Oregon lawmakers are advancing a proposal that would temporarily block new data centers from receiving property tax abatements through the state’s Enterprise Zone program, placing a short-term brake on an industry that has grown rapidly along the Columbia River. The change, approved Monday by a legislative budget subcommittee, would bar new data center projects from qualifying for the tax breaks until the summer of 2027.

The pause is part of ongoing negotiations around House Bill 4084, Gov. Tina Kotek’s primary economic development bill this session. According to reporting by Oregon Public Broadcasting, the governor had initially resisted calls to exclude data centers from expanded incentives but now supports the temporary halt after lawmakers advanced the change independently.

Rep. Nancy Nathanson, D‑Eugene, who proposed the pause, said during the hearing that legislators need space to fully assess the statewide impacts of large-scale computing facilities. Data centers have drawn heightened scrutiny for their energy consumption, with Gov. Kotek convening a statewide advisory committee to examine the strain these projects place on Oregon’s electrical grid. Many of the state’s existing facilities operate along the Columbia River corridor, leveraging proximity to hydroelectric power.

Oregon is home to roughly 125 data centers, with major sites operated by companies such as Meta, Apple, and Amazon. According to The Oregonian/OregonLive, these facilities drew more than $85 million in Enterprise Zone tax benefits this year—an increase from $45 million the prior year. Business Oregon, the state’s economic development agency, reports that data centers account for the largest share of the program’s total abatements due to the high cost of construction.

HB 4084 aims to expand the Enterprise Zone program by giving local governments more flexibility and allowing incentives to run up to 10 years for qualifying developments. The bill also includes a framework to fast‑track state permits for projects in targeted industries if they meet minimum investment thresholds. In rural areas, that threshold would begin at $25 million.

The debate has split lawmakers, particularly along geographic lines. Some legislators representing communities east of the Cascades argue data centers have stabilized local economies by creating long-term employment and attracting major capital investment. Others, including Sen. Jeff Golden, D‑Ashland, have pushed for stronger limits, citing concerns about the long-term costs of public subsidies. Golden sought to bar both data centers and cryptocurrency mining operations from receiving incentives under the bill before it was rerouted to a different committee.

Advocacy group Tax Fairness Oregon has urged lawmakers to remove data centers from HB 4084 entirely. In written testimony, the organization cited state and local incentive programs that, combined, amount to more than $457 million in annual tax breaks for the industry—up from approximately $330 million the previous year.

HB 4084 has already undergone significant adjustment as it moves through the Legislature. The version advancing this week narrows a separate jobs tax credit created earlier in the session under Senate Bill 1507. That credit, originally projected to reach $4.6 million this budget cycle, is now expected to total $1.1 million after being limited to select industries such as advanced manufacturing, wood products, food and beverage processing, and apparel.

For communities along the Washington–Oregon border, including Cowlitz County, the debate carries local resonance. Data center construction in Oregon has influenced regional energy planning, and any adjustments to incentive structures could affect economic development strategies on both sides of the river. While the pause on tax breaks applies only in Oregon, the policy signals a shift in how Northwest states may approach the rapidly expanding sector.

HB 4084 continues to move through the legislative process, with lawmakers indicating that further changes are possible before the session concludes.

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