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Legislative Newsletter - June 22, 2011

Number 10

State Revenues Continue to Grow; Surplus Likely
Through 11 months of the fiscal year, state general fund revenues have increased by 5.8% over the same period last year, exceeding the state’s official projection of 3.5% growth. With just days left in the current fiscal year, administration officials are estimating a year-end revenue surplus in the $100 to $200 million range (though other estimates put that figure at around $250 million).

      May receipts were up nearly 18% from the same month a year ago, fueled by a 49% increase in “non-withholding” income taxes. These dollars, which account for about 14% of the state’s general fund revenue, are up 14% for the year. Withholding and sales taxes showed only modest growth during May.

      Overall, revenue collections have exceeded the previous year’s performance in 14 of the past 15 months, with increases of at least nine percent in six of the last seven months. The state must collect $1.6 billion in June to meet the official budget forecast; as comparison, $1.8 billion was collected during June of last year.

Board of Health Approves Revised AOSS Rules

      The Virginia Board of Health approved Alternative Onsite Sewage System (AOSS) regulations at a meeting earlier this month. The rules contain a number of new performance requirements to be applicable to all AOSS, and require AOSS owners to establish a relationship with a licensed operator and have their system maintained by the operator. Professional engineers asked the Board to table the proposed regulations, saying that the economic and social impact of the proposed rules had been underestimated, that the Board did not provide scientific and evidence based documentation to support proposed effluent and groundwater quality standards, and that it exceeded its statutory authority in numerous areas of the proposed regulation.

      Three notable changes in the regulations since they were published for public comment in late 2010 are as follows: 1) The licensed operator of the AOSS is no longer required to notify the local health department when his “relationship” (maintenance contract) with a homeowner is terminated (making it harder for the local health department to track annual inspections); 2) Professional engineers can seek waivers from certain performance requirements in the regulations for AOSS they design (such systems enjoy a pre-existing statutory exemption); and 3) Nitrogen reduction requirements for new AOSS in the Chesapeake Bay watershed are delayed until July 1, 2013, or two years after the effective date of the regulations, whichever occurs later.

      The final regulations now undergo an executive branch review. Once that review is complete and the proposal is approved by the governor, the regulations will be published and will go into effect 30 days after publication.


CTB Approves Six-Year Program
      The Commonwealth Transportation Board (CTB) approved a FY2012-FY2017 Six-year Improvement Program at its regular meeting last week. For FY12, it includes nearly $2 billion more for the state’s highways than the current program. However, over the six years, 40% of transportation fund dollars are targeted for highway maintenance, while just under 30% is for construction projects.

      The CTB also approved revenue sharing funds to localities across the state, including dollars to Albemarle, Charlottesville and Fluvanna in our region. The Virginia Department of Transportation (VDOT) received nearly 70 applications for funding which requested over $131 million. Legislation approved by the General Assembly this past session stipulate yearly allocations for the program to be $50 to $200 million; VDOT anticipates FY12 and FY13 allocations of just over $50 million each year.

      Also at its meeting last week, the CTB received a report on VDOT’s business plan. The plan cites several objectives of interest to local governments. Specifically, they include 1) supporting expeditious processing of Virginia Transportation Infrastructure Bank applications to approve use of at least 70% of the $280 million in available funding by June of next year; 2) developing a strategy to reduce transfers from the construction fund to highway maintenance by $100 million; and 3) developing a strategy to increase revenue sharing funds by $100 million in FY13.


Biosolids Regulatory Review Continues
      A stakeholder advisory committee for the State Water Control Board’s (SWCB) proposed regulations governing biosolids is meeting tomorrow (Thursday) to review public comment on the suggested changes to the rules. Recall that the SWCB is revising several sets of regulations that govern the land application of biosolids, following a change in the oversight of sewage sludge several years ago from the Department of Health. Comments on the draft regulations, which propose changes in nine major areas, were received during March and April. Over 1,100 comments were received on topics related to permitting, notification of application, buffers, storage of biosolids and fees. Any changes to the proposal as a result of the public comment are expected to be presented to the SWCB for further consideration sometime this fall.


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