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News and Notes February 16, 2016

News and Notes February 16, 2016
News and Notes February 16, 2016
News and Notes February 16, 2016
The following is a summary of policy information concerning the top legislative initiatives of the Hampton Roads Chamber of Commerce.

News and Notes from the Virginia General Assembly
February 16, 2016

In the Virginia General Assembly “Crossover” day is February 17th this year. After this date each legislative body will only be able to act on bills from the other Chamber. This year there were over 2,700 bills introduced and many have significant impacts on businesses in the Commonwealth.

HRCC Opposes SB 111 (Peterson D 34th)

The Hampton Roads Chamber of Commerce has signed on to a letter representing the views of a broad coalition of business organizations in opposition to SB 111. SB 111 raises the punitive damages cap in Virginia to $500,000. The Chamber is concerned that Virginia has been dropping in every business and legal climate ranking. This legislation would serve to put our state at a competitive disadvantage when others, such as North Carolina, that have reduced their punitive damages cap to $250,000. SB 111 passed the Senate on a vote of 26-14. Special thanks to Senators Norment, Wagner and Cosgrove for voting no on the measure.

GO Virginia Legislation Advances

HB 834 (Cox R 66th, Torian D 52nd) establishes the Growth and Opportunity Board, the framework for regional boards and the GO Grants programs which provide start-up funding for innovative and transformational projects to fuel private sector growth. (93-7 vote, passed)

HB 846 (Hugo R 40th, Minchew R 10th, James D 80th) provides incentives for localities to work together on economic development projects by allowing the localities involved to receive a portion of the tax revenues from the results. The six year grant will equal up to half of the tax revenues from the joint project. In order to qualify for the grant localities must have a cost and revenue sharing plan, meet job creation criteria and have a specific plan for the use of the funds. (HB 846 passed on a vote of 93-5)

State Revenue Collections Surge in January

January’s revenue collections in the Commonwealth rose 6.6%. The growth was due to increases in payroll withholding, individual estimated payments and fewer individual tax refunds being issued.

Workers Comp-Fee Schedule Bills Approved

Compromise measures that direct the Workers Compensation Commission to establish fee schedules for the payment of medical services under the state’s Workers Compensation program have advanced. HB 378 (Farrell R 56th) and SB 631 (Wagner R 7th) establish regulations that would be effective January 1, 2018.

Tax Credits for Research and Development Supported by the Chamber

HB 884 (Hugo R 40th) - This bill creates a tax credit for businesses with Virginia research and development expenses in excesses of $5 Million in the taxable year.

SB 58 (McDougle R 4th) - This bill is identical to HB 884. The bill has passed the Senate on a 39-0 vote.

Hampton Roads Transportation Funding Challenge

In May of 2013, the General Assembly adopted HB 2313 which imposed a sales tax on the wholesale price of gas. The legislation set a “floor price” for taxation at the state level, but no “floor” was set for regional gas taxes. If the state “floor” would have been in place, the effective tax rate would have been at 6.7 cents per gallon instead of 2.2 cents per gallon today! This “floor difference” is 67% less than expected in terms of revenues available for regional transportation infrastructure.

Since drafting the legislation to enact HB 2313, gas prices have dropped 57% from February 2013.

The motor fuels tax in Hampton Roads was expected to yield $73.8 million in revenues in FY 2016. Due to falling gas prices, the fuel tax revenues will yield annual revenue of $23 million, 69% less than estimated.

The Solution:

SB 742 (Wagner R 7th) changes the regional gas tax in Hampton Roads to a cents per gallon tax that decreases as the price of gas increases. The tax would be imposed on the basis of the price of gas as determined by the Commission of the Department of Motor Vehicles using a prescribed formula to calculate the average wholesale price. This bill passed the Senate 23-11 and awaits action in the House. The Chamber SUPPORTS the legislation.

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