Legislative Newsletter - February 1, 2012

Number 3

Calendar for 2012 General Assembly Session
February 14     “Crossover” day of bills
February 19     House and Senate versions of the budget released

Highlights

• House and Senate money committees to get serious next week about crafting amendments to the biennial budget proposed by Governor McDonnell. Expect the two committees to take much different paths in developing their plans (see below).
• Legislators and money committee staff are examining funding and land use policy provisions proposed in the omnibus transportation bills introduced at the request of the governor. Senators could be poised to generate more revenue to “stop the bleeding” in transportation (see below).
• Bill aimed at planning district commissions being heard Thursday. The introduced version of HB 823 would limit the functional responsibilities of PDCs to the areas of transportation and the environment. A substitute version will propose that PDCs be composed entirely of elected officials. Current state law stipulates that a majority of members of any Commission must be elected officials representing the member localities.
• Companion machinery and tools tax bills will be considered next week. HB 512 and SB 549 classify certain machinery and tools as capital and, thus, taxable solely by the state. Preliminary estimates are that this would result in a reduction in more than 20% in local match and tools taxes. In our region, these taxes generate more than $1.5 million annually. Statewide, the figure is just over $200 million.
• House of Delegates nears approval of HB 10 that prohibits a locality from increasing its local license tax above current rates and also provides that any new license tax be based on net income rather than on gross receipts. The Joint Legislative Audit and Review Commission is studying the fiscal implications of basing the license tax on net income rather than the current gross receipts, a process that will not be completed until next year.

Budget News

      The House and Senate money committees are working on their respective versions of the budget. Subcommittees will be developing their amendments over the next two weeks, with report out of the respective budgets scheduled for February 19.
      House Appropriations subcommittees have been hearing presentations of member budget requests and examining the amount of money available for their program areas. Meanwhile, the Senate Finance Committee, which has a new chairman, five new members and all new subcommittee chairmen, has been educating its members on various funding schemes currently in place. Prior to the budget report out date, the committees also will have received an updated state revenue forecast based on state tax collections for the first seven months of the fiscal year.

      Both committees will be taking a serious look at the Virginia Retirement System (VRS) bills before them and the direction they wish to take in funding and reforming the state pension system. It appears, from the differences in the VRS bills submitted in each body, that the House and Senate will approach changes to the pension system in different ways. The Senate Finance Committee has appointed a special subcommittee to examine proposed retirement legislation submitted in the Senate.

      The chairman of the House Appropriations Committee proposed a one cent sales tax increase (HB 1239), subject to approval by the voters in November, with one-half of the revenues generated to be used for secondary road construction, road maintenance and bridge repair, and one-half to be used for funding mental health services, K-12 education, and higher education. It was estimated that the additional penny tax would generate in excess of $1 billion annually. The bill was heard the last week in a House Finance subcommittee. With apologies and appreciation to the patron, the subcommittee voted to “gently” table the measure, effectively killing the bill for the year.

Transportation

      Many questions and concerns are being raised by lawmakers and legislative staff about the omnibus transportation bills. HB 1248 and SB 639 propose various funding and land use policies, a number of which are of concern to localities. The Charlottesville-Albemarle Metropolitan Planning Organization (MPO), staffed by the TJPDC, has outlined its concerns in letters to the General Assembly money committees. Among the troubling provisions are the following:

1. Changes to Comprehensive Plan provisions that appear to give VDOT and CTB the ability to review local transportation plans and withhold money or require repayment of previously expended funds if the local plans are not supportive of or consistent with  state priority projects.
2. Conflicts with federal requirements for programming of federal funds for transportation improvements.
3. Amendments to the revenue sharing program to allow revenue sharing funds to be spent for maintenance/operations, opening the door for localities to take on maintenance responsibilities that currently fall to VDOT and the effectively require a 50% match by localities.  
4. Provisions for Transportation Improvement Districts that would redirect state tax revenue from other sources into transportation. For any transportation project costing in excess of $20 million, the CTB could designate a Transportation Improvement District that is a five mile radius around the project, and 25% of any growth of state tax revenues would transferred to the Transportation District Improvement Fund to help pay off the project.  This undercuts the formulas that have been carefully crafted over time regarding allocation of state revenues.
5. Provisions for a Virginia Toll Road Authority that seems to create the opportunity for any road in the state to become a toll road based on an agreement between the owner of the road and the Authority. There is no provision for review or comment by local governments or citizens and no provision for compensation for any increases in traffic or other impacts on local areas resulting from converting public roads to toll roads.

      Senators on the Senate Finance Subcommittee on Transportation raised numerous questions about the legislation with the Secretary of Transportation today. They were especially concerned about provisions dealing with the transportation improvement districts. They also noted the absence of fiscal impact statement being available for the bill. The subcommittee chairman also hinted, for the second time in as many weeks, that the panel may look at enhancing transportation revenue, noting the lack of any increase in or indexing of the gas tax in the 25 years since it was last raised.

Party Labels

      The House and Senate have nixed bills to require party identification, including identification as an independent, for local offices on ballots. The House Privileges and Elections Committee narrowly defeated HB 769  on a 12 to 10 vote. The Senate version, SB 56 was reported from the Senate Privileges and Elections Committee on an 8 to 7 vote, but was then defeated today on the Senate floor, 25 to 14.

Other Legislation

Following are updates on action on some of the bills of particular interest to our local governments:

HB 166    Narrows instances in which a zoning administrator may modify certain orders. UPDATE: Passed House

HB 170    Allows zoning administrator decisions that are reviewed by the local governing body to be appealable to circuit court. UPDATE: Passed House

HB 222    Allows localities to meet certain notice requirements by utilizing their websites or other means, rather than a newspaper of general circulation. UPDATE: Failed

HB 242    Requires the Cooperative Extension Service to maintain a local office with at least one employee in each county. UPDATE: Failed

HB 370    Allows VDOT to enter into agreements with local governments to maintain highway medians within their boundaries. UPDATE: Failed  

HB 1065    Integrates elements of the Erosion and Sediment Control Act, the Stormwater Act, and Chesapeake Bay Preservation Act so that these regulatory programs can be implemented in a consolidated and consistent manner; includes a requirement that all counties and cities adopt a stormwater management program UPDATE: Reported by House Agriculture Committee. The Senate counterpart, SB 407 has passed the Senate.

HB 1157    Equalizes city and county taxing authority beginning January 1, 2013, by granting counties the same authority available to cities, specifically related to taxes on meals, transient room rentals, cigarettes, and admissions to events. UPDATE: Stricken from docket

SB 125    Allows a political subdivision with employees eligible for coverage under the Line of Duty Act to make an irrevocable election to self-fund the benefits available under the Line of Duty Act. UPDATE: Passed Senate

SB 198    Provides for the health insurance credit provided to retired teachers to be provided to all retired employees of the local school division, at the option of the local school board and as a cost borne by the local government. UPDATE: Failed

SB 274    Any locality may amend its comprehensive plan to incorporate one or more urban development areas UDA. UPDATE: Reported by Senate Local Government, 8 to 7.

SJ 3/SB 240    Constitutional amendment and corresponding voter referendum concerning eminent domain/ taking or damaging of private property for public use. UPDATE: Reported by Senate Privileges and Elections, 13 to 2.

Here’s an update on bills requested by or of special interest to several of our PDC localities:

SB 353    Authorizes the appointment of a distillery licensee for the Virginia Distillery Company in Nelson County for the purpose of allowing on site sales. UPDATE: Passed Senate, 37 to 3. 

SB 358    Allows local governments by ordinance to permit use of infrared traffic light signal changers by fire-fighting vehicles in nonemergency situations. UPDATE:  Carried Over (no action) for the year. 

SB 359    Permits the operation of a formal program of trapping, sterilizing, and returning feral cats to their colonies. UPDATE:  To be heard in the Senate Agriculture Committee on Thursday.

SB 364    Allows "police-requested towing" to be initiated by uniformed employees authorized by the local police department.  UPDATE:  Passed Senate, 40 to 0.

      Information on General Assembly members, meetings, bills and resolutions, and the budget is available at http://lis.virginia.gov/. Live streaming video of House and Senate floor sessions is available at http://legis.state.va.us/.

PHONE: 434-979-7310 x350
EMAIL: dblount@tjpdc.org