Warm up with GREEN Education this Winter!
For members interested in obtaining the LEED Green Associate certification, AOBA is offering an information-packed online, live course EACH month on four consecutive Wednesdays from 1:00 to 3:00pm. This course is sponsored by the AOBA Alliance, Inc. Note: January dates are Jan. 18 and 25. February course dates are Feb. 1, 8, 15 and 22. Details and registration info at aoba-metro.org.

SPECIAL EDITION: MARYLAND AND VIRGINIA 2012 GENERAL ASSEMBLY

Note to readers: As you probably know, on Wednesday of this week the General Assemblies of Maryland and Virginia convened their 2012 Sessions. In the next few weeks, over 3,000 bills will have been introduced in each State's legislature. We've made this first edition of At Issue in 2012 a combined issue which previews some of the bills and issues of particular interest to AOBA members that your government affairs team expects to address—as always, with your insights and assistance.

VIRGINIA

Maintain the Cap on Commercial Real Estate Taxing Authority for Transportation

In 2007, the legislature enacted H.B. 3202, which granted local governments in Northern Virginia the authority to assess a surcharge on the real estate taxes of commercial properties to fund transportation infrastructure projects, of up to 25 cents per $100/assessed value. Within weeks of this authority being created, it was used by Arlington and Fairfax Counties to enact commercial real estate tax surcharges of 12.5 cents and 11 cents, respectively. Read more

Devolution of Road Maintenance Responsibilities to Local Governments

Several times in the past year, Gov. McDonnell’s Secretary of Transportation, Sean Connaughton, has indicated the Administration’s support for shifting (“devolving”) the State’s current responsibility for maintenance of Virginia’s road network to local governments in Northern Virginia instead. Read more

Liability of Property Owners for Delinquent Water Bills of Tenants

Last year, municipal water authorities, claiming that they needed the “same level of protection as private water companies,” began seeking changes to existing law that would make owners of both commercial and residential rental property liable for the delinquent water utility payments of tenants-- effectively turning building owners into collection agents for the water authorities. Read more

Court Filing Fees for Legal Aid Services

The economic decline has resulted in numerous legislative efforts in the last several General Assembly sessions to increase filing fees for civil court actions. AOBA and VAMA have battled extensively to defend our industries against these hidden tax increases and limit the collective impact of such proposals. Read more

Poverty Law Center Legislative Proposals

The Virginia Poverty Law Center (VPLC), an advocacy organization that exists to serve the legal needs of low-income Virginians, many of whom live in rental housing, presented several legislative proposals to the Housing Commission that would affect AOBA members. The first proposal sought to prohibit “self-help” evictions by declaring void any lease provisions which require tenants to waive or forego rights under the Virginia Landlord/Tenant Act (VLTA). Read more

Amendments to the Virginia Residential Landlord/Tenant Act

AOBA partners each year with other real estate organizations to promote favorable amendments to the Virginia Residential Landlord/Tenant Act (VRLTA). The changes we are proposing this year include the following... Read more

Business, Professional and Occupational License Tax Reform

The Business, Professional and Occupational License (BPOL) tax has long been decried by the business community as unfair, punitive and regressive. Initially levied 200 years ago to fund Virginia’s share of expenses for the War of 1812, it is considered particularly onerous to new and small businesses, as it sets forth licensing fees for various industry categories based, not on profit, but on gross receipts. Read more

Mandated Coverage of Tenant Relocation Expenses

The Arlington County Board is again considering requesting that the General Assembly pass legislation authorizing local governments to force property owners to provide relocation assistance when tenants will be displaced as properties undergo redevelopment or a change in use. Under existing code, 120-day notice is all that is required when tenants are to be displaced by such activities. Read more

MARYLAND

The 430th Session of the Maryland General Assembly convened in Annapolis and will run for 90 consecutive days, ending April 9, 2012.

In last month’s Maryland edition of At Issue (delivered to your email on December 9, 2011; or see it here) we provided extensive information about what AOBA expects to come up in the General Assembly this year-- we won’t repeat it all here, but urge you to check it out and contact Lesa Hoover at lhoover@aoba-metro.org or (301) 261-1460 if you’d like additional information. Read more

VIRGINIA

Maintain the Cap on Commercial Real Estate Taxing Authority for Transportation

In 2007, the legislature enacted H.B. 3202, which granted local governments in Northern Virginia the authority to assess a surcharge on the real estate taxes of commercial properties to fund transportation infrastructure projects, of up to 25 cents per $100/assessed value. Within weeks of this authority being created, it was used by Arlington and Fairfax Counties to enact commercial real estate tax surcharges of 12.5 cents and 11 cents, respectively.

The commercial real estate surcharge was one of several new local funding mechanisms that the General Assembly authorized and intended that local governments use for their transportation infrastructure priorities. However, the other revenue sources provided for in the legislation were subsequently overturned by the Supreme Court of Virginia. Consequently, commercial real estate was left as the almost exclusive source of new revenues that localities could tap for transportation projects— meaning that AOBA members and other commercial property owners were left greatly exposed.

Reacting swiftly to the court decision, in the 2008 General Assembly Session AOBA obtained passage of legislation lowering the cap on the taxing authority, to 12.5 cents per $100/assessed value. However, a July 1, 2012 sunset provision was added to the cap legislation-- meaning that, even though the General Assembly has never authorized other local revenue sources to replace the ones thrown out by the Supreme Court, local governments will soon once again have authority to impose a commercial real property tax surcharge of up to 25 cents per $100 of assessed value.

Delegate Tim Hugo (R-Fairfax) has agreed to patron legislation on behalf of AOBA to keep this from happening; his bill would eliminate the sunset provision and keep the cap at 12.5 cents. The legislation is supported by the major Chambers of Commerce in Northern Virginia, and obtaining its passage will be a top AOBA legislative priority.

Devolution of Road Maintenance Responsibilities to Local Governments

Several times in the past year, Gov. McDonnell’s Secretary of Transportation, Sean Connaughton, has indicated the Administration’s support for shifting (“devolving”) the State’s current responsibility for maintenance of Virginia’s road network to local governments in Northern Virginia instead. Troublingly absent from the Secretary’s statements, however, has been any mention regarding the associated revenue streams that would obviously need to accompany any such transfer of responsibility: shifting responsibility, without money, would effectively translate into a significant unfunded mandate on local governments, and inevitably compel them to adopt and/or increase—you guessed it—higher real estate taxes on commercial properties. In recent weeks, the Governor has publicly seemed to back away from the devolution idea somewhat. However, it is almost certain that the State will continue to study the idea: all the more reason to keep the current cap on the transportation surtax until a more balanced set of funding sources are authorized.

Liability of Property Owners for Delinquent Water Bills of Tenants

Last year, municipal water authorities, claiming that they needed the “same level of protection as private water companies,” began seeking changes to existing law that would make owners of both commercial and residential rental property liable for the delinquent water utility payments of tenants-- effectively turning building owners into collection agents for the water authorities. Property owners, in turn, cited problems that have arisen when water utilities have placed liens on properties because of tenant delinquencies, without prior notice to the property owner, and that some utilities have also refused to connect a new tenant until the prior tenant’s obligations were settled.

This past summer, the Virginia Housing Commission appointed a special task force to review and make recommendations regarding possible law changes to address these concerns. In large part due to AOBA’s involvement in the task force discussions, compromise legislation was produced that substantially improves the status quo for property owners. The proposed bill includes numerous property owner protections that should reduce and nearly eliminate the necessity for utilities to actually pursue liens on property, while still giving them a degree of authority which, they assert, is closely tied to their bond ratings and fiscal viability. These protections include:

• Localities and private water authorities would only be allowed to enter into a contract with a tenant for water and sewer services after obtaining written authorization from the housing provider or commercial property owner
• The utility must obtain a security deposit from the tenant, in an amount sufficient to cover up to five months of water and sewer bills, which must first be applied to any outstanding balance prior to placement of a lien
• The bill establishes a cap on liens placed for water and sewer delinquencies in the range of three months of delinquent bills, or up to a maximum of $150
• A water/sewer authority would not be allowed to require that the tenant’s account be put in the property owner’s name, nor could it require a security deposit from the property owner.

While the compromise bill won the support and endorsement of the Housing Commission, the Virginia Poverty Law Center is currently opposing it, arguing that the security deposit requirements should be more limited so that low-income Virginians are not “priced out” of securing such services. The bill currently contains an exemption for Section 8 tenants.

Court Filing Fees for Legal Aid Services

The economic decline has resulted in numerous legislative efforts in the last several General Assembly sessions to increase filing fees for civil court actions. AOBA and VAMA have battled extensively to defend our industries against these hidden tax increases and limit the collective impact of such proposals. Impending cuts at the federal level have spawned yet another initiative in this Session to increase the filing fee, this time earmarked to fund Legal Aid services. This particular fee has increased 500% over a ten-year period, but the cuts in federal support for these services have resonated with legislative leaders who have previously opposed such fee increases. The legislation will be carried this year by House Courts Committee Chairman Dave Albo (R-Fairfax) and Senate Majority Leader Tommy Norment (R-Williamsburg.)

Poverty Law Center Legislative Proposals

The Virginia Poverty Law Center (VPLC), an advocacy organization that exists to serve the legal needs of low-income Virginians, many of whom live in rental housing, presented several legislative proposals to the Housing Commission that would affect AOBA members. The first proposal sought to prohibit “self-help” evictions by declaring void any lease provisions which require tenants to waive or forego rights under the Virginia Landlord/Tenant Act (VLTA). AOBA members will know that similar provision already exists under the Virginia Residential Landlord/Tenant Act (VRLTA), which applies to properties with more than four residential units. However, as initially drafted, the legislation would have also applied to commercial, industrial and retail properties, where such “self-help” terms are frequently included in the lease. AOBA opposed the legislation for this reason and, in response, the Housing Commission instructed that the Poverty Law Center bill be amended so that it would not apply to non-residential properties.

A second VPLC proposal sought to require that a housing provider furnish tenants with a receipt in all instances where rent payments are made by cash transaction. While the core concept behind this proposal doesn’t seem to conflict with standard industry practice, the legislation, as drafted, would have required that the written receipt 1) be on a form provided by the Virginia Supreme Court, 2) include information about where such payment is allocated, if not to the current month’s rent, and 3) what allocation has been made to previously owed balances and late fees. The Supreme Court, however, is typically not in the business of providing business forms, and a rental office leasing agent who may accept a tenant’s cash payment might not also be privy to information about how this or previous payments have been applied. In addition, several housing providers noted the significant administrative burden that would be created, particularly when cash or money order payments are received by way of a drop-box, rather than in person. The bill would require that paper receipts be created and mailing to all tenants who made such payments, not just those who had specifically requested them.

The Poverty Law Center responded by redrafting the proposal into two separate bills. The first would require that a full accounting of how rent payments are allocated be provided, upon request of the tenant, within a reasonable time frame. AOBA agreed to this legislation and it was endorsed by the Housing Commission. The second bill, however, maintained the requirement to provide a receipt to all tenants who pay by cash or money order-- irrespective of whether they are requesting one-- and further sought to place specific language in all lease documents alerting them to their right to request a receipt. The Housing Commission agreed with AOBA’s position and advanced an amended version of the proposal which would only require receipts to be provided on request of the tenant. The Poverty Law Center, apparently unsatisfied with this resolution, has since gotten Arlington Delegate Patrick Hope to file competing legislation that still requires the lease language.

Amendments to the Virginia Residential Landlord/Tenant Act

AOBA partners each year with other real estate organizations to promote favorable amendments to the Virginia Residential Landlord/Tenant Act (VRLTA). The changes we are proposing this year include the following:

• Expanding the ability to file electronically for Civil Court actions, to include appendices
• Limiting the definition of “fair and reasonable costs” local governments may recoup for fire inspections, to exclude overtime costs and to allow third-party inspections
• Mirror federal requirements with regard to notification to tenants in the event of building foreclosure

Allowing housing providers to obtain renter’s insurance and pass the costs of the policy on to tenants

Business, Professional and Occupational License Tax Reform

The Business, Professional and Occupational License (BPOL) tax has long been decried by the business community as unfair, punitive and regressive. Initially levied 200 years ago to fund Virginia’s share of expenses for the War of 1812, it is considered particularly onerous to new and small businesses, as it sets forth licensing fees for various industry categories based, not on profit, but on gross receipts. In the meantime, local governments have come to rely on the BPOL tax as a critical element in providing some diversification of their available revenue sources. And, once again, a reduction in any one revenue source brings pressure to raise others, such as real property taxes.

In last year’s Session, the General Assembly initiated actions to reform the way in which BPOL taxes are collected, offering local governments the authority to levy them on profit, rather than on gross receipts, and authorizing exemptions for new and relocating businesses. It is anticipated that further BPOL reform discussions will continue in 2012, but focusing this time on mandatory, rather than voluntary, local-option changes.

One such initiative being advanced by the Commonwealth’s retailers’ associations would eliminate both the BPOL and Machinery and Tools taxes. The revenues “lost” from these sources would be replaced by expanding the existing sales and use tax to cover business-to-consumer (not business-to-business) services. This expansion of the sales tax would likely include residential rent payments. At this point, it is unclear as to whether the retailers’ initiative will be considered during the regular session or as part of a later special session on tax reform. Much evaluation must be done to determine the potential impact of such a change on AOBA members.

Mandated Coverage of Tenant Relocation Expenses

The Arlington County Board is again considering requesting that the General Assembly pass legislation authorizing local governments to force property owners to provide relocation assistance when tenants will be displaced as properties undergo redevelopment or a change in use. Under existing code, 120-day notice is all that is required when tenants are to be displaced by such activities. The County currently has a set of “voluntary guidelines” for relocation assistance which it frequently forces upon housing providers by making zoning approval contingent on compliance with them. However, the County lacks such leverage where a property is being redeveloped by-right under its existing zoning designation, and this is what is likely to drive it to seek such legislation again in 2012.

MARYLAND

The 430th Session of the Maryland General Assembly convened in Annapolis and will run for 90 consecutive days, ending April 9, 2012.

In last month’s Maryland edition of At Issue (delivered to your email on December 9, 2011; or see it here) we provided extensive information about what AOBA expects to come up in the General Assembly this year-- we won’t repeat it all here, but urge you to check it out and contact Lesa Hoover at lhoover@aoba-metro.org or (301) 261-1460 if you’d like additional information.

During the 2012 Session, AOBA’s Maryland Legislative and Regulatory Issues Committee, chaired by Richard Luchs, Esq. of Greenstein DeLorme & Luchs, will meet weekly to review pending legislation. Committee membership is open to all AOBA members with an interest in Maryland issues, and everyone is encouraged to participate. The Committee decides which bills to track, the priority level to be given each, and helps shape AOBA’s position on each bill. Members of the Committee frequently testify on bills in Annapolis or assist our lobbying efforts in other ways.

Anyone interested in joining the Committee should contact Lesa Hoover. Here is the schedule of committee meetings:

All meetings will be at 2:00 P.M. in the community room (lower level) of
GEORGIA WEST APARTMENTS (Located behind Georgian Towers)
8708 FIRST AVENUE
SILVER SPRING, MARYLAND 20910
(301) 588 1774 (for directions)
(Parking is available in the county garage or on the street in metered spaces)

Each Friday during Session, Committee members receive an e-mail meeting reminder, along with a list of bills to be discussed. Should there be too few bills to warrant a meeting, it will be cancelled and members will be asked to e-mail comments, concerns or questions to Lesa Hoover. In inclement weather, members should call Lesa at (301)261-1460 to confirm that the meeting will still be held.

At any time, one can see a list of all bills introduced in the General Assembly here:

Senate: http://mlis.state.md.us/2012rs/CurrentStatusReport/SenateCurrentStatusReport.pdf

House: http://mlis.state.md.us/2012rs/CurrentStatusReport/HouseCurrentStatusReport.pdf

Below is a variety of information about the Maryland General Assembly that members may find of interest.

Maryland has a bicameral legislature, consisting of the 42-member Senate, led by the Senate President, and the 141-member House of Delegates, led by the House Speaker. In the Senate, 35 members are Democrats (74%) and 12 are Republicans (25%); in the House of Delegates, 98 are Democrats (69.5%) and 43 are Republicans (30.5%).

There are 23 counties in Maryland, which operate under one of three types of government. Interestingly, a county’s form of government can determine when it must seek authority from the General Assembly to perform various functions. The Charter form of government is used by Montgomery and Prince George’s Counties. Under a charter government, certain acts require that the General Assembly first pass legislation conferring authority, and there is a separate process for such bills. A local authority bill must first be presented to the County’s General Assembly delegation, which must hold a hearing in the County on the bill. The bill then must follow the rules of the delegation, which generally include assigning the bill to a delegation subcommittee for review, hearing and vote. A bill receiving a favorable subcommittee vote then goes before the full delegation. If it gets a favorable vote from the full delegation, the bill moves forward, i.e. it is given a House or Senate bill number, then assigned to a standing committee, and from there follows the General Assembly’s normal bill process.

How a Bill Becomes Law
The Constitution of Maryland mandates that bills be limited to one subject, clearly described by the title of the bill. The State Constitution also requires that, before any bill becomes law, it must be read three times in each chamber, for a total of six readings. The “first reading” is the introduction of the bill on the chamber floor. The bill is then assigned to a standing committee for review and public hearing. The fate of most legislative proposals is determined within the standing committee. If the bill is approved by a majority vote of the committee, with or without amendments, it continues to a “second reading” in the originating chamber.

On second reading, the bill goes before the full chamber and is open to amendments from any member. After a vote in the full chamber on the bill and any amendments, the bill is ordered printed for “third reading.” During third reading, the chamber cannot offer any amendments. If the bill is passed by a majority vote, it is then sent to the opposite chamber. Once in the opposite chamber, the bill goes through the identical process as in the first, except that amendments can be added on both second and third reading.

If the bill passes in the same form as adopted by the first chamber, the legislation goes to the Governor for signature. If the bill passes the second chamber in a different form, the originating chamber can approve, or reject, the changes of the opposite chamber. If given final approval by the originating chamber, the bill goes to the Governor; if rejected, it is usually sent to a conference committee of three members from each chamber, appointed by the Senate President and the House Speaker. The conference committee sends a report of its recommendations to each chamber, which then can adopt or reject it. If the report is adopted, the bill is voted upon for final passage in each house. If the report is rejected by either house, the bill fails.

A bill becomes law when it is signed by the Governor, or when three-fifths of each chamber overrides a veto. The Governor can veto a bill up to 30 days after presentation, except the budget bill and constitutional amendments; they must be presented to the Governor within twenty days following adjournment of a session. The budget bill, however, becomes law upon its final passage and cannot be vetoed. Constitutional amendments also cannot be vetoed, but become law only upon their ratification by the voters at the next general election.

Budget Bill
The Constitution provides for an annual budget bill. Each year, the Governor is required to present a bill to the General Assembly containing the budget for State government for the next fiscal year. (The fiscal year begins July 1 and ends June 30.) The General Assembly may reduce the Governor's budget proposals, but it may not increase them. The budget must be balanced. If the General Assembly has not acted upon the Governor’s budget bill seven days before the expiration of a regular session, the Governor, by proclamation, may extend the session for action to be taken on the bill.

Joint Resolutions
Certain issues are required by law or the Constitution to be introduced in the form of a joint resolution, and such joint resolutions, when adopted, have the force and effect of law. Examples include salary recommendations from the General Assembly Compensation Commission, the Governor's Salary Commission, and the Judicial Compensation Commission; reapportionment plans for General Assembly membership; and amendments to the U.S. Constitution submitted for ratification. This year, redistricting of the State’s legislative districts must be considered. The Maryland Constitution’s procedure for redrawing General Assembly districts requires that the Governor first conduct public hearings, and then introduce a new legislative district plan on the first day of the legislative session in the second year following each census. The Governor’s plan then takes effect on the 45th day of the legislative session, unless the General Assembly enacts its own plan before the deadline.

Communication with Maryland Legislators
Who is my legislator? http://mdelect.net/
Find your legislators using a street address.
Send E-Mail to a Legislator