Capitol Briefs 2021 | Issue 3

Session 2021, Issue 3
February 1, 2021

During the week of January 25 (the third week of session), our attention turned to legislation concerning electric vehicles (EVs). We understand this is future of our industry and we support this innovation.

As Democrats on the state and national level are focusing on the environment, it was simply a matter of time until attention was focused on transportation emissions. As you may recall, last year the General Assembly considered a bill that would have imposed the California LEV and ZEV standards on Virginia. This could potentially impact the kind of vehicles you have available from your manufacturer by requiring a certain amount of those vehicles to be ZEVs, perhaps to the exclusion of conventional internal-combustion engine vehicles. Last year’s measure was not successful, but we knew we would see this issue again.

We made very clear to our legislators that accepting mandates on the kinds of vehicles dealers will have to sell could only be tolerable if the General Assembly committed resources to enhance demand for EVs and to ensure sufficient infrastructure to charge them. The General Assembly heard us and is considering a package of legislation to advance EVs and transportation electrification infrastructure. The individual bills are detailed below.

The VADA, as directed by the Legislative Committee, is leading from the front on the issue of EVs by supporting these efforts by the General Assembly. Legislators have taken note and have expressed their appreciation and respect for the way the VADA and its dealer members have approached this important issue. The goodwill we have engendered among the environmental community will be very helpful as we all work together to successfully adopt new technologies in transportation to improve environmental quality.

Here are a few press mentions about VADA’s efforts as well as an information piece we created for legislators.

• Virginia Mercury: Virginia auto dealers say they will support new vehicle emissions standards
• Richmond Times-Dispatch: Don Hall column: To create a cleaner Virginia, incentivize purchases of EV automobiles (published prior to VADA’s full support)
• Virginia Mercury: Democrats eye vehicles as the next target for cutting carbon emissions (published prior to VADA support, but offers accurate and balanced overview of the issue)

Also, download our EV One-Pager to understand our position and facts regarding EV adoption in Virginia.

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

Here are some of the key issues we are 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: Full passage by the House expected this week.

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: To be considered by House Finance Committee this week.

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. 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. 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: Final passage by the House scheduled for this week.

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.