Legislative Newsletter - February 20, 2009

Number 5

Calendar for 2009 General Assembly Session

February 23     Last day for committee action on bills

February 26     Conference committee deadline for compromise budget

February 28     Scheduled adjournment

Budget News

     A conference committee of senior legislators will meet over the coming days to try to reach a compromise spending plan for the remainder of the current biennium. Members of the budget conference committee are Senators Colgan (Prince William), Houck (Spotsylvania), Howell (Fairfax), Saslaw (Fairfax), Wampler (Bristol) and Stosch (Henrico), and Delegates Putney (Bedford), Hamilton (Newport News), Cox (Chesterfield), Hogan (Halifax), Sherwood (Frederick) and Joannou (Portsmouth). They face a deadline of next Tuesday night to make recommendations on a compromise funding package; in recent years, legislators have missed their deadline for reaching a compromise, and with the difficulties and uncertainties being faced this year, it is possible that deadline could be missed again.

     The House and Senate have taken vastly different tracks in addressing the budget this year. While the House proceeded to approve its budget last week following release of the plan by the House Appropriations Committee, the Senate opted to postpone consideration of it version of the budget until several days ago, in order to be able to take into consideration a revised revenue report and more definitive word from Washington about federal stimulus dollars coming to Virginia. Revenues for the month of January declined 15% from a year ago, pushing the revenue collection drop for the first seven months of the fiscal year to 5.5% (below the 4.8% decline on which the FY09 budget is built). This increases the budget shortfall another $822 million (roughly $400 million in both FY09 and FY10), for a total gap in the current biennial budget that now stands at $3.7 billion.

     Legislators have learned that the federal package will send about $216 million to Virginia for revenue stabilization and another $808 million for Medicaid reimbursements. The Senate, in approving its version of the budget on Wednesday, used these dollars to avoid further reductions that otherwise would have been necessitated by the additional $822 shortfall. Details about the various streams of funding that may be coming to the state and localities from the federal package are still coming out, with administrative rules and guidance possibly available by the end of next week. All told, state officials at this point are anticipating some $4 billion in federal stimulus dollars will be available to Virginia over the next 27 months.

     The Senate plan specifically uses anticipated federal dollars to, among other things, offset previous reductions to various constitutional offices, and regional and local jails. It also increases HB 599 funding in FY10 by $6.6 million using stimulus dollars, thereby level funding the program at $197.3 million.

     It would restore funding cuts in public and higher education, “contingent” upon the availability of federal stimulus dollars earmarked specifically for education.  For K-12 education, the amendments restore $429.8 million in cuts proposed by the governor in FY10, including the proposed cap on certain support positions included in basic aid; instead local school divisions will have discretion on where the funding reduction may be taken. Further, the Senate calls for the Board of Education to review reporting requirements, evaluate current staffing standards for instructional positions, and review the appropriateness of establishing staffing standards for support positions; and it requires a review of state laws, procedures and regulations to see what changes can be made to alleviate administrative requirements on school divisions. As previously reported, the Senate plan establishes a statewide health insurance program for school and local government employees beginning July 1, 2010; a related bill was left in the Senate Finance Committee.

Legislation in the mix

     With the deadline for committee action looming, House and Senate committees are quickly wrapping up their work for the session. A pair of bills addressing alternative on-site sewage systems is nearing passage, despite opposition from localities and a few amendments. 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). HB 1788 is on the Senate floor, where additional amendments are expected to be attempted on Monday, while SB1276 was reported from the House Counties, Cities and Towns Committee.

     Bills to extend current expiration deadlines on previously approved land use actions also are proceeding. 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. It is on the Senate floor for approval, while SB 1533, which extends the expiration of special use permits that were valid and outstanding as of January 1, 2009, until July 1, 2011, was reported by House Counties, Cities and Towns.

     A bill to delay the effective date of forthcoming stormwater management regulations has easily passed the House and Senate. HB 1991 delays until July 1, 2010, the effective date of the Virginia Stormwater Management Permit (VSMP) regulations, which could have significant fiscal and administrative impact, thus allowing for possible legislative review by the 2010 General Assembly prior to taking effect.

     The Senate has amended a bill, HB 2583, which stipulates that at least 10% of the assets in the Local Government Investment Pool (LGIP) be invested in financial institutions qualified to accept public deposits under the Virginia Security for Public Deposits Act. The Finance Committee added a re-enactment clause to the bill, meaning it would have to pass the General Assembly again next year and be signed into law in order to take effect. Interestingly, there is no bill or provision to stipulate that state assets also be invested in such a manner.

     HB 2138 and SB 1369 are nearing final passage. They define “defacement” and permit localities to charge a property owner for the cost of removing defacement that occurs on a public or private building located on an unoccupied property. Charges that remain unpaid shall constitute a lien against such property, provided the locality provides at least 15 days notice to the property owner prior to the removal of the defacement. 

     SB 1024 as introduced would have removed the requirement for an additional "local coholder" of a conservation or open-space easement when Open-Space Lands Preservation Trust Fund grants are used. Amendments to the bill allow the Virginia Outdoors Foundation to have a local coholder. It has passed the House. Two bills to allow localities to offer rate incentives or flexibility for green roof construction also are making their way through the legislative process. HB 1975 has been approved and SB 1058 was reported from House Counties, Cities and Towns.

     HB 1735 also is close to passage. This bill would allow any locality to create an arts and cultural district for the purpose of increasing awareness and support for the arts and culture in the locality. Presently, the authority has been granted only to a handful of localities, including Charlottesville.

     The House Privileges & Elections Committee has amended SJ 332 to permit the General Assembly to allow local governments to grant tax exemptions for green buildings. The previous version of the bill also would have allowed the General Assembly to grant those exemptions.

     The following measures have been defeated for the year: HJ 725, a Constitutional amendment to establish what constitutes a taking of private property for a public use; HB 1730, which would have required a sunset clause on all new or increased state and local taxes and fees; and HB 2063, which would have changed 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.

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

→Lower speed limit on unpaved roads—HB 1837 (Albemarle Co.) (APPROVED)

→Regional Transit Authority enabling legislation—HB 2158 (APPROVED)

→Certain licensed distillers as ABC agents (Eades Distillery-Nelson County)— SB 1213 (reported by House General Laws)

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

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

→Clean energy financing authorization— SB 1212 (Charlottesville and Albemarle) (reported by House Commerce and Labor)

→CSA judicial review— SB 1506 (Greene Co.) (reported by House Courts of Justice)

→Camille remembrance— SJ 379 (Nelson Co.) (APPROVED)

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)