Legislative Newsletter No. 2 — January 26, 2004

2004 General Assembly Calendar

• January 27 — House and Senate member budget amendment requests released
  
• February 17 — "Crossover" day—last day for house of origin to act on bills
  
• February 22 — House and Senate budgets released

Money Matters

The General Assembly's money committees have been told that year-to-date revenue growth (thorough December) is about on the budgeted estimated of 6.8%. Chairman John Chichester told the Senate Finance Committee this week that even with projected revenue increases, there is not enough to cover increased costs associated with education and Medicaid and to address priorities that have been sliding in recent years, such as higher education. He charged the committee with providing leadership to develop a budget needed for the longer view, rather than develop a budget for the short term, as has been done the past three years using one time fixes. In his opening statements to the committee last year, Chichester noted that the next two-year budget (meaning 2004-2006) will be challenged by these one time fixes, re-benchmarking of the SOQ and VRS rate changes, and that lawmakers would have to look at "both sides of the equation" in determining the right mix of services and resources.

Meanwhile, House Appropriations Committee staff has developed a list of possible funding reductions for its members to consider should the House budget contain no tax policy changes that generate additional revenue. Among them are some cuts to education, transportation, the HB 599 program and employee pay hikes. Optional Medicaid services also are being examined by a subcommittee. Some House Republicans are suggesting that modest gas and cigarette taxes could be included as part of their budget re-write. Without tax policy changes proposed in the introduced version, lawmakers would face a nearly $1 billion gap between expected revenue and mandated/high priority spending.

Much discussion of the budget again falls around education funding, particularly the proposed deduction of certain federal ($307 million) and locally generated ($111 million) revenues that lower state costs of the SOQ. Some House Appropriations members are criticizing this year's record increase in state costs to "rebenchmark" the SOQ and may look to "back out" certain costs, such as teacher salaries, that are part of the SOQ cost calculation and that are driven by local spending (localities increased teacher salaries the past several years when the state did not).

Budget amendments submitted by legislators will be released Tuesday. The governor had an earlier deadline to submit any technical amendments to his introduced plan. One restores state funding of about $102,000 each year for regional criminal justice academies, while $6 million is added in FY05 for increased retirement costs for certain Constitutional officers.

Finally, in addition to the comprehensive tax reform packages discussed in the last newsletter (Chichester, Hanger, Louderback), there are also numerous bills related to taxes, including those that increase revenues to the state and localities (cigarette, gas, local income tax) and those, like property tax caps and BPOL measures, that serve to limit local revenues.

Legislation

The Senate Local Government Committee has approved SB 152 allowing Nelson County to call its industrial development authority and economic development authority. The bill was amended to allow all localities to make such a change without coming to the legislature to seek such approval. The committee decided to delay voting on SB 76, which would prohibit localities from regulating political signs on public property 30 days before an election. Several amendments being proposed are likely to preserve current local and state regulation. Senate Transportation approved SB 58, which revises nonconforming signs provisions to prescribe that such signs be governed by VDOT regulations. The committee also overwhelmingly approved a bill to allow all localities to install and operate "photo-red" monitoring systems.

A House Finance subcommittee has narrowly recommended against approval of two bills that would limit local revenue raising authority. HB 412 would require cities to hold a referendum in order to increase the meals and transient occupancy taxes, while HB 385 limits real property tax rates and assessments. Del. Robert Orrock, the subcommittee chairman, expressed his concern that at the same time the legislature acknowledges the pressures on local government revenues and costs, there are bills that have the state saying "we need to ratchet you down." Both bills were up for a vote in the full committee Monday.

When the dust settled after last Friday's filing deadline, legislators had submitted more than 2,400 bills and resolutions for consideration. All legislation must be acted on in its house of introduction by February 17. Here are more to add to our growing list:

HB 358 requires, among other things, the recording, either by audio or video, of the minutes of a closed meeting, which shall be subject to public disclosure only in certain court proceedings.

HB 408 requires the use of a visible, traction-improving substance on steel plates used in connection with road repairs.

HB 473 and HB 1076 clarify provisions adopted last year that transferred tax exemption authority to local governments.

HB 616 expands the definition of law enforcement officer in the Procedural Guarantee Act to include sheriff's deputies and adds a provision for legal counsel prior to being questioned.

HB 803 expands current overtime compensation provisions for fire protection employees to law-enforcement employees.

HB 820 states that once a locality begins condemnation proceedings, it may not rezone the property without consent of the landowner.

HB 822 would impact Housing and Redevelopment Authority rehabilitation projects by prohibiting condemnation to obtain land if the land would later be conveyed to a private property owner.

HB 825 allows VHDA to finance certain mixed-income and mixed-use developments.

HB 906 requires VDOT to administer a highway logo sign program consistent with the requirements of the Manual on Uniform Traffic Control Devices.

HB 988 requires disclosure in certain land use proceedings.

HB 1078 allows taxpayers aggrieved by the assessment of any local tax to appeal such assessment to the Tax Commissioner.

HB 1113 limits liability recovery from public transportation operators to $2 million per person.

HB 1122 suspends collection of local business taxes when being appealed in court.

HB 1177 consolidates and reorganizes the stormwater management program, with local provisions to be effective July, 2006. Interested parties now are focusing discussions of this bill on fees structure and allowance for more stringent local requirements.

HB 1212 and SB 543 establish a Secretary of Agriculture and Forestry.

HB 1349 and SB 453 equalize county taxing authorities with those of cities.

HB 1350 and SB 369 maintain the 2002 caps on fee amounts that can be charged for various water permits.

HB 1380 authorizes the conduct of electronic communication meetings for local public bodies.

HB 1400 requires state, local and regional correctional facilities to offer debit telephone systems.

HB 1418 imposes a $1/month fee on owners of improved real property valued over $60,000.

HB 1419 authorizes creation of a Charlottesville/Albemarle transportation district, which could be used to facilitate the construction of a Route 29 bypass.

HB 1462 establishes a $5 per ton solid waste tipping fee, with localities authorized to keep half, and the remaining half to be sent to the state for landfill cleanup, brownfields restoration, economic development and environmental emergency response.

SB 279 allows managers of political subdivisions to be included in the Law Enforcement Officers Retirement System.

SB 352 reorganizes record exemptions in the Freedom of Information Act.

SB 353 requires a transportation infrastructure component in comprehensive plans.

SB 400 allows localities to restrict nonessential ground water use during declared water shortages or emergencies.

SB 427 expands provisions of the Chesapeake Bay Preservation Act to additional localities, as determined by the Chesapeake Bay Local Assistance Department.

SB 428 prohibits public bodies from requiring contractors doing business with the body from paying in excess of the federal minimum wage.

SB 523 creates a Watershed Coordination Program to engage stakeholders to develop strategic plans to mitigate and prevent nonpoint source water pollution.

SB 527 establishes a Land and Water Conservation Trust Fund that requires waterworks owners to collect and remit to the state, a $2 per month per connection fee; proceeds from the fund largely would be split between the Land Conservation and Water Quality Improvement Funds.

SB 530 is Senator Hanger's tax reform bill (see previous newsletter).

SB 604 revises provisions related to transportation of persons under a temporary detention order.

SB 635 is Senator Chichester's tax reform bill (see previous newsletter).

SB 670 directs VDOT to construct the Rt. 29 bypass around Charlottesville as soon as practicable, allowing use of the area's other urban and secondary system construction funds for the project.

Studies And Resolutions

HJR 93 creates a joint subcommittee to study the Virginia Procurement Act.

HJR 105 creates a joint subcommittee to study the level of state funding needed for K-12 infrastructure.

HJR 167 directs a JLARC study of the functions and operations of commissioners of the revenue, treasurers and finance directors; HJR 225 calls for a Crime Commission study of Commonwealth's attorney offices.

HJR 170 continues the Growth and Economic Development Commission for purpose of developing APFO legislation.

HJR 193 directs a JLARC study of the Department of Social Services.

HJR 227 creates a joint subcommittee to study conditional zoning.

SJR 78 creates a joint subcommittee to study transportation maintenance and construction programs and their funding.

SJR 82 continues the Senate and House Finance Committees study of the tax code.

Most of the impact fee bills assigned to different committees (as discussed in the last newsletter) have been re-referred to the House Counties, Cities and Towns Committee. The only exception is HB 307, which is still in House Education. SB 393 is a school capacity/adequate public facilities bill in Senate Local Government. Local governments are trying to get the bill out of committee and to the Senate floor. However, there's a lot of sentiment to funnel all APFO bills to the proposed HJR 170 study.

Here's an update on bills requested by PDC localities:

HB 154-tax-exempt provisions for the elderly and disabled (Charlottesville) (on House floor)

SB 152-industrial/economic development authority (Nelson) (on Senate floor)

SB 247-real estate tax credit for permanent easements (Charlottesville) (in Senate Finance)

SB 248-revisions to disability provisions for disabled veterans (Charlottesville) (in Sen. Fin.)

SB 373-state industrial access road funds (Nelson) (in Senate Transportation)

SB 374-admissions tax authorization for all classes of events (Nelson) (in Senate Finance)

SB 375 - use of transient occupancy tax revenues (Nelson) (in Senate Finance)