News and Notes from the Virginia General Assembly

 Points of Contact: Ira Agricola, Senior Vice President &
Candace Reid, Manager, Governmental Affairs
Representing: Hampton Roads Chamber of Commerce &
Greater Williamsburg Chamber &Tourism Alliance

 Tuesday, February 2, 2010

No portion of this communication may be retransmitted or reproduced without the expressed permission of the
Hampton Roads Chamber of Commerce

Land Use

HB 374 (Cosgrove R-78^th) – This bill delays payment of cash proffers from the time the building permit is issued to the time the final inspection is complete and a certificate of occupancy issued.  The bill was reported on January 22^nd from Counties, Cities and Towns Committee in the House.  The Chamber SUPPORTS the measure.

Transportation

While most political observers see an early fall special session called to focus on transportation funding; there are a number of transportation bills under consideration.  These bills include:

HB 230 (Watts D-39^th) – changes the allocation of construction funds for primary roads and interstate highways to 90% of allocation to be determined by a ratio of vehicle – miles traveled divided by the primary road lane mileage.  The bill also increases the motor fuels tax by 10 cents per gallon, minus 1 cent for each 20 cents that the average price of gas exceeds $3 per gallon.

HB 269 (Englin D-45^th) – increases state sales tax on motor fuel in Northern Virginia from 2.1 to 4.2.

HB 756 (Stolle R-83^rd, Oder R-94^th) – Requires 80% of offshore royalties paid to Commonwealth to go to Transportation Trust Fund.

HB 805 (Poindexter R-9^th) – 80% of royalties of offshore natural gas and oil drilling to Transportation Trust Fund with remaining 20% to no-petroleum based fuels.

HB 900 (Comstock R-34^th) – 80% of royalties to Transportation Trust Fund, 20% to clean up Chesapeake Bay.

HB 970 (Rust R-86^th) – increases to 75% the amount of General Fund surplus designated to Transportation Trust Fund.

HB 971 (Rust R-86^th) – imposes 1% tax at distributor level.  Funds go to highway maintenance.  Increases state sales tax in Northern Virginia by 0.5% and imposes a regional fee on the recordation of deeds.

HB 1047 (Kory D-38^th) – increases transit by 4.3%.

HB 1059 (Marshall R-13^th) – authorizes CTB to issue bonds not to exceed $4 billion with bonds paid by tolls, fares or fees.

HB 1061 (Marshall R-13^th) – authorizes general obligation bonds in an amount not to exceed $4 billion to finance capital transportation projects.

HB 1153 (Scott-D-53^rd) – converts 17.5 cents per gallon excise tax to percentage rates. 

Senate Transportation Bills

SB 114 (Petersen D-34^th) – ties the fuel tax to the fuel efficiency of motor vehicles.

SB 343 (Hanger R-24^th) – adjusts fuels taxes each year by April 1 by the percentage increase in the Corporate Average Fuel Economy Figure.

SB 115 (Petersen D-34^th) – authorizes city and county to impose a 1% surcharge on the retail price of motor fuels sold at retail.

SB 132 (Obenshain R-26^th) – increases general fund revenue for transportation from 0.5 to 1%.

SB 164 (Edwards D-21^st) – increases revenue for transportation by increasing vehicle sales and use tax by one-half percent, motor vehicle rental tax by 1 percent and by imposing a 5% tax at the wholesale level on gasoline.

SB 223 (Barker D-39^th) – replaces current fuels tax with wholesale price.

SB 600 (Wagner R-7^th) – increases general fund surplus designated to Transportation Trust Fund.

SB 601 (Wagner R-7^th) - requires 80% of any revenues and royalties paid to Commonwealth as a result of offshore natural gas and oil drilling be deposited to the Transportation Trust Fund.

 Some Important Dates

January 22      Deadline to introduce bills

February 16     Deadline to consider bills in both chambers

March 8           Deadline for committee action on legislation

March 13          Adjournment 

Chamber Lobbies to Retain Dealer Discount  

The Chamber communicated with Governor McDonnell’s staff to confirm our position to retain the “Dealer Discount.” The Dealer Discount is a fee that partially offsets the cost of collecting the Commonwealth’s sales tax. 

Tax Conformity

HB 614 (Purkey R-82^nd) raises taxes on Virginia businesses, primarily manufacturers, by $30 million annually.  This bill is the Tax Department’s annual IRS conformity/de-conformity bill – normally a bill that is not controversial.

The controversial aspect of this year’s bill is that it eliminates a key deduction available to manufacturers (Section 199 of the Internal Revenue Code.)

We respectfully OPPOSE the loss of this deduction and will work to communicate the position of the Chamber to the appropriate members of the legislature. 

High Court Lifts Ban on Corporate Political Money

Last week the U.S. Supreme Court changed the way federal campaigns will be funded, lifting restrictions on independent expenditures by corporations and unions, and allowing unlimited corporate dollars to be used to advocate the election or defeat of specific candidates. 

Unemployment Insurance

The Chamber OPPOSES three bills that would permanently expand Unemployment Insurance; SB 239 (Watkins R10th), SB 562 (Puckett D-38^th), and HB 647 (Armstrong D-10^th).  The expectation is that the Senate bills will emerge from the Senate so our focus will be on the House. 

Governor McDonnell Announces Job Creation Plan

The Governor’s bills to support job creation will be carried by Senate Finance Chair Colgan, Senator Wampler and House Appropriations Chair Putney. 

McDonnell is calling for $50 million in new investments over the next biennium.  The Governor is proposing:

• More than doubling the Governor’s Opportunity Fund in FY 2011 by increasing the state commitment by $12.1 million
• Committing $5 million in FY 2011 to a state industrial mega-site fund to attract new employers
• Using $2 million over the biennium to establish state economic development offices in major growth markets in China, India and the United Kingdom.
• Supporting the fast growing bio-technology and life sciences industry by removing the $3 million cap on the Qualified Equity and Subordinated Debt Investment Tax Credit and raising it to $5 million in FY 2011; Investing $3 million in bioscience “Wet Lab” Facilities over the biennium; Utilizing $2 million to reestablish funding for the Business Incubator Program in FY 2011; Providing income tax exemption for qualified investments by technology and science startup companies in FY 2012 (cost $500,000)
• Increasing state funding for the Virginia Tourist Corporation by $3.6 million in each year of the biennium, and state funding for the Governor’s Motion Picture Opportunity Fund by $2 million in FY 2011
• Depositing the Wine Liter Tax attributable to Virginia Wine into the Wine Promotion Fund ($1.5 million over biennium)
• Improving Virginia’s business assistance services by increasing funding for the Loan Guarantee Program by $1 million in FY 2011; Continuing funding for the Business One Stop Program, cost of $1 million over the biennium; Increase the appropriation for the Virginia Job Investment Program by $6.5 million in FY 2011

During the General Assembly session, please feel free to contact the Chamber’s governmental affairs team. Ira Agricola can be reached at 664-2570 or at iagricola@hrccva.com.You may contact Candace Reid at 664-2572 or at creid@hrccva.com to bring any business issue or concern to the attention of the Chamber.