Gov. Shapiro's plan ties sustainability, transparency to tax breaks for data center developers
Governor Josh Shapiro has introduced the Responsible Infrastructure Development (GRID) Standards for data center developers in Pennsylvania, linking state tax benefits to requirements for sustainability, transparency, community engagement, and economic development. The plan faces criticism from environmental groups for not going far enough and from some tech industry groups for potentially complicating development. Concurrently, state lawmakers are proposing legislation to repeal data center sales tax breaks and allow municipalities to impose development moratoriums.
Gov. Josh Shapiro has unveiled his Governor’s Responsible Infrastructure Development (GRID) Standards for data center developers in Pennsylvania. This plan aims to link state tax benefits, such as sales tax exemptions on computer equipment, to strict accountability standards. The proposed regulations address public concerns regarding energy affordability, environmental impact, noise, and quality of life, requiring developers to meet mandates for protecting energy, promoting transparency, supporting workforce development, and safeguarding the environment.
The proposal has elicited varied reactions. Environmental organizations, including Food and Water Watch Pennsylvania and Conservation Voters of Pennsylvania, criticize the plan, arguing it acknowledges a “data center problem” but offers insufficient solutions and fails to hold “Big Tech” adequately accountable. They stress the importance of data centers covering the full costs of grid interconnection and building new clean energy capacity. Conversely, the Data Center Coalition, which represents major tech companies, voiced concerns that the GRID plan could establish a complex framework that impedes development within the commonwealth, despite acknowledging the significance of responsible development.
Simultaneously, two Republican state lawmakers, Sen. Jarrett Coleman (R-Lehigh) and Rep. Jamie Walsh (R-Luzerne), are introducing legislation to repeal existing sales tax breaks for data centers, intending to reallocate the revenue to reduce the state gas tax. Their proposed bills would also grant municipalities the authority to implement an 18-month moratorium on new data center applications, allowing time to update local zoning ordinances concerning power supplies, water consumption, noise, and setbacks. Senate Majority Leader Joe Pittman indicated an evolving perspective on data center development and anticipates ongoing legislative discussions, suggesting a substantial debate over the future direction of data center growth and regulation in the state.