On Sunday, the House Appropriations Committee and Senate Finance and Appropriations Committee released their respective budget proposals, outlining their key funding priorities for the Commonwealth. Both the House and Senate have formally adopted the reports from their respective chamber's budget, and now a group of conferees will be appointed to begin the process of reconciling for a final budget. As legislators work toward agreement, the Virginia Chamber will continue to advocate for proposals that foster economic growth and support the business community. A summary of key budget proposals is provided below. Additionally, we are highlighting bills that remain a concern to the business community.
BILLS OF CONCERN
HB 2561 (Lopez) extends the statute of limitations for claims of discrimination and violations of minimum wage and overtime wage payment and increases damages awarded related to these claims. The legislation passed the House on a vote of 51-48 and is awaiting consideration by the Senate Commerce and Labor Committee.
HB 2351 (Hernandez) removes the $25 million cap for suspension bonds and irrevocable letters of credit for appellants during the appeal of a civil action. As drafted, the legislation would impose an unnecessarily heavy burden on the exercise of the right appeal. The legislation passed the House on a vote of 99-0 and is awaiting consideration by the Senate Courts of Justice Committee.
HB1730 (Delaney) and SB 894 (Perry/Obenshain) create a new standard to hold employers liable for injury or death of a “vulnerable victim” that resulted from the criminal conduct of an employee. SB 894 passed the Senate 25-13. On Wednesday, the bill reported from the House Courts committee with an amendment that removes public transit agencies funded by the Commonwealth Mass Transit Fund from the definition of vulnerable victims. HB 1730 passed the House 60-38-1 and awaits consideration by the Senate Courts of Justice Committee.
SB 1052 (Ebbin) expands employer liability under the Virginia Human Rights Act by lowering the coverage threshold from 15 to more than five employees, increasing compliance costs and legal risks for small businesses. SB 1052 passed the Senate by a vote of 21-18 and awaits consideration by the House Labor and Commerce Committee.
HB 1928 (Ward) increases the minimum wage incrementally to $15.00 per hour by January 1, 2027. Current law indexes Virginia’s minimum wage to inflation. The legislation passed the House by a vote of 50-46 and awaits consideration by the Senate Committee on Commerce and Labor.
SB 1122 (Boysko) and HB 2531 (Sewell) require the Virginia Employment Commission to establish and administer a paid family and medical leave insurance program to be funded by employer and employee contributions. SB 1122 passed the Senate on a vote of 21-18 and awaits consideration by the House Appropriations Committee. HB 2531 passed the House on a vote of 51-47 and is scheduled to be heard in the Senate Committee on Commerce and Labor on Monday, February 10.
SB 1132 (Boysko) prohibits employers from seeking wage or salary history of prospective employees and creates a cause of action for any violations of these provisions. The Senate passed the bill on a vote of 21-18, and the legislation awaits consideration by the House Labor and Commerce Committee.
SB 1299 (McPike) amends the Virginia Workers’ Compensation Act as it relates to compensation to dependents or beneficiaries of an employee killed. As amended, the bill expands the eligible dependents or beneficiaries to include the surviving spouse, parent, or parents of a decedent who leaves behind no child or grandchild, among other provisions. The legislation passed the Senate on a vote of 26-14 and awaits consideration by the House Labor and Commerce Committee.
HB 1921 (Ward) expands provisions of the Code that currently require one hour of paid sick leave for every 30 hours worked for home health workers to cover all employees of private employers and state and local governments. The bill passed the House on a vote of 51-47 and is awaiting consideration by the Senate Committee on Commerce and Labor.
HB 1724 (Delaney) establishes a Prescription Drug Affordability Board in Virginia. The legislation passed the House on a vote of 52-44 and is scheduled to be heard in the Senate Committee on Labor and Commerce on Monday, February 10.
AMENDMENTS TO FY 2025 - FY 2026 BUDGET
Business Climate
The House budget increases funding for the Virginia Business Ready Sites Program Fund by $20 million in FY 2025 and provides $50 million in VBRSP funding in FY 2026, for a total of $90 million in funding over the biennium. The Senate increases Virginia Business Ready Sites funding by $20 million in FY 2025 and maintains $20 million in funding for FY 2026, for a total of $60 million in funding over the biennium.
The Senate budget provides $10 million for economic development on Virginia’s Eastern Shore. $5 million is provided to facilitate marine transport access to the Mid-Atlantic Regional Spaceport and $5 million is provided to Accomack County for natural gas infrastructure expansion.
The Senate budget provides $2.5 million in FY 2025 to the Virginia Economic Development Partnership to enhance economic development marketing to capitalize on Virginia’s designation as America’s Top State for Business.
Both the House and Senate budgets provide nearly $1 billion for income tax rebates in an amount up to $200 for individual filers or $400 for married persons filing jointly and increases the standard deduction for taxable years 2025 and 2026 to $8,750 for individual filers and to $17,500 for married persons filing jointly.
The Senate authorizes all counties and cities in Virginia to impose an additional local sales and use tax, at a rate not to exceed one percent, and provided such additional tax is approved in a voter referendum. Revenue collected pursuant to such tax is permitted to be used only for capital projects for the construction and renovation of schools.
Both the House and Senate budgets provide $25 million in disaster relief funding associated with Hurricane Helene. The Senate budget provides an additional $25 million for general disaster relief.
The Senate budget includes a language-only amendment that directs the Department of Taxation to study corporate income tax in Virginia, focusing on market-based sourcing for sales.
Workforce and Education
Both the House and Senate budgets provide $25 million to the Employee Child Care Assistance Pilot Program. The House budget’s income eligibility for family income is that of the Child Care Subsidy Program and caps the state contribution at 33%. The Senate budget requires the Virginia Early Childhood Foundation to create guidelines for the program, including income eligibility, and stipulates that employees must not contribute more than 25% with employers, on average, contributing 37.5%.
Both the House and Senate redirect $25 million for the College Partnership Laboratory Schools Fund to support other K-12 initiatives.
The House moves $6 million from the State Council of Higher Education for Virginia (SCHEV) to the Virginia Economic Development Partnership (VEDP) to manage the employer-focused activities of Virginia Talent + Opportunity Partnership (V-TOP), including the marketing of promotion and marketing of the program to expand internships and work-based learning opportunities. The Senate budget includes language to require SCHEV and VEDP to establish a MOU to support the employer-focused outreach efforts of V-TOP.
Both the House and Senate budgets removed $2.1 million for the Virginia Has Job Initiative at Virginia Works.
The House budget includes language directing the Virginia Office of Education and Labor Market Alignment to evaluate the need to transition from the Virginia Economic Development Partnership Authority to an independent agency within state government with responsibility for Virginia's workforce and education data systems.
The House budget includes $750,000 to support the Diplomas for All Program at the Goodwill Industries of the Valley’s Excel Center to help adults earn high school diplomas and workforce credentials.
The House budget includes $150,000 to CodeVA to support an Artificial Intelligence education pilot program to equip students to become creators, developers, and engineers of AI and machine learning technologies.
The Senate budget includes $500,000 to support Opportunity Scholars in expanding programming to Hampton Roads and Northern Virginia.
The House budget includes language to allow certain higher education institutions the ability to charge less than 100 percent of the average cost of education to out-of-state students in an effort to increase Virginia’s talent pipeline.
Health Care and Life Sciences
The House budget provides $4.5 million toward the development of fast-acting insulin to reduce the cost of this drug for consumers to no more than $30 per vial.
The House budget includes funding for life sciences.
The House budget includes over $3.2 million to recruit and retain nursing faculty and grow the nursing workforce.
Both the House and Senate budgets provide $500,000 to Free Clinics.
Both the House and Senate budgets provide $2.5 million in FY 2026 for the creation of a pilot program for mobile maternal health clinics.
Both budgets include language regarding requiring the state Medicaid agency to contract with a single state pharmacy benefits manager to administer pharmacy benefits for Medicaid recipients. The House budget calls for an independent consultant to study the issue; the Senate budget calls for the implementation of this manager by July 1, 2026.
Energy
The Senate budget contains language providing that data center operators must meet certain energy efficiency standards to be eligible for the sales and use tax exemption for data center purchases.
Infrastructure
The Senate budget provides $25 million in FY 2025 for the Virginia Department of Health to provide grants to localities for costs associated with upgrades or replacement of existing drinking water infrastructure.
Both the House and Senate budgets provide $3.3 million in FY 2025 to the Washington Metropolitan Area Transit Authority.
Housing
The House budget provides $15 million in FY 2026 to award grants to first-time homebuyers, pursuant to House Bill 1598, in an amount equal to 5% of the sale price, up to $10,000.
The Senate budget provides $190,000 to establish a Workforce Housing Incentive Matching Grant program. The program would provide matching funds for localities, or other political subdivisions acting on behalf of localities, that offer unique benefits to businesses that provide housing assistance for their workforce.
The Senate budget contains provisions extending the Housing Opportunity Tax Credit from 2025 to 2030, and provides the credit is subject to an annual cap of $60 million per calendar year with a multi-year cap of $555 million through 2030.
Environment
The House budget provides $20 million in FY 2025 to the Department of Conservation and Recreation to address the backlog of deferred maintenance at Virginia’s state parks.
The Senate budget provides an additional $50 million in FY 2025 for the Community Flood Preparedness Fund for a total of $150 million over the biennium.
The House budget provides $50 million to the Stormwater Local Assistance Fund.
Each day, we are updating our Bills We’re Watching on our website. You can access those bills by visiting: https://vachamber.com/advocacy/bills-were-watching/
If you would like to share your comments or concerns on bill(s) that impact your business, please email us at: policy@vachamber.com. | 