A proposal backed by Gov. Josh Shapiro that would tie tax incentives for data centers to environmental, energy and transparency requirements cleared a key hurdle in the Pennsylvania House with bipartisan support.Tax Break would depend on meeting standardsThe measure would restructure an existing tax exemption for data center equipment, making it available only to projects that meet specific standards related to environmental protection, energy use and community engagement.Supporters say communities need protectionsSupporters say the proposal is intended to address concerns about the rapid growth of data centers and their potential impact on local communities, including increased electricity demand, water usage and noise.State Rep. Joe Webster, a Democrat who supports the measure, said the proposal would give developers an incentive to address community concerns while providing safeguards for residents.“They’re going to be able to protect their water. They’re going to have the community benefit agreement, and noise and the kinds of things that everybody’s worried about get some controls and attention for the local community,” Webster said.Shapiro pushes for stronger oversightShapiro has advocated for stronger oversight of data center projects and has encouraged developers to voluntarily meet those standards. The legislation would place those requirements into state law for projects seeking the tax incentive.Republicans split on the planSome Republicans opposed the proposal, arguing that many developers already have the land and zoning approvals they need and may not be influenced by the tax break.“If we’re trying to bribe these guys, get real,” said Rep. Scott Barger, who voted against the measure.Other Republicans supported the bill but questioned whether the incentive would be enough to influence large-scale data center operators.“I fear most of these hyperscalers are just going to come in and say, ‘We don’t care about the 6%, we’re going to do what we want anyway,’ which leaves communities in a bad place,” said Rep. Jeremy Shaffer, who voted in favor of the proposal. Separate bill would allow moratoriumsHouse lawmakers also passed legislation enabling municipalities to pass moratoriums on major data center projects while they try to address their zoning laws and other changes sought by the community to protect them from environmental and concerns from data centers.The measures now move to the Pennsylvania Senate for consideration.

HARRISBURG, Pa. —

A proposal backed by Gov. Josh Shapiro that would tie tax incentives for data centers to environmental, energy and transparency requirements cleared a key hurdle in the Pennsylvania House with bipartisan support.

Tax Break would depend on meeting standards

The measure would restructure an existing tax exemption for data center equipment, making it available only to projects that meet specific standards related to environmental protection, energy use and community engagement.

Supporters say communities need protections

Supporters say the proposal is intended to address concerns about the rapid growth of data centers and their potential impact on local communities, including increased electricity demand, water usage and noise.

State Rep. Joe Webster, a Democrat who supports the measure, said the proposal would give developers an incentive to address community concerns while providing safeguards for residents.

“They’re going to be able to protect their water. They’re going to have the community benefit agreement, and noise and the kinds of things that everybody’s worried about get some controls and attention for the local community,” Webster said.

Shapiro pushes for stronger oversight

Shapiro has advocated for stronger oversight of data center projects and has encouraged developers to voluntarily meet those standards. The legislation would place those requirements into state law for projects seeking the tax incentive.

Republicans split on the plan

Some Republicans opposed the proposal, arguing that many developers already have the land and zoning approvals they need and may not be influenced by the tax break.

“If we’re trying to bribe these guys, get real,” said Rep. Scott Barger, who voted against the measure.

Other Republicans supported the bill but questioned whether the incentive would be enough to influence large-scale data center operators.

“I fear most of these hyperscalers are just going to come in and say, ‘We don’t care about the 6%, we’re going to do what we want anyway,’ which leaves communities in a bad place,” said Rep. Jeremy Shaffer, who voted in favor of the proposal.

Separate bill would allow moratoriums

House lawmakers also passed legislation enabling municipalities to pass moratoriums on major data center projects while they try to address their zoning laws and other changes sought by the community to protect them from environmental and concerns from data centers.

The measures now move to the Pennsylvania Senate for consideration.