NVTC's 2017 General Assembly Session Wrap-upOn February 25th, the Virginia General Assembly adjourned sine die concluding the 2017 Legislative Session. During the 46-day short session, the General Assembly heard more than 2,000 bills related to a broad array of issues and policies. More than 800 bills were approved and sent to the Governor for his review and action. The General Assembly will convene for a one-day Veto Session on April 5th to act on bills that are vetoed or amended by the Governor. NVTC's specific legislative priorities for the 2017 Legislative Session were outlined in a letter to policymakers before the session began and NVTC maintained a full-time presence in Richmond throughout the session to actively advocate on behalf of the technology community.
Specific legislation of interest to Northern Virginia's technology community included:
Tax Incentive for Investors in VC Funds that Target Virginia Companies
NVTC successfully supported legislation sponsored by Del. Nick Rush (HB 2074) which allows investors in qualified venture capital funds to deduct any income earned through their investment, including carried interest, if the venture capital fund invests a majority of its capital in Virginia businesses.
HB 2074 passed the General Assembly and has been sent to the Governor McAuliffe for review and action.
STEM Education and Computer Science
NVTC supported legislation sponsored by Sen. Jennifer McClellan (SB 1493) and Del. Tag Greason (HB 1663) that directs the Northern Virginia Community College to contract with a §501(c)(3) nonprofit organization to develop, market, and implement high-quality and effective computer science training and professional development activities for public school teachers throughout the Commonwealth.
SB 1493 and HB 1663 passed the General Assembly and have been sent to Governor McAuliffe for review and action.
Research & Development Tax Credits
NVTC successfully opposed legislation sponsored by Sen. Glen Sturtevant (SB 1540) which would have phased out the Commonwealth's Research & Development Tax Credits by 2027.
NVTC led the effort in 2011 to establish Virginia's refundable R&D tax credit for small businesses and has worked since then to strengthen it. Last year, NVTC worked with a coalition led by NVTC member company Raytheon to pass legislation that established a new $20 million R&D tax credit for larger businesses with Virginia research and development expenses in excess of $5 million, and increased funding and the per company cap on the R&D tax credit for small businesses.
NVTC believes that both of these credits are important tools in enhancing Virginia's competitiveness as a preferred location for research investment and activity and that incentivizing research and development is critical for a healthy economy. Nearly eighty percent (80%) of states have an R&D tax credit and among the states that compete with Virginia, such as Texas and Indiana, both are aggressive in incentivizing R&D through a robust tax credit. The Research & Development tax credits serve as an important tool in attracting new employers and this type of credit also incentivizes existing Virginia companies to grow and expand their footprint.
SB 1540 was defeated in the Senate Finance Committee and did not move forward this session.
Data Breach Notification Requirement
Legislation sponsored by Sen. Janet Howell (SB 1033) and Del. Mark Keam (HB 2113) and supported by Governor McAuliffe initially sought to require employers to notify the Department of Taxation after discovery of a security breach of payroll information. NVTC successfully supported amendments to the legislation providing that employers instead notify the Attorney General utilizing the same process required under Virginia's existing data base breach law to streamline compliance requirements for Virginia businesses and prevent confusion.
SB 1033 and HB 2113 passed the General Assembly and have been sent to Governor McAuliffe for review and action.
Unmanned Systems-Related Legislation
NVTC successfully proposed amendments to and supported legislation sponsored by Del. Randy Minchew (HB 2350) which expands Virginia's anti-peeping laws to include the use of electronic devices.
HB 2350 passed the General Assembly and has been sent to Governor McAuliffe for review and action.
Legislation sponsored by Sen. Dave Marsden (SB 873) clarifies that the fire chief or other officer in charge at fires and other emergency situations has the authority to regulate immediate airspace in addition to groundspace to maintain order at the scene.
SB 873 passed the General Assembly and has been sent to Governor McAuliffe for review and action.
NVTC opposed two bills that sought to create new unmanned systems-specific criminal and civil laws, primarily related to privacy. While well-intentioned, the bills posed unintended consequences and would have been problematic for technology businesses and the UAS industry. Legislation sponsored by Del. Matt Farris (HB 1602) would have created a civil cause of action for the physical and constructive invasion of privacy where a person, with the intent to coerce, intimidate, or harass, enters onto the land or into the airspace above the land of another person to capture an image of private property or an individual located on the private property without consent or uses any device, including an unmanned aircraft system, to capture such an image in lieu of physically entering the land or airspace.
HB 1602 passed the House Courts of Justice Committee but was left on the House floor with no action taken and did not move forward this session.
Legislation sponsored by Del. Terry Kilgore (HB 2197) would have created a civil cause of action for the invasion of privacy when a person uses an unmanned aircraft system to enter without consent into the airspace above any designated facility, as defined in the bill, or critical infrastructure to capture an image or attempt to capture an image, as specified in the bill.
HB 2197 was defeated in the House Courts of Justice Committee and did not move forward.
NVTC has been a strong supporter of legislation that would prohibit public sector employment discrimination on the basis of sexual orientation. This legislation fosters fair treatment in the workplace, benefits technology employers by promoting employment and retention of a critical talent pool and benefits higher education institutions in their recruitment and retention of faculty and researchers who train the workforce and help drive our innovation economy. This session, there were several pieces of legislation related to employment nondiscrimination sponsored by Sen. Adam Ebbin (SB 783), Del. Kaye Kory (HB 2057), and Del. Mark Levine (HB 2129).
SB 783 passed the Senate but was defeated in the House General Laws Committee and did not move forward.
HB 2057 and HB 2129 were also defeated in the House General Laws Committee and did not move forward.
Wireless Communications Infrastructure
NVTC supported legislation sponsored by Sen. Ryan McDougle (SB 1282) which aims to encourage more broadband deployment by providing for a more uniform and streamlined process across local governments for the approval of small cell facilities on existing structures to meet growing demand for wireless data, attract businesses that require ultra-fast and reliable network connections and recognize the full potential of Internet of Things (IoT)-related solutions in healthcare, transportation, Smart Cities and other important areas.
SB 1282 passed the General Assembly and has been sent to Governor McAuliffe for review and action.
Expansion of Virginia Subpoena Power to Foreign Business Entities
NVTC successfully opposed legislation sponsored by Sen. Scott Surovell (SB 814) which would have expanded the territorial limits of subpoena power in Virginia to compel out-of-state discovery from nonresident, non-parties to a civil case. The Uniform Interstate Depositions and Discovery Act (UIDDA), which Virginia and most states have adopted, affords protection to Virginia citizens subject to subpoena from another state by providing for enforcement of the subpoena in Virginia under Virginia law. In turn, it contemplates that Virginia courts will respect the territorial limitations of their own subpoena power.
NVTC believes that legislation to expand Virginia's territorial limitations on its own subpoena power may lead to other states responding in-kind to the detriment of businesses that chose to locate in Virginia because of Virginia's legal framework, protections and safeguards.
SB 814 was defeated in Senate Courts of Justice Committee and did not move forward this year.
Metro Safety Commission
NVTC participated in a Northern Virginia Transportation Coalition effort led by the Northern Virginia Transportation Alliance (NVTA) in successfully supporting legislation sponsored by Sen. George Barker (SB 1251) and Del. Jim LeMunyon (HB 2136) to implement the federally-mandated Metro Safety Commission to oversee Metro safety and maintenance efforts, implement necessary WMATA Compact and personnel reforms, and ensure continued federal and statewide transit funding.
The federal government required that identical legislation establishing the Metro Safety Commission be enacted in DC, MD, and VA by February 9th. The three jurisdictions failed to meet the Feb. 9 deadline to create the Commission and the Federal Transit Administration (FTA) indicated they will withhold 5 percent of Urbanized Area formula funds from VA, MD, DC, or about $8.9 million, through April. That figure could grow to roughly $15 million through the end of FY2017 if the commission isn't created and certified by the FTA by that point. NVTC recently signed on to a letter organized by the Northern Virginia Transportation Coalition and sent to U.S. Secretary of Transportation Elaine Chao requesting that she suspend the FTA's decision to withhold federal transit funds from the three WMATA jurisdictions.
HB 2136 and SB1251 passed the General Assembly and have been sent to Governor McAuliffe for review and action.
The General Assembly also included budget language which aims to increases transparency at WMATA and directs the Secretary on Transportation to identify potential reforms as part of the preparation for the renegotiation of the multistate WMATA Compact.
NVTC supported legislation sponsored by Del. Kathy Byron (HB 2108) which initially aimed to focus taxpayer dollars that are spent on government run and funded broadband authorities to the deployment of broadband in unserved areas of the Commonwealth to ensure taxpayer dollars are well spent and are not used to compete with private sector broadband providers.
After substantial local government opposition, the legislation was substantially narrowed to focus on transparency of government-run broadband authorities. The legislation approved by the General Assembly now provides that local government broadband authorities have to maintain records concerning the fixing and revision of rates, fees, and charges and make them available to the public via Freedom of Information Act.
HB 2108 was approved by the General Assembly and has been sent to Governor McAuliffe for review and action.
Uniform Fiduciary Access to Digital Assets Act (UFADA)
NVTC successfully supported legislation sponsored by Sen. Mark Obenshain (SB 903) and Del. Jay Leftwich (HB 1608) which creates the Uniform Fiduciary Access to Digital Assets Act. The bill is an update to NVTC supported legislation signed by the Governor in 2015 and allows fiduciaries to manage digital property like computer files, web domains, and virtual currency, and restricts a fiduciary's access to electronic communications such as email, text messages, and social media accounts unless the original user consented to such access in a will, trust, power of attorney, or other record.
SB 903 and HB 1608 passed the General Assembly and have been signed into law by Governor McAuliffe.
NVTC successfully supported legislation sponsored by Sen. Adam Ebbin (SB 1258) which expands the Virginia Solar Energy Development Authority and renames it the Virginia Solar Energy Development and Energy Storage Authority. The Authority's mission now includes positioning the Commonwealth as a leader in research, development, commercialization, manufacturing, and deployment of energy storage technology.
SB 1258 was approved by the General Assembly and has been sent to Governor McAuliffe for review and action.
Student Access to Collected Personal Information
NVTC was successful in seeking amendments to legislation sponsored by Sen. Frank Ruff (SB 951) which allows, but not mandate, school systems to include in contracts with school service technology providers a provision that parents can access student personal information in machine readable format. The legislation as originally introduced would have prohibited technology businesses from doing business with Virginia school systems if they provide parents with access to student personal information in any format other than machine readable format.
SB 951 was approved by the General Assembly and has been sent to Governor McAuliffe for review and action.
NVTC supported a resolution sponsored by Del. Kathleen Murphy (HJ 692) which would have directed the Joint Legislative Audit and Review Commission (JLARC) to (i) evaluate the Commonwealth's current policies, procedures, and standards for assessing cybersecurity risks and protecting the electronic information of all branches of state government and (ii) make recommendations for the improvement of such policies, procedures, and standards, including a recommendation as to whether the General Assembly through legislation or the Governor through executive action should establish a centralized office or agency to have ongoing authority over the Commonwealth's cybersecurity policies, procedures, and standards.
HJ 692 was defeated in the House Rules Committee along with many other study resolutions that would have resulted in cost to the state.
Legislation sponsored by Del. Dave Albo (HB 2360) requires that any contract for information technology entered into by the Commonwealth's executive, legislative, and judicial branches and independent agencies require compliance with applicable federal laws and regulations pertaining to information security and privacy.
HB 2360 passed the General Assembly and has been sent to Governor McAuliffe for review and action.
NVTC supported legislation sponsored by Sen. Monty Mason (SB 1377) and Del. John Bell (HB 1986) and supported by Governor McAuliffe which sought to update Virginia's computer trespass laws by expanding the standard of intent from malicious activity to also include activity conducted through intentionally deceptive means and without authority. The legislation also included a safe harbor provision clarifying that the prohibitions under Virginia's computer trespass laws are not intended to proscribe legitimate commercial activity.
SB 1377 passed the Senate but both SB 1377 and HB 1986 were defeated in the House Courts of Justice Committee and did not move forward.
Legislation sponsored by Sen. Glen Sturtevant (SB 1090) and Del. Chris Collins (HB 2288) would have made it a Class 5 felony for a person to maliciously install or cause to be installed a computer program that takes control of or restricts access to another computer or computer network and demand a ransom to restore control of the computer or computer network. The bills also expanded the private right of action for a person or property that is injured by a computer trespass.
SB 1090 and HB 2288 were both defeated in the Senate Finance Committee.
Legislation sponsored by Sen. Monty Mason (SB 1138) and Del. David Yancey (HB 1815) and supported by Governor McAuliffe would increase the Class 1 misdemeanor computer trespass crimes to a Class 6 felony if the computer targeted is one that is exclusively for the use of, or used by or for, the Commonwealth, a local government within the Commonwealth, or certain public utilities. SB 1138 was defeated in the Senate Finance Committee.
HB 1815 passed the House and Senate and has been sent to Governor McAuliffe for review and action.
The General Assembly approved legislation sponsored by Sen. Tommy Norment (SB 1578) which would allow localities to require the registration of persons offering property for short-term rental through AirBnB and other online platforms and authorize localities to impose fees and penalties on persons who violate the registry ordinance or who offer short-term rentals that have multiple violations of state or federal laws or ordinances.
SB 1578 passed the General Assembly and has been sent to Governor McAuliffe for review and action.
Virginia Research Investment Committee
Legislation sponsored by Sen. Dick Saslaw (SB 1371) and Del. Chris Jones (HB 2245) seeks to better consolidate and align research funding in Virginia by moving responsibility for the development of the Commonwealth Research and Technology Strategic Roadmap from the Center for Innovative Technology to the Virginia Research Investment Committee.
SB 1371 and HB 2245 passed the General Assembly and have been sent to Governor McAuliffe for review and action.
Angel Investment Tax Credit
Legislation sponsored by Del. John Bell (HB 1806) aimed to modify Virginia's angel investment tax credit by increasing funding by $2.5 million per year with the new funding dedicated exclusively to cyber investments.
HB 1806 was defeated in the House Finance Committee and did not move forward.
Virginia Economic Development Partnership (VEDP)
Legislation sponsored by Sen. Frank Ruff (SB 1574) Del. Chris Jones (HB 2471) reorganizes and shifts authority of the Virginia Economic Development Partnership (VEDP). The legislation would establish a new division within the partnership to oversee financial incentives and assure that companies comply with their terms. It also will create an internal auditing arm to monitor the organization. The board overseeing the authority would shrink from 24 to 17 members and would have more alignment with the GO Virginia initiative. Additionally, International trade will remain a division of VEDP under the legislation, rather than splitting off as an independent corporation as required under legislation adopted last session.
SB 1574 and HB 2471 have been approved by the General Assembly and have been sent to Governor McAuliffe for review and action.
Telework Expenses Tax Credit
Legislation sponsored by Sen. Emmett Hanger (SB 1576) and Del. Lee Ware (HB 1814) seeks to extend the sunset date for the telework expenses tax credit from taxable years prior to January 1, 2017, to taxable years prior to January 1, 2022. The legislation also extends the sunset date for the worker retraining tax credit and transfers the certification of eligible worker retraining programs from the Department of Small Business and Supplier Diversity to the Virginia Economic Development Partnership Authority.
SB 1576 and HB 1814 passed the General Assembly and have been sent to Governor McAuliffe for review and action.
Specific budget actions of interest to the technology community include:
Global Genomics and Bioinformatics Research Institute
Last session, NVTC supported an initiative to provide targeted investment in life sciences and personalized medicine by launching the Global Genomics and Bioinformatics Research Institute at the new Inova Center for Personalized Health to leverage Virginia's life sciences and health assets, the data analytics and cyber capabilities of our technology sector, and the strengths of our universities.
This session, Governor McAuliffe proposed reducing funding for the initiative by $4 million (from $8 million). The General Assembly restored the funding to $8 million in the budget they approved.
NVTC supports the GO Virginia initiative, which is a bipartisan and business-led effort focused on creating economic incentives for localities and regions to collaborate together to make meaningful progress on infrastructure and other regional investments. Specifically, Go Virginia will incentivize localities and public and private sector entities to collaborate and act together, and money from the state would only go to those localities or projects where there is significant public sector and/or private sector collaboration.
In Governor McAuliffe's proposed budget, GO Virginia's funding was reduced by 40% or roughly $15 million. The General Assembly restored $7.5 million of the $15 million in the budget they approved. Funding includes $650,000 per qualifying region for organizational building and gap analyses; $10.9 million the second year for grants based on each region's share of the state population; and $11.3 million the second year for competitive grants.
New Economy Workforce Credential Grant Program
Ruff and Del. Kathy Byron which established the "New Economy Workforce Credentials Grant Fund" with the aim of focusing the alignment of workforce training programs with the needs of business and industry. This legislation was the first pay-for-performance program for award of workforce credentials in the country where the state will pay up to $3,000 per student who receives a credential in a high demand field (including cybersecurity and other technology areas).
This session, Governor McAuliffe proposed an additional $1 million for New Economy Workforce Credential Grant Program due to strong demand for the program which would increase funding from $12.5 million to $13.5 million. The General Assembly removed the additional $1 million in funding in the budget they approved.
In the Governor's proposed budget, Governor McAuliffe proposed $1 million to support cybersecurity public service scholarships. The General Assembly eliminated that funding in the budget they approved.
Cyber Summer Camps
In the Governor's proposed budget, Governor McAuliffe proposed $480,000 to support summer cyber camps. The General Assembly eliminated that funding in the budget they approved.
Virginia Biosciences Health Research Corporation (VBHRC)
Governor McAuliffe proposed $2.5 million the first year and $5 million the second year to be provided for the Virginia Biosciences Health Research Corporation (VBHRC). The General Assembly cut funding by $1.3 million in the second year of the budget they approved.
Virginia Research Investment Fund
Governor McAuliffe proposed reducing funding for the Virginia Research Investment Fund by $10 million, leaving $12 million in place to support the initiative. The General Assembly adopted these reductions in the budget they approved.
Additionally, the budget approved by the General Assembly included an additional $250,000 to support the responsibilities assigned to the Virginia Research Investment Fund, the New Economic Workforce Grant, and the Virginia Longitudinal Data System.
The budget approved by the General Assembly did not include a proposed budget amendment articulating a policy statement indicating that state agencies should modernize and protect the Commonwealth's information systems, where appropriate, by expeditiously leveraging commercial cloud computing services that comply with rigorous security requirements throughout state government while driving cost savings and achieving new efficiencies.