Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Data Centers topic
No spam. Unsubscribe anytime.
Lawmakers clash over data‑center incentives; Democrats push a one‑year moratorium
Summary
Lawmakers debated data‑center tax incentives and permits. Democrats signaled opposition to a 50‑year exemption and introduced House Bill 1301, a one‑year pause on new large‑scale data‑center permits to study electricity, water and local impacts; Republican leaders stressed incentives and local control.
Data centers have become a flashpoint in the 2026 South Dakota legislative session, with Democratic leaders urging more public input and Republican leaders warning that broad restrictions could chill investment.
Erin Healy (Minority leader, Dist. 10) said her caucus will oppose legislation that would provide 50‑year tax exemptions to data centers. “We recognize that data centers are an incredibly important way to really grow economic development ... but we also need to acknowledge that they need more clear information and much more public input,” Healy said, adding that a 50‑year exemption raises long‑term concerns.
Healy said her caucus is sponsoring House Bill 1301, which would pause new large‑scale data‑center permits for one year — a moratorium through June 30, 2027 — to allow time for a study of electricity costs, water use and other impacts and to collect public comment. “It’s a moratorium until June 30, 2027,” she said.
Republican leaders warned against blanket moratoria. House Speaker John Hansen and Representative Scott Odenbach said incentives are a standard economic‑development tool; Odenbach noted examples such as TIFs used by cities to attract investment. “Economic development and incentives are tools that you use to build tax base in the state and encourage investment,” Odenbach said.
Speaker Hansen pushed back on broad exemptions for very large corporations: “I just don’t think it’s fair ... when you’re giving tax breaks to, in particular, some of the richest tech companies in the world,” he said, arguing for fairness to South Dakota businesses that have paid sales taxes for years.
Both sides emphasized the need for cost‑benefit analysis. Questions for lawmakers included whether incentives are necessary to attract projects (“but‑for” tests), how utility rates for existing customers would be affected and whether local control should play a larger role.
Next steps: Healy said her caucus will press for committee hearings and a summer study to gather more data; Republican leaders said they will work through the committee and floor processes and urged case‑by‑case consideration rather than sweeping bans.
Ending: The debate is expected to continue in committee hearings and during the session’s floor calendar.
