Sen. Josh Hawley, Republican of Missouri, announced on September 16, 2026 that he will introduce legislation to prohibit data centers from receiving tax incentives in federally designated Opportunity Zones.
The proposal matters because Opportunity Zone tax breaks were intended to spur investment in low‑income neighborhoods, yet a 2022 report from the National Community Reinvestment Coalition found that 14% of existing data centers and more than 17% of planned projects are located in those zones. Faith‑based readers may see this as a call to protect resources meant for struggling communities from being diverted to wealthy technology firms.
Hawley described the current loophole as “corporate welfare,” arguing that data centers do not need government aid because the companies are already financially strong. The tax incentives originated in the 2017 Tax Cuts and Jobs Act and were made permanent by the Inflation Reduction Act (“the big, beautiful bill”) despite not being designed for data center use.
According to the Department of Housing and Urban Development, there are 8,746 Opportunity Zones across the United States, nearly half of which are in rural areas where many tech giants are planning new data center facilities. By closing the loophole, the bill aims to redirect the tax benefits back to their original purpose—supporting affordable housing, small businesses, and community development.
The move also intersects with growing congressional concern over artificial intelligence. Data centers are critical infrastructure for AI development, and Hawley has called for stronger guardrails that would allow individuals to sue tech companies if personal data is used without consent.
If introduced, the legislation will face debate on Capitol Hill as lawmakers balance the need for technological advancement with stewardship of resources for the poor. Hawley said the bill will add a federal barrier intended to slow the rapid expansion of data centers while preserving the spirit of Opportunity Zones.