's Transition Team before taking office. Here are the details:

Bill Summary: Income taxes; recognition of income from capital gains. 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, on or after January 1, 2011, 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.

HB 523 (Delegate Nixon)
http://leg1.state.va.us/cgi-bin/legp504.exe?101+sum+HB523
SB 426 (Senator Herring)
http://leg1.state.va.us/cgi-bin/legp504.exe?101+sum+SB428

DNA Co. Intrexon Raises $17.4M

Biotech company Intrexon Corporation raised $17.4 million in Series D shares, according to an SEC filing. A group of 40 investors took part in the equity offering.

Housed at the Virginia Tech campus in Blacksburg, Va., Intrexon is developing DNA control systems to enhance the safety and efficacy of existing and emerging biological therapeutics.
Named in the filing were executive officers Randal J. Kirk, chief executive officer and chairman of the board; Thomas Reed, Ph.D., founder & chief science officer; Sunil Chada, Ph.D., senior vice president, translational medicine; Rick Sterling, chief financial officer; Ronald B. Herberman, M.D., chief medical officer - oncology; and Robert Beech, senior vice president, corporate development & communications. Directors named were Cesar L. Alvarez; Steven Frank; Larry Horner; Dean J. Mitchell; and Burton Sobel M.D.

While specific investors are not identified in the filing, Intrexon has reported $35 million in Series C-2 investment in previous years from New River Management, managed by Third Security, LLC., and NewVa Capital Partners, LP.

SEC filing: http://tinyurl.com/ye5lkq6.

By Citybizlist Staff'
Citybizlist Washington D.C.
March 5, 2010

Gauze is good for Newport News firm

A Newport News company whose bread-and-butter is developing high-tech wound-healing products had two major announcements in February, including receiving substantial funding that could help it capture a share of the defense industry in addition to its pursuits in the consumer realm. Soluble Systems LLC announced it received $800,000 in federal funding to conduct a clinical study of its flagship product, TheraGauze.

Congress approved the funding from the 2010 Defense Appropriations Bill with the hope that TheraGauze can be proven to be a successful new battlefield wound dressing.

TheraGauze, which the company manufactures in Hampton, is a complex piece of gauze that has the ability to sense and respond to moisture within a wound. If part of a wound needs less moisture, the product can absorb it. If part of the same wound needs extra moisture to promote healing, the gauze helps produce that moisture, jump-starting or speeding up the healing process. The company calls this its proprietary Skin Moisture Rebalancing Technology.

The science behind TheraGauze came to be in the late '90s when Dr. Guy Levy, a local dentist, now the company's chief technology officer, secured a patent for a polymer intended to help combat dry mouth in Levy's dental patients.

Levy and attorney Allan Staley, now the company's president, "ultimately discovered [the polymer] had a lot more attributes than originally anticipated," Staley said.
Without getting into its patented chemical specifics, the polymer seems to magically know how to handle moisture in a wound. From there a wound-care dressing was developed and the two brought in CEO Kerry McCarter, a former Johnson & Johnson exec.

Finally in late 2007, after raising $5.9 million, Soluble Systems was able to bring TheraGauze to market. It's manufactured in a high-tech clean room in the facilities of the Arc of the Virginia Peninsula, a group that helps put individuals with developmental and other disabilities to work.
In addition to studying its moisture capabilities, one of the goals of the Department of Defense-funded study will be to further confirm the product's ability to deliver antibiotics to a wound, particularly serious wounds and infections seen in battle.

The study will take place at multiple sites including Eastern Virginia Medical School in Norfolk, Harvard Medical School, Johns Hopkins Medical Center and The University of Cincinnati Medical Center.

The study will begin later this year and will run for about two years, Staley said, and more funding will be sought from DOD to supplement the initial $800,000. It sought $4 million for the study initially.

The other big news for Soluble Systems came when it received notice that it was granted trademark protection on its skin graft product known as TheraSkin.

TheraSkin refers to cryogenically preserved grafts of human skin that are applied to wounds that are not healing properly. The technology behind this product provides important skin elements such as cytokines and collagen to and around the wound to jump-start the healing process.

TheraSkin was launched in 2009 after the company secured a partnership with Virginia Beach-based organ procurer LifeNet for its supply of human skin.

"We were looking to expand our product line and wanted to create a synergistic product expansion," Staley said. "[TheraGauze and TheraSkin] work together as part of the wound solution."

That combination of products, and a few more undisclosed Thera-brand ideas up its sleeve, gives Soluble Systems reason to be excited for the future.

The company employs 22 workers, including a sales force that calls on 10 major markets all over the U.S.

It is approaching $1 million in annualized sales, Staley said, with a target of just under $2 million in total sales for 2010.

It's in the midst of raising a second round of private capital, some of which will come from local investors, though its track record now allows it to look elsewhere for funding.

The money will be used to expand its sales efforts into 20 markets with 65 sales reps over the next five years.

Its biggest challenge, Staley said, remains competing with its multinational competitors and getting the Thera-brand and Soluble Systems names out there. The market in which TheraGauze competes is ripe with competition. TheraSkin, however, has just two main competitors, Staley said, both of which use bioengineered tissue rather than actual human skin.
TheraGauze has been plugged into the industry distribution chain and is available to consumers by the box or the case with a prescription.

A 2-inch-by-2-inch piece of the gauze runs about $8. The price goes up for larger versions.
Soluble Systems hopes to one day sell TheraGauze as an over-the-counter product.

It has been selling TheraSkin to customers such as VA hospitals since the fall.

The big question - what's the end game for Soluble Systems?

The biotechnology industry is a frontier for venture capital, acquisition or even going public.
For now, "we're looking to grow a company - to build a company here in Virginia," Staley said. "We'd like to employ more than 22 people."

Availability of private capital and a disdain toward public offerings will keep an IPO off the table for now, he said.

"It truly is an exciting opportunity to build this company and help the patient population to heal better and faster," Staley said, "and ultimately provide a solid return for our investors."

By Michael Schwartz Inside Business

Anti- Embryonic Stem Cell Language in VA House Budget

From the Richmond Times-Dispatch:

"Two perennial amendments pushed by anti-abortion legislators also found their way into the House committee's budget bill.

A language amendment would prohibit state funding of embryonic-stem-cell research but would permit entities that conduct such research, without using state money, to receive state funding. State funding of research using aborted fetuses would be prohibited.

A second language amendment would prohibit the distribution of state money to Planned Parenthood Federation of America, or any affiliate. Very little general-fund money is given to the organization. Planned Parenthood says none of that money goes to abortions.

Similar amendments have failed in past sessions."

VA Senate Rejects Governor's Econ Dev Plan- Except Biotech!

Washington Post: "Legislative and budgetary measures designed to create jobs are Republican Gov. Bob McDonnell's top priorities for the current legislative session. So it may be no great surprise the Democratic-led Senate Finance Committee declined to include most of his package in the budget it passed Sunday."

"Senators noted they did include funding for a new biotech center in Northern Virginia, as endorsed by McDonnell. And they passed a variety of tax credits and other bills that McDonnell wanted for job creation, each of which has budgetary impact."

For more click here.

New biotechnology scholarship available at NOVA :: Northern Virginia Community College

Northern Virginia Community College is accepting applications for a new scholarship sponsored by Rividium, Inc. The Rividium Biotechnology Scholarship will provide $3,000 per year for two years for a student who plans to enroll full time in NOVA’s Biotechnology Program beginning in fall 2010.

To be eligible, applicants must be graduating from a local high school this year, have a minimum 3.0 grade point average and qualify for financial aid as determined by the Free Application for Federal Student Aid (FAFSA).

The biotechnology associate degree program prepares graduates for employment in entry-level positions as laboratory, research or manufacturing technicians at biotechnology and pharmaceutical companies. Coursework covers basic scientific principles in biology and chemistry and emphasizes laboratory techniques and procedures.

The application deadline is March 15. To access the application, click here.

For more information, call Ia Gomez at 703-530-8255."

VA Del. Chris Peace: Support Capital Gains Exclusion for Biotech in Virginia

"Encouraging innovation and technology: Former Secretary of Commerce and Trade Bob Skunda along with the executive director of the Virginia Biotechnology Association, Mark Herzog, have brought nearly 60 businesses to the Virginia BioTechnology Research Park in downtown Richmond. These businesses have diversified our marketplace and made the region attractive to those who wish to explore the cutting edge of research and development. The park's businesses include life science companies, research institutes, and government laboratories -- and employ close to 2,000 people. In order to aide our statewide competitiveness in this sector -- as well as attract more scientists, engineers, and researchers who bring additional jobs to the commonwealth -- Del. Sam Nixon and Sen. Mark Herring (HB523/SB 428) introduced the Virginia Innovation Investment Act, which is a capital gains exclusion on income earned from a qualified investment in an advanced technology company in Virginia. There is a three-year window for the investment to be made. This bill will incentivize individuals and corporations to make investments in Virginia businesses that would not otherwise have occurred."

Click here for the full story from the Richmond Times Dispatch.

Flashback: John Crowley from "Extraordinary Measures" in Virginia

 
John Crowley, the man who started a biotech company with the express purpose of saving his own kids suffering with Pompe's Disease, was a keynote speaker at the 2004 Virginia Biotechnology Summit in McLean. His story has been made into the Hollywood film "Extraordinary Measures" starring Harrison Ford and Brendan Fraser. The photo is from his speech he made to the audience that night at the banquet.

For more pictures from the event, click here.

HGS CEO Cites Virginia as Success in Growing & Attracting Biotech

Tom Watkins, CEO of Human Genome Sciences and the chairman of the Maryland Life Sciences Advisory Board, commented recently on Maryland's economic development plan and competition from other states:

"We have to be realistic," he said, pointing out that it is a 10-year plan. "Other states, such as Virginia, are being aggressive in growing and attracting biotechnology companies. So we have to be forward-looking."

H. Thomas Watkins
CEO, Human Genome Sciences
January 29, 2010

http://www.gazette.net/stories/01292010/businew175358_32548.php

Biotechnology Is Part of Jobs and Opporunities Agenda

In a column published in the Augusta Free Press yesterday, Lt. Governor Bill Bolling referenced biotechnology as a part of the administation's jobs and opportunities agenda.

"We will be able to invest in a number of strategic programs that are designed to improve Virginia’s ability to attract enhanced manufacturing facilities, become the East Coast’s energy leader and assert our position as a great place for biotechnology and life sciences companies."

Read the column here.

VaBIO Hosts "Extraordinary Measures" Movie Night in Richmond

 
The Virginia Biotechnology Association rounded up nearly a dozen members and friends January 27 in Richmond to see the new Harrison Ford biotech -themed movie "Extraordinary Measures" about John Crowley's fight to save his kids suffering from Pompe's Disease. Next week we plan to do the same in Charlottesville!

Virginia Gov. McDonnell proposes more biotech funding

Virginia Gov. Bob McDonnell made biotech initiatives a visible part of a job creation agenda he unveiled Tuesday.

His list of economic development action items includes removing a $3 million cap on certain equity and debt investment tax credits and raising the amount to $5 million in fiscal year 2011.

McDonnell also wants $2 million in fiscal 2011 funding for a business incubator program that would serve biotech companies.

He has expressed support for a bill already introduced that would create an exemption from the capital gains tax for income related to certain angel, corporate or venture investments in science and technology startups, a key issue for young biotech companies that are in a constant search for funding.

In addition, the new governor said he would invest $3 million in bioscience wet lab facilities over the next two years. In a move initiated by former Gov. Tim Kaine, the state is already awarding $3 million from the Governor’s Opportunity Fund to the Ignite Institute, a new nonprofit medical research organization, and the Center for Innovative Technology to build roughly 20,000 square feet of new lab space in the CIT’s Herndon building.

McDonnell’s plans for Ignite include $22 million in total funding for the nonprofit through the next five years, as long as Ignite agrees by June 30 to fulfill its pledge to create 415 jobs and invest $200 million in its future campus in Fairfax County.

The funding, announced by Kaine in an economic development gathering with Fairfax County leaders late last year, will be divided into four $5.5 million chunks. Under McDonnell’s proposal, the first $5.5 million chunk will be awarded in fiscal 2012, starting July 1, 2011.

Ignite, which needs to raise roughly $100 million more to help make the planned institute successful, also received a $25 million funding commitment from another major partner, Inova Health Systems.

Washington Business Journal
Vandana Sinha
January 26

VA Gov McDonnell: $7.5 Million for Biotech Program

Governor Bob McDonnell Lays Out Details on Job-Creation Investments; Identifies Existing Funding and Spending Cuts to Offset Cost

Senate Finance Chair Colgan and House Appropriations Chair Putney Join Senator William Wampler to Carry Governor’s Job Creation Measures

RICHMOND- Virginia Governor Bob McDonnell today announced that leading Republican and Democratic lawmakers will carry the budget amendments necessary to implement the job-creation proposals he outlined in his Address to the Joint Houses of the General Assembly last Monday. In the Senate the amendments will be carried by ranking Senate Finance Committee member William Wampler (R-Bristol) and Finance Committee Chairman Senator Charles Colgan (D- Prince William). The amendments in the House will be brought forward by Appropriations Committee Chairman Delegate Lacey Putney (I-Bedford). McDonnell further announced that he has identified existing funding and specific spending cuts to offset the cost of each new job-creation proposal.

In last Monday’s speech to the General Assembly, McDonnell called for greater investments in state programs that spur job-creation and economic development in the Commonwealth. The Governor noted, “Yes, we face a difficult budget cycle. The budget that I have inherited is dire, and it is unbalanced. We begin with nearly a billion dollar annual shortfall based on tax hike proposals that both parties have rejected. More spending cuts must be made. But even in the toughest of times – even now – we must have the vision and the foresight to invest in our future.”

Lieutenant Governor Bill Bolling, Chief Jobs Creation Officer, commented, “I am delighted to join Governor McDonnell and legislative leaders in supporting this aggressive jobs and opportunity agenda. These proposals will enable us to re-prioritize economic development in Virginia and invest in programs that help create jobs for Virginia families. This is the most important issue currently facing our state, and it deserves our full attention. These legislative initiatives and financial investments will send a message that we are serious about getting Virginia’s economy moving again and enable us to reach out to businesses all across the country and all around the world an encourage them to make Virginia their home.”

Speaking today about the Governor’s job-creation legislation, Senator Charles Colgan stated, “The need to create new jobs for Virginians is pressing, not partisan. The proposals made by the Governor represent smart investments in the Commonwealth’s future. I am confident that we will find broad bipartisan support for them.”

Delegate Lacey Putney remarked, “We all know who creates jobs: men and women in the private sector. We also know that government can either make their lives easier, or get in their way. These ideas will facilitate job creation and economic development. They are exactly what a smart state should be doing in a tough time.”

Senator William Wampler added, “The citizens of my Senate district, like all Virginians, are reeling from some of the toughest economic times in many years. If Richmond will give them the resources to get to work rebuilding our economy, they will. These efforts will result in real jobs and a real return on investment. I applaud the Governor for finding cuts equal to each investment he is asking the Commonwealth to make. That is fiscally responsible government.”

Delegate Kirk Cox (R-Colonial Heights), who serves as Vice-Chairman of the House Appropriations Committee, will help Delegate Putney in this effort. He commented, "This is a comprehensive approach that addresses all of the critical areas of much needed economic development for Virginia. We are committed to work together - Republicans and Democrats, House and Senate - to make this happen."

McDonnell is calling for $50 million in new investments over the next biennium. The Governor is proposing:

· More than doubling the Governor’s Opportunity Fund in FY 2011 by increasing the state commitment by $12.1 million

· Committing $5 million in FY 2011 to a state industrial mega-site fund to attract new employers

· Using $2 million over the biennium to establish state economic development offices in major growth markets in China, India and the United Kingdom

· Supporting the fast growing bio-technology and life sciences industry by removing the $3 million cap on the Qualified Equity and Subordinated Debt Investment Tax Credit and raising it to $5 million in FY 2011; Investing $3 million in bioscience "Wet Lab" Facilities over the biennium; Utilizing $2 million to reestablish funding for the Business Incubator Program in FY 2011; Providing income tax exemption for qualified investments by technology and science startup companies in FY 2012 (cost $500,000)

· Increasing state funding for the Virginia Tourism Corporation by $3.6 million in each year of the biennium, and state funding for the Governor’s Motion Picture Opportunity Fund by $2 million in FY 2011

· Depositing the Wine Liter Tax attributable to Virginia Wine into the Wine Promotion Fund ($1.5 million over biennium)

· Improving Virginia’s business assistance services by increasing funding for the Loan Guarantee Program by $1 million in FY 2011; Continuing funding for the Business One Stop Program, cost of $1 million over the biennium; Increase the appropriation for the Virginia Jobs Investment Program by $6.5 million in FY 2011

The fiscal impact of the Governor’s investments will be offset by utilizing existing revenue sources and cutting some expenses. Specifically:

· $21 million will be available through increased revenue from Virginia’s tax amnesty program

· $500,000 from the elimination of a capital outlay contingency reserve

· $4 million by not filling vacant positions at the Department of Correctional Education

· $1.2 million by deferring equipment purchases at the Department of Corrections

· $25 million will be available through the phase-in of VRS employer contribution rate increases included in the introduced budget bill with one-half of the increase being recognized in FY2011 and the full increase being recognized in FY2012

· $5 million will come from an offset of state funding with additional federal grant funding for food stamp program administration

Va. business leaders put transportation woes on back burner for now, turn to incentives and fairer school funding

Virginia’s budget woes may have proved stronger than Northern Virginia’s transportation woes, but area business leaders are sharpening their focus on issues from job creation to education funding in Gov. Bob McDonnell’s rookie legislative season, which started Jan. 13.

Business officials are generally receptive to the postponement of transportation fixes given the staggering $4 billion deficit.

Instead, they will take up an issue that has snared the political agendas of many regional business groups: the state’s formula for funding its school systems — encapsulated in a composite index that breaks down the state’s and local governments’ share of funding. The higher the composite index, the more that local government pitches in for school funding based on its ability to pay from sources such as adjusted gross income, taxable retail sales and property values.

Here’s where the index gets complicated. The current funding expectations from local governments were enacted July 1, 2008, for the 2008-10 period based on local revenue levels from 2005 — before the housing crash plundered property values.

Before leaving office, Gov. Tim Kaine had proposed freezing the current rates until July 1, 2011, to save smaller, more vulnerable localities from anticipated increases during budget crises. But business leaders said that leaves Northern Virginia and its larger localities shouldering more of the state’s budget burdens and paying tens of millions of dollars more in their cut of school system bills than they can bear.

“It’s adding insult to injury,” said Tony Howard, president of the Loudoun County Chamber of Commerce, which is teaming with the Dulles Regional and Greater Reston chambers for the first time to send a lobbyist to Richmond to focus on taxes and regulation, energy, the environment and economic development.

Business leaders said their rationale for making school funding a cornerstone issue is simple. They consider the health of neighborhood schools a key factor in attracting companies to the area.

“The No. 1 reason we hear for businesses to come to Virginia, and to Fairfax County in particular, in addition to the low regulatory and pro-business stance, is education,” said Stu Mendelsohn, Chamber of Commerce chairman in Fairfax County, where political leaders have considered legal action against the funding proposal.

While business groups lobby legislators for a budget amendment that would thaw the proposed composite index freeze, they also are trying to increase job creation, rallying behind McDonnell’s plan to double the Governor’s Opportunity Fund, a pot of money used to entice businesses to locate in the state.

Biotech business leaders are watching this legislative session closely, hoping for new benefits for potential investors. They are tracking bills lauded by McDonnell and offered by Sen. Mark Herring, D-Leesburg, and Del. Sam Nixon, R-Richmond, that would exempt capital gains taxes from income related to certain angel, corporate or venture capital investments in science and technology startups. Biotech leaders in Virginia see the measure as a way to better compete for younger industry players that might have chosen another headquarters address, such as in Maryland, where tax breaks are more readily available for angel investors. (For more on the tech industry's issues, click here.)

“It’s one more incentive to not consider that,” said Mark Herzog, executive director of the Virginia Biotechnology Association.

An optimistic Herring said the bills’ chances are good even in a downturn because they don’t require new funding.

Even as business groups train their eyes on the emerging issues of 2010 — everything from delaying new stormwater management regulations on new development to curbing the unemployment insurance burden on companies — transportation remains the top priority for some who anticipate it becoming the subject of a special session in the fall.

One bill to raise the gas tax is again on the table, but many observers think it has little likelihood of getting passed.

But another bill has captured more attention — one introduced by Del. Thomas Davis Rust, R-Herndon, that, in part, increases sales taxes in Northern Virginia by 0.5 percent to fund transportation projects specifically in that region.

“The budget is going to consume everything,” said Bob Chase, president of the Northern Virginia Transportation Alliance. “A pledge to make meeting Virginia’s transportation needs a top priority was a cornerstone of McDonnell’s campaign. It’s our expectation that he remains committed to honoring that.”

Washington Business Journal
Vandana Sinha
January 22, 2010

US Trade Representative Seeks Input on Trade Matters

The United States Trade Representative (USTR) has instituted investigation No. 332-509, Small and Medium-Sized Enterprises: U.S. and EU Export Activities, and Barriers and Opportunities Experienced by U.S. Firms, for the purpose of preparing the second in a series of three reports requested by the USTR relating to small and medium-sized enterprises. They are seeking feedback and are inviting companies to participate.

BACKGROUND: In his letter the USTR requested that the Commission provide three reports during the next 12 months relating to small and medium-sized enterprises (SMEs). In this notice the Commission is instituting the second of three investigations under section 332(g) for the purpose of preparing the second report, which is to be transmitted to the USTR by July 6, 2010. The Commission published notice of institution of the first investigation, investigation No. 332-508, in the Federal Register of October 28, 2009 (74 F.R. 55581).

As requested, in the second report (investigation No. 332-509) the Commission will:
(1) Assist in analyzing the performance of U.S. SME firms in exporting compared to SMEs exporting in other leading economies. As one way of comparing the performance of U.S. SMEs to those in other countries, the Commission will compare the exporting activity of SMEs in the United States and the European Union (EU), and analyze the distinctions between U.S. and EU firms in terms of sectoral composition, firm characteristics, and exporting behavior.
(2) Identify barriers to exporting noted by U.S. SMEs and strategies used by SMEs to
overcome special constraints and reduce trade costs.
(3) Identify the benefits to SMEs from increased export opportunities, including free trade agreements and other trading arrangements.

To best aid the Commission in gathering information for the report, the Commission is seeking information in response to the following questions:
• What are the most significant constraints that U.S. SMEs face in their efforts to export?
• If SMEs have been successful in overcoming those constraints, what strategies have they adopted?
• What particular benefits do SMEs believe they have received from increased export
opportunities including those from free trade agreements and other trading arrangements; which trade agreements or other arrangements have been most beneficial?

DATES:
January 26, 2010: Deadline for filing requests to appear at the public hearing.
January 28, 2010: Deadline for filing pre-hearing briefs and statements.
February 9, 2010: Public hearing (Washington, DC).
February 23, 2010: Deadline for filing post-hearing briefs and statements.
March 26, 2010: Deadline for filing written submissions.
July 6, 2010: Transmittal of Commission report to the USTR.

ADDRESSES: All Commission offices, including the Commission's hearing rooms, are located in the United States International Trade Commission Building, 500 E Street SW, Washington, DC. All written submissions should be addressed to the Secretary, United States International Trade Commission, 500 E Street SW, Washington, DC 20436.

FOR FURTHER INFORMATION CONTACT: Project Leader Laura Bloodgood (202-708-4726 or laura.bloodgood@usitc.gov)