| From the President |
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 Budget deficit, fiscal malaise, and severe cold spell aside, there is a perceptible air of excitement in the business community surrounding the inauguration of Governor Bob McDonnell and the launching of the new Administration. The Governor's well-orchestrated transition process, the caliber of his appointments, his examples of attending to the homeless, the imprisoned and the disadvantaged are all clear signals of an administration that will be sensitive, disciplined, focused, and well-organized. The Virginia Chamber looks forward to working with the team, first to weather the downturn and then, as conditions permit, to restore our Commonwealth to a posture of economic leadership and prosperity for all. Hearty congratulations to Governor McDonnell, his cabinet and staff. And a farewell note to former Governor Tim Kaine. He leaves the Governor's Mansion with a deserved reputation for being perhaps the nicest, most approachable, thoughtful and resilient Governor in recent memory. He was dealt several difficult hands and played them to the best of his considerable ability. We are grateful for his many prominent economic development successes, his integrity, his frequent association with the business community and his obvious affection for the Commonwealth. Finally, a word about Commerce and Trade cabinet nominee Robert Sledd, the former Chairman & CEO of Performance Foods. It is with a real sense of disappointment that I note he has been withdrawn from consideration in the face of political opposition because of his corporate board seats. He brought to state government a deep reservoir of business acumen, a long track record of business success, a no-nonsense demeanor and a willingness to forego compensation at taxpayers' expense to serve the people of Virginia in a critical post. That he serves on the Boards of Directors of two Virginia corporations, Universal Corporation and Owens and Minor, not only adds to the breadth of his experience but would have bolstered his resolve to strengthen Virginia's business climate. Let's remember that Commerce and Trade is first and foremost the entity that markets Virginia to the world. Bob Sledd would have done it well. We welcome James Cheng to the post and look forward to working with him. |
| Observerations on the First Week & More |
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Beginning today, we will provide you with weekly updates of some of the more important and pressing things going on in the 2010 General Assembly, and if we can find it, the silliest bill of the session. If you can find one before we do, send it in.
On a more serious note, these are still challenging times and our work in the coming weeks will be to make sure we emerge from this "long" session - as we did in 2009 - having done no harm. That's our message to legislators again this year: "Do no harm. Help us recover. Don't make things more difficult."
I expect most legislators share this view. To act otherwise would only prolong a recovery that needs to get underway.
Week one of the session started as most of them do - slow. With 20 new members in the House and two in the Senate, the bodies had to organize. That accomplished, Governor Kaine offered his farewell speech to both bodies Wednesday evening. Much of it recited his many accomplishments, while some of it addressed the remaining challenges.
"The biggest challenge facing us is the decades-old gridlock in transportation investments. I had hoped to solve that issue as Governor but could not convince you, the General Assembly, that we needed to invest new state money in roads to maintain our competitive edge..." he stated. We agree. That rock gets kicked down the road a bit further to the new administration which has promised to tackle it.
"A second challenge," Governor Kaine noted, "is the need to keep our higher education system in the position of national pre-eminence that it currently enjoys......" Again, we agree. And, there are other challenges.
By the time you read this, Governor Kaine will have left office and Governor-elect McDonnell will have assumed his new responsibilities. We wish both the very best in their new endeavors. We thank Governor Kaine for his dedicated service, sacrifice, leadership, and vision.
Now, the work begins. In the remaining 55 days, we will touch on some of the more pressing issues before the General Assembly that may be of interest to you. We hope some will stir you to action and that you'll refer frequently to the "helpful tips on navigating the session" found later in this newsletter. If we miss something that you have an interest in, please let us know. Let's get started.
-Budget. The General Assembly now has the task of responding to former Governor Kaine's budget proposals and developing their own budget - balanced - before they go home. Even in a 60 day session, that will be a challenge.
The proposed budget offers much to chew on, but two things stand out that will get attention.
One is Governor Kaine's proposal to eliminate the state's $950 million a year payment to localities for car tax relief and replace it with a 1% surcharge on individual income taxes. That proposal is not getting a warm reception.
The other is the Governor's proposal to eliminate the discounts retail dealers receive for collecting and remitting a variety of sales taxes. His explanation is this:
"..... this budget incorporates a $120 million savings by eliminating the 'dealer discount' for retailers. While it once made sense to compensate merchants for the labor costs of collecting sales tax on behalf of the Commonwealth, the digital era has rendered this discount both unnecessary and archaic. Virginians pay sales tax with the expectation that their dollars are used to fund public services - this budget ensures the full amount of the tax payments will be used to support critical state programs."
Many retailers respectfully disagree with this justification, and will press their case in the weeks ahead. Most see it as a tax increase since they would now be asked to collect and remit the taxes, at their expense.
-Tax. A ton of bills have been seen to raise taxes or grant "tax relief" for something people want to encourage. We'll wade through these as they come in, but my guess is that anything that negatively impacts revenue will be hard to sell in these difficult times. Raising taxes will be too.
-Healthcare. Bills to make healthcare more affordable, accessible or expensive will compete for time again this year. At the top of the more expensive list - for a second year - is one to mandate coverage for autism related services. Three bills have been dropped so far to address what did not pass last year, in part because those bills were eventually made to apply to the state health plan. When their impact on just the state health plan was learned, they were rejected.
Two of the bills this year are interesting (HB 3031/O'Bannon; SB 464/Howell) in that they ask that the state health plan be exempted until 2015, presumably again because of costs. Their impact on small employers would be immediate.
-Unemployment insurance. Efforts to again expand eligibility and/or increase benefit costs will get some time despite the fact that the state's trust fund (used to pay benefits) went broke last fall and has been borrowing money from a federal trust fund - which is also broke - to pay benefits.
These efforts come at a time when your 2010 state tax bill will be considerably higher than what you paid in 2009. Watch that mail box.
SB 239/Watkins is one such bill. It would permanently expand eligibility for some and further increase your costs in order to quality for a one time $125 million pop in federal stimulus or "UI Modernization" dollars. It's the same issue revisited from the 2009 veto session, which the General Assembly rejected. We will urge the General Assembly to reject it again.
Several good bills (HBs 177, 178/Morrissey) have been dropped for a second year. Both would disqualify "seasonal workers" from obtaining benefits if they knew when they accepted the job that it was for a certain period of time.
-Workers' compensation. Efforts to expand or reign in costs in this area will compete for time as well. One good measure to control medical costs will be introduced by the Chamber's Business Coalition on Workers' Compensation and can be reviewed here in a letter sent last week to the General Assembly. The measure being offered is SB 367/Puckett. The printed version provided in our paper and posted on the web will be amended to request that the Workers' Compensation Commission study the matter and address it by rule. That will effectively remove a complicated issue from the General Assembly and put it in a Commission that deals with these issues daily.
If your company is not a BCWC member, please join. It's a powerful and respected group that gets results. Since 1993, it's been free! That can't be said about most things.
-Workplace. Just a few bills to comment on here. A measure that nearly passed a few years back has returned. It's the "gun in the car" bill (HB 171/Pogge) that allows guns stored in locked vehicles on private property even where the property owner objects. The bill has made its round in other states and now it has returned to Virginia. It pits "Second Amendment Rights" (which are not absolute) against private property rights. It's divisive and unnecessary.
Also returning for another year is the "potty" bill. It (SB 34/Barker) would require retail stores with employee only restrooms to make those restrooms available to certain customers or face a $100 fine.
Finally, another Barker bill, SB 225, requires all public contractors/subcontractors to register and participate in a federal Electronic Work Verification Program (E-Verify or similar program) to determine that their employees are legally eligible for employment in the United States. This state law proposal is patterned after a recent federal rule change, and was heard over the summer by the state's Small Business Commission. That Commission never acted on the bill. It's unnecessary if employers complete the required I-9 process.
-And, your 2010 lobbying team. Very little discussed here or in articles below can be adequately dealt without the lobbying team you have put in place. Let me introduce them to you and encourage you to contact them with your concerns or questions.
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Keith Cheatham covers budget, tax, health care, workers' and unemployment compensation insurance, labor and employment law issues.
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Tyler Craddock covers transportation, civil justice, development and land use issues.
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Hugh Keogh covers economic development, workforce training, and tourism issues. |
| The View from the Back Office |
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Tyler Craddock
The 2010 session of the General Assembly is underway, and we here at the Virginia Chamber have hit the ground running. While the budget will be the issue that is on most folks' minds, there are others that are being addressed. To be sure, the session is but a few days old and some things will need a few more days to season, but being that as it may, here are some early thoughts and observations:
-Transportation. Word around Capitol Square is that the much-discussed "fix" for transportation may not come during the current regular session of the General Assembly. Instead, according to talk around the proverbial water cooler at the corner of Ninth and Broad, it may come later this year in a special session.
Choosing to address transportation later in the year makes sense. There are many pressing issues that are addressed in any regular session of the General Assembly. Everything from policies affecting taxation, growth, the court system, local governments and other various and sundry topics is debated during regular sessions of the General Assembly. Oh, and do not forget that other minor issue: the state budget. While there are certainly some transportation issues that can and should be addressed during the regular session, such as a performance audit of VDOT, it would be foolhardy to also try and craft an entire transportation plan in that same sixty-day window.
In addition, a special session later in the year would give the Governor and the General Assembly the benefit of at least one and perhaps two more quarters of fiscal data. As such, they would go into this venture with a clearer picture of what the future might hold in terms of the economy and receipts from existing revenue streams.
-Civil Justice. As we have written about already, we have two modest tort reform bills this session.
One would allow a party to a civil action to use depositions in support of a motion for summary judgment and motions to strike. This legislation makes it easier for the court system to clear the docket of cases where the preponderance of evidence clearly and decisively favors one party and to do so in a manner that would prevent unnecessary trial expenses. Virginia is the only state in the United States that does not allow this common-sense practice. As a result, defendants unable to remove a matter to federal court are left without a practical summary judgment remedy and must bear the costs of trial before a court may rule to strike the case. Passage of this legislation would cut litigation costs for Virginia businesses and enhance the reputation of Virginia's civil justice system.
The other would provide for an offer of judgment system for civil cases similar to that in the federal system. A defendant in a civil action who realizes that they have liability would be able to make an offer of judgment to the plaintiff. If the plaintiff accepts, the court enters judgment, but if the offer is rejected and the trial results are not more favorable to the plaintiff than the offer, the court shall deny the plaintiff recovery of its post-offer costs and order the plaintiff to pay the defendant's costs from the time of offer. This legislation would encourage more cases to be settled out of court as both defendants and plaintiffs would have ample incentive to avoid trial. This change would expedite judgments for plaintiffs in cases where the defendant acknowledges liability, and allow the Commonwealth to save money and lower the cost of defending suits for Virginia businesses. Moreover, this legislation represents an additional step that Virginia can take to strengthen its pro-business climate and maintain its ranking as the best place in America to do business.
You can read more about both bills by clicking here.
Both bills are being carried by Senator Harry Blevins and Delegate John O'Bannon. The summary judgment legislation is HB 309 and SB 363. The offer of judgment legislation is HB 310 and HB 366.
We are fortunate to have the support of the following for these two bills:
American Insurance Association Arlington Chamber of Commerce Chesterfield County Chamber of Commerce Fairfax County Chamber of Commerce Greater Williamsburg Chamber and Tourism Alliance Hampton Roads Chamber of Commerce Norfolk Southern Corporation The ILEX Group Independent Insurance Agents of Virginia, Inc. State Farm Insurance Virginia Association of Defense Attorneys Virginia Chamber of Commerce Virginia Hospitality & Travel Association Virginia Peninsula Chamber of Commerce If you would like to add your company, chamber or association to this list, please let me know and we will sign you up! -Land Use & Development. Because of the continuing historic downturn in development and construction, particularly in then housing industry, we have not seen the glaring focus on growth issues that has characterized some past sessions of the General Assembly, and we have not seen to this point the avalanche of so-called growth control bills. One bill of note that the Virginia Chamber strongly supports is HB 374, which would prohibit collection of a cash proffer payment until the period between the final inspection and issuance of the certificate of occupancy (CO). Under current practice, cash proffer payments are collected when the builder pulls a building permit, which is usually months earlier in the process. Passage of this bill will keep builders from having to carry this cost and the interest it accrues on their balance sheets for months, thereby helping improve their cash flow and prevent home buyers from ultimately paying those accrued interest costs. Passage of this bill could help stimulate more housing production in Virginia. That is important when you consider that over 55 businesses, many times local small businesses are usually involved in the acquisition, financing and construction of every new home in the Commonwealth. Another proposal we are following is legislation (HB 1071/Athey & SB 420/Vogel) that would modify Virginia's Urban Development Area statutes. This legislation would require that UDA's in localities with higher populations allow for denser development and provide for other changes. This legislation represents the work of discussions between local governments and the business community. In addition, there are several bills that in one way or another seek to delay implementation of the new stormwater regulations being promulgated by the Department of Conservation and Recreation. While they vary in approach, there is shared concern about the effect these regulations would have on Virginia's economy. Certainly, the Chamber shares that concern and will support the efforts of those legislators who are trying to delay implementation of these flawed regulations. On a related note, the Department of Conservation and Recreation voted last week to allow for an additional thirty days of comments on the proposed stormwater regulations after a number of groups, including the Virginia Chamber, requested the comment period based on the fact that substantial changes were made to the regulations prior to their being passed in December. A copy of our letter can be seen here. |
| A Year for Energy & the Environment
David Anderson
Governor McDonnell recently announced his choice of Doug Domenech to serve as Secretary of Natural Resources and Maureen Matsen to serve as Deputy Secretary of Natural Resources.
Domenech served as a senior official at the U.S. Department of Interior during the Administration of George W. Bush, was chair of the Loudoun County Republican Party and was the campaign manager for Mike Farris' 1993 run for Lt. Governor. Matsen is an attorney who has served for many years in the Office of the Attorney General, most recently as Deputy Attorney General. Domenech and Matsen are both dedicated and talented public servants and we look forward to working with them over the next four years.
The Governor also announced his intention to retain David Paylor as Director of the Department of Environmental Quality. Paylor has a done a very fine job of managing the Department and has a well earned reputation for balance and fairness. The Governor has not yet announced his choice to lead the Department of Conservation and Recreation, the other major environmental regulatory agency within the Natural Resources Secretariat.
At the time of this writing, about 2000 bills have been introduced in the General Assembly and more are on the way. This is shaping up to be the year for energy legislation. Bills have been introduced transforming electric rate structures, imposing new energy efficiency standards, effecting clean energy financing, revising Virginia's energy plan, and encouraging off shore drilling. Several bills have been introduced involving green house gas emissions. On a more general regulatory level, Delegate Joe May has put in a bill that would increase the size of the State Corporation Commission from three to five judges. The Commission, with regulatory authority over electric utilities, plays a large role in the development of the Commonwealth's energy policy and also plays an increasing role in the development of environmental policy.
Senator Frank Wagner is expected to introduce a bill that would increase the authority of the Joint Commission on Administrative Rules. Currently, the Commission, with the concurrence of the Governor, can suspend regulations before they go into effect. Wagner's bill would increase the power of the Commission, with the concurrence of the Governor, to suspend regulations that are final and in effect. This would significantly increase the ability of elected officials to provide a check on regulatory activity by government agencies across the board. |
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| Chamber Announces 2010 Annual Meeting & More |
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-Please join us for the Virginia Chamber's Annual Meeting - January 27 at 3:30 p.m. at the Richmond Marriott Hotel. This meeting provides an excellent opportunity for you to meet the new Chamber leadership and Board members and hear about issues coming before the 2010 General Assembly Session. Also on the agenda is a presentation from Brian Gunderson, Vice President and Managing Director of the U.S. Chamber's Campaign for Free Enterprise. He will speak on their initiative to renew the spirit of free enterprise in the nation. Gunderson has served at the highest levels of the U.S. government and has broad experience in trade, tax and economic policy, national security issues, management of large organizations, government relations, and communications. Please contact Maryann Crowder at 804 237-1458 for more information. -Office space available. The Virginia Chamber has space available in its building, just five blocks from the Capitol, for a one or two person business staff, either permanently or for the duration of the General Assembly. Ideal working environment, conference room access, little or no overhead. For information, please contact Maryann Crowder at 804 237-1458. |
| Navigating the 2010 Session - Helpful Tips |
Keith Cheatham With the 2010 Session in progress, there's no better way to keep up with it than to bookmark the General Assembly's website. There's a wealth of information available from here. Don't know who your state legislators are? Click here to find them. Just fill in the required fields and save the information. Do it for both your home and work address. You may find that you have four contacts. We'll be asking you often in the coming weeks to contact them. Visit our website often. It's user friendly and full of important information. Forget your "member's only" password? No problem. Contact Keith Cheatham at 804 237-1456. Need more information, or have questions or comments about the upcoming session? Contact Keith Cheatham at 804 237-1456. Watch for our timely Action Alerts and Chamber Briefings in your inbox and on our homepage under "Government Affairs". | |
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1.27.2010
Richmond Marriott
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CALENDAR |
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January 2010
Virginia Chamber Annual Meeting
January 27 in Richmond
Board of Directors Meeting
February 2 in Richmond
February 9 in Richmond
February 23 in Richmond
Spring 2010
Board of Directors Meeting
May 6-7 in Pentagon City
Hugh Keogh Retirement Gala & Roast
June 16 in Richmond
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| Giving the Chamber a Stronger, More Effective VOICE! |
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