Gov. Tina Kotek ordered Oregon's environmental regulators to stop issuing air and water pollution permits for new or expanding data centers statewide. The freeze could stall development across Hillsboro's Silicon Forest until at least July 2027.

Kotek sent the directive in an Oct. 9 letter to Oregon Department of Environmental Quality (DEQ) Director Leah Feldon, first reported by OPB. The order also blocks DEQ from processing applications from cities and counties seeking to renew or modify wastewater permits to accommodate data centers.

The freeze expands a previous moratorium that applied only to state-owned land. Without air or water pollution permits, most large "hyperscale" data centers cannot build anywhere in Oregon, on public or private land.

DEQ confirmed on Tuesday, Oct. 13, that it has paused new and renewed permits for data centers while it evaluates how to carry out the order.

Hillsboro already acting on its own

The state freeze lands on top of local restrictions Hillsboro has already put in place. The city council unanimously approved a 120-day moratorium on new data center approvals in late July, effective until at least Nov. 24.

The council is also advancing a permanent ordinance that would cap new standalone data center construction at 30 more acres and add a 1,000-foot buffer around schools. Council members voted unanimously to move that proposal forward at an Oct. 7 meeting, according to The Oregonian. A final vote is scheduled for Oct. 20.

Data centers already occupy more than 430 acres in Hillsboro, with another 140 acres under construction or allocated. The industry received $84 million in local property tax breaks last year while employing 284 people, according to Washington County records. That works out to $296,000 in tax breaks per job, per year.

Council President Rob Harris warned at the Oct. 7 meeting that without action, data centers could consume "thousands of acres" of land in future Hillsboro developments.

Amazon pushes back

The freeze drew sharp criticism from the industry's biggest player in Oregon.

Amazon Web Services vice president Shannon Kellogg called the directive abrupt and said in a written statement that it would "eliminate thousands of construction jobs" and halt billions of dollars in planned investment across Oregon communities and small businesses.

Amazon says it employs 2,500 people at its Oregon data centers and pays $71 million in local taxes. Its tax breaks saved the company nearly $200 million last year alone, The Oregonian reported.

Statewide, the data center industry collects more than $450 million a year in local tax breaks, according to The Oregonian. Oregon has more than 120 data centers spanning more than 2,000 acres, with communities planning for 9,000 more.

What comes next

Kotek said in her letter that the pause would give her time to evaluate recommendations from her seven-member Data Center Advisory Committee. The committee issued a 20-page preliminary report in mid-September after nine months of fact-finding.

Oregon's next legislative session convenes in January, when lawmakers are expected to consider a range of data center regulation bills. Both Kotek and her Republican opponent, state Sen. Christine Drazan, have said they favor a moratorium.

The public can submit comments on the advisory committee's report until 5 p.m. Oct. 24, according to the Oregon Capital Chronicle. Hillsboro's council is set to vote on its own permanent data center cap on Oct. 20.