An Act to amend and reenact § 15.2-5002 of the Code of Virginia, relating to private activity bonds; allocation of state ceiling.
HB1227 amends Virginia’s private activity bond allocation statute, § 15.2-5002, to update the distribution of the state ceiling for calendar year 2026 and future years. The bill changes the share reserved for housing bonds from 57 percent to 67 percent, with the housing allocation split between local housing authorities and the Virginia Housing Development Authority. It also reduces the share reserved for industrial development bonds from 25 percent to 15 percent, while leaving the state allocation for state issuing authorities at 18 percent.
The bill also updates the internal distribution within the housing category, increasing the local housing authorities’ portion from 14 percent to 17 percent and the Virginia Housing Development Authority’s portion from 43 percent to 50 percent. The industrial development provision retains a mechanism that can reduce the housing allocation if manufacturing and exempt-facility bonds have already exceeded the industrial development set-aside, but the maximum cap is lowered from 41 percent to 25 percent for 2026 and beyond. Overall, the measure shifts more of Virginia’s private activity bond capacity toward housing and away from industrial development.
HB1227 changes how Virginia allocates its annual private activity bond ceiling under § 15.2-5002, directly affecting local housing authorities, the Virginia Housing Development Authority, industrial development bond issuers, and state issuing authorities. By increasing the housing set-aside and reducing the industrial development set-aside, the bill prioritizes financing for single-family and multifamily housing projects over manufacturing and exempt-facility projects. The statute’s updated percentages govern bond issuance capacity for 2026 and later years, altering the amount of tax-exempt bond authority available to each category.
The available record shows no committee transcript or recorded votes, so there is no documented debate summary or roll-call evidence of opposition. The enacted chapter text suggests the bill moved successfully through the legislative process and was approved as Chapter 37 on March 31, 2026. Based on the substance of the change, the measure appears to have been treated as a policy adjustment favoring housing finance, but the provided materials do not show explicit support or criticism from legislators or stakeholders.
The main policy tension in HB1227 is the reallocation of scarce private activity bond capacity between housing and industrial development. Supporters would likely favor the larger housing set-aside because it expands financing capacity for affordable and multifamily housing, while opponents or affected interests in manufacturing and exempt-facility development may object to the reduced industrial development share and lower cap. The bill also affects how much flexibility state and local issuers have in using bond authority, but no specific objections, amendments, or named opponents are included in the record provided.