By Allison Peck
The order rescinds portions of the ImagiNE Nebraska Act that allowed qualifying data centers to receive state tax incentives. Going forward, new AI-focused data center projects will no longer be eligible for those incentives, though previously approved projects are not affected.
The executive order also requires the Nebraska Departments of Economic Development, Revenue, and Water, Energy and Environment to work together when reviewing future proposals to determine whether projects are in the state's best interest. A new Data Center Task Force will also be created to study issues including electricity demand, water use and local planning before making recommendations to the Nebraska Legislature.
Pillen stressed the action is not intended to stop data center development in Nebraska.
"This is not a moratorium on data centers," Pillen said.
Instead, the governor said Nebraska's approach is changing as demand for artificial intelligence continues to grow.
"It's critically important that we grow power in the state of Nebraska, but that we do it on private investments, not off the backs of all of us," Pillen said.
Pillen said he first became concerned about the state's electric capacity shortly after taking office when he learned Nebraska businesses were struggling to expand because power generation had not kept pace with demand.
"I came in three and a half years ago and found out that we were running out of electricity because of the plethora of data centers," Pillen said during a question-and-answer session with reporters.
He said protecting Nebraska's public power system, water resources and taxpayers prompted the executive order.
"We just simply believe that we do not need to bring people together by incredible tax incentives. We need to make sure that we attract givers, not takers," Pillen said.
During the news conference, Pillen clarified that no future AI data center projects will receive ImagiNE Act tax incentives.
"No more tax credits," he said.
The announcement has particular significance in Lincoln County, where local officials have spent months debating how to regulate potential large-scale data center developments.
State Sen. Mike Jacobson of North Platte, who represents Legislative District 42, stood alongside the governor Monday and said he plans to introduce legislation during the 2027 session to permanently remove qualifying data centers from the ImagiNE Act.
Jacobson said incentive programs are generally designed either to help Nebraska compete with other states for business investment or to help emerging businesses get established. He said he no longer believes those incentives are necessary for today's AI data center industry.
"They have plenty of money to come and locate here, and there's no real strong competitive pressures right now to get them located here," Jacobson said. "We should stand on its own."
He said the governor's executive order immediately accomplishes the policy change he had planned to pursue through legislation.
"I'd indicated that I'd be willing to bring a bill next year to codify that, and I think the Governor did the appropriate thing to say, 'Well, I'm going to move forward and issue an executive order that's really going to do that today,'" Jacobson said.
Jacobson also praised the Lincoln County Commissioners and Lincoln County Planning Commission for their work developing local standards for future data center projects.
"I do want to applaud the Lincoln County Commissioners and the Lincoln County Planning Commission for the work that they've done to thoughtfully put together what I think are good standards that they're looking at for data centers," he said.
Although some Nebraska counties have considered temporary moratoriums on data center development, Pillen said his executive order was not prompted by those local discussions.
Instead, he said the issue has been under consideration since early in his administration and expressed hope the newly created task force will provide counties with additional information as they consider future projects.
The executive order takes effect immediately, while Jacobson said legislation next year would make the changes permanent if approved by the Nebraska Legislature.