Localities hosting data center infrastructure; DHCD to study revenue sharing program.
The bill seeks to explore various aspects of tax revenues generated by data centers, including the potential compensation for localities that suffer economic disadvantages as a result of hosting supportive infrastructure without sharing in the tax benefits. This could lead to more equitable financial arrangements among local governments, particularly in areas where data centers significantly contribute to local economies. Furthermore, the study aims to assess the scope of infrastructure that indirectly benefits data centers and formulate strategies to mitigate any negative economic impacts on those localities not hosting the data centers directly.
HJR64 proposes a study by the Department of Housing and Community Development aimed at creating a revenue sharing program for localities that host data center infrastructure, especially those adjacent to localities hosting actual data centers. The bill acknowledges the significant tax revenues that data centers generate, particularly property taxes, and highlights the financial impact on localities that do not host data centers but are affected by their infrastructure. These adjacent localities may see diminished tax revenues or decreased property values due to the presence of data centers in neighboring areas.
In conclusion, HJR64 is a legislative measure aimed at addressing the financial dynamics surrounding data centers and their impact on localities. By commissioning a study, the bill seeks to gather comprehensive data to inform policy decisions about revenue sharing, ultimately aiming for a more fair distribution of economic benefits from the burgeoning data center industry in the state.
While the bill appears to have the intentions of improving local government finances and addressing disparities, it may face scrutiny regarding the feasibility of a revenue sharing program and the implications it could have for state-level tax revenue collection. Notably, there could be debates around whether such a program might incentivize or discourage data center construction in certain areas based on the potential financial arrangements dictated by this study. Observers may express concerns regarding the administrative burden that implementing such a program could impose on both the state and local governments.