<p class=ldtitle>A BILL to amend and reenact § 2.2-2237.3 of the Code of Virginia, relating to Virginia Economic Development Partnership Authority; Division of Incentives; due diligence for major projects.</p>
HB1033 would amend Virginia law governing the Virginia Economic Development Partnership Authority’s Division of Incentives and the approval process for major economic development incentive packages. The bill requires the Division of Incentives to perform due diligence before the Governor may approve any project involving state incentives, including grants or loans from the Development Opportunity Fund, and requires certification by the Secretary of Commerce and Trade that the incentives are appropriate based on expected investment and job creation. For certain large or unusual incentive packages, the bill also requires review by the MEI Project Approval Commission.
The bill adds a specific due-diligence requirement for projects meeting certain thresholds or involving incentives not currently authorized by law: the Division must examine whether the business has entered into a labor peace agreement with employees. It defines that term to include protections against picketing and work stoppages while allowing labor organizations access to communicate with employees and organize them. The bill also requires incentive contracts or memoranda of understanding to include job and investment benchmarks, repayment obligations if those benchmarks are not met, and procedures for the Commonwealth to pursue recovery, including interest, fees, and attorney’s fees. It further limits extensions of project deadlines by requiring Board approval, and for additional extensions, approval by both the Board and the MEI Project Approval Commission.
If enacted, the bill would tighten oversight of state economic development incentives by adding pre-approval due diligence, stronger performance-based repayment provisions, and more formal review of extensions and large incentive packages. It would affect the Virginia Economic Development Partnership Authority, the Board overseeing incentives, the Secretary of Commerce and Trade, the MEI Project Approval Commission, and businesses receiving Commonwealth incentives, especially those involving large cash payments or packages exceeding $10 million in value. It also expands the Commonwealth’s ability to recover funds when promised investments or jobs are not delivered and authorizes confidential employment-data review to verify claims.
The available voting history suggests limited opposition at the subcommittee level, with the bill receiving a 7-0 recommendation to be struck from the docket, indicating no recorded support in that action and likely a lack of momentum. Because there are no committee transcripts, the broader discussion record is sparse, but the bill’s placement in Labor and Commerce and its labor-peace and incentive-accountability provisions suggest it was framed around oversight, accountability, and labor-related conditions for major public subsidies. Overall sentiment in the available record appears neutral to unfavorable in terms of advancement, given that it was left in committee.
The most notable points of contention are likely the labor peace agreement requirement and the added scrutiny for large incentive packages. Businesses seeking state incentives may view the labor-peace condition, the $3.5 million cash-payment trigger, and the $10 million aggregate threshold as burdensome or restrictive, while supporters would likely argue these provisions protect public funds and ensure accountability. Another possible point of disagreement is the expanded repayment and enforcement authority, including attorney’s fees and assignment of rights to the Commonwealth, which increases the state’s leverage over recipients and local partners.