Data Center Battle Continues: 1000 Friends of Oregon Sues Hillsboro
A lawsuit has been filed against the City of Hillsboro, Oregon, by 1000 Friends of Oregon and other groups, challenging the approval of 17 data center tax exemptions. These approvals occurred in a rush before a state-enacted one-year moratorium on new property tax breaks for data centers took effect. The plaintiffs argue the approvals lacked public notice and proper oversight.
Governor Tina Kotek initially supported a bill in February 2026 to double property tax benefits for data centers in Oregon, extending them from 5 to 10 years. However, significant backlash from environmental groups, consumer advocates, and local activists led Governor Kotek to amend the bill, introducing a one-year moratorium on new property tax breaks for data centers within Standard Enterprise Zones, predominantly located in western Oregon, particularly Washington County.
The amended bill passed in March and became effective on June 1. In the period between its passage and implementation, the City of Hillsboro approved 17 data center tax exemptions following a surge of last-minute applications. Now, 1000 Friends of Oregon, joined by the Oregon Education Association, Tax Fairness Oregon, Tualatin Riverkeepers, and local farmers and activists, has filed a lawsuit challenging these approvals. The plaintiffs allege that City and County staff processed these applications "without the required public notice and without authorization or oversight from their respective public bodies."
The lawsuit aims to contest these approvals amidst ongoing local activism against the rapid expansion of data centers in Washington County. The plaintiffs contend that the rushed approvals circumvented proper procedures, raising concerns about transparency and accountability in local government decisions regarding data center development.