Virginia HB 1132: Data center tax revenue; creates local residential renewable energy incentive program.

Bill Text

2026 SESSION

INTRODUCED

26104725D

HOUSE BILL NO. 1132

Offered January 14, 2026

Prefiled January 14, 2026

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.

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Patron—Reid

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Referred to Committee on Finance

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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, or July 1 of the year preceding the effective date of the ordinance establishing a local residential renewable energy incentive program, whichever is later.

"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 was 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 a facility whose primary services are the storage, management, and processing of digital data and is used to house (i) computer and network systems, including associated components such as servers, network equipment and appliances, and telecommunications and data storage systems; (ii) systems for monitoring and managing infrastructure performance; (iii) equipment used for the transformation, transmission, distribution, or management of at least one megawatt of capacity of electrical plant equipment and associated air handlers; (iv) internet-related equipment and services; (v) data communications connections; (vi) environmental controls; (vii) fire protection systems; and (viii) security systems and services.

"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 fund" means the local residential renewable energy incentive fund for the applicable locality.

"Incentive program" means the local residential renewable energy incentive program 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 systems 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 taxes from at least 20 data center buildings, shall, by ordinance, 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 buildings 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 shall 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 "local residential renewable energy incentive fund" corresponding to the applicable local