VA HB897

Extends the existing data center sales and use tax exemption from June 30, 2035 to June 30, 2040, but requires data center operators to enter into new or amended memoranda of understanding with the Virginia Economic Development Partnership Authority by July 1, 2028 to qualify for the extension

Imposes new environmental requirements for data centers seeking the extended exemption, including procuring zero carbon energy resources at levels six years ahead of utility requirements beginning July 1, 2031, and restricting backup generator use to grid emergencies and required testing

Requires qualifying data centers to demonstrate certification in sustainable design standards (such as LEED, Energy Star, or BREEAM) and environmental management standards (such as ISO 14001) beginning July 1, 2031

Exempts data centers with existing memoranda of understanding as of July 1, 2026 from the new environmental requirements, and exempts large-scale data center projects (those meeting $35 billion/$100 billion investment thresholds under subdivision 19) entered before July 1, 2026 from the new requirements

Directs the Department of Environmental Quality to evaluate non carbon-emitting backup generator technologies by November 2029, and requires investor-owned electric utilities to file voluntary tariffs by July 1, 2027 to facilitate large customer clean energy procurement