Moore orders new state review for large data centers, pushes to end tax break

Maryland Gov. Wes Moore has signed an executive order creating a new statewide review process for large data center projects, while emphasizing that local governments will retain final authority over whether projects can move forward in their jurisdictions.

The Sept. 23 order establishes the Maryland Data Center Accountability Task Force, which will review proposed data centers expected to use 25 megawatts or more at peak demand whenever developers seek state action such as a permit, incentive, financing or letter of support.

Moore said the state will not override a local government that rejects a data center project.

The new framework instead determines whether a project qualifies for state support and how state agencies should handle applications tied to it.

The task force will evaluate projects against five broad principles: protecting ratepayers and the electric grid, generating economic benefits for Marylanders, incorporating community input, providing environmental protections, and maintaining transparency and accountability.

Each project will receive one of three public determinations:

Aligned Conditionally Aligned Not Aligned

Those classifications could carry significant consequences.

Under the order, state agencies are directed to delay substantive review of certain state approvals for projects deemed not aligned until developers have documented required local land-use approvals.

Projects seeking state incentives, grants, loans or financing also must be determined aligned or conditionally aligned before receiving that support.

Projects receiving favorable determinations could potentially receive letters of support or state advocacy before entities such as regional grid operator PJM or the Federal Energy Regulatory Commission.

Public dashboard required

The executive order also creates a public Data Center Dashboard that the state says will be updated monthly.

The dashboard is expected to include information such as project location, developer and parent company, any disclosed anchor tenant, projected electric demand, expected water usage, requested state actions and the task force’s eventual determination.

Moore said developers seeking state assistance will be expected to make specific and measurable public commitments.

The task force will include representatives from the Maryland Energy Administration and the departments of Commerce, Labor, Environment, Natural Resources, Agriculture and Planning.

Moore wants tax exemption repealed

Moore also announced that he plans to work with lawmakers during the 2027 General Assembly session to repeal Maryland’s Data Center Sales and Use Tax Exemption, which was created in 2020.

The tax exemption was originally intended to attract data center investment to Maryland.

Moore now argues that developers should bear more of the infrastructure and energy costs associated with their projects rather than shifting those costs to residents.

Frederick officials react

The issue has particular significance in Frederick County, where data center development has become one of the region’s most prominent policy debates.

County Executive Jessica Fitzwater said in a statement provided to The Frederick News-Post that she supports stronger state guardrails and Moore’s effort to repeal the tax exemption.

County Council Member Jerry Donald, who voted against Frederick County’s data center overlay zone, also said he welcomed the governor’s action but questioned how much practical effect it would have on projects already advancing around the former Eastalco industrial site near Adamstown.

Those are their stated assessments of the executive order; the state has not announced that existing Frederick County projects will be stopped by the new framework.

Moore’s order does not itself impose a statewide moratorium.

He has separately indicated he could support a statewide moratorium if legislation reached his desk, but during Wednesday’s announcement he characterized moratorium decisions as primarily matters for local jurisdictions.

Groups seeking stronger restrictions argued that the order does not go far enough, while some business and Republican critics argued that tougher regulation and repeal of tax incentives could make Maryland less competitive for investment.

The executive order nonetheless creates a more centralized state role in reviewing large projects and determining whether they qualify for state assistance.

No new NDAs

The order also directs state agencies not to enter into new non-disclosure agreements with data center developers, operators or site-selection representatives.

Existing agreements will continue to be honored, but the order says they should not be renewed or extended.

That provision could be particularly significant in jurisdictions where transparency around developer negotiations has become a public issue.

60-day initial review

Once a project enters the state review process, the task force has 60 days to issue an initial assessment and post it publicly.

The executive order does not establish a firm deadline for the final determination.

Developers may request reconsideration within 30 days after a determination by supplying additional information or commitments.

The result is not a state veto over data centers, but it gives Maryland agencies a new mechanism to decide which projects receive state cooperation, incentives and other forms of assistance.