Green Development Zones

Virginia’s cities, counties, and towns have the ability to establish, by ordinance, one or more green development zones. Each locality may grant tax incentives and provide certain regulatory flexibility to green development businesses located in a green development zone or to businesses operating in an energy-efficient building located in a green development zone. 

The incentives may be provided for up to 10 years and may include, but are not limited to, (i) reduction of permit fees, (ii) reduction of user fees, and (iii) reduction of any type of gross receipts tax.

In addition, local governing bodies may also provide for regulatory flexibility in such green technology zone, which may include, but are not limited to, (i) special zoning for the district, (ii) permit process reform, (iii) exemption from ordinances, and (iv) any other incentive adopted by ordinance, which shall be binding upon the locality for a period of up to 10 years. 

Each locality designs and administers its own program.

Green Development Zone Definitions:

“Green development business” means a business engaged primarily in the design, development, or production of materials, components, or equipment used to reduce negative impact on the environment.

“Energy-efficient building” means a building that (i) exceeds the energy efficiency standards prescribed in the Virginia Uniform Statewide Building Code by at least 30 percent as determined by any qualified architect, professional engineer, or licensed contractor who is not related to the taxpayer, and who shall certify to the taxpayer that they have qualifications to provide the certification; (ii) is certified to meet or exceed performance standards of the Green Globes Green Building Rating System of the Green Building Initiative; (iii) is certified to meet or exceed performance standards of the Leadership in Energy and Environmental Design (LEED) Green Building Rating System of the U.S. Green Building Council; or (iv) is certified to meet or exceed performance standards or guidelines under the EarthCraft House Program. Energy-efficient building certification for purposes of clause (ii), (iii), or (iv) shall be determined by (a) the granting of a certification under one of the programs in clauses (i) through (iv) that certifies that the building meets or exceeds the performance standards or guidelines of the program or (b) a qualified architect or professional engineer designated by the county, city, or town, who shall determine whether the building meets or exceeds the performance standards or guidelines under any program described in clauses (i) through (iv).

Each locality designs and administers its own program.

Companies interested in the benefits of locating in a green development zone should contact the locality being considered for the expansion or location of new operations to see if the locality has established an ordinance enacting a green development zone.

Code of Virginia

How long are incentives available in a green development zone?

Local incentives may be provided for up to 10 years once a green development zone has been established.