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HB539 • 2026

Local highway system funding; revenue-sharing funds, funding cycle.

<p class=ldtitle>A BILL to amend and reenact § 33.2-357 of the Code of Virginia, relating to local highway system funding; revenue-sharing funds; funding cycle.</p>

Taxes
Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor
Hamilton
Last action
2026-02-18
Official status
Failed
Effective date
Not listed

Plain English Breakdown

The bill summary does not provide details about specific rules for allocation or enforcement mechanisms.

Local Highway System Funding; Revenue-Sharing Funds

This bill requires localities to apply annually for state funds to improve their roads and highways.

What This Bill Does

  • Changes the way local governments can receive revenue-sharing funds from the state to improve, construct, reconstruct, or maintain their highway systems.
  • Requires that localities must apply for these funds each year.

Who It Names or Affects

  • Local governments that want to improve their roads and highways.
  • The Commonwealth Transportation Board which allocates funding.

Terms To Know

Revenue-sharing funds
Money given by the state to localities to help them improve their roads and highways.
Commonwealth Transportation Board
The group that decides how revenue-sharing funds are allocated to local governments.

Limits and Unknowns

  • Does not specify what happens if a locality does not apply for funding in a given year.
  • It is unclear how the bill will be enforced or monitored once enacted.
  • The exact amount of money available each year depends on state appropriations and may vary.

Bill History

  1. 2026-02-18 House

    Left in Committee Transportation

  2. 2026-01-27 Transportation Infrastructure and Funding

    Subcommittee failed to recommend laying on the table (7-Y 3-N)

  3. 2026-01-23 House

    Fiscal Impact Statement from Department of Planning and Budget (HB539)

  4. 2026-01-19 Transportation Infrastructure and Funding

    Assigned HTRAN sub: Transportation Infrastructure and Funding

  5. 2026-01-13 House

    Prefiled and ordered printed; Offered 01-14-2026 26103295D

  6. 2026-01-13 Transportation

    Referred to Committee on Transportation

Official Summary Text

Local highway system funding; revenue-sharing funds; funding cycle.
Requires the application process established by the Commonwealth Transportation Board for localities to receive revenue-sharing funds to use for the improvement, construction, reconstruction, or maintenance of the highway system to be conducted on an annual basis.

Current Bill Text

Read the full stored bill text 
A BILL to amend and reenact §
33.2-357
of the Code of Virginia, relating to local highway system funding; revenue-sharing funds; funding cycle.

Be it enacted by the General Assembly of Virginia:

1. That §
33.2-357
of the Code of Virginia is amended and reenacted as follows:

§
33.2-357
. Revenue-sharing funds for systems in certain localities.

A. From revenues made available by the General Assembly and appropriated for the improvement, construction, reconstruction, or maintenance of the systems of state highways, the Board may make an equivalent matching allocation to any locality for designations by the governing body of up to $5 million for use by the locality to improve, construct, maintain, or reconstruct the highway systems within such locality with up to $2.5 million for use by the locality to maintain the highway systems within such locality. After adopting a resolution supporting the action, the governing body of the locality may request revenue-sharing funds to improve, construct, reconstruct, or maintain a highway system located in another locality or between two or more localities or to bring subdivision streets, used as such prior to the date specified in §
33.2-335
, up to standards sufficient to qualify them for inclusion in the primary or secondary state highway system. All requests for funding shall be accompanied by a prioritized listing of specified projects.

B. In allocating funds under this section, the Board shall give priority to projects as follows: first, to projects that have previously received an allocation of funds pursuant to this section; second, to projects that (i) meet a transportation need identified in the Statewide Transportation Plan pursuant to §
33.2-353
or (ii) accelerate a project in a locality's capital plan; and third, to projects that address pavement resurfacing and bridge rehabilitation projects where the maintenance needs analysis determines that the infrastructure does not meet the Department's maintenance performance targets.

C. The Department shall contract with the locality for the implementation of the project. Such contract may cover either a single project or may provide for the locality's implementation of several projects. The locality shall undertake implementation of the particular project by obtaining the necessary permits from the Department in order to ensure that the improvement is consistent with the Department's standards for such improvements. At the request of the locality, the Department may provide the locality with engineering, right-of-way acquisition, construction, or maintenance services for a project with its own forces. The locality shall provide payment to the Department for any such services. If administered by the Department, such contract shall also require that the governing body of the locality pay to the Department within 30 days the local revenue-sharing funds upon written notice by the Department of its intent to proceed. Any project having funds allocated under this program shall be initiated in such a fashion that at least a portion of such funds have been expended within one year of allocation. Any revenue-sharing funds for projects not initiated after two subsequent fiscal years of allocation may be reallocated at the discretion of the Board.

D. Total Commonwealth funds allocated by the Board under this section shall not exceed the greater of $100 million or seven percent of funds available for distribution pursuant to subsection B of §
33.2-358
prior to the distribution of funds pursuant to this section, whichever is greater, in each fiscal year, subject to appropriation for such purpose. For any fiscal year in which less than the full program allocation has been allocated by the Board to specific governing bodies, those localities requesting the maximum allocation under subsection A may be allowed an additional allocation at the discretion of the Board.

E. The funds allocated by the Board under this section shall be distributed and administered in accordance with the revenue-sharing program guidelines established by the Board.
Such guidelines shall
establish an annual application process.