Capitol Briefs 5 (2.10.20)

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Senate removes safety inspection repeal from omnibus transportation package. House considers legislation on vehicle emissions standards. Business-centric measures undergo review in both chambers.


Session 2020, Issue 5

February 10, 2020

It appears safety inspections will remain. How frequently they’re required is to be determined.

For weeks now, your legislative team has been hard at work advocating that the Commonwealth keep annual inspections in place. To support our case, we have cited where other states experienced increases in fatalities and/or crashes after eliminating their respective programs. We have also cited findings that crashes involving vehicles with defects are twice as likely to result in a fatality as crashes involving vehicles without defects.

That said, the Governor’s administration remains committed to changing the status quo. Last Sunday afternoon, Speaker of the House of Delegates Eileen Filler-Corn called us to express she would add to her transportation bill (HB 1414) a modification to the inspection program to require inspections once every two years. She did so, and the House Transportation Committee approved it last Tuesday morning. We anticipate it will be approved by the House this week.

This compromise from the administration did not come as a shock to us. We heard rumors of it two weeks ago, but before that, we knew this sort of “meet in the middle” solution would be desirable for many. While we think consumer safety means inspections every year, we firmly believe keeping the program on a biennial basis is far better than losing the program altogether.

The Senate still has a say—they’ll consider two Senate Bills that address inspections plus whatever emerges from the House—and we know some Senators prefer the annual check. Either way, keeping vehicle safety inspections is a positive for Virginia drivers and the Commonwealth’s franchised dealer community. Thankfully, and because of VADA’s efforts—including that which many provided on Dealer Day and elsewhere—it seems inspections will remain. Only their frequency is uncertain.

Bills outside the Transportation Committee realm meant long hours for Team VADA. 

Every year, we monitor and become heavily involved in bills outside franchise legislation. As a result, last Tuesday and Wednesday were particularly busy.

Tuesday morning, our day began by testifying in House Transportation, where members considered the Speaker’s HB 1414, mentioned above.

Tuesday afternoon, we appeared in House Transportation subcommittee to discuss HB 717 (Reid), which addresses electric vehicle rebates. The meeting was delayed over an hour, but when the bill was heard around 5:30 PM, we expressed support of the substituted language, which calls for a workgroup to consider how best to increase EV affordability—after all, VADA members sell electric cars. We thanked Del. Reid for collaborating with us on the change, which invites us to be a part of the workgroup should it come to fruition. Both subcommittee and full committee approved the bill last week.

After testifying on Del. Reid’s bill Tuesday evening, we appeared in House Labor & Commerce subcommittee to speak on two bills—HB 417 (Cole, J.) and HB 1112 (Hudson). The former would have prevented an employer from ever requiring an employee to purchase materials or tools necessary for the job. If signed into law, it would totally alter service departments at every franchised dealership in Virginia, as dealers would need to provide auto technicians with all the tools techs currently bring. Thankfully, that bill died in subcommittee. The latter, HB 1112, would have made void every non-compete agreement in the Commonwealth. Fortunately, that bill was carried to next year and is not a threat for the 2020 session. We left the General Assembly that day just after 9 p.m.

A late night in Labor and Commerce had no impact on a 7:00 AM subcommittee in House Agriculture, Chesapeake, and Natural Resources the next morning. We met at VADA at 6:30 AM and headed downtown to speak on HB 577, legislation from Del. Mark Keam that would tie Virginia to California vehicle emissions standards. As you can imagine, we have some concerns with that—for starters, the bill would significantly impact what cars could be sold, titled, and registered in Virginia. We sat in subcommittee for two hours only to learn the bill would be carried for consideration. We’ll be back this week to express our thoughts on that legislation.

Please see below for more updates on bills we are tracking this session.

Weekly Legislative Update

See where we are on the issues and bills that affect Virginia dealerships the most.

Safety Inspections

Originally, there were five bills—two in the House, three in the Senate—addressing Virginia’s annual safety inspection program. As part of his budget proposal, Gov. Ralph Northam announced his desire to repeal the program. He asked Del. Jay Jones (D-Norfolk) and Sen. Louise Lucas (D-Southside & Hampton Roads) to carry legislation including such repeal in addition to other transportation safety initiatives.

As we reach the halfway point of Session, the House has staked out its position to require safety inspections once every two years, while the Senate’s approach is to maintain annual inspections.

Throughout session, we have highlighted consumer safety reasons for keeping the program, providing data to back up our points. We have also discussed how even the newest vehicles cannot alert drivers to every deficiency in a vehicle an inspection would catch.

  • HB 130 – Del. McNamara; SB 125 – Sen. Suetterlein
    • Either bill would eliminate Virginia’s safety inspection program. Both bills have been defeated. 
  • HB 1414 – Speaker Filler-Corn
    • Bill would, among furthering other administration-backed transportation initiatives—alter the safety inspection program to require inspections once every 24 months. We anticipate the House will pass it this week.
  • HB 1439 – Del. Jones
    • As amended, HB 1439 would alter Virginia’s safety inspection program to require inspections once every 24 months. Bill also includes other transportation safety measures. We anticipate the House will pass it this week.
  • SB 907 – Sen. Lucas
    • Bill would eliminate Virginia’s safety inspection program for all vehicles except for salvage vehicles, converted electric vehicles, and certain motorcycles. We anticipate the Senate will pass it this week.
  • SB 370 – Sen. Bell
    • Bill would extend from 12 months to 24 months the validity period of the first motor vehicle safety inspection of a new motor vehicle so long as the vehicle has not been drive more than 15,000 miles. Referred to Senate Transportation. This bill will not go forward.

California Cars

  • HB 577 – Del. Keam
    • Bill would put in place California emissions standards, potentially both low emissions (LEV) and zero emissions (ZEV) standards. This bill died in House Appropriations.

Dealer Plates

  • HB 595 – Del. Bourne
    • Bill would authorize the Department of Motor Vehicles to issue, upon request of a licensed dealer, a license plate that is a combination of a special license plate and a dealer tag. VADA asked Del. Bourne to carry this legislation. The House passed the bill 98-0. It will move to the Senate for consideration.

Peer-to-Peer Vehicle Sharing 

Marketed by some as Airbnb for cars, peer-to-peer vehicle sharing is an emerging technology that would allow one to rent—or share, depending on whom you ask—their vehicle to another through an online platform. The sharing platforms asked patrons to carry their preferred legislation. A rental car company asked patrons to carry theirs. Taxation was the main point of contention, with the platforms wanting less than the 10% rental tax applied to their transactions.

Why are we involved? We want everyone—including the car sharing platforms and/or its users—to pay their fair share to the Commonwealth so as to prevent Virginia from needing to increase the sales and use tax as a way of accounting for any deficits.

Additionally, we want to prevent a platform company—owned or funded by a large auto manufacturer—from titling a fleet of vehicles in another state, never paying Virginia’s sales and use tax, and bringing cars into Virginia to operate just as a traditional rental company but with a tax break.

With VADA’s help, the two sides reached agreement. Whenever a single owner has 11 or more vehicles on a shared platform, the tax on transactions shall be 10%, same as the rental tax. A single owner who has 10 or less vehicles on a shared platform will be taxed at 6.5% for the first year of this law and 7% thereafter. This is a win for VADA. It preserves transportation revenue, and it prevents large manufacturer owned fleets from circumventing the rental rules.

  • HB 891 & 892 – Del. Sickles; SB 749 & 750 – Sen. Cosgrove
    • This rental company-backed legislation would govern peer-to-peer vehicle sharing platforms and platform use in Virginia. HB 891 and HB 892 are unimportant now, as the rental company and sharing platforms have agreed to language that will be reflected in HB 1539. We anticipate the same consensus language will be reflected in SB 749 or Senator Newman’s SB 735. SB 750 is no longer needed.
  • HB 1539 – Del. Jones; SB 735 – Sen. Newman
    • This peer-to-peer vehicle sharing company-backed legislation would govern peer-to-peer vehicle sharing platforms and platform use in Virginia. We anticipate the House will pass HB 1539 this week with language reflecting the agreement between the sharing platforms and traditional rental company. It is unclear whether SB 749 or SB 735 will continue with the agreed language. Whichever it is, we anticipate the Senate will pass it this week.

Employer Issues

As always, we are monitoring various employer-employee legislation. This year, such bills include those addressing employee purchases of necessary tools and equipment, non-compete agreements, an increase in the minimum wage, and paid sick leave.

  • HB 417 – Del. Cole, J.
    • Prohibits any employer from requiring an employee to purchase from the employer or any other person materials necessary or required for the employee to perform or complete the work for which he was hired. This bill died in House Labor and Commerce subcommittee.

Consumer Data Security 

  • HB 473 – Del. Sickles
    • As you know, consumer privacy regarding data has been a point of emphasis for consumer advocates nationwide. This bill does not go as far as the California Consumer Privacy Act, but it would impact many larger dealerships with consumer data in excess of 100,000 records. This bill was continued to 2021 to allow for a study over the next year.

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