HR-9262-119
Referred to the Committee on Ways and Means, and in addition to the Committee on the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Sponsored by Robert Bresnahan (R-PA)
What it does
This bill would do three things: (1) strip federal courts of jurisdiction to hear legal challenges when a local government votes to block a large data center (20+ megawatts of power demand) through a recorded vote with documented findings; (2) prohibit federal agencies from issuing permits for a data center if its developer is suing to overturn a local zoning denial; and (3) amend the Internal Revenue Code to deny any existing federal tax credits to data center developers who have not signed a legally enforceable community benefit agreement with local government covering taxes, infrastructure, environmental monitoring, and a local workforce hiring plan.
Who benefits
Local governments (municipalities and counties) that want to block or impose conditions on large data center development. Residents near proposed data center sites who are concerned about noise, water use, road congestion, or utility strain. Local construction workers, contractors, and subcontractors who would gain a hiring preference under the workforce plan requirement. Registered apprenticeship programs, community colleges, and career and technical education centers that would be named as preferred workforce partners. Competing land uses (housing, agriculture, light industry) that may be displaced by large data centers. Utilities and infrastructure providers who would receive mitigation commitments.
Who is hurt
Large data center developers and operators — including major cloud computing and AI infrastructure companies — who would face new conditions on federal tax credits and lose the ability to challenge local zoning denials in federal court. Out-of-region construction workers and labor contractors who may be passed over under local hiring preferences. States and regions seeking to attract data center investment for economic development purposes. Businesses and consumers who depend on data center capacity expansion (cloud services, AI applications, streaming, financial services). Developers in jurisdictions with no local government willing to sign a community benefit agreement, who could be effectively blocked from receiving any federal tax credits regardless of merit.
Supporters argue
Supporters argue that large data centers impose significant burdens on local communities — consuming tens of millions of gallons of water annually, straining power grids, and generating industrial noise — while often paying little in local taxes due to state-level tax incentives. They contend that stripping federal court jurisdiction over local zoning decisions restores the traditional role of municipalities as the primary regulators of land use, and that conditioning federal tax credits on community benefit agreements ensures that public subsidies produce measurable local returns, including local jobs and infrastructure investment.
Opponents argue
Opponents argue that stripping federal courts of jurisdiction over local zoning decisions could allow municipalities to block data center development for pretextual or discriminatory reasons with no meaningful legal recourse, undermining the rule of law and chilling billions in private infrastructure investment. They contend that tying tax credits to community benefit agreements negotiated with individual local executives creates an inconsistent, deal-by-deal subsidy system that favors politically connected developers and disadvantages smaller firms, and that local hiring preferences may conflict with federal labor law and interstate commerce principles.
Constitutional context
The bill's jurisdiction-stripping provision raises questions under Article III, which grants Congress broad authority to define the appellate jurisdiction of federal courts, but courts have held that Congress may not strip jurisdiction in ways that violate constitutional rights (e.g., due process under the Fifth Amendment). The tax credit condition implicates the Taxing and Spending Clause (Art. I, §8, cl. 1), under which Congress may attach conditions to tax benefits, though retroactivity concerns under the Fifth Amendment's Due Process Clause could arise if credits are denied for actions taken before enactment.
Checks and balances
Local governments gain significant authority to block data center development without federal judicial review; Congress retains control through the tax credit conditions; federal agencies lose permitting discretion when developers are in active litigation against local zoning decisions.
Historical precedent
Congress has previously stripped federal court jurisdiction in specific domains (e.g., the REAL ID Act's channeling of immigration challenges), but a provision shielding local zoning decisions from all federal judicial review is a less common and more contested application of that power.