Date: 04/29/2014

Final
BILL SUMMARY for HB14-1389

HOUSE COMMITTEE ON BUSINESS, LABOR, ECONOMIC, & WORKFORCE DEVELOPMENT

Votes: View--> Action Taken:
Adopt amendment L.001. The motion passed without o
Adopt amendment L.002. The motion passed without o
Refer House Bill 14-1389, as amended, to the Commi		Pass Without Objection
Pass Without Objection
PASS



01:39 PM -- HB 14-1389

Representative DelGrosso and Representative Pabon presented House Bill 14-1389, concerning a sales and use tax exemption for information technology equipment that is used in certain data centers. The proposed strike-below amendment to the bill, Amendment L.001 (Attachment B), creates a sales and use tax exemption for information technology equipment used in qualified data centers. The sales tax exemption will be available starting July 1, 2015, and would apply to computers, data storage equipment, cooling systems, power infrastructure, and racking systems. Qualified data centers must be used primarily to house information technology equipment and be at least 25,000 square feet in size. To qualify for the exemption, new data centers must invest at least $30 million over five years and refurbished data centers must invest at least $15 million over two years. The investment amounts are for the total construction costs of the data center, including the building and structure, cooling equipment, and information technology equipment. Data centers must be certified by the Colorado Office of Economic Development and International Trade (OEDIT) before they can receive the exemption. Existing data centers may qualify for the exemption from investments made between June 30, 2010, and July 1, 2015, and refurbished data centers would qualify because of investments made between June 30, 2013, and July 1, 2015. The OEDIT may certify these existing facilities, which would exempt the purchase of information technology equipment after July 1, 2015, from sales and use taxes. However, these facilities would not qualify for a refund for taxes paid prior to July 1, 2015.

140429 AttachB.pdf140429 AttachB.pdf

The sponsors discussed similar incentives in 17 other states, how the strike-below amendment narrows the scope of the original bill, and responded to questions from the committee. The sponsors continued to respond to questions about alternative energy requirements, state versus local benefits, and return on investment under the bill.

The following individuals testified on the bill:

02:01 PM -- Bill Mueldener, representing the Colorado Technology Association (CTA), testified in support of the bill. Mr. Mueldener distributed a handout to committee members (Attachment C). He stated that Colorado had an ideal climate from a data center perspective, but needed tax incentives to be competitive with other states. He stated that data centers are a driver of the technology industry. Mr. Mueldener responded to questions from the committee.

140429 AttachC.pdf140429 AttachC.pdf

02:12 PM -- Erik Mitisek, representing CTA, testified in support of the bill. Mr. Mitisek discussed the technology developments in the state and explained how the bill would help the state continue to grow its technology industry. He responded to questions from the committee.

02:20 PM -- Tammy Fields, representing the Colorado Springs Regional Business Alliance, testified in support of the bill. She discussed how the state's low risk of natural disasters, semi-arid climate, and favorable utility rates make it a prime candidate for data centers; however, Colorado is not winning contracts because it cannot compete with better tax incentives in other states. She stated that this bill would drive investment dollars to the state's economy.

02:26 PM -- Bill Cherrier, representing Colorado Springs Utilities, testified in support of the bill. Mr. Cherrier stated that data centers can be located anywhere; development sites are selected based on costs. He stated that Colorado's energy rates are affordable and data centers represent a stable load factor for utility companies.

02:33 PM -- Ali Mickelson, representing the Colorado Fiscal Institute, testified in opposition to the bill. She discussed the number of tax credits the General Assembly has passed in 2014. She stated that the bill represents a limited special-interest tax credit. Ms. Mickelson responded to questions from the committee.

02:39 PM

The sponsors discussed the strike-below amendment and Amendment L.002 (Attachment D).

140429 AttachD.pdf140429 AttachD.pdf
BILL:HB14-1389
TIME: 02:39:58 PM
MOVED:Kraft-Tharp
MOTION:Adopt amendment L.002. The motion passed without objection.
SECONDED:Holbert
VOTE
Exum
Hamner
Holbert
Navarro
Nordberg
Rosenthal
Ryden
Szabo
Wright
Kraft-Tharp
Williams
YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:HB14-1389
TIME: 02:41:55 PM
MOVED:Kraft-Tharp
MOTION:Adopt amendment L.001. The motion passed without objection.
SECONDED:Holbert
VOTE
Exum
Hamner
Holbert
Navarro
Nordberg
Rosenthal
Ryden
Szabo
Wright
Kraft-Tharp
Williams
YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:HB14-1389
TIME: 02:42:43 PM
MOVED:Kraft-Tharp
MOTION:Refer House Bill 14-1389, as amended, to the Committee on Finance. The motion passed on a vote of 9-2.
SECONDED:Williams
VOTE
Exum
Yes
Hamner
No
Holbert
Yes
Navarro
Yes
Nordberg
Yes
Rosenthal
No
Ryden
Yes
Szabo
Yes
Wright
Yes
Kraft-Tharp
Yes
Williams
Yes
Final YES: 9 NO: 2 EXC: 0 ABS: 0 FINAL ACTION: PASS