Key Considerations for Policymaking on Data Centers

The toolkit is intended as a menu of options; not every intervention will be feasible in every locality, state, or region due to differences in local and state laws, existing regulation, and political conditions. We have included three key considerations to help determine which policy actions will work for your context. 

1. Beware of Preemption

Legal authority in the US is governed by a hierarchy. As a general principle, federal law supersedes and overrides state and local law, meaning that if the federal government passes a law or regulation on a certain issue, state and local laws, regulations, and ordinances cannot conflict with that law. This is known as preemption, because federal law preempts states and local governments from passing conflicting or competing laws and ordinances. Similarly, state law supersedes local law. 

This is important to keep in mind when proposing ordinances or issuing demands to stop or limit data centers, since local and state governments may be limited in their ability to govern certain issues. For example, one of our recommendations is for local governments to repeal or limit tax exemptions for data centers. In many states, however, state-level sales and use-tax exemptions abate both state and local sales tax portions, meaning that a local government in those states could not require a data center to pay sales tax. Throughout this guide, we have indicated where advocates and policymakers could face preemption issues. Before proposing ordinances or issuing demands around specific regulations or laws, it is important to consult with experts to understand what is legally possible in your jurisdiction. 

2. Consider What Level of Government Best Suits Each Intervention

Many of the local recommendations in this guide are targeted at regulating data center proposals. As a general principle, it is useful to think of local ordinances governing the proposal, construction, expansion, operations, and resource use of data centers in that jurisdiction, whereas states are able to look more holistically at economic development, cross-state transparency, and cross-state capacity. 

The tables below summarize interventions at the local and state level, ordered from strongest to least strong in terms of their likely effectiveness at each jurisdictional level:

It is also important to consider how far each policy intervention can reach and how that may impact neighboring jurisdictions. The laws passed by a local or state government generally apply only within that government’s jurisdiction. For example, a local moratorium will not prohibit development in surrounding cities or counties, and could potentially spur additional development just across city or county lines, where fewer protections exist. Simultaneously, passing strong protections may embolden other jurisdictions to take on similar protections. As much as possible, we encourage regional organizing and coordination, as the impacts of a data center are not limited to its immediate neighbors.

3. Assess Where Your Community Is

Communities across the country are confronting data center deals at various stages of development, each with its unique challenges and opportunities. The applicability of recommendations in this toolkit will depend on: 

• What stage of development your community is facing (a data center has been floated but not proposed, a data center has been proposed but not approved, there is an imminent hearing or approval process, data center or energy infrastructure is being expanded, or the harms of existing facilities are becoming clearer) 
• What relevant local or state ordinances or regulations exist (both those that directly address data center development and those that apply more broadly)
• What issues are most urgent for your community to address, and where there is power and energy to move policy 

4. Enforcement Power Is Key

It is critical that all policies be paired with strong enforcement mechanisms to ensure that data center operators abide by laws, ordinances, and regulations at all stages of data center development and operations. These must contain actual consequences for data center operators, including the ability to reject applications that don’t meet standards, revocation of permits, revocation of certificates of occupancy, civil penalties, and fines at the scale of the richest companies in the world. Many current regulations include only nominal fines, such as $1,000 for a violation, which have little consequence for these corporations.