West Virginia Data Center Bill Gets Local Pushback

WASHINGTON, April 22, 2025 – Local officials across West Virginia are concerned over legislation awaiting the governor’s signature that would incentivize data center development but reallocate property tax revenue and strip away local permitting and zoning control from counties and municipalities.

The bill, House Bill 2014, would establish a Certified Microgrid Program and a High Impact Data Center Program intended to lure these energy-intensive computing facilities to the Mountain State. 

Sent to Gov. Patrick Morrisey’s desk on April 15, the bill has been hailed by the Republican governor as the “single biggest economic development bill in many, many years,” citing its potential to boost job growth and attract new industries. But critics say the law sidelines local governments — both financially and administratively.

“My apprehensions on HB 2014 remain intact even after the bill passed,” said Morganne Tenney, executive director of the Putnam County Development Authority, MetroNews reported. “With the county restrictions and taxation language added to the ‘microgrid bill,’ I fear that counties will ultimately shy away from these types of projects.”

The legislation redirects half of the property tax revenue from certified data centers and microgrid developments to a state-managed income tax reduction fund. Only 30 percent is returned to the host county where the data center is located, with another 10 percent distributed on a per capita basis among all counties. The remaining 10 percent is split between an economic enhancement grant fund and an electric credit stabilization fund.

Local leaders argue that this formula undercuts the financial upside for communities absorbing the infrastructure burden. Without the provisions introduced by HB 2014, counties would have retained the majority of the property tax revenue generated from developments like data centers, officials said.

A project coming in at $5 billion could have generated $2 million to $3 million in tax revenue for a county commission as well as $3 million to $4 million for schools, Tenney said, but under the final bill she said she “remain[s] uncertain if the amount would be transformative to the state as a whole.”

The law also exempts qualifying projects from local land use rules, including municipal zoning, permitting, noise and lighting regulations. The legislation also says the certified developments would not be subject to county or municipal building permitting, inspection or code enforcement.

“I believe it is essential to have local governments at the table on these projects,” said Greenbrier County Commissioner Tammy Tincher. “The local site county also bears the increased responsibility of public safety and other infrastructure… The allocation, while appreciated, demonstrates the lack of value the state has on county government and the services it provides.”

The exemption from local rules drew bipartisan criticism during the legislative session. Delegate Evan Hansen, D-Monongalia, attempted to amend the bill to preserve local zoning authority – a proposal that was ultimately defeated.

“These microgrid districts are heavy industrial districts that would include not just data centers, which could be loud or have other impacts, but also power plants; they could include coal or gas or nuclear plants, and they could also include solar and wind,” Hansen said in an interview with MetroNews.

Hansen also questioned whether the redirection of property taxes was fair. 

“If that money was not commandeered by the state and then reallocated according to this formula, it would go to the local governments because that’s where local property taxes go according to state code.”

West Virginia already offers favorable conditions for data center developers, including a tax break under the High Technology Valuation Act that taxes servers at just 5 percent of their salvage value. Tenney said the new legislation risks tipping the balance too far.

“What about the counties who have been courting projects for months or years? This wipes [counties’] feet out from under them in the 11th hour,” she said.

The W.Va. House of Delegates first passed HB 2014 on April 1 by a vote of 88–12. The Senate followed on April 11 with a 32–1 vote after making amendments. The House then concurred with those changes on April 12, sending the bill to Morrisey’s desk on April 15, where it now awaits his signature.