Board of Trade legislative focus across D.C., Maryland, and Virginia
Last updated on Feb. 27, 2023
Virginia’s legislative session has concluded without a fully amended spending plan for Fiscal Years 2023-2024 . Instead, a “skinny budget” consisting of a few items was unanimously adopted. There is now a potential special session, which Virginia Governor Glenn Youngkin would call once negotiators can work a deal out. The Greater Washington Board of Trade was excited to have supported the workforce consolidation legislation that will be headed to the Governor’s desk and expects to play an active role in the implementation process. Maryland Governor Wes Moore has been hands-on in supporting his legislative agenda, having personally testified in front of the General Assembly on two of his initiatives, the SERVE Act and the Keep our Heroes Home Act. Meanwhile, Congress has taken up an interest in Washington D.C.’s new criminal code, with the House having voted in favor of overturning it.
Below is a look at legislation and initiatives we are following across D.C., Maryland, and Virginia:
Washington D.C.
D.C. Comeback Plan
Mayor Muriel Bowser’s D.C. Comeback Plan was released by her administration and is something the Board of Trade supports but will continue to monitor. Our President and CEO Jack McDougle shares in an Op-Ed why downtown revitalization is important, and ways we believe Bowser and her administration can improve upon this plan.
Proposed D.C. Criminal Code Changes
The United States House of Representatives voted in favor of overturing the rewrite of the District’s criminal code. The final vote was 250-173, to include 31 Democrats voting in favor of overturning the legislation. In order for the legislation to be overturned, it would still have to pass the Senate with 51 votes and be signed by the President. To date, all 49 Republicans in the Senate have signaled support for the resolution of disapproval, meaning only two Democrats are needed. While the White House has signaled they would veto the measure if it makes it to the president’s desk, they have not confirmed they would do so.
D.C.’s Stop Discrimination by Algorithms Act of 2023
Councilmembers introduced the Stop Discrimination by Algorithms Act of 2023 (B25-0114) earlier this month. The legislation would prohibit users of algorithmic decision-making in a discriminatory manner and would require corresponding notices to individuals whose personal information is used in certain algorithms to determine employment, housing, healthcare, and financial lending. This bill as proposed will impose significant new requirements and penalties for violations on a wide range of businesses located in the District. The Board of Trade among many other businesses and organizations, look to better understand how this bill can be implemented without harming businesses and staying competitive. The bill was referred to the Committee on Business and Economic Development, and Committee on Judiciary and Public Safety.
Maryland
Broadband Expansion Incentive Act of 2023
This bill would allow for subtraction modification under the Maryland income tax for certain qualified broadband grants awarded during the taxable year for broadband deployment; and provide an exemption from the sales and use tax for the sale of certain equipment related to providing internet service and deploying broadband. If passed and signed by the governor it would be effective July 1, 2023.
Amendments announced in committee:
- Establishes a rebate program to reimburse companies for qualifying costs up to a total of $2 million annually. The Governor’s Supplemental Budget includes $10 million in funding. Program is first come, first served.
- The Tax Cuts and Jobs Act (TCJA) passed in 2017 required that broadband grants be counted as income. This amendment would eliminate that requirement. There is similar federal legislation.
(HB0551) In the House – Hearing 2/16 at 1:00 p.m.
(SB0547) In the Senate – Hearing 3/01 at 1:00 p.m.
Fair Wage Act of 2023
This bill strives to increase the state minimum wage rate in effect for certain periods of time:
- For the 9-month period beginning January 1, 2023 $13.25 per hour
- For the 21-month period beginning October 1, 2023, $15.00 per hour
- For the 12-month period beginning July 1, 2025, and each subsequent 12-month period, the lesser of the average percentage growth in the consumer price index for the immediately preceding 12-month period or 5%.
The minimum wage rate shall be calculated on March 1 of each year and effective of July 1 of each year. Increasing, except under certain circumstances, such as the state minimum wage rate in effect for certain periods of time based on annual growth in a certain consumer price index.
This bill would also alter the Board of Public Works’ authority to temporarily suspend the minimum wage rate. It would repeal the requirement that the Governor’s budgets for certain fiscal years include certain provider rate increases. State law currently requires large businesses to reach $15 on Jan. 1, 2025, and small businesses to pay that wage by Jan. 1, 2026.
(HB0549) In the House – Hearing 2/27 at 1:00 p.m.
(SB0555) In the Senate – Hearing 3/02 at 1:00 p.m.
Income Tax – Subtraction Modification for Military Retirement Income – Keep Our Heroes Home Act – (HB0554)
Increasing the amount of a certain subtraction modification under the Maryland income tax for certain military retirement income received by individuals, regardless of age, for certain military service to $25,000 for the taxable year beginning after December 31, 2022, and $40,000 for taxable years beginning after December 31, 2023. It would cost about $30 million in the next fiscal year, and if passed it would be effective July 1, 2023.
(HB0554) In the House – Hearing 2/16 at 1:00 p.m.
(SB0553) In the Senate – Hearing 3/01 at 1:00 p.m.
Economic Development – Build Our Future Grant Pilot Program and Fund
This bill would establish the Build Our Future Grant Pilot Program in the Department of Commerce to provide funding for certain costs for infrastructure projects in eligible technology sectors. It would require certain grantees to provide matching funds and to demonstrate certain abilities; and establishing the Build Our Future Grant Fund as a continuing, nonlapsing fund.
The Maximum grant would be up to $2 million and require matching funds. Grants up to $1 million require a match to at least 200%, with grants between $1 million and $2 million requiring at least 400% match. A grantee must show ability to cover the full estimated project costs for which the grant is awarded.
(HB0552) In the House – Hearing 2/16 at 1:00 p.m.
(SB0549) In the Senate – Hearing 3/01 at 1:00 p.m.
Virginia
Workforce Development Consolidation
After 30+ years Virginia finally has a framework to restructure its workforce development programs and services. HB 2195 and SB 1470 were passed with a final combined House and Senate vote of 136-1. The Board of Trade’s advocacy reminded legislators that consolidation, clear performance metrics and accountability measured in jobs filled and employees retained is critical to maximizing economic security for both companies and labor. Secretary of Labor Bryan Slater can now work with Governor Youngkin to implement the provisions with likely a first convening of a stakeholder workgroup to develop and implement specific transition activities with work that must be completed by June 30, 2024.
The Board of Trade will work with interested members to identify and work on those initiatives that have regional impact such as high-quality internship or apprenticeship opportunities for students and tightly tying education/training outcomes to workforce needs. Our 2022-2026 Strategic Vision regarding the future of work and talent will guide our contributions to improving Virginia labor force for the National Capital Region.
Commonwealth Mass Transit Fund
SB 1079 and HB 1496 are headed to the Governor’s desk, implementing new transparency and accountability requirements for the Virginia Railway Express (VRE) and the Washington Metropolitan Washington Transit Authority (WMATA) that must be met to continue receiving state support funds. Staff at the Virginia Department of Rail and Public Transportation will quickly have to develop performance metrics that will prioritize uses for the state funding of the VRE. These metrics will eventually be proposed to the Commonwealth Transportation Board for adoption.
Proposed regulations against data centers
None of the proposed legislation significantly impacting data center development throughout the Commonwealth moved forward, including legislation that would have required a study of the industries impact on jobs, tax revenue, energy, and water use. However, there is a strong possibility that data center development will be a campaign issue for some local government elections in 2023.
Tax Policy
None of the significant legislation relating to the Governor’s 1 billion package of tax rate cuts, credits, and deductions was able to pass during the session, however, there remains the possibility of tax relief as negotiators attempt to finalize a more complete budget after having passed a “skinny budget” prior to the conclusion of session.
The Virginia General Assembly broke new ground before it adjourned Sine Die on February 25th when it unanimously approved the so-called “skinny budget” instead of a fully amended spending plan for Fiscal Years 2023-2024. The approved amendments address four key areas: (1) make a required $904 million deposit into the Rainy Day fund due to better than projected FY 2022 revenue collections, (2) make a $250 million payment into the Virginia Retirement System to further reduce unfunded liabilities and protect retirees; (3) fix a $201 million accounting error in the introduced budget and insure local K-12 school divisions are funded at promised levels and (4) provide $100 million in FY 2023 to complete existing capital projects whose costs have increased due to inflation and supply chain delays.
Budget conferees continue to negotiate, and the entire General Assembly will return in a special session to adopt a revised budget. The key block to consensus relates to what level — if any — tax relief will be provided. Because the underlying budget is in place until amended Virginia technically has a spending plan in place. However, Governor Youngkin has limited ability to change funding priorities and without action by the General Assembly he – and they – won’t be able to implement several bipartisan priorities discussed this year including salary increases for state employees and teachers, greater funding of new mental health and substance abuse services, economic development site preparation, and initiatives to reverse pandemic-related learning loss in K-12 school systems.
