II
119th CONGRESS
2d Session
S. 5689
IN THE SENATE OF THE UNITED STATES
October 15, 2026
Mr. Moreno, under authority of the order of the Senate of September 30, 2026, introduced the following bill; which was ordered read twice and referred to the Committee on Finance
A BILL
To prohibit Federal and State incentives for the development or commercial operations of data centers.
Short title
This Act may be cited as the Recapturing Excessive Corporate Largesse through Accountability and Incentive Measures Act
or the RECLAIM Act
.
Prohibition on incentives for covered data centers
No Federal incentives
A covered data center (as defined in section 5000E(b) of the Internal Revenue Code of 1986, as added by subsection (b)) shall not be eligible for any Federal grant, loan, loan guarantee, cooperative agreement, tax credit or deduction, exclusion, exemption, abatement, or other form of Federal financial assistance or tax incentive for the development or commercial operations of such covered data center.
Excise tax on prohibited state and local incentives
In general
Subtitle D of the Internal Revenue Code of 1986 is amended by adding at the end the following new chapter:
Prohibited state and local incentives for data centers
Sec. 5000E. Prohibited state and local incentives for data centers.
Prohibited state and local incentives for data centers
In general
In the case of any covered data center, there is imposed a tax in an amount equal to 100 percent of the amount of any prohibited State or local incentive received by the data center operator during the taxable year with respect to such data center.
Definitions
In this section—
Artificial intelligence
The term artificial intelligence has the meaning given such term in section 5002 of the National Artificial Intelligence Initiative Act of 2020 (15 U.S.C. 9401).
Covered data center
In general
Subject to subparagraph (B), the term covered data center means any facility or integrated campus of facilities—
that has or is designed to have a contracted peak power demand of not less than 100 megawatts, and
within which not less than 50 percent of the installed compute accelerators are AI accelerator chips attributed to artificial intelligence training, fine-tuning, or inference.
Regulations
In general
Not later than 1 year after the date of enactment of this section, the Secretary (in conjunction with the Secretary of Commerce) shall promulgate regulations that define the term AI accelerator chip for purposes of subparagraph (A)(ii).
Required considerations
In promulgating the regulations required under clause (i), the Secretary (in conjunction with the Secretary of Commerce) shall consider whether the definition of the term AI accelerator chip
should include graphics processing units, tensor processing units, application-specific integrated circuits, and other semiconductor devices designed primarily for artificial intelligence training or inference.
Adjustments
The Secretary (in conjunction with the Secretary of Commerce) may promulgate regulations—
adjusting the thresholds described in clauses (i) and (ii) of subparagraph (A) for high-density facilities optimized for artificial intelligence, and
excluding de minimis computing sites sitting on the edge of those thresholds.
Data center operator
The term data center operator means the person that enjoys the economic benefits from, and bears a majority of the economic burdens related to, ownership of the covered data center.
Prohibited State or local incentive
The term prohibited State or local incentive means any State or local grant, loan, loan guarantee, cooperative agreement, tax credit or deduction, exclusion, exemption, abatement, or other form of State or local financial assistance or tax incentive for the development or commercial operations of a covered data center.
Regulations and guidance
Not later than the date that is 12 months after the date of enactment of this section, the Secretary shall issue such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section, including any regulations or guidance for purposes of—
determining the value of any prohibited State or local incentive,
coordinating the tax imposed under subsection (a) with any other relevant Federal tax liability associated with a covered data center, including rules to prevent double taxation or double counting with respect to any prohibited State or local incentive, and
the timing of recognition of a prohibited State or local incentive as received, including rules addressing incentives received in installments or contingent on future performance.
.
Clerical amendment
The table of chapters for subtitle D of the Internal Revenue Code of 1986 is amended by inserting after the item relating to chapter 50A the following new item:
Chapter 50B—Prohibited state and local incentives for data centers
.
Sense of Congress
It is the sense of Congress that States and political subdivisions thereof should promptly repeal or reform any tax incentive programs that are specific to data centers in order to restore tax neutrality, protect public revenues, and eliminate distortions in business location decisions that disadvantage domestic manufacturing and other job-creating investments.
Effective dates
The provisions of this section, and any amendment to the Internal Revenue Code of 1986 made by this section, shall take effect on the day after the date on which final regulations are issued by the Secretary pursuant to section 5000E(c) of the Internal Revenue Code of 1986 (as added by subsection (b)).
Severability
If any provision of this Act or amendment made by this Act or the application of such provision or amendment to any person or circumstance is held to be unconstitutional, the remainder of this Act and the amendments made by this Act, and the application of the provision or amendment to any other person or circumstance, shall not be affected.