LEGISLATIVE CONNECTION

February 12, 2010

Patience Running Thin?

As the General Assembly approaches Crossover, when each Chamber must complete work on its own bills and then begin consideration of legislation from the other Chamber, some Democratic lawmakers continue to spar with the McDonnell Administration over how to solve Virginia's budget crisis.  Senate Democrats have amped up their criticism over what they perceive to be lack of candor and direction from Governor McDonnell on how he plans to fill the $4.2 billion canyon in Virginia's budget. On Tuesday, Secretary of Finance Ric Brown met with Senate Democrats in an effort to placate some of their concerns. Many of those attending the meeting came away less than impressed, claiming too many questions remain unanswered. On Wednesday, McDonnell responded that some Senate Democrats are upset that he has ruled out a tax increase and will instead focus on spending cuts. See more here and here. The General Assembly's money committees are scheduled to finish their work on the budget at the end of next week and report their respective versions of the budget bill on February 21st. 

Still in the Liquor Business (for now)

Virginia's practice of operating liquor stores is likely to continue at least for now. Earlier this week, Senator Mark Obenshain (R-Harrisonburg) withdrew legislation that would have moved the state towards privatization. Stating that he wants to work with the McDonnell administration on the language of the bill, Obenshain indicated that he will submit similar legislation at a special session on transportation tentatively planned for later this year or at next year's regular session. During last year's gubernatorial race, McDonnell estimated that the  privatization of Virginia's ABC stores could generate as much as $500 million in funding to meet the Commonwealth's transportation needs.

Unemployment Insurance

On Monday, the Senate, as expected, approved legislation (SB239) that would permanently expand the number of individuals who qualify for unemployment compensation in exchange for an additional $125 million in stimulus funds. This legislation would provide benefits to individuals enrolled in job training and waives a current requirement that one must be available for and actively looking for full time work. This legislation would also expand benefits to individuals who voluntarily leave work for a "compelling family reason," such as domestic violence or to accompany a spouse who has taken a job in another location. A similar bill, (HB647) was laid on the table last week in a House subcommittee. SB239 will likely be directed through the same House subcommittee and should meet a similar fate.

The Chamber remains opposed to permanently expanding eligibility criteria for a short term benefit.

The "Amazon" Bill

On Wednesday, the Senate Finance Committee advanced legislation (SB660) sponsored by Senator Emmett Hanger (R-Augusta) that would require on-line retailers to collect sales taxes from their customers in Virginia. During the Finance Committee hearing, several brick-and-mortar retailers testified that on-line merchants have an advantage because they do not have to collect Virginia sales tax. On-line retailers countered that if they do not have a physical presence in the Commonwealth, they should remain exempt from collecting Virginia's sales tax. Courts have ruled that the physical location/sales nexus is critical to determining if the sales tax can be imposed. Hanger's bill states that if a Virginia-based affiliate of an on-line retailer refers potential customers to the on-line retailer and that cumulative gross receipts generated from these affiliate referrals are in excess of $10,000 during the preceding four quarterly periods, the on-line retailer will be presumed to be soliciting or transacting business in Virginia and would be required to register for retail sales and use tax purposes. According to an estimate by the Virginia Retail Federation, this legislation could generate $17 million in revenue. The fate of this legislation remains uncertain in the tax-averse House of Delegates.  The Chamber supports an equal and fair taxing formula for Virginia retailers. 
 

Other Notable Legislation

Government Reform Bills

Redistricting Commission
A measure (SB173) that would create a bi-partisan redistricing panel to redraw legislative and congressional districts based on the 2010 census cleared a Senate committee this week. Sponsored by former Democratic gubernatorial candidate and current Senator Creigh Deeds (D-Bath), SB173 would create a commission consisting of three Democrats, three Republicans, and a seventh member picked by the other six. Currently, the General Assembly is tasked with redrawing the legislative and congressional districts. Critics of the current arrangement suggest that the majority party has traditionally redrawn districts favorable to their party's incumbents.

Earlier Tuesday, a House subcommittee quietly dispatched similar legislation. Opponents of the commission concept insist that the redistricting process is inherently political whether done by the legislature or a commission. With the House controlled by Republicans and the Senate in Democratic hands, next year's redistricting process could become quite eventful.  The Chamber supports a redistricting process that is as non-partisan as possible. 

Shifting the Budget Cycle
Senator Ryan McDougle's (R-Hanover) bill (SB102) that would have moved the budget writing process from even-numbered years to odd numbered years was effectively killed this week by a 21-19 vote to send the bill back to committee. This legislation, supported by Governor McDonnell, would have allowed an incoming governor to be in office for a year before proposing his or her first budget. The governor would then have had the opportunity to introduce two budgets during his or her term. Under the current arrangement, the outgoing Governor, constitutionally barred from seeking back-to-back terms, leaves office a month after proposing a new two-year budget.
 

Offshore Drilling Hits a Snag

Legislation that would have allowed the Commonwealth to collect future revenues and royalties from offshore resources was referred back to the Senate Finance Committee on Wednesday to be carried over until next year pursuant to Senate Rule 20F. Opponents of the legislation stated that uncertainty in Washington clouds the prospects of reaping revenues and royalties in the near future and chastised supporters of this bill for creating a perception that revenues will flow into the Commonwealth when the leasing process begins in a few years. Proponents of the bill, including Governor McDonnell, argued that this legislation would send a message to Congress that Virginia is serious about energy independence and securing potential profits from offshore oil and natural gas. During his campaign, then-candidate McDonnell suggested that revenues from offshore resources could be used to fund  transportation projects.

A House version of this bill (HB756) that would allocate a majority of future revenue and royalties to the Transportation Trust Fund has been referred to the Senate Finance Committee.

Wireless Communication

Earlier this week, the Senate passed legislation (SB517) that would prohibit a  driver from using his or her cell phone unless the device is in hands-free mode. Penalties would be phased in over time. Starting July 1, violators would face a $20 fine which would be increased to $50 for subsequent violations. On July 1, 2011, the fines would increase to $100 and $200 respectively. This legislation would not apply to emergency vehicles, drivers who are parked, GPS devices, On-Star or similar services, or individuals reporting emergencies. Earlier in the session, a similar House bill was rejected in subcommittee. 

 Cooperative Procurement

Last year, Salem Delegate Morgan Griffith introduced legislation that would have prohibited local governments from piggybacking on another locality's contract for goods and services without first obtaining a written determination that such an arrangement would be fiscally advantageous and efficient. While Delegate Griffith's bill found a receptive audience in the House, a Senate committee declined to advance this legislation. Delegate Griffith reintroduced similar legislation this year with some minor modifications. This year's bill would prohibit a locality from using another locality's contract for construction where the cost of the project is in excess of $200,000 and the other locality is more than 75 miles in straight line distance from the territorial limits of the locality attempting to piggyback on the contract. The main goal of this bill is to ensure that local contractors will be made aware of and able to bid on local capital projects. The legislation will also promote openness and fiscal responsibility in the cooperative procurement process. Over 1500 businesses in Virginia have signaled support for HB426. On Wednesday, the Senate General Laws Committee failed to advance similar Senate legislation (SB695). The same Senate Committee will consider HB426 after Crossover.  The Chamber supports this legislation.

Important Session Dates 

February 16th - Crossover

March 13th - Adjourn Sine Die

Video

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This format allows you to check bills and their status at a glance, by category. If you have questions along the way, please feel to contact or Tori Williams at twilliams@roanokechamber.org or 540.983.0700 x 229 or 540.819.7713. 

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