*This report was replaced in its entirety by the Division of Legislative Services on November 13, 2020.

This Report of the Local Tax Authority Work Group presents the work group's research on the different tax and non-tax authorities of the Commonwealth's cities and counties, as well as the different services required of cities and counties.

Beginning with non-tax authorities, the work group examined the constitutional and statutory distinction between cities and counties. The Constitution of Virginia of 1971 removed virtually all constitutional distinctions between them, so legal differences between classes of localities are mostly derived from statutory law. Cities and counties are both subject to the Dillon Rule, the principle that local governments are limited to the powers expressly granted to them by their state, and they share many authorities granted to all localities by the Commonwealth. Some powers are granted only to cities and others only to counties, and there are differences between the two relating to bonds and charters. Sovereign immunity is another distinction: cities and counties enjoy different levels of sovereign immunity, with counties being entitled to greater protection.

Regarding non-tax required services, cities and counties differ in their responsibilities for road maintenance. Cities, as well as Arlington and Henrico Counties, are responsible for maintaining their own roads, with state funding support. All other counties' roads are maintained by the Virginia Department of Transportation (VDOT). For different tax authorities, the rate caps on county taxes put in place during the 2020 Regular Session of the General Assembly remain the major difference between cities and counties.

Finally, the work group looked at possible technical amendments in accordance with Chapters 1214 and 1263. A handful of sections of the Code of Virginia (the Code) applicable to specific counties were identified as being potentially extraneous because they provide no additional authority beyond what is now granted generally to all counties. However, there was opposition to removing some of these sections, and the work group did not reach an agreement that the provisions should be changed. No technical amendments are recommended by the work group.