Isn’t That Special?
Legislative Update - July 2021

Article Matt Bruning

The Virginia General Assembly seems to have a recent increased propensity to expand their time convened in session outside their normally scheduled periods. They held a special session late last summer on pandemic-related and criminal justice issues. They added additional days to their regular session earlier this year through another special session to complete their legislative work. Now, Governor Northam has called the legislature back to action starting August 2nd, primarily to appropriate and allocate the roughly $4.3 billion in funds flowing to the Commonwealth from the federal American Rescue Act. This latest special session marks the eleventh use of special sessions in the last decade. For a part-time legislature, the frequency of these extra sessions invokes Dana Carvey’s Saturday Night Live Church Lady character’s sarcastic query – isn’t that special?

The forthcoming special session will focus on how best to spend the federal funds enacted earlier this year to support a number of areas nominally in response to the pandemic. The Governor and legislative leaders have already outlined their priorities for the use of these funds, citing public health efforts, including affordable housing, small business assistance, unemployment resources, public school facilities modernization and universal access to broadband. Much of the funding is already dedicated to certain purposes, often with federal requirements. Of note for the banking industry, Virginia will receive $188 million for the State Small Business Credit Initiative (SSBCI), a program last used in 2017 to leverage private capital to assist small businesses. There is also $258 million for a Homeowner Assistance Fund that may be used for assistance on mortgage, homeowner insurance or utility payments for Virginians facing financial hardships. These programs, and other specifically directed funding streams, will be administered by a variety of state agencies. The VBA remains in contact with the Northam Administration and the relevant governmental agencies on how banks can best partner in the programs utilizing these resources.

There has been positive news on the revenue collections in Virginia, with the latest estimates of at least $1 billion in additional revenue over the estimates contained in the current budget. Despite the additional funds flowing into the state coffers – a reflection of the national and Virginia economic recovery – legislators are unlikely to commit those new funds in the special session, deferring allocation until the 2022 Regular Session. Even then, there are some claims on the unanticipated revenue, including deposits to the Revenue Stabilization or “Rainy Day” Fund and specific earmarks to water quality improvement and transportation capital projects.

In addition to allocation of the federal funds, the pending special session will also allow for the selection of open judicial positions. The General Assembly expanded the scope and positions of the Virginia Court of Appeals earlier this year. Jumping from 11 to 17 judges, legislators will fill those new positions as well as other vacancies in the judiciary branch that have occurred since they adjourned in March. It remains to be decided whether further issues will be allowed in the session. With the state of emergency ended, the Capitol and legislative offices are reopened to the public and, while not finalized, it is likely both the House of Delegates and Senate will meet in their normal chambers for the first time since the end of the 2020 Regular Session.

Later this year, another special session will presumably be called for the legislature to address the decennial reapportionment process of district lines. The newly created bipartisan Virginia Redistricting Commission is charged with drawing the maps of the legislative districts. With the delay in receiving final census data due to the pandemic, the timeline has been pushed back such that the new lines will not be in place for the November House elections, but mostly likely will be presented by the Commission at another special session in the fall. So more special sessions to come, making them increasingly less special.