HF 1431

as introduced - 88th Legislature (2013 - 2014) Posted on 03/11/2013 02:41pm

A bill for an act
relating to taxation; sales and use; providing tax exemption for qualified data
centers; amending Minnesota Statutes 2012, section 297A.68, subdivision 42.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2012, section 297A.68, subdivision 42, is amended to
read:

Subd. 42.

Qualified data centers.

(a) Purchases of enterprise information
technology equipment and computer software for use in a qualified data center are exempt.
The tax on purchases exempt under this paragraph must be imposed and collected as if the
rate under section 297A.62, subdivision 1, applied, and then refunded after June 30, 2013,
in the manner provided in section 297A.75. This exemption includes enterprise information
technology equipment and computer software purchased to replace or upgrade enterprise
information technology equipment and computer software in a qualified data center.

(b) Electricity used or consumed in the operation of a qualified data center is exempt.

(c) For purposes of this subdivision, "qualified data center" means a facility in
Minnesota:

(1) that is comprised of one or more buildings that consist in the aggregate of at least
deleted text begin 30,000 deleted text end new text begin 25,000 new text end square feet, and that are located on a single parcel or on contiguous parcels,
where the total cost of construction or refurbishment, investment in enterprise information
technology equipment, and computer software is at least deleted text begin $50,000,000 deleted text end new text begin $20,000,000 new text end within
a deleted text begin 24-month deleted text end new text begin 48-month new text end period;

(2) that is constructed or substantially refurbished after June 30, 2012, where
"substantially refurbished" means that at least deleted text begin 30,000 deleted text end new text begin 25,000 new text end square feet have been rebuilt
or modified deleted text begin ; and deleted text end new text begin , including:
new text end

new text begin (i) installation of enterprise information technology equipment, computer software,
environmental control, and energy efficiency improvements; and
new text end

new text begin (ii) building improvements; and
new text end

(3) that is used to house enterprise information technology equipment, where the
facility has the following characteristics:

(i) uninterruptible power supplies, generator backup power, or both;

(ii) sophisticated fire suppression and prevention systems; and

(iii) enhanced security. A facility will be considered to have enhanced security if it
has restricted access to the facility to selected personnel; permanent security guards; video
camera surveillance; an electronic system requiring pass codes, keycards, or biometric
scans, such as hand scans and retinal or fingerprint recognition; or similar security features.

In determining whether the facility has the required square footage, the square
footage of the following spaces shall be included if the spaces support the operation of
enterprise information technology equipment: office space, meeting space, and mechanical
and other support facilities. new text begin For purposes of this subdivision, "computer software"
includes, but is not limited to, expenditures related to and software utilized or loaded at
the qualified data center, including maintenance, licensing, and software customization.
new text end

(d) For purposes of this subdivision, "enterprise information technology equipment"
means computers and equipment supporting computing, networking, or data storage,
including servers and routers. It includes, but is not limited to: cooling systems,
cooling towers, and other temperature control infrastructure; power infrastructure for
transformation, distribution, or management of electricity used for the maintenance
and operation of a qualified data center, including but not limited to exterior dedicated
business-owned substations, backup power generation systems, battery systems, and
related infrastructure; and racking systems, cabling, and trays, which are necessary for
the maintenance and operation of the qualified data center.

(e) A qualified data center may claim the exemptions in this subdivision for
purchases made either within 20 years of the date of its first purchase qualifying for the
exemption under paragraph (a), or by June 30, 2042, whichever is earlier.

(f) The purpose of this exemption is to create jobs in the construction and data
center industries.

(g) This subdivision is effective for sales and purchases made after June 30, 2012,
and before July 1, 2042.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2013.
new text end