(The Center Square) – A wide range of data center-related bills are on the table this legislative session as Virginia lawmakers review potential changes to tax policy, utility oversight, environmental reporting, and local approval requirements.
The proposals span multiple policy areas, including tax exemptions, utility cost recovery, water use disclosures, environmental monitoring, and land use authority.
Most of the measures remain in the earliest stages of the legislative process and are still pending in committee or subcommittee.
Several bills would revise how data centers are taxed. The commonwealths’ 570 data centers are most of any state.
Two proposals focus on changes to existing tax exemptions for data centers. House Bill 897 and House Bill 961 would tighten eligibility for the retail sales and use tax exemption, linking it to factors such as energy sourcing, backup power systems, and certain equipment upgrades.
Separate legislation would create a new land conservation tax tied to data center development. House Bill 641 and Senate Bill 393 propose a per square foot charge on data center facilities, with proceeds directed to land preservation and conservation programs under the Great Outdoors Act.
Other proposals focus on how data centers connect to the electric grid and how related infrastructure costs are handled.
House Bill 155 would require high-load facilities with electricity demand exceeding 25 megawatts to obtain a certificate of operation from the State Corporation Commission before beginning service. The bill directs regulators to consider grid capacity and potential cost impacts.
House Bill 503 would restrict electric utilities from recovering certain costs tied to serving large data center customers from other ratepayers, instead assigning those costs to the facilities themselves under specified conditions.
Environmental monitoring and resource use are also addressed.
House Bill 507 would place new limits and monitoring requirements on certain backup generators used by data centers. The bill would require air quality monitoring in areas with concentrated facilities.
House Bill 154 would require data centers to publicly disclose when emergency generation units are operating.
House Bill 589 would require water providers serving data centers to submit monthly water usage data to the State Water Control Board.
Land use and planning requirements are included in several measures.
House Bill 496 would require site assessments and water use disclosures before local governments approve rezoning or special use permits for new data centers. The bill specifies that local zoning authority is preserved.
House Bill 323 directs the Department of Energy to study the reuse of waste heat generated by data centers and report findings to the General Assembly.
One proposal, House Bill 1515, would temporarily prohibit final local approvals for new data center projects until certain electric grid interconnection requirements are met or until July 1, 2028.
That measure has already been continued to the 2027 session.
