General Assembly: Crossover Report
The 2010 session of the Virginia General Assembly convened January 13. During the course of the 60-day session, nearly 3,000 measures will be introduced and considered by legislators. Of these, AOBA is actively monitoring more than 250 individual bills that could, if enacted, potentially impact the interests of commercial and multifamily residential property owners/managers. AOBA has actively lobbied for passage, defeat or modification of several bills: taking active positions, educating key members and staff, testifying in committees, submitting official statements for the record and—very importantly—meeting legislators, wherever possible, accompanied by AOBA members.
As of the February 17 crossover deadline (the half-way point in session, at which time all bills are either transmitted to the opposite chamber or allowed to fail), AOBA has already amassed a number of successes in defending our industries against harmful proposals and helping ensure the continued consideration and advancement of proposals with a positive impact for AOBA members. At the same time, with numerous harmful bills still looming and a budget deficit of nearly $4 billion yet to be addressed, much remains at stake for AOBA members. The focus of AOBA’s advocacy efforts is built around its core interests of environment, general business, housing, local government authority and land use, taxes, transportation, utilities and energy. The continued economic slump has provoked many policy discussions and bill introductions in each of these areas, which will continue to play out in the balance of session.
Here are a few highlights of the 2010 legislative session at the crossover deadline:
Real Property Tax Assessment Reform:
Delegate Morgan Griffith (R-Salem), House Majority Leader, introduced H.B. 430 at AOBA’s request. This legislation levels the playing field between assessor and taxpayer in the real property tax assessment appeal process, and clarifies the procedures for local government assessments of properties operated as affordable housing. Among other provisions, H.B. 430 would require that assessors consider deed and income restrictions when assessing affordable housing properties. It would further expand the information that local assessors must disclose to taxpayers with regard to the valuation of their property and prohibit this information from being used by the assessor in an appeal if it has not been made available to the property owner prior to the appeal hearing. It would prescribe qualifications and training required for service on a local Board of Equalization, and would require that a local assessor or Board of Equalization produce an independent appraisal before a board could order an increase over and above the valuation being appealed by the taxpayer.
AOBA engaged in numerous discussions and negotiations with groups opposed to our bill, including the Virginia Association of Counties, the Virginia Municipal League, the Virginia Association of Assessors, and various local governments. While these discussions continue, the AOBA bill was given unanimous approval this week by the full House of Delegates. The bill is certain to face greater scrutiny in the State Senate in the coming weeks.
Court Fee Increase Advances:
Again this year, Senator Richard Stuart (R-Montross) introduced a measure seeking to increase the filing fee on any civil action (i.e. unlawful detainers and judgments) in General District court, from $27 to $176. This bill would not only substantially increase costs for housing providers, but would also create an unnecessary burden on tenants already struggling in difficult economic times. AOBA helped assemble a strong coalition to oppose the bill, including the Community Associations Institute, Housing Opportunities Made Equal, the Medical Society of Virginia, the National Federation of Independent Business, the Virginia Association of Realtors, the Virginia Bankers Association, the Virginia Court Clerks Association, the Virginia Creditors Bar Association, Virginia Hospital and Health Care Association, and the Virginia Retail Federation. In spite of these efforts, the Senate approved the fee hike on a 23-17 vote. AOBA will continue to fight this legislation as it is considered in the House of Delegates.
Fee Increase for Building Code Violations:
Prince William County introduced a legislative measure to sharply increase fees for any building code violation. The bill sought to increase the fee for any initial violation from $100 to $200, and for any subsequent violation from $150 to $500. The total allowable penalties arising out of a single set of circumstances would be increased from $1,500 up to $5,000. Despite extensive lobbying from the municipal governments for the fee increases, AOBA was able to secure amendments to the legislation that completely eliminate the fee increase for initial violations, reduce the increase for subsequent violations to $350, and the total allowable penalties to $2,500.
Commercial Real Estate Tax:
Members of the Northern Virginia delegation, in particular, have introduced several measures to restore a broad-based package of revenues to support the construction of critically needed new transportation infrastructure. AOBA members have a significant vested interest in this effort, as the commercial real estate tax surcharge remains among the only revenue sources left standing from the 2007 transportation package, after other measures were subsequently ruled unconstitutional. AOBA is on guard, however, for rumored, but not yet seen, legislative language that would mandate adoption by all Northern Virginia localities of the commercial real estate tax surcharge (only three have done so to date), and require that it eventually be set at 25 cents per $100 of assessed value (currently it is capped at 12.5 cents).
AOBA Pitches in to Preserve More Than $118 Million in Funding for Local School Systems
A provision in outgoing Governor Tim Kaine’s budget would have frozen the Local Composite Index for Fiscal Year 2011-- the formula by which state funding for K-12 education is determined and equalized based on each locality’s ability to pay for public education. In the past, as the relative wealth of Northern Virginia rose faster than the rest of the state, its LCI rose, as well, which sent more funds to “poorer” school districts. Now that our region has recently seen the greatest decrease in home values – an approximate 44 percent drop – there has been a corresponding drop in the LCI. The result is that, if left alone, for the first time in years the LCI would actually benefit Northern Virginia jurisdictions.
The proposed freeze, however, would instead have a significant adverse impact on the public schools of Loudoun, Prince William and Fairfax Counties. By delaying the LCI adjustment, as Governor Kaine proposed, public schools in Northern Virginia stood to lose more than $118 million in state funding, coming at the same time that Northern Virginia schools are experiencing their largest growth in student enrollment in decades.
AOBA was asked to join with numerous other Northern Virginia business organizations, with whom we often collaborate, in urging the incoming administration to amend the budget to unfreeze the LCI adjustment for 2010; doing so was natural, given the relationship that quality public schools have to both the livability of apartment communities and the appeal that Northern Virginia commercial locations currently hold for employers and the work force. This coalition effort was successful, as Governor Bob McDonnell recently announced that he would submit a budget amendment to unfreeze the LCI adjustment, and proposed alternative funding streams to offset in the lost revenues that would otherwise result. However, the ball is now in the court of the General Assembly, which must affirm this amendment, and thus the coalition’s efforts continue.
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