Legislators met in Richmond on Wednesday to act on the Governor’s vetoes and amendments to legislation from the 2024 regular session. In advance of the reconvened session, speculation ran rampant as to whether the legislature would reject the Governor’s amendments to the FY 2024 “caboose” and 2024-2026 biennium budgets, potentially courting a rare veto of the budget bills, or if the legislature might accept some amendments and reject others. On Wednesday afternoon, the Governor and legislative leadership provided some answers by announcing a path forward to avert an impasse on budget revisions. Legislators will convene in a special session beginning on Monday, May 13, with a planned vote on a budget compromise on May 15. As part of this process, legislators took several procedural votes during the reconvened session to allow budget negotiations to continue, first by ruling the Governor’s 242 amendments to the budget bills “not specific and severable,” (thus barring any further consideration of the amendments during the reconvened session) and then by voting to take no further action on the underlying budget bills (allowing new bills to be proposed in the special session). Both chambers subsequently adopted a resolution applying to the Governor to call a special session and instructing budget negotiators to use the budget passed by the General Assembly in March as the basis for deliberations.
Governor’s vetoes
The Governor issued vetoes for 153 bills, all of which were sustained by the legislature, so these bills will not become law at this time. VACo reported in last week’s Capitol Contact on bills of interest to local governments that were vetoed by the Governor; that report may be found at this link. The veto for HB 805 (Rasoul), which would have authorized all localities to impose up to a 1 percent sales and use tax for school capital needs, was sustained by the House of Delegates without a recorded vote, as were all other vetoed bills in the House. The vote in the Senate to override the Governor’s veto of the companion bill, SB 14 (McPike) failed on a vote of 25-15, as this fell two votes short of the 2/3 majority required in the Senate to override and advance to the House for consideration. VACo thanks all its members and those who advocated for these bills and the override effort.
Governor’s amendments
The legislature agreed to the Governor’s amendments for 60 bills and rejected amendments, in whole or in part, to 55 others. Bills for which the General Assembly rejected the Governor’s amendments are now returned to the Governor for final action within 30 days; the Governor may sign or veto these bills, or take no action, in which case the bills would become law without his signature.
Following is an update on the General Assembly’s actions on bills with gubernatorial amendments of interest to local governments.
Teacher salaries: HB 187 (Clark)/SB 104 (Lucas), as passed by the General Assembly, require the state to provide its share of salary increases over the next three legislative sessions sufficient to raise the average teacher salary in Virginia to at least the national average teacher salary by the end of the next biennium, with the increases phased in at increments specified in the bill.
The Governor’s amendments instead would require an annual review of teacher compensation (rather than the current biennial review), and require the budget bills introduced in the next two sessions to propose funding for compensation incentives for Standards of Quality-funded instructional and support position salaries to remain competitive (at or above the national average).
General Assembly action: Rejected the Governor’s amendments for both bills.
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K-12 funding for At-Risk Program and English language learners: HB 624 (Rasoul)/SB 105 (Lucas) revise the At-Risk Add-On program to create a new At-Risk program and funding formula and require staffing for English language learners to be based on student proficiency levels, as well as revising the National Teacher Certification Incentive Program. The bills also direct the Department of Education to collect data on English language learner expenditures and student proficiency levels, and to develop a plan for revised special education staffing requirements that would address needs in each school division.
The Governor’s amendments propose to add a reenactment clause and direct the Department of Education to collaborate with the Joint Subcommittee on Elementary and Secondary Education Funding to determine the impact of modifying the proxy used to estimate the number of at-risk students, as well as the impact of eliminating the Standards of Quality Prevention, Intervention, and Remediation program.
General Assembly action: Rejected the Governor’s amendments for both bills.
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Community schools: HB 625 (Rasoul)/SB 608 (Aird) establish the Office of Community Schools within the Department of Education and direct the new Office to administer the Community School Development and Implementation Planning Grant in accordance with funding priorities set out in the bill.
The Governor’s amendments propose to remove the provisions related to the grant program.
General Assembly action: Agreed to the Governor’s amendments.
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Building code enforcement for bus shelters: HB 285 (McQuinn) allows the local building official to enforce the Uniform Statewide Building Code for certain bus shelters and absolves the state from liability for any bus shelters built on state property in this situation. As passed by the General Assembly, the bill has a July 1, 2025, sunset date.
The Governor’s amendment proposes to extend this sunset until July 1, 2027.
General Assembly action: Agreed to the Governor’s amendments.
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Local authority to reduce speed limits: HB 1071 (Carr) allows any locality to reduce the speed limit to less than 25 miles per hour (but not less than 15 miles per hour) on highways within its boundary that are located within a business or residence district, provided that signage and notice requirements are met.
The Governor’s amendments propose to add a reenactment clause to the bill and require the Department of Transportation to study the issue.
General Assembly action: Rejected the Governor’s amendments.
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Skill games: SB 212 (Rouse) establishes a regulatory and tax framework for skill games, as defined in the bill.
The Governor’s amendments make significant changes to the legislation, including the following revisions:
- Under the bill as passed by the General Assembly (the enrolled bill), up to four skill games machines would be allowed at any ABC retail licensee and up to ten would be allowed at a truck stop. The Governor’s amendments would allow up to three “electronic gaming devices,” as defined in the bill, at host locations that are licensed to sell lottery tickets (but are not truck stops) and up to seven of the machines at truck stops that are licensed to sell lottery tickets. The Governor also proposes a statewide cap of 20,000 electronic gaming devices statewide.
- SB 212 as enrolled would impose a monthly tax of 25 percent of gross receipts for each skill game machine. The Governor appears to propose a 35 percent tax on gross profits generated from the play of electronic gaming devices, with frequency of remittance to be determined by Lottery Board regulations.
- SB 212 as enrolled would distribute skill game tax revenue as follows: 2 percent to the Problem Gambling Treatment and Support Fund; 6 percent to the Department of Taxation or Virginia Lottery Board for administrative costs; 15 percent to the host localities; 1 percent to the local law enforcement agency in the host locality; 1 percent to the Department of State Police, and 75 percent to the PreK-12 Priority Fund to be used for public education purposes. The Governor’s amendments would distribute revenue as follows: 5 percent of gross profits to the Gaming Regulatory Fund and 5 percent to the College Partnership Laboratory School Fund; from the remaining funding, 15 percent to the host locality; 2.5 percent to the Problem Gambling Treatment and Support Fund; 75 percent to the Elementary and Secondary Education Fund (which would be appropriated to local governments and school divisions for public education purposes); 2.5 percent to the Department of State Police, and 5 percent to the Interstate 81 Corridor Improvement Fund.
- The Governor’s amendments would authorize the governing body of a county or city to hold a referendum or adopt a local ordinance on the question of whether electronic gaming devices should be prohibited in the locality.
- The Governor’s amendments would bar electronic gaming devices within 35 miles of any casino gaming establishment or horse racetrack or satellite facility, or within 2,500 feet of any school, child day center, or place of worship.
General Assembly action: Rejected the Governor’s amendments.
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Recordation and property tax exemptions: HB 568 (Askew)/SB 517 (Williams Graves) eliminate the recordation tax exemption for the Virginia Division of the United Daughters of the Confederacy and eliminate the real and personal property tax exemption for this group and several other entities.
The Governor’s amendments propose to add reenactment clauses to the bills and direct the Department of Taxation to study the effect of recordation tax exemptions and property tax exemptions granted prior to 1971 on state and local government revenues.
General Assembly action: Rejected the Governor’s amendments.
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Pole attachments and telecommunications services: Among other provisions, HB 800 (Herring)/SB 713 (Marsden) direct the State Corporation Commission to resolve disputes involving pole access within 90 days, and all other related matters within 120 days.
The Governor’s amendments propose to allow either period to be extended by up to 60 days by Commission order.
General Assembly action: Agreed to the Governor’s amendments.
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Local government billing on behalf of volunteer fire departments: HB 852 (Williams) allows a local governing body to enact an ordinance regarding billing on behalf of volunteer fire departments for the provision of emergency medical services.
The Governor’s amendments propose to revise the bill to allow billing on behalf of volunteer fire departments for the support of a licensed emergency medical services agency.
General Assembly action: Agreed to the Governor’s amendments.
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Utility disconnections: HB 906 (Shin)/SB 480 (Aird) limit utility disconnections for nonpayment under certain circumstances and require certain notices prior to disconnection.
The Governor’s amendments propose to require notice to be provided via at least one method listed in the bill (as passed by the General Assembly, notice must be provided through at least two methods), and bar disconnection for residential customers until an account is 45 days in arrears (rather than 60 days, as in the enrolled bills).
General Assembly action: Agreed to the Governor’s amendments.
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Regulation of liquid nicotine and nicotine vapor products: HB 1069 (Willett)/SB 550 (Deeds) ban the sale of liquid nicotine and nicotine vapor products that are not certified to the Attorney General as authorized for marketing by the Food and Drug Administration (or meeting certain other requirements as spelled out in the bill). Under the bills, the Attorney General may bring a court action to enjoin a violation and a Commonwealth’s Attorney, or a county, city, or town attorney would have the same authority with the concurrence of the Attorney General.
The Governor’s amendments propose to remove the Attorney General’s authority to bring the court action or to concur with such an action by a Commonwealth’s Attorney or local government attorney. The amendments also propose to allow the Commonwealth’s Attorney or local government attorney to recoup costs of investigation and attorney fees and would provide that civil penalties in an action brought in the name of a locality would be paid into the local general fund.
General Assembly action: Agreed to the Governor’s amendments.
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Penalty for demolition of historic structures: HB 1415 (McQuinn) authorizes any locality to establish a civil penalty for the razing, demolition, or moving of a building or structure located in a historic district or designated as a historic structure or landmark in violation of local ordinance; the civil penalty would be limited to the market value of the property (to include the value of the building or structure and the value of the underlying real property).
The Governor’s amendments would revise the limitation on the civil penalty to provide that the penalty would be limited to twice the market value of the razed, demolished, or moved building or structure.
General Assembly action: Agreed to the Governor’s amendments.
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Procurement: SB 260 (DeSteph) provides that in case of a tie bid, preference would first be given to goods produced in Virginia, and then to goods produced in the United States.
The Governor’s amendments propose to add a process for a preference for Virginia-produced goods in the procurement of goods by manufacturers, and add language exempting a project or procurement from the bill’s requirements in the case of a conflict with federal law or regulation. The Governor also proposes to add a July 1, 2027, sunset date, and to require a report from the Department of General Services.
General Assembly action: Agreed to the Governor’s amendments.
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Resilient Virginia Revolving Fund: HB 673 (Feggans) directs the Department of Conservation and Recreation to weight projects in low-income geographic areas and projects incorporating nature-based solutions when making loans and grants to local governments from the Fund.
The Governor’s amendments would revise the bill to weight projects in low-income geographic areas and projects in a locality designated as having a very low community resilience rating, as determined by the Department.
General Assembly action: Agreed to the Governor’s amendments.
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Crisis receiving center/crisis stabilization unit regulations: SB 569 (Deeds) directs the State Board of Behavioral Health and Developmental Services to revise its regulations to authorize the appropriate and safe use of seclusion in crisis receiving centers and crisis stabilization units, and directs a workgroup to propose additional regulations allowing for evidence-based and recovery-oriented seclusion and restraint practices and alternative behavior management practices to limit the use of seclusion and restraint.
The Governor’s amendment would add an emergency clause to the bill.
General Assembly action: Agreed to the Governor’s amendments.
VACo Contact: VACo Legislative Team