Virginia Revenue Forecast and General Assembly Special Session Update

On Friday, October 16, the General Assembly’s Special Session went into recess. It did not adjourn. This allows the Governor to modify the budget to enact the redistricting constitutional amendment on November’s ballot if it passes.

Since our September legislative update, Del. Guzman’s (D-Woodbridge) paid quarantine leave (HB 5116) bill failed in the Senate Committee Commerce and Labor by a 14-1 vote. The two bills (SB 5067Saslaw and HB 5074Sullivan) that would provide businesses immunity from civil claims related to the transmission of or exposure to COVID-19 were stricken by their respective patrons after the inability to have labor and business groups reach an agreement. Lastly, Sen. Lewis’ (D-Accomac) bill (SB 5106) that would extend local land use approvals to address the pandemic has passed the House and Senate and awaiting the signature of the Governor.

Virginia Releases September 2020 Revenue Report

as reported from the Office of the Governor

Governor Ralph Northam announced that September General Fund revenue increased 7.6 percent from the previous year, driven by growth in payroll withholding, corporate, and recordation tax collections.  The Governor reported that Virginia’s General Fund revenues are increasing, and the Commonwealth has been able to avoid the major revenue shocks that other states are experiencing because of the ongoing pandemic. This is the result of the proactive measures Virginia has taken to mitigate the impacts of the virus on the state’s economy and put the Commonwealth on the path toward a strong recovery.

With September marking the end of the first quarter of fiscal year 2021, Secretary of Finance Aubrey Layne, reported this quarter’s revenue performance confirms that the Commonwealth took a measured and prudent path in the updated Interim Forecast released in August.

With one more deposit day than September of last year, payroll withholding grew 11.4 percent for the month. Furthermore, the first non-withholding estimated payment for fiscal year 2021 was due in September. Collections in non-withholding grew 2.4 percent over last year. Collections of sales and use taxes, reflecting August sales, fell 3.2 percent in September—almost all of the decline is due to accelerated sales tax (AST) refunds. As with non-withholding, the due date for the first estimated payment for corporate income tax collections for the fiscal year was also due in September. Collections of corporate income tax increased 17.4 percent in September from September of last year. Finally, collections of wills, suits, deeds, and contracts—mainly recordation tax collections—were $56.6 million in September, compared with $36.6 million in September of last year.   

On a fiscal year-to-date basis, total revenue collections rose 9.9 percent, well ahead of the annual forecast of a 1.8 percent decrease. On a fiscal year-to-date basis, collections of payroll withholding taxes—63 percent of General Fund revenues—increased 2.4 percent, equal to the annual estimate. Year-to-date non-withholding collections were $982.4 million compared with $617.6 million in the same period last year, increasing by 59.1 percent, ahead of the annual estimate of a 3.6 percent decline. Sales tax collections—16 percent of General Fund revenues—increased 7.5 percent through September, ahead of the annual forecast calling for a 9.7 percent decrease. Through the first quarter of the fiscal year, corporate income tax collections rose 36.1 percent from the same period last year, ahead of the annual estimate of a 3.0 percent increase. Finally, collections of wills, suits, deeds, and contracts were up 35.9 percent in the first quarter, well ahead of the forecasted 12.6 percent decline.   

If you have any questions, please feel free to submit them to Corey Clayborne, FAIA at cclayborne@aiava.org

2020 General Assembly Wrap-Up

On March 7, the 2020 General Assembly adjourned sine die.

With a new Democratic majority in both chambers, we saw a fast-paced session full of proposals on energy, sustainability, fair housing, anti-discrimination, labor rights, and gun-control. In this session, the Senate introduced 1,095 bills and the House introduced 1,734 bills respectively. In addition, 299 resolutions were put forth for consideration. There were many long days spent advocating for AIA Virginia. However, one of the great highlights was recognition of AIA Virginia on the House floor by Del. Betsy Carr (D – Richmond) at the end of February. Del. Carr’s remarks emphasized the important role that architects play in shaping equitable, resilient, and healthy communities.

The Joint Legislative Committee (JLC), composed of practitioners from AIA Virginia and ACEC Virginia, reviewed all the bills and resolutions to determine the ones to act on. 

We are thankful for the volunteer service of our AIA Virginia JLC representatives as follows:

Kathy Galvin, AIA – Principal at Kathy Galvin Architects
Ed Gillikin, AIA – Principal at KOP Architects
Kenney Payne, AIA – Vice President at Moseley Architects
Stephen Weisensale, AIA – Senior Associate at Commonwealth Architects

If you know any of these individuals, please take a moment to reach out to them and share your gratitude.

AIA Virginia played an instrumental role in three major bills, of which as of today, are awaiting the Governor’s signature.  SB 658, which makes the “duty to defend” language in indemnification clauses against public policy, was carried by Sen. Scott Surovell (D – Mount Vernon). HB 1300 and its companion SB 607 both provide for a 15-year statute of limitations for design and construction projects performed for the Commonwealth of Virginia, including public institutes of higher education. HB 1300 was carried by Del. Chris Hurst (D – Blacksburg) and Senate Minority Leader Tommy Norment (R – Williamsburg) served as the patron of SB  607.

Through the increasing membership support of our Political Action Committee (PAC), we have been able to build increasingly more legislative relationships. Please make a 2020 investment in our PAC today to help elevate our voice on the built environment. We need you.

Below are the bills that AIA Virginia engaged or monitored during the session.

ACTIVE

The organization acted in a lobbying capacity on the following bills:

HB 833Carroll Foy – Virginia Public Procurement Act; public works contracts, prevailing wage rate, penalty.

HB 1078Hope – Virginia Public Procurement Act; process for competitive negotiation, etc. (Note: The bill patron agreed to language that would exempt architects.)

HB 1300Hurst – Virginia Public Procurement Act; statute of limitations on actions on construction contracts. (Position: SUPPORT)

HB 1414Filler-Corn – Transportation; amends numerous laws related to funds, safety programs, revenue sources, etc. (Note: Successfully lobbied for building projects associated with transportation to be procured using Qualifications Based Selection)

SB 94Favola – Virginia Energy Plan; relating to the Commonwealth Energy Policy (Position: ADVOCATE FOR SEAT)

SB 385McPike – Engineers; exemption from regulation. (Position: SUPPORT)

SB 487Bell – Virginia Public Procurement Act; architectural and professional engineering term contracts. (Position: SUPPORT)

SB 607Norment – Virginia Public Procurement Act; statute of limitations on actions on construction contracts. (Position: SUPPORT)

SB 658Surovell – Contracts with design professionals; provisions requiring a duty to defend void. (Position: SUPPORT)

SB 890Saslaw – Transportation; amends numerous laws related to funds, safety programs, revenue sources, etc. (Note: Successfully lobbied for building projects associated with transportation to be procured using Qualifications Based Selection)

MONITOR

AIA Virginia monitored bills placed in this category.  Often, we watch bills because they are of interest and we want to remain informed.  When this is the case, it is often another organization taking the lead due to its specific expertise and political relationships.  If amendments are introduced that make a bill in this category detrimental to our profession, then it is moved to the ACTIVE list and we engage.  There are some bills that AIA Virginia does not take a position on.  An example of this would be bills that define “small business”.  Because of the composition of our membership, we would not want to take any action that would hurt any of our members.

HB 22Lindsey – Virginia Shoreline Resiliency Fund; grant program.

HB 454Wyatt – Virginia Public Procurement Act; purchase programs for recycled goods, climate-positive materials.

HB 558Lindsey – Micro-business; enhancement of participation in local procurement.

HB 810Bourne – Virginia housing opportunity tax credit program; VHDA, et al., to develop. (Position: ADVOCATE FOR SEAT)

HB 882Bulova – Stormwater management; proprietary best management practices, reciprocity.

HB 890Sickles – Construction management and design-build contracting; use by local public bodies.

HB 1313Hodges – Chief Resiliency Officer; Secretary of Public Safety and Homeland Security to designate.

HB 1407Ward – Misclassification of employees as independent contractors; Department of Taxation to investigate.

HB 1431Mugler – Art and Architectural Review Board; changes number of member quorum.

HB 1541McQuinn – Central Virginia Transportation Authority; created.

SB 110Howell – Research and development tax credits; extends sunset date, aggregate caps.

SB 333Stuart – Uniform Statewide Building Code; security locking mechanisms.

SB 341Locke – Construction management and design-build contracting; use by state and local public bodies.

SB 368Bell – Virginia Public Procurement Act; architectural and professional engineering term contracts. (Position: SUPPORT)

SB 481Favola – Employees; earned sick leave, civil penalties.

SB 888McClellan – School Construction and Modernization, Commission on; established, report. (Position: ADVOCATE FOR SEAT)

SB 963Surovell – Commonwealth Efficient and Resilient Buildings Board; establishes. (Position: ADVOCATE FOR SEAT)

DEAD

The following depicts the bills of interest to AIA Virginia that were introduced but were not successful: 

HB 24Lindsey – Hurricane and Flooding Risk Reduction and Bond Rating Protection Act of 2020; established, report.

HB 40Samirah – Public schools; mental health break spaces, regulations.

HB 84Fowler – Virginia Public Procurement Act; proposals to public higher educational institutions, disclosure.

HB 133Miyares – Virginia Public Procurement Act; professional and information technology project services contracts. (Position: OPPOSED)

HB 283Cole, J.G. – Highway construction and maintenance; time limitations.

HB 346Davis – Small Business and Supplier Diversity, Department of; redefines “small business.”

HB 359Lopez – Virginia Public Procurement Act; consideration of best value concepts for construction services.

HB 364Cole, M.L. – Statewide prioritization process; project selection.

HB 382Convirs-Fowler – Virginia Shoreline Resiliency Fund; grant program.

HB 389Miyares – Hurricane and Flooding Risk Reduction and Bond Rating Protection Act of 2020; established, report.

HB 525Subramanyam – Greenhouse gas emissions; State Air Pollution Control Board to conduct a statewide inventory.

HB 601Freitas – Administrative Process Act; review of occupational regulations.

HB 685LaRock – Va Public Procurement Act; preference for contractors using automatic billing verification software.

HB 898Guzman – Employees; earned sick leave, civil penalties.

HB 953Ayala – STEAM programs; establishes STEAM Education Fund. (Position: SUPPORT)

HB 970LaRock – Transportation; use of funds.

HB 982Webert – Professions and occupations; licensure by endorsement. (Position: OPPOSED originally and then shifted to neutral when the patron agreed to our bill language amendment)

HB 1005Mullin – Uniform Statewide Building Code; exceptions, provisions, and modifications.

HB 1109Hudson – Income tax, corporate; combined reporting requirements, disclosures.

HB 1134Lopez – Small Business and Supplier Diversity, Department of; redefines small business.

HB 1156Lopez – Historic rehabilitation; increases tax credit. (Position: SUPPORT)

HB 1274O’Quinn – School Construction Fund and Program; created and established.

HB 1364Hodges – Resource Protection Areas; improvement plans.

HB 1373Hodges – Flood Resiliency Clearing House Program; developed by Department of Conservation and Recreation.

HB 1377LaRock – Architectural and engineering contracts; certain localities.

HB 1389LaRock – Transportation funds; use of funds for projects.

HB 1488Hudson – Virginia Public Procurement Act; definitions, clarification of “best value.”

HB 1538Austin – Commonwealth Transportation Interstate 81 Corridor Bond Act of 2020; created.

HB 1650Ward – Small Business Procurement Enhancement Program; established, report.

HB 1709Heretick – Small businesses; definition to include LGBT-owned businesses.

HB 1714Wyatt – Transportation, Department of; design standards, modifications.

HB 1732Miyares – Uniform Statewide Building Code; installation of key boxes of high-risk structures.

HJ 67Orrock – Affordable housing; Virginia Housing Commission to study the definition.

SB 5Stanley – Board of Education; uniform minimum standards modern; public school buildings.

SB 6Stanley – Voter referendum; issuance of state general obligation bonds for school facility modernization.

SB 418Petersen – Virginia Public Procurement Act; cooperative procurement, construction.

SB 475Bell – Virginia Public Procurement Act; use of best value contracting.

SB 797Lewis – Uniform Statewide Building Code; exceptions, provisions, and modifications.

SB 829Stanley – Governor; authority to reinstate professional licenses.

SB 1061Petersen – C-PACE loans; residential dwellings and condominiums.

SB 1087Pillion – School Construction Fund and Program; created and established.

If you have any questions, please feel free to submit them to Corey Clayborne, FAIA at cclayborne@aiava.org

General Assembly Adjourned

The 2018 Virginia General Assembly session adjourned “sine die” on Saturday, March 10. While legislators completed work on a number of important bills this year, unfortunately, they were not able to reach an agreement on the budget bill. The House and Senate budgets differ by about $600 million, due in large part to the fact that the House budget includes the expansion of Medicaid and the Senate version does not.

Governor Northam called a special session on April 11 for legislators to complete their work on the budget. Virginia’s current budget expires on June 30.  AIA Virginia will monitor the Special Session of the General Assembly and report updates as appropriate.

Thank you for your continuous outreach efforts to your respective legislators of the General Assembly.  Our work is not complete. Out of session, AIA Virginia will continue to formulate new relationships and strengthen existing relationships with two goals:

  • To position architects as vital contributors to our built environment
  • To advocate for the profession

Please, please, please consider making a donation to the AIA Virginia PAC

Take a look at this infographic about the AIA Virginia PAC

The goal for this year is to raise $15,000. Last year we raised approximately $6,000.  From $5 to $500 to $5,000, every contribution helps.  Shout out to AIA Hampton Roads for having 100% PAC participation at the Board of Directors level!

For a more detailed analysis of the referenced bills we tracked this session, click here.  If you have any questions, please feel free to submit them to Corey Clayborne, AIA at cclayborne@aiava.org

General Assembly Brief

The Joint Legislative Committee had to vet approximately 3,000 total bills to extract the relevant ones to our profession.  Tuesday, February 13 marked the date of “Bill crossover” in the General Assembly.  This is the day when bills must pass one house or the other or die for the session.  As such, the “ACTIVE” list has been significantly reduced and many of those bills are “DEAD” for the session.

KEY VICTORIES

  • SB 188 – Provides that for competitive negotiation of professional services, a public body may conduct negotiations simultaneously with the top two ranked offerors.

 We successfully got architectural and engineering services removed from the bill.

ACTIVE

  • HB 97 – Virginia Public Procurement Act; methods of procurement, single or term contracts

This bill allows for single or term contracts for professional services without requiring competitive negotiation, provided the aggregate or the sum of all phases is not expected to exceed $80,000.  This change increased the limit in current law by $20,000.

MONITOR

  • SB 318 – Small Business and Supplier Diversity, Department of; implementation of certification programs

This bill would change the definition of small business, beginning July 1, 2019, to meet the small business size established by the regulations of the U.S. Small Business Administration.

There were a number of bills that were proposed that attempted to codify Governor Terry McAuliffe’s Executive Order 20 (EO-20).  EO-20 sets a 42% goal for participation by Small, Women and Minority Businesses (SWaM) in public contracts.  With the potential change coming regarding the definition of “small” in Virginia, public entities may face increasing challenges in attempting to meet this goal for the procurement of architecture and engineering services.  In meeting these goals, it is of paramount importance that the most qualified firms are selected.  These two goals are not mutually exclusive.  As such, we have requested a meeting with the Governor to discuss how we can work collaboratively to further those opportunities.

For a more detailed analysis of bills we are actively engaged with, bills we are monitoring, or to see bills that we were interested in but have died in session, click here.

General Assembly Wrap-Up

tl;dr: Historic Tax Credits are capped for 2 years, Construction Management has some new rules; Give to the PAC.

Like so much in the political scene these days, the 2017 General Assembly session has been a bit unusual. As the session came to a close a few days ago, here’s where things ended up.

Historic Rehabilitation Tax Credits
It was a wild ride. What started last summer with a subcommittee evaluating the effectiveness of the Historic Rehabilitation Tax Credit, suddenly became a  surprise $5M/tax payer cap in the Governor’s budget, and finally culminated in legislation that would have eliminated the tax credit altogether. With help from members, a coalition of supporters, and even Virginia’s first lady, we managed to walk the elimination back to the $5M/tax payer cap with a 2-year sunset. This result is certainly not what we hoped for at the beginning of the session, but we’ve managed to preserve the credit (for now).

We’ll be working between sessions to evaluate and share the results of several studies underway and to educate legislators about the benefits of the credit.

Procurement
Issues surrounding public procurement usually take the bulk of our time, but this year we didn’t have quite as many battles to fight in this arena. We kept a close watch on a number of bills but stayed out the fray for the most part as other entities duked it out.

HB2366 and its Senate version SB1129 regarding the use of Construction Management contracts have been adopted.

HB1693 has passed and is waiting on the governor’s signature. In contracts for architectural and engineering services relating to multiple construction projects, this bill increased the fee for any single project from $100,000 to $150,000.

SB1508 added language to include certain school divisions under the exception from the $100,000 single-project fee limit for architectural and professional engineering term contracts and the $ 1 million annual aggregate total of all such projects. Under the bill, the school divisions may pay a single-project fee of up to $2.5 million and an annual aggregate of $6 million. Certain localities already enjoy this exception.

There was some movement on the definition of small businesses, though minor. HB1858 would allow for SWaM businesses certified at the federal level (or some other certification process comparable to Virginia’s) to be certified in the Commonwealth. I include this under the procurement category because we’ve been watching small business definitions carefully. If Virginia’s small business definition for architecture firms changes, it could have a substantial impact on Qualifications Based Selection because of Executive Order 20 and its requirement to exceed an expenditure goal of 42% with small businesses.

Regulation
Lots of bills that could impact the regulatory environment showed up this year. They fell primarily into 2 different categories — legislation related to the Administrative Process Act and legislation related to regulatory boards.

Administrative Process Act
These bills were mostly aimed at reducing regulatory burden.

HB1731  requires the Joint Commission on Administrative Rules (on a yet-to-be-determined schedule) to conduct an ongoing review of the exemptions authorized by the Administrative Process Act.

HB1790  requires agencies to develop regulations in the least burdensome and intrusive manner possible. The bill calls for each agency to establish a schedule that provides for the annual review of at least 10 percent of an agency’s regulations.

HB1943 and its Senate companion, SB1431, require the Dept. of Planning and Budget to revise and reissue its economic impact analysis in certain circumstances.

SJ295 grants to the General Assembly the authority to review any administrative rule to ensure it is consistent with the legislative intent.

Board Regulation
Of all the bills related to the Regulatory Board that we were monitoring, none passed except for SB1374 which added an engineer to the board for contractors. The handful of bills that would have provided some additional oversight for the board all died. The bill that would have deregulated Landscape Architects and Certified Interior Designers failed, as did proposed regulation of land surveyor photogrammetrists.

Thank you
I hope you’ll join me in thanking Kenney Payne, AIA; Lynden Garland, AIA; Robert Burns, AIA and Ed Gillikin, AIA, who gave countless hours in support of our efforts. In addition, our friends with ACEC Virginia, the AIA Virginia Government Affairs Advisory Council and GIA Committee, and our legislative counsel with Williams Mullen were invaluable.

Obligatory PAC Appeal
No session wrap-up would be complete without an appeal to support the AIA Virginia PAC.

Our policy makers and politicians are stewards of our built infrastructure. They make decisions about the built world everyday — from funding, to planning, to preserving, to demolition — but most of them aren’t experts in design and planning. PAC money doesn’t buy influence, but it DOES help us get a seat at the table, so we can educate policy-makers on issues that are important to us. Give to the PAC today.

General Assembly Update: Crossover Edition

Today is the mid-point of the 2017 General Assembly session, known as “crossover.” At this point, each house of the legislature can only consider bills passed by the other house. [Translation: No new bills and any bills that haven’t been heard yet are dead for the session.]

Here’s where things stand now:

Historic Rehabilitation Tax Credits — Two bills survive: HB2460 and SB1034. Both bills cap the credit at $5M per taxpayer (as does the Governor’s budget). We were successful in getting the Senate bill amended to include a one-year sunset provision. Because of Governor’s budget already assumed this $5M cap and its related savings, we’re told that this is our best case scenario in this incredibly tight budget year.

Our goal now is to visit with members of the House side (who will be hearing SB1034 in the coming weeks) to ask that they don’t strip our amendment out. The Senate is expected to automatically add our amendment to HB2460. Our message to the House committee members will be that we appreciate the prudent measures that legislators are taking regarding the budget and we support a one-year sunset on the $5M cap. We’re asking that they not make the cap permanent until we receive the results of the studies that are currently underway. These studies will evaluate the credit’s ROI to the Commonwealth and are expected to be complete by mid-summer.

We’ll be meeting with the following legislators who sit on the House Finance Subcommittee 3 this week:

Delegate Kathy J. Byron

Delegate Lee Ware

Delegate Robert D. Orrock, Sr.

Delegate Timothy D. Hugo

Delegate Mark L. Keam

If you’re able to join me in meetings on Wednesday or Thursday, please contact me as soon as possible at rgeorge@aiava.org. Even if your legislator isn’t listed above, please consider reaching out to express support for a one-year sunset on the cap in SB1034 and HB2460. If you have a personal story about how the current uncertainty regarding the cap has caused funders to pull back on projects, please contact me and/or share it with your legislator. Feel free to call me at (804) 237-1768 if you’d like to talk about the credit a bit before reaching out to your legislator.

Procurement – We’re monitoring SB1129 which deals with the use of construction management contracts.

And, though we haven’t taken a position on Virginia’s definitions for small businesses, we’re watching SB1334 very closely. If Virginia’s small business definition for architecture firms changes, it could have a substantial impact on Qualifications Based Selection (QBS) because of Executive Order 20 and its requirement to exceed an expenditure goal of 42% with small businesses.

Regulation — Though nearly a dozen have died, we continue to monitor several bills that relate to the regulatory environment.

SB1449 seeks to address general concerns about overregulation, however (as one observer put it), the bills add another state division and another commission, essentially creating more red tape. We’re not taking a position but will watch to see that amendments don’t take us in a bad direction.

Of the several bills intending to address anti-trust concerns related to the Supreme Court ruling, North Carolina Board of Dental Examiners v. Federal Trade Commission, HB1566 has prevailed. We’re generally supportive, but we’ll continue to watch closely to make sure no erosion of licensure or HSW protections creep in.

HB1731, HB1790, and HB1871 call for a review of the Administrative Process Act which could impact the regulatory environment further down the road.