VA $207B biennial budget / enacted Jun 29 without signature / Article V Section 6 mechanic / $0.011/kWh consumption tax effective Jul 1 / $1.2B over biennium / $600M annual cap / Spanberger water amendment 'minimize use of any type of water' DEQ discretion / Roem D criticism too vague no numeric limits / intra-Dem fracture pragmatist vs restrictionist

Plain-English background. Virginia has two governors who matter for data centers: the Republican-appointed State Corporation Commission (SCC) that sets utility rates, and the elected governor who signs budgets. Gov. Abigail Spanberger (D) was elected in November 2025 partly on a 'data centers should pay for their own grid' affordability message. The two-year state budget for fiscal years 2027-2028 has been the policy vehicle for translating that campaign promise into law. The budget went through three stages over the last 60 days. House and Senate negotiators (Speaker Don Scott, Sen. Louise Lucas, Sen. Scott Surovell, Del. Luke Torian) cut a compromise on June 20: a $0.011 per kilowatt-hour electricity consumption tax on data center facilities exceeding a defined size threshold, $600M/year revenue cap with pro-rata refund of any excess, two-year sunset, supply-agnostic (same rate whether the electrons come from Dominion, Appalachian Power, a co-op, a competitive retail supplier, or behind-the-meter self-supply). $1.2B total revenue over the biennium. Existing sales-tax exemption preserved — the new tax is additive, not a replacement. The compromise budget went to Spanberger's desk last week. She returned it Friday June 26 with a package of amendments — most of them affecting non-data-center line items, but with one specific data-center addition: a water-conservation requirement saying any new data center using evaporative cooling 'shall demonstrate to the satisfaction of the [Department of Environmental Quality] that it has minimized the use of any type of water for cooling purposes and demonstrated the use of best available water-efficient technologies.' On Monday June 29, the General Assembly returned and voted on Spanberger's amendments. They accepted all of them. This is the legally important moment that most outside-Virginia coverage is missing. Under Virginia law (Article V, Section 6 of the Virginia Constitution), when the General Assembly accepts ALL of a governor's amendments to a bill, the bill becomes law WITHOUT requiring the governor's signature. Spanberger never has to sign anything tonight. The budget is already enacted as of Monday's vote. The $0.011/kWh tax goes into effect at 12:01 AM Wednesday July 1. Why this procedural detail matters strategically. If Spanberger had to sign the budget tonight, she would own the tax personally — every Republican attack ad in the 2029 reelection cycle would have her signature on the bill. By accepting all her amendments, the General Assembly handed her political cover: the tax becomes law without her signing it. The Republican attack will now have to argue 'she proposed amendments that contained the tax,' which is harder to compress into a 30-second spot than 'she signed the tax into law.' It's a subtle but real political maneuver. The substantive fight inside Monday's vote was about the water amendment. Sen. Danica Roem (D-Manassas, who represents one of the most data-center-dense districts in the country and has been Virginia's loudest pro-restriction Democrat for the last two years) publicly criticized Spanberger's water language as too vague. Her objection: 'shall demonstrate to the satisfaction of the department' is pure discretion. There's no numeric threshold, no maximum gallons-per-MW-hour, no specified cooling-technology benchmark. DEQ can approve or reject any individual project on subjective grounds. Roem wanted hard numeric limits in the statute. She lost — the amendment passed as Spanberger wrote it. This is the first visible intra-Dem fracture on data center stringency in Virginia, and it matters because Virginia is the country's most data-center-heavy state with the highest political stakes. The fracture line: pragmatist Democrats (Spanberger, Lucas, Surovell, Scott) want flexible regulatory tools that don't lock in numeric limits that might be wrong; restrictionist Democrats (Roem, Sen. Saddam Salim, Del. Josh Cole) want hard numbers that take discretion away from agencies hyperscalers might lobby. Both factions backed the $0.011/kWh tax — the disagreement is over what other constraints stack on top of it. What happens Wednesday July 1. The SCC begins collecting the consumption tax. The first quarterly return is due September 2026. DEQ begins reviewing the first wave of post-July-1 data center permit applications under the new water-conservation language — and the first application that gets rejected on the basis of 'has not demonstrated to the satisfaction of the department' becomes the first test case for whether Roem's vagueness critique was right. Watch for the first DEQ permit decision on a new evaporative-cooling data center in Q3 2026 — that decision sets the operational meaning of the statute.

Primary source · Virginia Mercury — Virginia General Assembly approves Spanberger's budget amendments, ending monthslong impasse (Jun 29 2026) + VPM News — Lawmakers accept Spanberger's budget amendments, averting state funding crisis (Jun 29 2026) + News From The States — Virginia has a new two-year budget. Here's what lawmakers now require of data centers + Canary Media — Virginia slaps data centers with big new tax — but no climate rules + Northern Virginia Daily — General Assembly OKs Spanberger's budget amendments, ending impasse + Virginia Scope — Data center debate spills over into Spanberger bill signing ↗