House Bill 1189, titled the Datacenter Transparency Act, would impose a two-year moratorium on state and local permits, certifications, and approvals needed to site new datacenters in North Carolina from August 1, 2026, through August 1, 2028. The bill defines a datacenter for this purpose as a facility designed for a 100-megawatt or larger load and primarily used for digital data storage, management, and processing, along with related power, cooling, and security infrastructure.
During the moratorium, the North Carolina Collaboratory at UNC-Chapel Hill would study the impacts of datacenters and recommend any needed legislation. The study would examine effects on the electric grid, electricity rates for non-datacenter customers, water supplies, wastewater systems, air quality, noise, and nearby property values, and would also look at experiences in other states. The Collaboratory would report its findings and proposed legislation by December 1, 2027, and receive a $200,000 appropriation for the study.
The bill also creates a new sales and use tax exemption certification process for datacenters. To claim the exemption, eligible or qualifying datacenters would have to obtain an annual exemption certificate from the Department of Revenue and submit detailed documentation about ownership, location, local benefits and incentives, employment, construction costs, and itemized expenditures for IT equipment, power infrastructure, cooling, utilities, and related services. Datacenters not yet under construction could seek a conditional certificate, but if they fail to provide the required information they would owe the taxes plus interest.
For existing datacenters, the bill requires reporting of the same information for the five most recent taxable years in which exemptions were claimed, and directs the Department of Commerce to estimate lost state revenue from the exemption and report annually to legislative finance leaders. The tax-reporting and exemption-certificate provisions are intended to increase transparency around the fiscal impact of datacenter tax incentives and would apply beginning July 1, 2027.
The overall sentiment reflected in the bill text is cautious and investigative rather than promotional: it pauses new siting while the state studies potential harms and financial impacts, but it also preserves and formalizes tax exemptions through a more detailed reporting regime. Because there were no committee transcripts or recorded votes provided, there is no documented public debate in the supplied materials, but the structure of the bill suggests concern about infrastructure strain, environmental effects, and lost tax revenue alongside interest in maintaining datacenter investment under stricter oversight.
HB1189 would temporarily halt new datacenter siting approvals by state agencies and local governments, affecting permitting processes involving the Department of Environmental Quality, the Utilities Commission, and local land-use authorities. It would also amend Chapter 105 of the General Statutes to add a new datacenter sales and use tax exemption certification system, requiring annual applications, documentation, and compliance reporting for eligible and qualifying datacenters. In addition, it would require retroactive reporting from existing datacenters and direct the Department of Commerce to quantify revenue losses tied to the exemption, while appropriating $200,000 to the UNC Collaboratory for the mandated study.
Based on the bill’s design, the sentiment appears mixed but generally cautious: it acknowledges the economic importance of datacenters while responding to concerns about grid capacity, water use, environmental impacts, local infrastructure, and tax expenditures. The moratorium and study provisions indicate skepticism about rapid datacenter expansion, while the exemption-certification framework suggests the legislature is not seeking to eliminate datacenter incentives outright. No votes or committee testimony were provided, so there is no recorded support or opposition in the supplied context.
The main points of contention likely involve whether North Carolina should pause new datacenter development, and whether datacenters should continue receiving sales and use tax exemptions. Potential supporters of the moratorium would likely emphasize electric grid reliability, water demand, wastewater capacity, air quality, noise, and property-value impacts, while opponents would likely argue that the pause could discourage investment and job creation. Another likely dispute is the bill’s transparency and reporting burden: datacenter operators would need to submit extensive financial, operational, and incentive-related data, and existing facilities would have to provide historical information for prior years. Local governments, utilities, environmental regulators, and datacenter developers are the parties most directly affected.