VADA to participate in workgroup to study best practices for providing electric vehicle incentives. HB 717 demonstrates VADA’s legislative involvement outside franchise issues and throughout the year.
Session 2020, Issue 8
March 3, 2020
This week, the General Assembly will end its 2020 Regular Session. All 140 members of our Commonwealth’s legislature have worked for nearly 60 consecutive days in pursuit of initiatives important to them and their constituents. As you know, the government business of these “part-time” legislators continues well beyond the legislative calendar. The same is true for VADA. For example, our legislative team will actively participate in a workgroup on electric vehicle rebates that will span the summer and fall of this year.
As you’ve read in these Capitol Briefs, Delegate David Reid (D-Loudoun) introduced HB 717, which initially sought to provide Virginians with electric vehicle rebates on new and used EVs. Aware of the sometimes-prohibitive cost of electric cars relative to vehicles with internal combustion engines, the Delegate was and remains focused on making EVs more affordable to all Virginians, including those with lower incomes.
We admire the Delegate’s intent with the bill. We also support electric cars and incentives to increase the sale of EVs. At the same time, we understand the car-buying process, the practical barriers to widespread adoption of EVs, and why some rebate/incentive programs are successful and others are not. We feared the language as introduced would either (1) not pass the legislature or (2) not achieve its purpose of making EVs more affordable to a wider market of consumers.
Fortunately, Delegate Reid was willing to work with us. We share a good working relationship with the Delegate, who is once again on the House Transportation Committee after reelection last November.
We met with him and his staff on numerous occasions and ultimately advocated for an amendment to the bill that would call for a workgroup to evaluate this issue. Most legislators understand they cannot be experts on every issue, so they routinely call for government agencies and industry professionals to study a topic, consider legislative options, and provide a report to the General Assembly.
That’s precisely what happened here. We expressed to Delegate Reid that we should not rush to set up an EV incentive program only to see it fail. He listened, change the bill’s language, and included us as one of the stated groups to participate in the study.
The Department of Mines, Minerals, and Energy; the Department of Environmental Quality; the Department of Taxation; and the Department of Motor Vehicles are charged with administering the workgroup, which would also include automobile manufacturers, electric vehicle charging network representatives, electric vehicle manufacturers, environmental organizations, and energy utility organizations. We will meet several times in person, and likely over the phone, and provide the General Assembly with a recommendation this November. The report may then inspire legislation in the 2021 session.
It appears the bills will pass, and we are pleased to see it. We also look forward to participating in the workgroup over the summer and into the fall. While unrelated to franchise legislation, HB 717 provides insight into the ways we work during and after session on behalf of the new car and truck dealers of Virginia.
Weekly Legislative Update
See where we are on the issues and bills that affect Virginia dealerships the most.
Here’s where we are: The House maintains its position to require safety inspections once every two years, while the Senate’s approach is to keep annual inspections. What happens now? Small groups of Senators and Delegates will meet in what are called committees of conference to determine the fates to House Bills 1414 and 1439, which both call for inspections every 24 months, and Senate Bills 890 and 907, which would keep annual inspections in place.
We have worked this issue ever since the Governor announced his desire to eliminate safety inspections last December. We have testified in front of committees and subcommittees. We have met privately in Senate and House offices to discuss the importance of the inspection program as it relates to consumer safety. We have also exchanged text messages and phone calls with our elected representatives. And other groups have worked with us in the fight.
Now, there is nothing anyone can do but accept whatever emerges from the conference committees. Safety inspections are one of numerous issues being considered in committees of conference this session.
The Governor’s administration was working to eliminate safety inspections, and they had some people convinced. Thankfully, they are willing to accept every other year, and some in the General Assembly think we should be grateful for the compromise.
While the conferees could decide to keep yearly safety inspections, the Governor will still have the power to veto or amend whatever reaches his desk. In sum, please understand inspections once every 24 months is a very real possibility.
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. The House passed the bill 56-42. The Senate conformed the bill to SB 890 (annual inspections) then passed it. The House rejected the Senate substitute. This means a committee of conference will consider this bill along with SB 890, which is similar in many ways but differs on the topic of safety inspections.
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. The House passed the bill 52-48. The Senate conformed the bill to SB 907 (annual inspections) then passed it. The House rejected the Senate substitute. This means a committee of conference will consider this bill along with SB 907, which is similar in many ways but differs on the topic of safety inspections.
SB 890 – Sen. Saslaw
- Bill contains the same transportation measures as HB 1414 but maintains the annual inspection system. The Senate passed the bill 23-17. The House conformed the bill to HB 1414 (inspections every other year). The Senate rejected the House substitute. This means a committee of conference will consider the bill along with HB 1414, which is similar in many ways but differs on the topic of safety inspections.
SB 907 – Sen. Lucas
- Bill contains some of the same measures as HB 1439 but maintains the annual inspection system. The Senate passed the bill 26-14. The House conformed the bill to HB 1439 (inspections every other year). The Senate rejected the House substitute. This means a committee of conference will consider the bill along with HB 1439, which is similar in many ways but differs on the topic of safety inspections.
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.
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. The Senate passed the bill 38-0. It will go to the Governor for approval.
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.
Lastly, just last week, one of the peer-to-peer sharing platforms—not the one primarily backing the bill, with whom we’ve worked most closely—expressed new reservations about the compromise language. This happened despite such company having participated in discussions about the bill throughout session. Thankfully, their efforts did not thwart the bill’s progress. Still, this was a reminder that nothing is done until it reaches the finish line.
SB 735 – Sen. Newman
- SB 735 reflects the consensus language and will be the vehicle for the agreed upon language moving forward. There is no need for HB 891, HB 892, HB 1539, SB 749, or SB 750 and, as such, all died before crossover. The Senate passed the bill 40-0. The House passed it 95-4. It will go to the Governor for approval.
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.
Consumer Data Security
Various bills dealing with consumer data will be studied over the coming year in preparation for legislation in 2021.