Thursday, January 22, 2015
VACo tackles several troublesome local tax bills
There are several troublesome tax bills that could pose significant fiscal impacts to local government revenues. VACo has been working on the following local tax-related bills this week in the Senate Finance Committee and the House Finance Committee.
VACo opposes HB 1352 (Ramadan), which negatively affects local business and occupational licensing (BPOL) taxes. The bill also allows a deduction from gross receipts for amounts paid by the licensee to persons who are not employees pursuant to a subcontract between the licensee. The deduction would become effective beginning with the 2016 license year. VACo opposes the bill because it eliminates the BPOL taxes that local governments can levy on subcontractors. The local fiscal impact could be a $50 million hit to local revenues. The bill was carried over by the House Finance Committee’s Subcommittee #2 on January 21 and will be heard by the subcommittee sometime next week. VACo will continue to oppose any negative fiscal implications the bill has on localities.
HB 1297 (Rasoul) classifies machinery and tools owned by a business and used directly in producing or generating renewable energy as a separate class of property for tax rate purposes. The bill authorizes each locality to impose a tax on such machinery and tools at a rate less than that generally applicable in the locality. The bill has been referred to the House Finance Committee’s Subcommittee #1. VACo is currently working with the patron of the bill and will provide updates on its status.
HB 1416 (Taylor) provides that neither the taxpayer nor the locality shall have the burden of proof in an appeal of a real property assessment to the circuit court. The bill is of concern because it takes away the presumption that the valuation determined by a local assessor is correct. This change weakens local governments’ ability to protect itself in court from taxpayers seeking real property tax relief. The bill also takes away the taxpayer’s obligation to provide evidence that the assessor’s valuation is incorrect. The bill was tabled on January 21 by the House Courts of Justice Committee’s Civil Laws Subcommittee but could be brought back up by the committee. VACo will continue to work with the patron to try and eliminate the negative effects to local government.
SB 826 (Martin) limits the growth in appropriations from state sources to the growth of Virginia’s population plus the rate of inflation. The bill was carried over on January 22 until next week by the Senate Finance Committee. This bill creates some concerns, particularly in light of the fiscal constraints it could place on the localities as well as the state. VACo will continue to oppose this legislation.
VACo is working with Senator Emmett Hanger to amend language in SB 1127 (Hanger). The bill declares miscellaneous and incidental property with an original cost of less than $250 as a separate classification of tangible personal property. The bill clarifies that when reporting such property, a taxpayer may provide an aggregate estimate of the total value of such property instead of an itemized list. The bill also authorizes a locality to tax such property at a separate rate of taxation not to exceed the rate imposed on general tangible personal property. VACo will continue to provide updates on the bill.
Local tax bills provide positive impacts on local government
VACo worked to support the patrons of HB 1762 (Watts) and HB 2117 (Mason). These identical bills provide that retail sales and hotel taxes on transient room rentals are computed based upon the total charges or the total price paid for the use or possession of the room. For those cases that a hotel or similar establishment contracts with an intermediary to facilitate the sale of the room and the intermediary charges the customer for the room and such facilitation efforts, the bill would require the intermediary to separately state the taxes on the bill or invoice provided to the customer and to collect the taxes based upon the total charges or the total price paid for the use or possession of the room. The bills would provide local governments with and additional stream of revenue. The bill was passed by indefinitely on January 21 in the House Finance Committee’s Subcommittee #1.
VACo supported three bills dealing with local taxing authority carried by Senator Louise Lucas in the January 21 Senate Finance Committee meeting. All bills were amended in committee to be exclusive to Isle of Wight County.
SB 759 authorizes all counties to impose a transient occupancy tax of up to 5 percent. The bill also eliminates the requirement that certain localities currently authorized to impose a 5 percent transient occupancy tax dedicate any excess over 2 percent to tourism purposes. The bill was amended to only apply to Isle of Wight County. The bill was reported out of committee as amended.
SB 774 deals with an admissions tax in counties. The bill sought to extend the authorization to levy a tax on admissions charged for attendance at any event to all counties and remove specific authorizations deemed unnecessary as a result of this bill. The bill failed to report out of committee.
SB 784 allows all localities to impose a cigarette tax by removing the requirement that they had such authority prior to 1977. The bill sets a maximum rate on the cigarette tax imposed by counties of five cents per pack or the amount levied under state law, whichever is greater. The bill failed to report out of committee.
VACo member input addresses concerns in Emergency Notifications Bill
VACo conducted a survey of its membership this week to assess the impact of HB1553 (D. Marshall) on county emergency notification plans. Forty-three counties responded to the one-day survey with 38 reporting they have an emergency notification system and the details regarding the operations of those systems.
VACo presented the survey results to Delegate Danny Marshall, who agreed to address locality concerns by amending the introduced bill to grandfather all existing systems and require new systems have an opt-in component for non-emergency notifications only.
The bill was amended in Subcommittee 1 of House Counties, Cities and Towns on January 21.
VACo Contact: Erik Johnston
Freedom of Information Act bills a mixed bag
HB 1646, assigned to the House Courts of Justice Committee’s Civil Law Subcommittee, provides that a court may invalidate any action taken by a public body at a meeting, if a court determines the public body violated the notice requirement found in section 2.2-3707 (E) of the act. This particular notice provision deals with a person’s annual request for notice of meetings.
HB 2223 ( Morris), assigned to House Courts of Justice Committee’s Criminal Law Subcommittee, provides an additional penalty of a class 1 misdemeanor for anyone convicted of a willful and knowing violation of the provisions of the act. A class 1 misdemeanor is punishable by confinement in jail for not more than 12 months and a fine of not more than $2,500.
A helpful FOIA bill, SB 1109 (Stuart), provides for a new exemption allowing for closed meetings regarding discussion of plans to protect public safety as it relates to terrorist activity or specific cybersecurity threats or vulnerabilities, where discussion in an open meeting would jeopardize the safety of any person or the security of any facility, building, structure, information technology system, or software program; or discussion of reports or plans related to the security of any governmental facility, building or structure, or the safety of persons using such facility, building or structure.
VACo Contact: Phyllis Errico
Bill creating administrative burden for localities tabled, sent for further study
HB 1404 (Head) was tabled in Subcommittee 2 of the House Counties, Cities and Towns Committee on January 21. The bill provides that in any instance that a person is seeking a business permit, a license or an application for any similar local government approval from a locality, the locality shall provide documentation and instructions that outline all steps necessary to obtain the permit, license, or approval.
VACo testified against the bill and worked with the patron and committee members to support sending the bill for further study to the Small Business Commission where local government business best practices may be studied.
VACo Contact: Erik Johnston
Two grievance bills detrimental to localities and schools boards
HB 1744 provides that an aggrieved employee would decide whether the final step in a local grievance procedure would be before an administrative hearing officer or a three-member panel. Currently, if the locality has chosen to use a hearing officer, there is no panel at the last step. This bill also makes changes to the teacher grievance procedure.
The bill has been assigned to the House Education Committee.
SB 980 is in the Senate Education and Health Committee and rewrites the teacher grievance procedure that was just adopted two sessions ago. This bill takes the decision on whether to use a hearing officer out of the hands of the School Board and gives the grievant the option of choosing a three-member panel.
VACo Contact: Phyllis Errico
Notice bills fail to advance
HB 1438 (R.P. Bell), which gives localities the option of meeting certain notice requirements by utilizing alternatives to a newspaper of general circulation, failed to report out of Subcommittee 2 of the House Counties, Cities and Towns Committee on January 21. After vigorous debate, including VACo testimony, the bill failed to report by a vote of 6-5, with Delegates Stolle, DeSteph, Pillion, Torian and Krupicka voting in favor of this VACo supported bill. HB 1405 (Head) only applied to localities with a population over 50,000 and also failed to report.
VACo Contact: Erik Johnston
Elections bills fail to move forward
Two VACo supported bills addressing the cost of elections to localities failed to report out of the House Privileges and Elections Subcommittee on Campaign Finance on January 21. HB 1300 (Ware) required the appropriate political party to reimburse in full each county and city conducting a primary election at the direction of the Commonwealth. HB 1301 (Ware) required the state to reimburse localities the whole amount of compensation and expenses for electoral board members and general registrars.
VACo Contact: Erik Johnston
Register for the 2015 County Government Day at the General Assembly on February 5
The Virginia Association of Counties invites county officials to VACo County Government Day at the General Assembly on February 5 at the Richmond Marriott.
VACo staff will report on legislation affecting local governments, then county officials are encouraged to go to the Capitol to participate in committee meetings and advocate state legislators. In the evening, county officials are strongly encouraged to invite their state legislators to dinner.
9 a.m. – VACo Board of Directors’ meeting
11 a.m. – Registration
Noon – Keynote Speaker | VACo staff legislative briefings (box lunch provided)
Afternoon – Visit Capitol and advocate legislators
Evening – Make plans to take your state legislators to dinner
Also please plan on joining VACo members at the Rural Caucus Reception and Dinner on February 4.
VACo Contact: Carol Cameron