Will Establish Nation-Leading Regulatory Framework That Protects Ratepayers, the Environment and New Yorkers

One Year Pause Will Ensure New Yorkers Are Not Paying for Transmission and Infrastructure Build Outs

Will Create New York State Data Center Community Investment Framework, Ensuring Localities Can Unlock Millions From New Development

Governor Will Pursue Legislation To Repeal Sales Tax Exemptions for Massive Data Centers Across the State

Governor is creating a first-of-its kind Office of Digital Innovation, Governance, Integrity, and Trust (DIGIT)

Policy Outline for Community Investment Framework Is Available Here

Copy of the Executive Order Is Available Here

Governor Kathy Hochul today held a roundtable with state, business and local leaders from the Finger Lakes Region to highlight her Executive Order that creates the nation’s first moratorium on new hyperscale data centers, establishing the strongest standards for data center development and creating a blueprint to support localities. The Governor is temporarily pausing State environmental permits for up to one year in order to build a nation-leading regulatory framework that protects ratepayers, the environment, the energy grid and communities across the state.

“New Yorkers’ well-being and convenience always comes first — that’s why we’re not letting residents foot the bill while data centers come in, plant the seeds and benefit from our localities,” Governor Hochul said. “This one year pause is centered around an action plan to protect ratepayers from rising utility costs, determine the best approach for the environment and to ensure incoming partners are paying into our already-overwhelmed energy grid. We’re developing a framework that works for our communities, not against them.”

Earlier this year, the Governor directed the Department of Public Service (DPS) to begin the Energize NY proceeding, which will require data centers to either pay more for their energy or supply their own, allowing the state to keep energy more affordable for New Yorkers. As part of that proceeding, the Governor is now also directing DPS to develop a Generic Environmental Impact Statement (GEIS) for data centers to ensure new data centers coming online are being held to consistent standards. During the development of this GEIS, which will take up to a year, a moratorium will be in place and the Department of Environmental Conservation (DEC) will not issue any discretionary permits not already deemed complete. The state will use the GEIS to assess the potential environmental impacts of the construction and operation of data centers in the state, including their effect on energy demand, water use and quality, and air quality. Once the State finalizes these standards, the moratorium will be lifted, allowing new data center projects to proceed as long as they follow state, zoning code and other local approvals.

The Governor also directed Empire State Development (ESD) to issue a Community Investment Framework (CIF) within 60 days, which will provide clear guidance to local entities to help them negotiate community benefits as part of any large-scale data center deal, including local infrastructure improvements, child care investments, and direct financial support for their community. The CIF will also establish frameworks that provide organized labor a seat at the table and prioritize prevailing wage standards and project labor agreements for data center construction, local hiring, apprenticeships and workforce development to maximize economic benefits. This framework will additionally include a formula to help communities assess where to begin investment negotiations. An outline of the CIF is currently available on ESD’s website, and the public is encouraged to submit feedback.

Additionally, the Governor is directing DPS to consider creating a New York Grid Acceleration Fund to require data centers to invest in the state’s aging grid infrastructure and energy needs so all New Yorkers benefit from responsible development. The fund could support the procurement of new clean energy supply and establishment of an insurance pool to which developers may need to contribute to protect against speculative large loads that create uncertainty and increase costs. DPS will also consider approaches to require data centers to fund new clean electric generation dedicated to their operations, including but not limited to customer-sited distributed energy resources and battery storage.

Finally, Governor Hochul is pursuing legislation to repeal sales tax exemptions for massive data centers across the state.

State Senator Jeremy Cooney said, “Governor Hochul’s willingness to listen on data centers sets the precedent that New York’s communities will always come first. This timeline allows the proper framework to be laid for a safe integration of this new technology — protecting ratepayers, the environment, our energy grid, and unlocking opportunities for labor leaders. I will continue to support the Governor’s commitment to ensuring sensible policies surrounding data centers in New York.”

Monroe County Executive Adam J. Bello said, “Any economic development project, including data centers, must be a net positive for our community, and we have to protect residents from rising electrical bills. Because the pace of technological demand is moving faster than our physical infrastructure, we have to take a thoughtful, deliberate and prudent approach. Thanks to Governor Hochul for her leadership on this issue and for engaging local stakeholders in the conversation.”

Greater Rochester Chamber President and CEO Bob Duffy said, “New York State must remain an international leader in emerging technologies powering the 21st century economy — but it must do so responsibly. Thank you to Governor Kathy Hochul for her leadership in ensuring our state implements thoughtful, comprehensive policies that support all of its communal goals. By convening discussions like this and addressing implementation concerns prior to development, Governor Hochul is setting New York up to find a mutually beneficial path forward. We look forward to continued collaboration with leaders across the state to ensure that all voices are heard in this conversation and all New Yorkers benefit from these investments.”

Genesee County Legislature Chair Christian Yunker said, “I appreciate Governor Hochul taking the time to hear directly from communities that are on the front lines of economic development. This roundtable gives us an opportunity to share how data centers could impact communities. We have the opportunity to create jobs, strengthen local tax bases, and support long-term growth while addressing legitimate concerns. This is a healthy exercise.”

Since taking office, Governor Hochul has ensured New York is leading the nation in AI innovation and development. As part of her FY25 Budget, the Governor launched Empire AI, a nation-leading initiative to advance AI research for public good. This year, she launched the FutureWorks Commission to advise on policy and private sector actions to protect the security of workers while harnessing the economic benefits of AI for all New Yorkers. This blue ribbon Commission is composed of nation-leading experts, workers’ advocates, and business leaders, and will be charged with advising Governor Hochul on how to navigate the AI transition, so that the benefits of AI can be shared among New York’s families, workers and small businesses — not just large corporations.

Governor Hochul also implemented nation-leading safeguards to keep New Yorkers safe online and to ensure safe and responsible AI use in New York State. Initiatives include:

• The SAFE for Kids Act and Child Data Protection Act that restrict addictive feeds for kids and prevent online operators from collecting and monetizing children’s data without informed consent.
• AI Companion legislation which set first-in-the-nation safeguards, diverting user conversations about self-harm to mental health resources and interrupting unhealthy addictive behaviors. The Governor also outlawed AI-Generated Child Sexual Abuse Material.
• The recently signed Warning Labels bill that will require social media companies post warnings about the platform’s potential impact on mental health.
• AI Deceptive Practices Act, which enhances protections against unauthorized use of likeness/voice and the unauthorized dissemination of intimate images.

This year, the Governor’s Safe by Design Act was enacted in the FY27 State Budget. Safe by Design ensures that parental controls for kids are set at the highest protections on common social and gaming platforms, which means that non-connections above the age of 18 cannot privately communicate with kids, view their full profile, or tag them in content. Location settings will also be turned off by default, and children under 13 must receive parental approval for new connections. It also disables certain AI chatbot features on online platforms for kids and parents must be able to set limits on children’s financial transactions on online gaming platforms and view their child’s transaction history. While many of these platforms have increased their security features for kids, in New York it is now the law, and cannot be relaxed by these platforms over time.

Additionally, Governor Hochul is creating a first-of-its kind Office of Digital Innovation, Governance, Integrity, and Trust (DIGIT). DIGIT will serve as a central, authoritative body for digital safety and technological governance, devising new approaches and ensuring consistent enforcement to keep New Yorkers safe online while protecting New York’s position as a state that values and invests in cutting-edge innovation. The DIGIT Office will first focus on regulating large frontier AI developers as outlined in the RAISE Act, enabling greater transparency into their safety measures and establishing a reporting mechanism for developers to report critical safety incidents. The effective date of the law is January 1, 2027.

Participants of today’s roundtable includes:

• Commissioner Hope Knight, President & CEO, Empire State Development
• State Senator Jeremy Cooney
• County Executive Adam Bello, Monroe County
• Christian Yunker, Managing Partner, CY Farms & Chair, Genesee County Legislature
• Stephen Schultz, Town Supervisor, Town of Henrietta
• Joshua Banda, Student, Monroe Community College
• Robert “Bob” Duffy, President & CEO, Greater Rochester Chamber of Commerce
• Kevin Ellis, CEO, Upstate Niagara Dairy Co-op
• Dr. Barbara Grosh, Resident, Town of Penfield
• Rachel Sherman, Board Member, Rush-Henrietta Board of Education & Executive Director, Wilson Foundation