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Legislative Bulletin

February 14, 2007


Senate, House split resurfaces over transportation funding

As part of the ongoing negotiations over transportation funding, the Senate removed $250 million in general funds from HB 3202 (Howell), the transportation funding and land-use reform bill passed by the House. The Senate replaced the general fund money with a one-time $150 vehicle registration fee that could raise about $300 million annually.

The HB 3202 Senate substitute passed the Senate with amendments 23-17 today (Feb. 14). Provisions for abusive driver fees, increased fees for violation of weight limits, increased registration fees for cars and trucks, and equalized diesel tax and road tax remained in the legislation. The substitute, offered by Sen. John Watkins of Chesterfield and approved by the Senate Finance Committee on Feb. 13, also includes the authorization of $2 million in bonds. In addition, about $85 million would be made available to local governments through a statewide local option 10-cent increase in the grantor's tax. All together, state imposed revenues assumed in the HB 3202 substitute total about $730 million in FY09.

The HB 3202 Senate substitute, like its predecessor, includes regional packages for Hampton Roads and for Northern Virginia that would allow local governments to levy fees and taxes specifically for transportation projects in those areas.

Hampton Roads

The Hampton Roads plan includes a $20 driver's license fee; a $10 local vehicle registration fee; a 1 percent initial vehicle registration fee (at local option); a $10 auto inspection fee; a 5 percent service tax on auto repairs; a 30 cents grantor's tax; a 2 percent motor vehicle rental tax, and a 20-cent commercial real estate tax. The region would also share in the statewide local option grantor's tax. The package is estimated to yield nearly $171 million in FY09.

Northern Virginia

The Northern Virginia plan would include a 0.05 percent local sales and use tax; a 1 percent initial vehicle registration fee; a 40-cent grantor's tax; a 2 percent motor vehicle rental tax; and a 2 percent motel tax. Including a portion of the statewide local option grantor's tax, the package could yield about $430 million in FY09.

A few hours later, the House Transportation Committee amended and reported an already-passed bill, SB 1101 (Williams), restoring the provisions of Speaker Bill Howell's HB 3202, and including the provision of general funds. Funding provisions of SB 1101 now include:

Senate, House disagree over transportation land-use provisions

The Senate Finance Committee intends to significantly amend the land-use elements of the House's omnibus transportation bill -- HB 3202 (Howell). The House Transportation Committee has reported a substitute SB 1101 (Williams) that has the same language as an earlier version of HB 3202 reflecting the wording prior to the Senate's amendments. As a result, two distinctly different versions of the transportation bill are alive (see story above).

Major land use provisions include:

Urban development areas: Both bills provide that every county with either a 20 percent growth rate per decade or a population over 50,000 must incorporate into the comprehensive plan one or more urban development areas in the county. Cities and other counties may create UDAs. Each UDA must accommodate growth for the next 20 years. Each must provide residential density of four units per acre or three times the density of the area outside the UDA. If a county certifies that it has already satisfied the requirements of the bill, no further action is required.

Urban transportation service districts: In the House version of SB 1101, counties with a population exceeding 90,000 may create one or more UTSDs as special tax districts; take over the road maintenance in the district and receive significant moneys from the state for roads. Any UTSD must contain a minimum permitted residential density of 1 unit per acre. The funding part provides that any such county would receive the same amount as cities plus the difference between the urban funding and what VDOT currently spends. In addition, the county would receive $10,000 per VDOT employee it hires. A floor amendment added the two counties (Henrico and Arlington) that currently maintain their roads to the funding formula proposed for counties that create a UTSD.It appears that the Senate has removed the UTSD provisions from HB 3202, however, we are attempting to verify this.)

Impact fees: Under SB 1101, any county that creates a UTSD by July 1, 2009 may impose impact fees on lands outside the service district for by-right residential development. The fees may be imposed to help pay for a variety of public facilities: roads, schools, public safety facilities and others. The restriction to agriculture lands severely limits the value of the impact fee provision, because in the largest counties, there is not much land zoned for agricultural use. Further, impact fees should apply to by-right development locality-wide. The structure of the impact fee portion is a significant improvement over the existing Northern Virginia impact fee laws. HB 3202 appears to have no impact fee provisions in it as a result of floor amendments made Feb. 14. Instead, the Senate version has an enactment clause that directs the House and Senate land use committees and money committees to study the methods of financing the local share of transportation costs. The study is to evaluate impact fees, cash proffers, UTSDs, community development authorities and other sources, and is to report back by Dec. 1, 2007.

Shifting road maintenance to counties: SB 1101 currently retains the road maintenance provision by which VDOT will not accept any new subdivision streets for maintenance after July 1, 2007 that is not located in an urban development area. This provision would cost counties millions of dollars into the future, as state funding for maintenance would be eliminated for all new subdivision streets, except those in a UDA. HB 3202 has a provision that simply states that VDOT will establish regulations on which roads in the future will be accepted into the state system. It also directs the secretary of transportation to work with invited counties to evaluate the funding and other changes that would be needed to allow transportation to be taken over by the counties. This review is to be done by July, 2008.

Some of the details of the two bills are very much at odds. It is highly likely that the various provisions will be reworked by a conference committee, assuming the two bills move forward. VML will report on the negotiations and the changes.

Senate photo red bill conformed to similar House bill

SB 829 (Devolites Davis), which would have allowed specific localities to use photo red monitoring cameras to catch motorists running red lights, was conformed to HB 1778 (Cosgrove) and reported from the House Transportation Committee.

HB 1778 gives all localities the option to use the technology. In addition, the bill caps the fine at $50 per violation, allows cameras at no more than one intersection for every 10,000 residents at one time, and fines individuals $1,000 for release of information collected by the cameras for a red light running violation. SB 871 (Watkins), another photo red bill that allowed all localities to utilize the technology, was incorporated into SB 829.

Teacher retiree health care credit goes to floor

The Senate Finance Committee reported legislation to increase the monthly health insurance credit to retired teachers from $2.50 to $4 for each year of creditable service. The bill -- HB 2370 (Tata) -- is effective Jan. 1, 2008, if the state’s share of the cost is included in the appropriations act. The bill increases state costs by about $6 million and local costs by about $8 million. On the House side, the Appropriations Committee was scheduled to take up SB 1218 this afternoon (Feb. 14). The Senate bill is effective July 1, 2007, and therefore costs state and local governments twice as much.

Other post employment benefits still in committee

The bill that authorizes localities and other political subdivisions to establish trusts in order to pre-fund post employment benefits remain -- SB 789 (Stosch) -- is still in the House Appropriations Committee. A few committee members, in particular Del. Clark Hogan of Halifax and Del. Johnny Joannou of Portsmouth, have expressed reservations about the portion of the bill that allows the Virginia Retirement System to serve as the money manager for these trusts. It is expected that the portion of the bill allowing VRS to serve in this roll will be stricken from the bill, but local governments still support passage of the remainder of the bill, which will at least make it clear that political subdivisions can establish these accounts. Local governments are urged to call their member of House Appropriations in support of passage of SB 789. The Compensation and Retirement Subcommittee may hear the bill on Feb. 15 or the full committee on Feb. 16.

Opposition grows against billboard bill, but outcome still in doubt

A bill that will take away one more tool local governments have to regulate billboards in their communities is still alive in the House. Although SB 1102 (Williams) was defeated initially in the House 45-51 on Tuesday, supporters of the bill invoked a legislative prerogative that will allow it to be reconsidered. As a result, the supporters have been working hard since Tuesday afternoon to convince delegates to switch their votes. The bill was passed by for the day in the House immediately following the vote on Tuesday and again today, which means that local government officials MUST continue to contact their delegates to defeat this billboard industry-backed infringement on their authority.

SB 1102 would allow the owner of a billboard situated on land acquired due to widening, construction or reconstruction by purchase, or by exercise of eminent domain, to relocate the billboard to another location on the same property and adjust the height or angle of it.

If you have questions, contact Kimberly Pollard at kpollard@vml.org or 804/400-1987.

House vote on SB 1102 Tuesday, Feb. 13:

YEAS (45) -- Abbitt, Albo, Barlow, Bowling, Byron, Callahan, Carrico, Cosgrove, Cox, Crockett-Stark, Dudley, Fralin, Frederick, Gear, Griffith, Hall, Hamilton, Hugo, Iaquinto, Ingram, Janis, Joannou, S.C. Jones, Kilgore, Lohr, Marsden, D.W. Marshall, R.G. Marshall, J.H. Miller, Morgan, Nixon, Nutter, O'Bannon, Orrock, Phillips, Poisson, Rapp, Reid, Rust, Saxman, Scott, E.T., Sherwood, Suit, R.L. Ware, Wright.

NAYS (51) -- Alexander, Amundson, Armstrong, BaCote, Bell, Brink, Bulova, Caputo, Cline, Cole, Dance, Ebbin, Eisenberg, Englin, Gilbert, Hargrove, Hogan, Howell, A.T., Hull, Hurt, Johnson, Jones, D.C., Speaker Howell, Landes, Lewis, Lingamfelter, May, McClellan, McEachin, McQuigg, Melvin, P.J. Miller, Moran, Peace, Plum, Purkey, Scott, J.M., Shannon, Shuler, Sickles, Spruill, Tata, Toscano, Tyler, Valentine, Waddell, Ward, Ware, O., Watts, Welch, Wittman.

ABSTENTIONS (1) -- Oder.

NOT VOTING (3) --Athey, Putney, Wardrup.

Bill advances sparing localities from paying certain fees

A Senate bill that exempts localities from paying any fees for services rendered by clerks or other court officer for services rendered in cases when the locality is a party to a case in its own court system was reported from the House Courts of Justice civil laws subcommittee. SB 1293 (Norment) also would exempt fees when the locality is a party to a case in any other jurisdiction where the locality and the other jurisdiction have a reciprocal waiver of fees agreement. It further provides that sheriffs may grant a waiver of sheriff's fees to other localities. The full House Courts of Justice Committee will take up the bill next.

Ban on touch-screen voting machines moves forward

The Senate Privileges & Elections Committee reported an amended version of a bill that places a ban on the purchase of direct recording electronic voting machines (or DREs, commonly known as touch screens) as of July 1, 2007. HB 2707 (Hugo) also requires a recount of optical scan ballots when the undercount in an election is large enough to change the results. On the House side, SB 840 (Devolites Davis) will be before House Privileges & Elections Committee on Feb. 16.

Constitutional amendment update

The constitutional amendment authorizing the General Assembly to enact legislation to allow localities to use a homestead exemption was scheduled to come before a House Privileges & Elections subcommittee this afternoon (Feb. 14). An amendment similar to SJR 354 (Rerras) was killed by the subcommittee earlier this session. Both VML and VACo support the measure.

On the Senate side, the Senate Privileges & Elections Committee did not report amendments that would have allowed the General Assembly to overturn administrative regulations HJR 593 (Griffith) and to establish a recall procedure for statewide elected officers -- HJR 614 (Hargrove).

Credible compensation bill sent to JLARC study

The House Appropriations Subcommittee on Compensation and Retirement sent the bill that would have included salary supplements for teachers for activities such as coaching to JLARC for inclusion in the compensation and benefits study that is underway. The fiscal impact to local governments of SB 1087 (Puckett) would have been $7.4 million, which would be reflected in teacher retirement rates in FY 08.

Underground power and gas lines – exempt from comprehensive plan review

SB 1351 (Wagner) -- as amended -- provide that underground distribution facilities of power companies and gas companies will be exempt from the comprehensive plan review process in Va. Code § 15.2-2232.

A House Counties, Cities and Towns subcommittee recommended for approval a version worked out by local government interests, including VML and VACo, and utilities. The bill originally provided a blanket exemption for all work to extend or improve utility company facilities, above or below ground, no matter how large the project. The compromise is a significant improvement and reflects the current practice in many localities.

Affordable dwelling unit ordinance legislation in good shape

HB 2010 (Suit) and SB 955 (Quayle) have been amended into a workable condition that will allow the localities that are now attempting to begin or improve their affordable dwelling unit programs. The changes provide for an increase in density (30 percent, up from 20 percent) if 17 percent (up from 12.5 percent) are dedicated to affordable units.

Further, the locality may create a housing trust fund to help with affordable housing. HB 2834 (Waddell) increases the maximum amount localities may provide employees for the acquisition of housing from $5,000 to $25,000. This bill is now headed to the Senate floor.

Senate Local Government Committee reports legislation

The Senate Local Government Committee reported the following bills on Feb. 13:

HB 1974 (Fralin) allows cities to create economic revitalization zones. Fees and local business license taxes may be waived by the city council.

HB 1979 (Lohr) extends the current moratorium on city-initiated annexation 10 years to 2020. (Two members of the committee voted against the bill: Sens. Patsy Ticer and Toddy Puller.)

HB 2261 (Rust) allows increased penalties for violation of a zoning ordinance’s overcrowding provisions. This will help localities fight against turning homes into rooming houses.

HB 2503 (Toscano) allows a city and county to enter into an agreement for the city to create higher density, that would be transferred from the county. (This is an amendment of the TDR legislation passed last year.)

Biosolids bill giving local governments more control advances

The House Committee on Agriculture, Chesapeake and Natural Resources reported SB 1300 (Newman), authorizing localities to require a special exception or a special use permit to store biosolids in its jurisdiction, unless the material is stored on the same farm where it will be land applied.

Related legislation, HB 2802 (Byron) is on the Senate floor. The legislation consolidates the program that regulates the application of biosolids under the Department of Environmental Quality (DEQ). Now, the responsibility for regulating biosolids land application is split between DEQ and the Department of Health.

Environmental boards consolidation bills amended

The bills that would consolidate the Air Pollution Control Board, the Waste Management Board and the State Water Control Board into one 11-member citizen board -- the Virginia Board of Environmental Quality – were conformed and moved ahead. Both HB 3113 (Landes) and SB 1403 (Puckett) would transfer the authority to issue licenses and permits to the Department of Environmental Quality. The bills include a "re-enactment clause" that requires the General Assembly of 2008 to reaffirm the legislation and delays the effective date until July 1, 2008. Both bills also address procedures for appealing decisions of the director of DEQ to the new Environmental Appeals Board.

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