Legislative Summary 2016

On Tuesday, the Governor’s office announced tax estimates for 2017 were lowered by about $240 million, which will require more significant work on the budget than previously anticipated. With this new development, it is likely legislators will not come to an agreement on the budget before the current extended budget session ends on Tuesday. It appears the legislators will be sent home until all parties are more willing to come together to address the dire economic problems that face West Virginia. We would anticipate the Governor will reintroduce a tobacco tax increase and possibly other increases in the special session “Call” when he does bring legislators back to town. You can view the Governor’s press release regarding the budget by clicking here.

One important piece of legislation that did not gain much attention this session was SB 558, a bill that maintained the solvency of the State’s Unemployment Compensation Fund by allowing Workforce WV to borrow $50 million from the State’s Rainy Day Fund when the Unemployment Compensation Fund fell below the $50 million dollar mark. This was important legislation as it prevented the state from having to borrow money from the federal government to keep the Unemployment Fund solvent. If this occurred, it would have negatively affected the State’s bond ratings. Jan Vineyard worked with legislative leadership to pass this bill at the request of Governor Tomblin. Governor Tomblin did notify the Legislature toward the end of the session that the money was borrowed and he hoped to pay it back within a month or two. Typically mid-April is when the Fund begins seeing an influx of cash.

Of the 1,894 bills introduced this session, 450 passed at least one chamber of the Legislature, while 276 of those passed both chambers and completed the legislative process.

Unfair Trade Practices Act Modernization – Avoiding Full Repeal of the UTPA

The Unfair Trade Practices Act (UTPA) bill, SB 259, passed the Senate by a 32-0-2 vote and in the House on 99-0-1 vote. The bill now goes to the Governor for approval or veto. As originally introduced, the bill called for the full repeal of the UTPA. Jan Vineyard, along with OMEGA members and a large number of stakeholders, spent a significant amount of time and effort working with legislators through the process to develop a bill that worked for all parties involved. This was a hard fought battle.

We consider this a modernization of the UTPA. We are extremely pleased that we were able to keep our 4% wholesale and 7% retail mark-ups. It does clarify that state and federal fuel taxes cannot be included in the mark-up at the retail and wholesale levels. The bill removes language allowing plaintiffs to get triple damages. The bill addresses rebates, discounts and coupons, stating that they must be earned. The only change made during the House consideration process is an exclusion made for 15 days when a business has their grand opening. The strengthened language should aid our members in Unfair Trade actions.

No Tobacco Tax Increases

We have prevented any tax increases to tobacco this session. This is a great success for our retailers, especially those along our borders and interstates. There were several bills introduced this session by both chambers of the Legislature that called for increases in the tobacco tax. The Governor’s proposed tobacco tax bill, SB 420, was the only piece of legislation that had momentum and any chance of passing. That bill, which was amended to raise the originally proposed .45 cent per pack tax increase on cigarettes to $1 a pack, overwhelming passed the Senate, but the bill quickly died in the House.

The Legislature and the administration continue to work on the Budget, so the work on preventing a tobacco tax increase is not yet over. The Governor has made mention of another push at some form of sustained long-term revenue, such as the tobacco tax. We’ll continue to work against any measure that would negatively impact our members and weaken our competiveness on our state’s borders.

No Fuel Tax Increases

No legislation was passed that would have increased the state’s excise tax on gasoline or diesel fuel. SB 555, was a bill that originally called for a five cent increase on the gasoline excise tax when the average wholesale price per gallon fell below $2.00. During the early consideration phase, we were able to negotiate that increase to three cents. But, then an amendment was made that turned this into a robust highway funding bill, which would have raised over $300 million in new revenue for the State Road Fund through a one percent increase in the consumer’s sales tax, DMV fee increases and other initiatives. The original language of the highway funding amendment also called for a five percent increase on the diesel fuel tax, but we were able to have it removed. This bill had bipartisan support in the Senate where it passed 25-9, but quickly died during the House committee process.

No Food, Soft Drink, Beer or Other Tax Increases

There were a few bills introduced this session that called for an increase on other products vital to our industry’s consumers. SB 418 would have added a three percent consumer tax back on food sales. SB 668 would have increased the consumer sales tax on soft drinks, syrups and dry mixes. HB 2029 and HB 2262 would have allowed counties or municipalities to add up to three percent in additional taxes to food and beverages sold at restaurants and SB 4701 would have allowed for increased taxes on beer, liquor and wine. We prevented these bills from ever gaining consideration in the committee process. Late into the session, there was serious talk of placing amendments into SB 420, which would have increased not only the tax on soft drinks, but beer and candy as well. We cannot allow for the nickel and diming of our industry’s consumers and we’ll continue to work against taxes of this nature.

RACK Tax Discount – Saving Members $1.8 Million

We prevented SB 38, a bill to remove the ¾ of one percent tax discount given to licensed fuel distributors, from ever getting momentum for consideration by the Senate Finance Committee. This bill saves our members more than $1.8 million annually.

Legal Reform

While last year’s session saw more sweeping and significant legal reform bills, this year’s session continued to address the issue with small but needed changes including: SB 7, which prohibits a person from profiting off their own illegal activities. This bill was in response to a West Virginia Supreme Court decision which awarded damages to illegal drug users who sued a pharmacy. SB 15, the Learned Intermediary doctrine, provides protections for a pharmaceutical manufacturer when it provides warnings and instructions on a particular drug to a provider. The manufacturer cannot be held jointly liable in a product liability case when that provider fails to issue warnings or instructions to a patient. Other legal reform bills include SB 29, regarding tolling statute of limitations, and HB 4007, which codifies a transparent bidding process for the Attorney General hiring outside counsel. These pieces of legislation will continue to improve the legal climate in our state.

Regulatory Reform

The main legislation addressing reforming the State’s regulatory practices, SB 619, also known as the 2016 Regulatory Reform Act, narrowly passed the Senate along party lines and passed the House rather handily on a 82-14-4 vote. The bill changes the current rule-making statute, including mandating both an economic and a health impact statement on each proposed rule and requiring all proposed rules include data on whether the rule will be “overly burdensome” to business and industry. The bill was sent to the Governor for approval or veto. Several other regulatory reform bills, including HB 2101, were passed this session, which will erase obsolete regulations from state code and reviews state agencies, boards and other entities to determine their necessity going forward.

Above Ground Storage Tank (AST) Rules

Last session we worked extremely hard to protect our industry in regards to AST regulations. As part of that work, there was a need to develop AST rules. During the interim process we worked hard to draft rules that protected our industry. The following are the updated Aboveground Storage Tank Rules (Promulgated in SB 157):

47 CSR 63 – Aboveground Storage Tank Rules (SB 183)

47 CSR 64 – AST Fee Assessments (SB 184)

47 CSR 65 – AST Administrative Proceedings and Civil Penalty Assessment (SB 185)

Other Industry Related Legislation That Passed:

SB 6 – Requiring Drug Screening and Testing of Applicants for TANF Program

SB 505 – Exempting Certain Uses of Field Gas from Motor Fuel Excise Taxes

SB 582 – Providing Refundable Tax Credit for Motor Fuel Sold for Use or Consumed in Railroad Diesel Locomotives

HB 2852 – Relating to Legalizing and Regulating the Sale and Use of Fireworks

Industry Legislation that Did Not Pass:

SB 248 – Raising Legal Age for Purchase of Tobacco, Tobacco-Products, Tobacco-Derived Products, Alternative Nicotine and Vapor Products to 21

HB 2073 – Requiring Retail Establishments Offering Gasoline or Other Motor Fuel to Provide Refueling Assistance and Refueling Access to Persons with a Disability

HB 4259 – Relating to the Regulation of Vapor Products (This bill would have required vapor products to be behind the counter.)