eNews Mar 4 2016Friday, March 04, 2016 - 03:00pm
Budget conference fully underway; speak up now on local amendments
The Senate officially named its budget conferees on March 2, and the House-Senate budget conference, which had already been underway, got its official start.
Who to Contact:
State seizure of local fines & forfeitures, or “local aid to the state, part II.”
Language authorizing the state to seize local fines and forfeitures remains in both the House and Senate budgets (the Senate made a technical amendment that does not change the impact of the language). A total of 33 localities will be required to turn in an increasing share of their local fines and forfeitures to the state Literary Fund if the language remains.
- Ask delegates and senators to eliminate Item 3-6.05, which authorizes the state to seize local fines and forfeitures.
- There is no basis in the Virginia Code or the Virginia Constitution to mandate that local revenues go into the Literary Fund.
- Any issues with the funding of the Literary Fund result from the state drawing down balances by using it more for operational costs (i.e., paying the state share of teacher retirement) than for making loans for school construction.
- Local governments contribute $3.6 billion above the match requirement for K-12 education costs.
State assistance to local law enforcement (HB 599 program)
Gov. McAuliffe’s introduced budget increased funding to this program by $6.7 million each year. The House reduced by $1.55 million each year (Item 400#1h). The Senate maintained the level of funding proposed in the introduced budget ($179.12 million each year).
- Tell the conferees to adopt the Senate amendment to retain the funding level at $179.12 million each year, which represents a modest step towards getting the program’s funding levels back to the pre-recession level.
Jail per diems
Both the House and Senate retained funding to pay the state’s share of the FY16 fourth quarter; both recognized, to different degrees, the need to make a down payment on the state share of per diem payments in the new biennium (Item 70#2h and Item 70#1s). The House funded both years of the new biennium, the Senate only amended FY17 funding levels.
- Please urge conferees to retain this funding commitment in the budget and not allow funding to be shifted elsewhere in the budget.
CSA local administrative funding
The House budget included $500,000 each year to provide a modest but meaningful boost in local administrative funding for the Children’s Services Act (CSA) program (Item 285#1h); the Senate did not provide any additional funding.
- Ask the conferees to adopt the House amendment to increase administrative funding, which has not increased since FY2000, even as local responsibilities and costs have grown substantially over time.
K-12 education funding
The education funding included in the introduced budget as well as the House and Senate packages is greatly welcome. Each version recognizes that localities are paying a disproportionate share of the cost of public education. The budgets represent an important step in beginning to reverse the state disinvestment in public education, but state education funding continues to lag historic levels. The House version includes a greater commitment to on-going funding.
- Ask the conferees to support flexibility on local match requirements and to support increased funding for K-12 education.
Stormwater Local Assistance Fund
The Senate budget authorizes $20 million in bonds for Stormwater Local Assistance Funds (SLAF) to provide 50 percent matching grants to localities to reduce stormwater pollution (Item C-47.5#1s). There is no House amendment, and no funding was included in the Governor’s introduced budget.
- Ask the conferees to adopt the Senate amendment to provide dedicated and adequate state appropriations to the SLAF to address costs associated with the permit requirements of Municipal Separate Storm Sewer System (MS4) and new EPA requirements.
Airbnb study and reenactment
The Senate budget would require that any legislation passed this session relating to the collection of taxes and the preemption of local authority regarding limited residential lodging (Airbnb) cannot become effective until it is reenacted by the 2017 Session and the Virginia Housing Commission completes a study and reports its work to the chairmen of the Senate and House budget-writing committees (Item 3-5.14#3s) .
Action needed and talking points
- Ask the conferees to adopt the Senate amendment to require reenactment and the Housing Commission study.
General Assembly sends bill to Gov. McAuliffe, exempting Veteran Service Organizations from state and local taxes
Nonprofit VSOs are already exempt from federal income taxes under § 501 (c)(19) of the Internal Revenue Code. HB 63 extends the exemption to include state and local sales taxes on purchases of tangible personal property provided that an organization is exempt from federal income taxes or has annual gross receipts less than $5,000. VSOs would need to file an application with the Virginia Department of Taxation, meet the applicable criteria, and obtain a certificate of exemption from the Department to make purchases of qualifying tangible personal property.
The legislation also exempts the gross receipts of these § 501 (c)(19) organizations from BPOL, except to the extent an organization has receipts from an unrelated trade or business with receipts subject to federal income taxes.
Federal regulations allow § 501 (c)(19) groups to conduct social and recreational activities without jeopardizing their tax-exempt status if the activities are conducted with post members. These activities include operating bars and restaurants, gambling, and holding dinners and dances. To qualify as § 501 (c)(19) an organization must be operated for one or more of the following purposes:
- Promotion of the social welfare of the community;
- Assisting disabled and needy war veterans;
- Providing care and assistance to hospitalized veterans;
- Fostering programs to perpetuate the memory of deceased veterans;
- Conducting programs for religious, charitable, scientific, literary or educational purposes
- Sponsoring in patriotic activities;
- Providing insurance benefits to members or members’ dependents; or
- Providing social and recreational activities for members.
An unending rollercoaster ride of ups and downs throughout the session finally ended this week with one of the bills (HB 812) stranded in the Senate Finance Committee and the other (SB 416) sent to the governor but slimmed down to a study with an additional provision requiring the General Assembly to re-enact the bill in 2017.
In the bill version passed by the General Assembly, the Housing Commission will convene a work group with representation from the hotel industry, hosting platform providers like Airbnb, local government, state and local tax officials, property owners, and other interested parties to explore issues related to registration, land use, tax, and other items of public interest tied to short-term rentals. The work group will take into consideration existing local ordinances governing the activities of bed and breakfast inns, vacation rentals, and other transient occupancy venues. The group will have a December 1, 2016, deadline to complete its work with the goal of developing recommendations and draft legislation for the 2017 session.
VML thanks its members as well as the hospitality industry for working together with us to effectively shape the outcome of these bills. VML is also indebted to Speaker Bill Howell and Senate Majority Leader Tommy Norment for their leadership and guidance.
In a letter delivered yesterday to the chairmen of the House Appropriations and Senate Finance Committees, Gov. Terry McAuliffe thanked the General Assembly for supporting his highest priority – public education – but expressed concern over the hits the legislature delivered to his economic development initiatives.
The governor asked the budget conferees to reconsider seventeen issues, ranging in cost and programs from $169,042 for a call center to address questions received by the Department of Elections regarding the 2016 presidential election to over $90.0 million in bond funding to construct two new juvenile correctional centers.
In the meantime, House and Senate budget conferees have been meeting for several days, aiming to finish their work in time for the General Assembly to adjourn sine die before Saturday, March 12.
VML reminds members to reach out to their delegates and senators to protect K-12 spending, support funding for the Stormwater Local Assistance Fund (SLAF), eliminate the confiscation of local fines and forfeitures, restore full funding for jail per diems, and increase state support for the 599 local law enforcement program and the local administration of Children Services Act (CSA) programs. (See the February 29 eNews Action Alert for details.)
More than 40 cities and counties will have to replace by 2020 touchscreen voting equipment with machines that have a paper trail under legislation that has passed both houses and been sent to the Governor. SB 190 (Miller) prohibited the use of touchscreens (also termed direct recording equipment or DREs) as of July 1, 2017 but the version that came out of the House pushed that date back to 2020. The Senate on March 3 agreed to that date as well.
VML contact: Mary Jo Fields, firstname.lastname@example.org
Two bills viewed under the rubric of parental choice were amended by the Senate Finance Committee on March 2 and sent to the Senate floor for passage.
The committee put a reenactment clause on HB 359 (LaRock), meaning that the bill will not take effect unless reenacted in the 2017 session. The bill would allow parents of students with disabilities to apply to their resident school division for a Parental Choice Education Savings Account. Under the bill, 90 percent of state special education and Standards of Quality funding for a student associated with that division would be transferred to the account. The parents could use the funds to pay for a variety of items, including tuition at non-sectarian or sectarian schools, higher education, educational services, transportation, supplies and “other goods and services” necessary for education.
The committee delayed until the 2018-2019 school year implementation of the full-time, on-line virtual school created under HB 8 (Bell, Richard). The committee also capped enrollment in the school at 5,000 students statewide, and requires the state Department of Education to develop a proposed methodology for estimating the cost of fully online programs. The bill requires the average state share of Standards of Quality per pupil funding for each enrolled student to be transferred to the virtual school.
VML contact: Mary Jo Fields, email@example.com
Local governments and school divisions could gain access to a pooled health insurance program run by the state under legislation reported by the House Appropriations Committee on March 2.
SB 364 (Chafin) would allow the state Department of Human Resource Management to establish a plan or plans similar to the state employee plan. The difference between this approach and The Local Choice program is that the plan could include a single rate for all participants, instead of individual rates. Pool participants would be subject to experience adjustments to help minimize the effect of adverse selection.
VML contact: Mary Jo Fields, firstname.lastname@example.org
Compromise legislation directing the Workers Compensation Commission to establish fee schedules for the payment of medical services under the workers’ compensation program are nearing the end of the legislative process. HB 378 (Farrell) is about to be sent to the Governor and SB 631 (Wagner) is already on his desk. The regulations establishing the fee schedules would be effective Jan. 1, 2018. VML has a legislative position supporting the establishment of fee schedules.
VML contact: Chris LaGow, email@example.com
The House Courts of Justice Committee has reported SB 417 (Vogel), the bill to authorize local departments of social services to continue to file certain routine petitions with the juvenile and domestic relations courts. VML supports the bill, which now moves to the House floor for action.
A similar bill, HB 589 (Campbell), was passed by the House before cross-over. Unfortunately, that bill did not make it out of the Senate Courts of Justice Committee.
VML contact: Janet Areson (firstname.lastname@example.org)
A bill to provide the option for localities with stormwater utility fees to enter into public-private partnerships has been hijacked by a controversial amendment sought by railroads. The result is a disagreement between the two chambers. At issue is the request of railroad companies to exempt them from the fees assessed on their rail beds. The Senate voted yesterday by a vote of 29 to 11 to include the exemption for railroads. The House early today voted down the exemption leading to a stale mate.
SB468 (Wagner) is now headed to special committee made up of several members from the House and Senate to see if a compromise can be reached. VML, VACo, and with the Virginia Association of Municipal Stormwater Agencies, oppose the exemption.
Staff Contact: Joe Lerch, email@example.com
The Supreme Court of Virginia heard the case of Department of Corrections v. Surovell, 776 S.E. 2d 579 (Va. 2015) in the fall of 2015 and the court found that the Department of Corrections was not required to redact the execution manuals. They could be withheld in their entirety.
SB494 (Surovell) HB817 (LeMunyon) seek to clarify what most people versed in FOIA believe the code says; which is that the manuals have to be redacted and cannot be categorically withheld. In fact the bills state specifically “The provisions of this act are declaratory of the law as it existed prior to the September 17, 2015 decision of the Supreme Court of Virginia…..” These bills were consolidated in SB494 and passed the Senate 38-1 and the House 98-2. On March 1, 2016, the Governor proposed a substitute bill to SB494 which guts the entire bill and sends the issue to the FOIA council.
This morning, the Governor’s amendments were rejected by the Senate.
VML has supported the concept of the bill and will support rejecting the amendments by the Governor.
Staff Contact: Michelle Gowdy, firstname.lastname@example.org
VACo and VML met with the Governor’s staff Thursday afternoon regarding SB549 (Obenshain), the proffer bill. The request of the Governor’s office was to consider an amendment to SB549 which would allow localities and developers to waive the requirements listed in this bill and proceed to enter into an agreement for a voluntary proffer. The Governor’s staff promised to inform VML once the Governor makes a decision on this bill.
Staff Contact: Michelle Gowdy, email@example.com
Conference registration opens July 1
Registration for the 2016 VML Annual Conference in Virginia Beach is forthcoming, but NOW is the time to reserve your hotel room on-line at https://resweb.passkey.com/go/VML2016
- DoubleTree by Hilton Hotel
- Hilton Virginia Beach Oceanfront
- Sheraton Virginia Beach Oceanfront
We strongly recommend that you book your reservation online within our housing block as VML makes every effort to include a range of accommodations for its attendees, with consideration of comfort, quality and safety as well as other factors. Complimentary continuous shuttle service will be provided to the official conference hotels only.
Please e-mail any housing inquiries to Eric Logan, Convention Housing Manager, at firstname.lastname@example.org or call direct line (757) 385-6656.