New Laws Report –
Effective July 1, 2022
With only 13 days to spare before the end of the state fiscal year on July 1, the General Assembly and the Governor finished their work on the state budget bills and other legislation that came before the 2022 Session. Below is a summary of legislation of interest to trucking passed by the General Assembly and signed into law by the Governor. Additionally, as explained below, increases in Virginia’s fuel and IFTA tax rates will take effect. Unless noted otherwise, these new laws become effective tomorrow, Friday, July 1, 2022. Please contact Dale Bennett at email@example.com or 804-355-5371 if you have any questions or need any additional information about actions taken by the General Assembly.
Fuel and IFTA Tax Rates Increase on July 1
Under current law, Virginia’s fuel and IFTA tax rates are adjusted annually on July 1st. The fuel tax is adjusted based on increases in the Consumer Price Index. For the period July 1, 2022 through June 30, 2023, the state tax on gas will increase from $0.262 to $0.28 per gallon. The tax on diesel will increase from $0.27 to $0.289 per gallon.
Additionally, the IFTA surcharge increases annually based on improvements in the fuel economy of vehicles subject to the IFTA tax. Effective July 1, 2022, the IFTA surcharge will increase from $0.139 to $0.14. These two adjustments will increase the total Virginia IFTA tax rate from $0.409 to $0.429 for the period July 1, 2022 through June 30, 2023. Also, the annual Virginia Road Tax Fee that is assessed on intrastate vehicles not subject to IFTA will increase from $258.86 to $271.52 per vehicle.
On June 22, Governor Glenn Youngkin signed two budget bills – one amending the current budget and the other adopting the state budget for the 2022 – 2024 biennium that takes effect this Friday, July 1. Here is a summary of budget provisions of interest to the motorcoach industry.
Expansion of Access to Entry-Level Driver Training for Commercial Drivers. The budget bills signed into law by the Governor on June 22, 2022 contain provisions that exempt entities not providing entry-level commercial driver training to the general public from the requirement to be licensed or certified by the Virginia DMV to provide entry-level driver training in the Commonwealth. Such entities are required, however, to comply with all relevant federal requirements. This change allows employers to provide theory and skills training to their own employees at locations in Virginia.
Entities that provide commercial motor vehicle training to the general public and that are not Virginia governmental entities will continue to be required to be licensed or certified by DMV to provide entry-level driver training. Such entities are required to comply with the provisions of Chapter 17 of Title 46.2 of the Code of Virginia and Subparts F and G of Part 380 of Title 49 of the Code of Federal Regulations. These budget provisions became effective on June 22, 2022 and will remain in effect until the end of the 2022 – 2024 biennium on July 1, 2024.
Tax Relief – the budget provides almost $4 billion in tax relief, including:
- Elimination of the 1.5% state tax on groceries
- Doubling of the standard deduction to $8,000 for single filers and $16,000 for joint filers
- Gives every Virginia taxpayer a tax rebate of $250 for single filers and $500 for joint filers
- Exempts $40,000 of veteran retirement income tax for veterans over 55
- Invests $150 million in site development to attract job creators
- Provides $10 million to support transformation initiatives at DMV, the Virginia Employment Commission, and other state agencies
Bills of interest to the motorcoach industry that passed and take effect on Friday, July 1, unless noted otherwise, include: (You can click on the bill number to go to the legislative information system where you can click on the “Governor: Acts of Assembly Chapter . . .” link to read a copy of the actual language of the bill/new law.)
SB 774 (Dunnavant): Commercial Use of School Buses – Based on an idea arising out of a middle school project, this bill, as introduced, would allow school boards to enter into agreements with third-party logistics companies to use their school buses for transportation services. The VMA was able to secure an amendment to the bill that would prohibit third-party logistics companies from using school buses to provide transportation of passengers for compensation.
SB 705 (Marsden): Towing – Towing and recovery operators are required to include the contact information for the Attorney General’s Division of Consumer Counsel on any invoice charging $10,000 or more for towing and recovery services rendered pursuant to a lawful request for towing by a law-enforcement officer for the towing and recovery of a vehicle with a g.v.w.r. greater than 26,000 lbs. Towing and recovery operators in violation of this requirement are subject to a civil penalty of $1,000 per violation.
Although not included in the legislation, the Chairs of the two transportation committees will jointly request a study of towing issues, including excessive charges and other problems that commercial vehicle owners have been experiencing in the unregulated environment that heavy duty towing companies currently operate in. We are hopeful that this study will produce legislative recommendations to address these issues in the 2023 Session. There will be an informal group of commercial vehicle and towing industry representatives that will review and try to resolve invoice complaints on a non-binding basis. We will provide more information as details of the study and the “Public Safety Towing Invoice Panel” are finalized.
CDLs and Driver Licensing
HB 553 (O’Quinn): Initiatives to Promote CDL Training and Opportunities – The General Assembly has directed the Secretary of Transportation, in consultation and working with the Secretary of Labor and various state agencies to implement the following initiatives related to CDLs:
- Identify state laws, regulations, or policies that adversely affect or create unnecessary burdens on the trucking industry and commercial drivers and propose recommendations to them;
- Promote CDL training and certification opportunities;
- Promote CDL training and certification opportunities for veterans and military service members;
- Promote CDL training and certification opportunities for individuals who are preparing to reenter society or who have already reentered society;
- Coordinate with third parties, such as public institutions of higher education and private businesses, to increase the number of training and testing opportunities for CDL applicants and licensees, and to expand existing training where possible; and
- Encourage third-party CDL testing and training programs to expand the pool of CDL applicants eligible to participate in their programs.
HB 1146 (Bell), HB 530 (Batten) and SB 301 (Deeds): CDL Examinations and Driver Training – Governmental entities, including comprehensive community colleges in the Virginia Community College System, certified as third party testers are authorized to test and train drivers employed by another governmental entity or enrolled in a commercial driver training course offered by a community college. The validity of a CDL skills test certification is extended from 60 days to 6 months to allow CDL applicants more time to visit DMV to get their CDL after completing both their knowledge and skills tests. The prohibition on applicants 18 years of age and older retaking skills tests within 15 days is repealed. Certain provisions requiring an applicant to, after failing the behind the wheel examination for a third time, take a course prior to reexamination are also repealed.
HB 971 (Byron) and SB 94 (Howell): Tax Conformity – Virginia’s date of conformity to the Internal Revenue Code (“IRC”) from Dec. 31, 2020 to Dec. 31, 2021. This allows Virginia to generally conform to the tax provisions of the American Rescue Plan Act (“ARPA”). Virginia’s existing policy regarding certain COVID-19 business assistance programs is changed as follows:
- Retroactively allow the up to $100,000 Virginia-specific deduction for Paycheck Protection Program (“PPP”) loan forgiveness recipients to certain fiscal year filers who were previously denied such deduction because it was limited to Taxable Year 2020 only;
- Retroactively allow the up to $100,000 Virginia-specific subtraction for Rebuild Virginia grant recipients to certain fiscal year filers who were previously denied such subtraction because it was limited to Taxable Year 2020 only;
- For Taxable Years 2021 and after, allow full deductibility of expenses paid or incurred with forgiven PPP loan proceeds; and
- For Taxable Year 2021 and after, allow full deductibility of expenses paid or incurred with Economic Injury Disaster Loan (“EIDL”) program funding and funding from certain other COVID-19 business assistance programs.
These bills became effective when the Governor signed them on March 9, 2022. Click here to read the complete summary and fiscal impact statement for both bills.
HB 348 (Watts): Corporate Tax Returns of Affiliated Corporations – Decreases from 20 years to 12 years the time period for which an affiliated group of corporations must file on the same basis before it may apply to the Tax Commissioner for permission to change the basis of the type of return filed (i) from consolidated to separate or (ii) from separate or combined to consolidated.
HB 1006 (Brewer) and SB 288 (Ebbin): Income Tax Deductions for Business Interest – The Virginia individual and corporate income tax deduction is increased from 20% to 30% for business interest disallowed as a deduction under § 163(j) of the Internal Revenue Code for taxable years beginning on and after January 1, 2022.
HB 1121 (McNamara) and SB 692 (Petersen): Income Tax; Pass-Through Entities – A qualifying pass-through entity is permitted to make an annual election in taxable years 2021 through 2025 to pay an elective income tax at a rate of 5.75% at the entity level for the taxable period covered by the return. This new law also (i) creates a corresponding refundable income tax credit for taxable years 2021 through 2025 for any amount of income derived from a pass-through entity having Virginia taxable income if such pass-through entity makes such election and pays the elective income tax imposed at the entity level and (ii) allows an individual to claim a credit for similar taxes paid to other states for taxable years 2021 through 2025.
Traffic Safety and Enforcement
SB 362 (Stuart): Bicycles and Other Vehicles; Riding Two Abreast – Persons riding bicycles, electric personal assistive mobility devices, electric power-assisted bicycles, or motorized skateboards or scooters two abreast are prohibited from impeding the normal and reasonable movement of traffic and requires such persons to move into a single-file formation as quickly as is practicable when being overtaken from the rear by a faster-moving vehicle.
HB 750 (Bell) and SB 327 (Reeves): Arrest and Summons Quotas – Prohibits (i) any agency of the Commonwealth or director or chief executive of any agency or department employing law-enforcement officers; (ii) any sheriff; (iii) any police force; or (iv) the Dept. of State Police from establishing a formal or informal quota that requires a law-enforcement officer to make a specific number of arrests or issue a specific number of summonses within a designated period of time. Use of the number of arrests made or summonses issued by a law-enforcement officer is prohibited from being used as the sole criterion for evaluating the law-enforcement officer’s job performance.
HB 920 (Kilgore) and SB 247 (Surovell): Careless driving; vulnerable road users – Makes is a Class 1 misdemeanor to operate a vehicle in a careless or distracted manner and cause the death or serious bodily injury of a vulnerable road user. Courts are allowed to suspend the driver’s license or restrict the driver’s license of a person convicted of careless driving for up to six months.
Labor and Employment
HB 1173 (Ware) and SB 631 (Barker): Fair Labor Standards Act; Overtime Pay – Replaces changes to the Virginia Overtime Wage Act enacted by the 2021 General Assembly with the provision that any employer that violates the overtime wage requirements of the federal Fair Labor Standards Act, and any related laws and regulations, shall be liable to its employee for remedies or other relief available under the Fair Labor Standards Act. The Secretary of Labor is directed to convene a work group to review overtime issues and the Virginia Overtime Wage Act and submit a report on its findings and recommendations.
HB 1156 (Byron) and SB 15 (Favola): Private Family Leave Insurance – Establishes family leave insurance as a class of insurance. “Family leave insurance” is an insurance policy issued to an employer related to a benefit program provided to an employee to pay for the employee’s income loss due to (i) the birth of a child or adoption of a child by the employee; (ii) placement of a child with the employee for foster care; (iii) care of a family member of the employee who has a serious health condition; or (iv) circumstances arising out of the fact that the employee’s family member who is a service member is on active duty or has been notified of an impending call or order to active duty. Family leave insurance may be written as an amendment or rider to a group disability income policy, included in a group disability income policy, or written as a separate group insurance policy purchased by an employer.
HB 1178 (Avoli): Posting of Seizure First Aid Information – The Department of Labor and Industry (DOLI) is required to disseminate information regarding seizure first aid to all employers and employees in the Commonwealth and requires all employers of 25 or more employees to physically post this information in a prominent location in the workplace. The bill incorporates the “Good Samaritan” provision of the Code of Virginia that shields a person from liability when rendering emergency care in good faith under certain circumstances.
HB 270 (Byron) and SB 219 (McPike): Virginia Employment Commission – Several administrative reforms, changes in reporting requirements and other provisions governing the VEC and unemployment compensation system will take effect. Of interest to businesses is that employers are required to submit claim-related forms and separation information electronically, as well as other information and electronic tax payments upon the VEC’s request, unless the employer has received a waiver from the VEC.
SB 769 (Reeves): Program Integrity – Requires the Virginia Employment Commission to undertake several actions that include performing a full eligibility review of suspicious or potentially improper unemployment claims and recovering any improper overpayment of benefits to the fullest extent authorized by state and federal law. The Departments of Social Services, Medical Assistance Services, and Housing and Community Development are required to notify the VEC if an individual enrolled in public assistance programs has become employed. This legislation will take effect on January 1, 2023.
HB 652 (Wampler): Benefit Eligibility – Requires the VEC to conduct an incarceration check and employment identification check prior to awarding benefits to any individual.
HB 689 (Wampler): Employer Duty to Furnish Medical Attention; Cost Limit – Scooters are added to the list of medical equipment an employer is required to furnish to an employee under certain circumstances. The limit on the aggregate cost of items and modifications required to be furnished by an employer to an injured employee is increased from $42,000 to $55,000, with annual increases based on the CPI.
SB 677 (Lewis): Cost Of Living Supplements – Cost-of-living supplements shall be payable to claimants who are receiving disability benefits under the Virginia Workers’ Compensation Act but are not receiving federal disability benefits.
HJ 11 (Marshall): Charging Premiums for Bonus Pay, Vacations, etc. – The Workers’ Compensation Commission is requested to study the practice of charging workers’ comp premiums on bonus pay, vacations, and holidays and submitting its findings before the 2023 General Assembly session.
SB 215 (McPike): Electronic Vehicle Titling and Registration – DMV is authorized to expand the existing electronic titling program for new motor vehicles to all applications for original motor vehicle titles, thereby authorizing person-to-person online titling. This new law also allows for online registration of such motor vehicles and issuance of a 30-day, temporary certificate of registration.
HB 740 (Bell) and SB 729 (Ruff): Catalytic Converters – Makes it a Class 6 felony for a person to willfully break, injure, tamper with, or remove any part or parts of any vehicle, aircraft, boat, or vessel for the purpose of injuring, defacing, or destroying said vehicle, aircraft, boat, or vessel, or temporarily or permanently preventing its useful operation, or for any purpose against the will or without the consent of the owner, or to in any other manner willfully or maliciously interfere with or prevent the running or operation of such vehicle, aircraft, boat, or vessel, when such violation involves the breaking, injuring, tampering with, or removal of a catalytic converter or the parts thereof. A felony conviction under this section will result in a one-year driver’s license revocation under the felony motor vehicle statute. This new law also imposes certain requirements for scrap metal purchasers regarding the purchase of a catalytic converter or parts thereof.
SB 777 (Peake): Front and Rear Bumper Height Limits – Makes it illegal for a passenger car, pickup or panel truck to be operated on a public highway if the suspension, frame, or chassis has been modified to cause the height of the front bumper to be 4 or more inches greater than the height of the rear bumper, i.e. altered vehicles known as “Carolina squats.” This new law became effective on March 22, 2022.