General Assembly Update February 8, 2022

General Assembly Updates,

The 2022 General Assembly is hitting full stride and the debates are picking up swiftly as legislation works its way through committees. Every bill must be heard and voted up or down by “Crossover” which is February 15. Committee meetings and subcommittee meetings will go longer as will floor debates in the House and Senate chambers. Legislators and lobbyists will be discussing issues in meetings as early as 7:00 AM and go to well past 7:00 PM next week. If you want to watch any of the Committee for noon Floor discussions click here and then click on House Video or Floor Video.

Many of the Governor’s campaign initiatives – from streamlining regulations, to charter schools to the appointment of Secretary of Natural Resources to tax cuts are meeting resistance from Senate committees. The next week will involve a lot of “horse trading” that may impact other legislative initiatives as well.

Here are key areas that VTCA is actively engaged:

Gas Tax  HB1144 – This bill estimates the financial impact of a one year freeze to the Commonwealth Transportation Fund is more than just one year. The primary impact of this legislation would be the reduction in the gas and diesel tax rates in FY2023 and FY2024. However, a smaller impact persists in future fiscal years from the assumed inflationary increases beginning from a lower base. Estimated funding reduction by year:

  • 2023 – $275,500,000 Commonwealth Transportation Fund
  • 2024 – $74,000,000 Commonwealth Transportation Fund
  • 2025-2008 each year about – $25,000,000 Commonwealth Transportation Fund

Grocery Tax – The grocery tax cut is one of the signature pieces of Governor Youngkin’s campaign and is more complex than it sounds due to all the government services tied to the sales tax: state & local government services, schools, and transportation infrastructure.

The initial impact to future transportation funding is around $134 million each year and grows from there ($139 million by 2026). What is not clear is how the administration is planning on backfilling the transportation loss of revenue with other funds. Details are still being developed but it remains unclear whether those “other” funds will come from Virginia’s General Fund or federal funding? If the loss of grocery sales tax revenue for transportation is replaced, the administration is suggesting the net annual loss to the CTF will be estimated at around $65 million the first year, then $1.4 million every year after. Needless to say, we are asking lots of questions on how this will work.

PLA – HB1091 – Requires every public body, prior to requiring bidders, offerors, contractors, subcontractors, or operators on public works contracts to enter into, become or remain signatories to, or adhere to project labor agreements, to make a written determination that requiring such bidders, offerors, contractors, subcontractors, or operators to enter into, become or remain signatories to, or adhere to such project labor agreements advances the public’s interests based on objective criteria established by the public body by regulation or ordinance, such as cost, efficiency, quality, safety, timeliness, maintenance of a skilled labor force, labor stability, or advancing minority-owned and women-owned business participation in the project.

Wage Theft – HB889 – Provides that a contractor, regardless of tier, has a valid defense to a claim for nonpayment of wages if he obtains a written certification from the subcontractor stating that (i) the subcontractor and each of his sub-subcontractors has paid all employees all wages due for the period during which the wages are claimed for the work performed on the project and (ii) to the subcontractor’s knowledge, all sub-subcontractors below the subcontractor, regardless of tier, have similarly paid their employees all such wages.

Cooperative Procurement – HB 705 – Allows a public body to participate in cooperative procurement for construction contracts purchased by localities if the contract is valued at no greater than $200,000.

Term Contracts for Engineers – HB427 – Provides that the sum of all projects performed in an architectural and professional engineering contract term shall not exceed $10 million, and the fee for any single project shall not exceed $2.5 million. The bill allows a contract for multiple architectural or professional engineering projects to be renewable for up to three additional terms at the option of the public body.

Lower Carbon Concrete bonus – SB272 – Provides a performance bonus for contractors to utilize approved lower carbon concrete products in projects with the Department of General Services (DGS) and the Virginia Department of Transportation (VDOT). The bill directs the Department of Environmental Quality to develop, in conjunction with DGS and VDOT, the baseline for determining if a concrete product is lower carbon concrete. The bill requires VDOT and DGS to report annually to the Governor and the General Assembly concerning the use of the performance bonus. The bill also creates a nonrefundable tax credit for taxable years beginning on and after January 1, 2022, but before January 1, 2026, for certain technology implementation costs incurred by concrete producers in the production of lower carbon concrete equal to the amount actually paid by the producer for the technology implementation, up to a maximum of $5,000.

Resiliency in Smart Scale – HB707 – Adds resiliency, defined in the bill, to the list of factors to be considered during the statewide transportation funding prioritization process commonly known as SMART SCALE. The bill also requires that the factors of congestion mitigation, economic development, accessibility, safety, resiliency, and environmental quality be considered relative to the anticipated life-cycle cost of the project or strategy under consideration.

Preference for Recycled Materials – HB1287 – Requires the Department of General Services (DGS), in determining the award of any contract for materials to be purchased for use by agencies of the Commonwealth, to procure using competitive sealed bidding and give preference to bidders that supply materials containing recycled content, so long as such materials offer a cost competitive advantage over materials that do not contain recycled content.

The list of other bills we are tracking can be found HERE.