(The Center Square) – House of Delegates leaders on Friday proposed creating a Virginia Commission on Data Center Accountability while leaving the state’s existing data center sales and use tax exemption in place.
Speaker Don Scott and House Appropriations Chairman Luke Torian described the measure as a compromise budget proposal as lawmakers work toward a budget agreement before the June 30 deadline.
The proposal would establish a 13-member commission to review data center incentives, energy demand, infrastructure costs, environmental impacts, workforce issues and community concerns.
Under the proposal, the Virginia Commission on Data Center Accountability would include lawmakers; administration officials; a State Corporation Commission representative and members appointed by the governor representing a data center customer; a utility; an environmental or conservation organization; a skilled-trades organization; and a locality.
The commission would be required to hold at least four public meetings, complete its meetings by Sept. 30, and submit a final report by Nov. 1.
The proposal does not eliminate Virginia’s existing sales and use tax exemption for qualifying data centers, an issue that has been at the center of budget negotiations.
“Virginia’s families cannot wait – and we will not make them wait,” Scott said in a statement announcing the proposal.
Torian said the package seeks to address state priorities while preparing for uncertainty tied to federal funding decisions.
“This budget comes through for Virginians in a real and meaningful way without introducing a single new tax,” Torian said. “It anticipates future federal funding cuts by establishing a reserve.”
The proposal would deposit $225 million into a Federal Uncertainty Contingency Fund and leave approximately $582 million unspent at the end of the biennium in fiscal year 2028.
According to House budget documents, the proposal includes about $1.8 billion in additional state support for public education over the biennium; a net $2.4 billion increase to fully fund Medicaid and Children’s Health Insurance Program forecast costs; and $79.1 million for health insurance premium assistance through Virginia’s health insurance marketplace.
Gov. Abigail Spanberger endorsed the proposal.
“It is a proposal I am proud to support,” Spanberger said in a statement.
She said the budget creates “a clear roadmap” for evaluating the impact of data centers and reviewing state incentives.
Senate Finance and Appropriations Chairwoman Louise Lucas criticized the proposal, calling the House’s public release “an unprecedented step” and saying chamber conferees did not continue discussions with Senate negotiators.
Lucas said the Senate proposal would establish a tiered state impact fee on data centers projected to generate $1.7 billion in revenue, while the House proposal instead creates a commission to study the issue.
The House is scheduled to reconvene Thursday and the Senate on next Monday as lawmakers continue work toward a final budget agreement before the start of the new fiscal year on July 1.