SF 2934

as introduced - 88th Legislature (2013 - 2014) Posted on 04/01/2014 09:20am

A bill for an act
relating to taxation; sales and use; modifying exemption for data centers;
amending Minnesota Statutes 2013 Supplement, section 297A.68, subdivision
42; Laws 2013, chapter 143, article 8, section 27.

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 new text begin : (1) new text end enterprise information
technology equipment new text begin ; new text end and new text begin (2) new text end computer software new text begin purchased after June 30, 2013, new text end 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
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 deleted text begin , deleted text end new text begin ; new text end environmental
control deleted text begin , deleted text end new text begin ; new text end computer software deleted text begin , deleted text end new text begin purchased after June 30, 2013; new text end 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), deleted text begin 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 deleted text end new text begin with a
new text end total cost of construction or refurbishment, investment in enterprise information technology
equipment, and computer software deleted text begin is deleted text end new text begin of new text end 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, 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.

(f) A qualified data center new text begin or 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 deleted text begin after June 30, 2012,
and deleted text end before July 1, 2042.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for sales and purchases
made after June 30, 2012, except that for purchases of computer software, this section is
effective for sales and purchases made after June 30, 2013.
new text end

Sec. 2.

Laws 2013, chapter 143, article 8, section 27, the effective date, is amended to
read:

EFFECTIVE DATE.

This section is effective new text begin retroactively new text end for sales and purchases
made after June 30, deleted text begin 2013 deleted text end new text begin 2012, except that for purchases of computer software, this
section is effective for sales and purchases made after June 30, 2013 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end