Capitol Briefs 2021 | Issue 4

Session 2021, Issue 4
February 8, 2021

As we have reported in past updates, much has changed about the operation of the General Assembly during these unique times. In this abbreviated session, both chambers had to complete work on their own bills last Friday, Feb. 5, leaving just six days remaining in the regular session. Last week, the Governor did as he promised and called a special session of the General Assembly to finish out the extra 16 days that the Republicans refused to agree to in a break with tradition. We expect the legislative work to continue after the official regular session deadline in much the same way as it has always done.

We also alluded to the changes we expected to see in the substance of what the General Assembly would enact after a.) the Democratic takeover of the House and Senate in 2019, and b.) by the election of President Joe Biden and a Democratic U.S. Senate in 2020. Well, last week saw bills making their way through the General Assembly that would not have been seen even three years ago. Here are some examples:

• Abolition of the Death Penalty: The House and Senate have each passed bills to abolish the death penalty making it all but certain that Virginia will be the 23^rd state, and the first in the South, to do so.
• Marijuana Legalization: The House and Senate have each passed bills eliminating criminal penalties for possession of marijuana for people ages 21 and older, provide for an automatic expungement process for those convicted of certain marijuana-related crimes, establish a regulatory scheme, and impose taxes on marijuana products.
• Elimination of Mandatory Minimum Sentences: The House and Senate have each passed bills to eliminate mandatory minimum sentences. Democrats have argued the high disparity in severe mandatory sentences for crimes likely committed by minorities makes these sentences racially-suspect and have tied the hands of judges who consider all the circumstances of the crime in deciding punishment. Supporters of continuing the minimums warn that sentencing by different judges around the state could treat defendants very differently, and that would create unfairness in the justice system.
• Restoration of Rights Amendment: The House has passed a resolution to put on the ballot a constitutional amendment to restore rights to felons who complete their sentences. The resolution will have to be passed again in 2022 before it is placed on the ballot.

As to the legislation that more directly impacts Virginia's franchised new car and truck dealers, here are some of the key issues we're tracking.

Electric Vehicles (EVs)

Virginia dealers support the adoption of EVs. They have adapted to changes in their industry for generations, and electric vehicles represent just the latest in a long line of advancements. The adoption of electric vehicles will be achieved, but only with the investment of all parties: manufacturers, dealers, electric utilities, environmental groups, government, consumers. Virginia dealers are doing their part.

We are actively working on several measure to advance the adoption of electric vehicles in Virginia:

ZEV Mandates – HB 1965 – Bagby

Requires adoption of California Air Resources Board (CARB) LEV and ZEV mandates.

Virginia dealers support the adoption of EVs. They have adapted to changes in their industry for generations, and electric vehicles represent just the latest in a long line of advancements. The adoption of electric vehicles will be achieved, but only with the investment of all parties: manufacturers, dealers, electric utilities, environmental groups, government, and consumers. Virginia dealers are doing their part. Adoption of California Air Resources Board (CARB) ZEV mandates is but a small step that requires significant investments by both the public and private sectors. Because ZEV mandates have the potential to affect dealers most significantly, we must ensure legislators understand the potential adverse impacts. Virginia should only consider ZEV mandates in conjunction with the necessary commitment of resources to assure successful implementation of the regulations without unfair impact on any party, including dealers.

Status: Passed the House (55-44). To be considered by the Senate.

Electric Vehicle Rebate Program – HB 1979 (Reid)

Establishes a point-of-sale rebate program for EVs.

This bill would provide rebates to reduce the cost of EVs. Currently the bill calls for a $2,000 rebate for the purchase of a new or used EV, along with an additional $2,500 for lower income purchasers. This is a critical part of efforts to spur the adoption of EVs. However, sufficient funding for this program would run into the tens of millions of dollars, and only several million are on the table right now.

Status: Passed the House (55-44). To be considered by the Senate. See recent media coverage of the rebate issue in the Virginia Mercury.

EV Infrastructure and Incentives Study – HB 2282 (Sullivan)

Requires the SCC, in cooperation with the Department of Mines, Minerals and Energy and the Department of Environmental Quality, to recommend policy proposals to advance transportation electrification in consultation with a wide list of interested parties, including dealers. 

Status: Passed the House (76-23). To be considered by the Senate

Inclusion of Transportation Electrification in VA Energy Plan – SB 1223 (Boyko)

Amends the VA Energy Plan to ensure that the promotion of transportation electrification is considered as a critical component of the plan.

Status: Passed the Senate (22-15). To be considered by the House.

Test Drives – HB 2318 (Roem)

Allows localities to regulate test drives in residential areas.

As originally drafted, the bill would allow a locality to pass an ordinance prohibiting test drives in residential areas. Any driver operating a vehicle on a dealer tag in a residential area would be subject to a traffic infraction. However, the bill could result in police stops on any person driving on a dealer tag in a residential area in a locality that adopts an ordinance, whether or not the person is on a test drive.

We worked with Del. Roem and the City of Manassas Park (which requested the bill), and the proposed measure is now much more limited in its impact on dealers and their customers. Dealers in any locality that adopt an ordinance regarding test drives in an enhanced speed area under §46.2-878.2 (Virginia’s code section on maximum speed limits in residential areas) must give notice of the ordinance and areas to avoid on a test drive. If a customer violates the speed limit or runs a stop sign in that enhanced speed area, the locality may contact the Dealer Board so the Board can determine if the notice was given by the dealer. If so, end of inquiry. If not, the dealer may be subject to a civil penalty by the Board.

The language solves the problem of the potential for anyone driving on a dealer tag to be stopped in a residential area, while also providing for enforcement against a dealer who does not provide the required notice. It also clarifies what a test drive is, making clear it does not include a prospective purchaser who is driving a vehicle to their residence when the dealer allows them to take a vehicle for several days.

We appreciate Delegate Roem’s willingness to address our concerns.

Status: Passed the House (84-15). To be considered by the Senate.

Other Measures We Are Watching

• Tax conformity measures to address the tax implications of the proceeds of PPP loans. The administration is proposing that expenses paid for with PPP funds NOT be deductible for state tax purposes. This is different from the federal tax treatment of those expenses.
• COVID-related issues, including sales tax exemptions for PPE and liability protections.
• Employer-related issues, including paid sick leave, equal pay and right to work.
• Consumer data bills. We are working to ensure no new restrictions are placed on dealers in handling their customer information.

As always, it is our pleasure to work for the interests of Virginia dealers at the General Assembly.