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Gov. Pillen Signs Executive Order on Data Centers
LINCOLN, NE – Today, Governor Jim Pillen signed an executive order ending access to tax incentives provided through the state’s ImagiNE Nebraska Act for data centers. Joined at the announcement by Senator Mike Jacobson, Director of Economic Development (DED) Maureen Larsen and Director Jesse Bradley of Water, Energy and Environment (DWEE), the Governor said his order will allow the state to assess the benefits of such projects going forward, while also evaluating impacts to resources like land, water and electricity.
“Early in my administration, I called for a pause in building new data centers, and this executive order is consistent with that call,” said Gov. Pillen. “Data centers are a booming industry. Major tech companies are pouring hundreds of billions of dollars into them. And while that presents significant economic opportunity, it also presents resource challenges.”
In addition to prohibiting data center applications from being approved under the ImagiNE Act, the order requires that DED, Revenue and DWEE work collaboratively when reviewing project proposals to determine if they are in the state’s best interest. It also requires the establishment of a data center task force through DWEE to ensure protection of the state’s natural resources.
Speaking about Nebraska’s unique water management system, Dir. Bradley said the task force will work with NRDs to ensure that policies and best practices are effective. Another aspect will be making sure that county officials have the necessary tools for zoning and other activities.
“I think this is just a great opportunity to educate and learn about all the great practices Nebraska has as a state but also examine those and make sure those practices are going to ensure that we have sustainable resources for the future,” added Bradley. “Building off of the work that was done on energy last session, I think this is a natural fit to now really examine the water side of things.”
Passage of LB1261 this year included ‘behind the meter’ legislation allowing massive industrial users to engage private entities in construction of their own power facilities, thereby protecting ratepayers from price hikes due to increased electrical demand.
“This is not a moratorium on data centers,” said Gov. Pillen. “However, if a local entity chooses to engage in the development of a data center, it must now be developed in accordance with guidelines included in the executive order.”
Sen. Jacobson, who will be introducing legislation next year, said that providing tax incentives to data centers is not necessary at this point, given the amount of money the companies are able to generate on their own and that competition to entice them is not an issue.
"If a mega data center chooses to locate in Nebraska, our taxpayers and communities should receive the full benefit of that investment. Tax incentive programs should not return or waive the very revenue that could support our counties, cities, schools, and other political subdivisions,” said Sen. Jacobson. “We neither promote nor prohibit data centers. We ensure that if they locate here, the people of Nebraska benefit. I look forward to working with Governor Pillen and my colleagues next session on legislation that achieves that goal."
Dir. Larsen joined Gov. Pillen in acknowledging the role of data centers in the development of artificial intelligence and other technologies.
“As a matter of national security, it is absolutely critical for America to be a global leader in AI,” said the DED director. “And being at the forefront of AI will require building data centers in the U.S. At the same time, we must assess the impact of increased water and power demands on existing Nebraska businesses and communities. The Governor's executive order enables us to evaluate whether potential data center projects are truly in Nebraskans' best interests.”
“We need to make sure we have givers coming to Nebraska who want to make an incredible difference for democracy,” said Gov. Pillen. This executive order is simple – it’s a strategic and necessary step that will allow us to keep moving forward in this conversation with the right considerations and objectives in mind.”
Executive Order 26-17 can be found on the Governor's website here: Executive Order No. 26-17
Gov. Pillen speaks at data center news conference
Sen. Jacobson speaks at data center news conference
Gov. Pillen displays signed executive order
