Pillen Executive Order Ends Tax Incentives for Future Data Centers; Jacobson Plans Permanent Legislative Change
Nebraska Governor Jim Pillen issued an executive order ending state tax incentives for new AI-focused data centers, citing concerns over electricity capacity and water resources. State Senator Mike Jacobson plans to introduce legislation to permanently codify this change. A new task force will study data center issues and provide recommendations to the legislature, while local entities like Lincoln County are developing their own standards.
Governor Jim Pillen of Nebraska signed an executive order to eliminate state tax incentives for new AI-focused data center projects under the ImagiNE Nebraska Act. This action, which does not affect previously approved projects, was prompted by concerns over Nebraska's electric capacity, water resources, and the belief that the AI data center industry no longer requires such incentives to locate in the state. Pillen emphasized that the order is not a moratorium on data center development but a shift in approach to attract "givers, not takers."
The executive order mandates collaboration between the Nebraska Departments of Economic Development, Revenue, and Water, Energy and Environment in reviewing future proposals to ensure they align with the state's interests. It also establishes a new Data Center Task Force to study critical issues like electricity demand, water usage, and local planning, providing recommendations to the Nebraska Legislature.
State Senator Mike Jacobson of North Platte, representing Legislative District 42, stood with Governor Pillen during the announcement and announced his intention to introduce legislation in the 2027 session to permanently codify the removal of data centers from the ImagiNE Act's qualifying criteria. Jacobson commended the Lincoln County Commissioners and Planning Commission for their work in developing local standards for data center projects, an area where local officials have been actively debating regulations. The executive order is effective immediately, with Jacobson's proposed legislation aiming to make the changes permanent.