Localities hosting data center infrastructure; DHCD to study revenue sharing program.
Impact
The study mandated by HJR64 will analyze various aspects of the economic footprint data centers leave on communities, specifically investigating the amount of tax revenue generated and the benefits offered to data centers in terms of tax incentives. Furthermore, the study aims to assess losses incurred by localities not hosting these centers and to explore policy options for a revenue-sharing framework. As such, the findings are intended to inform legislative proposals that would forge a path for a more equitable distribution of financial resources among local governments affected by the presence of data centers.
Summary
HJR64 is a legislative proposal that seeks to address the taxation and economic impact of data centers on localities within the state. Specifically, it requests the Department of Housing and Community Development to conduct a study focusing on the creation of a revenue-sharing program. This program would aim to compensate localities that are adjacent to those hosting data centers but do not directly benefit from the property tax revenues that these centers generate. The bill highlights the discrepancies in tax revenue recognition between localities hosting the data centers and those that support the infrastructure of these facilities without receiving the associated financial benefits.
Contention
The bill centers around the ongoing discussions about the economic impact of data centers on localities that are indirectly affected by their operations. Proponents of the revenue-sharing model argue that localities hosting essential infrastructure deserve recognition and compensation for their contributions to the operational success of data centers located in other areas. Conversely, opponents may raise concerns about the feasibility of implementing such a program, including potential administrative burdens and the complexities of equitable distribution of funds. Engaging various stakeholders, including locality representatives, will be critical to understanding the full implications of these proposed policies.