2025 Post Session Legislative Update

The Virginia General Assembly Adjourned Sine Die on Saturday, February 22. As the political focus of Virginia shifts to the coming statewide and House of Delegates races, let’s look at significant policy decisions the General Assembly made. Over the coming weeks, Governor Youngkin will take action on the bills sent to his desk. His deadline for action is March 24. The General Assembly will have a Reconvene Session on April 2 to respond to his amendments and vetoes. All laws signed by the Governor will take effect July 1 of this year unless otherwise stated in the legislation. It should be noted that the General Assembly has put in place a Special Session to meet at some point this year to address actions at the federal level that could impact the state budget.

Below are updates on legislative initiatives mentioned in the original Pre-Session Report we released, along with some additional bills that generated robust discussion and interest.

Artificial Intelligence

Over the past year, the Joint Commission on Technology and Science (JCOTS) met to discuss legislation carried over from the 2024 Session. All four of the refined bill concepts were recommended by the Commission.

• HB697(Maldonado)/SB571(Ebbin): This legislation makes it a Class 1 misdemeanor to use synthetic media for committing a crime offense involving fraud. Also, it allows civil action against the person who violates this code section. Lastly, it calls on the Attorney General to establish a workgroup to study Virginia’s AI laws. Status: Concepts reintroduced as HB2124 and SB1053 have passed both chambers with widespread bi-partisan support and are on the Governor’s desk.
• SB164(Reeves): Creates property rights for people to own their digital replications of themselves for commercial use. Allows these digital creations to be licensed and provides a legal framework for unauthorized use. Status: Concepts reintroduced as SB1421. The Senate Bill was passed by indefinitely (8-7). HB2462 (Glass) tackled this issue differently. It passed the House (55-41). HB2462 was put into conference following Senate amendments conforming it to Senator Reeves’ introduced bill but failed to generate a conference report.
• SB487(Aird): Establishes standards for public bodies that use AI systems to make “high-risk” decisions to avoid algorithmic discrimination. A high-risk decision is considered material or legal and impacts education, employment, finance, or housing. The concern is based on fears of biased data that will negatively impact a person because of their gender, race, etc. It also seeks to establish a workgroup to study the impact on local governments. Status: Concepts reintroduced as SB1214 and passed the Senate 40-0. It was later left in the House Appropriations Committee.
• HB747(Maldonado): Regulates high-risk decision-making AI systems private entities use to prevent algorithmic discrimination. This includes disclosure to a consumer when AI is being used, allowing a person to opt out in favor of human review. Status: Concepts reintroduced as HB2094 and passed the House 51-47. This legislation passed the Senate with a substitute that added a definition for facial recognition technology. The legislation passed and is on the way to the Governor’s desk.

Blockchain

Delegate Dan Helmer introduced legislation, HB1796, to permit Decentralized Autonomous Organizations (DAOs) to operate in Virginia. A DAO is an organization that is managed through computer programs where financial resources and voting are tracked through blockchain. Three states currently recognize DAOs as legal entities: Tennessee, Vermont, and Wyoming. Status: This legislation was passed with a reenactment clause. This means, in its current state, the bill would have to pass the General Assembly again next Session. It is on the Governor’s Desk.

Car Tax

The Governor’s amendments to the biannual budget seek to provide car tax relief. He addresses this issue by creating a $1.1 billion fund for income tax credits—individual taxpayers earning $50,000 or less will qualify for $150 in tax credits. Joint filers will qualify for $300 if their income is $100,000 or less. Status: The final conference report used the $1.1 billion as rebates of $200 for individuals and $400 for joint filers to be issued by October 15, 2025, and increases in the refundable portion of the Earned Income Tax Credit (EITC) to

20% of the federal credit.

Data Centers

On December 9, 2024, the Joint Legislative Audit and Review Commission (JLARC) reported on Virginia’s world-leading data center industry and policy options for the General Assembly to consider how best to handle the industry moving forward. Northern Virginia accounts for 13% of global data center operational capacity, the world’s single largest market. Data centers are estimated to contribute $9.1 billion in GDP annually to the Commonwealth’s economy. The most substantial aspect of the report is the impact industry growth will have on energy consumption. The report states that left unconstrained, data center projects will increase energy demand by +183% between now and 2040. Much of the industry’s new site growth is expected along the I-95 corridor. The list of policy options made by the Commission may be read here. Status: Numerous data center bills were introduced during this Session based on the JLARC report. Below are a few of note.

• HB1601(Thomas)/SB1449(Ebbin) Provides that before any approval of a rezoning application, special exception, or special use permit for the siting of a new high energy use facility (HEUF) shall collect certain information. Status: HB1601 Passed the House (57-40). SB1449 Passed the Senate (33-6-1). They were put into conference and passed by the General Assembly. They are on the Governor’s desk.
• HB2084(Shin) Directs the SCC to determine if the utilities need new and additional classifications for energy customers. Status: Passed the House (61-35). It then passed the Senate with a substitute (24-16). Following conference it passed the General Assembly in its House-approved form.
• SB960(Perry) Directs the SCC to initiate proceedings to determine if the current allocation of costs among its customers is appropriate to ensure data centers are not being subsidized. Status: This legislation was put into conference with HB 2084. It did not report from the conference.

• SB1047(Roem) Directs the Department of Energy to evaluate and asses demand response programs. Status: Passed the Senate (21-17). It passed the House (53-44). The bill is on the Governor’s desk.

NOVA Casino

Following extensive legislative actions, studies from JLARC, and referendums by localities, Virginia has five permitted casinos in as many localities: Bristol, Danville, Norfolk, Petersburg, and Portsmouth. During the 2024 Session, Senator Marsden introduced SB675, which enables a casino in Northern Virginia. This legislation failed to pass, but similar legislation was introduced during this Session.  Status: SB982 (Surovell) passed the Senate (24-16) but was left in the House Committee on Appropriations.

Oak Hill Farm Park

Delegate Lopez introduced legislation to authorize the Department of Conservation and Recreation to acquire Oak Hill Farm as a state park for preservation. This property is 1,240 acres and includes James Monroe’s home. Status: The legislation passed the House 99-0. After lengthy discussions in Senate Finance and Appropriations regarding the project’s long-term viability, it was reported. It was later recommitted to the committee, killing the legislation.

Rental Algorithm Pricing

Several bills were introduced in this Session to regulate the use of algorithms for setting rental pricing. These bills, HB 1870 (Callsen), HB 2047 Anthony, and SB 1400 (Salim), are looking to address concerns raised from recent federal investigations and lawsuits surrounding this practice. Status: All failed to report but will be studied by the Joint Commission on Technology and Science.

Sanctuary Cities

Under budget Item 377 in the Governor’s proposed amendments to the biannual budget, there is language that compels officials to comply with ICE and directs the withholding of payments for failure to comply. This is one of many policy decisions that will nationalize legislative policy discussions during this Session.

F.1. Any Director, Superintendent, sheriff, or other official in charge of a facility in which an alien is incarcerated shall comply with lawful U.S. Immigration and Customs Enforcement detainers and shall provide at least 48-hour prerelease notification to U.S. Immigration and Customs Enforcement.

2. If any Director, Superintendent, sheriff, or other official in charge of a facility is in violation of F.1. or if a local law enforcement agency, sheriff’s office, or official in charge of a facility, pursuant to adoption of a local ordinance, procedure, policy, or custom prohibits or impedes communication or cooperation with U.S. Immigration and Customs Enforcement, the Director of the Department of Criminal Justice Services shall withhold reimbursements due to a locality under Title 9.1, Chapter 1, Article 8, Code of Virginia, and the Compensation Board shall withhold per diem payments for financial assistance to local or regional jails.

Status: This language was not included in the budget conference report.

Solar-Siting

The reconstituted Commission on Electric Utility Regulation took on numerous policy questions impacting the regulation and permitting of Virginia’s energy industry. One prominent question is how to balance the Commonwealth’s renewable energy goals created in the Virginia Clean Economy Act and surging energy demand with local land use decision-making. There has been a sharp decline in solar projects approved by local governments and a sharp increase in onerous zoning ordinances. The CEUR made recommendations on these issues. Status: SB1190 (Deeds) and HB2126 (Sullivan) were introduced to capture the recommendations of CEUR. Both were substantially amended throughout the process. SB1190 failed to report from the Floor. HB2126 failed to report from Subcommittee.

Additionally, there was legislation to set standard ordinances for siting, HB2438 (Mundon King). This legislation passed the House (48-46) but failed to report from Senate Commerce and Labor (7-7-1).

Speed Cameras

Senate Bill 1233 (Williams-Graves) incorporates portions of HB2041 (Seibold). The final version asses a $100 fine regardless of if the pedestrian is properly in a crosswalk. It also permits law enforcement to install recording devices at pedestrian crossings and stop sign violations within previously approved monitoring areas. Lastly, the legislation puts in place a rigorous process for speed cameras to be approved, limits their profitability, and puts a due process framework in place. Status: This legislation is on the Governor’s desk.

Standard Deduction

Governor Youngkin has called on the General Assembly to permanently increase the standard deduction from $3,000 for single filers and $6,000 for couples to $8,500 and $17,000, respectively. This change expires on January 1, 2026. As of this posting, Senator Suetterlein introduced SB782 to accomplish this initiative. Status: SB782 failed to report from committee. The final budget conference report increased the standard deduction over the current biennium. The deduction is $8,750 for individuals and $17,500 for joint filers.

Taxes on Tips

Senate Minority Leader Ryan McDougle and Delegate Chad Green have introduced SB763/HB1562. This legislation provides an income tax deduction for cash tips received and is a major initiative in Governor Youngkin’s 2025 Legislative Agenda. This proposal is anticipated to return $70 million annually to taxpayers. The Virginia Department of Taxation and the Virginia Employment Commission estimate that more than 250,000 Virginia workers receive tips as part of their employment. Status: It is not included in the final budget conference report.

Virginia Military Survivors and Education Program (VMSDEP)

Following the 2024 General Assembly Session, numerous meetings were held regarding the long-term feasibility of VMSDEP. This program is designed to provide educational benefits to the surviving family members and dependents of military service members who are killed in action, are permanently disabled due to service, or are classified as missing in action. The Governor announced an additional $120 million and long-term sustainable funding from VA529 surpluses. No policy changes on how the program is implemented were presented. Status: HB1694 (Askew) requires the Department of Veterans Services and the State Council of Higher Education for Virginia to coordinate to report no later than December 15 of each year on persons eligible for the program and an estimate of how many enrolled in higher education using the tuition waiver. The bill passed unanimously. There was also $ 100 million in funding provided in the budget conference report.