GOVERNOR'S RECOMMENDATION

I approve the general purpose of this bill, but I am returning it with a request for the adoption of 18 amendments. I am grateful to each member of the House of Delegates and the Senate of Virginia for your dedicated work and your timely passage of this budget.

I am pleased that the budget you returned to me reflects so many of the important new initiatives that we have been advancing together—particularly those that we agreed to last year, but then put on hold due to the pandemic. Virginians have worked hard over the past year and have sacrificed a lot, and today, we are beginning to see our economy and our way of life recover.

More work lies ahead for Virginia and our country, but a full recovery is now within our reach. It is time to move important initiatives forward such as early childhood education, free community college for eligible students pursuing high-demand fields, and pay increases for public employees and teachers.

As with any budget, there is always an opportunity to make it better with each stage of review, so these amendments seek to improve the budget, not to re-write it. The majority of these amendments propose changes in language only. Here is a summary:

 

1. Reflect GF resource changes on front page

2. Fund third-party investigation of Inspector General

3. Adjust elections language

4. Add positions to address findings from disparity study

5. Extend Superintendent’s waiver language

6. Reflect hospital provision requirements associated with HB 2162

7. Authorize the appropriation of federal ARPA Medicaid revenue

8. Expand use of federal funds to be used for child care services

9. Correct nongeneral fund source for school age child care grants

10. Replace provision for Virginia Land Conservation Foundation funding with general fund support to assist the Chickahominy Tribe

11. Clarify law-enforcement firearm waiver

12. Provide drug recognition expert training

13. Amend line-of-duty means testing and spouse exception

14. Fund marijuana prevention and education

15. Revert unspent state COVID-19 fund amounts

16. Amend reporting date for corporate income tax informational reporting

17. Modify US Department of Agriculture MOU language

18. Amend limits on economic relief payments

 

Language Only Amendments

Several of the language amendments close gaps or clarify legislation that has passed recently. These include: continuing the elections provisions that we adopted last fall, closing an existing gap until the new legislation takes effect on July 1, 2021; eliminating conflicts between existing budget language and legislation that was just enacted related to requirements placed on hospitals for designated support persons; and clarifying the type of firearms for which law enforcement must obtain waivers from the Department of Criminal Justices Services.

I also propose three language amendments to ensure our ability to continue responding to needs related to the COVID pandemic by giving agencies the flexibility to respond and the authority to address the opportunities presented by the federal funding such as the American Rescue Plan Act (ARPA), until we can address the matter fully at a special session. The first gives the Superintendent of Public Instruction continued authority to grant temporary flexibility or waivers for certain deadlines and requirements that cannot be met due to the state of emergency or school closures resulting from COVID-19. The second gives the Director of the Department of Planning and Budget specific authority to increase federal appropriations for the Department of Medical Assistance Services to recognize increases in federal funding made available through enhanced federal matching assistance percentages authorized under the American Rescue Plan Act. The third provides the Department of Social Services with flexibility to expand the use of up to $33.2 million of federal funds, currently dedicated specifically to school age child care, for broader purposes within the range of child care services.

In addition to giving agencies the capacity to respond to COVID issues, I propose an amendment to remove the limits on federal COVID-19 economic relief payments exempt from the creditor process. Current law, based on legislation passed at the 2020 special session, defines "emergency relief payment" and exempts up to $1,200 of economic relief payments from the creditor process. This amendment removes that limit to reflect the additional payments received under the American Rescue Plan Act (ARPA).

Similarly, I propose an amendment to move the Corporate Income Tax Informational Reporting date by one month, from June 1, 2021, to July 1, 2021. This will allow time for the Department of Taxation to contract for services required to create the applicable changes related to this new requirement. In addition, as businesses continue to recover and manage the impacts of COVID, this delay will provide businesses more time to become aware of and to understand the reporting requirements.

Other language amendments make technical adjustments for clarity or to facilitate the ability to enact current policy.

Spending Amendments

In addition to the language amendments, I propose five spending amendments. In total, these amendments will increase spending by $6.3 million.

The first of these amendments provides $250,000 to the Office of the Attorney General to fund a third-party investigation of the Office of the State Inspector General’s policies, processes, and procedures employed during its handling of the Vincent Martin matter.

The second provides funding of $598,403 and five positions for the Department of Small Business and Supplier Diversity to support implementation of the recommendations and findings from the disparity study conducted in accordance with Executive Order Thirty-Five.

The third removes language requiring the Virginia Land Conservation Foundation to reserve $3.5 million for the identification and evaluation of a project focused on the preservation of tribal lands of the Chickahominy Tribe and replaces it with a $3.5 million direct appropriation from the general fund for the project.

The fourth provides $1.0 million from the general fund for the Department of State Police to coordinate with and provide training to state and local law enforcement agencies in Drug Recognition Expert techniques to provide effective detection and enforcement for driving under the influence of drugs.

The fifth provides $1.0 million from the general fund for the planning and implementation of marijuana prevention and education programs and to develop public health education campaigns.

The “half-sheet” amendments and the explanation of each is attached to this memorandum.

In summary, I propose 18 amendments. Twelve are language-only changes and five increase spending by $6.3 million. The final one transfers $3.3 million to the general fund, which provides additional resources for the amendments that increase general fund spending. These changes result in a net increase in general fund spending of just over $3.0 million.

These changes will decrease the unappropriated balance from $11.1 million to $8.1 million. I ask that you approve each of these proposed amendments.

Amendment 1: Reflect GF resource changes on front page

Item 0

Language:

Page 1, line 45, strike “$692,219,999” and insert “$695,527,155”.

Page 1, line 45, strike “$1,374,637,348” and insert “$1,377,944,504”.

Page 1, line 49, strike “$24,608,530,974” and insert “$24,611,838,130”.

Page 1, line 49, strike “$48,219,941,137” and insert “$48,223,248,293”.

Page 2, line 19, strike “$76,240,040,222” and insert “$76,243,347,378”.

Page 2, line 19, strike “$143,166,141,311” and insert “$143,169,448,467”.

Explanation:

(This amendment reflects GF resource changes included in these amendments on the front page of the budget bill. A companion amendment to Section 3 -1.01 increases GF resources through additional transfers from nongeneral fund cash to the general fund.)

Amendment 2: Fund third-party investigation of Inspector General

Item 57

Language:

Page 51, line 6, strike “$37,133,302” and insert “$37,383,302”.

Page 52, after line 37 insert:

“I. The appropriation in this item includes up to $250,000 from the general fund in the first year to conduct an independent, third-party investigation of the Office of the State Inspector General’s policies, process, and procedures employed during its investigation of the Virginia Parole Board’s handling of the Vincent Martin matter. The Office of the Attorney General, in consultation with the Office of the Governor, the Speaker of the House of Delegates, and the President pro tempore of the Senate, is directed to secure an investigator to conduct the investigation. The Office of the State Inspector General and the Virginia Parole Board shall cooperate fully in the investigation.  Records that are confidential under federal or state law shall be maintained as confidential by the Office of State Inspector General and shall not be further disclosed, except as required by law. Records that are confidential under state law shall be accessible to the investigator; records that are confidential under federal law shall be made available to the extent permitted by federal law.  All confidential records provided to the investigator shall be maintained as confidential by the investigator and shall not be further disclosed, except as required by law.  Notwithstanding any other provision of law, investigative notes, draft reports, and other correspondence generated during the course of this investigation are exempt from disclosure under the Virginia Freedom of Information Act, section 2.2-3700 et seq. of the Code of Virginia.  No later than June 15, 2021, the investigator shall prepare a written report to the Governor, Speaker, Majority Leader and Minority Leader of the House of Delegates, President pro tempore, Majority Leader and Minority Leader of the Senate with the investigator’s findings and any recommendations.”

Explanation:

(This amendment provides funding for a third-party investigation of the Office of the State Inspector General’s policies, processes, and procedures employed during its handling of the Vincent Martin matter.)

Amendment 3: Adjust elections language

Item 86         

Language:

Page 91, Line 10, after “special elections”, insert “, general elections,”.

Page 91, Line 21, after “special elections”, insert “, general elections,”.

Page 91, Line 34, after “special elections”, insert “, general elections,”.

Page 92, Line 17, after “special elections”, insert “, general elections,”.

Explanation:

(This amendment adds general elections to the list of elections that continue, until July 1, the elections policies put into place by the General Assembly during the 2020 General Assembly, Special Session I.)

Amendment 4: Add positions to address findings from disparity study

Item 128

Language:

Page 135, line 6, strike “$7,771,779” and insert “$8,370,182”.

Page 135, Line 13, strike “$1,271,452” and insert “$1,869,855”

Page 137, Line 18, strike the second “40.00” and insert “45.00”

Page 137, Line 21, strike the second “64.00” and insert “69.00”

Explanation:

(This amendment provides funding and positions to support the findings from the disparity study conducted in accordance with Executive Order Thirty-Five.)

Amendment 5: Extend Superintendent’s waiver language

Item 143        

Language:

Page 163, line 21, after “2019 -2020)”, strike “or” and insert “,”.

Page 163, line 21, after “2020 -2021)” insert “, or fiscal year 2022 (school year 2021 -2022)”.

Explanation:

(This amendment extends, into fiscal year 2022 (school year 2021- 2022), the Superintendent of Public Instruction’s authority to grant temporary flexibility or issue waivers of certain deadlines and requirements that cannot be met due to the state of emergency or school closures resulting from COVID-19.)

Amendment 6: Reflect hospital provision requirements associated with HB 2162

Item 300       

Language:

Page 357, strike lines 15 through 38.

Explanation:

(This amendment clarifies that the requirements placed on hospitals regarding designated support persons are consistent with enacted HB 2162 of the 2021 General Assembly.)

Amendment 7: Authorize the appropriation of federal ARPA Medicaid revenue

Item 313        

Language:

Page 413, after line 20, insert:

“LLLLLL. Notwithstanding the provisions of Item 479.10 of this Act, the Director of the Department of Planning and Budget shall have the authority to appropriate additional federal Medicaid revenue for current services as provided for in the American Rescue Plan Act of 2021 (ARPA).  However, no expansion of Medicaid programs or services shall be implemented with ARPA funds unless specifically authorized by the General Assembly.  Any state funds offset by this additional federal revenue shall remain unspent and shall be retained until expenditure of such funds is reauthorized and appropriated by the General Assembly.”

Explanation:

(This amendment clarifies that the Director of the Department of Planning and Budget (DPB) has the authority to appropriate additional federal Medicaid revenue for current services as provided for in the American Rescue Plan Act of 2021 (ARPA).  This action ensures that federal support for existing Medicaid programs can flow without interruption, including any increases needed to support increases in federal matching percentages.  In addition, language is added to prohibit any expansion of Medicaid programs or benefits with regard to the ARPA funding without General Assembly approval.  State funding must also remain unspent until reauthorized and appropriated by General Assembly action.)

Amendment 8: Expand use of federal funds to be used for child care services

Item 350       

Language:

Page 457, line 52, after “479.10.”, insert:

“Federal funds appropriated for this purpose also may be used for broader purposes within the range of child care services than those purposes herein.”

Explanation:

(This amendment expands the use of $33.2 million of federal funds currently dedicated specifically to school age child care and permits the funding to be used for broader purposes within the range of child care services.)

Amendment 9: Correct nongeneral fund source for school age child care grants

Item 350       

Language:

Page 457, line 38, after “federal” strike “Coronavirus Relief Funds” and insert “Child Care Development Block Grant (CCDBG) funding provided to states in response to the COVID-19 pandemic”

Explanation:

(This amendment corrects the source of nongeneral funds for school age child care grants. It changes the source from federal Coronavirus Relief Funds to federal Child Care Development Block Grant funds.)

Amendment 10: Replace provision for Virginia Land Conservation Foundation funding with general fund support to assist the Chickahominy Tribe

Item 374

Language:

Page 487, line 43, strike “$80,586,747” and insert “$84,086,747”

Page 487, line 48, strike “$50,932,897” and insert “54,432,897”

Page 488, line 10, after “Virginia.” strike the remainder of the line, through line 14.

Page 490, after line 47 insert:

“V. Out of the amounts in this Item, $3,500,000 the second year from the general fund is provided to the Chickahominy Tribe to assist in the acquisition and restoration of tribal land.”

Explanation:

(This amendment removes language requiring the Virginia Land Conservation Foundation to reserve $3,500,000 for the identification and evaluation of a project focused on the preservation of tribal lands of the Chickahominy Tribe, and instead provides a direct general fund appropriation for the project.)

Amendment 11: Clarify law-enforcement firearm waiver

Item 403

Language:

Page 524, after line 27, insert:

“K. Notwithstanding the provisions of §§ 2.2-5515, 15.2-1721.1, and 52-11.3, a waiver from the Criminal Justice Services Board is only required for the continued use of rifles of .50 caliber or higher or ammunition of .50 caliber or higher for use in such rifles and not for other types of firearms or ammunition of .50 caliber or higher.”

Explanation:

(This amendment clarifies that a Criminal Justice Services Board waiver must be obtained to use certain firearms.)

Amendment 12: Provide Drug Recognition Expert training

Item 427

Language:

Page 551, line 47, strike “$32,359,876” and insert “$33,359,876”

Page 551, line 48, strike “$9,636,498” and insert “$10,636,498”     

Page 552, after line 34, insert:

“D. Included in this appropriation is $1,000,000 the second year from the general fund for the Department to provide training to state and local law enforcement officers in Drug Recognition Expert techniques.”

Explanation:

(This amendment provides $1,000,000 from the general fund the second year for the Department of State Police to coordinate and provide training to state and local law enforcement agencies in Drug Recognition Expert techniques in order to provide effective detection and enforcement for driving under the influence of drugs.)

Amendment 13: Amend line-of-duty means testing and spouse exception

Item 477

Language:

Page 603, after Line 7 insert:

“4. Notwithstanding the provisions of § 9.l-401(C), Code of Virginia, any disabled person, as defined in § 9.1-400(B), Code of Virginia, who was injured in the line-of-duty in February 2016 but whose date of disability for purposes of the Line-of-Duty Act is in March 2019, shall not be subject to subdivision 4 of such subsection. Also, the spouse of such person as of the date of disability shall be considered an "eligible spouse" for purposes of continued health coverage pursuant to § 9.1-401, Code of Virginia, and will not be subject to the provisions of that definition that disqualify a spouse who ceases to be married to a disabled person, as defined in §9.1-400, Code of Virginia, or the spouse of a deceased person who remarries at any time.”

Explanation:

(This amendment removes the income testing provision of the Line-of-Duty Act for certain individuals who fall within the definition of disabled person, as defined in § 9.1-400, Code of Virginia and provides that a spouse as of the date of disability of certain disabled persons as defined in § 9.1-400, will not lose health insurance coverage upon divorce or remarriage.)

Amendment 14: Fund marijuana prevention and education

Item 479

Language:

Page 609, line 43, strike “$19,945,052” and insert “$20,945,052”.

Page 609, line 50, strike “$16,495,052” and insert “$17,495,052”.

Page 614, after line 49, insert:

“V. Out of this appropriation, $1,000,000 the second year from the general fund is provided for evidence-based marijuana prevention and education programs and public health campaigns, including programs focused on youth and college-aged populations. The Director, Department of Planning and Budget, is authorized to transfer these funds to the applicable state agency or agencies, authorities, or offices, to support these efforts.”

Explanation:

(This amendment provides funding for the planning and implementation of marijuana prevention programs and public health campaigns.)

Amendment 15: Revert unspent state COVID-19 fund amounts

Item 3-1.01

Transfers***

Interfund Transfers***   Language

Language:

Page 702, after line 28 insert:

“NN.1. On or before June 30, 2021, the State Comptroller shall transfer to the general fund all remaining balances estimated at $15,856, from Fund 02019, Covid-19 Additional State Funding, in the Department of Emergency Management.

2. On or before June 30, 2021, the State Comptroller shall transfer to the general fund all remaining balances estimated at $3,291,300, from Fund 02019, Covid-19 Additional State Funding, in the Department of Health.”

Explanation:

(This amendment transfers unspent amounts to the general fund from amounts originally appropriated from the general fund and subsequently transferred to the Covid-19 Additional State Funding Fund - Fund 02019. The expenses originally intended for these amounts have been funded from other nongeneral fund sources. A companion amendment to Item 0 reflects the GF resource change resulting from this amendment.)

Amendment 16: Amend reporting date for Corporate Income Tax Informational Reporting

Item 3 -5.23

Language:

Page 712, line 1, strike “June 1” and insert “July 1”.

Page 712, line 13, strike “June 1” and insert “July 1”.

Explanation:

(This amendment moves the Corporate Income Tax Informational Reporting date from June 1, 2021, to July 1, 2021, to allow for the Department of Taxation to contract for services required to create the applicable changes that will allow businesses to report and to provide businesses more time to understand the reporting requirements.)

Amendment 17: Modify US Department of Agriculture MOU language

Item 4 -5.07

Language:

Page 743, strike lines 37 and 38, and insert:

“which liability shall be secured by, and at the discretion of, the Division of Risk Management, Department of the Treasury, pursuant to the provisions of Virginia Code §2.2-1837(A)(2), through either 1) the Virginia Risk Management Liability Plan (“the Plan”), or 2) a separate insurance policy procured by the Division of Risk Management, the cost of which shall be charged to the agencies using USFS lands.”

Explanation:

(This amendment modifies US Department of Agriculture MOU language to allow for additional options for liability coverage for state entities using US Department of Agriculture land.)

Amendment 18: Amend limits on Economic Relief Payments

Item 4 -14

Language:

Page 796, after line 36, insert:

“13. That § 34-28.3 of the Code of Virginia is amended and reenacted as follows:

§ 34-28.3. Emergency relief payments exempt.

A. For the purposes of this section, "emergency relief payment" means a 2020 recovery rebate for individuals and qualifying children provided pursuant to § 2201 of the federal Coronavirus Aid, Relief, and Economic Security Act (P.L. 116-136) or any future federal payments or rebates provided directly to individuals for economic relief or stimulus due to the COVID-19 pandemic, not to exceed $1,200 per individual per payment or rebate, and not to exceed $500 for each qualifying child paid to the individual per payment or rebate.

B. All emergency relief payments paid to individuals shall be automatically exempt from the creditor process. Any financial institution, as defined by § 6.2-100, receiving such payments directly from the federal government shall exempt such payments from the creditor process if (i) the payment is marked by the federal government as an "emergency relief payment" or includes some other unique identifier that is reasonably sufficient to allow the financial institution to identify the funds as an emergency relief payment or (ii) the federal government or accountholder receiving the emergency relief payment gives notice to the financial institution of such payment. In exempting emergency relief payments on deposit from the creditor process, a financial institution shall look back two months preceding the date of receipt of service of the creditor process. The financial institution shall perform a one-time account review separately for each account in the name of an account holder who is subject to the creditor process without consideration for any other attributes of the account or the creditor process, including (a) the presence of other funds, from whatever source, that may be commingled in the account with funds from an emergency relief payment; (b) the existence of a co-owner on the account; and (c) the balance in the account, provided the balance is above zero dollars on the date of account review. After conducting the account review, a financial institution shall exempt from the creditor process the lesser of the sum of all posted emergency relief payments to an account between the close of business on the beginning date of the lookback period and the open of business on the ending date of the lookback period or the balance in an account when the account review is performed.

If the creditor process involves a court return date, such as a garnishment, and requires a continued hold on the account, including any deposits made up to the return date, then if an emergency relief payment is deposited into an account after the completion of the account review but before the creditor process or garnishment return date and the account holder notifies the financial institution that the deposit of an emergency relief payment has been made, the financial institution must review the account. If the financial institution verifies that the deposited funds are exempt under this section, then such deposited funds shall be treated as exempt from the creditor process or garnishment. This second account review shall begin within two business days of receiving the notice from the account holder and shall cover the period from the start of business on the date of the completion of the previous account review to the end of business on the date of the notification from the account holder. For any creditor process that requires a continued hold, such as a garnishment where the account hold must continue until the garnishment return date, the account holder may access exempt funds by withdrawal as permitted by the financial institution.

In its answer to the creditor process, the financial institution shall state the amount of account funds that are being held pursuant to the creditor process and the amount of account funds that were treated as exempt under this section.

A financial institution that makes a good faith effort to comply with the requirements set forth herein shall not be subject to liability or regulatory action under any state law, regulation, court or other order, or regulatory interpretation for actions concerning any emergency relief payments.

Emergency relief payments shall be exempt from the creditor process even if deposited into an account with a financial institution or other organization accepting deposits and thereby commingled with other funds.

For the purposes of this section, no such exemption shall extend to child support, spousal support, or criminal restitution orders.

C. If a financial institution does not set aside an emergency relief payment as exempt from the creditor process, then the accountholder receiving such payment must claim the exemption within the time limits prescribed by subsection B of § 34-17 and in the manner prescribed under § 8.01-512.4.”

Page 796, line 37, strike “13” and insert “14”.

Page 796, line 38, strike “14” and insert “15”.

Page 796, line 38, strike “and eleventh” and insert “eleventh, and thirteenth”.

Explanation:

(This amendment removes the limits on federal COVID-19 economic relief payments exempt from the creditor process. Current law defines "emergency relief payment" and exempts up to $1,200 of economic relief payments from the creditor process in the legislation passed at the 2020 special session. This amendment removes that limit to reflect the additional payments received under the American Rescue Plan Act (ARPA).)