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General Assembly Raised Bill No. 6468
January Session, 2021
LCO No. 3635
Referred to Committee on FINANCE, REVENUE AND
BONDING
Introduced by:
(FIN)
AN ACT CONCERNING IN CENTIVES FOR QUALIFIED DATA
CENTERS TO LOCATE IN THE STATE.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. (NEW) (Effective July 1, 2021) (a) As used in this section: 1
(1) "Colocation tenant" means a person that contracts with the owner 2
or operator of a qualified data center to use or occupy all or part of a 3
qualified data center for a period of at least two years; 4
(2) "Eligible qualified data center costs" means expenditures made on 5
or after July 1, 2021, for the development, acquisition, construction, 6
rehabilitation, renovation, repair or operation of a facility to be used as 7
a qualified data center, including the cost of land, buildings, site 8
improvements, modular data centers, lease payments, site 9
characterization and assessment, engineering services, design services 10
and data center equipment acquisition and permitting related to such 11
data center equipment acquisitions. "Eligible qualified data center costs" 12
does not include expenditures made in connection with real or personal 13
property that is located outside the boundaries of the facility to be used 14 Raised Bill No. 6468
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as a qualified data center; 15
(3) "Enterprise information technology equipment" means: 16
(A) Hardware that support computing, networking or data storage 17
functions, including servers and routers; 18
(B) Networking systems equipment that support computing, 19
networking or data storage functions and have an industry designation 20
as equipment within the enterprise class or data center class of 21
networking systems; and 22
(C) Generators and other equipment used to ensure an uninterrupted 23
power supply for the hardware and networking systems equipment 24
under subparagraph (A) or (B) of this subdivision; 25
(4) "Facility" means one or more contiguous tracts of land in the state 26
and any structure and personal property contained on such land; 27
(5) "Operator" means a person that contracts with the owner of a 28
qualified data center to operate such qualified data center; 29
(6) "Owner" means a person that holds a leasehold estate in excess of 30
fifty years or a fee title to a facility; 31
(7) "Person" means an individual, an estate, a trust, a receiver, a 32
cooperative association, a corporation, a company, a firm, a partnership, 33
a limited partnership, a limited liability company, a limited liability 34
partnership or a joint venture; 35
(8) "Qualified data center" means a facility that is developed, 36
acquired, constructed, rehabilitated, renovated, repaired or operated, to 37
house a group of networked computer servers in one physical location 38
or multiple contiguous locations to centralize the storage, management 39
and dissemination of data and information pertaining to a particular 40
business or classification or body of knowledge; 41
(9) "Qualified data center equipment" means computer equipment, 42 Raised Bill No. 6468
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software and hardware purchased or leased for the processing, storage, 43
retrieval or communication of data, including: 44
(A) Computer servers, routers, connections, chassis, networking 45
equipment, switches, racks, fiber optic and copper cables, trays, 46
conduits and other enabling machinery, equipment and hardware, 47
regardless of whether such personal property is affixed to or 48
incorporated into real property; 49
(B) Equipment used in the operation of computer equipment or 50
software for the benefit of a qualified data center, including component 51
parts, replacement parts and upgrades, regardless of whether the 52
personal property is affixed to or incorporated into real property; 53
(C) Equipment necessary for the transformation, generation, 54
distribution or management of electricity that is required to operate 55
computer servers and related equipment, including substations, 56
generators, uninterruptible energy equipment, supplies, conduits, fuel 57
piping and storage, cabling, duct banks, switches, switchboards, 58
batteries and testing equipment; 59
(D) Equipment necessary to cool and maintain a controlled 60
environment for the operation of computer servers and other equipment 61
of a qualified data center, including chillers, mechanical equipment, 62
refrigerant piping, fuel piping and storage, adiabatic and free cooling 63
systems, cooling towers, water softeners, air handling units, indoor 64
direct exchange units, fans, ducting and filters; 65
(E) Water conservation systems, including equipment designed to 66
collect, conserve and reuse water; 67
(F) Conduit, ducting and fiber optic and copper cables located 68
outside the qualified data center, that are directly related to connecting 69
one or more qualified data center locations; 70
(G) Monitoring equipment and security systems; 71
(H) Modular data centers and preassembled components of any item 72 Raised Bill No. 6468
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described in this subsection, including components used in the 73
manufacturing of modular data centers; and 74
(I) Any other personal property that is essential to the operations of a 75
qualified data center or that is acquired for incorporation into or used 76
or consumed in the operation of the qualified data center; and 77
(10) "Qualified investment" means the aggregate, nonduplicative 78
eligible qualified data center costs expended by an owner, operator and 79
colocation tenant of a qualified data center. 80
(b) Any person that anticipates it will own, operate or be a colocation 81
tenant in a qualified data center in this state may apply to the 82
Commissioner of Economic and Community Development to enter into 83
an agreement in accordance with the provisions of subsection (c) of this 84
section, for exemption from the taxes imposed under chapters 219 and 85
203 of the general statutes as set forth in subsections (d) and (e) of this 86
section. 87
(c) (1) Any person described in subsection (b) of this section that seeks 88
an exemption under subsection (b) of this section shall submit an 89
application to the Commissioner of Economic and Community 90
Development, in a manner and form prescribed by the commissioner. If 91
the commissioner approves such application, the commissioner shall 92
enter into an agreement with such person, provided such person 93
demonstrates to the satisfaction of the commissioner that: 94
(A) The facility to be developed, acquired, constructed, rehabilitated, 95
renovated, repaired or operated will be used as a qualified data center; 96
and 97
(B) The qualified data center will make, on or before the fifth 98
anniversary of the date an agreement entered into pursuant to this 99
section becomes effective, a qualified investment of at least (i) fifty 100
million dollars if such qualified data center is located in an enterprise 101
zone designated pursuant to section 32-70 of the general statutes or a 102
federal qualified opportunity zone designated pursuant to the Tax Cuts 103 Raised Bill No. 6468
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and Jobs Act of 2017, P.L. 115-97, as amended from time to time, or (ii) 104
two hundred million dollars if such qualified data center is not located 105
in an enterprise zone or a federal qualified opportunity zone. 106
(2) Any agreement entered into pursuant to this section shall: 107
(A) Be for a period of twenty years, unless extended under the 108
provisions of subdivision (3) of this subsection, from the date an 109
agreement entered into pursuant to this section becomes effective, 110
which may be in the year in which the construction, rehabilitation, 111
renovation or repair of a qualified data center commences; 112
(B) Include a five-year qualifying period, from the date an agreement 113
entered into pursuant to this section becomes effective, for the 114
applicable qualified investment amount set forth in subparagraph (B) of 115
subdivision (1) of this subsection to be reached; 116
(C) Include the payment of an annual fee by the qualified data center, 117
to be determined annually by the commissioner and not to exceed fifty 118
thousand dollars, for the administrative and operational costs of the 119
Office of Data Infrastructure Administration and Security established 120
under subsection (f) of this section. Such fee shall be paid by the 121
qualified data center to the commissioner during each year of such 122
qualifying period or until the applicable qualified investment amount 123
set forth in subparagraph (B) of subdivision (1) of this subsection is 124
reached, whichever is sooner; 125
(D) Include a detailed description of the capital project that is the 126
subject of the agreement; 127
(E) Provide that the provisions of the agreement may be transferred, 128
within the time period such agreement is effective and for the remaining 129
duration of such time period, to any (i) subsequent owner of the 130
qualified data center, (ii) operator or affiliate of the operator of the 131
qualified data center, or (iii) colocation tenant, provided the facility 132
continues to be used as a qualified data center; and 133 Raised Bill No. 6468
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(F) Include provisions for the assessment and payment of the taxes 134
exempted pursuant to such agreement and the rates or amounts of 135
penalties and interest to be imposed thereon, if the commissioner 136
determines that the requirements of the agreement or of a qualified data 137
center are not being met or have not been met. 138
(3) If a qualified data center makes a qualified investment of at least 139
(A) two hundred million dollars if such qualified data center is located 140
in an enterprise zone designated pursuant to section 32-70 of the general 141
statutes or a federal qualified opportunity zone designated pursuant to 142
the Tax Cuts and Jobs Act of 2017, P.L. 115-97, as amended from time to 143
time, or (B) four hundred million dollars if such qualified data center is 144
not located in an enterprise zone or a federal qualified opportunity zone, 145
the commissioner shall extend to thirty years the period for which an 146
agreement entered into pursuant to this section is effective. 147
(4) Any qualified data center that enters into an agreement pursuant 148
to this section and makes the applicable qualified investment amount 149
set forth in subdivision (3) of this subsection shall be exempt from any 150
financial transactions tax or fee that may be imposed by the state on 151
trades of stocks, bonds, derivatives and other financial products. The 152
exemption under this subdivision shall be effective for a period of thirty 153
years from the date the construction, rehabilitation, renovation or repair 154
of a facility is completed, as determined by the commissioner. The 155
commissioner may incorporate the provisions of this subdivision into 156
the agreement entered into pursuant to this section or amend an existing 157
agreement with a qualified data center to incorporate the provisions of 158
this subdivision. 159
(d) (1) With respect to the exemption from the taxes imposed under 160
chapter 219 of the general statutes, the Commissioner of Economic and 161
Community Development shall notify the Commissioner of Revenue 162
Services of any person that has entered into an agreement pursuant to 163
this section. The Commissioner of Revenue Services shall provide to 164
such person a certificate that exempts such person, and any contractor 165
or subcontractor of such person, from such taxes for (A) the sale of and 166 Raised Bill No. 6468
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the storage, use or other consumption in this state of qualified data 167
center equipment acquired for incorporation into or used and consumed 168
in the development, acquisition, construction, rehabilitation, 169
renovation, repair or operation of a facility that is used or to be used as 170
a qualified data center, (B) the sale of and the acceptance, use or other 171
consumption in this state of any service described under subdivision 172
(37) of subsection (a) of section 12-407 of the general statutes, that is used 173
and consumed in the development, acquisition, construction, 174
rehabilitation, renovation, repair or operation of a facility that is used or 175
to be used as a qualified data center, and (C) all electricity used by a 176
qualified data center. Such person, and any contractor or subcontractor 177
of such person, may use such certificate for the purchase, storage, use or 178
other consumption in this state of qualified data center equipment, 179
services and electricity as set forth in this subsection and each seller of 180
such equipment, services or electricity may rely on such certificate. 181
(2) The certificate provided pursuant to subdivision (1) of this 182
subsection shall, during the time period the agreement is effective, 183
apply to any additional building at a qualified data center to be 184
developed, acquired, constructed, rehabilitated, renovated, repaired or 185
operated, to house a group of networked computer servers, regardless 186
of whether such development, acquisition, construction, rehabilitation, 187
renovation, repair or operation was contemplated at the time of entering 188
into the agreement. 189
(e) (1) With respect to the exemption from the tax imposed under 190
chapter 203 of the general statutes, such exemption shall apply to (A) 191
real property, buildings or structures, located within or at a qualified 192
data center, and (B) enterprise information technology equipment used 193
by a qualified data center. 194
(2) The exemption under this subsection shall, during the time period 195
the agreement is effective with respect to the exemption from the tax 196
imposed under chapter 203 of the general statutes, apply to any 197
additional building at a qualified data center that is developed, 198
acquired, constructed, rehabilitated, renovated, repaired or operated, to 199 Raised Bill No. 6468
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house a group of networked computer servers, and any additional 200
facility acquired for the development, construction, rehabilitation, 201
renovation, repair or operation of a qualified data center, after the date 202
the agreement was entered into, regardless of whether any such 203
development, acquisition, construction, rehabilitation, renovation, 204
repair or operation was contemplated at the time of entering into the 205
agreement. 206
(3) The Commissioner of Economic and Community Development 207
shall notify each municipality in which such facility is located of any 208
agreement entered into pursuant to this section and shall provide the 209
identity of the person with which the commissioner has entered into 210
such agreement, the date such agreement is effective and the terms of 211
the agreement with respect to the exemption from the tax imposed 212
under chapter 203 of the general statutes. 213
(4) No developer or owner shall commence construction, 214
rehabilitation, renovation or repair of a facility that will be a qualified 215
data center unless such owner has entered into a negotiated host 216
municipality fee agreement with the municipality in which such facility 217
is located. If a facility is located in contiguous municipalities, such 218
owner shall enter into a negotiated host municipality fee agreement 219
with each such municipality. 220
(f) There is established an Office of Data Infrastructure 221
Administration and Security within the Department of Economic and 222
Community Development. The office shall (1) serve as the liaison 223
between applicants and qualified data centers and other state agencies, 224
(2) provide assistance to applicants and qualified data centers from the 225
preapplication phase to the post-operational stage, and (3) seek to 226
ensure coordinated, efficient and timely responses to applicants and 227
qualified data centers. 228
(g) The Commissioner of Economic and Community Development 229
shall notify the Commissioner of Revenue Services of any taxes imposed 230
under chapter 219 of the general statutes that become due and owing 231 Raised Bill No. 6468
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due to the requirements of an agreement entered into pursuant to this 232
section or of a qualified data center not being met. The amount of any 233
such tax, penalty or interest due and unpaid may be collected under the 234
provisions of section 12-35 of the general statutes. The warrant provided 235
under section 12-35 of the general statutes shall be signed by the 236
Commissioner of Revenue Services or the commissioner's authorized 237
agent. The amount of any such tax, penalty or interest shall be a lien on 238
the real estate of the qualified data center from the last day of the month 239
next preceding the due date of such tax until such tax is paid. The 240
Commissioner of Revenue Services may record such lien in the records 241
of any municipality in which the real estate of such qualified data center 242
is located but no such lien shall be enforceable against a bona fide 243
purchaser or qualified encumbrancer of such real estate. When any tax 244
with respect to which a lien has been recorded under the provisions of 245
this subsection has been satisfied, the commissioner shall, upon request 246
of any interested party, issue a certificate discharging such lien, which 247
certificate shall be recorded in the same office in which the lien was 248
recorded. Any action for the foreclosure of such lien shall be brought by 249
the Attorney General in the name of the state in the superior court for 250
the judicial district in which the real estate subject to such lien is located, 251
or, if such property is located in two or more judicial districts, in the 252
superior court for any one such judicial district, and the court may limit 253
the time for redemption or order the sale of such real estate or make 254
such other or further decree as it judges equitable.255
This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2021 New section
Statement of Purpose:
To provide certain tax exemptions to incentivize qualified data centers
to locate in the state.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
underlined.]