Pillen establishes new task force, suspends tax incentives for data centers

Nebraska Governor Jim Pillen has signed an executive order to halt a variety of state tax incentives for new large-scale data center projects, effective immediately for new applications. The governor emphasized that this action is not a moratorium on data center development, but rather a strategic pause to re-evaluate how the state attracts and supports such projects. The executive order specifically prohibits new applications from receiving benefits under the "ImagiNE Nebraska" Act, which includes sales and use tax refunds, property tax exemptions, and investment credits.

The order also establishes a new task force, a collaborative effort between the Nebraska Department of Economic Development and the Nebraska Department of Water, Energy, and Environment. Governor Pillen stated the task force would explore additional safeguards for the state's natural resources, particularly concerning water consumption, and address the significant demands data centers place on electrical grids. Maureen Larsen, director of the Nebraska Department of Economic Development, and Jesse Bradley, director of the Nebraska Department of Water, Energy, and Environment, both highlighted the need for greater discretion in evaluating data center projects given their resource intensity.

This move comes amidst a broader state discussion on data center development, with at least a dozen Nebraska county boards having already enacted local moratoriums. Earlier this year, legislation was also introduced to stop incentivizing data centers statewide, and the Nebraska Legislature passed LB 1261 to facilitate private financing for large-scale energy projects for industrial users, which could include data centers.