LINCOLN — New data center projects coming to Nebraska will no longer benefit from tax incentives provided under the ImagiNE Act, according to a new executive order.
Gov. Jim Pillen signed the executive order Monday alongside State Sens. Mike Jacobson, Rob Clements, Tony Sorrentino and Eliot Bostar, Department of Economic Development Director Maureen Larsen and Department of Water, and Energy and Environment Director Jesse Bradley.
The order prohibits any new data center applications from being approved for tax credits under the ImagiNE Nebraska Act. While Pillen initially said this would apply to large-scale data centers, he later clarified that it would apply to all new data center projects.
The order also directs the state Department of Water, Energy, and Environment to create a task force that will offer recommendations to the Nebraska Legislature about how to best protect state resources like water and electricity. Pillen did not specify what officials would serve on the task force, but said several people have already come forward with interest in participating.
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Currently, Nebraska houses 39 data centers across the state. According to conservative thinktank the Platte Institute, Nebraska ranks 9th in the U.S. for the number of data centers per capita. Neighboring Iowa ranks 2nd, with 105 data centers statewide.
The governor did not know how much money data centers have received in ImagiNE Act credits to this point, but said it was “too much.”
Jacobson, who Pillen said gave him the idea for the executive order, clarified that no general fund dollars have gone to data centers, and that any incentives they received were refunds of tax payments they made to the state.
Financial services company Moody’s estimated that there will be at least $3 trillion invested in global data centers by 2030. Pillen said that convinced him that new data center projects don’t need Nebraska to ease their development, but instead they should give back to the state.
“We need to make sure that we attract givers, not takers,” Pillen said.
Pillen said Nebraska ranks second in the U.S. for the percentage of electricity spent on data centers, at 11.5%. He said this has prevented other businesses from expanding in Nebraska when they would have otherwise.
One piece of protecting Nebraska’s electricity came through Legislative Bill 1261, which Pillen celebrated with a ceremonial signing in early June. The bill alters the authority of public power districts to allow private companies to build energy infrastructure, like power plants, without the risk of having a public power board take them over using the power of eminent domain.
During that signing, Pillen said he called for a pause on building new data centers, but also expressed support for further investments in artificial intelligence. He said Monday that he still supports artificial intelligence, but argued the executive order would help ensure Nebraska “doesn’t give the farm away” by doing it.
Former State Sen. Lynne Walz of Fremont, the Democratic nominee challenging Pillen’s bid for reelection, accused Pillen in an email statement of changing his tune on incentives from what he was pushing during this year’s legislative session.
“Nebraskans deserve to know the truth,” Walz said. “Less than four months ago, he was lobbying senators to pass these same incentives. We are tired of politicians saying one thing and doing another.”
State Sen. Danielle Conrad of Lincoln noted that she brought an amendment to LB 1261 that would have accomplished a similar goal to Pillen’s executive order. Her amendment stated that no privately owned electric generation facility would receive tax incentives under the Nebraska Advantage Act, or the ImagiNE Nebraska Act.
Conrad’s amendment was rejected during floor debate, with Jacobson and Sorrentino voting against it. Bostar voted yes, while Clements was present-not-voting.
Jacobson said he couldn’t speak to how he voted on a specific amendment, but noted that “things were moving rapidly” at that point in the session, with only two weeks to go before lawmakers adjourned. He said “the heat has turned up” on conversations about data centers since then, and he intends to introduce a bill codifying the governor’s executive order in 2027.
When asked why he didn’t act sooner to rescind credits for data centers, Pillen said “the glass of milk was spilled” long before he took office. He noted that he was the first governor to call for a “timeout” on new data centers roughly three years ago.
Since then, at least 12 Nebraska counties have passed moratoriums on data centers. Pillen repeatedly clarified that his executive order was not a moratorium, and said he hopes the task force it establishes will help teach the counties some of what he has learned over the last three years.
“We’ve all had moments when we’ve used the word ‘never,’” Pillen said. “I’m old enough to admit that whenever I used the word ‘never,’ it was a mistake.”
This story is provided by States Newsroom, a nonprofit state news network and Blox Digital content partner.
