General Assembly to Meet and Act on Governor McDonnell’s Proposed Amendments During the April 3rd Re-Convene Session.
Governor Bob McDonnell submitted amendments or substitute language on March 25th to 70 bills, including the budget and the transportation funding initiatives. Six bills were vetoed. The General Assembly will consider all of these amendments, substitutions and vetoes on April 3 and 4th along with Judicial appointments.
Under the Constitution of Virginia, the legislature can approve or reject the amendments and substitutions but CANNOT change them. If amendments are accepted, the bills will become law. When amendments are rejected, the bill is returned to the Governor, who has the option of signing the bill without amendments, not signing the bill (the bill still becomes law), or he can veto the bill. Vetoes can be overridden only by a super majority of votes in both legislative chambers.
Amendments to HB 2313, Transportation Funding
- Reducing the proposed vehicle titling tax increase from 4.3 percent to 4.15 percent. After hearing from automobile dealers and constituents, the governor proposed this amendment to ensure that the increase is reduced and does not adversely impact the number of vehicles purchases.
- Reducing the Alternative Fuel Vehicles annual Fee from $100 to $64. The intent of this fee assessed to drivers of alternative fuel vehicles was to ensure that they are paying their share for the road maintenance and wear and tear caused by their vehicles. The original proposal for a $100 fee was based on a 17.5 cents per gallon gas tax. The conference report establishes a lower rate of taxation on gasoline. As such, this amendment ensures equity in how different types of vehicle fuels are taxed.
- Correcting and reducing the rate of taxation for the regional congestion relief fee. The stated goal for this fee was to raise approximately $30 million per year. Based on slightly incorrect data, the fee was set at $0.25/$100 for real estate transactions. Utilizing correct data, a rate of $0.15/$100 will generate the same revenue of $30 million per year.
- Reducing the Transient Occupancy Tax (TOT) in Northern Virginia. At 3 percent, the TOT would place the tax in Northern Virginia near or above surrounding out-of-state jurisdictions. Reducing the rate to 2 percent will not significantly impact revenues, but will ensure Virginia’s hotels remain competitive with surrounding states.
- Addressing potential legal questions regarding regional taxation authority for Northern Virginia and Hampton Roads. Amendments were made to the sections imposing the regional taxes for transportation by the state to improve the legal posture of the law by changing the applicability of the taxes to any Planning District Commission meeting certain empirical thresholds including population, registered vehicles and transit ridership. Hampton Roads and Northern Virginia are the only jurisdictions currently meeting these criteria, but in the future other parts of the Commonwealth could utilize these tools if their transportation challenges continue to grow.
- Ensuring transportation funds generated by this legislation are only used for transportation. General provisions were added to the legislation to ensure that funds provided for in the statewide funding and regional plans remain dedicated to transportation in the years ahead. In making this commitment to fund this core function of state government, Virginians expect that commitment to be honored and that this funding is to be used solely for the purpose for which it was intended.
These amendments, combined with a series of technical and administrative amendments, should accomplish the goals established by the Governor earlier this year by moving away from the declining gasoline tax and toward a more dynamic sales tax-based revenue source. The final version of HB 2313 sponsored by Speaker Bill Howell eliminates the 17.5 cents per gallon tax on gasoline, increases the state sales portion of the sales tax from 5 percent to 5.3 percent, dedicates revenues for the Commonwealth Mass Transit Fund and the Intercity Rail Operating and Capital Fund, and dedicates increased revenues for the Commonwealth Transportation Fund. Governor McDonnell’s amendments would still result in over $5.9 billion in total revenue for transportation over the next five years.
A recent Quinnipiac Poll released on March 28th note that Virginians by a 3-1 margin believe the passage of the Transportation bill was good for Virginia across all regions and demographic groups.
Drone Moratorium Bill Amended
The Governor offered a substitute for two bills that relate to the use of drones (HB 2012 Cline and SB 1331 McEachin).
The substitute allows institutions of higher learning or other research organizations to use drones for research and development. It also allows the use of drones when a person is in immediate danger.
Affordable Care Act – Adds a number of additional reform measures that the Commonwealth would have to implement with contracts and agreements with the Centers for Medicare and Medicaid BEFORE the state moves ahead with expansion (reference Amendment #24, item 307).