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Committee backs ban on local tax incentives for data centers amid calls to protect public funds
Summary
The HUDZ committee approved a due‑pass recommendation for Board Bill 55, which would bar city decision‑making bodies from granting local tax incentives (TIF, Chapter 353, PILOT, PACE, enhanced enterprise zones) to projects whose principal use is a data center; public advocates and attorneys recommended widening the language to close other taxing‑authority loopholes.
The committee passed a due‑pass recommendation Wednesday on a proposal that would prohibit the city and its decision‑making bodies from approving local tax incentives for projects whose principal use is a data center.
Vice Chair Sonier, who sponsored Board Bill 55, said the measure would preserve public funds for municipal services and avoid subsidizing projects that can impose hidden costs on neighborhoods in the form of higher utility bills, generator pollution and cumulative environmental burdens. “If data centers are going to use massive amounts of electricity and water, the city should not be subsidizing them through local tax incentives,” Sonier said.
The draft bans a wide range of locally administered incentives, explicitly naming tax‑increment financing (TIF), Chapter 353 redevelopment abatements, planned industrial expansion authority abatements, industrial development bond‑linked property tax abatement, payment‑in‑lieu‑of‑tax (PILOT) arrangements, enhanced enterprise zones and similar local benefits. The sponsor told the committee the bill applies only to local incentives and does not affect state incentives.
Public commenters including environmental groups and community advocates urged the committee to close potential loopholes to ensure other local financing entities — such as port authorities, special taxing districts or clean‑energy financing boards — could not provide comparable benefits that would effectively subsidize data‑center development. Attorney Jerry Connelly recommended explicit language to ensure special taxing districts and the clean‑energy development board do not supply analogous incentives.
Committee members voted to recommend Board Bill 55 to the full board.
