A BILL to amend the Code of Virginia by adding in Chapter 32 of Title 58.1 an article numbered 4.3, consisting of sections numbered 58.1-3246 through 58.1-3249, relating to data center tax revenue; local residential renewable energy incentive program; tangible personal property tax reimbursement; penalty.
HB1132 creates a new local residential renewable energy incentive program for counties, cities, and towns that collect real property taxes from at least 20 data centers. Under the bill, a locality must establish a special incentive fund and direct a portion of the growth in data center tax revenue above a July 1, 2026 base assessed value into that fund. The program is designed to capture “new data center revenue” from increased assessments on data center real estate and machinery and tools, while leaving the preexisting tax base to be collected and allocated as usual.
The bill requires the incentive fund to be used first to reduce residential utility bills, then to support renewable energy investments, especially residential solar and battery storage. It also directs a portion of new data center revenue toward pro rata reimbursements tied to tangible personal property tax on qualifying vehicles. The bill prioritizes grants for lower-income households, households with high energy burdens, and households receiving public assistance, and it bars localities from forcing property owners to participate or imposing capacity limits on residential solar or storage approved under the program. It also includes a mechanism for dissolving the program and returning remaining funds to the locality’s general fund if the ordinance is repealed.
HB1132 would amend Title 58.1 of the Code of Virginia by adding new sections governing how certain localities must allocate incremental tax revenue from data centers. It would create new duties for local assessing officers, treasurers, and finance directors, establish a special fund, and impose enforcement provisions including transfer of funds to the Department of Energy and a Class 1 misdemeanor for a treasurer who violates the transfer requirement. The bill also expressly states that it does not alter existing utility renewable portfolio standards, interconnection rules, net metering limits, or existing community solar and shared solar programs.
The overall sentiment reflected in the bill’s progression is cautious or unresolved rather than strongly affirmative, as it was continued to the next session in the House Finance Committee by voice vote and did not advance to final passage. The structure of the bill suggests support for using data center tax growth to offset residential energy costs, but the lack of recorded votes or transcript discussion limits the ability to identify a clear consensus.
The main points of contention likely center on the bill’s mandatory diversion of local data center tax growth, the requirement that affected localities create and administer the program, and the enforcement provisions tied to fund transfers and criminal penalties. Potential concerns also include local fiscal autonomy, the treatment of tax revenue already anticipated in local budgets, and whether the program’s solar and battery-storage priorities could create administrative or equity issues for local governments, utilities, and data center operators.
HB1132 would add a new article to Title 58.1 governing local taxation and revenue allocation for certain high-data-center localities. It would require qualifying counties, cities, and towns to segregate incremental real estate and machinery-and-tools tax revenue from data centers into a dedicated residential renewable energy incentive fund, changing how those local tax receipts are distributed and spent. The bill would also create new administrative responsibilities for local assessing officers, treasurers, and finance directors, and would authorize state-level enforcement through the Department of Energy and the Attorney General.
The available record suggests mixed but not fully developed sentiment. The bill was continued to the next session in the House Finance Committee by voice vote, which indicates it did not receive enough momentum for immediate advancement but also was not rejected outright. Because there are no recorded floor votes or committee transcript excerpts, the public and legislative sentiment can only be inferred as tentative and unresolved, with the bill appearing to have some policy appeal but insufficient consensus for passage in the current session.
Likely areas of contention include the bill’s requirement that certain localities redirect a portion of data center tax growth into a special fund, which could be viewed as limiting local budget discretion and altering expected revenue streams. Data center owners and local governments may object to the mandatory nature of the program, the treatment of assessed-value growth, and the exclusion of some revenue increases from the fund. Additional controversy may arise from the bill’s enforcement provisions, including the transfer of funds to the Department of Energy and the Class 1 misdemeanor penalty for a local treasurer who violates the statute. There may also be debate over the bill’s policy priorities, especially the emphasis on residential solar, battery storage, and targeted rebates for utility bills and qualifying vehicles.