Nevada Governor Lombardo issues executive order on data center development

Nevada Governor Joe Lombardo has signed Executive Order 2026-005, establishing the Nevada Standard for Responsible Data Center Development. The order aims to reform the state’s tax abatement program to ensure that the rapid growth of data centers does not place undue burdens on local taxpayers and infrastructure.

Under the new regulations, companies seeking tax abatements must cover their own energy and infrastructure costs to prevent these expenses from being passed on to ratepayers. Developers are also required to meet local water standards, pay the Local School Support Tax in full, and execute a binding Community Support Commitment. The order mandates a combined sales-and-use tax rate of at least 4.6% and prohibits the abatement of taxes designated for the state general fund or schools.

Additionally, the order introduces security and reliability measures, including a ban on projects owned or controlled by designated foreign adversaries. It also requires a ‘Responsible Speed to Power Plan’ to identify necessary energy generation through 2036 without shifting costs to existing customers. These measures address gaps in a 2015 statute that lacked specific protections for water and energy usage.