Post Governor Actions Legislative Update

The Governor took legislative action on over 960 bills laid on his desk from the 2025 General Assembly Session, including the budget. Governor Youngkin vetoed nearly 160 bills and made recommendations to just as many. In the budget bill, the Governor made 205 amendments and 8 vetoes. A complete list of the Governor’s amendments to the budget may be read here.

The General Assembly will have a Reconvene Session on April 2 to respond to his amendments and vetoes. For bills which the Governor vetoed, the threshold for his veto to be overridden is a 2/3 vote of members present. For his recommended amendments to be rejected or accepted, it’s a simple majority.

All laws signed by the Governor will take effect July 1 of this year unless otherwise stated in the legislation. We will provide an additional update on legislative actions following the Reconvene Session.

Artificial Intelligence

• HB2124 (Maldonado)/SB1053(Ebbin): This legislation makes it a Class 1 misdemeanor to use synthetic media for committing a crime offense involving fraud. Also, it allows civil action against the person who violates this code section. Lastly, it calls on the Attorney General to establish a workgroup to study Virginia’s AI laws. Status: Signed into law.
• HB2094 (Maldonado): Regulates high-risk decision-making AI systems private entities use to prevent algorithmic discrimination. This includes disclosure to a consumer when AI is being used, allowing a person to opt out in favor of human review. The bill passed the House 51-47 and the Senate 21-19 with a substitute that added a definition for facial recognition technology. Status: Vetoed by the Governor. In his explanation, the Governor stated that he felt the rigid framework would not adapt to the ever-changing landscape of AI and would harm startups, job creation, and innovation. 

Blockchain and Web3

Delegate Dan Helmer introduced legislation, HB1796, to permit Decentralized Autonomous Organizations (DAOs) to operate in Virginia. A DAO is an organization that is managed through computer programs where financial resources and voting are tracked through blockchain. Three states currently recognize DAOs as legal entities: Tennessee, Vermont, and Wyoming. This legislation was passed with a reenactment clause. This means, in its current state, the bill would have to pass the General Assembly again next Session. Status: The Governor made recommendations to the legislation in the nature of a substitute. The new language converts the bill into a study of DAOs.

Cannabis

HB2485(Krizek)/SB970(Rouse): This legislation establishes a framework for creating a retail marijuana market in the Commonwealth, administered by the Virginia Cannabis Control Authority. Status: Vetoed by the Governor. The Governor vetoed this legislation last year as well.

Car Tax

The Governor’s amendments to the biannual budget seek to provide car tax relief. He addresses this issue by creating a $1.1 billion fund for income tax credits—individual taxpayers earning $50,000 or less will qualify for $150 in tax credits. Joint filers will qualify for $300 if their income is $100,000 or less. The final conference report used the $1.1 billion as general tax rebates of $200 for individuals and $400 for joint filers to be issued by October 15, 2025, and increases in the refundable portion of the Earned Income Tax Credit (EITC) to 20% of the federal credit. Status: The final conference report remains unchanged by the Governor.

Data Centers

• HB1601(Thomas)/SB1449(Ebbin) Provides that before any approval of a rezoning application, special exception, or special use permit for the siting of a new high-energy use facility (HEUF) shall collect certain information. Status: The Governor changed requirements on localities to permissive actions they may take and added a reenactment clause, which would require the 2026 General Assembly to pay the same legislation.
• HB2084(Shin) Directs the SCC to determine if the utilities need new and additional classifications for energy customers. Status: Signed into law.
• SB1047(Roem) Directs the Department of Energy to evaluate and asses demand response programs. Status: Vetoed by the Governor. In his explanation, the Governor stated that the SCC currently has this authority, and utilities already offer these programs.
• In his amendments to the budget, the Governor included an extension of the Data Center Sales & Use Tax exemption from 2035 to 2050.

Energy Storage

HB2537(Sullivan)/SB1394(Bagby) Increase the targets for new energy storage capacity in both Appalachian Power and Dominion Energy territories. The legislation defines the differences between short-term and long-term energy storage. The dividing line is at 10 hours of capacity. Status: The Governor provided recommendations that effectively undue Renewable Portfolio Standards in the Commonwealth.

Electric Vehicles

HB1791(Sullivan) passed the General Assembly on largely partisan lines. This legislation creates the Electric Vehicle Rural Infrastructure Program and Fund to assist private developers with non-utility costs for installing electric vehicle charging stations. Status: Vetoed by the Governor. In his explanation, the Governor stated that federal programs and private companies are already developing an EV charging network. Funding for the program has also been removed in his amendments to the budget.

Oak Hill Farm Park

Delegate Lopez introduced legislation, HB2306, to authorize the Department of Conservation and Recreation to acquire Oak Hill Farm as a state park for preservation. This property is 1,240 acres and includes James Monroe’s home. The legislation passed the House 99-0. It was reported after lengthy discussions in Senate Finance and Appropriations regarding the project’s long-term viability. Later, the bill was recommitted to the committee, killing the legislation. Status: The Governor added language in his amendments to the budget, which creates requirements that must be met for the state to establish Oak Hill as a state park.

Renewable Energy

HB1616, introduced by Delegate Feggans, would require the Director of the Department of Energy to identify and develop training resources to advance workforce development in the offshore wind industry in the Commonwealth. Status: Vetoed by the Governor. In his explanation, the Governor indicated that DOE is already addressing workforce development.

HB1779/SB1338 (Del. Rip Sullivan/Sen. Dave Marsden) is legislation that adds fusion energy to the list of generation sources that qualify as clean energy. Status: This legislation passed the General Assembly unanimously and was signed into law.

HB1934/SB1192 (Del. LeVere Bolling/Sen. Creigh Deeds) are bills that would encourage small-scale solar projects for elementary and secondary schools. Status: The Governor made recommendations to the legislation which deletes large portions of the code sections pertaining to the renewable portfolio standards.

HB2024/SB1165 (Del. Holly Seibold/Sen. Saddam Salim) These bill legislation would prevent government entities from prohibiting the use of solar panels that meet EPA standards. Status: Governor Youngkin amended the legislation to prohibit the banning of solar panels manufactured in the United States.

HB2037, introduced by Delegate Bulova, would allow localities to adopt ordinances requiring solar canopies be developed on parking lots with over 100 spaces. Status: Vetoed by the Governor. In his explanation, the Governor stated he had concerns with mandating solar in parking lots and felt it was an expensive form of generation.

HB2090, introduced by Delegate Shin, would make more projects eligible for the multi-family shared solar program, including projects with shared or adjacent substations. Current law requires energy facilities to be onsite or adjacent to the subscriber base. This legislation also created a minimum bill for low-income customers. Status: Vetoed by the Governor. In his explanation, the Governor felt this expansion undermined the original intent of the program and had concerns about the impact of a minimum bill on non-participating customers’ electric bills.

HB2113, introduced by Delegate Charniele Herring, establishes a Solar Interconnection Grant Program. The fund would provide grants to public bodies to offset the costs associated with the interconnection of solar facilities. The legislation passed the Senate 39-0 and the House 65-31. Status: Vetoed by the Governor. In his explanation, the Governor said that numerous funding sources already exist for solar projects, and thus, he felt this legislation was unnecessary.

HB2346/SB1100 (Del. Phil Hernandez/Sen. Ghazala Hashmi) requires Dominion Energy to conduct a pilot program for a virtual power plant. Status: The Governor made recommendations to direct the SCC to conduct a proceeding to review virtual power plants.

HB2413/SB1021 (Del. Mundon-King/Sen. Scott Surovell) were Commission on Electric Utility Regulation recommendations. This legislation would modify the integrated resource plans in numerous ways, including expanding the planning timeline by five years and changing filing to every three years. Status: Vetoed by the Governor. In his explanation, the Governor stated that the SCC has the authority to regulate IRPs and discuss concerns broadly with the Virginia Clean Economy Act.

SB893 was introduced by Scott Surovell. This legislation adds geothermal heating and cooling systems to the renewable portfolio standards. Status: Vetoed by the Governor. In his explanation, the Governor indicated that this was creating a subsidization for HVAC technologies.

Sanctuary Cities

Under budget Item 377 in the Governor’s proposed amendments to the biannual budget, there is language that compels officials to comply with ICE and directs the withholding of payments for failure to comply. This is one of many policy decisions that will nationalize legislative policy discussions during this Session.

F.1. Any Director, Superintendent, sheriff, or other official in charge of a facility in which an alien is incarcerated shall comply with lawful U.S. Immigration and Customs Enforcement detainers and shall provide at least 48-hour prerelease notification to U.S. Immigration and Customs Enforcement.

2. If any Director, Superintendent, sheriff, or other official in charge of a facility is in violation of F.1. or if a local law enforcement agency, sheriff’s office, or official in charge of a facility, pursuant to adoption of a local ordinance, procedure, policy, or custom prohibits or impedes communication or cooperation with U.S. Immigration and Customs Enforcement, the Director of the Department of Criminal Justice Services shall withhold reimbursements due to a locality under Title 9.1, Chapter 1, Article 8, Code of Virginia, and the Compensation Board shall withhold per diem payments for financial assistance to local or regional jails.

Status: This language was not included in the budget conference report, but the Governor has reinserted the language into his budget recommendations.

Speed Cameras

Senate Bill 1233 (Williams-Graves) incorporates portions of HB2041 (Seibold). The final version asses a $100 fine regardless of if the pedestrian is properly in a crosswalk. It also permits law enforcement to install recording devices at pedestrian crossings and stop sign violations within previously approved monitoring areas. Lastly, the legislation puts in place a rigorous process for speed cameras to be approved, limits their profitability, and puts a due process framework in place. Status: Vetoed by the Governor. In his explanation, the Governor indicated that he did not feel the bill, as drafted, struck the proper balance between public safety and privacy. Additionally, he mentioned that the legislation did not reflect the consensus of stakeholders.

Standard Deduction

Governor Youngkin has called on the General Assembly to permanently increase the standard deduction from $3,000 for single filers and $6,000 for couples to $8,500 and $17,000, respectively. This change expires on January 1, 2026. As of this posting, Senator Suetterlein introduced SB782 to accomplish this initiative. SB782 failed to report from committee. The final budget conference report increased the standard deduction over the current biennium. The deduction is $8,750 for individuals and $17,500 for joint filers. However, it would expire with the current budget. Status: The Governor’s amendments made these changes to the standard deduction permanent.

Taxes on Tips

Senate Minority Leader Ryan McDougle and Delegate Chad Green have introduced SB763/HB1562. This legislation provides an income tax deduction for cash tips received and is a major initiative in Governor Youngkin’s 2025 Legislative Agenda. This proposal is anticipated to return $70 million annually to taxpayers. The Virginia Department of Taxation and the Virginia Employment Commission estimate that more than 250,000 Virginia workers receive tips as part of their employment. Status: It is not included in the final budget conference report and was not included in the Governor’s amendments.

Virginia Military Survivors and Education Program (VMSDEP)

Following the 2024 General Assembly Session, numerous meetings were held regarding the long-term feasibility of VMSDEP. This program is designed to provide educational benefits to the surviving family members and dependents of military service members who are killed in action, are permanently disabled due to service, or are classified as missing in action. The Governor announced an additional $120 million and long-term sustainable funding from VA529 surpluses. No policy changes on how the program is implemented were presented. HB1694 (Askew) requires the Department of Veterans Services and the State Council of Higher Education for Virginia to coordinate to report no later than December 15 of each year on persons eligible for the program and an estimate of how many enrolled in higher education using the tuition waiver. The bill passed unanimously. There was also $ 100 million in funding provided in the budget conference report. Status: HB1694 was signed into law. The Governor’s budget amendments direct $90 million from the general fund and $60 million in non-general funds to the program.

Photo from Paul Brady Photography/Shutterstock.