Lombardo Executive Order Puts Guardrails on Data Centers After Ford-Authored 2015 Giveaway
Nevada Governor Joe Lombardo signed Executive Order 2026-005, establishing new standards for responsible data center development to address issues with tax abatements, energy, water use, and grid reliability. The order requires developers to pay full taxes and cover their own infrastructure costs. This policy aims to rectify perceived gaps in a 2015 statute, sparking political debate with former Senate Minority Leader Aaron Ford, who initially co-sponsored the 2015 law but now criticizes the executive order and proposes more stringent measures.
Nevada Governor Joe Lombardo signed Executive Order 2026-005, enacting the Nevada Standard for Responsible Data Center Development. The order mandates that developers seeking tax abatements must fully pay the Local School Support Tax, cover their own energy and infrastructure expenses, adhere to local water standards, and ensure grid reliability, preventing costs from being passed to ratepayers. Additionally, it prohibits projects owned or controlled by designated foreign adversaries and requires a Responsible Speed to Power Plan outlining generation needs through 2036.
The executive order targets deficiencies in a 2015 statute, Senate Bill 170, which created data center abatement programs without provisions for energy or water use protections. Then-Senate Minority Leader Aaron Ford, a co-sponsor of the 2015 bill, has since shifted his stance, now advocating for a pause on new abatements, an audit of existing ones, a ban on evaporative cooling, and requirements for data centers to be self-sufficient in water and electricity. Ford criticized Lombardo's order as merely maintaining the status quo, while Team Lombardo accused Ford of attempting to "rewrite history."
Democratic efforts, including an interim committee vote led by Senator Dina Neal, have sought to freeze new data center construction and repeal tax breaks, which would affect long-standing Nevada operators such as Switch. Lombardo's administration views the executive order as a balanced approach to foster responsible investment and job creation, ending what they describe as an automatic subsidy that predates the current AI boom. Developers must meet new Community Support Commitment terms by November 6, or their applications will not proceed to the Governor’s Office of Economic Development board.
Lombardo's office highlighted that the new order leverages expanded authority granted to GOED in upcoming 2025 legislative changes, allowing the office to deny applications, reduce abatements, or impose conditions. The policy is also designed to restore school funding diverted by previous abatements, estimated at $357 million since 2015, and ensure developers bear their project costs.