Legislative Newsletter - February 6, 2007

Number 3

Calendar for 2007 General Assembly Session

February 8       House and Senate floor votes on their budgets

February 19     Last day for committee action on bills

February 20     Deadline for budget conferees to agree on a compromise spending plan

February 24     Adjournment

BUDGET items of interest

            The House Appropriations and Senate Finance Committees have proposed their amendments to the current two-year budget. The respective chambers will vote on their budget proposals this week, then a committee of conference, composed of senior legislators, will meet to hammer out a compromise spending plan. That final plan may hinge on a compromise on a transportation funding package, since at this writing, the House and Senate have different plans poised for passage. The elements of the Senate transportation plan, crafted in response to a compromise package developed by key House and Senate leaders, can be found in SB 1379. Meanwhile, the House compromise plan is contained in HB 3202. See legislation below for further explanation of these plans.

Here are some highlights of proposed House and Senate budget provisions affecting local governments; additional details on the amendments are being made available later today.

Transportation— The House proposes to use $566 million in general fund dollars and authorizes up to $2 billion in debt over the next seven years for transportation projects across the state. The plan targets the $339 million earmarked during last year’s session to be used for priority projects, while the other $227 million from general fund surplus dollars will be used for debt service ($163 million) and formula allocations ($64 million). The House plan proposes that future transportation revenues come from ongoing general fund support of $250 million/year, plus half of nonrecurring surpluses, dedicated insurance premiums, and abusive driver and other fees.

The Senate programs $500 million in general funds dollars for debt service ($161 million) and priority transportation projects ($339 million) across the state, including $23.1 for the local road revenue sharing program. The Senate plan removes the 5% sales tax exemption on gasoline. One percent of that is to be sent back to localities for local and regional projects, with much of the remainder being targeted for highway maintenance needs across the state.

Pay raises—The House budget includes a 4% pay raise for state-supported local employees, effective December 1 (up from 3% proposed in the introduced budget). The Senate maintains a 3% pay hike for these local employees. Both versions propose a 3% pay raise for school teachers, effective December 1.

Retirement benefits—The House and Senate budgets both fund an increase in the retired teacher health insurance credit from the current $2.50/month to $4.00/month for each year of creditable service (no cap on the years of service). This is the same level of the health care credit for retired state employees. The House sets aside nearly $6 million for state costs of this change, while the Senate earmarks double that amount. Localities will be required to pay their share of the costs. Also, both budgets provide additional state funding for enhanced benefits to sheriff’s deputies. The House provides about $3.8 million (rather than the $11.5 million proposed by the governor) as an incentive for localities to increase benefits for deputies. while the Senate proposed additional funds as part of a requirement that deputies be part of the Law Enforcement Officers' Retirement System (LEOS).

Public Education—The House rejected funding proposed by the Governor for establishing pre-school pilot programs and expanding early intervention reading and Algebra readiness initiatives and redirected it to other uses. The Senate rejected funding proposed for the Algebra readiness initiative, put pre-school pilots money into the existing preschool initiative, and endorsed the early intervention reading proposal. The House also creates a reserve for one-time start-up costs or expansion of existing pre-school programs. The House also proposed $500,000 for a Center for Teacher Quality and Educational Leadership to serve as a professional development facility focusing on teacher quality and educational leadership for schools not meeting SOL benchmarks. As the legislature faces another SOQ rebenchmarking next year, along with various increased staffing proposals from the Board of Education, the Senate proposed language establishing a small joint subcommittee of legislators to review K-12 costs drivers and trends, a task that had been tackled this past year by various agency staff.

Water Quality Improvement—The House plan provides $50 million in FY08 to the Water Quality Improvement Fund to continue funding grants to localities to upgrade wastewater treatment plans, and $3.8 million in non point source pollution from the FY06 surplus. The Senate supports the bond package introduced by the Governor for water quality improvement.

Land Conservation—The House and Senate both reduce the $20 million in funding proposed by the governor for land conservation, with the House supporting $5 million for PDR programs and the Senate endorsing an $8 million package.

Human Services—House budget language specifies that funding for mental health services for adolescents through MHMRSAS give priority to those at risk of custody relinquishment. The Senate designates $2 million, with a local match required, for such services. The House budget nearly doubles the number mental retardation waiver slots proposed in the introduced budget, and provides $800,000 in FY08 for DSS child day care subsidies and $700,000 for home delivered meals for the elderly through area agencies on aging (the Senate funds a $300,000 increase). A House-proposed language amendment requires DSS to review the current three-tiered locality grouping structure used to determine TANF payment amounts. The Senate increases auxiliary grant funding by nearly $1 million and funding to community action agencies by about $500,000, and funds an additional $2.4 million in the second year to provide community services to those with substance abuse disorders.

Public Safety—The House and Senate rejected the governor’s proposed changes to the HB599 distribution formula, which would have directed more funds toward cities with the highest crime rates, and maintain the existing distribution formula. The Senate also maintains the “hold harmless” provision for FY08.  A House language amendment requires localities to annually certify that HB599 funds were used to supplement rather than supplant local funding for public safety. The Senate also includes $3.15 million for commonwealth attorneys staffing.

Other items of interest—The House maintains current funding for broadband technology expansion, rather than increasing those dollars in the current year as proposed by the governor. House budget language directs DEQ to convene a panel of experts to examine the effect of biosolids on health and the environment. Both budgets provide increased general fund support for victim witness programs.

LEGISLATION for the homestretch

The House and Senate have vastly different legislative vehicles for their respective transportation packages. The House plan, HB 3202, up for a vote on the floor today, is largely the Republican compromise package announced several weeks ago and explained in the last newsletter (and above). It also contains several land use provisions as previously explained. Those include a requirement for many counties to include one or more urban development areas in their comprehensive plan; authorization for large counties (over 90,000 population) to establish urban transportation service districts; and language requiring VDOT to classify secondary roads as either local collector roads or local subdivision roads, and after July 1, to not accept any new local subdivision roads into the state system to be maintained. The first two of these provisions also are embodied in separate legislation pending on the House floor.

The Senate Finance Committee rejected the Republican compromise transportation plan and instead approved an alternate version (SB 1379) that is being considered on the Senate floor today. The bill removes ALL provisions related to land use. It does include a bonding provision, increases some user fees (diesel fuel equalization and institutes some abusive driver fees), uses only $66 million in general funds (ongoing) and removes the sales tax exemption on gasoline. It also includes regional plans for Northern Va. and Hampton Roads. Of the money generated by the sales tax exemption change, approx. $100 million would be funneled to local governments based on vehicle registrations.

Interested stakeholders have worked throughout the session on a pair of bills, HB 2493 and SB 1205, that propose further restrictions on localities in addressing events and activities at farm wineries. Though the parties have worked tirelessly on this legislation, it still tips the balance of competing locality and wine interests farther away from local governments. Also, House and Senate bills have been approved that will create a nonprofit, wholesale distributor within the Department of Agriculture and Consumer Services to provide wine distribution services to local and farm wineries.

Various eminent domain bills remain in play. The House measure, HB 2954 restricts the use of eminent domain well beyond the Kelo case provisions. Similarly, a constitutional amendment, HJR 723, contains broad language that unnecessarily restricts local government authority to exercise eminent domain. Meanwhile, a pair of Senate bills, SB 781 and SB 1296, are more favorable to local governments. The Senate also is poised to approve SJR 404, which directs JLARC to conduct a comprehensive study of the use of eminent domain by state and local entities.

Another bill that infringes on local authority is HB 3109, which eliminates the ability of local governments to prohibit hunting within a half mile of a subdivision. It also allows hunters to self-regulate their action concerning the range of any firearm being discharged.

All freestanding impact fee, APFO bills and bills clarifying authority to deny rezonings based on lack of infrastructure have been defeated.

Other legislation of interest that will continue to be debated in the second half of the session includes the following:

HB 1778—authorizes localities to establish red light photo monitoring systems (also SB 829 and SB 871).

HB 2010—compromise legislation of various stakeholders, including local governments, that revises affordable dwelling unit provisions to allow for the establishment of housing trust funds and bonus density in exchange for affordable units (also SB 955).

HB 2127—require localities, in years when there is a 1% or more increase projected in total tax revenues, to mail to each property owner a notice of the public hearing on the budget and include the current year's real estate levy and proposed levies for each individual parcel, based on the chief administrative officer’s budget.

HB 2181—compromise legislation of various stakeholders, including local governments, to provide for a uniform, statewide statutory classification and taxation for idle machinery and tools on a prospective basis (also SB 1151).

HB 2227—maintains current provisions for subdivision streets to be taken into the state system and maintained by VDOT, and requires CTB to promulgate regulations revising subdivision street requirements (SB 1181).

HB 2370—legislation that increases the retired teacher health insurance credit as noted above (also SB 1218).

HB 2446—authorizes Albemarle and Prince William Counties (county executive form of government) to provide grants, loans and other assistance to their employees for housing needs (also SB 1387).

HB 2640-- prohibits the imposition of local vehicle license taxes and fees on inoperable vehicles.

SB 812—requires revenue sharing funds to be prioritized first for projects administered by localities, and second, when a locality commits more local funding than the amount of revenue sharing funding requested.

SB 1001—revises various electronic meeting provisions of the Freedom of Information Act, including to allow members of public bodies to participate in meetings electronically from a remote location under certain circumstances.

SB 1053—requires state regulations that authorize localities to require building permits for certain alterations in designated historic districts.

SB 1074—makes clustering provisions adopted last year optional for applicable localities under 40,000 in population.

SB 1166—legislation that requires deputy sheriffs to become members of LEOS and increases the retirement multiplier for sheriffs (as noted above).

SB 1200-- limits the fees charged by VDOT for review of local road improvement applications, plans and plats to no more than $1,000 for each review.

SB 1300—authorizes localities to adopt an ordinance requiring a special exception or special use permit for the storage of sewage sludge.

SB 1332—expands, subject to appropriation of state funds, eligibility for state pool funds to include children requiring mental health services to avoid placement in foster care.

SB 1389—establishes a TransDominion Express Commission to identify needed construction, reconstruction, improvements or repairs to railroads and their facilities within the corridor.

Finally

            Bills requested by several of our PDC localities that are still in the legislative process include the following:

For Charlottesville, HB 2010 and SB 955 (affordable dwelling units—see above); and HB 2674 and SB 898 (toy vehicles).

For Albemarle, HB 2503 (transfer of development rights; SB 869 is an identical measure).

For Charlottesville and Albemarle, HB 1685 and SB 887 (use of primary road funds).

General Assembly Contact Numbers for David Blount, TJPDC Legislative Liaison

804-644-3702 (phone)

804-783-8226 (fax)

979-7310 x350 (Charlottesville voicemail)

(Richmond email)