Pa. bills would tie data center tax break to transparency, sustainability

By Peter Hall and Whitney Downard, Pennsylvania Capital-Star
June 17, 2026

Data center developers would be required to pledge transparency in Pennsylvania communities where they want to build in order to get a sales tax break on computer equipment, under legislation aiming to prevent secrecy around the massive computing hubs.

Rep. Joe Ciresi (D-Montgomery) said the builders of one such project in his district approached local officials with a request to sign a non-disclosure agreement earlier this year.

Limerick Township leaders ultimately declined to sign, but the fact that developers sought it in the first place doesn’t sit well, Ciresi said.

They also refused to name the company that would ultimately occupy the 1.5 million square foot facility planned for vacant land near the nuclear power plant in Limerick, Montgomery County..

“You should know who’s developing it, as a good neighbor, and I should have a right to come out and speak for or against that same company,” Ciresi said. “And we’re seeing this all over the commonwealth.”

Ciresi’s House Bill 2359 passed Wednesday in the House Energy Committee with a 23-3 vote and now heads to the full chamber for consideration.

It was one of three data center bills that headed to the House as officials across the commonwealth try to balance the promise of jobs and tax revenue against impacts many fear will change their communities for the worse.

Simultaneously, lawmakers in the House Local Government Committee unanimously voted to allow municipalities to “pause” all data center considerations for 180 days, giving local officials time to draft rules while still allowing companies to submit proposals.

“We are told that these facilities can bring economic opportunities and investment. However, they can also present unique challenges related to land use, energy consumption, water resources, infrastructure, emergency services and communities,” said sponsoring Rep. Paul Friel, (D-Chester). “The reality is that many local governments are being asked to evaluate these proposals before they’ve had sufficient time to understand their impacts or develop zoning ordinances tailored to this rapidly evolving industry.”

And in the Finance Committee, lawmakers voted 15-11 to advance legislation that would codify Gov. Josh Shapiro’s framework for sustainable data center development called the Governor’s Responsible Infrastructure Development (GRID) Standards.

House Bill 2650, introduced on Tuesday by Rep. Joe Webster (D-Montgomery),  would establish benchmarks for energy affordability, community engagement, supporting workforce and economic development and protecting the environment.

They would replace the current sales tax exemption, requiring data center developers to obtain certification from the state to claim it and other tax incentives, the Shapiro administration said.

Ciresi’s bill, originally dealing exclusively with NDAs, was amended to include language that ties the transparency requirement to the state’s sales tax exemption on computer equipment for data centers. The five-year-old tax exception is projected to cost the commonwealth $517 million annually by 2030.

While some lawmakers have proposed repealing the exception, calling it a handout to big tech, Rep. Craig Williams (R-Delaware) said he expects that companies building hyperscale data centers such as Google and Meta will simply pass on the tax break.

“I believe they’ll say, ‘Take your tax break, we’re good, we’re just not going to comply with any of your requirements,’” Williams said, noting that some in the industry didn’t bother to comment on the bill.

Rep. Eric Nelson (R-Westmoreland) said he opposes placing conditions on the tax exception, calling it a “bait-and-switch” that could cost jobs and opportunities. He noted the reclamation of former mine sites in western Pennsylvania for data centers has remediated environmental catastrophes and returned tax revenue to municipalities and schools.

“These data centers are doing in our communities things that we were never able to achieve at all, and now we want to tug at the rug underneath them and tell them, ‘If you don’t comply with these additional requirements that aren’t placed upon them from other states, we are going to cost you millions of dollars,’” Nelson said.

Local Government Committee considers applicability to existing data centers

Friel emphasized that municipalities would have a choice to pause data center applications under House Bill 2496 and weren’t required to do so. Amendments specified that the pause would apply to hyperscale projects and take effect immediately.

Some lawmakers questioned how it might affect projects already in progress.

“If someone has already submitted an application for a land development process, can the General Assembly — after the fact — come in and say we’re changing the timeframe?” Rep. Brett Miller (R-Lancaster), the ranking Republican member of the Local Government Committee, said.

“I’m in favor of this, but I don’t want it to run afoul of the Constitution,” Miller continued. “I do believe municipalities would be very wise to be working on this right now, but the other thing is applicants have lawyers. And they will sue … I just don’t want to see that crushing burden on a municipality.”

Friel said he’d drafted the language to start the 120-pause once a meeting agenda was posted in order to capture any developers trying to submit in the short window before a vote. But future amendments could be added to clarify whether it applied to existing applications.

Rep. Tarah Probst (D-Monroe) said she thought any new zoning standards should apply retroactively.

“There are some really good actors and there’re some really bad actors when it comes to data centers. And the real bad actors are the ones that are going into these little municipalities and just steamrolling over them,” said Monroe.

“(Companies) have gone everywhere and put applications in everywhere to catch people with their pants down — sorry about the reference, but they did. They absolutely will have to follow whatever the new zoning will be in that district,” she continued.

Municipalities can regulate the locations and aesthetics of data centers, but can’t ban them outright. Chester and Montgomery county planning commissioners jointly developed a guide to drafting data center regulations that’s a resource available to municipalities across the commonwealth.

Pennsylvania Capital-Star is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Pennsylvania Capital-Star maintains editorial independence. Contact Editor Tim Lambert for questions: info@penncapital-star.com.