RD4 - Executive Summary of the 2010 Interim Work of the Manufacturing Development Commission

    Executive Summary:

    The Manufacturing Development Commission is established by Chapter 41 (§ 30-275 et seq.) of Title 30 of the Code of Virginia. The Commission is charged with assessing manufacturing needs and formulating legislative and regulatory remedies to ensure the future of the manufacturing sector in Virginia.

    The Commission's legislative members are Senators Frank W. Wagner, W. Roscoe Reynolds, and Ralph K. Smith and Delegates Harry R. "Bob" Purkey, Watkins M. Abbitt, Jr., Kathy J. Byron, Daniel W. Marshall, III, and Albert C. Pollard, Jr. The citizen members are Brett A. Vassey, Joyce W. Waugh, Robert L. Williams, and Sean D. Kerlee. Secretary of Commerce and Trade James Cheng serves an ex officio member. Senator Wagner chairs the Commission.

    2010-2011 Interim Activities

    The Manufacturing Development Commission met on June 22, 2010, at the McKee Foods Corporation Plant in Stuarts Draft. Issues addressed at its meeting included:

    • Energy Mandate Impact Assessment Legislation

    Two bills were introduced in the 2010 Session to require the State Corporation Commission (SCC) or the Joint Legislative Audit and Review Commission (JLARC) to prepare an assessment of the economic impact of proposed mandates that affect the use, delivery, availability or regulation of energy. House Bill 1274, patroned by Delegate Hugo, and Senate Bill 647, patroned by Senator Watkins, were both carried over to the 2011 Session. Cathie France of Virginia Natural Gas/AGL Resources and Bill Murray of Dominion expressed concerns with the 2010 legislation. Ms. France questioned whether the SCC staff was the appropriate body to conduct the analyses of energy bills. Mr. Murray acknowledged the difficulty in defining the scope of energy-related legislation that should be subject to the proposed analysis process, and cautioned that requiring all energy bills to be analyzed may have adverse unintended consequences. Jeff Smith, IV, representing the Coalition for Fair Utility Rates, described the ability to evaluate the impact of pending legislation on energy costs as significant. He recommended that the legislation require a cost analysis of any proposed legislation that would change how energy is regulated in the Commonwealth.

    • Environmental Permitting Regulations

    The Commission received reports regarding proposed changes to environmental permitting regulations. Sidney Harrison of Industrial TurnAround Corporation briefed the Commission on pending EPA air regulations. In order to obtain discharge permits in some nonattainment areas, applicants may be required to purchase pollution offsets from within the affected area. Proposed rules are expected, among other things, to cause permitting delays, impede the funding of new projects (as lenders deal with uncertainty), increase administrative costs associated with reporting requirements, and increase capital costs. Mr. Harrison also voiced concerns with proposed greenhouse gas regulations. The issue of increased waste disposal fees was addressed by Meade Spotts of the law firm of Spotts Fain. As part of efforts to balance the state's budget, language in the appropriation act adopted in the 2010 legislative session (Item 354 B 2) requires the Waste Management Board to adopt regulations ensuring that general funds not be required to cover at least 60 percent of the direct costs of issuing, reissuing, amending or modifying permits and performing inspections and enforcement actions regarding permits for sanitary landfills and other nonhazardous solid waste. The Board's proposed regulations call for a 79 percent increase in the base fee for municipal solid waste facilities and a 400 percent increase in base fees, plus a sliding scale/per ton fee, for construction and demolition debris landfills. The new regulations will take effect July 1 and have a term of one year, which affords the General Assembly the opportunity to review relevant issues in the 2011 Session.

    • Clean Energy Funds

    Jessica Morey of the Clean Energy States Alliance, a multi-state coalition of more than 20 clean energy programs, provided the Commission with an overview of state clean energy funds. These state funds, which are principally composed of money collected through surcharges on electric rates, are used to support energy efficiency and renewable energy programs. Funds can be allocated through direct subsidies for projects, loans and equity investments in companies and projects, investments in industry infrastructure, research and development, or any combination of these approaches. Senator Wagner remarked that he has been active in attempts to get renewable energy projects underway in Virginia, and criticized the length of time required to obtain permits for off-shore wind energy projects.

    Summaries of the Commission's meeting in the 2010-2011 interim may be found on the Commission's website at http://dls.state.va.us/manufacturing.htm.

    This executive summary of the interim activity and work of the Commission is prepared pursuant to subdivision 8 of § 30-276, and is submitted in lieu of an annual report.