Sec 41-1519. Computer data center tax relief; definitions

A. From and after August 31, 2013, tax relief is allowed for the owner or operator of a computer data center certified pursuant to this section. The same tax relief is allowed for qualified colocation tenants of the computer data center. All tax relief applies during the qualification period.

B. To qualify for the tax relief, the owner or operator shall submit to the authority a form prescribed by the authority that includes all of the following:

1. The owner's or operator's name, address and telephone number.

2. The address of the site where the facility is or will be located, including, if applicable, information sufficient to identify the specific portion or portions of the facility composing the computer data center.

3. If the computer data center is to qualify under subsection E, paragraph 1 of this section, both of the following:

(a) The anticipated investment associated with the computer data center for which the tax relief is being sought and whether the computer data center is anticipated to qualify as a sustainable redevelopment project.

(b) An affirmation, signed by an authorized executive representing the owner or operator, that the computer data center is expected to satisfy one of the certification requirements prescribed in subsection E, paragraph 1 of this section and that the computer data center will not violate subsection L of this section.

4. If the computer data center is to qualify under subsection E, paragraph 2 of this section, an affirmation, signed by an authorized executive representing the owner or operator, that the computer data center has satisfied the certification requirements prescribed in subsection E, paragraph 2 of this section, whether the computer data center qualifies as a sustainable redevelopment project and that the computer data center will not violate subsection L of this section.

C. Within sixty days after receiving a complete and correct form, the authority shall review the form and either issue a written certification that the computer data center qualifies for the tax relief or provide written reasons for its denial. Failure to approve or deny the form within sixty days after the date the owner or operator submits the form to the authority constitutes certification of the computer data center, and the authority shall issue written certification to the owner or operator within fourteen days. The authority shall send a copy of the certification to the department of revenue. The authority shall not certify any new computer data center after December 31, 2023.

D. An owner or operator may separate a facility into one or more computer data centers, which may each receive a separate certification if each computer data center individually meets the requirements prescribed in subsection E of this section. A portion of a facility or an article of computer data equipment shall not be deemed to be a part of more than one computer data center. The owner or operator may aggregate one or more of the parcels, buildings, condominiums or modular data centers in a facility into a single computer data center if, in the aggregate, the parcels, buildings, condominiums and modular data centers meet the requirements of subsection E of this section.

E. A computer data center must meet one of the following requirements after taking into account the combined investments made by the owner, operator or qualified colocation tenants of a computer data center:

1. On or before the fifth anniversary of certification, the computer data center creates a minimum investment of at least:

(a) Twenty-five million dollars of new investment, including costs of land, buildings, modular data centers and computer data center equipment, if the computer data center is located in a county with a population of eight hundred thousand or less persons.

(b) Fifty million dollars of new investment, including costs of land, buildings, modular data centers and computer data center equipment, if the computer data center is located in a county with a population of more than eight hundred thousand persons.

2. During the seventy-two months immediately before September 1, 2013, the computer data center created an investment of at least two hundred fifty million dollars, including costs of land, buildings, modular data centers and computer data center equipment.

F. On or before the fifth anniversary of the certification of a new computer data center, the owner or operator shall notify the authority in writing that the computer data center for which the certification is requested has or has not satisfied the requirements prescribed in subsection E, paragraph 1 of this section. Until a new computer data center satisfies the requirements prescribed in subsection E, paragraph 1 of this section, the owner or operator shall keep detailed records of all investment created by the new computer data center, including costs of land, buildings, modular data centers and computer data center equipment, and all tax relief directly received by the owner or operator. This subsection and subsection G of this section do not apply to an existing computer data center.

G. If the department of revenue determines that the requirements of subsection E, paragraph 1 of this section have not been satisfied or that there has been a violation of subsection L of this section, the department may revoke the certification of a new computer data center and the owner or operator may appeal the revocation pursuant to title 42, chapter 1, article 6. If certification is revoked pursuant to this subsection, the qualification period of any owner, operator or qualified colocation tenant of the new computer data center expires and the department may recapture from the owner or operator all or part of the tax relief provided directly to the owner or operator. The department may give special consideration or allow a temporary exemption from recapture of the tax relief if there is extraordinary hardship due to factors beyond the control of the owner or operator. The department may require the owner or operator to file appropriate amended tax returns to reflect any recapture of the tax relief.

H. The authority and the department of revenue shall adopt rules and prescribe forms and procedures as necessary for the purposes of this section. The authority and the department shall collaborate in adopting rules as necessary to avoid duplication and inconsistencies while accomplishing the purposes of this section.

I. Proprietary business information contained in the form described in subsection B of this section and the written notice described in subsection F of this section are confidential and shall not be disclosed to the public except that the information shall be transmitted to the department of revenue. The authority or the department may disclose the name of a computer data center that has been certified pursuant to this section.

J. The owner or operator shall provide the authority and the department of revenue with a list of qualified colocation tenants, including the commencement and expiration dates of each qualified colocation tenant's agreement to use or occupy all or part of the computer data center, and shall notify the authority and the department within thirty days after any changes to the list.

K. Except as provided in subsection G of this section, on certification, the computer data center remains certified regardless of a future transfer, sale or disposition, directly or indirectly, of the computer data center.

L. This section does not allow a computer data center to do either of the following:

1. Generate electricity for resale purposes.

2. Generate, provide or sell electricity outside of the computer data center.

M. The owner or operator may include single entities or affiliated entities.

N. For the purposes of this section:

1. "Computer data center" means all or part of a facility that may be composed of multiple businesses or owners, that is or will be predominantly used to house working servers and that may have uninterruptible energy supply or generator backup power, or both, cooling systems, towers and other temperature control infrastructure.

2. "Computer data center equipment" means equipment that is used to outfit, operate or benefit a computer data center and component parts, installations, refreshments, replacements and upgrades to this equipment, whether any of the property is affixed to or incorporated into real property, including:

(a) All equipment necessary for the transformation, generation, distribution or management of electricity that is required to operate computer server equipment, including generators, uninterruptible energy, supplies, conduit, gaseous fuel piping, cabling, duct banks, switches, switchboards, batteries and testing equipment.

(b) All equipment necessary to cool and maintain a controlled environment for the operation of the computer server and other components of the computer data center, including mechanical equipment, refrigerant piping, gaseous fuel piping, adiabatic and free cooling systems, cooling towers, water softeners, air handling units, indoor direct exchange units, fans, ducting and filters.

(c) All water conservation systems, including facilities or mechanisms that are designed to collect, conserve and reuse water.

(d) All enabling software, computer server equipment, chassis, networking equipment, switches, racks, cabling, trays and conduit.

(e) All monitoring equipment and security systems.

(f) Modular data centers and preassembled components of any item described in this paragraph, including components used in the manufacturing of modular data centers.

(g) Other tangible personal property that is essential to the operations of a computer data center.

3. "Existing computer data center" means a computer data center that is certified under subsection E, paragraph 2 of this section.

4. "Facility" means one or more parcels of land in this state and any structures and personal property contained on the land.

5. "Modular data center" means a portable system of information technology, climate control, energy supply and energy distribution machinery, equipment and related tangible personal property contained in an intermodal freight container or similar structure.

6. "New computer data center" means a computer data center that is certified under subsection E, paragraph 1 of this section.

7. "Qualification period" means:

(a) With respect to the owner or operator of a computer data center, a period of time beginning on the date of certification of the computer data center and expiring at the end of the tenth full calendar year following the calendar year in which the owner or operator filed the form for certification, except, if a computer data center is a sustainable redevelopment project, qualification period means a period of time beginning on the date of certification of the computer data center and expiring at the end of the twentieth full calendar year following the calendar year in which the owner or operator filed the form for certification.

(b) With respect to the qualified colocation tenant of the owner or operator of a computer data center certified under this section, a period of time beginning on the date that the qualified colocation tenant enters into an agreement concerning the use or occupancy of the computer data center and expiring at the earlier of the expiration of the term of this agreement or the tenth full calendar year following the calendar year in which the qualified colocation tenant enters into this agreement, except, if a computer data center is a sustainable redevelopment project, qualification period means a period of time beginning on the date that the qualified colocation tenant enters into an agreement concerning the use or occupancy of the computer data center and expiring at the earlier of the expiration of the term of this agreement or the twentieth full calendar year following the calendar year in which the tenant enters into this agreement.

8. "Qualified colocation tenant" means an entity that contracts with the owner or operator of a computer data center that is certified pursuant to this section to use or occupy all or part of the computer data center for at least five hundred kilowatts per month for a period of two or more years.

9. "Sustainable redevelopment project" means a computer data center that satisfies the requirements in subsection E of this section and that occupies or will occupy the structural improvements at an existing facility that either:

(a) Was at least fifty per cent vacant for six of the twelve months before the acquisition by purchase or lease of or with respect to the facility.

(b) Attains certification under the energy star or green globes standard, the leadership in energy and environmental design green building rating standard developed by the United States green building council or an equivalent green building standard and was not previously certified under these standards.

10. "Tax relief" means the deduction of the gross proceeds of sale or gross income from the sale of qualified equipment as prescribed by section 42-5061, 42-5159 or 42-6004 that is installed in a computer data center.