LAS VEGAS (FOX5) — Governor Joe Lombardo announced Friday morning that he has signed an executive order establishing what his office calls the “Nevada Standard for Responsible Data Center Development.”
The order aims to create a policy framework governing how data centers are developed in the state by requiring developers to pay the Local School Support Tax in full, cover all project-related costs so they are not passed on to ratepayers, and protect the water supply, electrical grid and communities where facilities operate.
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Background on abatement law
The executive order provides guardrails for data center abatement legislation passed in 2015, which required the Governor’s Office of Economic Development to grant tax abatements for data centers that met statutory employment, wage and investment thresholds. That law included no protections for energy and water use and no flexibility to deny abatements, according to the governor’s office.
In 2025, the Legislature expanded the GOED Board’s authority to deny an application, approve it for a lesser amount, or impose conditions on its approval.
“I promised Nevadans that data centers would be developed responsibly with the community’s interest in mind. Today, we’re delivering on that promise,” Lombardo said. “This executive order establishes a standard that data center developers must follow if they are going to build in Nevada. They must pay their share, protect our water resources, keep costs from being passed on to ratepayers, and protect the communities that host them.”
Community Support Commitment required
Under the executive order, data center applications seeking a partial tax abatement cannot be brought before the GOED Board unless the developer agrees to pay the Local School Support Tax in full and executes a binding Community Support Commitment.
“We have a responsibility to make sure our schools have the resources they need to educate Nevada’s children. This executive order puts money back into our schools that otherwise would have been lost under outdated state law. That wasn’t right, and I’m proud to correct it and make certain those dollars reach our classrooms,” Lombardo said.
Data center applications will not move forward until the developer has executed the Nevada Community Support Commitment. The commitment will be established by the executive director of GOED in consultation with the state engineer, the Public Utilities Commission of Nevada, state agencies, local governments and school districts.
At a minimum, the executive order states, data center developers must meet local water standards, cover the cost of serving the facility without passing those costs on to ratepayers, and ensure the project does not strain the electrical grid or community during emergencies.
The executive order sets a combined sales and use tax rate of not less than 4.6%, consisting of the Sales and Use Tax Act and the Local School Support Tax, neither of which may be abated in any amount, for applications brought before the Board.
The order also bars the executive director from bringing forward an application where the applicant or facility operator is owned or controlled by, or subject to the direction of, a foreign adversary of the United States as designated under federal regulations.
State commitments and speed to power plan
The executive order also lays out commitments from the state, including a Responsible Speed to Power Plan identifying the facilities required to serve the large load anticipated through 2036 while ensuring no costs are passed on to Nevada ratepayers.
Under the order, the executive director must notify an applicant within 30 days of any incompleteness in its application and place a complete application on the Board’s next lawful agenda. The executive director may not condition an abatement on any payment or exaction not stated in the order or the Community Support Commitment, and must publish annually, in aggregate form, the measures the commitment requires to be reported.
The Director of the Office of Energy must deliver the Responsible Speed to Power Plan to the governor by Dec. 31, in consultation with the executive director and each electric utility.
“Data centers can be an unprecedented opportunity for Nevada, but if companies want to build here, they need to play by our rules. This order sets clear expectations while opening the door to billions in responsible investment, good-paying jobs, and long-term economic growth for Nevadans,” Lombardo said.
The order took effect immediately upon signing and applies to every application not yet acted upon by the Board. It remains in effect until rescinded or superseded by regulation, guidelines adopted under the State Plan for Economic Development, or an act of the Legislature.
Industry response
The Data Center Coalition responded to the executive order in a statement from Khara Boender, the group’s Director of Government Affairs for the West.
“We thank Governor Lombardo for his leadership on this issue and for his willingness to engage directly with all stakeholders as Nevada works through the complex issues associated with data center development,” Boender said. “While we have concerns that some of the policies in his Executive Order create additional hurdles to data center development in Nevada, we share the Governor’s commitment to job creation and protecting Nevada’s natural resources, as well as his mission to elevate Nevada’s teachers and public education system. We will continue to work with Governor Lombardo and state policymakers to advance responsible development that delivers lasting benefits for all Nevadans.”
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