Maryland has joined the ranks of state and local governments taking action to restrict the growth of data centers.
"By signing this executive order, we are establishing clear safeguards to ensure Marylanders do not foot the bill, our people benefit, community voices are heard, and our environment is protected — all while centering transparency and accountability throughout the process," said the state's Democratic Gov. Wes Moore.
The executive order creates a standard review process that covers data centers requiring 25 megawatts or more of electricity to operate.
A typical data center uses 10–50 megawatts while large hyperscale facilities can require 100–500 megawatts.
Maryland intends to hinge permitting on principals that include ratepayer and grid protection, economic benefits, community voice, environmental protections, transparency, and accountability.
The executive order also establishes the Maryland Data Center Task Force, that will set up an online dashboard to help local governments keep track of news and development.
The order excludes research or clinical facilities along with accredited institution of higher education, health care institutions, or a facility serving a state agency or the US Department of Defense.
Nondisclosure agreements between government officials and data center developers are also being taken off the table.
The executive order notes that "a majority of Maryland's counties have adopted temporary moratoria on data center development and have asked the state for guidance."
The Governor also announced plans to "work directly with the General Assembly in the upcoming legislative session to repeal the Data Center Sales and Use Tax Exemption, originally enacted in 2020."
The exemption applies to sales and use tax on the purchase of qualified data center personal property.
Job creation was part of the original deal along with a minimum of $2 million or $5 million investment, depending on where the center was located.
Opponents of data centers, some of whom are calling for a total ban, maintain the state has lost more than $22 million of sales tax revenue since the exemption was put in place.
Maryland's moves come on the heels of neighboring Virginia's
Northern Virginia is the acknowledged leader in data center hosting having enacted its sale tax exemption in 2010.
Controversy over data centers and the rise of artificial intelligence that's partially fueling them, is attracting attention in Congress and holding sway over the midterm elections.
Earlier this month, Democratic Rep. Suhas Subramanyam, a Democrat who represents Northern Virginia in the House, introduced four bills aimed at reforming how the centers are sited and operate.
The Senate is weighing the pros and cons of staying in session next week in order to vote on The Ratepayer Protection Act which sailed through the House on a 413-3 vote.
The GOP-sponsored legislation would require state public utility commissions to consider a strategy to make data centers pay their own way, instead of passing costs onto consumers.
Vulnerable Republican Senators believe passing the bill would provide evidence that Congress is working on affordability issues and offers an easy win they could tout on the campaign trail.
