On November 10th, the General Assembly met for a one-day special session to elect judges and address further cuts to the budget due to the $2.4 billion budget shortfall. The House and Senate also both passed legislation to allow insurance companies to renew health insurance plans in 2015 that were cancelled under the Affordable Care Act. Governor McAuliffe has since signed the bill into law.

We are continuing to monitor the situation with the state's budget shortfall. Officials are still working to identify approximately $322 million in remaining cuts, which Governor McAuliffe is expected to address in amendments he'll announce to the General Assembly's money committees December 17.

On Wednesday, November 19th, we were pleased to host the 2014 Virginia Congressional Luncheon on Capitol Hill. Over 200 business leaders joined us from members of Virginia's Congressional Delegation including Senator Mark Warner, Senator Tim Kaine, Congressman Bob Goodlatte, Congressman Robert Hurt and Congressman Morgan Griffith.

Each highlighted important business issues such as healthcare costs, energy, transportation re-authorization and the federal budget and national debt. To view pictures from the Congressional Luncheon, please click here.

As we continue to prepare for the 2015 General Assembly session, we plan to host a pre-session Legislative Roundtable meeting on December 16th. Legislative Roundtable provides Virginia Chamber members the opportunity to discuss their priorities for the upcoming General Assembly session as well as hear what others are anticipating. For more information, or to sign up to attend, please click here.

We're looking forward to hosting the 5th Annual Virginia Economic Summit on December 5th in Williamsburg. This year's topic is "Innovating Virginia's Future." We invite you to join us as we explore how innovation and entrepreneurship are empowering our state's economy and enhancing our economic competitiveness. For more information on the Economic Summit, as well as other upcoming events in 2015, please see below.

JLARC Releases Study on Cost of Public Higher Education in Virginia

In 2012, the General Assembly directed JLARC to study the cost efficiency of the state's institutions of higher education and to identify opportunities to reduce costs. Interest in this topic was spurred by substantial increases in tuition and fees in recent years and the high debt load of Virginia students. Earlier this month, JLARC released the findings of this study, which presents options and recommendations to address the rising cost of public higher education in Virginia. Some key findings include: 

• Virginia's higher education institutions are high quality but high cost
• Virginia's 15 public four-year higher education institutions collectively achieve their missions-to educate and graduate students-better than most. Virginia ranked second among all states in terms of average six-year graduation rates.
• The state's public institutions are also, on average, among the nation's most expensive for students.
•  Spending increased, primarily on non-academic services
  • Total institutional operating spending per student increased 24 percent between FY 2002 and FY 2012. The majority of this spending growth was on the non-academic services, which accounted for 56 percent of the total increase in per student spending.
• State and individual institutions have relied heavily on debt to expand or improve campuses, and maintenance needs have grown
• At colleges and universities around the country, borrowing and capital spending have generally increased over the past two decades, but Virginia's borrowing and spending have been exceptionally high.
• Amid this substantial capital spending, existing facilities have deteriorated.

EPA CLEAN POWER PLANT COMMENT PERIOD EXTENDED 

EPA has announced a 45-day extension of the comment period for EPA's Clean Power Plant proposal. Stakeholders now have until December 1st to comment on the rule, which mandates Virginia's existing power plants to cut carbon dioxide emissions by 38 percent below 2005 levels by 2030. To view instructions on how to submit comments, please click here.

EPA based the target for this state on cuts through the following: 

• 3.4%: Increase efficiency of coal plants
• 16.2%: Use low-emitting natural gas combined cycle plants more where excess capacity is available
• 11.8%: Use more zero-emitting power sources such as renewables and nuclear
• 6.5%: Reduce electricity demand by using electricity more efficiently

On October 14, the State Corporation Commission (SCC) provided comments to the EPA on their proposed Clean Power Plan. According to the SCC's review of the proposed federal rules, the EPA's carbon plan is likely to "substantially" increase the costs of electricity and "significantly" affect the reliability of electrical service. The SCC estimated it would cost Dominion Virginia Power $6 billion to comply with these proposed rules (the SCC leaves out the costs for other utilities to comply).

Companies have announced that 27 gigawatts (27,000 megawatts) of coal power will be permanently shut down by 2020, but according to a report from Standard & Poor's, between 40 and 75 gigawatts of coal power might be shut down by the end of the decade.  What do the closures mean for electricity costs? According to a new report from the Brattle Group, the loss of coal will increase the price of power by 25 percent for energy grids that currently supply power for one-third of the nation.

The Virginia Chamber has submitted comments to the EPA (click here to view these comments) as well as outlined our position to members of our congressional delegation and state leaders.

NEW EPA WATER RULE 

The Environmental Protection Agency (EPA) proposed a new rule in April to clarify the agency's authority to regulate bodies of water under the Clean Water Act (CWA). Currently, regulations define "waters of the United States" as traditional navigable waterways, interstate waters, waters that could affect interstate or foreign commerce, tributaries, wetlands and the like. Polluting any of these waters requires a permit under the Clean Water Act. The proposed rule would, for example, consider streams that flow into a larger body of regulated water as waters of the United States.

If the proposed rule were finalized, many businesses will be confronted by new federal permitting obligations. Virtually any business that owns or operates a facility or has property could be affected, particularly if it has industrial ditches, retention ponds for stormwater runoff, fire ponds, dust suppression ponds, or other surface impoundments on site.  All of the new areas covered would bring with them new permit requirements. The new rule would increase permit costs between $19.8 million and $52 million each year.  In addition, mitigation costs would increase by $59.7 million to $113.5 million annually. Further, stormwater programs run by municipalities will be required to impose more stringent controls on facilities with parking lots, storage pads, or other large paved areas.

The Virginia Chamber recently joined the US Chamber and a coalition of over 350 business organizations in submitting comments to EPA Administrator McCarthy on this issue. To view the comments, please click here. The comments detail several examples of the impacts of the proposed rule, including:

• Maps prepared by EPA show the rule could expand federal jurisdiction over waters from 3.5 million river and stream miles to well over 8 million river and stream miles;
• The rule would make most ditches into "tributaries."  Routine maintenance activities in ditches and on-site ponds and impoundments could trigger permits that can cost $100,000 or more;
• These permitting requirements would likely trigger additional environmental reviews that would add years to the completion time for ordinary projects;
• Even if a project can get a permit, firms will often have to agree to mitigate environmental "damage" with costly restoration/mitigation projects;
• The proposal would likely also result in more stringent storm water management requirements, which would affect retailers, companies with large parking lots, "big box" stores, etc. 

A SPECIAL ANNOUNCEMENT REGARDING VIRGINIA'S FUTURE 

 FEATURED PANELS:

Game Changers: A Look at Virginia's Top Innovators

What global economic forces will impact business strategy for the next 10 years? What technologies are poised to have the greatest impact on the way businesses innovate their products and services? How can Virginia's regions position their communities for the future? Virginia's most innovative technology companies share their outlooks for what to expect. 

Putting Global Trade to Work for Virginia's Economy

Learn firsthand how Virginia benefits from our companies that sell internationally. Join 4 leading Virginia exporters as they describe their successes in global markets, and discover why international trade is critical to their corporate growth.