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Connecticut House Bill HB06468

Connecticut 2021 Regular Session

Connecticut House Bill HB06468 Compare Versions

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77 General Assembly Raised Bill No. 6468
88 January Session, 2021
99 LCO No. 3635
1010
1111
1212 Referred to Committee on FINANCE, REVENUE AND
1313 BONDING
1414
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1616 Introduced by:
1717 (FIN)
1818
1919
2020
2121
2222 AN ACT CONCERNING IN CENTIVES FOR QUALIFIED DATA
2323 CENTERS TO LOCATE IN THE STATE.
2424 Be it enacted by the Senate and House of Representatives in General
2525 Assembly convened:
2626
2727 Section 1. (NEW) (Effective July 1, 2021) (a) As used in this section: 1
2828 (1) "Colocation tenant" means a person that contracts with the owner 2
2929 or operator of a qualified data center to use or occupy all or part of a 3
3030 qualified data center for a period of at least two years; 4
3131 (2) "Eligible qualified data center costs" means expenditures made on 5
3232 or after July 1, 2021, for the development, acquisition, construction, 6
3333 rehabilitation, renovation, repair or operation of a facility to be used as 7
3434 a qualified data center, including the cost of land, buildings, site 8
3535 improvements, modular data centers, lease payments, site 9
3636 characterization and assessment, engineering services, design services 10
3737 and data center equipment acquisition and permitting related to such 11
3838 data center equipment acquisitions. "Eligible qualified data center costs" 12
3939 does not include expenditures made in connection with real or personal 13
4040 property that is located outside the boundaries of the facility to be used 14 Raised Bill No. 6468
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4646 as a qualified data center; 15
4747 (3) "Enterprise information technology equipment" means: 16
4848 (A) Hardware that support computing, networking or data storage 17
4949 functions, including servers and routers; 18
5050 (B) Networking systems equipment that support computing, 19
5151 networking or data storage functions and have an industry designation 20
5252 as equipment within the enterprise class or data center class of 21
5353 networking systems; and 22
5454 (C) Generators and other equipment used to ensure an uninterrupted 23
5555 power supply for the hardware and networking systems equipment 24
5656 under subparagraph (A) or (B) of this subdivision; 25
5757 (4) "Facility" means one or more contiguous tracts of land in the state 26
5858 and any structure and personal property contained on such land; 27
5959 (5) "Operator" means a person that contracts with the owner of a 28
6060 qualified data center to operate such qualified data center; 29
6161 (6) "Owner" means a person that holds a leasehold estate in excess of 30
6262 fifty years or a fee title to a facility; 31
6363 (7) "Person" means an individual, an estate, a trust, a receiver, a 32
6464 cooperative association, a corporation, a company, a firm, a partnership, 33
6565 a limited partnership, a limited liability company, a limited liability 34
6666 partnership or a joint venture; 35
6767 (8) "Qualified data center" means a facility that is developed, 36
6868 acquired, constructed, rehabilitated, renovated, repaired or operated, to 37
6969 house a group of networked computer servers in one physical location 38
7070 or multiple contiguous locations to centralize the storage, management 39
7171 and dissemination of data and information pertaining to a particular 40
7272 business or classification or body of knowledge; 41
7373 (9) "Qualified data center equipment" means computer equipment, 42 Raised Bill No. 6468
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7979 software and hardware purchased or leased for the processing, storage, 43
8080 retrieval or communication of data, including: 44
8181 (A) Computer servers, routers, connections, chassis, networking 45
8282 equipment, switches, racks, fiber optic and copper cables, trays, 46
8383 conduits and other enabling machinery, equipment and hardware, 47
8484 regardless of whether such personal property is affixed to or 48
8585 incorporated into real property; 49
8686 (B) Equipment used in the operation of computer equipment or 50
8787 software for the benefit of a qualified data center, including component 51
8888 parts, replacement parts and upgrades, regardless of whether the 52
8989 personal property is affixed to or incorporated into real property; 53
9090 (C) Equipment necessary for the transformation, generation, 54
9191 distribution or management of electricity that is required to operate 55
9292 computer servers and related equipment, including substations, 56
9393 generators, uninterruptible energy equipment, supplies, conduits, fuel 57
9494 piping and storage, cabling, duct banks, switches, switchboards, 58
9595 batteries and testing equipment; 59
9696 (D) Equipment necessary to cool and maintain a controlled 60
9797 environment for the operation of computer servers and other equipment 61
9898 of a qualified data center, including chillers, mechanical equipment, 62
9999 refrigerant piping, fuel piping and storage, adiabatic and free cooling 63
100100 systems, cooling towers, water softeners, air handling units, indoor 64
101101 direct exchange units, fans, ducting and filters; 65
102102 (E) Water conservation systems, including equipment designed to 66
103103 collect, conserve and reuse water; 67
104104 (F) Conduit, ducting and fiber optic and copper cables located 68
105105 outside the qualified data center, that are directly related to connecting 69
106106 one or more qualified data center locations; 70
107107 (G) Monitoring equipment and security systems; 71
108108 (H) Modular data centers and preassembled components of any item 72 Raised Bill No. 6468
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114114 described in this subsection, including components used in the 73
115115 manufacturing of modular data centers; and 74
116116 (I) Any other personal property that is essential to the operations of a 75
117117 qualified data center or that is acquired for incorporation into or used 76
118118 or consumed in the operation of the qualified data center; and 77
119119 (10) "Qualified investment" means the aggregate, nonduplicative 78
120120 eligible qualified data center costs expended by an owner, operator and 79
121121 colocation tenant of a qualified data center. 80
122122 (b) Any person that anticipates it will own, operate or be a colocation 81
123123 tenant in a qualified data center in this state may apply to the 82
124124 Commissioner of Economic and Community Development to enter into 83
125125 an agreement in accordance with the provisions of subsection (c) of this 84
126126 section, for exemption from the taxes imposed under chapters 219 and 85
127127 203 of the general statutes as set forth in subsections (d) and (e) of this 86
128128 section. 87
129129 (c) (1) Any person described in subsection (b) of this section that seeks 88
130130 an exemption under subsection (b) of this section shall submit an 89
131131 application to the Commissioner of Economic and Community 90
132132 Development, in a manner and form prescribed by the commissioner. If 91
133133 the commissioner approves such application, the commissioner shall 92
134134 enter into an agreement with such person, provided such person 93
135135 demonstrates to the satisfaction of the commissioner that: 94
136136 (A) The facility to be developed, acquired, constructed, rehabilitated, 95
137137 renovated, repaired or operated will be used as a qualified data center; 96
138138 and 97
139139 (B) The qualified data center will make, on or before the fifth 98
140140 anniversary of the date an agreement entered into pursuant to this 99
141141 section becomes effective, a qualified investment of at least (i) fifty 100
142142 million dollars if such qualified data center is located in an enterprise 101
143143 zone designated pursuant to section 32-70 of the general statutes or a 102
144144 federal qualified opportunity zone designated pursuant to the Tax Cuts 103 Raised Bill No. 6468
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150150 and Jobs Act of 2017, P.L. 115-97, as amended from time to time, or (ii) 104
151151 two hundred million dollars if such qualified data center is not located 105
152152 in an enterprise zone or a federal qualified opportunity zone. 106
153153 (2) Any agreement entered into pursuant to this section shall: 107
154154 (A) Be for a period of twenty years, unless extended under the 108
155155 provisions of subdivision (3) of this subsection, from the date an 109
156156 agreement entered into pursuant to this section becomes effective, 110
157157 which may be in the year in which the construction, rehabilitation, 111
158158 renovation or repair of a qualified data center commences; 112
159159 (B) Include a five-year qualifying period, from the date an agreement 113
160160 entered into pursuant to this section becomes effective, for the 114
161161 applicable qualified investment amount set forth in subparagraph (B) of 115
162162 subdivision (1) of this subsection to be reached; 116
163163 (C) Include the payment of an annual fee by the qualified data center, 117
164164 to be determined annually by the commissioner and not to exceed fifty 118
165165 thousand dollars, for the administrative and operational costs of the 119
166166 Office of Data Infrastructure Administration and Security established 120
167167 under subsection (f) of this section. Such fee shall be paid by the 121
168168 qualified data center to the commissioner during each year of such 122
169169 qualifying period or until the applicable qualified investment amount 123
170170 set forth in subparagraph (B) of subdivision (1) of this subsection is 124
171171 reached, whichever is sooner; 125
172172 (D) Include a detailed description of the capital project that is the 126
173173 subject of the agreement; 127
174174 (E) Provide that the provisions of the agreement may be transferred, 128
175175 within the time period such agreement is effective and for the remaining 129
176176 duration of such time period, to any (i) subsequent owner of the 130
177177 qualified data center, (ii) operator or affiliate of the operator of the 131
178178 qualified data center, or (iii) colocation tenant, provided the facility 132
179179 continues to be used as a qualified data center; and 133 Raised Bill No. 6468
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185185 (F) Include provisions for the assessment and payment of the taxes 134
186186 exempted pursuant to such agreement and the rates or amounts of 135
187187 penalties and interest to be imposed thereon, if the commissioner 136
188188 determines that the requirements of the agreement or of a qualified data 137
189189 center are not being met or have not been met. 138
190190 (3) If a qualified data center makes a qualified investment of at least 139
191191 (A) two hundred million dollars if such qualified data center is located 140
192192 in an enterprise zone designated pursuant to section 32-70 of the general 141
193193 statutes or a federal qualified opportunity zone designated pursuant to 142
194194 the Tax Cuts and Jobs Act of 2017, P.L. 115-97, as amended from time to 143
195195 time, or (B) four hundred million dollars if such qualified data center is 144
196196 not located in an enterprise zone or a federal qualified opportunity zone, 145
197197 the commissioner shall extend to thirty years the period for which an 146
198198 agreement entered into pursuant to this section is effective. 147
199199 (4) Any qualified data center that enters into an agreement pursuant 148
200200 to this section and makes the applicable qualified investment amount 149
201201 set forth in subdivision (3) of this subsection shall be exempt from any 150
202202 financial transactions tax or fee that may be imposed by the state on 151
203203 trades of stocks, bonds, derivatives and other financial products. The 152
204204 exemption under this subdivision shall be effective for a period of thirty 153
205205 years from the date the construction, rehabilitation, renovation or repair 154
206206 of a facility is completed, as determined by the commissioner. The 155
207207 commissioner may incorporate the provisions of this subdivision into 156
208208 the agreement entered into pursuant to this section or amend an existing 157
209209 agreement with a qualified data center to incorporate the provisions of 158
210210 this subdivision. 159
211211 (d) (1) With respect to the exemption from the taxes imposed under 160
212212 chapter 219 of the general statutes, the Commissioner of Economic and 161
213213 Community Development shall notify the Commissioner of Revenue 162
214214 Services of any person that has entered into an agreement pursuant to 163
215215 this section. The Commissioner of Revenue Services shall provide to 164
216216 such person a certificate that exempts such person, and any contractor 165
217217 or subcontractor of such person, from such taxes for (A) the sale of and 166 Raised Bill No. 6468
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223223 the storage, use or other consumption in this state of qualified data 167
224224 center equipment acquired for incorporation into or used and consumed 168
225225 in the development, acquisition, construction, rehabilitation, 169
226226 renovation, repair or operation of a facility that is used or to be used as 170
227227 a qualified data center, (B) the sale of and the acceptance, use or other 171
228228 consumption in this state of any service described under subdivision 172
229229 (37) of subsection (a) of section 12-407 of the general statutes, that is used 173
230230 and consumed in the development, acquisition, construction, 174
231231 rehabilitation, renovation, repair or operation of a facility that is used or 175
232232 to be used as a qualified data center, and (C) all electricity used by a 176
233233 qualified data center. Such person, and any contractor or subcontractor 177
234234 of such person, may use such certificate for the purchase, storage, use or 178
235235 other consumption in this state of qualified data center equipment, 179
236236 services and electricity as set forth in this subsection and each seller of 180
237237 such equipment, services or electricity may rely on such certificate. 181
238238 (2) The certificate provided pursuant to subdivision (1) of this 182
239239 subsection shall, during the time period the agreement is effective, 183
240240 apply to any additional building at a qualified data center to be 184
241241 developed, acquired, constructed, rehabilitated, renovated, repaired or 185
242242 operated, to house a group of networked computer servers, regardless 186
243243 of whether such development, acquisition, construction, rehabilitation, 187
244244 renovation, repair or operation was contemplated at the time of entering 188
245245 into the agreement. 189
246246 (e) (1) With respect to the exemption from the tax imposed under 190
247247 chapter 203 of the general statutes, such exemption shall apply to (A) 191
248248 real property, buildings or structures, located within or at a qualified 192
249249 data center, and (B) enterprise information technology equipment used 193
250250 by a qualified data center. 194
251251 (2) The exemption under this subsection shall, during the time period 195
252252 the agreement is effective with respect to the exemption from the tax 196
253253 imposed under chapter 203 of the general statutes, apply to any 197
254254 additional building at a qualified data center that is developed, 198
255255 acquired, constructed, rehabilitated, renovated, repaired or operated, to 199 Raised Bill No. 6468
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261261 house a group of networked computer servers, and any additional 200
262262 facility acquired for the development, construction, rehabilitation, 201
263263 renovation, repair or operation of a qualified data center, after the date 202
264264 the agreement was entered into, regardless of whether any such 203
265265 development, acquisition, construction, rehabilitation, renovation, 204
266266 repair or operation was contemplated at the time of entering into the 205
267267 agreement. 206
268268 (3) The Commissioner of Economic and Community Development 207
269269 shall notify each municipality in which such facility is located of any 208
270270 agreement entered into pursuant to this section and shall provide the 209
271271 identity of the person with which the commissioner has entered into 210
272272 such agreement, the date such agreement is effective and the terms of 211
273273 the agreement with respect to the exemption from the tax imposed 212
274274 under chapter 203 of the general statutes. 213
275275 (4) No developer or owner shall commence construction, 214
276276 rehabilitation, renovation or repair of a facility that will be a qualified 215
277277 data center unless such owner has entered into a negotiated host 216
278278 municipality fee agreement with the municipality in which such facility 217
279279 is located. If a facility is located in contiguous municipalities, such 218
280280 owner shall enter into a negotiated host municipality fee agreement 219
281281 with each such municipality. 220
282282 (f) There is established an Office of Data Infrastructure 221
283283 Administration and Security within the Department of Economic and 222
284284 Community Development. The office shall (1) serve as the liaison 223
285285 between applicants and qualified data centers and other state agencies, 224
286286 (2) provide assistance to applicants and qualified data centers from the 225
287287 preapplication phase to the post-operational stage, and (3) seek to 226
288288 ensure coordinated, efficient and timely responses to applicants and 227
289289 qualified data centers. 228
290290 (g) The Commissioner of Economic and Community Development 229
291291 shall notify the Commissioner of Revenue Services of any taxes imposed 230
292292 under chapter 219 of the general statutes that become due and owing 231 Raised Bill No. 6468
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298298 due to the requirements of an agreement entered into pursuant to this 232
299299 section or of a qualified data center not being met. The amount of any 233
300300 such tax, penalty or interest due and unpaid may be collected under the 234
301301 provisions of section 12-35 of the general statutes. The warrant provided 235
302302 under section 12-35 of the general statutes shall be signed by the 236
303303 Commissioner of Revenue Services or the commissioner's authorized 237
304304 agent. The amount of any such tax, penalty or interest shall be a lien on 238
305305 the real estate of the qualified data center from the last day of the month 239
306306 next preceding the due date of such tax until such tax is paid. The 240
307307 Commissioner of Revenue Services may record such lien in the records 241
308308 of any municipality in which the real estate of such qualified data center 242
309309 is located but no such lien shall be enforceable against a bona fide 243
310310 purchaser or qualified encumbrancer of such real estate. When any tax 244
311311 with respect to which a lien has been recorded under the provisions of 245
312312 this subsection has been satisfied, the commissioner shall, upon request 246
313313 of any interested party, issue a certificate discharging such lien, which 247
314314 certificate shall be recorded in the same office in which the lien was 248
315315 recorded. Any action for the foreclosure of such lien shall be brought by 249
316316 the Attorney General in the name of the state in the superior court for 250
317317 the judicial district in which the real estate subject to such lien is located, 251
318318 or, if such property is located in two or more judicial districts, in the 252
319319 superior court for any one such judicial district, and the court may limit 253
320320 the time for redemption or order the sale of such real estate or make 254
321321 such other or further decree as it judges equitable.255
322322 This act shall take effect as follows and shall amend the following
323323 sections:
324324
325325 Section 1 July 1, 2021 New section
326326
327327 Statement of Purpose:
328328 To provide certain tax exemptions to incentivize qualified data centers
329329 to locate in the state.
330330 [Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
331331 that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
332332 underlined.]
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