A state advisory committee studying Oregon's data center industry declined to recommend a moratorium or restrict local tax breaks in a preliminary report released Thursday, Sept. 10.
The Oregon Data Center Advisory Committee's findings land squarely in Hillsboro's lap. The city is home to the state's densest cluster of data centers and adopted its own 120-day moratorium on new data center applications on July 28 after weeks of resident testimony at city council meetings.
Committee members said a moratorium falls outside their scope. They also chose not to recommend that the state limit local governments' authority to grant data center tax breaks, which The Oregonian/OregonLive reported now exceed $450 million a year statewide.
The committee instead endorsed local control over siting decisions and called on the state to demand greater transparency from data center operators and establish safeguards for water, energy and power supplies.
"I don't think anyone has seen anything move at this speed and this scale," committee co-chair Michael Jung told The Oregonian/OregonLive.
The growth figures back him up. Active data center facilities in Oregon grew from eight in 2000 to roughly 123 by 2025, according to the preliminary report. Another 31 are in the siting process.
About 9,000 acres are proposed for development statewide, and 6,500 of those would require urban growth boundary expansions or changes in rural land use rules.
The committee received well over 700 written public comments before releasing its report. A 45-day public comment period opened Saturday, Sept. 12, with final recommendations expected in late November or December, several weeks behind the original schedule.
Hillsboro at the center
The report arrives as Hillsboro tech companies face scrutiny for filing incentive applications just before a state moratorium on certain local tax breaks took effect. Companies stacked applications in five-year increments to secure breaks into the 2050s, The Oregonian/OregonLive reported.
The top 11 tech-company-owned data centers in Hillsboro receive an average of $294,000 in property tax breaks per full-time employee this tax year, according to reporting by The Oregonian/OregonLive. Petitioners in a lawsuit against Hillsboro and Washington County allege the city granted about $84 million in data center tax breaks this year alone, contributing to rising utility bills, school closures and threats to local watersheds.
John Calhoun of Tax Fairness Oregon called the preliminary report "obsolete" in comments to The Oregonian/OregonLive, saying decisions will follow public opinion. A DHM Research poll published in August found two-thirds of Oregon voters want a data center moratorium and three-quarters want a ban on industry tax breaks.
Political ground shifting
Gov. Tina Kotek, who created the advisory committee in January, reversed her earlier position and told a rally in Salem on Tuesday, Sept. 8, that she now wants the Legislature to enact a moratorium when it convenes in early 2027. She also ordered state agencies to pause all unapproved land transactions and permits for new data center projects on public land through July 1, 2027, as Willamette Week reported.
U.S. Sen. Christine Drazan, who opposed a moratorium in July, also shifted on Tuesday, Sept. 8, calling for an immediate pause until Oregon can protect its water, energy and farmland.
The committee's final recommendations are expected before the end of 2026, in time for the Legislature's 2027 session. Residents can submit comments during the 45-day window through the Oregon Department of Energy.
