Legislative Actions at the April 2 Reconvened Session

The General Assembly met on April 2 to consider the Governor’s proposed amendments to legislation passed by the legislature during the 2025 session, including a series of amendments to the budget bill, as well as bills vetoed by the Governor.  Following is an update on the legislature’s actions on the Governor’s amendments and vetoes.

Budget Proposals

The Governor proposed substantial revisions to the state budget sent to him by the legislature in February, offering 205 amendments and vetoing eight items.  The Governor had indicated that his proposals were intended to hedge against economic uncertainty by redirecting $300 million from spending items included in the General Assembly’s proposal into state reserves.  The Governor also proposed a number of spending items that were not included in the legislature’s budget, several of which were items initially proposed in the December introduced budget, but not adopted by the General Assembly during regular session.

The General Assembly agreed to 33 of the Governor’s amendments at the reconvened session.  Many of these amendments were technical in nature; for example, several amendments removed spending allocations that were no longer necessary because the accompanying legislation had been vetoed.  The legislature did approve several substantive amendments of interest to local governments, as discussed below.

The Governor now has a 30-day deadline from the adjournment of the reconvened session to take action on the budget bill as it was returned to him; the Governor may sign the bill, veto the entire bill, issue line-item vetoes for particular items, or take no action and allow the budget to become law without his signature.

Below is a summary of the fate of key budget items of interest to local governments:

• K-12 support cap: As passed by the General Assembly, the budget functionally eliminated the cap on recognition of support positions by providing $222.9 million in FY 2026 to fund positions at a ratio that corresponds with prevailing local practice, a position maintained by the legislature during the reconvened session.  This action has been long sought by VACo and its advocacy partners and addressed VACo’s top budget priority for this session.  The Governor proposed to reduce this funding by $138.2 million and fund a staffing ratio of 25.50 support positions per 1,000 students (an increase over the FY 2025 ratio of 24 positions per 1,000 students, but a reduction from the enrolled budget’s ratio of 27.89 positions per 1,000 students).  The General Assembly did not accept the Governor’s amendment, returning the budget to the Governor with the legislature’s proposed $222.9 million spending level.
• School capital: The Governor proposed to deposit an additional $50 million in FY 2025 from the Literary Fund into the School Construction Fund. The General Assembly accepted this amendment.
• Wastewater projects: The Governor vetoed the budget item containing $431.2 million in bond authorization for wastewater projects over the biennium (an increase of $31.2 million over the bond authorization contained in the 2024 Appropriation Act), proposing a separate amendment designating $431.2 million in excess FY 2025 revenues, after any required Revenue Stabilization Fund deposit, for this purpose. The General Assembly sustained the veto, and did not accept the proposed contingent spending.  It is VACo’s understanding that the effect of these actions is to eliminate the additional $31.2 million in bond authorization approved by the 2025 General Assembly.
• Stormwater: The Governor vetoed the item authorizing $40 million in bond proceeds in FY 2025 for the Stormwater Local Assistance Fund (SLAF), and the legislature sustained this veto.
• Virginia Preschool Initiative Local Composite Index Cap: In his amendments, the Governor proposed to eliminate the current cap of 0.5000 on the Local Composite Index for the Virginia Preschool Initiative, effective July 1, 2025. This proposal, which was also included in the Governor’s introduced budget in December 2023, but not adopted by the legislature in 2024, and proposed in his December 2024 budget and rejected by the 2025 General Assembly, would mean that the local share would increase for this program for localities with LCIs above 0.5000.  The General Assembly did not accept this amendment.
• Disaster assistance: The General Assembly’s February budget included $50 million in FY 2025 for disaster mitigation and Hurricane Helene relief, with $25 million provided to assist residents who lost homes or sustained residential property damage as a result of Hurricane Helene (assistance for commercial property and crop loss would be allowed with funds available after all residential claims were executed), and $25 million to be used for major weather event disaster mitigation, such as improving structures’ ability to withstand hazards. From this funding, $350,000 would be provided for a pilot emergency management mobile communications platform in southwest Virginia.  The Governor proposed several modifications to this program.  The Governor’s amendments would allow damage from certain February 2025 storms to qualify; allow use of funding for commercial property and crop loss; allow the disaster mitigation funding to be used to satisfy match requirements for certain federal, state, and other funding programs; and allow mitigation funding to be used for disaster relief if claims exceed the $25 million set aside for relief.  The General Assembly accepted these amendments.

Bills Vetoed by the Governor

The Governor vetoed 157 bills.  A two-thirds supermajority vote of members present in each chamber is required to override a Governor’s veto – a high hurdle, particularly given the narrow margins in the General Assembly.  As a result, the General Assembly sustained all of these vetoes, meaning that the bills will not become law this year.

Among the bills vetoed by the Governor was SB 1307 (McPike), which would have authorized all counties and cities to impose a 1 percent local option sales and use tax for school capital needs, after approval in a local referendum.  VACo reported on bills of interest to local governments that were vetoed by the Governor in a recent edition of County Connections, which may be found at this link.  A full list of all bills vetoed may be found at this link.

Bills with Governor’s Amendments

The Governor offered amendments to 159 bills.  In order for the Governor’s amendments to be incorporated into a bill and enacted into statute, both chambers must vote to approve the amendments by a majority vote of the members present.

The legislature agreed to the Governor’s amendments for 68 bills and rejected amendments, in whole or in part, to 91 others.  Bills for which the General Assembly rejected the Governor’s amendments are now returned to the Governor for final action within 30 days of adjournment of the reconvened session; the Governor may sign or veto these bills, or take no action, in which case the bills would become law without his signature.

Following is an update on the General Assembly’s actions on bills with gubernatorial amendments of interest to local governments.

Reporting of equipment failures at waterworks: As passed by the General Assembly in February, HB 2749 (LeVere Bolling)  and SB 1408 (Reeves) require owners of waterworks to report any critical equipment failure or malfunction or contaminant release to the Department of Health as soon as practicable, but no more than six hours after discovery.

• The Governor’s amendment shortens this reporting period to two hours.  VACo asked the bills’ patrons to reject this amendment, which would impose a significant administrative burden on local staff by requiring evaluation and reporting of issues in a very limited timeframe, and retain the more reasonable six-hour requirement agreed to by the General Assembly.
• General Assembly action: Accepted the Governor’s amendment.  These bills will become law with the two-hour reporting period as amended by the Governor.

Emergency Medical Services and prescription drug boxes: SB 1318 (McPike), as passed by the General Assembly during the regular session, directs the Board of Pharmacy to convene a work group to advise the Board on issues related to emergency medical services providers.

• The Governor’s amendment rewrites the bill to direct the Board of Pharmacy, in collaboration with the Virginia Department of Health and the Office of Emergency Medical Services, to report on the progress made by EMS agencies in implementing Board of Pharmacy regulations and U.S. Drug Enforcement Agency requirements that replaced the hospital drug box exchange program.
• General Assembly action: Accepted the Governor’s amendment.  This bill will become law as amended by the Governor.

Data centers: HB 1601 (Thomas)/SB 1449 (Ebbin), as passed by the General Assembly during the regular session, require an applicant for a rezoning, or special use permit, for a data center (defined as a “High Energy Use Facility” or HEUF) to submit a sound study on potential impacts to any housing or schools within 500 feet of its property boundary. The legislation also requires a locality, when considering such application, to require the electric utility providing power to the proposed data center, to submit a report on (1) any new or existing electric substations that will be used to serve the HEUF; and (2) the anticipated transmission voltage required to serve the HEUF.

• The Governor’s amendments would remove these mandates and instead leave it to the discretion of the locality to require them. The Governor also proposed a reenactment clause, effectively nullifying the legislation by requiring the General Assembly to adopt it again in 2026 to make it effective. Given such, the proposed amendments did not impact local authority in the review of such applications.
• General Assembly action: Rejected the Governor’s amendments.  The Governor now has a 30-day deadline to take final action on these bills.

Affordable housing: HB 2153 (Carr), as passed by the General Assembly during the regular session, requires localities to incorporate into their comprehensive plans strategies to support affordable housing development by property tax-exempt nonprofit organizations. The legislation also grants localities the authority to adopt a variety of strategies to facilitate the development of affordable housing on property owned by property tax-exempt nonprofit organizations. These include (1) the adoption of an ordinance to reduce, or waive, the requirements for certain zoning permits; and (2) the creation of site plan application incentives.

• The Governor’s amendments remove these provisions and instead require the Department of Housing and Community Development (DHCD) to develop a document describing options for alteration or waiver of requirements for zoning permits, site plan application incentives, and other considerations that a locality may consider when implementing an ordinance to stimulate affordable housing and include strategies on property owned by a property tax-exempt nonprofit organizations. In the development of the document DHCD shall (1) consult stakeholders, including local governments, nonprofit organizations, and other expert resources; and (2) publish the document on the Department’s website no later than December 31, 2025.  The Governor’s substitute language does not impact counties.
• General Assembly action: Accepted the Governor’s amendments.  This bill will become law as amended by the Governor.

Photo speed monitoring devices: HB 2718 (Leftwich) deals with the use of photo speed monitoring devices in school crossing zones.  As passed by the General Assembly during the regular session, the bill provides that a sworn certificate or facsimile affirmed by a law-enforcement officer based on inspection of images produced by a photo speed monitoring device is not prima facie evidence of a vehicle speed violation unless the images document the presence of signage indicating a school crossing zone at the time of the violation.

• The Governor’s amendments are clarifying in nature.
• General Assembly action: Accepted the Governor’s amendments.  This bill will become law as amended by the Governor.

Recordation and property tax exemptions:

HB 1699 (Askew), as passed by the General Assembly during the regular session, eliminates the recordation tax exemption for the Virginia Division of the United Daughters of the Confederacy and eliminates the real and personal property tax exemption for this group and several other entities.

• The Governor’s amendments would add a reenactment clause to the bill and direct the Department of Taxation to study the impact of exemptions to the state recordation tax on state government revenues and the exemptions to real and personal property tax by classifications set or designations made on or before July 1, 1971, and the impact of such exemptions on local government revenues.
• General Assembly action: Rejected the Governor’s amendments.  The Governor now has a 30-day deadline to take final action on this bill.

HB 1970 (Watts)/SB 1202 (Deeds) respond to a specific case in the City of Winchester and clarify that the Constitutional property tax exemption for property owned by “institutions of learning not conducted for profit, so long as such property is primarily used for literary, scientific, or educational purposes or purposes incidental thereto” includes institutions licensed by the Department of Education that provide special education and related services pursuant to the federal Individuals with Disabilities Education Act.

• The Governor’s amendments stipulate that these provisions are declarative of existing law.
• General Assembly action: Accepted the Governor’s amendments.  These bills will become law as amended by the Governor.

HB 2302 (Sickles) relates to the Constitutional exemption for real and personal property owned by churches and religious bodies and stipulates that property on which a new structure is being built to replace or rebuild a church or other building for religious worship qualifies for the exemption.  The bill contains certain guardrails; as passed by the General Assembly during the regular session, the bill included a requirement that construction will commence no later than six months after discontinuation of the property’s previous use.

• The Governor’s amendments:  In order to address the situation that prompted the legislation, the Governor’s amendment extends the window to begin construction to five years.  Given the guardrails included in the legislation and the specificity of the situation it aims to address, VACo had no position on the bill.
• General Assembly action: Accepted the Governor’s amendments.  This bill will become law as amended by the Governor.

Recovery residences: SB 838 (VanValkenburg), as passed by the General Assembly during the regular session, changes the existing civil penalty for operating a recovery residence that is not certified by the Department of Behavioral Health and Developmental Services (DBHDS) to a Class 1 misdemeanor and directs the establishment of a workgroup to develop a process for state oversight of recovery residences, to include credentialing guidelines and a process for investigation of complaints.  The bill authorizes the Department of Behavioral Health and Developmental Services to issue provisional certification on a temporary basis to a recovery residence that has indicated an intent to receive accreditation by or membership in a credentialing agency.

• The Governor’s amendments revise the language regarding “provisional” certification to instead provide for “conditional” certification and specify that conditional certifications may be revoked for serious health and safety concerns.
• General Assembly action: Accepted the Governor’s amendments.  This bill will become law as amended by the Governor.

Towing: SB 1332 (Marsden), as passed by the General Assembly during the regular session, increases the maximum hookup and initial towing fee of a passenger car from $150 to $210 and makes provisions that authorize a towing and recovery operator to charge a fuel surcharge fee of $20 for the removal of certain vehicles permanent; however, a towing and recovery operator would be prohibited from charging such a fee in any locality where the governing body has adopted an ordinance setting reasonable limits on fees in accordance with existing law and has conducted a review considering an adjustment of such limitations by December 31, 2025.

• The Governor’s proposed substitute includes only the language increasing the maximum hookup and initial towing fee; this action allows the current fuel surcharge fee to expire on July 1, 2025.
• General Assembly action: Accepted the Governor’s amendments.  This bill will become law as amended by the Governor.

Employer liability: HB 1730 (Delaney) and SB 894 (Perry), as passed by the General Assembly during the regular session, establish an expansive legal framework for holding employers liable in civil actions involving victims who have been harmed by an employee’s actions.  This would create a great burden on public employers, who by the very nature of providing services for the public would be subject to claims and liability related to the acts of employees that they may not be able to foresee or anticipate.

• The Governor’s amendments are helpful to localities as employers, as they would create more feasible standards of employer responsibility for employees’ actions.  The amendments also narrow the definition of “vulnerable victim.”
• General Assembly action: Rejected the Governor’s amendments.  The Governor now has a 30-day deadline to take final action on these bills.

VACo Contacts: VACo Legislative Team