Legislators met on April 22 for the annual reconvened session under far different circumstances from those in place when the legislature adjourned March 12, the day the Governor declared a state of emergency due to COVID-19. In the intervening weeks, COVID-19 has inflicted economic hardship throughout the Commonwealth and required the adoption of social distancing measures such as the avoidance of large gatherings – a challenge for the General Assembly to observe, given its Constitutional requirement to meet and consider the Governor’s recommendations to legislation passed during the regular session. In order to guard against transmission of COVID-19, rather than conducting business in the close quarters of the Capitol, Delegates met in a tent on the Capitol grounds, and Senators met at the Science Museum of Virginia. Many of the Governor’s proposals under consideration at the “veto session” resulted from the economic reverberations of the COVID-19 pandemic, including a series of revisions to the “caboose” and biennium budgets to freeze new discretionary spending and authorize other actions to preserve liquidity pending a revenue reforecast.
Amendments to Legislation
The General Assembly considered amendments to 94 bills (in addition to budget amendments) and accepted most of the Governor’s proposals, rejecting amendments, in whole or in part, to eight bills. Bills for which the legislature rejected the Governor’s amendments will be returned to the Governor, who has 30 days to sign or veto the legislation; bills that are not acted upon before that deadline become law without the Governor’s signature.
The legislature accepted the Governor’s amendments to the bills of interest to local governments discussed in the last edition of County Connections, with one exception. Below is an update on the General Assembly’s action on these measures.
Taxing authority for counties: HB 785 (Watts)/SB 588 (Hanger) provide additional authority to counties to collect taxes on meals, transient occupancy, cigarettes, and admissions. The Governor’s amendments delay the effective date of the provisions governing transient occupancy taxes until May 1, 2021, and clarify that the provisions dealing with cigarette taxes take effect July 1, 2021. The bills’ remaining provisions would take effect in due course on July 1, 2020. General Assembly action: Accepted the Governor’s amendments. This legislation is discussed in more detail earlier in this newsletter.
Absentee voting: HB 207 (VanValkenburg) permits any voter to vote by absentee ballot and creates a permanent absentee list to which a voter may opt-in, beginning July 1, 2021. The Governor’s amendments repeal the delayed enactment clause that was included in legislation in 2019 authorizing no-excuse absentee voting beginning with the November 2020 general election, which would appear to authorize no-excuse absentee voting beginning July 1, 2020. General Assembly action: Accepted the Governor’s amendments.
Project labor agreements: HB 358 (Lopez)/SB 182 (Saslaw) authorize public bodies to require bidders to enter into or adhere to project labor agreements for public works projects. The Governor’s amendment delays the effective date of the legislation to May 1, 2021. (An additional amendment to SB 182 revises the definition of “public works” to make it consistent with HB 358.) General Assembly action: Accepted the Governor’s amendments.
Minimum wage: HB 395 (Ward)/SB 7 (Saslaw) increase the minimum wage from $7.25 per hour to $9.50 per hour, effective January 1, 2021; to $11.00 per hour, effective January 1, 2022; to $12.00 per hour, effective January 1, 2023; to $13.50 per hour, effective January 1, 2025 (subject to General Assembly approval by July 1, 2024); and to $15.00 per hour effective January 1, 2026 (similarly subject to General Assembly approval). For January 1, 2027, and thereafter, the annual minimum wage shall be adjusted to reflect increases in the consumer price index. The Governor’s amendments delay the first increase until May 1, 2021. General Assembly action: Accepted the Governor’s amendments.
PTSD and workers’ compensation: HB 438 (Heretick)/SB 561(Vogel) provide that Post-Traumatic Stress Disorder (PTSD) incurred by a law-enforcement officer or firefighter is an occupational disease compensable under the Virginia Workers’ Compensation Act and define qualifying PTSD events. The Governor’s amendment requires the Department of Criminal Justice Services (DCJS) to establish compulsory training standards for basic training of law enforcement officers for recognizing and managing stress, self-care techniques, and resiliency. General Assembly action: Accepted the Governor’s amendment.
Collective bargaining: HB 582 (Guzman)/SB 939 (Saslaw) authorize collective bargaining for employees of local governments and employees of local school boards at local option. The Governor’s amendment delays the bills’ effective date until May 1, 2021. General Assembly action: Accepted the Governor’s amendment.
Prevailing wage in public works contracts: HB 833 (Carroll Foy)/SB 8 (Saslaw) require public works contractors for state projects to pay wages at the prevailing wage rate and authorize any locality to adopt an ordinance with similar requirements. The Governor’s amendments delay the effective date of the legislation until May 1, 2021, and clarify the definition of “prevailing wage rate.” General Assembly action: Accepted the Governor’s amendment.
Agriculture and forestry development grants: HB 1002 (Guzman) creates the Agriculture and Forestry Industries Development Planning Grant Program and authorizes the Governor to award grants to political subdivisions to encourage efforts by political subdivisions to support agriculture and forestry. The Governor’s amendment adds an emergency clause to the bill. General Assembly action: Accepted the Governor’s amendment.
Tax exemptions for utility-scale solar: HB 1131 (Jones)/SB 762 (Barker) extend a state mandate to exempt utility-scale solar projects from local tax to 2030 (the exemption is currently set to expire in 2024). Specifically, current law mandates an 80 percent exemption from local machinery and tools tax (M&T) for solar projects greater than 5 megawatts (MW) in energy capacity. For projects greater than 20 MW and less than 150 MW, the mandatory exemption expires for any project that has not begun construction by Jan. 1, 2024. The legislation also provides the option for a locality, by local ordinance, to replace the M&T tax with an energy tax of $1,400 per MW of capacity installed per project. The Governor’s amendments are technical in nature and do not substantially alter the substance or application of the legislation. General Assembly action: Accepted the Governor’s amendments.
Transportation funding: HB 1414 (Filler-Corn)/SB 890 (Saslaw) make numerous changes related to transportation revenue funds, sources, and safety programs. This includes raising the Commonwealth’s gas tax 5 cents per gallon per year for two years beginning on July 1, 2020, and after July 1, 2022, adjusting the rate to the United States Average Consumer Price Index, all urban consumers (CPI-U); raising the diesel fuel tax to 27 cents per gallon by July 1, 2021 and also pegging the rate to CPI-U; imposing a 7.6 cent per gallon tax on gas distributors in any County or City that currently does not have a regional fuel tax, such as the ones existing in Northern Virginia, Hampton Roads, and the I-81 corridor, effective July 1, 2021, and also pegging it to CPI-U; creating a new highway use fee on fuel-efficient vehicles; reducing the state’s annual vehicle registration fee for motor vehicles by $10 while maintaining local registration fee rates; creating a new entity known as the Virginia Passenger Rail Authority, whose purpose is to develop, maintain, and improve passenger rail facilities and increase passenger rail capacity in the Commonwealth; and diverting all existing and proposed revenues into a single account known as the Commonwealth Transportation Fund. The Governor’s amendments clarify the authority of the Passenger Rail Authority to enter into agreements with other states and employ eminent domain; advance to July 1, 2020, the reduction of annual distribution of recordation tax revenues to cities and counties from $40 million to $20 million; reduce the excise tax on diesel fuel effective July 1, 2020 from 21.2 cents per gallon to 20.2 cents per gallon; and delay the reduction in regional WMATA capital fees, the creation of the regional congestion relief fee, and the increase in Transient Occupancy Tax in Northern Virginia, to May 1, 2021. General Assembly action: Accepted the Governor’s amendments.
Central Virginia Transportation Authority: HB 1541 (McQuinn) creates the Central Virginia Transportation Authority, composed of the Counties and Cities located in Planning District 15 (Goochland, Powhatan, Chesterfield, Colonial Heights, Henrico, Hanover, New Kent, Charles City, Richmond City) to administer transportation funding generated through the imposition of an additional regional 0.7 percent sales and use tax and 7.6 cent per gallon gas tax and 7.7 cents per gallon diesel fuel tax pegged to CPI-U. This authority follows similar authorities created in Northern Virginia and Hampton Roads. The Governor’s amendments require a cost benefit analysis component to the transportation project prioritization process; clarify membership on the Authority’s Board to include a member of the Commonwealth Transportation Board who resides in Planning District 15; stipulate that any locality included in the authority shall not reduce its transit funding by more than 50 percent of what has been appropriated as of July 1, 2019 instead of July 1, 2020; and peg increases required of localities to changes in CPI-U beginning in FY 2023; require the Authority to evaluate and report to the General Assembly by December 1, 2020, on the governance structure of transit service in the Richmond region; and delay the implementation of the tax increases dedicated to the Authority to October 1, 2020. General Assembly action: Accepted the Governor’s amendments.
Hampton Roads transit funding: HB 1726 (Askew)/SB 1038 (Lucas) create the Hampton Roads Regional Transit Program and Fund to develop, maintain, and improve a regional network of transit routes and related infrastructure, in Planning District 23. The program would be funded by an additional (i) regional grantor’s tax at a rate of $0.06 per $100 of the consideration for the conveyance and (ii) regional transient occupancy tax (TOT) at a rate of one percent of the charge for the occupancy, both imposed in localities in the Hampton Roads Transportation District. The legislation also dedicates $20 million of revenues from existing recordation taxes to funding the program. The Governor’s amendments prevent participating localities from reducing funds appropriated for public transportation to levels less than those appropriated on July 1, 2019; clarify the relationship between the Hampton Roads Transportation Accountability Commission (HRTAC) and the new Transit Program; and delay the increases in regional TOT to May 1, 2021. General Assembly action: Accepted the Governor’s amendments.
Reports on death investigations in local and regional jails: SB 215 (Suetterlein), as passed by the General Assembly, requires the Board of Corrections to report annually on any reviews conducted on deaths of inmates in local correctional facilities, including trends or similarities among deaths and recommendations to reduce the number of deaths in local correctional facilities. The Governor’s substitute expands this reporting requirement to include the results of the inspections and audits of local, regional, or community correctional facilities in addition to death reviews, and requires the report to include recommendations for changes to the standards established for these correctional facilities. General Assembly action: Rejected the Governor’s substitute.
Date of June primary: SB 316 (Kiggans) would delay the primary election held in June from the second Tuesday to the third Tuesday in June. The Governor’s amendment adds a reenactment clause to the bill, so it would need to be passed again next year to take effect. General Assembly action: Accepted the Governor’s amendment.
Peer-to-peer car rentals: SB 735 (Newman) is a compromise bill dealing with the regulation and taxation of peer-to-peer car rental services. As passed by the General Assembly, from July 1, 2020, to June 30, 2021, the bill would impose a tax on such rentals of 6.5 percent of the gross proceeds for vehicle owners listing no more than ten vehicles for rent at any given time, with the tax increasing to seven percent beginning July 1, 2021. The Governor’s amendments delay the effective date of the tax provisions to October 1, 2020. General Assembly action: Accepted the Governor’s amendments.
Split precincts: SB 740 (Obenshain) requires localities to adjust local precinct lines so that precincts are not split between General Assembly or Congressional districts. VACo has traditionally supported addressing this situation through technical adjustments made by the state to state-drawn lines; however, this approach has been unsuccessful in recent years. VACo had requested amendments to make the bill more workable for localities with respect to the timing of elections held in November of years in which redistricting is held. The Governor’s amendments would require precincts to be established for November elections based on districts as they exist on June 15 of a redistricting year; if new districts have not been established by that time, localities could use the June 15 districts to establish precinct lines to be used in November elections and then make further adjustments later to reflect subsequent changes to district lines. General Assembly action: Accepted the Governor’s amendments.
Electric personal delivery devices: SB 758 (Marsden) makes several changes related to electric personal delivery devices (aka delivery robots), including changing the weight limit of such devices from 50 to 500 pounds and allowing their use of sidewalks or crosswalks unless prohibited by local ordinance. The Governor’s amendments require the delivery devices to yield to pedestrian rights-of-way and to have device operator identifying information visibly displayed. General Assembly action: Accepted the Governor’s amendments.
Budget Amendments
The majority of the Governor’s amendments to the FY 2020 “caboose” and biennium budgets relate to the effects of the COVID-19 pandemic on state revenues. A series of amendments to the biennium budget “unallot” most of the new discretionary spending included in the budget as passed by the legislature (which included proposals from the Governor’s introduced budget as well as priority items added by the legislature). The legislature agreed to these amendments; as a result, this new spending is held in abeyance pending a revenue reforecast. It is expected that the legislature will return for a special session to make additional changes to the biennium budget, but no details are yet available on when such action may take place.
The General Assembly rejected several other amendments that would have provided additional discretion to the Governor to manage state spending during the pandemic. Language that would have permitted the Governor to delay or suspend certain capital projects in response to cash flow or debt capacity concerns was proposed to be included in the caboose, with similar language proposed for the biennium budget (with an additional provision allowing for the General Assembly to reauthorize the capital budget upon a revenue reforecast); the legislature rejected this amendment. Similarly, legislators rejected proposed language that would have authorized the Governor to withhold appropriated funding in any amount needed to address an imbalance between resources and appropriations as a result of the pandemic (existing budget language authorizes the Governor to withhold and unallot up to 15 percent of annual appropriations under certain circumstances).
In total, the General Assembly approved 33 of the 37 amendments proposed to the caboose and 137 of the 144 amendments proposed to the biennium budget. The legislature approved language in the caboose and biennium budgets authorizing public bodies to hold meetings by electronic means under certain circumstances during a state of emergency, provided that certain notice and record-keeping provisions are met. An amendment drawing particular attention would have delayed the May 5 elections to November; the House accepted this amendment, but after extensive debate, the Senate rejected it. The Governor subsequently exercised his statutory authority to delay the election by two weeks.
VACo Contact: VACo Legislative Team