HF 3194

as introduced - 88th Legislature (2013 - 2014) Posted on 03/19/2014 12:14pm

A bill for an act
relating to taxation; sales and use; modifying exemptions for qualified data
centers; amending Minnesota Statutes 2013 Supplement, section 297A.68,
subdivision 42.

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

Section 1.

Minnesota Statutes 2013 Supplement, 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, or a
qualified refurbished 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, or a qualified refurbished
data center.

(b) Electricity used or consumed in the operation of a qualified data center new text begin , or a
qualified refurbished data center, new text end is exempt.

(c) For purposes of this subdivision, "qualified data center deleted text begin , or a qualified refurbished
data center, deleted text end " means a facility in Minnesota:

(1) that is comprised of one or more buildings that consist in the aggregate of
at least 25,000 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 $30,000,000 within
a 48-month period;

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

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

(ii) building improvements; and

(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. For purposes of this subdivision, "computer
software" includes, but is not limited to, software utilized or loaded at the qualified data
center, including maintenance, licensing, and software customization.

(d) For purposes of this subdivision, a "qualified refurbished data center" means an
existing facility that qualifies as a data center under paragraph (c), clauses (2) and (3), but
that is comprised of one or more buildings that consist in the aggregate of at least 25,000
square feet, and that are located on a single parcel or contiguous parcels, where the total
cost of construction or refurbishment, investment in enterprise information technology
equipment, and computer software is at least $50,000,000 within a 24-month period.

(e) 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 new text begin or a qualified refurbished data center new text end , 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 deleted text begin the deleted text end new text begin a new text end qualified data center
new text begin or a qualified refurbished data center new text end .

(f) A qualified data center new text begin or a qualified refurbished data center new text end 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.

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

(h) 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, 2014.
new text end