Moreno’s RECLAIM Act Would Bar Federal Data Center Subsidies

On October 15, 2026, Senator Bernie Moreno (R-Ohio) announced the RECLAIM Act, a legislative proposal targeting public incentives for data-center development. The bill would prohibit the federal government from subsidizing data centers and apply a 100% federal excise tax to state or local grants and tax exemptions that qualifying data-center operators use. The proposal has not been enacted, so these provisions are not currently in force. It is a policy signal, rather than a solicitation, award, or immediate change to federal procurement rules.

Moreno’s announcement frames the bill around taxpayer exposure and the role of large technology companies in financing infrastructure they use. The senator said, “Taxpayers will not subsidize data centers, period,” and argued that federal intervention is warranted when state and local governments provide what he characterized as corporate welfare. The release describes data centers as essential to U.S. technological dominance, while asserting that hyperscalers should contribute to the systems and communities from which they benefit. It also says past federal, state, and local tax breaks supporting data-center expansion have amounted to billions, though the release does not provide a specific breakdown or independent estimate.

For GovCon firms, the central procurement implication is uncertainty around the future economics of data-center projects that depend on public incentives. Developers, contractors, investors, and technology suppliers should distinguish existing incentives from the bill’s proposed treatment and avoid assuming that its tax or subsidy restrictions are already applicable. If enacted, the proposal could change project financing assumptions and influence where operators build, how they structure projects, and whether they pursue work tied to federally supported infrastructure. Organizations bidding on data-center work should monitor legislative developments and test the resilience of pricing and schedules under scenarios with reduced or more costly incentives.

The source identifies the covered recipients as “SI hyper-scalers” and refers to state or local grants and tax exemptions leveraged for data centers; it does not provide the bill’s full statutory text or further define the covered entities in the announcement. That distinction matters for contractors and partners assessing exposure: the scope, implementation details, and potential interaction with existing incentive arrangements would need to be evaluated against the bill text and any subsequent legislative or administrative action. Until then, the RECLAIM Act is best treated as a proposal with potential downstream effects on commercial project economics, not as an active federal funding restriction or contracting requirement.

• Introduced: Senator Bernie Moreno announced the RECLAIM Act on October 15, 2026; the source identifies the U.S. Senate as the relevant government institution.
• Federal subsidies: The proposal would prohibit federal subsidies for data centers; it has not been enacted.
• State and local incentives: The bill would impose a 100% federal excise tax on qualifying state or local grants and tax exemptions used for data centers.
• Current status: The proposal is not in force and does not create a current procurement opportunity.
• Stated rationale: Moreno’s release says data-center development is important to U.S. technological dominance but argues that large technology companies should finance their own operations.
• Scale asserted by the sponsor: The release characterizes past tax breaks for data-center expansion as totaling billions, without providing a detailed calculation.
• Potential business exposure: Developers, contractors, investors, and suppliers should identify projects whose financing or bid assumptions rely on public grants, tax exemptions, or federal subsidies.
• Planning action: Track legislative progress and model project economics under scenarios in which incentives are unavailable or subject to the proposed tax, while treating the bill as a proposal until it becomes law.
• Scope to verify: The announcement refers to “SI hyper-scalers” but does not supply a detailed definition or explain the bill’s implementation mechanics; review the bill text before drawing conclusions about specific entities or projects.