To protect the authority of local governments to make zoning decisions regarding data center development, and to require community benefit agreements as a condition for Federal tax incentives.
Introduced June 11, 2026 · Last action June 11, 2026
Plain English Summary
This bill prevents the federal government from using tax incentives to override local zoning decisions about data center construction. It requires data center operators seeking federal tax benefits to negotiate and sign community benefit agreements with local governments before receiving those incentives.
Who benefits
Local governments and municipalities gain authority to control data center siting in their jurisdictions; community organizations and residents in areas where data centers are proposed gain leverage to negotiate local benefits; environmental and planning advocates seeking to limit sprawl or manage infrastructure impacts in their regions.
Who pays / loses
Data center operators and the technology industry lose the ability to use federal tax incentives as pressure to bypass local zoning restrictions; companies developing data centers face higher transaction costs from mandatory community benefit negotiations and potential delays from strengthened local authority; federal revenue decreases if fewer data center projects qualify for tax incentives due to the new requirements.
Funding & Lobbying Interests
The bill's sponsor, Rep. Bresnahan (R-PA-8), received $141,943.57 in 'Other' category contributions and $15,550 from construction in the 2024 cycle. The financial incentive structure suggests the bill appeals to local construction interests and community-based constituencies rather than to large technology or data center corporations. Data center operators and technology companies typically lobby against local zoning restrictions, making this legislation counter to their usual financial interests. Community benefit agreement advocates and local government associations would likely support this measure.
Political Impact
Affected Groups
Local government officials and planning boards (all municipalities considering data center projects); residents in communities near proposed data center sites (typically suburban and rural areas where land costs are lower); technology companies and data center operators seeking federal tax credits; communities historically affected by large industrial facility siting without local input.
Political Subtext
Proponents argue this bill restores local control over land use and prevents the federal government from using tax policy to circumvent community wishes and environmental concerns. They contend that data center development can strain local infrastructure, water resources, and electricity grids without corresponding community benefit. Critics from the technology and development sectors argue the bill slows economic growth, increases project costs, makes infrastructure investment less efficient, and gives local governments veto power over nationally important computing infrastructure. Non-partisan evidence on community benefit agreements shows mixed results: some agreements successfully deliver local commitments (jobs, tax revenue, infrastructure improvements), but enforcement mechanisms and actual delivery vary widely. The federal government has not historically used tax incentives as a primary enforcement tool for data center siting, making the scope of this bill's practical impact unclear.
Real-World Stakes
If passed, data center operators would need to negotiate with local governments before accessing federal tax incentives, slowing project timelines and potentially increasing costs. Communities could demand local hiring, infrastructure improvements, tax revenue sharing, or environmental protections as conditions for zoning approval. Comparable state-level community benefit agreements (e.g., in New York, Massachusetts) have produced mixed outcomes: some deliver substantial local benefits (e.g., the 2006 Yankee Stadium community benefits agreement included $100M+ in community investments), while others face enforcement gaps or fail to materialize as promised. The bill could reduce data center investment in regions with strong local opposition but increase it in communities willing to negotiate beneficial terms. Nationally, data centers represent critical infrastructure for cloud computing and artificial intelligence deployment; slower siting could affect technology infrastructure timing and geographic distribution.
Sponsor
Vote Record
No recorded votes.
Campaign Finance — Primary Sponsor
Top contributing industries
Other$141,943.57
Finance$23,975.84
Construction$15,550
Energy$8,593.85
Law$5,550
501(c)(4) disclosure: Contributions from 501(c)(4) "dark money" organizations are not required to be publicly disclosed and are not reflected in the figures above. Data sourced from FEC public disclosure filings.
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