Legislative Wrap-Up 2010
2010 Virginia General Assembly
Legislative Summary
NVBIA supported the state association, HBAV, in four legislative initiatives during the 2010 Virginia General Assembly. All four legislative proposals found wide acceptance from delegates & senators around the Commonwealth and all four bills have been signed into law by Governor McDonnell. Each bill has an effective date of July 1, 2010.
It is also important to note, that no anti-housing legislation passed the Virginia General Assembly this year. In all, about 850 pieces of legislation were approved by the General Assembly this year.
This marks the second year in a row that the state legislature has taken significant action to support the Virginia housing industry. In 2009, NVBIA assisted HBAV state legislation was passed to extend the validity any proffer, subdivision plat, plot, preliminary plan, final plan, conditional use permit, special use permit, special exception, construction plan, public improvement plan, site plan, or any other land use document or action that is valid and outstanding as of January 1, 2009, for a period of five years from its current expiration date, and any deadline or scheduled event specified in such document or action is extended for a period of five years, regardless of whether such expiration or schedule exists by operation of statute, proffer, permit, local ordinance, or local custom.
Below is HBAV’s brief summary of each legislative bill in the 2010 agenda.
VESTED RIGHTS - House Bill 1250 (Delegate Barry Knight).
This legislation provides that the issuance of any written order, requirement, decision or determination made by the zoning administrator regarding the permissibility of a specific use or density of the landowner's property that is no longer subject to change, modification or reversal, shall be considered a significant affirmative governmental act for purposes of determining vested rights.
In many cases, prior to beginning improvements or construction on property in Virginia, lenders require and property owners obtain a "Determination" from a zoning administrator to insure the intended use or density intended for the property is allowed by the underlying zoning classification. In most localities, such a "Determination" is a formal process. This measure will simply protect property rights and add a layer of certainty for landowners who have acquired a Zoning Determination from a local government.
STORMWATER REGULATION SUSPENSION - House Bill 1220 (Delegate Tim Hugo) and Senate Bill 395 (Senator Frank Wagner). [Governor McDonnell signed HB 1220 into law.]
These companion bills were drafted to suspend the controversial Stormwater Management Regulation of the Department of Conservation and Recreation (DCR) until 280 days after the completion of the Virginia Total Maximum Daily Loads (TMDL) Implementation Plan for the Chesapeake Bay Nutrient and Sediment TMDL is approved by the U.S. Environmental Protection Agency (EPA), but no later than December 1, 2011.
The EPA-TMDL is forecast to be completed by December, 2010. That will give DCR nearly 12 months to adopt a new stormwater regulation that will meet the allocations to be set out by the EPA-TMDL.
HBAV has consistently asserted that the previous DCR proposed stormwater regulation was not based on sound science, would have significantly increased the cost of land development in every region of Virginia and would have done little to improve the water quality of the Chesapeake Bay & its waters. Late in the DCR regulatory process, the EPA disclosed that the existing Stormwater Management Regulation has brought Virginia very close to meeting its current Phosphorous Gaol.
This measure is a compromise between and among a HBAV-led coalition of business organizations, locals governments, the Chesapeake Bay Foundation, the James River Association and the Nature Conservancy.
PROFFER PAYMENT DELAY/JOB CREATION - House Bill 374 (Delegate John Cosgrove) and Senate Bill 632 (Senator Mark Obenshain). [Governor. McDonnell signed HB 374 into law.]
These companion bills were designed to defer collection or acceptance of a cash proffer by a locality until after final inspection and before the property has been issued any certificate of occupancy.
A major impediment to the recovery of the new housing industry & job growth in many markets in Virginia is the widespread requirement the Per Lot Cash Proffers and other fees be paid to localities "upfront". In most circumstances, these proffers—which range from $15,000 in Richmond to $50,000+ in Loudoun County—must be paid in conjunction with as Application for Building Permit (and, in some cases, per lot cash proffers must be paid prior to that point in the development or construction process).
Requiring such upfront cash payments to local jurisdictions, especially in the prevailing construction & financing markets, stifles production and job creation by the housing industry. In the acquisition, financing & construction of new homes, an average of 50 companies go back to work.
WATER AND SEWER DELINQUENT PAYMENT - House Bill 407 (Delegate Glenn Oder).
As a component of the annual update of the Virginia landlord / tenant changes, this measure provides that if the landlord has not received the final water, sewer or other utility bill for the dwelling unit within the 45-day period, the landlord may provide written notice to the tenant that a portion of the security deposit is being held pending settlement of the water, sewer or other utility account, after which settlement, the landlord shall refund any remaining balance within 10 days.
Many localities or their Water and/or Sewer Authorities have the ability to place liens on property (owners) for delinquent water and sewer charges. That same authority applies to rental units. Meaning, many property owners are being required to pay the delinquent water and sewer bills for tenants that vacate their rental property. Often such bills are received long after an apartment or rental home is vacated and the delinquent charges can be substantial. This constitutes a balanced approach to this statewide issue and will allow landlords protection from such charges while providing the mechanism for payment of outstanding fees by the appropriate responsible party.
In addition to legislation, NVBIA members saw two favorable developments resolved in negotiations leading to adoption of the State’s biennial budget:
Court Fees—HBAV partnered with other business groups in a coalition that opposed a huge increase in court fees included in the Senate’s version of the budget. One proposal would have raised general district fees from $27 to $75 and circuit court fees from $60 to between $110 and $500 (for cases involving less than $1 million), and from $160 to $1,000 (in cases involving more than $1 million). At those levels, it would have cost more to file a civil suit in Virginia than any other state. Fortunately, the House was not willing to go along.
The measure would have significantly increased the cost of doing business for commercial property and multi-family owners seeking to exercise their legal rights with delinquent tenants in District Courts. In the final Budget Agreement, District Court fees were raised from $27 to $30. Circuit Court fees were raised from $60 to $100 if suing for under $50,000; from $110 to $200 if suing for under $50,000 to $100,000; increased from $160 to $250 if suing for $100,000 to $500,000; and increased to $300 if suing for over $500,000.
Tax Liability—NVBIA & its members, in conjunction with HBAV and other business interests, led a successful effort to reach a compromise on Virginia’s treatment of certain income under the state tax system, in this case cancellation of debt income (CODI).
Often, Virginia conforms its tax system with the Federal Internal Revenue Code. For 2009, the IRC allows qualifying companies to defer recognition of their tax liability on CODI until 2014 and then to pay the tax over the next four years. Because of the state’s acute financial constraints, the budget conferees did not think it prudent to mirror this deferral through conformance of the state tax system with the IRC.
However, following the Senate’s approach, the conferees did adopt a three year payment plan for CODI incurred in 2009, with ratable payments in 2009, 2010 & 2011 being permitted. This allowed the entire tax liability to be collected by the state within the timeframe of the current biennial budget cycle while providing some relief to the taxpayers, many of whom are members of the development & construction industry.