Arizona Officials Rejected Statewide Data Center Moratorium
State leaders have prioritized high-tech economic growth over a proposed pause on new facility approvals.
Updated on Oct. 13, 2026 in Data Centers
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Governor Katie Hobbs and Congressman Andy Biggs have formally opposed a proposed statewide moratorium on new data centers. The policy debate follows a recent state budget provision that implemented a three-year freeze on state tax incentives for new data center projects.
Why it matters
The dispute highlights a tension between state economic development goals and growing concerns over the infrastructure and resource demands required by large-scale computing facilities. Policymakers are now forced to weigh the benefits of a high-tech economy against the local impact on power and utility grids.
The current state budget includes a three-year moratorium on state tax incentives for data centers. This follows instances like Beale Infrastructure, which relocated a project to unincorporated Pima County after a rejection in Tucson.
The players
Katie Hobbs
The Governor of Arizona who advocates for the role of data centers in the high-tech economy.
Andy Biggs
A U.S. Congressman who opposes data center moratoriums and advocates for developers to fund all local infrastructure.
Kris Mayes
The Attorney General of Arizona who is pursuing a new approval process and commission for data centers.
Beale Infrastructure
A commercial developer that specializes in siting and building data centers in regional markets.
The details
Data centers require massive amounts of power and specialized water cooling systems to support high-density server racks—the physical hardware frames that hold computing servers. Developing these sites typically involves complex zoning negotiations between municipalities, such as the rejection by Tucson, and private developers like Beale Infrastructure. While the state has frozen tax incentives, the debate centers on whether developers should be mandated to fund the entirety of the necessary infrastructure upgrades, including power substations and transmission lines.
Timeline
July 2026: The state budget officially instituted a three-year moratorium on data center tax incentives.
September 2026: Governor Hobbs and Attorney General Mayes publicly debated the necessity of a broader moratorium.
October 6, 2026: Congressman Biggs rejected a moratorium proposal following a gubernatorial debate.
October 14, 2026: Attorney General Mayes is scheduled to host a town hall regarding the policy in Mesa.
The Tech Race
The current debate over moratoriums follows the implementation of the Arizona state budget's three-year data center tax incentive freeze. Policymakers are now competing to define the future regulatory framework for these facilities to maintain regional competitiveness.
The shift in tax incentives and potential new approval processes may change where and how quickly data centers are built in unincorporated areas of Pima County and beyond. Residents should watch for localized zoning changes as developers move projects away from cities like Tucson.
The takeaway
Arizona is moving toward a more restrictive environment for data centers, even as officials prioritize sector growth. Watch for the Attorney General's upcoming approval process framework to see if it establishes a new standard for local infrastructure funding.
What happens next
Attorney General Kris Mayes will hold a town hall in Mesa on October 14, 2026, to discuss the proposed data center approval process.
Further reading
For more on how infrastructure needs are shaping current industry growth, see our coverage in Data Centers.
Source note: This article includes information reported by abc15 Arizona.
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