| From the President |
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 As our winter board meeting drifts into the background, let me welcome our new members of the Board of Directors and take just a minute to reflect on the private sector's involvement in keeping Virginia a great place in which to do business. For well over a decade, the Virginia Chamber has used the tag line "Business Leadership for Virginia's Future." No where is that slogan better manifested than in the composition, focus and sincerity of the Virginia Chamber board. These are business men and women from all across Virginia, quite literally Abingdon to Virginia Beach and Martinsville to Tysons Corner. Their common bond is an affection for Virginia as a business location and an ardent desire to improve it and concomitantly improve the quality of life for our citizenry. These values are always clearly borne and demonstrated by our chairs. Dorcas Helfant-Browning, our 2009 chair, spread herself thin in participating in all of our 2009 events, inspiring staff to greater heights and solidifying the Chamber's access to our new Governor. She also has represented the interests and mindset of her native Hampton Roads region extraordinarily well in board discussions. She has been tireless in her support of the Chamber and Virginia Business. Her successor, Clint Morse, whose background appears later in this issue, can be expected to be equally tireless, on point and a strident defender of Virginia's business climate. We are all extremely fortunate that for years the Chamber has been able to attract this caliber of leadership and we fully expect that to continue. For all the uncertainties ahead in 2010, we can be comfortable that our leadership will be providing "Business Leadership for Virginia's Future." |
| New Officers & Directors Appointed at Annual Meeting |
Cyndi Miracle The Virginia Chamber has named Clinton Morse, an attorney and shareholder for LeClairRyan in Roanoke, as Chairman of its Board of Directors for 2010. In his new role, Mr. Morse will lead the Virginia Chamber's aggressive advocacy efforts to spur job creation and economic growth in the Commonwealth. Appointed at the Chamber's Annual Meeting held on January 27, he succeeds Dorcas Helfant-Browning, CEO & Managing Partner of Coldwell Banker Professional Realtors in Virginia Beach. "Clint adds a wealth of knowledge and experience to the leadership of the Virginia Chamber as we work to renew our state economy," said Hugh Keogh, Virginia Chamber President & CEO. "As one of Virginia's leading labor and employment attorneys, he is a passionate and highly effective proponent of a pro-business environment that will create economic growth and well paying jobs." Mr. Morse joined the board in 2004 and also serves as a member of the Chamber's Management Relations Committee. He has since served as First Vice Chair and Vice Chair for Southwest Virginia on the Chamber's executive committee. Read the full news release. We also want to welcome our new officers and directors, some of whom are incumbents moving to new positions on the board: Whittington Clement, Partner and Head of the Virginia Government Relations Team for Hunton & Williams in Richmond, as First Vice Chair;
Tom Palmer, Executive Vice President for SunTrust Bank in Richmond, as Vice Chairman - Finance;
Suzy Kelly, CEO of Jo-Kell Inc. in Chesapeake as Vice Chairman - Hampton Roads;
Jack Rust, President of Rust & Rust, P.C. in Fairfax as Vice Chairman - Northern Virginia;
Gary Thomson, CPA, Regional Partner-In-Charge for Goodman & Company, LLP in Glen Allen as Vice Chairman - Piedmont;
Linda Lawrence Dalton, Secretary/Treasurer of Lawrence Distributing Company in Danville as Vice Chairman - Southside;
Carlos A. Castro, President & CEO of Todos, Inc. in Woodbridge;
Matthew C. Harris, General Manager for The Boar's Head in Charlottesville;
Karen Henderson, President & CEO of Warrenton-Fauquier Chamber in Warrenton;
Stephan W. Milo, an Attorney with Wharton, Aldhizer & Weaver, PLC in Harrisonburg;
Samuel A. Schreiber, Regional Executive, Mid-Atlantic for Wachovia - A Wells Fargo Bank in McLean;
Clifford A. Cutchins, IV, Partner at McGuireWoods LLP in Richmond;
Kent D. Farmer, President & CEO of Rappahannock Electric Cooperative in Fredericksburg;
Patrick W. Farrell, CEO for Henrico Doctors' Hospital in Richmond;
Tammy M. Finley, Vice President, Employment Counsel for Advance Auto Parts in Roanoke, and
C. Burke King, President, Virginia Market, Anthem Blue Cross & Blue Shield in Richmond. |
| Observations on Week Three & More |
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Week three has concluded, and only 16 more workdays - counting weekends - remain until "crossover," that magical time of year when each body has acted on its own bills and now can only consider bills from the other body.
There's a lot to be done in the next two weeks. Most bills of any controversy have not been dealt with, but that will change this week. Time is running out.
Here's what's hot this week. If we miss a bill that's of concern to you, speak up.
-Budget/Tax. The General Assembly has the task of responding to former Governor Kaine's budget proposals - of which there are two - and developing their own before they go home. With a sputtering economy and stale revenues, that will present a challenge.
The proposed budgets offer much to chew on, but several things still remain unresolved and need your attention.
One is Governor Kaine's proposal to collect $144 million in this budget cycle by accelerating the sales tax collected and remitted by retailers. Some retailers believe the proposal is a bit aggressive and will try to scale it back.
Similarly, retailers are objecting to Governor Kaine's proposal to eliminate the discounts they receive for collecting and remitting a variety of sales taxes. It's a $121.8 million savings to the state over two years, but many retailers see it as a tax increase since they would now be asked to collect and remit the taxes, at their expense.
Finally, another $60 million "savings" proposed by outgoing Governor Kaine involves de-conforming from the domestic production tax deduction allowed by federal law.
HB 614/Purkey and SB 545/Colgan are the annual IRS conformity/de-conformity bills, which haven't been controversial in years. But this year, language was inserted to eliminate a key deduction available to manufacturers - one that has been available to manufacturers for six years.
Section 199 of the IRC was approved by Congress in 2004, and it was the 2005 General Assembly that chose to conform to that provision. The purpose of the federal deduction was to lower the effective tax rate on manufacturing. To remove it now after six years means the effective tax rate on manufacturing will go up
The other provisions in both bills are not really a problem because they are new. No one has ever used them to date. Section 199 is not new. Everyone eligible has used it for six years. To eliminate that deduction now means taxes will go up on Virginia businesses - mainly manufacturers - by $30 million annually.
IRS conformity is one of those touchstone "pro-business" policies that keep Virginia at the top of the heap. It's important that Virginia continues to be viewed as a conformity state.
Please ask your House and Senate members to remove the offending provision and pass the bill.
-Healthcare. While the Congress still appears to be in limbo on heath care "reform", state bills to make healthcare more affordable and accessible - or more expensive - are piling up. Many will be heard this week.
Two are HB 1263/L.Ware and SB 622/Wampler. Both prohibit dental insurers from negotiating discounts for services that a patient (you and your employees) pays for out of pocket once the annual spending limit has been reached. This proposal won't affect your medical or dental insurance premiums, but it could mean you'll pay more the next time you visit your dentist's office.
It's a bit hard to wrap your head around the first time you study it, but simply put, the General Assembly should not intervene in things that are now settled by contracts. To learn more about this new issue, please go here. A number of bills have been introduced again this year that would require (i.e., mandate) insurers to cover educationally related services for autism spectrum disorders. Two, HB 303/O'Bannon and SB 464/Howell, will be heard this week. By anyone's estimate, these mandates would create one of the most expensive health insurance mandates in Virginia. Advocates of the bills last year estimated the cost at $1.90 per member per month, and those bills contained benefit caps. This would total over $41.4 million in yearly premium increases for the fully insured group market. Other estimates predict a much higher cost. Oddly, both bills require fully insured businesses - small and large - to cover these services when the bills pass, but exempt the state's health plan from covering its own employees until 2015. Just last year the General Assembly recognized the fairness of requiring the Commonwealth to provide the same benefits to state employees that it mandates on its smallest businesses. Seems fair enough, yet these bills seek to escape that year old policy because the Commonwealth knows these things are expensive, and cannot afford the higher costs now.
Contact your legislators NOW and ask that they defeat these measures.
-Unemployment insurance. Efforts to again expand benefit eligibility and/or increase benefit costs are on the plate this week.
SB 239/Watkins, SB 562/Puckett and HB 647/Armstrong are three such bills. Any one of them would permanently expand eligibility for some and further increase your business costs in order to qualify 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. You should encourage your legislators to reject them again.
You can read more about this important issue here.
Two good bills not yet mentioned are HBs 177 and 178/Morrisey. Both would deny benefits to workers who sign on knowing that their work is temporary and for a certain period of time. Both bills hit a roadblock last year (under the Kaine administration) when some objected that these measures were taking away a person's benefit rights. -Workers' compensation. Two soon to be identical Business Coalition on Workers' Compensation bills are awaiting action. HB 1326/Merricks and SB 367/Puckett provide, among other things, that the Workers' Compensation Commission appoint a task force to develop recommendations for regulations authorizing reductions or discounts for multiple surgical procedures performed during a single operative session, establishing an employer's limits of pecuniary liability for an assistant-at-surgery, establishing alternative methods to determine fee disputes, and related matters. These are good business bills and should be supported. Both are aimed at getting medical costs under control.
-Workplace. A NRA-backed bill (HB 171/Pogge) to allow guns in locked vehicles while on your property will likely get some attention this week. It's made its rounds in other states with some success. It's not needed. Most businesses have no policy prohibiting this and those that do, do so for good reason. Contact with your legislators this week are requested.
Two bills we wrote about last week are still awaiting action. SB 34/Lucas "prohibits an employer from classifying an individual as an independent contractor if he is an employee" and then goes into some detail defining what that means and sets up penalties for violating it. The patron has indicated the measure will not go forward after business concerns were expressed to her.
SB 377/Puckett appears similar. It establishes penalties for employers providing construction services that wrongly classify their employees as independent contractors. We're not sure what the patron intends to do with this measure, but there is business opposition to it. A Richmond-based law firm - Hunton & Williams - assisted our efforts in explaining precisely why these new bills were not needed.
Two bills we've not given much attention to yet will be heard this week. One is broad, the other narrower. Both require employers to use the (for the most part) voluntary federal E-verify program to verify the legal work status of new hires.
HB 737/Albo is the broader bill and requires the program's use for most employers. SB 225/ Barker is narrower and applies to contractors who do work with local and state governments. Neither bill is necessary.
The federal I-9 form already requires employers to "verify" this information. Requiring a second test to confirm the first is duplicative, time consuming and has problems.
Federal and state laws are already in place for employers who game the system, so these new efforts are not necessary. Contact your legislator NOW to express your concerns.
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| Governor Announces Jobs Package |
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Governor Bob McDonnell unveiled his job creation package at a January 26 press conference that was noteworthy for the palpable excitement that surrounded it and for its substance. Flanked by some two dozen legislators of both parties and many regions of Virginia, the Governor struck a bi-partisan tone that underscored the importance of getting Virginia moving again economically.
The event also emphasized the role of Lieutenant Governor Bill Bolling as the Chief Jobs Creation Officer for the Commonwealth. Also introduced were Secretary of Commerce and Trade James Cheng (a former Virginia Chamber Fantastic Fifty winner) and senior advisor Bob Sledd. The team is in place.
The chief ingredients to the Governor's $50 million package were these:
- More than doubling the Governor's Opportunity Fund by an increase of $12.1 million by 2011,
- Committing $5 million to a state mega-site fund,
- Expending $2 million to establish new economic development offices in China, India and the United Kingdom during the biennium,
- Investing more than $10 million in bio-tech and life sciences initiatives,
- Increasing funding for the Virginia Tourism Corporation by $3.6 million in each year of the biennium while increasing the Governor's Motion Picture Opportunity Fund by $2 million in 2011, and
- Increasing the Virginia Jobs Investment Program by $6.5 million in FY 2011.
These actions represent a true and dramatic commitment to enhancing Virginia's competiveness in the global marketplace. We are grateful and await their bipartisan support in General Assembly. |
| The View from the Back Office |
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Tyler Craddock
-Tort Reform Bills Update. Tort reform legislation introduced at the request of the Virginia Chamber (HB 309/O'Bannon and HB 310/O'Bannon) has been referred to the Small Business Commission for further study over the interim. This will give the business community and members of the General Assembly an additional opportunity to examine these bills and assess how their passage would improve the business climate in Virginia. Over the course of the year, the Chamber staff will continue to work with all interested parties to bring these needed reforms to fruition.
-Speaking of Tort Reform. Last week, we wrote about legislation (HB 465/Herring) that was far from tort reform - in fact it might even be called tort de-form. It is certainly one of the most hostile, anti-business bills this session. This proposal would provide that if a jury awards damages in excess of what the plaintiff originally demanded, then the plaintiff could be allowed to amend their complaint and be awarded the increased damages. The problem is that this introduces a great amount of uncertainty into the process for Virginia businesses. If a plaintiff files a complaint for a certain amount, then the defendant should know what their exposure is so they can proceed accordingly. This bill would toss that concept out the window. Instead, this proposal would make every business subject to greater uncertainty and the potential victim of a runaway jury.
This bill had been reported from a House subcommittee on a narrow 5-4 vote. But, a funny thing happened on the way to full committee. The business community (including the Virginia Chamber and Chamber members like the Independent Insurance Agents of Virginia, State Farm, Geico, etc.) and other affected stakeholders lobbied the full committee against the bill. In the end, the bill was soundly defeated in the full committee.
-Proffer Bill Advances. Legislation supported by the Virginia Chamber (HB 374/Cosgrove) that would prohibit collection of a cash proffer payment until the period between the final inspection and the certificate of occupancy (CO) has been approved by the House and sent to the Senate. In the floor debate, Delegate Bob Marshall tried to amend the bill in a manner that would have effectively gutted the legislation. Fortunately, the Marshall amendment was soundly defeated on a 26-73 vote. On final passage, Delegate Marshall again spoke against the measure. He was joined by Delegates Kaye Kory and Jim Scott. The final vote for passage was 71-27.
A Senate version of this proposal (SB 632/Obenshain) will be heard this week.
-UDA Bills Explained. Several members have asked about legislation (HB 1071/Athey and SB 420/Vogel) that would amend current provisions regarding Urban Development Areas (UDA's). HB 3202 (2007) contained several land use provisions. One of those required certain localities to create UDA's to accommodate future residential and commercial growth. Since that time, multiple stakeholders have suggested improvements and clarification to the statute, and the joint subcommittee on land use and development co-chaired by Delegate Athey and Senator Vogel has likewise discussed this issue. This legislation is the fruit of that discussion.
The major provisions contained in this legislation can be viewed by clicking here. As this legislation moves through the process, we will monitor it closely and report any significant changes.
-Two Good Bills. We are always on the lookout for the silliest bill of the session. We already have reported one. I'm sure there are others. But, we are also on the lookout for really good bills. Two good ones deal with transportation.
The first (HB 391/Lohr) lowers the width required for streets in cities and towns as a condition of receiving state funds. This will be a cost saver for the Commonwealth and the development community. This legislation has been approved unanimously by a House subcommittee.
Another (SB 551/Barker) "provides for more limited review by VDOT when a property being considered for rezoning has already been subject to a VDOT review in connection with development of a local comprehensive plan". Again, this would be a cost saver for the business community as well as the taxpayers.
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| Energy & Environmental News of Note
David Anderson
At week's end, there seemed to be agreement among the various stakeholders on language to delay the effective date of the Department of Conservation and Recreation's stormwater regulations. At last count, there were six separate bills delaying the regulations.
The basic issue has been to delay the regulations so they can be revised to be consistent with the EPA's ongoing regulatory action to control the flow of nutrients into the Chesapeake Bay while also providing some certainty that the process will have a predictable end. The compromise language would provide that the regulations be delayed for 280 days after the conclusion of the EPA process but no later that December 2012. As of this writing, some technical details are still being worked out to ensure conformity with the Administrative Process Act.
Delegate Herring's effort to have the state transportation plan include a strategy for greenhouse gas emissions reduction came to an end when her bill, HB 25, died in committee.
Several bills have been introduced dealing with offshore energy production. Both Delegate Janis and Senator McEachin have introduced bills creating a Virginia Offshore Wind Development Authority (HB 389 and SB 577 respectively). Delegate Villanueva's bill (HB 787) conforming state law on offshore energy development to federal law was reported from Committee. Delegate Poindexter has introduced legislation (HB 805) requiring that offshore energy royalty payments be deposited in the transportation trust fund. Delegate Hugo has introduced a bill (HB 1037) giving electric utilities triple credit in the renewable energy portfolio programs for the use of offshore wind.
The Virginia Chamber, the Virginia Manufacturers Association, and Dominion Resources joined together to oppose HB 697, a bill from Delegate Bulova that would authorize the State Water Control Board to determine whether granting a water permit was consistent with the state water resources plan. The fundamental problem with the bill is that the state has not completed its water resources plan, so tying the plan to the granting of water permits creates an unnecessary level of cost and uncertainty to the regulatory process. The bill is dead.
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| Tourism News of Note
Dennis Flannery
This week is busy for tourism issues, with the need for turnout for some crucial votes certain to be made more difficult by the weather.
-Early school opening: The Virginia Chamber is supporting the Virginia Hospitality & Travel Association in its opposition to 'pre-Labor Day' school opening bills, an effort which has proven to be pricklier this year than in the past. Several votes have surprised many in the industry. HB 565/Tata has been reported out of the House Education Committee and will be considered on the House floor this week; in addition, SBs 77, 203, 253, 412, and 498 have also been reported out of committee and will likewise be voted on in the full Senate this week.
-Virginia Tourism Corporation: As part of a sweeping economic development and jobs package that Governor McDonnell announced last week, the VTC budget is slated for an additional $3.6 million in each of the next two years. The VTC will make their presentation to a Senate Finance subcommittee on Tuesday morning and we'll be there in support. SB 525/Norment, which "dedicates the revenues from the Commonwealth's soft drink excise tax and litter tax to the Cooperative Marketing Fund administered by the Virginia Tourism Authority," is up Tuesday in Senate Finance; more next week.
-Safety Rest Areas: Both study resolutions are moving along. HJ126/Nutter has been revised by the patron to direct the Virginia Transportation Research Council to conduct the study as they have greater experience with federal highway issues. We expect a similar substitute to be submitted for SJ99/Herring, which will be heard in a Senate Rules subcommittee on Tuesday. |
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| 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". |
| Chamber Day and the Old Dominion Assembly Draw Top Leadership and Record Participation!
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 Nearly 300 Virginia Chamber members and local/regional chamber leaders met in Richmond on January 27th to hear from our newly elected leadership. It was the best attendance ever for a Chamber Day event. Governor Bob McDonnell and Lt. Governor Bill Bolling discussed the administration's top priority - job creation. Newly elected Attorney General Ken Cuccinelli and Speaker Bill Howell also  spoke on what the business community must do to keep Virginia the best state for business.
A special thanks to our Signature Sponsor, UPS and break sponsor LEAD Virginia, for their support. The Virginia Chamber's annual Old Dominion Assembly Reception was held later that evening, providing the opportunity to network and thank our elected and appointed officials as the new General Assembly and leadership begin their work. We are grateful to Signature Sponsor Altria Group, Inc., Gold Sponsors Bank of America and Coca-Cola, and the other sponsoring companies who helped make this evening an outstanding success.
If you missed these great events this year, plan to come in 2011. |
| Upcoming Events |
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February 2
February 9
February 23
March 2
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CALENDAR |
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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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