Scott Vetoes Data Center Bill, Citing Existing Regulatory Authority

His letter tells legislators that Vermont law “already provides substantial regulatory authority to prevent harmful impacts."

Governor Phil Scott on Thursday returned H.727, “An act relating to sustainable data center deployment,” to the General Assembly without his signature, the Office of the Governor announced. Scott acted under Chapter II, Section 11 of the Vermont Constitution.

In a letter to the Legislature, Scott wrote that he shares “some concerns Vermonters have about data centers” and that he is “mindful of the challenges they have created in other states.” He wrote that existing Vermont law “already provides substantial regulatory authority to prevent harmful impacts,” citing the Act 250 process, Public Utility Commission oversight, environmental permitting requirements, energy siting rules, and municipal zoning. Those frameworks, Scott wrote, “already provide extensive review and enforcement tools.”

“The last thing Vermont should do is worsen our economic challenges by adding new and unnecessary regulatory systems,” Scott wrote.

Scott wrote that the bill’s reach extends beyond data centers. “Although the bill is seemingly aimed at data centers, its broader message extends far beyond those facilities and into areas Vermont depends on for many of its best jobs,” he wrote, naming “advanced manufacturing, semiconductor manufacturing, energy and clean technology, and other innovation-driven industries that also require substantial energy and infrastructure.”

He wrote that the bill “creates an unacceptable precedent which will have much broader consequences for economic opportunity and long-term competitiveness in Vermont” and that Vermont “cannot afford policies that risk driving current or future jobs and investment to other states, when we already have regulations and policies in place to address our concerns about data centers.”

Scott proposed a path forward in the same letter. “If the Legislature wishes to pass a data center bill,” he wrote, “it should start with a bill that more closely resembles the House passed version of H.727, with additional and substantial changes made to prevent unintended economic consequences in other important sectors of Vermont’s economy.”

The Office of the Governor identified the contact for the announcement as Press Secretary Amanda Wheeler. The full veto letter and the bill’s legislative status page are linked from the announcement.