Virginia General Assembly Approves Budget with Data Center Water Conservation and Energy Tax Amendments
The Virginia General Assembly narrowly avoided a government shutdown by approving Governor Abigail Spanberger's budget amendments. These amendments include a water conservation requirement for new data centers in Eastern Virginia and a new statewide energy consumption tax on data centers.
The Virginia General Assembly successfully avoided a state government shutdown by accepting all 14 of Governor Abigail Spanberger's suggested changes to the long-stalled budget during a special session. Both chambers approved the amendments, which are set to go into effect on July 1st.
Among the key changes are a new water conservation requirement for data centers built in Eastern Virginia and a first-of-its-kind statewide energy consumption tax on data centers. State Senator Richard H. Stuart (R-25th District) criticized the water provision, arguing it undermines a previously agreed-upon data center tax exemption compromise due to vague language. The budget package also includes funding for elections, cancer screenings for firefighters, and menhaden research, with a total price tag of $62 million in edits.
Governor Spanberger lauded the General Assembly's approval, stating that the budget makes Virginia a "national leader" in regulating data centers. She emphasized that the energy consumption tax ensures the data center industry pays its fair share for energy use, signaling that this is just the beginning of regulatory efforts.