HR-10102-119
Referred to the Committee on Ways and Means, and in addition to the Committees on Energy and Commerce, and Science, Space, and Technology, 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 Andrea Salinas (D-OR)
What it does
This bill would create a new federal excise tax of 1 cent per kilowatt-hour on electricity used by data centers with more than 1 megawatt of power capacity. Revenue collected would be split into five equal shares directed to the Land and Water Conservation Fund, the Housing Trust Fund, the Hazardous Substance Superfund, the Highway Trust Fund, and a newly created Energy Technology Trust Fund that would back loan guarantees for energy projects.
Who benefits
Recipients of the funded programs would benefit, including conservation and public land projects funded through the Land and Water Conservation Fund, affordable housing developers and low-income renters served by the Housing Trust Fund, communities near contaminated sites cleaned up under the Superfund, road and infrastructure projects funded by the Highway Trust Fund, and energy technology companies seeking federally backed loan guarantees. Utilities and electricity providers not classified as data centers face no direct tax burden.
Who is hurt
Data center operators—including large cloud computing companies, AI and machine learning firms, and colocation facility providers—would bear the direct tax cost. These costs could be passed through to businesses and consumers who rely on cloud services, streaming, e-commerce, and other data-center-dependent industries. Communities hosting data centers (often chosen for economic development) could see reduced incentive for future data center investment, potentially affecting local tax revenue and jobs tied to data center construction and operation.
Supporters argue
Supporters argue that data centers consume enormous and rapidly growing amounts of electricity—driven partly by the expansion of artificial intelligence—straining local power grids and infrastructure without directly compensating the communities and systems affected. They contend that dedicating this new tax revenue to housing, conservation, environmental cleanup, highways, and energy technology creates a direct link between the industry's rising resource consumption and public reinvestment in the infrastructure and communities that support it.
Opponents argue
Opponents argue that a flat per-kilowatt-hour tax does not distinguish between efficient and inefficient facilities, potentially penalizing operators who have invested in renewable energy or efficiency improvements just as much as those who have not. They contend the tax could raise the cost of cloud computing, AI development, and digital services for businesses and consumers nationwide, and that diverting revenue into five unrelated trust funds reflects a lack of clear policy rationale rather than a targeted response to any single problem the tax purports to address.
Constitutional context
As a revenue-raising excise tax, this bill falls under Congress's taxing power (Article I, Section 8) and must originate in the House, which this bill does. Because it applies uniformly across states rather than apportioning by population, it does not raise the direct-tax apportionment concerns at issue in cases like Moore v. United States.
Checks and balances
Congress would exercise its taxing and spending authority directly through statute, with the Treasury Department and IRS responsible for administering collection and Executive branch agencies managing the distributed trust funds, subject to ongoing congressional oversight and appropriations control.
Historical precedent
Congress has previously created dedicated excise taxes tied to specific trust funds, such as fuel taxes funding the Highway Trust Fund, but a federal excise tax targeting electricity consumption by a specific industry sector like data centers has no direct historical analogue.