eNews Jan. 11, 2019

Friday, January 11, 2019 - 05:59pm

 

In this issue:

• Expanded property tax exemptions
• Proffer bills
• Other Senate Local Government Committee bills
• Governor and Republicans set to clash over tax policy
• Transportation bills
• Eminent domain bills
• ERA moves forward
• Grants for broadband in rural areas
• Environmental and natural resource legislation
• Procurement bills
• Redistricting update

 

Expansions of property tax exemption proposed

Oh No. Not Again.

In 2011, a constitutional amendment went into effect that required localities to provide a real estate property tax break for disabled veterans and surviving spouses. Virtually every year proposals are introduced—and some adopted—that expand this tax exemption. This week, two proposed state constitutional amendments were offered (HJ657 and HJ676) that would expand local tax exemptions for disabled veterans and their surviving spouses.

As approved by the General Assembly and voters, the local real estate property tax exemption applies to veterans who are 100 percent disabled and to the surviving spouse of a disabled veteran who died after January 1, 2011. As proposed by Delegate Pogge, HJ657 would expand spousal benefits by eliminating the January 1, 2011 date. The change – if approved by this year’s legislative session, the 2020 legislative session, and a November 2020 referendum – would take effect on January 1, 2021.

HJ676, patroned by Delegate Filler-Corn, would provide a new tax benefit for the disabled veteran (and spouse) by eliminating any state or local tax on one motor vehicle owned and used primarily by or for a disabled veteran. Current constitutional tax exemptions affect real estate taxes. If approved in this session, the 2020 legislative session and voters in November of 2020, the exempted taxes would expand to include the state motor vehicle sales and use tax and the local personal property tax.

VML has consistently argued that because local governments are not responsible for declaring war or for sending members of the country’s armed forces overseas to fight, the responsibility to care for disabled veterans and the families and spouses of those killed in action, belongs to the federal government and not to local taxpayers.

The Commissioners of the Revenue reported that in 2016 the total value of exempted real estate taxes for disabled veterans and the surviving spouses of disabled veterans and soldiers killed in combat exceeded $36 million.

The amendments have not yet been assigned to a committee but are likely to be heard in the House Privileges & Elections Committee.

VML Contact: Neal Menkes, nmenkes@vml.org

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Proffer bills to be considered

On Tuesday, January 15^th the Senate Local Government Committee will take up all the following proffer bills:

• SB1143 (Peake) – this bill includes old language proposed by the Homebuilders of Virginia along with a clarification on how to calculate capacity from previously approved residential developments.
• SB1373 (Favola) – this bill includes several changes, the first of which adds a subsection that will allow the applicant/owner to submit a proffer that the applicant/owner deems reasonable and appropriate. It also allows communications between the parties, states that the applicant must object in writing to the governing body prior to grant or denial of the rezoning application as the basis for a lawsuit and stipulates that nothing prohibits or requires presentation, analysis, or discussion on potential impacts of new residential development or new use on the locality’s facilities. The current version also amends the small area comprehensive plan, but we do not think that this language will stay.
• SB1524 (Black) – this bill adds detail to the definitions of “public facilities” (and other “facility” related definitions). It also removes the word “specifically” from the small area comprehensive plan, allows any reasonable and appropriate proffer to be offered and changes the legal standard from “clear and convincing” to “preponderance of the evidence.”

Additionally, there are three proffers related bills on the House side:

• HB2276 (Murphy) has an option to not use 15.2-2303.4 (C)
• HB2342 (Thomas) is similar to Favola’s bill.
• HB1801 (Ware) is similar to Peake’s bill.

It is expected that these will be heard on Wednesday morning at 7:30 in subcommittee #1 of the House Counties, Cities and Towns Committee.

VML Contact: Michelle Gowdy, mgowdy@vml.org

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Other bills to be heard Tuesday in the Senate Local Government Committee

• SB1155 (Black) authorizes the screening of trash receptacles at a business or multi-family residence if it has a central collection receptacle.
• SB1248 (Reeves) authorizes a locality by ordinance to create a local stormwater management fund to assist private property owners or common interest communities to conduct stormwater and erosion prevention. Local monies would be used for the fund.
• SB1304 (Edwards) allows localities to designate reasonable no-smoking areas in outdoor amphitheaters or concert venues owned by the locality. It also prescribes the civil penalty.
• SB1305 (Edwards) assists localities in recovering unpaid charges for recycling and waste disposal by allowing them the ability to place a lien on properties.
• SB1127 (Favola) is a bill which equalizes municipal taxing authority and county taxing authority. It has a delayed effective date of July 1, 2020.

VML Contact: Michelle Gowdy, mgowdy@vml.org

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Governor and Republicans set to clash over tax policy

State financial assistance for local government priorities could be affected.

Today marks the deadline for senators and delegates to submit their budget requests to the House Appropriations and Senate Finance Committees.

However, progress on the state budget will be tied to the resolution of competing tax policy choices championed by Gov. Ralph Northam and General Assembly Republicans. Neither has the political muscle to power their tax choice to the end line. Compromise is likely but achieving a “win-win” solution will probably be a painful process.  And, local governments may find themselves stuck between a rock and a hard place as a deal between the two parties is hammered out.

The conflict centers on conforming state tax definitions and policies with the 2017 federal tax cuts.  Since 2002, the legislature has passed annual conformity bills to align the state tax code to most of the federal changes made in the previous year. This is done for reasons of administration. Conformity allows individuals and businesses to use one set of documents and calculations to prepare both their federal and state tax returns.  Professional tax preparers and individuals can work off the same definitions, guidance and other rules.

Both the governor and the Republicans understand the need for conformity. The issue is tax policy. Gov. Northam’s budget plans anticipate using $1.2 billion in new revenue resulting from the 2017 federal changes. Some of his spending items include a refundable earned income tax credit for households making less than $54,000 a year, increasing the state’s reserve funds, and new outlays in the Stormwater Local Assistance Fund, school counselors, and broadband expansion.

Republicans want that extra money to find a way back to state taxpayers. Republican ideas for doing so include allowing taxpayers to itemize deductions on their state tax returns even if they claim the federal standard deduction and increasing the state standard deduction.

The House Appropriations Committee chairman, Chris Jones, has made it clear that the committee will reject any of the Northam spending items that depend on the $1.2 billion in this biennium. That means the House will have roughly $950 million in new revenue tied to the state’s growing economy rather than the changes in federal tax rates. Spending on issues of interest to local governments will be affected because $462.5 million is required to fill a budget shortfall in the Medicaid program. Thus, the House will face the challenge of squeezing 10-pounds of tomatoes in a can designed to hold only 5-pounds.

The bottom line: Governor Northam’s spending agenda is in jeopardy until the tax situation is settled.

VML Contact: Neal Menkes, nmenkes@vml.org

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Transportation bills hit the hopper

Subjects include the regulation of scooters and related devices, restrictions on the use of handheld devices by drivers (a perennial issue), and improvements to Interstate 81.

Scooters. In recent years, many of the Commonwealth’s more densely populated localities have seen the arrival of rental bicycles, which are used by a rider for a short period of time and then returned to designated bike racks. In a similar vein, some companies are now providing electric scooters (or similar devices) for hire. Localities where these have been deployed have experienced two major problems:

• Storage: Unlike many of the bicycle companies, scooter companies do not generally provide a rack or other place to return the scooters. Consequently, the scooters are often left in the middle of sidewalks, or other problematic locations.
• Safety: The scooters are often used on sidewalks and pose a danger to the riders and pedestrians.

Several localities in Virginia have begun pilot programs to determine how they should regulate the use of these scooters. Bills introduced so far pertaining to scooters and related devices vary. Some seek to make them easier to use without local government interference (HB1786-Hurst), while others authorize localities to prohibit or regulate the operation of companies providing these devices (HB2214-J. Jones; HB2232-Bagby). HB1786 is in the House Transportation Committee ; the other two bills have not been assigned.

Using Cell Phones While Driving.  Legislation has been introduced again this year to further restrict the use of cell phones and other hand-held devices while driving. In general, these bills (HB1811-Collins; SB1341-Stuart) in would prohibit using these devices while operating a motor vehicle unless the device is hands-free. HB1811 is in the House Courts of Justice Committee; SB1341 is in the Senate Transportation Committee.

Interstate 81 Corridor Improvements.  The Interstate 81 corridor is heavily travelled (especially by trucks) and experiences significant traffic safety problems. Following a General Assembly-mandated study, the Commonwealth Transportation Board has made recommendations on improvements to I-81, as well as ways to pay for these improvements (including regional sales taxes, regional motor fuels taxes, and tolls) that will now be considered by the 2019 session.

• HB2571 (LaRock) has been introduced to create a commission, comprised largely of local officials, that would allocate funds for these improvements. The bill is awaiting assignment to a committee.
• SB1470 (Edwards) would increase the motor fuels tax statewide (by an additional tax of 5 percent of the wholesale price of gasoline), and earmark $300 million of the new revenue for improvements to I-81. SB1470 is in the Senate Finance Committee.
• SB1322 (Hanger) would raise the tax on motor fuels sold along I-81 by 2.1 percent and use the new revenue for improvements to that interstate. SB1322 is in the Senate Finance Committee.

Additional legislation pertaining to Interstate 81 improvements is likely to be introduced.

VML Contact: Bernie Caton, bernard.caton@verizon.net

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Eminent domain bills to be heard in Senate Courts of Justice Committee on Monday, Jan. 14^th

• SB1039 (Peake) this bill requires a land owner in a condemnation proceeding to submit to jurors instead of commissioners) a determination of just compensation. If the property owner does not elect a jury, the court would make the determination of just compensation.
• SB1403 (Petersen) removes a section of 25.1-245.1 which makes all costs assessed in the same manner regardless of the identity of the condemnor. This includes public service companies, public service corporations and railroad or government utility corporations. It also repeals §25.1-245 which relates to costs assessed in condemnation proceedings.
• SB1404 (Petersen) stipulates that in an eminent domain proceeding the cost of filing a petition for the distribution of the funds will be assessed against the condemnor. This bill also tinkers with the interest rate on funds represented by a certificate of deposit from the date of filing the certificate until the court receives the funds and reorganizes provisions dealing with recordation of a certificate by the Commissioner of Highways.
• SB1421 (Obenshain) changes the provisions that deal with entry upon private property in an eminent domain proceeding along with other changes related to just compensation and damage recovery resulting from the reformation, alteration, revision, amendment or invalidation of a certificate in the eminent domain proceeding.

VML Contact: Michelle Gowdy, mgowdy@vml.org

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ERA moves forward in the Senate

The Senate Privileges and Elections Senate Finance Committee voted Wednesday to bring SJ284, which would ratify the Equal Rights Amendment, to the Senate floor. The resolution passed 8-6, garnering support from Republican Senators DeSteph and Vogel. Senators Saslaw and Sturtevant will carry the resolution for the full Senate vote on a yet-to-be-decided date.

VML Contact: Jessica Ackerman, jackerman@vml.org

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Bill to provide grants for broadband in rural areas

SB1317 (Edwards) requires the Tobacco Region Revitalization Commission to provide $10M in grants each fiscal year (beginning in July 2020) for the purchase and installation of wireless and broadband equipment used to provide communication services in rural service areas. This bill is in the Senate Commerce and Labor Committee on Monday.

VML Contact: Michelle Gowdy, mgowdy@vml.org

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Environmental and natural resource legislation introduced

Stormwater management, plastic bags legislation may be of interest to local governments

Stormwater Management:

• HB1614 (Cole) would allow any locality to create a local Stormwater Management Fund that could be used to provide grants to owners of private property or common interest communities for stormwater management and erosion prevention projects. The Fund would be comprised exclusively of appropriations by the locality. HB1614 is in the House Counties, Cities & Towns Committee.
• SB1328 (Hanger) would authorize the Department of Environmental Quality, with the approval of the Secretary of Natural Resources, to designate a portion of the moneys in the Stormwater Local Assistance Fund to provide grants to local governments that are not regulated under municipal separate storm sewer (MS4) permits for the planning, design, and implementation of stormwater best management practices. SB1328 is in the Senate Agriculture, Conservation & Natural Resources Committee.

Plastic Bag Taxes and Restrictions:

• HB1669 (Carr) would allow any locality to impose a tax of five cents per bag on disposable paper or plastic bags provided to consumers (although certain bags would be exempt from the tax). The bill is in the House Finance Committee.
• SB1070 (Ebbin) is similar legislation that would authorize localities to levy a nickel-a-bag tax. SB1116 will be heard in the Senate Finance Committee.
• HB2095 (Guzman) would allow a locality to prohibit the purchase, sale, or provision of certain single use products that cannot be recycled or composted and for which there is a suitable alternative product available (again, with certain exceptions). The bill also authorizes any county or city to impose a five-cent per bag tax on disposable plastic bags, with revenue from the local tax to be used for litter control and stormwater management. HB2095 is in the House Rules Committee (which may not bode well for its future).
• SB1116 (Petersen) would impose a five-cent per bag tax on plastic bags provided to customers within the Chesapeake Bay Watershed. Revenues from the tax would be used to support programs to clean up the Bay. SB1116 will be heard in the Senate Finance Committee.

VML Contact: Bernie Caton, bernard.caton@verizon.net

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Procurement bills assigned to committees

HB1667 (Kilgore) is a procurement bill that deals with the Virginia Public Procurement Act (VPPA) and the statute of limitations on actions on construction contracts as well as the statute of limitations on actions on performance bonds. Currently, the statute of limitations for general written contracts is 5 years or 3 years for oral contracts. Under the bill, the statute of limitations for VPPA contracts would be 5 years after substantial completion of the work on the project (emphasis added). In addition, no action would be able to be brought on a warranty or guarantee more than one year from the breach of that warranty.

The two main concerns with this bill are that it significantly shortens the time frame in which a public body can pursue remedies as outlined in the performance bond and that it starts the “shot clock” at the time of substantial completion.

This bill is currently in the House Courts of Justice Committee and the patron has committed to working with localities to make the bill “better”!

A companion bill, SB1369 (Norment), has been referred to the Senate General Laws and Technology Committee.

VML Contact: Michelle Gowdy, mgowdy@vml.org

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Virginia redistricting battle update

In June of last year, a Federal Judicial Panel ruled that 11 House Districts in the Commonwealth were unconstitutional racial gerrymanders. In December, a court appointed expert submitted potential revisions affecting between 21 and 26 districts; a hearing regarding the recommendation took place Thursday. It is hopeful that a decision will be rendered before the end of March.

After the June ruling, the Speaker of the House appealed the ruling to the US Supreme Court who has agreed to hear the case. The Court will first consider whether the House Republicans have standing to challenge the ruling. In addition, the Speaker asked for a delay in the process of redrawing the districts; that request was denied on Tuesday with no comment.

Primary elections are scheduled for June 11^th.

VML Contact: Jessica Ackerman, jackerman@vml.org

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• Michelle Gowdy – Executive Director, mgowdy@vml.org
• Janet Areson – Director of Policy Development, jareson@vml.org
• Neal Menkes – Fiscal Policy Manager, nmenkes@vml.org
• Jessica Ackerman – Policy and Advisory Relations Manager, jackerman@vml.org
• Bernie Caton – VML Consultant, bcaton@vml.org

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