Legislative Bulletin January 24, 2023
Tuesday, January 24, 2023 - 05:27pm
In this issue
- Bank franchise tax collection bill warrants a close look
- Grocery tax legislation: Senate bill perishes, House bill survives
- Reducing taxes at the expense of local governments…the trend continues
Local Government & General Laws
- Bills that have passed Senate Local Government this week
- Bills reported out of House General Laws full committee
- Local control of firearms in government buildings, other public spaces: Two of three bills remain
- Sovereign immunity for cities and towns threatened by Senate bill
- Legislation would require localities to supplement salaries of state-employed public defenders
- House bill would include dispatchers as eligible for PTSD workers’ compensation
Finance
Bank franchise tax collection bill warrants a close look
Every year some legislation we are tracking begins to take on a life of its own. For 2023, that legislation is HB1896 (Byron) / SB1182 (Ruff) which proposes to change the way bank franchise taxes are collected.
Currently these fees are collected by localities. The bills, which have yet to be heard in Committee, would allow banks with deposits in Virginia in excess of $40 billion to remit the bank franchise fee tax to the Commonwealth instead of the county, city, or town where the bank resides. (NOTE: We’re hearing that the $40 billion threshold may be reduced).
Eighty percent of the revenues, less an unknown amount to reimburse the Tax Department for administration of the fee, would be deposited into a Local Bank Franchise Tax Fund. Revenues in the newly created fund would be distributed among counties, cities, and towns based on the most recent yearly estimate of the population provided by the Weldon Cooper Center for Public Service at the University of Virginia.
The fiscal impact is unknown but will likely vary by locality
VML, along with VACo and the Commissioners of the Revenue, are meeting with the proponents of the bill to understand the provisions of the bill but especially the potential impact. According to public records, six banks – Truist, CapitalOne, Bank of America, TowneBank, Atlantic Union, and Wells Fargo – would be able to remit payments to the Commonwealth if the bill passes. If you have a branch of one of these banks in your locality, you should give this bill a close look to ensure you understand the impact on your community.
VML Contact: Joe Flores, jflores@vml.org
Grocery tax legislation: Senate bill perishes, House bill survives
Last Friday we noted that SB850 (Suetterlein), which proposed to eliminate the one percent local option sales tax on food for human consumption and personal hygiene products, was defeated in the Senate Finance and Appropriations Committee (SFAC). The House companion, HB1484 (McNamara), fared differently on Monday and is likely on its way to passage in the House. We will continue to monitor the bill as it crosses over to the Senate.
VML Contact: Joe Flores, jflores@vml.org
Reducing taxes at the expense of local governments…the trend continues
Senate Joint Resolution 231 (McPike and Bell) proposes a constitutional amendment to expand the current tax exemption for real property available to the surviving spouses of soldiers killed in action to the surviving spouses of soldiers who died in the line of duty. VML won’t be opposing the bill but will continue to highlight the General Assembly’s penchant for encouraging the reduction of taxes at the expense of local governments.
Thankfully, Senator Stuart recognizes the problem
To Senator Stuart’s credit, his SB1032 recognizes what has been transpiring and would require the Commonwealth to subsidize local real estate tax relief for disabled veterans and surviving spouses of members of the United States Armed Forces killed in action when more than one percent of a locality’s real estate tax base is lost due to such state-mandated tax relief programs.
The fate of the bill is uncertain, but we appreciate the Senator’s recognition that these and other tax exemptions take a toll on local revenues.
VML Contact: Joe Flores, jflores@vml.org
Local Government & General Laws
Bills that have passed Senate Local Government this week
SB1151 (Edwards) Local government; standardization of public notice requirements for certain intended actions and hearings; report. VML strongly supports this bill which came out of a Code Commission study over the summer. This bill standardizes the frequency of advertisements in the newspaper and pares down several zoning notice requirements for the newspapers.
SB1322 (McClellan, Hashmi) Comprehensive plan; healthy communities strategy. Authorizes cities with populations of more than 20,000 and counties with populations over 100,00 to consider adopting a healthy communities strategy during their comprehensive plan review process.
SB1390 (Lewis) Extension of land use approvals for solar photovoltaic projects. Extends to July 1, 2026 the sunset date for various local land use approvals for solar projects that were valid and outstanding as of July 1, 2023.
SB1455 (Norment) Civil disturbance; local curfew; penalty. Enables the chief law-enforcement officer of a locality to enact a curfew for not more than 24 hours during a civil disturbance. The local governing body or judiciary have to take action beyond the 24-hour period.
Charter bills
The following charter bills passed the Senate Committee on Local Government today:
- SB822 (Locke) Charter; City of Newport News; certain advertising requirements
- SB829 (Locke) Charter; City of Newport News; real estate assessment
- SB874 (McDougle) Charter; Town of Kilmarnock
- SB961 (Peake) Charter; Town of Farmville
- SB1021 (Edwards) Charter; City of Roanoke; municipal elections
VML Contact: Michelle Gowdy, mgowdy@vml.org
Bills reported out of House General Laws full committee
HB1490 (Davis) Virginia Public Procurement Act; certain construction contracts, performance and payment bonds. Allows a locality to pass an ordinance that will allow a contractor to furnish a performance bond and payment bond equal to the dollar amount in the current contract not a contract of indefinite delivery or quantity contract.
HB1569 (Walker) Virginia Freedom of Information Act; disclosure of personnel records. States that access to personnel records of persons employed by a public body engaged in emergency medical services or fire protection services or an emergency 911 or any equivalent reporting system shall be discretionary.
HB1610 (Tata) Virginia Public Procurement Act; cooperative procurement, installation of playground equipment. Allows cooperative procurement to purchase the installation of playground equipment which includes all associated and necessary construction and maintenance.
HB2133 (Wilt) State Fire Marshal; authority. Provides that the State Fire Marshal or his designee has authority over state-owned property for fire safety and fire prevention.
HB1810 (Davis) State and local employees; rights of employees, freedoms of conscience and expression. States that an employee of local government shall not be penalized by their employer for expressing an opinion on a current or proposed rule, etc. during an open meeting at such time designated for public comment. This does not include any person appointed to a position in a unit of local government by an elected official or a government body comprised in whole or in part of elected officials.
VML Contact: Michelle Gowdy, mgowdy@vml.org
Human Services
Updates on Health and Humans Services legislation affecting localities
On Jan. 24, the House Health, Welfare, and Institutions (HWI) committee reported HB2185 (Rasoul), which modifies and updates requirements of performance contracts between community services boards/behavioral health authorities (CSBs/BHAs) and the Department of Behavioral Health and Developmental Services. The bill is a recommendation of the Behavioral Health Commission and the Joint Legislative Audit and Review Commission (JLARC). VML is monitoring the bill.
Earlier in the day, a HWI subcommittee recommended reporting HB1817 (Avoli), which permits seizure of a decedent’s non-probate assets to cover the costs of disposition of such decedent’s unclaimed body. Currently, seizure is limited to estate assets out of which disposition costs may be paid; and a locality picks up the cost if assets are not available. The City of Staunton brought forward the issue. VML supports the bill.
Also this morning, Senate Finance and Appropriations reported a substitute to SB1269 (Edwards), which would expand the use of Auxiliary Grants (AGs) to independent living situations. The substitute adds an enactment clause that requires the Department of Aging and Rehabilitative Services (DARS) to develop an implementation plan for expanding the program to independent living, including the services that recipients, may need; the identification of potential recipients; and whether the current AG program levels are sufficient when considering state and local components of the program (local governments pay a 20 percent match on each grant). The report is due to General Assembly committees by Nov. 1, 2023.
Also added was a re-enactment clause, meaning the bill would need to be approved by the 2024 General Assembly to go into effect.
VML supports the substitute and hopes to work further on potential changes to the program, particularly the funding component, to try to lessen the financial burden on local governments.
A companion bill, HB1906 (Hope), is in subcommittee #3 of HWI.
VML Contact: Janet Areson, jareson@vml.org
Education
Action today on education legislation important to localities
HB1574 (Walker) School board selection; referendum on direct election of school board members by voters; authorization by local governing body. Successfully reported out of the House Education K-12 subcommittee today. This bill would allow local governing bodies to file a petition with the circuit court asking for a referendum to be held on whether the school board should be appointed or elected. Following testimony, this bill was reported out of the subcommittee on a vote of five to three and has been docketed for the House Education Committee tomorrow morning.
SJ254 (Obenshain) Constitutional amendment (first reference); charter schools. This amendment would have granted the Board of Education authority to establish charter schools rather than local governing bodies. SJ254 was heard this afternoon in Senate Privileges and Elections Subcommittee #1 where it was passed by indefinitely. Being a constitutional amendment, this would have had to pass two different legislative bodies (before and after an election) to go into effect. However, as the amendment was defeated it will not be going forward.
VML Contact: Josette Bulova, jbulova@vml.org
Public Safety
Local control of firearms in government buildings, other public spaces: Two of three bills remain
Monday, the Senate Judiciary Committee killed SB1236 (Obenshain), which would have ended local authority over guns in parks, community centers and streets during a street festival or parade. Similar legislation is still in play: SB805 (Chase) will be heard by the committee as soon as the senator ends her isolation due to covid. HB1427 (LaRock), likely will be considered by the House Public Safety Committee.
Contact: Mark Flynn, markkflynn@gmail.com
Sovereign immunity for cities and towns threatened by Senate bill
SB1379 (Deeds) would end sovereign immunity for one large class of public employees: medical providers, including doctors, nurses, therapists, dentists, physical therapists, psychologists, clinical social workers, and others. The bill was filed in response to a Virginia Supreme Court opinion that applied sovereign immunity to preclude a malpractice suit against the doctor, a city employee, and the city. The bill is currently in the Senate Rehabilitation and Social Services Committee but may be moved to the Senate Judiciary Committee.
VML’s concern is that this could be the first of a thousand cuts that kills sovereign immunity. If that immunity disappears and city employees are faced with being personal defendants in lawsuits by people, it will become difficult to hire workers and will cause a dramatic increase in the cost of operating local governments.
Contacts: Mark Flynn, markkflynn@gmail.com; Janet Areson, jareson@vml.org
Legislation would require locality to supplement salaries of state-employed public defenders
HB1429 (Anderson) would require any locality that supplements the salaries of the Commonwealth Attorney and deputies to fund the state-employed public defenders on a proportional basis. It is to be heard in the House Courts of Justice Committee. Commonwealth attorneys are part of the public safety system that serves every city and county. It is often critically important to supplement the Commonwealth attorneys’ salaries to enhance public safety. Plus, the prosecutors in several localities handle local ordinance violations for the city, town, or county, and should be compensated for that work. Funding public defenders does not further these needs. Certainly, VML supports good representation for all who need it, but that must remain a state obligation.
Contact: Mark Flynn, markkflynn@gmail.com
House bill would include dispatchers as eligible for PTSD workers’ compensation
HB1631 (Bulova) and SB1088 (Ebbin) add public safety dispatchers to the list of public safety employees whose post-traumatic stress disorder treatment will be covered by the employer’s workers compensation. This will add a new class of workers to those being compensated, which will prove expensive for localities. SB1088 was reported by the Commerce Committee and referred to Senate Finance. HB1631 is to be heard by the House Commerce Committee.
Contact: Mark Flynn, markkflynn@gmail.com
