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HOUSE BILL NO. 1132
AMENDMENT IN THE NATURE OF A SUBSTITUTE
(Proposed by the House Committee on Finance
on ________________)
(Patron Prior to Substitute--Delegate Reid)
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.
Be it enacted by the General Assembly of Virginia:
1. That the Code of Virginia is amended 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
, as follows:
Article
4.3
.
Local
Residential Renewable Energy Incentive Program
.
§
58.1-3246
.
Definitions.
A. For purposes of this
article
, unless the context requires a different meaning
:
"Base assessed value" means
the assessed value of real estate or machinery and tools
owned by a data center as shown upon the records of the local assessing officer on
July
1
, 2026
.
"Budget surplus" means
the
amount of
revenue generated from taxation
of the real or personal property owned by a data center that exceeds the amount of such revenue that w
as forecasted or budgeted by a locality for a given tax year.
"Current assessed value" means
the annual assessed value of real estate or machinery and tools owned by a data center as show upon the records of the local assessing officer.
"Data center" means
the same as such term is defined in subdivision
A 43 of §
58.1-3506
.
"Data center building" means any improvement upon the real property owned by a data center for which an individual local assessment for real property taxes is made.
"
Incentive
f
und" means
the
local residential renewable energy incentive fund for
the applicable locality.
"
Incentive
p
rogram" means the
l
ocal
r
esidential
r
enewable
e
nergy
i
ncentive
p
rogram
for the applicable locality
.
"New data center revenue" means all revenue generated
in excess of the base assed value
of real estate or machinery and tools owned by a data center.
"Qualified installer" means any person who (i) holds a valid license as an electrical contractor by the Board for Contractors and as otherwise required in accordance with the provisions of Chapter 11 (§
54.1-1100
et seq.) of Title 54.1
,
(ii) installs solar energy and energy storage system
s
in the Commonwealth
, and (iii)
is
authorized by the Board
for Contractors
to perform alternative energy system contracting
.
"Qualifying vehicle" means the same as
that
term is defined in §
58.1-3523
.
"Tangible personal property
tax" means the same as
that
term is defined in §
58.1-3523
.
§
58.1-3247
.
Adoption of local residential renewable energy incentive program.
The governing body of any county, city, or town
that collects real
property tax
es
from at least 20
data center
s
,
shall
, by ord
inance,
create
a local residential renewable energy incentive program
.
Such ordinance shall provide that all or a specified percentage
of the real estate taxes, machinery and tools taxes, or both, upon such
data center
s
shall be assessed, collected, and allocated in the following manner:
1. The local assessing officer shall record in the appropriate books both the base assessed value and the current assessed value of the real estate or machinery and tools, or both,
upon any data center subject to real or personal property tax by such locality.
2. Real estate taxes or machinery and tools taxes attributable to the lower of the current assessed value or base assessed value of the real estate
or the machinery and tools
of
such data center shal
l be allocated by the treasurer or director of finance as they would be in the absence of such ordinance.
3. All or the specified percentage of the increase in real estate taxes or machinery and tools taxes, or both, attributable to the difference between (i) the current assessed value of such property
and (ii) the base assessed value of such property shall be allocated by the
locality
and paid into a special fund entitled the "
l
ocal
r
esidential
r
enewable
e
nergy
i
ncentive
f
und"
corresponding to the applicable locality,
to be used as provided in §
58.1-32
48.
4.
A
mounts paid into the
incentive
fund
pursuant to subdivision 3
shall not include
(i)
any additional revenues resulting from an increase in the tax rate on real estate or machinery and tools after the adoption of
an ordinance creating
a
n
incentive program,
and (ii)
any additional revenues
solely attribut
able to
an increase in the assessed value of real estat
e or machinery and tools
that
were owned by the data center prior to the adoption of such ordinance unless such property is improved or enhanced.
§
58.1-3248
.
Use of funds deposited into the
l
ocal
r
esidential
r
enewable
e
nergy
i
ncentive
fund
; penalty
.
A.
Any county, city, or town
that
is required to
adopt an ordinance
pursuant to this article
shall
use funds in such locality's
incentive
fund for the following purposes
, in priority order
:
1. To reduce existing utility bills for residential customers;
2. To reduce reliance upon fossil fuel power generation facilities by investing in renewable energy resources and facilities
. For purposes o
f this subdivision, localities shall prioritize such investments in the following order:
a.
R
esidential solar;
and
b.
R
esidential battery storage;
3
. To minimize fu
ture electricity costs for residential customers
by
directing
:
a.
Fiftee
n
percent of
new data center revenue to
be spent toward residential solar and battery storage
investment
; and
b.
Fifteen
percent of
new data center revenue to
be spent toward
providing pro rata reimbursements for each resident of such locality in proportion to such resident's most recent assessment for tangible personal propert
y
tax
for
any
qualifying vehicle
.
B.
A
ny
locality
required
to
create a
n incentive
fund
pursuant to this article shall
:
1. P
rioritize grants for single-family and townhome residential rooftop solar equipment
for households with incomes at or below 80 percent of the area median income for such locality, households that
spend at least six percent of such household's gross income on energy, and households within such locality that currently receive public assistance benefits.
2. After
complying with subdivision 1, prioritize investments in equipment and installation of residential rooftop solar.
3. Ensure that no
property owner is forced to participate in the
incentive
program.
4. Ensure that any funds
granted in relation to a rental property are granted directly to the paying util
ity customer, whether such customer is the landlord or the tenant.
5.
Ensure that only
qualified installers
are eligible to participate in any
incentive
program.
C.
N
o participating locality shall impose a capacity limit on the amount of residential solar or energy storage resources approved for use under such program by such customers
.
D
.
Nothing in this section shall be construed to amend or affect
(i)
a Phase
I
or Phase II Utility's renewable energy portfolio standard obligations under § 56
-585.5
,
(ii)
the interconnection requirements and approval process established by the State Corporation Commission for an electrical utility pursuant to
§§
56-578
and
56-594
,
(iii) capacity limits and other provisions related to net metering
under §
56-594
or
56-594.01
,
(i
v
) a
pilot program for
community solar
development
under § 56-
585.1:3
,
(v)
a multi-family shared solar program under §
56-585.1:12
,
or
(vi)
a shared solar program under §
56-594.3
or
56
-594.4.
E
.
Any revenues in such
incentive
fund
that
are not used
in good faith
for a purpose authorized by this article shall be deemed surplus funds. At the end of the tax year, all surplus funds may be paid into the general
fund of the corresponding locality.
F
.
If any
locality violates the provisions of this article
, the local treasurer for such locality
shall immediately transfer any remaining funds in such locality's incentive fund
directly to the
Department of Energy
. The
Department of Energy
shall direct such remaining funds to be used for the pu
rposes stated in this article and thereafter the incentive fund for such locality shall be dissolved.
Any local treasurer violating the provisions of this subsection is guilty of a Class 1 mis
demeanor. The Attorney General is authorized to enforce the provisions of this subsection.
§
58.1-3249
.
Dissolving the local residential renewable energy incentive program.
A.
The existence of a
n incentive
progra
m
created pursuant to this article
and
the corresponding
incentive
f
und shall dissolve upon the passage of an ordinance repealing the local residential renewable energy incentive ordinance
. When the
incentive
f
und is dissolved, any revenue
s
remaining in the
incentive
f
und shall be paid into the general fund of the county, city, or town.
B. Upon dissolving the
incentive
fund, real estate or machinery and tools, or both, shall be assessed and taxes collected in the same manner as applicable in the year preceding the adoption of the local residential renewable energy incentive ordinance.