The Virginia Legislative Record is a report of the activities of Virginia legislative study commissions and joint subcommittees, reflecting the ongoing deliberations and recommendations of interim legislative studies. Meeting summaries were prepared by the staff of the Division of Legislative Services. More information concerning the individual commissions and committees is available on the DLS website or by calling 804-786-3591.
2015 Interim Meeting Summaries
2015 Interim News and Meeting Calendar
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July 20, 2015
The Virginia Code Commission (Commission) met on July 20, 2015, with Senator John Edwards, chair, presiding.
Adoption of Policy on Remote Meeting Participation
Alan Gernhardt, FOIA Council attorney, explained the proposed policy on member participation in Commission meetings by electronic communication means required under § 2.2-3708.1 of the Code of Virginia. Section 2.2-3708.1 allows individual members of the Commission to participate in a meeting through electronic communication means from a remote location that is not open to the public in the event of (i) an emergency or personal matter or (ii) a temporary or permanent disability or other medical condition. For a member to participate remotely, the Commission must have a written policy addressing such participation and meet other requirements specified in § 2.2-3708.1.
The proposed policy is derived from a similar policy adopted by the FOIA Council and provides for automatic approval of a member to participate remotely unless the member’s participation would violate FOIA, and, if such participation is challenged, then the matter would be put to a vote. Remote participation due to an emergency or personal matter is limited by law to two meetings or 25% of the meetings per member each calendar year.
The Commission approved the policy as presented.
of Administrative Law Advisory Committee (ALAC) Work Plan
Mr. Lisk presented ALAC’s work plan for 2015. Continuing studies include the review of the Model State Administrative Procedure Act (MSAPA), the timeliness of regulations as it relates to the Executive review process of regulations, and issues surrounding incorporation of an agency’s guidance document by reference in its own regulation.
The MSAPA judicial work group is continuing its discussion of ex parte communications and additional amendments to the Administrative Process Act (APA) on reconsideration and intervention. ALAC will also discuss amendments on administrative hearings by teleconference or videoconference.
ALAC proposes to review with the Attorney General’s office an interpretation issue on agencies’ use of the APA exemption provided in § 2.2-4006 A 4 a, which provides that regulations are exempt from part of the APA when the regulations are necessary to conform to changes in Virginia statutory law or the appropriation act where no agency discretion is involved. In 2011, an amendment was added requiring regulations promulgated under this exemption to be filed with the Registrar within 90 days of the law’s effective date.
In response to a comment by Mr. Calhoun concerning the amount of time it takes for a regulatory action to undergo the Executive review process, Mr. Hopkins stated that the issue is being looked at internally at the Governor’s office. Mr. Lisk stated that this problem is not a new one and has been an issue since the early 1990s. ALAC is looking at ways to hasten the review process without impeding the Governor’s authority.
The Commission approved ALAC’s proposed work plan as presented.
Request to Study Whether Changes to Code of Virginia Are Needed In Light of Obergefell v. Hodges Ruling
The chair pointed to the June 26 letter from Speaker Howell and Senator Norment requesting the Code Commission to evaluate what changes may be necessary to the Code of Virginia in light of the U.S. Supreme Court ruling in Obergefell v. Hodges and asked how the Commission would like to proceed. After discussing the matter, the Commission requested DLS to evaluate the scope of the request and how it relates to Senator Ebbin’s and Delegate Simon’s 2015 legislation concerning use of gender-specific terms throughout the Code of Virginia, which is also under review by the Commission. Upon a member expressing interest in the history of any overturned constitutional provisions in Virginia, David Cotter, DLS senior attorney, reported that there have been two—one pertaining to Virginia’s poll tax and the other concerning racial segregation. Mr. Cotter stated that both provisions remained in the Constitution of Virginia until 1971 when the Constitution was wholly revised. Staff will report back to the Commission later this summer.
Laws Report - Title 58.1
Mr. Vucci and Mr. Rosenberg presented a chart of Title 58.1-related statutes identified as obsolete and a proposed bill draft to remove the obsolete provisions from the Code of Virginia.
Mr. Vucci reported that § 58.1-339.5 (earned-income tax credit for low-income families with children) never took effect and therefore is recommended for repeal. The section passed in 1998 under the condition that the credit was effective upon written notice from the U.S. Department of Health and Human Services that the income tax credit qualifies as a portion of the maintenance of effort under the Temporary Assistance for Needy Families program. Instead, Virginia received a notice that the earned income tax program for low income families does not qualify for federal funds. Mr. Vucci stated that there is already a credit in the law that basically replaces this section, but § 58.1-339.5 potentially could be reactivated if a letter meeting the condition of the 1998 act is received from the federal government.
Mr. Vucci recommended the following tax credits be repealed because the credits have expired: §§ 58.1-339.9 (rent reductions), 58.1-434 (telecommunications income), 58.1-435 (low-income housing), 58.1-439.1 (clean fuel vehicle and advanced cellulosic biofuels job creation), 58.1-439.11 (employees with disabilities), 58.1-439.13 (investing in technology industries in tobacco-dependent localities), and 58.1-439.14 (research and development occurring in tobacco-dependent localities). Also, staff recommended repealing the following sections pertaining to the issuance of regulations, which are no longer needed since the associated tax credits have expired: § 36-55.63 (low-income housing) and § 58.1-439.16 (tobacco-dependent localities). Staff further noted that the low-income housing tax credit has been replaced by the livable home credit. Mr. Vucci alerted the members that § 58.1-439.1 had recently expired on January 1, 2015, and legislation to extend the tax credit failed.
In addition, Mr. Vucci recommended the Commission consider repealing the following sections:
Mr. Rosenberg explained the reasoning for considering the repeal of the remaining sections listed in the chart as follows:
The Commission discussed the recommendations and asked staff to check with the patron of the failed 2015 legislation to extend the tax credit provided in § 58.1-439.1. The Commission approved the recommendations and proposed bill draft.
of Title 23, Educational Institutions
Mr. Brimmer and Mr. Stevens presented proposed Chapters 8 (Health and Campus Safety) and 9 (Academic Policies) and revisited issues previously raised in several other chapters.
Proposed Chapter 8, Health and Campus Safety. This chapter is a consolidation of provisions relating to student health and campus safety that are currently scattered throughout existing Title 23. Mr. Brimmer explained the changes, and the Commission discussed the following points:
Proposed Chapter 9, Academic Policies. This chapter is a consolidation of statutes related to academic policies scattered throughout Title 23.
Senator McDougle commented on proposed § 23.1-900, which pertains to information to include on academic transcripts of students who have been suspended, dismissed, or withdrawn from an institution due to an investigation for an offense involving sexual violence. Specifically, new language in subsection C refers to institutions “described in subsection B.” Senator McDougle asked for clarification on whether there is a difference in which institutions are affected under current law versus the ones that would be affected by the proposed change. Staff will compile a list of such institutions for the Commission’s review. The Commission also discussed in detail subsection B and how it should be clarified to specifically say what it means. For instance, Judge Baskervill noted that the first part of subsection B provides an exclusion for The George Washington University by description, not by name. Mr. Brimmer stated that the titlewide definitions should provide clarification to some of the questions. The definitions are under development and will be presented at a future meeting.
Proposed Chapters 25, 26, 27, 28, and 29. Mr. Brimmer addressed outstanding issues in previously reviewed Chapters 25 (Virginia Military Institute), 26 (Virginia Polytechnic Institute and State University), 27 (Virginia State University), 28 (The College of William and Mary in Virginia), and 29 (State Board for Community Colleges).
Much of the language previously proposed for removal has been restored at the request of individual institutions. For example, an attempt was made to standardize provisions on conferring degrees in the titlewide general provisions section, but staff was unsuccessful in convincing some institutions to agree to remove such language from the statutes applying to the specific institution. Also, other language previously identified as not needing to be set out in statute has been restored because individual institutions have insisted that it be retained. An example of such language is in proposed § 23.1-2510 (existing § 23-112), which authorizes the Superintendent of VMI to “enlist musicians for service at the Institute.”
At the conclusion of his presentation, Mr. Brimmer advised that the Commission has completed nine of the 32 chapters. Staff plans to present 12 chapters at the August meeting and 11 chapters in September.
Staff suggested that the Commission consider either lengthening the meeting days or scheduling additional meeting dates in order to finalize the Title 23 recodification by the end of the year.
Law Portal Update
Ms. Hausenfluck updated the members on the status of the Code of Virginia on the Virginia Law Portal. She explained that the portal brings together the legal publications that comprise Virginia law, including the Code of Virginia, Virginia Administrative Code, Virginia Constitution, charters, authorities, compacts, and uncodified acts. The Code of Virginia on the portal updates and replaces the previous format commonly known as the “LIS Code.” Bookmarks and links that previously directed the user to the LIS Code now redirect to the portal. Ms. Hausenfluck concluded by reporting that the Virginia Law Portal has a Twitter account @VA_Laws.
The next meeting of the Commission is on Wednesday, August 19, 2015.
August 3-4, 2015
On August 3 and 4, 2015, the Dr. Martin Luther King, Jr. Memorial Commission (the MLK Commission) collaborated with the Library of Virginia to cosponsor the Anne & Ryland Brown Teacher Institute and the commemoration of the 50th anniversary of the Voting Rights Act of 1965 symposium.
Anne & Ryland Brown Teacher Institute
Every summer, the Library of Virginia’s Education Department organizes and presents a teacher development workshop with the financial support of the Anne and Ryland Brown Enrichment Fund. Each year, the theme and format of the workshop are different to reach more teachers and present content that is relevant to the Standards of Learning for Virginia Public Schools. Originally, the MLK Commission planned to host its own teacher institute on the Reconstruction Amendments (13th, 14th, and 15th amendments) of the United States Constitution; however, the MLK Commission and Library agreed to collaborate and use the Reconstruction Amendments as the theme for the Sixth Annual Anne & Ryland Brown Teacher Institute. The Library also launched its current exhibition, Remaking Virginia: Transformation through Emancipation, to focus on the Amendments and their relevance in rebuilding Virginia after the American Civil War.
According to the Library of Virginia, “since 2009, the Brown Endowment Enrichment Fund has underwritten the research and development of educational materials by two Virginia educators. The 2015 Brown Teacher Research Fellowships focused on research and projects in support of Remaking Virginia: Transformation through Emancipation, the Library of Virginia’s exhibition examining the transformation of Virginia society in the years following the American Civil War. Even as the American Civil War was still being fought, the status of almost one-half million African Americans in Virginia began to change. No longer were they someone else’s property—they were free. They anticipated the promise of change from their former status as slaves: the promises of education, political participation, and full citizenship. Yet, in their struggle to achieve these goals, freedmen and freedwomen faced the hostility of their former masters and the society that had long benefitted from their labor. Union troops and U.S. government officials reconstructing the Southern states were often indifferent. What challenges did African Americans face in their struggle to achieve what they believed freedom would bring them? What obstacles blocked their efforts to gain citizenship? How successful were African Americans during Reconstruction in claiming their objectives? Did the 14th and 15th Amendments to the Constitution significantly aid them in their struggles? The Library of Virginia’s exhibition Remaking Virginia: Transformation through Emancipation offers a look at the changing world Virginians faced during Reconstruction.”
The 2015 Brown Teacher Research Fellows Joy Beatty of Richmond and W. Scott Pierce of Newport News developed teacher resources that examine Virginia’s Reconstruction era, generally between 1863 and 1877, and created a set of documents from the Reconstruction period that will be added to the Education Department’s online primary resource collection, Document Bank of Virginia (http://edu.lva.virginia.gov/dbva), the Library’s initiative to provide primary source documents for public school classrooms.
On August 3–4, 2015, 42 teachers from across the Commonwealth attended sessions on the Reconstruction era and the Reconstruction Amendments that provided both historical content and teaching methodology. On the opening day, Dr. Edward Ayers, former president of the University of Richmond and renowned Civil War historian, opened the Institute with an address to teachers on Reconstruction era history in Virginia. Afterwards, teachers toured the Remaking Virginia exhibition and explored the Library’s and MLK Commission’s relevant digital offerings. The first day of teacher-focused activities concluded with a talk by local author Anne Westrick and teacher Joshua Forbes on using historical fiction paired with primary sources in the classroom.
On the second day of the Teacher Institute, teachers were introduced to the Document Bank of Virginia, the Library of Virginia Education Department’s new digital initiative to provide primary source documents for classrooms. Working in small groups, teachers prepared documents from the Library’s collections that will be added to the Document Bank, honed their transcription skills by learning about the Library’s crowd-sourced transcription project, “Making History,” and used original voting records from the Library’s collections to explain how African American voters gained, lost, and then regained the right to vote between the American Civil War and the Civil Rights eras.
Due to the collaboration with the MLK Commission, the Library was able to greatly expand its geographical reach to teachers as far away as Galax and the number of spaces available for the Institute, provide overnight lodging for attendees who traveled more than 70 miles in order to attend, and furnish lunch and coffee on both days of the event to attendees and presenters.
50th Anniversary of the Voting Rights Act of 1965: Protecting, Extending, and Ensuring the Franchise Symposium
On August 3, 2015, the MLK Commission held a commemorative symposium to mark the 50th anniversary of the Voting Rights Act of 1965 at the Library of Virginia. The symposium was free and open to the public. The MLK Commission assembled a distinguished panel for this important discussion. The panelists were the Honorable Robert C. Scott of Virginia, member of the U.S. House of Representatives, who provided information on Congressional efforts to restore the Voting Rights Act; Henry L. Chambers, Jr., J.D., professor of law at the University of Richmond who explained the history of the Voting Rights Act and offered a legal analysis of the United States Supreme Court decision in Shelby County, Alabama v. Holder, 133 S. Ct. 2612 (2013); Claire Guthrie Gustañaga, J.D., executive director of the ACLU of Virginia who described the effects of the Supreme Court’s Shelby decision on voting rights today throughout the nation; and the Honorable Jennifer L. McClellan, J.D., Chair of the MLK Commission, who discussed contemporary issues arising from the Shelby decision, the need to ensure that future generations appreciate and understand the sacrifices that were made to secure the right to vote, and the necessity of protecting the franchise. The panel was moderated by Lauranett L. Lee, Ph.D., Curator of African American History at the Virginia Historical Society.
Honorees of the MLK Commission for the occasion were the Reverend Dr. Wyatt Tee Walker, who was the chief of staff for the Reverend Dr. Martin Luther King, Jr., and the Honorable William Ferguson Reid, M.D., the first African American elected to the Virginia House of Delegates in 1967 after Reconstruction, both of whom were presented the MLK Commission’s “Spirit of Martin” award.
Teacher and Public Reaction
Teachers attending the Institute were overwhelmingly positive in their feedback and remarked on the variety of sessions in the Institute that focused on both historical content and teaching methodology. Many attendees and members of the public stated that the symposium was the highlight of the two-day Institute and commended the MLK Commission on its exemplary work.
July 30, 2015
The Joint Commission on Transportation Accountability (the Commission) met on July 30, 2015, in Richmond. The meeting was called to order, roll was taken, and a quorum was present.
Chairman Timothy Hugo and Vice-Chairman Stephen Newman made opening remarks. The Commission’s agenda included presentations by Richard Holcomb, the Commissioner of the Department of Motor Vehicles (DMV), and by Aubrey Layne, the Secretary of Transportation.
of Legislation on Transportation Network Companies, SB 1025 (2015) and
HB 1662 (2015)
Commissioner Holcomb reported on the effort DMV has put into the recent regulation of transportation network companies (TNCs). Both Uber and Lyft applied with DMV under the new law and are operating in Virginia.
Delegate Tom Rust acknowledged the ongoing effort and hard work by DMV to put this together and inquired about other motor carriers who are providing their services through an app and making sure that they are not being charged the application fee. Commissioner Holcomb and Rena Hussey (DMV) stated that other motor carriers that are not transportation network companies may offer their existing services through an app without paying the application fee to DMV, as provided in the TNC legislation.
Delegate Rust also asked if the application fee is sufficient or whether the General Assembly will need to reevaluate the fee. Commissioner Holcomb responded that DMV plans to report on this issue in December 2016 as required by the legislation.
Delegate Vivian Watts inquired about how a passenger knows the driver is a registered TNC driver. Commissioner Holcomb spoke about his personal experience taking an Uber in Dallas and explained that in addition to the decals, the app sends you a picture of the driver and the TNC vehicle so that the passenger has advance notice of what the driver and car look like.
on Vital Records at DMV
Commissioner Holcomb reported that over 150,000 birth certificates have been processed through DMV since the process was put in place. In addition to birth certificates, DMV will soon be able to offer marriage certificates, divorce decrees, and death certificates.
Senator Newman asked about progress on this new group of records and asked that for the next meeting there be an update on the processing through DMV of marriage certificates, divorce decrees, and death certificates.
on U.S. Route 29 Improvements, U.S. Route 460 Project Modification, and
Interstate 66 Projects and Financial Estimates
Chairman Hugo welcomed Secretary Aubrey Layne (the Secretary) who congratulated DMV on their great work with TNCs. The Secretary spoke to the Commission on several major transportation projects throughout the Commonwealth.
Delegate David Yancey asked if when this project was put forward and there were wetlands concerns if the issue had been discussed at the Commonwealth Transportation Board (CTB) meetings.
The Secretary informed the Commission that yes, the CTB did discuss the wetlands issue and was told that the permit was the risk of the contractor, and the Secretary mentioned that the Public-Private Partnership (P3) guidelines existing at the time allowed the administration to choose projects like this. The Army Corps of Engineers expressed significant concern about which the Secretary was informed upon becoming Secretary but he was not aware of their concerns during his service as a member of the CTB. The CTB was told that the amount of wetlands that were going to be affected was a reasonable amount and that it was okay to move forward with the project. Despite the wetlands impact increasing from 100 to 500 acres, the contract continued to call for payments. Payment stopped in November 2013.
Chairman Hugo asked if any of the $160 million that was spent on permits is usable for other projects. The Secretary advised that some of it will be usable for other projects that are being pursued in that area but most of it will not.
Senator Newman asked about the Commonwealth moving forward and providing transportation infrastructure for its citizens when two of the major projects described today have been canceled and the third is in flux. The Secretary responded that it was necessary for the Commonwealth to move forward and deliver but with up-to-date information and an accurate risk assessment.
Senator Newman inquired about the cost breakdown and the upfront capital investment on the P3 model for the multimodal project. Secretary Layne indicated that this project does not include bicycles but will include rail as discussed in cooperation with the local partners and that the project must include either Virginia Railway Express or metro expansion. Senator Newman asked for a breakdown of the upfront costs by the modes of transportation.
Delegate Jim LeMunyon asked about the differences in the models and specifically if the $350 million in excess funds was a choice for the Commonwealth to add to buy down costs. Secretary Layne indicated that he would not characterize it as a choice because the revenue stream from the tolls would only support half of the project. Secretary Layne added that the lower interest rates available to the state allow for the same revenue stream to be able to pay for more of the debt.
Delegate Watts asked for more details on the financial information and if the transit capital operating along the corridor could only be paid by tolls with the public finance model and not with the P3. Secretary Layne indicated that it would be negotiated that way in the contract.
Secretary Layne concluded by letting the Commission know that they have met with five interested parties, four of which have signed letters saying they could deliver and would bid off of the Commonwealth’s term sheet. Two of those stated they would exceed the terms.
Secretary Layne informed the Commission that more information will be available when the P3 Advisory Committee meets on August 17, 2015, and that they would make a recommendation by mid-December on which finance model would be in the best interest of the Commonwealth.
The Commission thanked the Secretary for his time.
August 4, 2015
The Commission on Unemployment Compensation (CUC) met on August 4, 2015, in Richmond, with Senator John Watkins presiding.
The duties of the CUC include evaluating the impact of existing statutes and proposed legislation on unemployment compensation and the Unemployment Trust Fund, assessing the Commonwealth’s unemployment compensation programs, examining ways to enhance the effectiveness of these programs, and monitoring the current status and long-term projections for the Unemployment Trust Fund.
Unemployment Trust Fund Balance and State Taxes
Ellen Marie Hess, Commissioner of the Virginia Employment Commission (VEC), briefed the members on the status of Virginia’s Unemployment Trust Fund (the Trust Fund) and related issues. The Trust Fund, which is used to pay unemployment benefits to claimants, was reported to have a balance of $448.3 million on January 1, 2015. One year earlier, the balance was $186.9 million. The solvency level of the Trust Fund on June 30, 2015, is projected to be 52.2 percent. On June 30, 2014, the solvency level was 40.3 percent. The rising solvency level is good news for Virginia’s employers because the fund builder tax, which is assessed at the rate of two-tenths percent of the first $8,000 of each employee’s wages, is suspended for years when the solvency level exceeds 50 percent. The solvency level rose above 50 percent more rapidly than had been forecast in 2014, when the VEC projected that this level would not exceed 50 percent until June 2016. Ms. Hess attributed the more rapid rise to continued improvement in the economy, which has resulted in the payment of fewer claims. She also noted that the decline in state unemployment tax revenue from $749.9 million in 2014 to $667.3 in 2015 was attributable to a shift in the distribution of employers’ tax rates, as the percentage of employers charged the lowest state unemployment tax rate of 0.10 percent increased from 15.9 percent to 17.3 percent and the percentage of employers charged the highest state unemployment tax rate of 6.2 percent decreased from 9.7 percent to 7.3 percent.
The VEC predicted that the Trust Fund’s June 30 solvency level will reach 60 percent in 2016, 65 percent in 2017, 67 percent in 2018, 66 percent in 2019, and 65 percent in 2020. Though the solvency level is expected to crest at 67 percent in 2018, the balance in the Trust Fund is expected to continue growing, from $939 million on June 30, 2016, to $1.19 billion on June 30, 2020.
The average total state unemployment tax per employee is expected to decline throughout the period 2015-2020. This average tax, which excludes the federal unemployment tax assessment but includes the pool tax and fund builder tax, rose from $103 in 2009 to $236 in 2012, then fell to $234 in 2013 and to $221 in 2014. For 2015, the average total state tax was forecast to decline to $186 per employee, of which $158.80 was base tax, $11.20 was pool tax, and $16 was fund builder tax. The average tax per employee is projected to be $158 in 2016, $145 in 2017, $138 in 2018, $132 in 2019, and $134 in 2020. The average pool tax assessment per employee peaked in 2012 at $42.40; in 2016, it is expected to be $8.80.
Claims and Payment Data
Total initial claims for unemployment benefits for the first six months of 2015 were 94,635, and annual claims for the year are projected to total 182,000. Such a total for 2015 would be 42,000 fewer than the 224,882 claims filed during 2014. Ms. Hess attributed the 19.4 percent decline in total initial claims through June 2015 compared with the same period in 2014 to fewer layoffs in the manufacturing sector.
Final payments of benefits in the first half of 2015 are down 20.2 percent from the same period in 2014 and down 30.5 percent from the same period in 2013. The exhaustion rate, which reflects the percentage of unemployment compensation recipients who use up all of the weeks of regular unemployment benefits for which they are eligible, was 41.2 percent in June 2015; in the corresponding month one year earlier, the exhaustion rate was 46.3 percent.
Virginia’s maximum weekly unemployment benefit of $378 reflects a weekly benefit replacement rate of 39 percent of the state’s average weekly wage. The national average maximum weekly unemployment benefit in 2015 is $431, and the national average weekly benefit replacement rate is 45 percent. While Virginia’s maximum weekly unemployment benefit is lower than the national average, it is third-highest among the six jurisdictions composing the area within the Fourth Circuit Court of Appeals. Only one of these six jurisdictions (the District of Columbia) had an average weekly benefit replacement rate in 2015 that is lower than Virginia’s rate.
The average state unemployment tax per employee in Virginia of $211 for the year ending September 30, 2014, was the lowest of these six jurisdictions. The national average for the same period was $400, and the highest among the six jurisdictions was the $473 assessed in North Carolina.
Ms. Hess reported that Virginia’s unemployment rate
(not seasonally adjusted) for June 2015 was 5.0 percent. The corresponding
rate for June 2014 was 5.4 percent and for June 2013 was 6.1 percent.
Implementation of Recent Legislation
The CUC was briefed on the status of the VEC’s implementation of two legislative programs recently enacted by the General Assembly. The first is the Short-Time Compensation (STC) program, which was enacted during the 2014 Session. Senate Bill 110, which was jointly chief patroned by Senators William Stanley and George Barker, provided for the establishment of an STC program under which employers may seek approval of a plan to reduce the hours worked by employees and permit the employees whose hours are reduced to receive partial compensation for lost wages.
The bill included enactment clauses providing that (i) the STC program will expire on January 1, 2020, and (ii) if federal grants covering certain costs of establishing the STC program are not received by the VEC by July 1, 2016, the program will expire on that date. The U.S. Department of Labor has notified the VEC that the inclusion of these two enactment clauses precludes Virginia’s STC program from qualifying for federal grants that may otherwise reimburse the VEC for costs associated with establishing the program.
The STC program became effective January 1, 2015. To date, one employer submitted an application for participation in the STC program. The application was denied because it did not meet the program’s criteria.
The second legislative program on which the CUC received an update is the military trailing spouse program enacted during the 2014 Session. Senate Bill 18, patroned by Senator Mamie Locke, provides that good cause for leaving employment exists if an employee voluntarily leaves a job to accompany the employee’s spouse, who is on active duty in the military or naval services of the United States, to a new military-related assignment established pursuant to a permanent change of duty order from which the employee’s place of employment is not reasonably accessible. The measure applies only if the state to which the spouse is transferred has a similar provision, unless the transfer involves members of the Virginia National Guard relocated within the Commonwealth.
In order to assist the CUC in monitoring the costs and benefits provided by this measure, Ms. Hess reported that in fiscal year 2015 the VEC paid out $658,597 in unemployment benefits to 212 claimants. She noted that the costs of this program are less than the VEC had anticipated. The lower costs may prompt the VEC to recalculate the pool charge to be assessed in 2016, due to the provision of Senate Bill 18 requiring that benefits paid to qualifying claimants be charged against the pool rather than against the claimant’s employer. In response to an inquiry by Senator Watkins, the VEC pledged to review available data to determine if the recent recession and federal budget sequestration have produced any trends regarding the quality of jobs in the Commonwealth’s economy, including the number of employees whose jobs are for less than the traditional 40-hours per week. Ms. Hess identified two trends: manufacturing jobs continue to be lost, and the statewide average weekly wage continues to improve.
Treasury Offset Program
The Treasury Offset Program (TOP) is a centralized offset program administered by the Bureau of the Fiscal Service, an agency within the U.S. Department of the Treasury. TOP is used to collect delinquent debts owed to federal agencies and states.
Section § 2.2-4806 of the Code of Virginia requires state agencies to use TOP to collect eligible debts. Ms. Hess reported that the VEC will utilize TOP to collect eligible unemployment benefit overpayment debts and unpaid unemployment tax debts. Debts are eligible to be referred to TOP if they are the result of fraud or the claimant’s failure to report earnings while collecting unemployment benefits, or if they are more than 90 days delinquent and the debtor is not in appeal, repayment, or bankruptcy. The VEC estimates that in the first year of participation, approximately 65,000 accounts will be referred to TOP and that $35 million will be requested for offset.
The entirety of the funds recovered from TOP is required to be deposited into the Unemployment Trust Fund. This requirement precludes the VEC from using funds collected through the TOP to cover the charge of $17 per offset. As a result, the VEC is required to pay the offset charges, which are expected to be up to $1 million, from its own funds. Ms. Hess acknowledged that an appropriation will be required to cover this cost, and she reported that the administration has been asked to include it in the Governor’s amendments to the budget. Members cautioned that an appropriation of general funds for such purpose may not be approved, and that the VEC may want to seek a budget amendment that authorizes the use of funds in the agency’s penalty and interest account to cover the TOP offset charges.
Status of the VEC’s Unemployment Modernization Project
The VEC has been implementing upgrades to its information technology systems through its Unemployment Modernization Project (UI Mod). UI Mod was intended to replace the agency’s mainframe computer system with one capable of supporting the payment of benefits to unemployed workers, the collection of taxes from employers, and the accumulation of wage data.
Ms. Hess reported that the tax portions of the program have been completed and will “go live” on a date this fall. She expressed hope that the benefits portions of UI Mod will be completed next year, though the funding for this portion has not been identified. The bulk of the funds for UI Mod to date have been provided from Reed Act federal funds with the balance coming from the VEC’s penalty and interest fund. Senator Watkins observed that the VEC is one of two agencies out of compliance with VITA standards, and that it is imperative that the VEC be ready to respond to any changes that result from the ongoing negotiations of the Commonwealth’s information technology contracts.
The final issue addressed by Ms. Hess was the cost savings initiative underway at the VEC. The agency has identified savings from a variety of sources, including canceling a lease for office space near its downtown headquarters, reducing its vehicle fleet, and eliminating unused and underused computers.
House Bill 1278
The chairman of the House Commerce and Labor Committee requested that the chairman of the CUC consider issues raised by House Bill 1278 from the 2015 Session. House Bill 1278, introduced by Delegate Glenn Davis, amends provisions in Virginia’s unemployment compensation laws designating the employer responsible for benefit charges. Under current law, the last employer that employed a benefits-eligible individual for 30 days (whether or no consecutive) or 240 hours will be assessed benefit charges relating to such individual’s benefit claim. The bill increases the employment thresholds at which responsibility attaches to 60 days or 480 hours. The last employer that employed a benefits-eligible individual for this period will be assessed benefit charges relating to such individual’s benefit claim.
According to the VEC’s fiscal impact statement, the fiscal impact of House Bill 1278 could not be determined. When the bill was heard in House Commerce and Labor Subcommittee #2 on January 29, 2015, the VEC reported that the bill’s administrative costs would be $652,040. The Code of Virginia requires that a claimant have qualifying separations from his last 30-day employer and any subsequent employers. As a result, the VEC is required to adjudicate issues arising from recent non-chargeable employers. Increasing the charging period from 30 to 60 days would be expected to increase the number of adjudications.
In addition to making some prior 60-day employers responsible for benefit charges associated with subsequent discharges of a former employee, the measure would have the effect of increasing the pool tax paid by all employers, because the benefits would be charged to the pool if a responsible 60-day employer cannot be ascertained. Data provided by the VEC indicated that if a measure like House Bill 1278 were to take effect on July 1, 2016, the pool tax rate would increase by an average of 0.11 percent for each of the years 2017 through 2024. Over this eight-year period, the additional taxes required by the bill would total $173.3 million.
In his remarks to the CUC, Delegate Davis acknowledged that House Bill 1278 did not accomplish his goal, which was to eliminate the “cliff effect” that results from the existing 30-day attachment period without increasing taxes or making employees ineligible for benefits. He reported that he has been working with Pat Levy-Lavelle of the Legal Aid Justice Center to develop an alternative approach, based on the system in effect in34 other states, whereby all employers of a claimant during the base period are charged benefits in proportion to the wages earned by the claimant with each employer. Delegate Davis stated his intent to continue examining this option, which was the basis of legislation introduced by former Delegate Tata as House Bill 2485 in 2003.
On Senator Watkins’ motion, the CUC recommended that House Bill 1278 not be recommended. Delegate Davis was advised to meet with the VEC and other interested groups, including the Virginia Chamber of Commerce and the Legal Aid Justice Center, in the development of his alternative legislation.
House Bill 1855
Delegate Les Adams introduced House Bill 1855 in the 2015 Session. The bill was tabled in the House Commerce and Labor Committee and, at Delegate Adams’ request, the chairman of the House Commerce and Labor Committee asked the CUC to examine issues related to the bill.
House Bill 1855 excludes from the amount of wages paid by an employer, for purposes of calculating state unemployment tax liability, wages paid to an employee who owns all or a majority of the equity of the employer, if the employer is a corporation, limited liability company, or other business entity. The bill’s rationale was that the wages of an employee who is also the owner of the employing business should not be subject to state unemployment taxes if the employee/business owner is ineligible for unemployment compensation benefits.
Regardless of the merits of that rationale, the bill if enacted would have the effect of making the employing business liable for a 10-fold increase (from $42 to $420 per employee) in its federal unemployment tax. This result would occur because the 90 percent tax credit against the federal unemployment tax that is provided to employers that pay state unemployment taxes on time and in full per employee would be forfeited.
Faced with this result, Delegate Adams announced that he did not wish to pursue House Bill 1855 as introduced. Through staff, he asked the CUC to consider whether the VEC’s standards for determining when the owner of a business is eligible for UI benefits are appropriate. In the decision of the VEC on appeal of the Appeals Examiner’s ruling, the circumstances that may be considered in determining whether the claimant may be deemed unemployed due to the resulting separation from employment and lack of work include whether the claimant has disposed of his interest in the employer corporation, or whether the corporation has been completely dissolved so that there is no position or job. Prior decisions have held that a claimant who continued to perform services for an inactive corporation for no compensation nonetheless remains an employee of the corporation.
Delegate Adams also asked the CUC to explore whether there is a better way to make information about the VEC’s standards available or accessible to employers. While the VEC website includes links to certain court and appeals documents, all case decisions are not available and employers may not be aware that the information is available on the website.
Lisa Rowley, the VEC’s Chief Administrative Law Judge, provided the CUC with an overview of the VEC’s current standards for determining whether an owner of a defunct business is still an employee of the business, and, if not, whether the termination of employment was voluntary. She added that in the case involving Delegate Adams’ constituent that gave rise to House Bill 1855, the employer/corporation is still in business.
The CUC decided to make no recommendation on House Bill 1855. Senator Watkins observed that the other matters raised by Delegate Adams, such as appropriateness of the current standards and the ability of employers to access information about these standards, are not embodied in the bill that was referred to the CUC.
The chairman announced that the next meeting of the CUC will be held in December. The meeting is expected to include an update on the status of the Unemployment Trust Fund and a review of proposals for unemployment-related legislation to be introduced in the 2016 Session.
The following legislative commissions and committees are not staffed by DLS. They also hold regular meetings during the interim. Visit their websites to obtain full information regarding their meeting dates, agendas, and summaries.
Meetings may be added at any time; please check the General Assembly and DLS websites for updates.
Visit the Virginia Law Portal for publications that constitute “Virginia law,” including the Code of Virginia, the Virginia Administrative Code, the Constitution of Virginia, Compacts, Charters, Authorities, and Uncodified Acts of Assembly. For updates, follow Virginia Law on Twitter @VA_Laws.
Each publication is a database of the Virginia Law Portal. Each database can be searched independently and all databases can be searched collectively. For example, searching for special conservator of the peace finds 18 results when searching only the Code of Virginia but finds additional references in the authorities, charters, and uncodified acts databases and the Virginia Administrative Code after selecting All from the search dropdown menu. Using quotation marks around this search phrase example further narrows the search results in the Code of Virginia to 10 results.
Results for searches of the Code of Virginia and the Virginia Administrative Code are sorted by relevance. To list the results by Code section or VAC section order, choose Section order from the dropdown menu located in the top right portion of a search result.
The section look up search box on the left side of the Code of Virginia provides a direct search for an individual Code section and the VAC# look up search box on the left side of the Virginia Administrative Code database provides a direct search for a regulation section.
When using these look up search boxes, enter a title number to go straight to the table of contents of a particular title. For example, enter 18.2 in the Code of Virginia section look up box and the table of contents for Title 18.2, Crimes and Offenses Generally, appears. Enter 12 in the Virginia Administrative Code VAC# look up box and Title 12, Health, appears.
Complete information on meetings during the 2015 interim is available on the website of the Division of Legislative Services (dls.virginia.gov/commissions.html).
© 2015 Division of Legislative Services
Published in Richmond, Virginia, by the Division of Legislative Services, an agency of the General Assembly of Virginia.