Government Affairs

General Assembly Update

January 8, 2013

Several significant pieces of transportation funding legislation have been pre-filed in the General Assembly.  The Governor will unveil his transportation funding package at a press conference in Richmond today. The General Assembly convenes tomorrow, January 8th. Pre-filed bills include:

HB 1403 Retail Sales and Use Tax. Increases the amount of sales and use tax revenue dedicated to the Transportation Trust Fund from an amount generated by a 0.5 percent tax rate under current law to an amount generated by a one percent tax rate, phased in by a 0.1 percent increase each year for five years, or over a longer period of time if there is a lack of growth in general fund revenues.

HB 1409 Motor fuels tax. Converts the rate of taxation on motor fuels from cents per gallon to a percentage rate. The bill provides that the Commissioner of the Department of Motor Vehicles shall calculate the percentage rate in an amount that will most closely yield the amount of cents per gallon being charged on the applicable motor fuel prior to the effective date of the bill. Thereafter, the percentage rates would not change, but would be applied against the average price per gallon of the fuel, less federal and state taxes, as determined by the Commissioner of the Department of Motor Vehicles over rolling six-month periods, to determine the cents to be charged.

HB 1438 Motor fuels tax. Requires that the motor fuels tax rate be indexed on January 1, 2014, and each year thereafter, to the average percentage change in the U.S. Department of Transportation’s Transportation Services Index for the three years ending October 31 of the year immediately preceding the affected year.

HB 1450 Hampton Roads Planning District; additional 1% sales & use tax in counties in District. Provides for an additional one percent sales and use tax in the counties and cities located in the Hampton Roads Planning District, with the additional revenues generated by the tax to be used for regional transportation projects. The tax would become effective on January 1, 2014, and only if approved by a majority of the voters in the Planning District at the November 2013 election.

HB 1460 Tolls; prohibits on Interstate 95 without approval of General Assembly.

HB 1472 Transportation funding and administration. Provides additional funding for transportation by (i) imposing a motor fuels sales tax rate of five percent for highway maintenance; (ii) increasing the state sales tax in Northern Virginia by 0.5 percent for transportation projects in Northern Virginia; and (iii) adding an additional recordation tax in Northern Virginia at a rate of $0.40 per $100 valuation. The bill also reduces the sales and use tax rate on food for human consumption from 1.5 percent to one percent, and repeals the authority for certain localities to impose a local income tax. The bill removes the sunset date (June 30, 2018) from the legislation that reduced the special real property tax rate on commercial property in Northern Virginia from $0.25 per $100 of assessed value to $0.125 per $100 of assessed value. Finally, the bill increases the special real property tax rate on commercial property in localities in Hampton Roads from $0.10 per $100 of assessed value to $0.125 per $100 of assessed value.

HJ 584 Constitutional amendment; Transportation Funds. Places a “lock-box” on transportation funds.

SB 695, SB 696, SB 697 Va. Toll Relief Act and Va. Casino Gaming Commission. Creates casino gaming commission and regulations whereby local governments could permit casino gaming facilities with revenues going to transportation in the area

SB 700 Taxes on fuels. Makes the retail sale of gasoline, diesel fuel, and other fuels subject to the general five percent retail sales and use tax and reduces the fuels tax on such fuels by $0.05 per gallon from $0.175 per gallon to $0.125 per gallon. Under current law, the sale of fuels is exempt from the general retail sales and use tax, but fuels are subject to a fuels tax imposed at the rate of $0.175 per gallon. Of the net additional revenues generated each year under the bill, $250 million would be deposited into the Highway Maintenance and Operating Fund and the remainder would be deposited into the Highway Construction Projects Trust Fund created under the bill.

SB 717 Transportation Revenues.  Establishes a five percent tax on motor fuels sales based on the statewide average wholesale price of a gallon of self-serve unleaded regular gasoline. Increases the additional registration fee on electric vehicles from $50 to $102 and requires hybrid electric motor vehicles registered in the Commonwealth to pay this fee.

Prohibits the placement of tolls on existing roads in the Commonwealth without the approval of the General Assembly. Lowers individual income tax rates and changes the individual income tax structure, effective January 1, 2014. Income less than $5,000 would be taxed at a 0.75% rate, income over $5,000 and up to $17,000 would be taxed at a 4.5% rate, and income over $17,000 would continue to be taxed at a 5.75% rate. Repeals income tax credits for vehicle emissions testing equipment, clean-fuel vehicles, and biodiesel fuel producers effective for taxable years beginning on or after January 1, 2013. Eliminates the sales tax exemption currently extended to certain services, such as auto repairs, taxi and limousines, armored cars, travel, and transportation.

SB 824 Hampton Roads Planning District; additional 1% sales & use tax in counties in District. Provides for an additional one percent sales and use tax in the counties and cities located in the Hampton Roads Planning District, with the additional revenues generated by the tax to be used for regional transportation projects. The tax would become effective on January 1, 2014, and only if approved by a majority of the voters in the Planning District at the November 2013 election.

SJ 2, SJ 6, SJ 275 Constitutional amendment; Transportation Funds.  Creates “lock-box” for transportation funds.