WASHINGTON, October 17, 2026 — Sen. Bernie Moreno (R-OH) introduced legislation on Thursday that would impose a 100% federal tax on any state or local tax incentive given to data center companies, effectively nullifying such subsidies.
The bill, titled the Recapturing Excessive Corporate Largesse through Accountability and Incentive Measures, or RECLAIM Act, would also prohibit the federal government from offering its own incentives to data center firms. According to the Washington Examiner, Moreno’s proposal includes a “sense of Congress” opinion urging states and localities to repeal their existing data center incentives.
Targeting AI Infrastructure Subsidies
Moreno said the bill aims to counter what he describes as excessive public support for AI infrastructure expansion. The legislation specifically targets tax breaks and incentives provided to data centers, which are critical to the growth of artificial intelligence systems. By imposing a federal tax equal to 100% of the value of any state or local incentive, the bill seeks to eliminate the financial benefit of such subsidies.
The measure would also bar federal agencies from granting new incentives to data center companies. Moreno’s office did not specify whether existing federal incentives would be revoked, only that no new ones would be issued under the bill’s provisions.
Part of Broader Republican Reconciliation Push
Moreno indicated the RECLAIM Act is intended to be included in a larger reconciliation package that Republicans plan to advance after the midterm elections. Speaking to reporters at the Capitol, he said the party aims to pass a “giant” bill encompassing all achievable Republican priorities using the reconciliation process, which allows passage with a simple Senate majority and no Democratic support.
He added that losing control of either the House or Senate would increase motivation to pass the bill before the opposition could take office. “If we lose the House and the Senate, we should be here from Nov. 9 until Dec. 31 with no break at all,” Moreno said, according to remarks reported in The Fiscal Times. “Like, we’ll have turkeys here for Thanksgiving because we have to get this done.”
Fiscal Responsibility and Corporate Accountability
The senator framed the bill as a response to concerns about fiscal responsibility and what he termed “corporate largesse.” By taxing incentives at 100%, the federal government would recoup the full value of any state or local subsidy, effectively neutralizing its impact. The legislation does not propose new spending but instead uses the tax code to offset what Moreno views as market-distorting public aid.
Moreno did not cite specific figures on the total value of current data center incentives nationwide, nor did the bill’s text, as referenced in the sources, include estimates of potential federal revenue from the proposed tax.
Legislative Outlook
The RECLAIM Act remains a proposal and has not yet been scheduled for committee consideration or a floor vote. Its advancement depends on the Republican leadership’s post-midterm agenda and the outcome of the November elections. Moreno’s comments suggest the bill is being positioned as a priority for the lame-duck session should Republicans retain or regain control of Congress.
The legislation reflects growing scrutiny in Washington over the use of public funds to support private technological expansion, particularly in sectors tied to AI and high-performance computing. As data center construction continues to accelerate across multiple states, the debate over the appropriate level of government support is likely to intensify.
Sources
- Moreno pushes 100% tax on data center subsidies and incentives
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Photo: Martin Falbisoner (CC BY-SA 3.0)
