Environmental campaigners oppose legislation.
Legislators in Colorado are planning to offer new tax breaks in a bid to lure more data center operators to the Centennial State, but are facing opposition from environmental campaigners.
A new bill, dubbed the Colorado Data Center Development and Grid Modernization Act, has been proposed by the state senate’s Transportation and Energy Committee.
It would see data center companies offered 20-year exemptions from sales and use taxes, with the potential for a 10-year extension if the right conditions are met. To qualify, operators must commit to capital investment of at least $250 million in Colorado, and pledge to create 25 full-time jobs.
Projects must also meet energy and water efficiency standards, and not “result in unreasonable cost impacts” to other Colorado electricity users. Non-partisan fiscal analysis, published alongside the bill, estimates it would cost Colorado an initial $17 million in tax revenue.
The bipartisan legislation was introduced in the Colorado Senate last week and passed the Transport and Energy Committee 6-3, meaning it will be taken forward for further scrutiny by lawmakers. Senator Paul Lundeen, a Republican who represents El Paso County, told his colleagues: “Welcome to the future, the future that is unfolding all around us - and I mean all around us.”
In comments reported by the Denver Post, Lundeen added: “It’s happening in pretty much every state except Colorado right now and we’d like to change that.”
The bill appears to be an updated version of legislation proposed last year, which would have provided tax incentives for data center operators spending more than $100 million.
Though the committee was supportive, environmental campaigners who spoke at the meeting voiced concerns.
Megan Kemp, of environmental group EarthJustice, described the bill as “rushed,” according to a report from Colorado Newsline.
Kemp said: “[The bill] fails to provide critical safeguards for utility customers, neglects to consider impacts on communities, and undermines our progress toward meeting critical climate goals.”
Colorado is not currently a major data center market, though companies including DataBank, Flexential, Novva, QTS, CoreSite, IPI, and Verizon all operate in the state. It is also home to Crusoe, the AI cloud and data center company involved in major projects, including OpenAI’s Stargate.
The Colorado state government did not have difficulty finding data center space itself, having recently completed a two-year IT migration that saw it move workloads from the leased eFORT facility to the state-owned Lakewood Data Center.
