VRLT Mid-sessin Report: Feb. 16, 2024

February 14th, 2024 was not only Valentine’s Day and Ash Wednesday, it was Crossover Day in the Virginia General Assembly. Crossover Day is the formal halfway-point in each year’s Legislative Session where all of the bills that have passed the House must “crossover,” to the Senate for consideration and vice versa. All bills that have not been fully passed by their original chamber by that day are officially dead beyond revival.

I’d like to give you a short, broad survey of where the legislation stands now that will affect your business most:

1. Tipped Wage – HB335 was brought by Delegate Deborah Gardner to phase out Virginia’s tipped wage credit over the course of a few years, much in the same way that our standard minimum wage has been rising periodically as a result of Democratic legislation from the 2020 and 2021 sessions. VRLTA’s opposition to the bill was strong enough that the patron substituted her bill for a working group that will be convened through the Department of Labor and Industry over the course of 2024 to study the prospect. That group will collaborate on a report to be given to the House and Senate chairs of the respective Commerce committees by December 1, 2024.

2. Short-term Rental Regulation – HB695was brought by Delegate Lee Ware on behalf of VRLTA as well as the Virginia Municipal League and the Virginia Commissioners’ of the Revenue Association to establish a registry for short-term rentals (STRs) that would help localities corroborate tax remittances and ensure local ordinance compliance. That bill had reported out of the House Finance Subcommittee and the full Finance Committee completely uncontested, and was scheduled for a hearing at the final meeting of the House Appropriations Committee. It was, however, removed from the docket at the last moment for unclear “policy concerns.” VRLTA is still working to ascertain what those might be, but the bill will not move forward this year.

• Two other bills regarding STRs are making their way through the process. The first, SB544 from Senator Lamont Bagby will seek to stop localities from using the Special Use Permit or Conditional Use Permit process as a regulation on STRs where the property is the owner’s primary residence. It will grandfather localities that already have this process in place.
• The second bill, HB1466 from Delegate Candi Mundon King, will seek to prohibit localities from blanket bans on lessees or sublessees from operating an STR when they have written permission from the property owner. These lessees or sublessees would still need to be in compliance with all local ordinances and state laws.

3. Fee Disclosures – SB388 was brought by Senator Stella Pekarsky to prohibit hidden fees in most consumer transactions. This bill would require disclosure upfront of final pricing in most merchant transactions. The patron accepted VRLTA amendments which dealt with the funds charged as part of Tourism Improvement Districts, which are termed as fees but in reality act as taxes. That took us out of opposition, however industries such as the airlines, rideshares, delivery services, and more continue to have deep concerns with the bill and how it affects their industries’ various practices around pricing.

4. Minimum Wage – HB1/SB1 were brought by Delegate Jeion Ward and Senator Louise Lucas as re-enactments of the original minimum wage hikes that Democratic majorities passed during their brief trifecta in 2020 and 2021, in which they controlled both houses of the legislature as well as the Governor’s mansion. Both bills have passed their respective chambers on clean party-line votes. The Governor has signaled that he is not inclined to sign the bills, however this is one of several matters that will likely come down to budget negotiations between the legislature and the Governor before it is finally resolved one way or the other.

5. Capitals/Wizards Arena – HB1514 was brought by House Appropriations Chairman Luke Torian to establish a governing authority and set up a financing framework for the building of the proposed new home of the Washington Wizards and Washington Capitals in Potomac Yard, Alexandria. This will also probably come down to the final budget negotiations. The Senate version, carried by Majority Leader Scott Surovell (SB718) was left in committee, but the House version (HB1514) was passed. The Senate Chair of Finance, Louise Lucas, has made clear that she is not inclined to let the bill through under the current political conditions. It’s possible that some give and take with the Governor could change that, but more remains to be seen.

6. Dealer Discount – VRLTA worked with Senator Glen Sturtevant to re-introduce language that would fully restore Virginia’s dealer discount on interchange fees associated with tax remittances to the state. The budgets are not final yet.

These are just a few of the most salient measures for the tourism, lodging, and restaurant industries that are making their way through the legislature. You can find a more comprehensive bill listing at our online VRLTA Bill Tracker, which is updated weekly with the newest actions on bills and the budget.

As ever, if you have questions about this or other issues related to the government and our industries, please don’t hesitate to reach out to me, Tommy Herbert, VRLTA’s Director of Government Affairs, at Tommy@VRLTA.org or (804) 761-3235. Thank you.

Best,
Tommy