Overview
This legislation establishes an immediate, statewide prohibition on the construction of new data centers in Maryland. The bill's primary objective is to halt data center development until the General Assembly enacts companion legislation requiring such facilities to be co-located with dedicated power generation infrastructure. The measure reflects a legislative determination that unconstrained data center growth poses unacceptable demands on the State's electrical grid without corresponding investment in power generation capacity. The bill is structured as an emergency measure, meaning it takes effect immediately upon enactment rather than following the standard legislative calendar. Critically, the prohibition is designed as a temporary mechanism — it self-abrogates once the General Assembly passes legislation mandating that new data centers be co-located with natural gas, nuclear, or small modular reactor power generation facilities and that such facilities provide sufficient capacity to meet the data center's full power needs.
Core Provisions
The bill establishes two parallel prohibitions operating simultaneously. Under §1(A), no person — including private developers, corporations, or other entities — may construct a data center anywhere within the State of Maryland. Under §1(C), no unit of State or local government may approve any proposal for the construction of a data center, effectively cutting off the permitting and approval pipeline at every level of government. The definition of 'data center' under §11–239(a)(2) is broad, encompassing any building or group of buildings used to house computer systems, computer storage equipment, and associated infrastructure that organizations use to organize, process, store, and disseminate large amounts of data. This definition captures the full range of commercial, governmental, and institutional data center facilities. The Act contains a grandfathering provision under §2, which exempts from the prohibition any data center construction that has already received all required federal, State, and local permits prior to the Act's effective date, protecting vested development rights. The abrogation clause under §3 specifies the precise legislative conditions that would terminate the prohibition: the General Assembly must enact legislation requiring all new data centers to be co-located with a new or existing natural gas power generation facility, nuclear power generation facility, or small modular reactor, and must further require that additional power generation capacity be constructed at the co-located facility sufficient to meet or exceed the data center's power needs.
Key Points
- Prohibition on any person constructing a data center in the State [§1(A)]
- Prohibition on any State or local government unit approving a data center construction proposal [§1(C)]
- Broad statutory definition of 'data center' covering all buildings housing computer systems and associated infrastructure [§11–239(a)(2)]
- Grandfathering exemption for projects with all required permits secured before the Act's effective date [§2]
- Automatic abrogation upon enactment of co-location and power capacity legislation [§3]
- Emergency measure designation for immediate effect [§4]
Legal References
- Annotated Code of Maryland, Article – Real Property
- Annotated Code of Maryland, Article – Tax – General
- Annotated Code of Maryland §11–239(a)(1)
- Annotated Code of Maryland §11–239(a)(2)
Implementation
The bill operates through a dual-track enforcement structure targeting both private actors and government agencies. Private persons are directly prohibited from constructing data centers, creating a statutory cause of action and regulatory basis for enforcement by State authorities. Government units at both the State and local level are independently prohibited from approving construction proposals, which means planning commissions, zoning boards, building departments, and other permitting authorities must refuse to process or grant approvals for new data center projects. The emergency designation ensures the prohibition takes effect without delay, requiring immediate compliance from all regulated parties. No dedicated enforcement agency is specified in the bill, which means enforcement falls to existing regulatory and prosecutorial authorities under general State law. The grandfathering provision requires permitting authorities to verify whether a project has obtained all required federal, State, and local permits before the effective date — a determination that may require coordination across multiple agencies. The bill contains no reporting requirements, no rulemaking delegation, and no appropriation, reflecting its character as a direct statutory prohibition rather than a regulatory program.
Impact
The bill's immediate impact falls on developers, technology companies, and other entities that had planned or were in the process of planning data center construction in Maryland. Any project that has not yet secured all required permits is effectively halted upon the Act's effective date. Maryland's data center industry — which has seen significant investment growth, particularly in the Prince George's County corridor — faces a complete development freeze for new projects. Local governments that had anticipated tax revenues and economic development benefits from approved or pending data center projects will experience disruption to those plans. The bill's abrogation mechanism means the prohibition's duration is entirely contingent on legislative action, creating regulatory uncertainty for the industry. There are no direct fiscal appropriations in the bill, but the indirect economic impact includes foregone investment, construction employment, and the substantial property tax and sales tax revenues that Maryland law provides to incentivize data center development. The bill does not affect existing, operational data centers, limiting its immediate operational disruption. The longer-term intended outcome is to reshape the data center development model in Maryland so that future facilities are paired with dedicated power generation, reducing strain on the shared electrical grid.
Legal Framework
The bill operates under the Maryland General Assembly's plenary police power authority to regulate land use, construction, and commercial activity within the State. By amending the Annotated Code of Maryland across both the Real Property and Tax – General articles, the legislation integrates the prohibition into the existing statutory framework governing property development and tax incentives. The prohibition on local government approvals constitutes a preemption of local land use authority, superseding any local zoning ordinances or regulations that might otherwise permit data center construction. This top-down preemption is a standard exercise of State legislative supremacy over local government in Maryland's Dillon's Rule framework. The grandfathering provision reflects constitutional avoidance of takings and vested rights claims by protecting projects that have already obtained all required permits. The abrogation clause is a self-executing legislative condition — it does not require gubernatorial action or agency rulemaking to take effect, but rather operates automatically upon the General Assembly's enactment of qualifying legislation. The emergency measure designation invokes the General Assembly's authority to make legislation immediately effective, bypassing the standard 90-day delayed effective date applicable to most Maryland legislation.
Legal References
- Annotated Code of Maryland (2023 Replacement Volume and 2025 Supplement)
- Annotated Code of Maryland, Article – Real Property
- Annotated Code of Maryland, Article – Tax – General
- Annotated Code of Maryland §11–239
Critical Issues
The bill raises significant constitutional and practical concerns. The breadth of the prohibition — covering all data center construction without exception for size, type, or purpose — creates substantial risk of Commerce Clause challenges, as data centers are integral to interstate commerce and a blanket State prohibition may be found to impermissibly burden that commerce. Takings claims are a secondary risk for developers who have invested substantially in pre-permit planning and design work but have not yet secured all required approvals, as the grandfathering provision's all-or-nothing structure may not fully protect reliance interests. The abrogation mechanism, while innovative, creates indefinite regulatory uncertainty: the prohibition remains in force for an unspecified period until the General Assembly acts, and there is no deadline or trigger requiring legislative action on the co-location framework. This open-ended duration amplifies the economic disruption and may deter investment in Maryland's technology sector beyond the data center industry itself. The bill's definition of 'data center' is broad enough to potentially capture facilities that do not place significant strain on the electrical grid, such as small enterprise server rooms or edge computing installations, raising concerns about overbreadth. Opposition from the technology industry, economic development advocates, and local governments anticipating tax revenues will be substantial. Finally, the bill does not address the underlying grid capacity problem directly — it merely halts new demand without adding supply — meaning the policy goal of grid stability depends entirely on future legislative action that may face its own political and regulatory obstacles.
Key Points
- Potential Commerce Clause challenge to a blanket prohibition on facilities integral to interstate commerce
- Takings and vested rights exposure for developers with substantial pre-permit investment
- Indefinite duration of the prohibition with no legislative deadline for enacting the co-location framework
- Overbroad definition of 'data center' potentially capturing small or low-impact facilities
- No direct mechanism to address grid capacity — prohibition halts demand but does not add supply
- Preemption of local land use authority may generate intergovernmental conflict
- Significant economic disruption to Maryland's technology investment pipeline and associated tax revenues
Legal References
- U.S. Constitution, Article I, §8 (Commerce Clause)
- U.S. Constitution, Fifth Amendment (Takings Clause)
- Maryland Constitution, Article III (Legislative Power)