Bill redirects AI data center tax credits to energy relief
New Jersey lawmakers are advancing a bill (A5165/S4390) to redirect $125 million in unspent tax credits, originally meant for AI data centers, towards programs aimed at lowering electricity costs. This legislative move reflects a re-evaluation of state priorities amid growing concerns over data centers' electricity demands, community impacts, and public sentiment for a construction pause. The bill has passed committees in both legislative houses, indicating potential bipartisan support.
New Jersey lawmakers are advancing a bill, A5165/S4390, that seeks to redirect $125 million in unspent tax credits originally allocated for AI data center development. Instead, the funds would be channeled to programs designed to lower electricity costs for consumers. The Assembly State and Local Government Committee approved A5165, sponsored by Assemblymen Andrew Macurdy and Balvir Singh, with bipartisan support also seen in the unanimous clearance of the Senate companion bill S4390 by the Senate Budget and Appropriations Committee.
Assemblyman Macurdy stated that the proposal reflects a necessary re-evaluation of state priorities, ensuring efficient use of taxpayer dollars. Assemblyman Singh emphasized that wealthy corporations backing AI data centers no longer require taxpayer subsidies. This legislative push comes amidst growing public and political contention over data centers in New Jersey, fueled by concerns about their increasing electricity demands and local community impacts, such as noise complaints from a facility in Vineland. Governor Mikie Sherrill has also advocated for new regulations ("guardrails") on AI data center development in the state. Public polling in April and May indicated voter preference for a temporary pause on new data center construction and opposition to building AI data centers in their communities.