BALLSTON-VIRGINIA SQUARE

Civic Association Newsletter

January/February 1997 - Volume 20, No. 4



1997 GENERAL ASSEMBLY HIGHLIGHTS

AS OF JANUARY 19, 1997

Since the December 1996 Newsletter, the Executive Committee has obtained information on another Local Income Tax bill, House Bill (HB) 1651, Local income taxes, 1997 General Assembly, patroned by Delegate Mitchell Van Yahres (D), House District 57, Charlottesville, Virginia.

In the prior issue of the Newsletter, December 1996, the Association reported under the article titled BVSCA 1996 NEIGHBORHOOD SURVEY RESULTS PRESENTED TO COUNTY BOARD, page 7, that BVSCA President Ernie Ragland encouraged the County Board at the Board Meeting of October 26, 1996, to read the BVSCA 1996 Neighborhood Survey results. During the discussion, President Ragland stated "Mr. Wise and Mr. Hunter have just mentioned a local income tax. Our members of BVSCA believe that it is the highest concern item in our most recent survey. We received 93.7%, either concerned or critical problem response from our members. We do mention House Bill (HB) 1410 on page 36 of the [October/November 1996] Newsletter. We talk about the recent history, concern by the members, and some information from last year in our discussion here at the County Board.

We mentioned also the Federation's discussion and your comments Mr. Hunter [at the January 1996 Civic Federation meeting], and then we did some follow-up research. This HB 1410 does not address personal property tax. It only addresses the real estate tax and the local income tax. The idea is correct though that the first year of the implementation of the local income tax, assuming that a county or a city would establish an ordinance approving such a tax, the first year in terms of effect, it would only apply [as an offset] against the real estate tax. There is no mention in the bill about personal property taxes."

Comparable to HB 1410, 1996 General Assembly, HB 1651, 1997 General Assembly, proposes to eliminate the five-year expiration of authority to levy the tax. Also, under HB 1651, any county or city is hereby authorized to levy a local income tax at the rate of one percent in addition to the applicable state income tax rate for an individual, for a fiduciary of an estate or trust, or for a corporation, for each taxable year of every resident of such county or city or corporation having income from sources within such county or city. The same rate shall apply to individuals, fiduciaries and corporations.

Further, in the first full fiscal year in which the tax is levied, this bill requires the governing body of each county or city in which such tax is levied to reduce the rate of its real estate tax or tangible personal property tax in an amount that will reduce real estate tax revenues or the tangible personal property tax revenues in the following year by an amount equal to the amount of local income tax revenues collected. In each future fiscal year following a reduction in the real estate tax or the tangible personal property tax, the revenues from such real estate tax or tangible personal property tax shall not increase by more than the sum of the city's or county's estimated percentage population change plus the rate of inflation in Virginia as measured by the CPI-U published by the Bureau of Labor Statistics as determined by the State Tax Commissioner for the latest twelve-month period.

Similar to HB 1410, 1996 General Assembly, HB 1651, 1997 General Assembly, shows that all reference to the referendum and voter approval requirement has been crossed out, and the limiting language that the income tax be used for transportation purposes also has been crossed out. The bill states that the tax may be imposed by the adoption of an ordinance by the governing body of the county or city.... This bill and four other significant bills from the 1997 General Assembly that affect our community are provided for our members consideration. These include: 1) HB 1651 Local income taxes; 2) SB 770 Salaries of board members in Arlington County; 3) SB 954 Industrial development authorities; 4) HB 2180 Industrial development authorities; and 5) SB 1012 Filing information with commissioners of revenue.

1) HOUSE BILL NO. 1651 Local income taxes; increased.

Offered January 8, 1997, Prefiled January 2, 1997

A BILL to amend and reenact 58.1-540 and 58.1-548 of the Code of Virginia and to repeal 58.1-549 of the Code of Virginia, relating to local income taxes.

Chief Patron-- Delegate Mitchell Van Yahres (D)-House District 57, Charlottesville, Virginia; General Assembly (804) 786-7292;

Patron--Delegate John J. Davies III (D)-House District 30, Culpeper, Virginia; General Assembly (804) 786-7102

Referred to Committee on Finance

Be it enacted by the General Assembly of Virginia:

1. That 58.1-540 and 58.1-548 of the Code of Virginia are amended and reenacted as follows:

58.1-540. Levy of the tax.

A. Any county or city is hereby authorized to levy a local income tax at the rate of one percent in addition to the applicable state income tax rate upon the Virginia taxable income as determined in 58.1-322 for an individual, 58.1-361 for a fiduciary of an estate or trust, or 58.1-402 for a corporation, for each taxable year of every resident of such county or city or corporation having income from sources within such county or city. The same rate shall apply to individuals, fiduciaries and corporations.

B. The tax may be imposed by the adoption of an ordinance by the governing body of the county or city in accordance with general or special law, and the tax may be thereafter enacted, modified or repealed as any other tax the governing body is empowered to levy subject only to the limitations herein. No ordinance levying a local income tax shall be repealed unless and until all debts or other obligations of the county or city to which such revenues are pledged or otherwise committed have been paid or provision made for payment.

C. In the first full fiscal year in which the tax is levied, the governing body of each county or city in which such tax is levied shall reduce the rate of its real estate tax or tangible personal property tax in an amount that will reduce real estate tax revenues or the tangible personal property tax revenues in the following year by an amount equal to the amount of local income tax revenues collected. In each future fiscal year following a reduction in the real estate tax or the tangible personal property tax, the revenues from such real estate tax or tangible personal property tax shall not increase by more than the sum of the city's or county's estimated percentage population change plus the rate of inflation in Virginia as measured by the CPI-U published by the Bureau of Labor Statistics as determined by the State Tax Commissioner for the latest twelve-month period.

58.1-548. Disposition of revenues; costs of administration.

A. All local income tax revenues collected by the Tax Commissioner pursuant to this article shall be paid into the General Fund of the state treasury.

B. Such revenues shall be transferred monthly by the Comptroller to a special fund entitled "Collections of Local Income Taxes," upon certification of such amounts by the Tax Commissioner.

C. As soon as practicable after the last day of each calendar quarter, the Comptroller shall pay over and distribute to each county and city the local income tax revenues to be estimated by the Tax Commissioner. The Tax Commissioner shall reconcile such estimates during the month following the close of the fiscal year for those returns on file for the preceding taxable year.

D. The direct costs of state administration of the local income tax as certified to the Comptroller by the Department of Taxation shall be deducted on a prorated basis from the distributions to each county and city under subsection C of this section. In determining each county's or city's prorated share of administrative costs, the Comptroller shall apportion the total administrative costs in the ratio which the revenues of each county or city bear to the total local income tax revenues distributed. The direct costs for local administration of the local income tax shall be paid entirely from the local revenues of the county or city.

2. That 58.1-549 of the Code of Virginia is repealed.

Bill Tracking - 1997 session

HB 1651 Local income taxes; increased.

Chief Patron-Mitchell Van Yahres

Status:

01/08/97 House: Referred to Committee on Finance

01/10/97 House: Assigned to Finance sub-committee: 1

2) SENATE BILL NO. 770 Salaries of board members in Arlington Co.

Offered January 8, 1997

A BILL to amend the Code of Virginia by adding a section numbered 15.1-687.25, relating to the County manager plan; board salaries.

Patrons--Whipple, Howell and Ticer; Delegates: Almand, Connally and Darner

Referred to the Committee on Local Government

Be it enacted by the General Assembly of Virginia:

1. That the Code of Virginia is amended by adding a section numbered 15.1-687.25 as follows:

15.1-687.25. Salaries and expenses of board members.

Notwithstanding any other provisions of law to the contrary, the governing body of any county which has adopted the county manager plan provided for in this chapter, may, after a public hearing pursuant to notice in the manner provided in 15.1-504, set the annual salary of its members.

The maximum allowable salary is $25,000, except:

1. The annual salary of the chairman, vice-chairman, or both, may exceed the maximum allowable salary prescribed above; and

2. The maximum allowable salary prescribed above may be adjusted by the application of a recognized measure of inflation, as provided by an agency of the federal government.

In addition to the maximum allowable salary described above, the county board may also grant its members such fringe benefits, expenses, and reimbursements as it deems appropriate, after the notice of a public hearing described above.

Full text: 01/08/97 Senate: Presented & ordered printed 977327758

Status:

01/08/97 Senate: Referred to Committee on Local Government

01/14/97 Senate: Reported from Local Government (15-Y 0-N)

01/15/97 Senate: Constitutional reading dispensed (38-Y 0-N)

01/15/97 Senate: VOTE: CONST. READING DISPENSED (38-Y 0-N)

01/16/97 Senate: Read second time and engrossed

01/17/97 Senate: Read third time and passed Senate (39-Y 0-N)

01/17/97 Senate: VOTE: PASSAGE (39-Y 0-N)

01/17/97 Senate: Rec. of passage agreed to by Senate (40-Y 0-N)

01/17/97 Senate: VOTE: RECONSIDER (40-Y 0-N)

01/17/97 Senate: Passed Senate (40-Y 0-N)

01/17/97 Senate: VOTE: PASSAGE (40-Y 0-N)

01/17/97 Senate: Communicated to House

3) SB 954 Industrial development authorities.

4) HB 2180 Industrial development authorities.

Patron-Mary Margaret Whipple

Patron-L. Karen Darner

Summary:

Industrial development authorities. Allows industrial development authorities created by localities without housing authorities to issue tax-exempt bonds to finance housing projects owned and operated by for-profit enterprises. Currently, only taxable bonds may be issued to finance single or multi-family residences operated by commercial enterprises.

Full text:

01/16/97 Senate: Presented & ordered printed 970367758

01/16/97 House: Presented & ordered printed 970368196

Status:

01/16/97 Senate: Referred to Committee on Counties, Cities and Towns

01/16/97 House: Referred to Committee on Counties, Cities and Towns

5) SB 1012 Filing information with commissioners of revenue.

Offered January 17, 1997

A BILL to amend and reenact 58.1-3901 of the Code of Virginia, relating to filing information with commissioners of the revenue; penalty.

Chief Patron-- Senator Richard J. Holland (D), Senate District 15, Windsor, Virginia; General Assembly (804) 786- 7392

Referred to the Committee on Finance

Be it enacted by the General Assembly of Virginia:

1. That 58.1-3901 of the Code of Virginia is amended and reenacted as follows:

58.1-3901.

Owners, operators, managers of certain facilities to file information with the commissioner annually.

Every person owning, managing, or operating any apartment house,condominium, cooperative-housing facility, office building, shopping center, trailer camp or trailer court, self-storage facility, marina, or privately owned or operated airport in the Commonwealth shall, on or before February 1 of each year, upon request of the commissioner of the revenue of the county or city in which any such facility is located, file with such commissioner of the revenue a list giving the name and address of every tenant, lessee, owner, or other person permitted to occupy or use space at such facility, the state and registration number of any watercraft or aircraft at the facility, and the year, make, model, state and license plate number of any motor vehicle garaged, housed, or parked on the premises as of January 1 preceding. The owner, manager, or operator of such facility may require, as a condition to leasing, selling, licensing, or otherwise granting any rights or interest in space at such facility, that any tenant, renter, or such other person provide the owner, manager, or operator of such facility with the information required to be provided pursuant to this section. The governing body of any county adjoining a county having a population of more than 1,000 per square mile may require like information from any such person leasing houses for rent, and violation of any such ordinance requiring the same may be punished as hereinafter provided. Any person failing to comply with this section shall be guilty of a Class 4 misdemeanor.

The Association encourages members to call the 1997 Virginia General Assembly Constituent Hotline Telephone Number 1-800-889-0229, and express your views on these bills or others.



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