Nebraska Ends ImagiNE Incentives for New Data Centers Under Pillen Order

Nebraska Gov. Jim Pillen signed Executive Order 26-17 on July 20 ending access to ImagiNE Nebraska Act incentives for new data-center applications, according to the governor’s office, while directing state agencies to examine the industry’s effects on water, electricity, infrastructure and communities.

The governor’s office announced the order on July 21. It said new data-center applications cannot be approved under the ImagiNE program. The order also requires the Nebraska Department of Economic Development and Department of Revenue to coordinate, as appropriate and consistent with law, with agencies that have expertise in natural resources, energy infrastructure, agriculture, public utilities and economic development when reviewing incentive decisions.

The action changes the state incentive environment for future projects but does not create a statewide ban on data centers. Pillen said the order is not a moratorium and does not discourage lawful development or private investment.

What the order changes

Executive Order 26-17 directs the Department of Economic Development to administer the ImagiNE Nebraska Act consistently with the law’s economic-development purposes while considering whether projects contribute to Nebraska’s long-term prosperity and environmental quality. It also directs coordination with the Department of Water, Environment, and Energy.

The governor’s announcement describes the immediate effect as prohibiting new data-center applications from being approved under the ImagiNE Act. The order itself establishes the administrative framework and directs agencies to consider statewide interests, including the effects of proposed projects on water, energy systems, agriculture, utilities, infrastructure and communities.

The order does not say that existing data centers or previously approved incentive agreements are cancelled. It also does not itself impose the reporting, utility-cost, decommissioning or community-benefit requirements adopted separately by the Legislature in 2026.

Task force will prepare 2027 recommendations

The order directs the Department of Water, Environment, and Energy to establish a data-center task force. The task force must study the effects of data centers on Nebraska’s water and environment and provide recommendations to the Legislature in 2027.

The recommendations must address how to ensure future data-center projects do not degrade the state’s natural resources. They also must include proposals for common-sense county zoning guidelines.

Those zoning guidelines and any additional safeguards remain future recommendations, not current statewide law. Residents and local officials should watch for the task force’s membership, meetings, reports and legislative proposals during the 2027 session.

Separate 2026 law adds requirements for large facilities

Nebraska’s 2026 legislation created new rules for data centers with peak electricity demand of at least 10 megawatts. Under Nebraska Revised Statutes section 70-1506, those facilities must report their name, owners and developers, physical size, location, electricity demand, water use, tax exemptions, incentives, conservation measures, renewable-energy commitments and expected service life.

Data-center owners also must bear decommissioning costs and enter community-benefit agreements with affected communities. The annual report is due to the Department of Water, Environment, and Energy and the Legislature’s Natural Resources Committee by Sept. 30 each year. The law took effect July 18, 2026.

The law also allows public-power suppliers to require data centers to pay for infrastructure upgrades made necessary by their operations. Suppliers may require direct payment or a letter of credit and may impose terms requiring the facility to pay the full cost of electric service so those costs are not shifted to other retail customers.

Those requirements must be fair, reasonable and not unduly discriminatory. Before imposing them, the public-power supplier must conduct a load study identifying the project’s costs, impacts and needed infrastructure upgrades.

Tax exemptions are changing on separate timelines

The Nebraska Department of Revenue says one data-center sales-and-use-tax exemption was repealed effective July 1, 2026. The provision covered tangible personal property acquired by a data-center operator for storing, managing or disseminating data used outside Nebraska.

A separate personal-property-tax exemption is scheduled for repeal effective Jan. 1, 2027. The different dates mean Nebraska has not ended every data-center tax provision on the same day.

What residents should watch next

For future projects, the immediate change is that new data-center applications will not be approved for ImagiNE Nebraska Act incentives under the policy announced by the governor. Large projects remain legally possible, but they will face the new statutory requirements governing utility costs, reporting, decommissioning and community benefits, along with any applicable local approvals.

The economic and fiscal effect will depend on whether companies proceed without the ImagiNE incentive pathway and how individual projects are reviewed by state agencies, public-power suppliers and local governments. The next major policy step is the Department of Water, Environment, and Energy task force’s work and the Legislature’s 2027 consideration of water protections and county zoning standards.

Sources

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