2025 Virginia General Assembly Crossover Update

Tuesday, February 4, was the midway point for the Virginia General Assembly, known as “Crossover.” Each chamber will now only deal with legislation that originated from the other. Over 2,000 bills, constitutional amendments, and joint study resolutions were introduced for consideration. This number has been significantly diminished and will continue to be before the General Assembly adjourns Sine Die on February 22. Below are updates on legislative initiatives previously mentioned in the Pre-Session Report.

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.

• 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 AI laws. Status: Concepts reintroduced as HB2124 and SB1053 have passed the House 87-9 and 39-0.
• 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. Status: Concepts reintroduced as SB1421 and HB2411 (Glass). The Senate Bill was passed by indefinitely (8-7). The House Bill failed to report from the Appropriations Committee.
• 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. Status: Concepts reintroduced as SB1642 and passed the Senate 40-0.
• HB747(Maldonado): Regulates high-risk decision-making AI systems private entities use to prevent algorithmic discrimination. This includes disclosure to a consumer when AI is being used, allowing a person to opt out in favor of human review. Status: Concepts reintroduced as HB2094 and passed the House 51-47.

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. Status: Both the House and Senate budgets repurposed the $1.1 Billion as rebates of $200 for individuals and $400 for joint filers to be issued by October 15, 2025, and increases in the refundable portion of the Earned Income Tax Credit (EITC) to 20% of the federal credit.

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 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. Status: Numerous data center bills were introduced during this Session based on the JLARC report. Below are the bills that remain.

• HB1601(Thomas)/SB1449(Ebbin) Provides that before any approval of a rezoning application, special exception, or special use permit for the siting of a new high energy use facility (HEUF) shall collect certain information. Status: HB1601 Passed the House (57-40). SB1449 Passed the Senate (33-6-1).
• HB2084(Shin) Directs the SCC to determine if the utilities need new and additional classifications for energy customers. Status: Passed the House (61-35).
• SB960(Perry) Directs the SCC to initiate proceedings to determine if the current allocation of costs among its customers is appropriate to ensure data centers are not being subsidized. Status: Passed the Senate (26-13-1).
• SB1047(Roem) Directs the Department of Energy to evaluate and asses demand response programs. Status: Passed the Senate (21-17).

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.  Status: SB982 (Surovell) passed the Senate (24-16).

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.

Status: Removed from House and Senate Budgets.

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. Status: SB1190 (Deeds) and HB2126 (Sullivan) were introduced to capture the recommendations of CEUR. Both were substantially amended throughout the process. SB1190 failed to report from the Floor. HB2126 failed to report from Subcommittee. Additionally, there is legislation to set standard ordinances for siting, HB2438 (Mundon King). This legislation passed the House (48-46).

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. Status: SB782 failed to report from committee. The House and Senate budgets made adjustments to the standard deduction by increasing the current biennium deduction to $8,750 for individuals and $17,500 for joint filers.

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. Status: Both bills failed to report from committee.

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. Status: HB1694 (Askew) requires the Department of Veterans Services and the State Council of Higher Education for Virginia to coordinate to report no later than December 15 of each year on persons eligible for the program and an estimate of how many enrolled in higher education using the tuition waiver. Budget discussions are still ongoing.

Zach is a part of our Gentry Locke Consulting team that is affiliated with Gentry Locke’s Government & Regulatory Affairs Practice Group. To learn more about Zach and our Gentry Locke Consulting team, check out their website here.