Capitol Briefs: Week 5

February 16, 2026

Tax and transportation funding bills defeated as dealer-specific legislation rolls on

We are now five weeks into the 2026 General Assembly session – and things are looking up. At this point, we are only a few days away from Crossover – the point of session where both chambers must finish working on all their bills and send them to the other – so we have a much clearer picture of what bills may advance through the session and make it to the Governor’s office.

At a high level, here's where things stand. Dive deeper into the bills below.

• Dealer-specific modernization bills are advancing with broad bipartisan support
• Large tax restructuring proposals are largely defeated in Virginia this year
• Employment law expansion bills remain the most significant policies to watch, but there is more work to be done on these initiatives
• Right to Repair proposals are sidelined this session

In the back half of the General Assembly, it becomes more difficult for bills to make it through committees without significant support, and more bills are being tabled due to their fiscal impact on the Commonwealth. Over the coming weeks, we will continue to track bill amendments closely and work with legislators on any changes that may materially impact dealers and the overall business climate.

Tax and transportation funding bills won't move forward

Bills to increase Virginia taxes to fund transportation in Northern Virginia will not reach the Governor's desk after they were killed in committee hearings last week – including two proposals that would have taxed vehicle repairs. We did a major deep dive on tax proposals in our Week 3 Capitol Brief. Stopping these bills was a major legislative priority for VADA this year, and we are pleased to report this major legislative win.

• HB900 (Del. Rip Sullivan) & SB730 (Sen. Scott Surovell) were identical bills which would have decreased the statewide sales and use tax rate while increasing the sales and use tax base to include taxes on services, increased highway use fees, and regional transportation fees. The bills did not make it out of committees.
• HB1179 (Del. Kathy Tran) & SB638 (Sen. Adam Ebbin) were another set of identical bills which would have increased the highway use fee, taxed deliveries, taxed rideshare rides, and imposed several regional tax increases to fund transportation. SB638 did not make it out of its Senate committee. HB1179 has yet to be heard in House Appropriations, but with the Senate already defeating the initiative, it is not likely to end up going any further.
• HB978 (Del. Vivian Watts) would have expanded the sales and use tax base to include taxes on services and digital personal properties. It did not make it out of committee.

Motor Vehicle and Dealer Legislation

HB570 (Del. Michael Feggans) – Dealer Records

• Status: Passed House (98-0), referred to Senate Transportation
• This dealer-specific bill continues to move smoothly. It modernizes dealer recordkeeping by allowing electronic preservation without prior DMV approval, cleaning up obsolete requirements

HB586 (Del. Scott Wyatt) – Dealer Business-Hours Filing

• Status: Passed House (98-0), referred to Senate Transportation
• This bill shifts filing of dealer business-hour changes from the DMV to the Motor Vehicle Dealer Board – a logical regulatory adjustment reflecting modern practices. Like HB570, it passed overwhelmingly in the House and heads to the Senate in excellent shape.

HB608 (Del. Scott Wyatt) – Dealer Plate Use Expansion

• Status: Passed House (98-0), referred to Senate Transportation
• This bill authorizes the limited use of dealer plates for parts/fuel delivery and vehicle transport to retail supply facilities. Strong bipartisan support signals the legislator’s comfort with the bill’s narrow scope and practical utility.

HB1389 (Del. Scott Wyatt) – Motor Vehicle Transaction Recovery Fund

• Status: Reported favorably from House Transportation (21-0), and on House floor calendar
• This bill would allow recovery from the Fund for losses or damages to a consumer resulting from the breach of an extended service contract by a licensed dealer participating in the Fund. This bill received an unfavorable fiscal impact statement, which said that the bill could increase the claims filed against the Fund and ultimately cause it to become insolvent. VADA suggested an amendment which tightened the language to protect against broad and attenuated claims against the Fund, which assuaged the concerns of legislators. As it stands, it is too soon to know how this bill could impact the Fund, but we will continue to watch this situation should it pass.

SB440 & SB441 (Sen. Lamont Bagby) – License Plate Use Extensions

• Status: Passed Senate (40-0), referred to House Transportation
• Both bills are aimed at increasing the flexibility of dealers when a customer has a vehicle in their shop for a lengthy repair. Should these bills pass, customers would be able to use their own license plate on a loaner vehicle for 30 days, instead of 5 days - which is the rule under current law - with a permit that would also be valid for 30 days.

HB1145 (Del. Terry Austin) – Safety Inspections

• Status: Passed House (98-0), referred to Senate Transportation
• While this bill initially sought to increase the period between motor vehicle safety inspections from 12 months to 24 months, the amended version of this bill removes regulatory barriers in hopes of increasing the amount of certified inspection stations in Virginia.

HB312 (Del. Kacey Carnegie) & SB767 (Sen. Luther Cifers) – Glass Repair & Replacement

• Status: HB312 passed House (96-3), referred to Senate Commerce & Labor; SB767 passed the Senate (39-0)
• These bills make it a violation of the Virginia Consumer Protection Act for a motor vehicle glass repair facility to fail to notify customers about advanced driver assistance systems in their vehicle and of the repair shop’s ability to recalibrate such system following a repair. The Senate version of the bill received an amendment in Senate Finance and Appropriations, which allows for emissions inspection waivers in the event that a vehicle failed an initial inspection and its onboard diagnostic system is in a not-ready condition to be tested when presented for reinspection when the owner has written proof of emissions maintenance on the vehicle since the initial inspection.

HB55 (Del. Rip Sullivan) – Noise Abatement Monitoring Systems

• Status: Reported favorably from House Transportation (14-6), and on the House floor calendar
• This bill will allow certain Virginia localities to pilot automated noise monitoring systems to enforce vehicle exhaust violations, focusing on vehicle decibel levels greater than 96.

HB1008 (Del. Kathy Tran) – EV Tax Credit Reciprocity

• Status: Reported favorably from House Finance (21-0), and on the House floor calendar
• This bill will allow a tax credit for EV purchasers who move to Virginia within 12 months of purchasing an EV in the state they previously resided.

HJ34 (Del. Lily Franklin) – A Study Abolishing VA’s Personal Property Tax on Vehicles

• Status: Passed House (68-25), and in Senate Finance & Appropriations
• This bill directs the tax department to study options to eliminate the personal property tax on vehicles in Virginia and to determine alternative sources of local revenue – a measure supported by Virginia’s localities. The Senate version of this bill, SR6 (Sen. David Marsden), ultimately did not make it out of Senate Finance and Appropriations. The House bill will either meet the same fate, or a second look may force Senate Finance legislators to consider funding this initiative more seriously.

HB1309 (Del. Jason Ballard) – GAP Insurance & Waivers

• Status: Reported favorably from House Labor & Commerce (20-0, and on the House floor calendar
• While guaranteed asset protection (GAP) insurance has been allowed by Virginia’s State Corporation Commission, this bill will make it clear that Virginia law allows for GAP insurance products and GAP waivers to be sold.

HB808 (Del. Dan Helmer) – Modification of Loss Estimates

• Status: Reported favorably from House Labor & Commerce (20-0), and on the House floor calendar
• This bill prohibits public insurance adjusters from modifying estimates of loss unless the revised estimate includes detailed explanations as to why any modification occurred. This will impact dealings between auto body shops, their customers, and insurance providers.

Employment & Business Bills Advancing

HB1 (Del. Jeion Ward, D-Hampton) & SB1 (Sen. Louise Lucas, D-Portsmouth)

• Status: HB1 passed House (64-34), referred to Senate Commerce & Labor; SB1 reported favorably from Senate Finance & Appropriations (10-5), and is on the Senate floor calendar
• These identical companion bills incrementally increase Virginia’s minimum wage to $15 per hour by January 1, 2028 and require an annual adjustment to reflect the consumer price index after that.

The goal behind the legislation is to provide predictability and long-term stability for both employees and employers. However, it represents a significant long-term shift in employer wage obligations and it will remain a closely watched issue for Virginia employers.

HB18 (Del. Adele McClure) & SB3 (Sen. Lashrecse Aird) – Employee Child Care Program

• Status: HB18 passed the House (91-7) and was referred to Senate Finance & Appropriations; SB3 passed the Senate (39-0)
• These bills establish a new state-supported program to incentivize employees to contribute to childcare costs. Thus far, this initiative has received strong bipartisan support and will hopefully support workforce retention and Virginian’s access to childcare, if enacted.

HB 238 (Del. Alfonso Lopez) – Wage & Overtime Liability Expansion

• Status: Passed House (64-35), referred to Senate Commerce & Labor
• This bill expands employer liability for minimum wage, overtime, and worker misclassification violations while typing remedies to the wage payment statute (including liquidated damages and attorney’s fees). This remains a significant expansion of exposure for employers and continues to warrant close engagement as it moves in the Senate.

HB 930 (Del. Marcus Simon) – Whistleblower Expansion

• Status: Reported favorably from House Labor & Commerce (15-7), and on the House floor calendar
• This bill contemplates a major expansion of Virginia’s whistleblower protections. While punitive damages were removed from the bill in a committee substitute, the bill still:
  • Broadens protected activity significantly
  • Creates additional rights of action
  • Limits employer handbook restrictions
  • Sets a high burden of proof for employers

The business community has been actively engaged in this legislation. It continues to present meaningful compliance and litigation considerations for employers. VADA continues to monitor this closely as it moves along in the legislative process.

SB644 (Sen. Scott Surovell) – Wage Liability & Whistleblower Protections

• Status: Reported favorably from Senate Finance & Appropriations (10-5), and on the Senate floor calendar
• This bill combines the policies in HB238 and HB930 for an omnibus approach to civil actions brought by employees and expands employee protections in court. A deep dive on this bill can be found in last week’s Capitol Brief.

SB199 (Sen. Barbara Favola) & HB5 (Del. Kelly Convirs-Fowler) – Paid Sick Leave

• Status: SB199 reported favorably from Senate Finance & Appropriations (10-5), on Senate Floor Calendar; HB5 reported favorably from House Appropriations (15-7), on House Floor Calendar
• These bills will require employers to provide one hour of paid sick leave to each employee for every 30 hours worked.

VADA is continuing to work alongside the business community to ensure that these proposals are implemented in ways that are workable and balanced for employers.

HB449 (Del. Marcus Simon) & SB 229 (Sen. Scott Surovell) – Class Actions

• Status: HB449 passed House (64-34) and referred to Senate Courts; SB229 passed Senate (22-18)
• These bills establish procedures for class action claims in Virginia courts. Currently, Virginia and Mississippi are the only two states without state-level class actions. Virginia’s business community remains focused on conforming the procedures set forth to match federal class action procedures – which would include an amendment for meaningful summary judgment in Virginia. This item will likely be a work in progress until the bill’s delayed enactment in 2027. However, the business community faces strong pushback from trial lawyers on the inclusion of more business-friendly amendments.

‘Right to Repair’ Legislation Defeated in Virginia

If you attended NADA’s Washington Conference last year – you have heard about a recent rise in ‘Right to Repair’ legislation. While the issue is complicated, as it relates to motor vehicles there is no need for legislation due to a longstanding Memorandum of Understanding between stakeholders. A ‘Right to Repair’ bill was introduced in Virginia this year, but we were able to work with NADA and our OEM counterparts to remove motor vehicles from the equation. Ultimately, the bill did not make it out of its committee.

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