Governor amends transportation package; Republican leaders appear on board

Gov. Tim Kaine significantly amended the transportation bill passed by the General Assembly on the last day of the 2007 session. A majority of Republicans in both chambers, including House Speaker William Howell, appeared to approve of Kaine’s revisions. The General Assembly will reconvene April 4 to act on all of the governor’s vetoes and amendments.

If the General Assembly approves the amendments to HB 3202, it will mark the end of more than two years of often-partisan debate over how to pay for a substantial, long-term investment in Virginia’s overburdened transportation network.

The Kaine amendments, including changes to the land-use component of the bill, are extensive. VML staff will provide a detailed analysis of the 50 pages of amendments to HB 3202 later this week.

Meanwhile, here is a summary of some of the most important changes proposed by the governor:

Statewide transportation funding plan

• Authorizes $3 billion in new 25-year debt for highway construction. The debt would be supported by dedicating one-third of insurance premiums to existing and new debt payments. This effectively frees up the construction funding that is now going to pay existing debt.
  
• Dedicates three cents of existing recordation taxes to transportation (approximately $65 million annually). Of this, two cents would go to transit funding and one cent would go to highway maintenance.
  
• Increases the tax on diesel fuel by 1.5 cents per gallon, equalizing it with the gasoline tax (yielding about $22 million annually).
  
• Uses two-thirds of any annual non-recurring general fund surplus, an increase from the General Assembly’s proposal of one-half the surplus.
  
• Significantly, the proposal increases the percentage of bonds going to transit capital to 20 percent from 15.7 percent. It also removes the prohibition on using bond proceeds for urban and secondary roads.
  
• Retains the $10 car registration fee, the abusive driver fees, and the increased penalties for overweight trucks.
  

Northern Virginia regional package

• Cities and counties could increase commercial real estate taxes by up to 25 cents per $100 of assessed value. Local governments could also levy a local $10 registration fee. Together, these local option fees could produce about $100 million annually, which could be spent locally or dedicated to the regional authority. Localities could also levy a commercial/residential impact fee – with details to be determined.
  
• The Northern Virginia regional transportation authority could impose taxes and fees expected to yield over $300 million annually. These would include:
  

• 2 percent motor vehicle rental tax;

• 2 percent lodging tax;

• $10 vehicle safety inspection fee;

• 1 percent initial vehicle registration fee;

• 5 percent sales tax on auto repairs;

• $10 regional registration fee;

• 40-cents grantor’s tax.

Hampton Roads regional package

• Cities and counties in Hampton Roads could levy a commercial real estate tax of up to 10 cents per $100 of assessed value. Hampton Roads localities could also levy a $10 local vehicle registration fee. These local option fees, estimated to produce about $40 million annually, could be spent locally, or dedicated to the regional authority. Localities could also levy a commercial/residential impact fee – with details to be determined.
  
• A new regional transportation authority would be authorized to collect taxes and fees totaling about $175 million annually, and including:
  

• 2 percent sales tax on gasoline;

• 2 percent motor vehicle rental fee;

• $10 vehicle safety inspection fee;

• 1 percent initial vehicle registration fee;

• 5 percent sales tax on auto repairs;

• $10 regional registration fee;

• 40-cents grantor’s tax

Land use provisions

The transportation bill retains three main land use components: urban development areas, impact fees and urban transportation service districts. The governor, however, changed each.

Urban development areas

• The governor’s substitute adds cities and towns to the list of counties that must include urban development areas in the comprehensive plan and changes the criteria for UDAs to be mandatory: (1) The locality must have zoning; and (2) The locality has a population of at least 20,000 and a decennial growth rate of at least 5 percent, or a decennial growth rate of 15 percent regardless of size.
  
• The UDA must provide a minimum density of four residential units per acre (the General Assembly included a minimum density of three times the area outside the UDA).
  

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