A BILL to amend and reenact §§ 2.2-2240.3 and 2.2-5101 of the Code of Virginia, relating to economic development incentives; wage requirements.
HB1138 would revise two Virginia economic development incentive programs by tightening wage standards for companies seeking state assistance and by clarifying how those incentives are awarded. In the Virginia Jobs Investment Program, the bill would require eligible companies to pay at least 1.2 times the federal or state minimum wage, whichever is higher, or, in certain distressed areas, an average wage tied to the locality’s prevailing average wage. It also limits eligibility to full-time positions with fringe benefits and preserves the program as a special nonreverting fund used for grants to qualifying businesses.
The bill also amends the Virginia Investment Performance Grant program for manufacturers and research and development service providers. It would generally require new jobs tied to grant awards to pay at least the prevailing average wage, but would allow a reduced threshold in high-unemployment or high-poverty localities, and in very distressed areas would permit even lower wages only with a written gubernatorial finding. The bill keeps existing requirements for capital investment, job creation, and legislative review of guidelines, while capping total annual grant payments at $7 million and individual awards at $5 million, paid in installments after project completion is verified.
HB1138 would change the statutory eligibility criteria for state economic development grants and workforce incentives by adding or modifying wage floors, local economic distress exceptions, and benefit requirements. It would affect the Virginia Jobs Investment Program under § 2.2-2240.3 and Virginia Investment Performance Grants under § 2.2-5101, influencing which businesses can receive state support and under what wage conditions. The bill would not create a new program, but would alter how existing incentive funds are administered and distributed to employers, manufacturers, and research and development service providers.
The bill appears to have faced significant opposition in the House, where it was defeated on third reading by a vote of 33-65 with no abstentions. Because there are no committee transcripts or recorded floor remarks provided, the available record does not show detailed debate, but the vote suggests the proposal did not command broad support. The overall sentiment from the legislative outcome is that the bill was controversial or at least not persuasive to a majority of House members.
The main point of contention appears to be the bill’s wage requirements for economic development incentives. Supporters likely viewed the measure as a way to ensure public subsidies go to better-paying jobs and to align incentives with local wage standards, while opponents likely objected to stricter eligibility rules that could make Virginia less competitive for attracting or retaining projects. The bill’s exceptions for distressed localities and gubernatorial discretion suggest an attempt to balance those concerns, but the defeat indicates disagreement over whether the added wage conditions would help workers without discouraging investment.