VirginiaHB3972026 Regular SessionHouseWALLET

Clean energy and community flood preparedness; market-based trading program.

Sponsored By: Charniele L. Herring (Democratic)

Signed by Governor

Summary

Clean energy and community flood preparedness; market-based trading program. Directs the Department of Environmental Quality and the State Air Pollution Control Board to establish and maintain a market-based trading program consistent with the Regional Greenhouse Gas Initiative program, as defined in existing law, to reduce carbon dioxide emissions from electricity generating units in the Commonwealth. This bill is identical to SB 802.

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Bill Overview

Analyzed Economic Effects

4 provisions identified: 2 benefits, 1 costs, 1 mixed.

Energy-saving funding for low-income households

Subject to Virginia's constitution, 50% of carbon-auction revenue funds low-income energy-saving programs, including programs for eligible housing developments. The housing department approves funding proposals, and the energy department provides technical help upon request. A separate 2% share pays these agencies to administer and carry out the programs together. At each fiscal year's end, unspent money and interest stay available for these programs instead of returning to the general fund. The law sets no individual income cutoff, household award amount, or savings formula.

Flood preparedness funding for Virginia communities

Subject to Virginia's constitution, 45% of carbon-auction revenue goes to the designated flood fund account. This money helps localities and residents facing repeated floods, rising seas, or flooding from severe weather. The law sets no total funding amount or individual household payment.

Carbon trading rules for Virginia power plants

Virginia requires a carbon trading program to cut power-plant pollution, following the Regional Greenhouse Gas Initiative. The environmental agency runs the program and auctions its emissions allowances. It must seek to sell 100% of allowances issued each year. Exceptions apply when selling all harms allowance value and consumer benefit, or conflicts with the regional program. Subject to Virginia's constitution, auction proceeds earn interest in a state treasury account and fund designated uses without further appropriation. A 3% share pays reasonable program costs and statewide climate planning and mitigation. Environmental, conservation, housing, and energy agencies jointly report on participation, yearly emissions cuts, revenue collected and deposited, and spending. Their report to the Governor and General Assembly was first due January 1, 2022, and is required annually afterward.

Carbon allowance duties for long-term energy buyers

Buyers under qualifying energy-conversion or energy-tolling contracts must acquire the covered power unit's required carbon allowances. The contract's primary term must last at least 20 years. Buyers must supply fuel and receive all rated generating capacity and associated electricity for the entire contract period. The law declares its provisions to clarify existing law. It does not specify allowance costs or whether households' power bills change.

Sponsors & Cosponsors

Sponsor

  • Charniele L. Herring

    Democratic • House

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 154 • No: 70

Senate vote • 3/2/2026

Passed Senate

Yes: 21 • No: 19

Senate vote • 2/26/2026

Constitutional reading dispensed Block Vote (on 2nd reading)

Yes: 40 • No: 0

Senate vote • 2/26/2026

Passed by for the day Block Vote (Voice Vote)

Yes: 0 • No: 0

Senate vote • 2/24/2026

Reported from Agriculture, Conservation and Natural Resources

Yes: 8 • No: 6

House vote • 2/3/2026

Read third time and passed House

Yes: 63 • No: 35

House vote • 1/28/2026

Reported from Agriculture, Chesapeake and Natural Resources with substitute

Yes: 15 • No: 7

House vote • 1/21/2026

Subcommittee recommends reporting with substitute

Yes: 7 • No: 3

Actions Timeline

  1. Acts of Assembly Chapter text (CHAP0920)

    4/13/2026Governor
  2. Approved by Governor-Chapter 920 (effective 7/1/2026)

    4/13/2026Governor
  3. Governor's Action Deadline 11:59 p.m., April 13, 2026

    3/10/2026Governor
  4. Enrolled Bill communicated to Governor on March 10, 2026

    3/10/2026House
  5. Fiscal Impact Statement from Department of Planning and Budget (HB397)

    3/5/2026House
  6. Bill text as passed House and Senate (HB397ER)

    3/5/2026House
  7. Enrolled

    3/5/2026House
  8. Signed by President

    3/5/2026Senate
  9. Signed by Speaker

    3/5/2026House
  10. Passed Senate (21-Y 19-N 0-A)

    3/2/2026Senate
  11. Passed by for the day

    2/27/2026Senate
  12. Read third time

    2/27/2026Senate
  13. Passed by for the day Block Vote (Voice Vote)

    2/26/2026Senate
  14. Constitutional reading dispensed Block Vote (on 2nd reading) (40-Y 0-N 0-A)

    2/26/2026Senate
  15. Rules suspended

    2/26/2026Senate
  16. Reported from Agriculture, Conservation and Natural Resources (8-Y 6-N)

    2/24/2026Senate
  17. Referred to Committee on Agriculture, Conservation and Natural Resources

    2/4/2026Senate
  18. Constitutional reading dispensed (on 1st reading)

    2/4/2026Senate
  19. Read third time and passed House (63-Y 35-N 0-A)

    2/3/2026House
  20. Engrossed by House - committee substitute

    2/2/2026House
  21. committee substitute agreed to

    2/2/2026House
  22. Read second time

    2/2/2026House
  23. Read first time

    1/30/2026House
  24. Fiscal Impact Statement from Department of Planning and Budget (HB397)

    1/29/2026House
  25. Committee substitute printed 26105867D-H1

    1/28/2026House

Bill Text

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