Legislative Newsletter - February 10, 2009

Number 4

Calendar for 2009 General Assembly Session

February 12     House and Senate votes on their versions of the budget

February 23     Last day for committee action on bills

February 26     Conference committee deadline for compromise budget

February 28     Scheduled 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 later this week, then a committee of conference, composed of senior legislators, will meet to hammer out a compromise spending plan. The budget writers expect to receive a revised revenue report (to include January revenues) within the next week, and are anxiously awaiting a definitive word from Washington as to dollars available for Virginia from a yet-to-be approved federal stimulus package.

     Here are some highlights of proposed House and Senate budget provisions affecting local governments; look for additional information on the budgets over the next several days from VML and VACo:

Public Education—

The House and Senate budgets approach cuts to public education in different ways:

     The House proposal has two major thrusts. One is to provide additional flexibility to local schools divisions in the form of eliminating local match and staffing requirements in programs contained in the Lottery Proceeds Fund area in the second year (most all localities many already far exceed required local effort for these programs), as well as for textbooks and technology grants. The second is to establish an Early Retirement Program for school division personnel in both 2009 and 2010. The optional program would be available to employees (other than the division superintendent) who has reached age 50 and has 25 years of service. School divisions can determine which groups of employees would be eligible for the program and would be responsible for paying Virginia Retirement System (VRS) for the cost of its participation at the rate of 20% of the eligible employee’s current salary for each year of service purchased.

     The Senate plan includes a one-time reduction  in FY10 of $368 million, which is the amount contained in the introduced budget in four policy areas (cap of state funding of school support positions, lottery funding, school constructions grants and hold harmless funding). It specifies that these cuts are to be temporary, one-time actions. The Senate also proposes to reduce textbook funding by one-half in FY10. Senate language directs the Department of Human Resource Management to create a statewide health insurance program for school division employees; school divisions would be required to enroll in the program unless invoking a one-time opt-out decision.

     The House plan also includes language to encourage localities to allow school divisions to carryover unspent local funds to the next school year and to appropriate state and local funds in a lump sum.

Public Safety—

     Neither budget makes any further reductions to HB 599 funding for local law enforcement agencies; the governor’s introduced budget included a 7% reduction. Both plans include language calling for a joint legislative study to determine state policy on funding jail capital costs.

     The House budget limits reductions contained in the introduced budget for Constitutional offices to 5% (reductions of 7% to 10% were proposed). The House plan calls for a review of Constitutional officer staffing standards. It also eliminates $2.9 in state funding for 14 drug courts and removes the exemption from the federal inmate cost recovery (this impacts the Central Virginia Regional Jail).

     The Senate plan includes a $1.5 million cut to community corrections and pretrial services; the introduced plan had a $3 million increase for pretrial services in localities with existing programs, to target offenders who are in and out of jail.

     The House budget includes language temporarily suspending the authority of circuit courts to require localities to repair or replace courthouses. The Senate has no similar proposal but instead proposes that the Joint Legislative Audit and Review Commission study the funding of courthouse construction, operation, and maintenance.

     The Senate eliminates proposed language from the introduced budget that increased the state’s share of clerks’ excess fees from one-third to two-thirds, but then paid for it by reducing aid to local governments by $6 million in FY10. The House did not alter the proposal. It includes language to allow localities to provide assistance to district and juvenile courts, either by directly funding staff or providing support services.

Transportation—

     Legislators are fully aware of the impact of the economic downtown on transportation revenues over the past year, and await another round of reductions in the Six Year Program coming in about two weeks. The House and Senate budgets propose several similar language amendments. One would require a detailed plan from VDOT as to how it will implement funding reductions proposed in the introduced budget. Another amendment would require DRPT to transfer 10% of transit capital funding for operations use. A House-proposed amendment would require the Secretary of Transportation to submit a list of prioritized transportation projects that would be ready to advertize should federal stimulus funding become available.

Human Services—

     Language in both plans requires the Office of CSA to develop a plan for conducting training sessions for CMPTs and FAPTs. House-endorsed language requires CMPTs and CSBs to develop local plans for intensive care coordination for CSA children placed in or at risk of placement in residential care and to determine the service provider for these services.

     The House adds 400 MR waiver slots in the second year (restoring 200 reduced by the governor, and adding 200 more). The Senate plan proposes to reduce auxiliary grants by $1.7 million.

Retirement benefits—

     The House agrees with language in the introduced budget allowing political subdivisions to have their retirement contributions based on the same assumptions as the state, while the Senate rejects that language. In addition, the House proposes a 10-member joint subcommittee to examine the recent JLARC report on State Employee Compensation.

Water Quality Improvement—

     The House plan proposes to transfer $149 million from the Water Quality Improvement Fund to the general fund (dollars already committed to specific projects). The amendment would replenish the fund with federal stimulus dollars or state debt. Both House and Senate would provide additional funding for agricultural best management practices to reduce water pollution; the House $20 million and the Senate $18.5 million. The Senate plan also includes $1.5 million for point and non-point source water pollution control

Legislation for the homestretch

     Local governments remain concerned about House and Senate-approved bills that restrict local regulation of alternative on-site sewage systems. HB 1788 and SB 1276 would bar localities from prohibiting the installation of any alternative system approved by the Board of Health for use in the situation for which it is proposed. Local bans on installation may continue in place until approval of regulations governing licensing of installers of such systems (expected by July 1, 2009). Local maintenance standards may continue until the Board of Health adopts final regulations for maintenance of such systems (not expected until July 1, 2010 or later).

     Bills to extend current expiration deadlines on previously approved land use actions have been approved. HB 2077 applies, in varying degrees, to subdivision plats, site plans, most special and conditional use permits and associated permits and other approvals, while also extending required dates for some existing proffers requirements, if progress on project is being delayed. The extensions in this bill are to January 1, 2014. In addition, SB 1533 extends the expiration of special use permits that were valid and outstanding as of January 1, 2009, until July 1, 2011. HB 2029 lowers the cap on administrative overhead charges that localities include in the calculation of project bonding requirements from 25% to 10% of construction costs for a period of five years, while SB 1335 allows localities to waive public hearing requirements when considering developer requests to amend certain existing proffer agreements. All these bills will now be heard in the opposite chamber.

HB 1991 extends the time that localities have to adopt a local stormwater management program, while delaying the proposed regulations from taking effect until July, 2010 (thus allowing for another legislative session prior to then). The House approved the bill unanimously.

HB 2019, SB 1398  and SB 1475  are related, similar measures that give new duties to the Office of Intermodal Planning and call for the designation of transportation “corridors of  statewide significance” that are to be noted on the transportation plan maps of local comprehensive plans. The bills were amended to respond to a number of local government concerns.

HB 2354, in its introduced form, offered some hope for mandate relief. The original version would have required, rather than allow, the Governor to temporarily suspend mandates on a locally faced with fiscal stress and the suspension or relaxation of the mandate would help alleviate the fiscal hardship. The amended version, however, focuses on the House budget provisions related to additional flexibility for local schools divisions in the lottery funds, textbooks and technology grants areas (see above).

     Legislators have approved a trio of bills that reduce the public notice required by localities, under certain circumstances, for increasing the local real property tax rate above the rate that would generate 101% of the prior year's property tax revenues. SB 1131 reduces the notice from 30 days to 10 days. HB 2308  and SB 1003 provide for 14 days notice when state appropriations are delayed. Previously, localities were required to give seven days notice, but the time was extended to 30 days by the 2007 General Assembly.

     The Senate has approved several bills that seek to make more data available about children being served through the Comprehensive Services Act. The three bills, SB 1180,  SB 1181, and SB 1182, add reporting requirements about expenditures on children receiving and not receiving CSA pool funding,  funding streams used in providing services and on the nature and costs of services.

     The substitute version of SB 1386 would eliminate state funding for local and regional jail construction. However, it is expected that language contained in both versions of the budget to study the state’s role in jail costs will prevail (see above).

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

HB 1730         Proposes a four-year sunset clause for any new or increased state or local tax

HB 1828         Allows localities to offer rate incentives or flexibility for green roof construction (also HB 1975 and SB 1058)

HB 1891         Reduces the amount of credit, from $100,000 to $50,000, that can be claimed under the land preservation tax credit provisions (also SB 986)

HB 1919         Increases from $1 to $5 the amount a locality may charge an inmate to defray the costs associated with the inmate's keep

HB 2055         Revises transfer of development rights provisions (also SB 1418)

HB 2063         Changes the distribution method for sales tax to public education to one based on average daily membership in a school division, while eliminating the triennial census of school population

HB 2165         Allows farmers to engage in small-scale production of biofuels in areas zoned agricultural without a special permit

HB 2266         Expands the current record exemption for certain identifying information of complainants in zoning cases to those in building or fire prevention code cases (also SB 1478)

HB 2424         Permits courts to order any person convicted of unlawfully defacing property to pay restitution to the locality for costs of removing or repairing the defacement

HB 2425         Allow localities to withdraw from the secondary system of highways

HB 2565         Directs the Office of Farmland Preservation to assist localities interested in developing farmland preservation policies, including use value assessment, transfer and lease of development rights and agricultural/forestal districts

HB 2628         Prohibits a local public body from purchasing construction in excess of $200,000 from the contract of another public body that is more than 75 miles away

HB 2665         Creates the Virginia Broadband Infrastructure Loan Fund for financing broadband infrastructure projects undertaken by local governments

HJ 725            Constitutional amendment; establishes what constitutes a taking of private property for a public use

SB 854            Establishes a pilot program of mental health courts in Virginia

SB 979            Allows localities, by ordinance, to impose up to a $10 fee on all motor vehicle violations, to be used for purchasing fuel for law enforcement vehicles

SB 982            Requires localities to waive service charges on development or redevelopment that provides a permanent reduction in stormwater flow and pollutant loading

SB 1024          Removes the requirement to have an additional "local coholder" of a conservation or open-space easement when Open-Space Lands Preservation Trust Fund grants are used

SB 1055          Establishes a permanent affordable housing fund

SB 1064          Requires website posting of the local comprehensive plan

SB 1285          Requires local governing bodies and school divisions to publish the estimated required local match in the school budget

SB 1487          Requires urban development areas to provide a mix of residential housing types to meet projected family income distributions of future residential growth

SJ 273             Constitutional amendment; authorizes the General Assembly to provide by law for the restoration of civil rights for persons convicted of nonviolent felonies who have completed service of their sentences

            Here’s an update on bills of specific local interest:

→Lower speed limit on unpaved roads—HB 1837 (Albemarle Co.) (in Senate Transportation Committee)

→Regional Transit Authority enabling legislation—HB 2158 (approved by House)

→Certain licensed distillers as ABC agents (Eades Distillery-Nelson County)— SB 1213 (approved by Senate)

→Rivanna Scenic River designation—SB 957 (in House Agriculture Committee)

→Increase in transient occupancy tax—SB 1025 (Greene Co.) (in House Finance)

→Clean energy financing authorization— SB 1212 (Charlottesville and Albemarle) (approved by Senate)

→CSA judicial review— SB 1506 (Greene Co.) (approved by Senate)

→Camille remembrance— SJ 379 (Nelson Co.) (approved by Senate)

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)