Data Center Bills Surge: Partisan Divide on Incentives and Costs
Legislators and tech companies are grappling with the growing impact of data centers, with a surge of over 300 bills addressing their benefits and drawbacks. A review of these bills reveals a partisan divide, with Democrats more likely to sponsor bills increasing incentives and Republicans stepping up to tackle costs and externalities.
The National Conference of State Legislatures' Legislative Summit highlighted rising energy bills due to data centers. Meanwhile, tech companies face accusations of greenwashing, and developers impose secrecy clauses on local governments. Some proposed laws, like Oregon's HB3698, demand transparency with electricity and water usage reports.
The U.S. House of Representatives led the way in promoting energy efficiency, with the largest share of laws passed between 2024 and 2025 containing relevant provisions. Over 59 bills targeted electrical infrastructure costs, with over 60% backed by Republicans. Bills establishing study groups, such as Montana's HJ 46, numbered 55.
Arkansas's HB1444 (Act 548) balanced incentives by expanding tax breaks for smaller data centers while raising investment thresholds for larger facilities and excluding crypto mining. Michigan's HB 4906 (Public Act 207 of 2024) tightened eligibility criteria for tax exemptions, including job creation and efficiency standards. Minnesota's HF 2928 proposed a 100% carbon-free electricity requirement by 2031.
The flurry of bills indicates a concerted effort to manage data center growth, with a mix of incentives, regulations, and studies. As the industry's impact on infrastructure, communities, and the environment becomes more apparent, lawmakers are responding with a balancing act that reflects partisan priorities.
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