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2007 General Assembly Update

 Week Ending 01/19/07

During the first 10 days of the 45 day session, over 2,500 pieces of legislation have been introduced. There are a large number of bills that have an impact on the Retail Industry. Click here for the Retail 2007 Profile. The two main topics of discussion during the first 10 days have been Transportation and The Electric Restructuring Act.

Transportation

The House and Senate Republicans’ introduced their Transportation Plan on Thursday, January 18th. Click here for the plan. This very early proposal will create a starting point for negotiations. One element of the proposal that may concern commercial property owners is the component that will authorize, by ordinance, localities in Hampton Roads and Northern Virginia to increase the real estate tax rate for commercial property an additional $.30 cent per hundred. This proposal is being supported by the Fairfax Chamber of Commerce as one means of addressing the severe traffic problems of Northern Virginia. Concern for commercial property owners in other localities will likely follow because those localities will seek the same authority to increase their commercial real estate tax rate if their traffic problems increase. The RMA will continue to monitor the negotiations.

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Electric Restructuring

The RMA has actively participated in the deregulation of the electric utility industry since 1999 when the RMA became a member of ALERT, (Alliance for Lower Electric Rates Today). The RMA sought to aggregate its members’ electric load in order to obtain lower rates. Competition has not occurred and may never occur. With the capped rates targeted for removal on December 31, 2010, it is important that Virginia goes back to a regulated model either in 2007 or 2008 (NOTE: when Maryland removed their caps, electric rates rose as high as 70%). The RMA is now a member of CFER (Coalition for Fair Electric Rates). Their guiding principals are:

  • Allow the opportunity for electricity rates not only to increase, but to be reduced as well.
  • Encourage more performance based regulation models for determining rates andensuring that any premium profit levels available to the utility are earned by meeting customer needs.
  • Ensure authority to review utility costs for reasonableness and prudence.
  • Ensure that Virginia customers pay only for generation units, other capital investments and costs that will serve Virginia customers.
  • Retain flexibility that allows businesses, under certain circumstances, to purchase electricity from other providers, which may be desirable in the future.

If any proposed legislation falls short of these principles, CFER will strongly urge the General Assembly to wait until the 2008 Session to act, thereby allowing the Electric Utility Restructuring Commission’s Capped Rates Subcommittee to complete its review and recommendations on this important, far-reaching policy initiative.

If you support the principals of CFER, e-mail the attached copy of the principals to each member of the Senate and House Commerce and Labor Committee and let them know that you support the principals. Click here for House and Senate Commerce and Labor Committee members and click here for the CFER principals.

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Minimum Wage

There have been 13 pieces of legislation introduced that would raise the minimum wage in Virginia. Most would take the minimum wage to the suggested federal rate of $7.25/hr.; however, there is one bill introduced by Del. Callahan that would raise the rate to $8.19 over a three year period and every year there after index the minimum wage based on the consumer price index.

The RMA’s legislative policy opposes any increase of the minimum wage at the state level, noting that any increase should be accomplished at the federal level. The House of Representatives has passed a bill that would take the minimum wage up to $7.25/hr. This bill is now before the Senate.

E-mail each member of the Senate and House Commerce and Labor Committee and let them know that you support any change to the minimum wage only at the federal level. Click here for the Senate and House Commerce and Labor Committee members e-mail.

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Sales Tax Holiday

There are a number of bills what would expand items included in the annual August three day Sales Tax Holiday by including computers and computer components. Members of Senate Finance were adamant last year that if they approved a 3 day sale event for clothing and school supplies, the RMA and other retail groups would pledge that we would not come asking for an expansion in exempt items in 2007.

Again this year there is legislation that would create a three day sales tax holiday in October for certain energy efficient appliances.

Hurricane Preparedness, new legislation introduced by Senator Ken Stolle of Virginia Beach, would provide beginning in 2008, for a seven-day 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.

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BPOL Tax

Business Professional Occupational License Tax

The RMA supports the outright repeal of this unfair tax on gross receipts. There is legislation by Del. Frederick that would repeal the BPOL tax. This bill will have the RMA’s support but will not likely gain support by other members of the House Finance Committee. Localities will argue that if the General Assembly takes away their BPOL Tax revenue, they would have no way to replace the lost revenue. The RMA would support a study conducted by a neutral party that would look at alternatives to BPOL. We will encourage Del. Frederick to introduce similar legislation in the 2008 General Assembly.

Del. Purkey, Senator Watkins and Senator Saslaw have introduced legislation that would clarify that the motor fuels tax is exempt from gross receipts for purposes of the BPOL tax. This bill has passed House Finance.

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