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2007 General Assembly Update

 Week Ending 02/02/07

The highlight of the full third week of the 2007 General Assembly was not the wrangling in the House Commerce and Labor Committee over which piece of legislation should be used to continue the discussion on electric restructuring. It was not the announcement of the House and Senate Transportation plans nor was it the vote by the House and Senate to restrict smoking in restaurants or other public places. The Senate Commerce and Labor Committee won the spotlight with its precedent setting vote to raise the state's minimum wage. This vote to increase the state's minimum wage deviates from the historic practice of having the state minimum wage conformed to the federal minimum wage. The Virginia State Code, states, “Every employer shall pay to each of his employees wages at a rate not less than the federal minimum wage and a training wage as prescribed by the U.S. Fair Labor Standards Act (29 U.S.C. § 201 et seq.).” The RMA and other associations and Chambers of Commerce opposed this legislation. The RMA’s legislative policy is to oppose any increase in the minimum wage at the State level. The Senate bill that passed will take the state minimum to $6.50 on July 1, 2007. This would be higher than the bill which is now before Congress, (click here for the federal bill). The RMA will oppose the Senate bill when it reaches the House Commerce and Labor Committee. Click here for the Retail 2007 Profile.

Transportation

Last week’s action by the House and Senate makes it appear that we may be heading for another year with no transportation plan, unless major compromises are made. The issue will again this year be divided down the line of one plan adding new taxes and the other not. The Senate Finance Committee rejected a plan which was supported by both members of the House and Senate that relied heavily on using General Fund surplus and bonds to fund transportation needs. Click here for plan.

The Senate Finance Committee voted 9-6 to advance a plan to the Senate floor that would have a new 5% tax on wholesale gasoline prices. (Currently this would raise the price on gasoline by .10 cent per gallon.) Additionally, the Senate plan would allow Northern Virginia and Hampton Roads to raise their sales and use tax 1% (from 5% to 6%) for regional highway and mass transit projects, would authorize localities to raise taxes on hotels and motels, rentals cars, increase vehicle registration fees and  increase the tax paid by dealers in real-estate deals. This proposal will be up for vote by the entire Senate this week.

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Electric Restructuring

The House Commerce and Labor Committee passed Del. Clark Hogan’s electric restructuring bill during last Thursday evening’s marathon meeting. There were two bills, one offered by Committee Chairman Del. Harvey Morgan which would have taken the electric utilities back to the oversight of the State Corporation Commission and the prevailing legislation which is a hybrid that contains limited SCC oversight and includes provisions for retail choice for those with 5 mega watts or more usage. It also provides the ability to aggregate. The RMA lobbied aggressively for the aggregation provision. Even through there is no retail competition for electric energy on the far horizon, the RMA believes it is important to preserve the ability to aggregate small commercial electricity customers so they can be competitive with retailers who may use a combined 5 mega watts of energy in Virginia, and are therefore able to shop for better rates. The House bill is now before the full House for vote.

The Senate Commerce and Labor Committee heard the Senate bill addressing restructuring on Monday, February 5th. The Committee voted 15-0 to pass Senator Norment's bill, which, like the House version, provides limited oversight by the SCC, includes limited retail choice, and aggregation for those with 5 maga watts or greater electic usage. Both bills also set a ceiling on return on investment for utilites.

Both the House and Senate version need a lot of work before they reach the Governor for his signature. Most of this work will be done by conferees and when they reach consensus, it will be up to the Governor to either accept or veto the conferees recommedations.

The RMA will continue to closely follow this issue of major importance to our members.

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Minimum Wage

Last week the Senate Commerce and Labor Committee in its precedent setting vote passed legislation that would raised the state minimum wage from $5.15 to $6.50 effective July 1, 2007. This vote to increase the state minimum wage deviates from the state minimum wage being conformed to the federal minimum wage. The Virginia State Code, states, “Every employer shall pay to each of his employees wages at a rate not less than the federal minimum wage and a training wage as prescribed by the U.S. Fair Labor Standards Act (29 U.S.C. § 201 et seq.).” The RMA and other associations and Chambers of Commerce opposed this legislation. The RMA’s legislative policy is to oppose any increase in the minimum wage at the State level. The RMA will oppose the Senate bill when it reaches the House Commerce and Labor Committee.

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Sales Tax Holiday

For nine years, the RMA lobbied for the creation of a Sales Tax Holiday, once opposing the Holiday because it didn’t include a provision to allow all retailers to participate. Last year, both the House and the Senate agreed to and passed a sales tax holiday bill, but the Senate version did not include computers or computer software.

Last week the House approved Delegate Clines bill, which would add to the Sale Tax Holiday statue the following language, “iii) computer systems, provided that the selling price of each system is $1,500 or less, and (iv) computers, computer hardware, computer software, or portable or handheld calculators, provided that the selling price of each item is $500 or less.”

The House has provided the inclusion of computers and computer software in their legislation in the past. The bill will meet its true test when it reaches Senate Finance Committee after crossover.

The Computer language was adopted with no lobbying from the retail community since there was an agreement that if we got the Sales Tax Holiday as passed last year we would not come back this year and ask for more inclusions into the Sales Tax Holiday. << Back to top

Hurricane Preparedness, Tax Holiday

With little or no effort from the lobby community, the Hurricane Preparedness bill passed out of Senate Finance last Thursday evening. Whether it was the fact that the bill was near the end of a long agenda or other politically motivated actions, the bill passed without one person having to stand and speak in support of the measure. The bill now goes before the full Senate for approval.

It will be interesting to watch how the Sales Tax Holiday bill from the House and the Hurricane Preparedness bill fare after crossover.

The Hurricane Preparedness legislation would provide, beginning in 2008, for a seven-day tax-exempt period that begins each year on May 25 and ends at midnight on May 31. There would be no sales and use tax on purchases of "(i) portable generators used to provide light or communications or preserve food in the event of a power outage and (ii) certain other hurricane preparedness equipment, including, but not limited to, blue ice, carbon monoxide detectors, cell phone batteries, cell phone chargers, gas or diesel fuel tanks, non electric food storage coolers, portable self-powered light sources, portable self-powered radios, two-way radios, weather band radios, storm shutter devices, tarpaulins or other flexible waterproof sheeting, ground anchor systems or tie down kits, and packages of AAA cell, AA cell, C cell, D cell, 6 volt, or 9 volt batteries, excluding automobile and boat batteries. As used in this section, "storm shutter" means materials and products manufactured, rated, and marketed specifically for the purpose of preventing window damage from storms. The tax exemption shall apply to each portable generator with a selling price of $1,000 or less, and each article of other hurricane preparedness equipment with a selling price of $60 or less. Any discount, coupon, or other credit offered either by the retailer or by a vendor of the retailer to reduce the final price to the customer shall be taken into account in determining the selling price for purposes of this exemption." The RMA will support this legislation. << Back to top

BPOL Tax

Business Professional Occupational License Tax

Motor Fuel Tax Exempt from BPOL
Legislation from both the House and Senate has now passed that will exempt from gross receipts the motor fuel tax. Both the House and Senate version include a retroactive clause.

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Smoke Free Act

The House has now passed Del. Morgan Griffith’s bill, which requires posting a sign “Smoking Permitted” at all entrances to restaurants that allow smoking. The Senate bill, which prohibits smoking in most public buildings including restaurants, has now passed the Senate.

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Joint Payment of Health Insurance Claims

This bill failed in the Commerce and Labor Committee on a 9-12 vote. The bill would have required every health insurer, health services plan, or health maintenance organization when paying a claim for services rendered by a health care provider not participating in the provider panel to pay the claim by sending a check made payable to both the insured, subscriber (or member), and to the nonparticipating health services provider.

The RMA was part of a large coalition to oppose this bill.

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Record Disposal

HB 2600, introduced by Del. Plum received opposition from every business lobby group. This bill would require businesses to take all reasonable measures to protect against unauthorized access to or use of personal information and require the disposal by means of burning, pulverizing or shredding of papers containing personal information. The personal information would include at minimum a post-it note to any other document that contains personal information. With the strong opposition Del. Plum struck his bill.

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If you have any questions about this legislation, please contact George Peyton, VP, Government Relations at (804) 334-2932.