2025 Virginia General Assembly Pre-Session Report

On Wednesday, January 8, 2025, the oldest legislative body in the Western Hemisphere will gavel in for another Session. This year will be a short 46-day Session and the last of the Youngkin Administration. In November, Virginia will have what looks to be a historic election for Governor. Also on the ballot later this year will be the Lieutenant Governor, Attorney General, and all 100 members of the House of Delegates. This year, an essential date for the legislative calendar in Virginia is February 4, the deadline for bills to pass their chamber of origination. Below are some expected significant policy decisions before the General Assembly this year. Additionally, there will likely be several legislative infliction points during this Session, which will be tied to expected actions from the incoming Trump administration.

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.

1. 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 laws on
2. 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.
3. 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.
4. HB747(Maldonado): Regulates high-risk decision-making AI systems used by private entities to prevent algorithmic discrimination. This includes disclosure to a consumer when AI is being used, and it allows a person to opt out in favor of human review.

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.

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 on 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.

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 bills are expected to be introduced this year.  

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.

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. Potential recommendations are expected at the Commission’s final meeting before Session later today. The Commission’s meeting may be viewed here.

Standard Deduction

Governor Younkgin 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 has introduced SB782 to accomplish this initiative.

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.

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. There will likely be legislation introduced to decide the program’s long-term viability.