A Bill for an Act
Page 1, Line 101Concerning benefits to facilitate data center development
Page 1, Line 102while supporting electric grid infrastructure, and, in
Page 1, Line 103connection therewith, creating the "Colorado Data
Page 1, Line 104Center Development and Grid Modernization Act".
Bill Summary
(Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.)
The bill creates the data center development and grid modernization program (program) in the Colorado office of economic development (office). To facilitate efficient data center development and grid modernization, the program allows tax and utility benefits to a data center operator that applies to the office to have a data center project certified at one of 2 levels and that satisfies certain eligibility criteria for certification.
The first level of data center project certification created in the bill is base certification. In connection with base certification, the bill specifies that:
- To obtain base certification, a data center operator must commit, through the application process with the office, to making a $250 million minimum capital investment in data center facility construction and equipment within 5 years, creating 25 full-time jobs that satisfy specified criteria, and breaking ground on the data center project within 5 years of obtaining base certification;
- In addition to the investment and job creation requirements, to obtain base certification a data center operator must also commit to implementing basic grid support capabilities, obtaining certification under one of several energy efficiency standards, implementing water stewardship strategies that optimize operational water management, sourcing at least 50% of the data center project's energy consumption from renewable and clean sources, supporting clean integration by implementing energy storage solutions that align with the data center project's needs and operations, agreeing to certain post-certification requirements, and agreeing to submit annual compliance reports to the office;
- A data center operator must apply to the office, in a form and manner to be determined by the office, for base certification before taking action to satisfy any of the eligibility criteria;
- The office is required to review a data center operator's application for base certification and award base certification to data center operators that have demonstrated that they will satisfy the base certification criteria;
- A data center operator that obtains base certification for a data center project is eligible for a 100% sales and use tax exemption on the purchase, use, and storage of information technology infrastructure, data center infrastructure, and electrical grid enhancement equipment (qualified purchases) for 20 years from the date that the data center project was certified, so long as the data center project satisfies ongoing compliance requirements; and
- In addition to the sales and use tax credit, a data center operator that obtains base certification for a data center project is eligible for standard utility rate incentives as negotiated between the data center operator and the utility.
- To obtain enhancement certification, a data center operator must invest a minimum of $10 million in grid enhancement and modernization, invest in workforce development or other community benefit programs, agree to certain post-certification requirements, and agree to submit annual compliance reports to the office;
- A data center operator must apply to the office, in a form and manner to be determined by the office, for enhancement certification either before or after making the required minimum grid enhancement and modernization investment;
- The office is required to review a data center operator's application for enhancement certification and award enhancement certification to data center operators that have demonstrated that they will satisfy the enhancement certification criteria;
- For income tax years commencing on or after 2026, a data center operator that obtains enhancement certification for a data center project is eligible for an income tax credit in an amount equal to 10% of the amount of any grid enhancement and modernization investment made by the data center operator and an additional amount equal to 5% of the amount of such investment if the investment is made in a rural area (grid enhancement credit);
- A data center operator is not eligible to claim the grid enhancement credit until the data center operator has made the required minimum grid enhancement and modernization investment; and
- In addition to the grid enhancement credit, a data center operator that obtains enhancement certification for a data center project is eligible for enhanced utility benefits as negotiated between the data center operator and the utility.
The second level of data center certification created in the bill is enhancement certification. A data center operator that has obtained base certification for a data center project may apply for enhancement certification for the same data center. In connection with enhancement certification, the bill specifies that:
Before submitting an application for certification for a data center project, a data center operator is required to conduct and document a preliminary consultation with the utility that will provide electricity for the data center project regarding interconnection feasibility, capacity, and infrastructure requirements and obtain a written feasibility assessment from the utility. A data center operator is required to include the documentation of the consultation and the written feasibility assessment with an application to the office for certification of the data center project, and, if the data center project includes projects requiring review by the public utilities commission (commission), the commission is required to review specified aspects of the application.
A certified data center project that necessitates a new customer load or co-located customer load that satisfies certain criteria (emerging new load) is eligible for targeted resource acquisition if the data center operator satisfies specified requirements. The bill specifies a process by which a utility regulated by the commission may submit a resource acquisition application to the commission to meet emerging new load needs. The bill also specifies how a utility may finance resources and infrastructure needs in connection with emerging new loads.
After achieving base certification and enhancement certification, a data center operator may apply to the office for certain benefit extensions for the sales and use tax exemption allowed to data center operators that have obtained base certification, for the grid enhancement credit allowed to data center operators that have obtained enhancement certification, and for the utility benefits negotiated between the data center operator and the utility.
If the office determines that a data center operator is not fulfilling its obligations and commitments to retain base certification or enhancement certification, the office is required to revoke the certification and the data center operator is required to repay the state for the tax benefits that it received.
This Unofficial Version Includes Committee
Amendments Not Yet Adopted on Second Reading
Page 4, Line 1Be it enacted by the General Assembly of the State of Colorado:
Page 4, Line 2SECTION 1. In Colorado Revised Statutes, add part 8 to article 48.5 of title 24 as follows:
Page 4, Line 3PART 8
DATA CENTER DEVELOPMENT
Page 4, Line 4AND INCENTIVES
Page 4, Line 524-48.5-801. Short title. The short title of this part 8 is the
Page 4, Line 6"Colorado Data Center Development and Incentive Program Act".
Page 4, Line 724-48.5-802. Legislative declaration. (1) The general assembly finds, determines, and declares that:
Page 5, Line 1(a) Colorado's continued economic growth and
Page 5, Line 2technological advancement depend on the development of
Page 5, Line 3modern digital infrastructure that can support emerging
Page 5, Line 4technologies while ensuring grid reliability, affordability of
Page 5, Line 5electric service for all customers, and environmental sustainability;
Page 5, Line 6(b) Colorado faces interrelated challenges in:
Page 5, Line 7(I) Achieving its clean energy and greenhouse gas reduction goals while maintaining grid system reliability;
Page 5, Line 8(II) Modernizing critical electrical grid infrastructure to support increasing electrification;
Page 5, Line 9(III) Ensuring equitable economic development across urban, suburban, and rural communities; and
Page 5, Line 10(IV) Maintaining economic competitiveness in an evolving technological landscape;
Page 5, Line 11(c) The Colorado electric transmission authority has
Page 5, Line 12identified critical transmission capacity needs requiring
Page 5, Line 13approximately four and one-half billion dollars in
Page 5, Line 14infrastructure investment through 2045, with significant
Page 5, Line 15requirements for grid modernization, reliability enhancement, and renewable and clean energy integration;
Page 5, Line 16(d) Data centers represent a transformative opportunity to:
Page 5, Line 17(I) Accelerate grid modernization through strategic
Page 5, Line 18investment contributions into transmission and distribution
Page 5, Line 19infrastructure;
Page 6, Line 1(II) Create high-wage employment opportunities across
Page 6, Line 2the state, particularly in areas transitioning from traditional energy economies; and
Page 6, Line 3(III) Strengthen local tax bases while driving technological innovation;
Page 6, Line 4(e) Colorado's existing tax structure does not
Page 6, Line 5adequately reflect the unique operational characteristics and
Page 6, Line 6infrastructure requirements of modern data center development;
Page 6, Line 7(f) The state's current tax framework creates unintended
Page 6, Line 8barriers to critical digital infrastructure investment, particularly regarding:
Page 6, Line 9(I) Large-scale capital investment in technological equipment;
Page 6, Line 10(II) Ongoing grid infrastructure modernization; and
(III) Renewable and clean energy deployment;
Page 6, Line 11(g) Data centers represent a distinct class of infrastructure that:
Page 6, Line 12(I) Requires significant up-front capital investment;
(II) Drives substantial grid modernization;
Page 6, Line 13(III) Creates high-wage technology employment; and
(IV) Generates long-term economic benefits;
Page 6, Line 14(h) Under Colorado's current tax framework, the state
Page 6, Line 15risks losing billions of dollars in potential investment over the
Page 6, Line 16next decade despite significant competitive advantages in climate, workforce, and renewable and clean resources;
Page 6, Line 17(i) Neighboring states have established comprehensive
Page 7, Line 1incentive programs that place Colorado at a competitive disadvantage;
Page 7, Line 2(j) Colorado's unique geographic and resource
Page 7, Line 3advantages create opportunities for leadership in sustainable data center development;
Page 7, Line 4(k) Emerging large load customers have the potential to
Page 7, Line 5drive significant investment in Colorado's energy infrastructure;
Page 7, Line 6(l) A targeted and transparent resource acquisition
Page 7, Line 7framework can enable utilities to efficiently serve these
Page 7, Line 8customers while preserving affordability, protecting existing
Page 7, Line 9ratepayers, and meeting the state's decarbonization and grid reliability goals; and
Page 7, Line 10(m) The general assembly equally supports the use of
Page 7, Line 11unionized and nonunionized labor to perform any of the
Page 7, Line 12necessary work in connection with data center development and
Page 7, Line 13the implementation of a targeted and transparent resource acquisition framework.
Page 7, Line 14(2) The general assembly further finds and declares that
Page 7, Line 15a structured, performance-based approach to data center development will:
Page 7, Line 16(a) Accelerate grid modernization through private investment;
Page 7, Line 17(b) Ensure responsible development that benefits local communities;
Page 7, Line 18(c) Advance multiple state policy objectives;
Page 7, Line 19(d) Create high-wage technology jobs;
Page 8, Line 1(e) Strengthen local tax bases, particularly in rural areas; and
Page 8, Line 2(f) Enhance Colorado's position as a leader in technological innovation.
Page 8, Line 324-48.5-803. Definitions.As used in this part 8, unless the context otherwise requires:
Page 8, Line 4(1) "Certification" means recognition granted to a data
Page 8, Line 5center by the office pursuant to section 24-48.5-807, upon
Page 8, Line 6determination that the data center meets the requirements specified in section 24-48.5-805.
Page 8, Line 7(2) "Certified data center" means a data center that has
Page 8, Line 8received certification from the office pursuant to section 24-48.5-807.
Page 8, Line 9(3) "Commission" means the Colorado public utilities commission created in section 40-2-101.
Page 8, Line 10(4) "Data center" means a facility with one or more
Page 8, Line 11buildings including corresponding electrical infrastructure that:
Page 8, Line 12(a) Houses information technology equipment used for data processing, data storage, or telecommunications; and
Page 8, Line 13(b) Has a primary function of delivering information technology services including:
Page 8, Line 14(I) Providing data storage, processing, and transport services;
Page 8, Line 15(II) Supporting the delivery of cloud computing services;
(III) Providing network connectivity services; and
Page 8, Line 16(IV) Supporting artificial intelligence, machine learning, or similar computational services.
Page 9, Line 1(5) "Data center operator" means any person or entity that:
Page 9, Line 2(a) Owns, leases, or operates a data center in Colorado;
Page 9, Line 3(b) Is a client or collocation tenant or licensee of a data
Page 9, Line 4center, including entities that lease, rent, or otherwise enter
Page 9, Line 5into a contractual agreement for the use of data center space or services; or
Page 9, Line 6(c) Co-locates information technology equipment within a qualifying data center facility.
Page 9, Line 7(6) "Data center tenant" means a client or co-location
Page 9, Line 8tenant or licensee of a data center, including an entity that
Page 9, Line 9leases, rents or otherwise enters into a contractual agreement
Page 9, Line 10for the use of data center space or services, or otherwise
Page 9, Line 11co-locates information technology equipment within a qualifying data center facility.
Page 9, Line 12(7) "Department" means the department of revenue.
Page 9, Line 13(8) "Energy office" means the Colorado energy office created in section 24-38.5-101.
Page 9, Line 14(9) "Office" means the office of economic development created in section 24-48.5-101.
Page 9, Line 15(10) "Program" means the data center development incentive program created in this part 8.
Page 9, Line 16(11) "Qualified purchase" means the purchase, on or after
Page 9, Line 17July 1, 2025, or the effective date of this part 8,whichever is later, of:
Page 9, Line 18(a) Information technology infrastructure including:
Page 10, Line 1(I) Computer equipment or software used in the operation of or for the benefit of the certified data center;
Page 10, Line 2(II) Software servers, routers, connections, monitoring and security systems, and other enabling machinery, equipment,
Page 10, Line 3software, and hardware, regardless of whether the property is
affixed to or incorporated into real property;
Page 10, Line 4(III) Data storage systems; and
(IV) Network infrastructure;
Page 10, Line 5(b) Data center infrastructure and transmission and generation system assets including:
Page 10, Line 6(I) Environmental control systems;
(II) On-site energy storage systems;
Page 10, Line 7(III) On-site renewable and clean energy systems; and
(IV) Building materials for data center construction;
Page 10, Line 8(c) Mechanical and power distribution systems; or
Page 10, Line 9(d) Other equipment and systems essential to data center operations.
Page 10, Line 10(12) "Renewable and clean energy" means electricity generated from:
Page 10, Line 11(a) Sources qualifying as eligible energy resources
Page 10, Line 12pursuant to sections 30-20-1202 (2) and 40-2-124, including but not limited to:
Page 10, Line 13(I) Solar;
(II) Wind;
Page 10, Line 14(III) Geothermal;
(IV) Biomass;
Page 10, Line 15(V) Hydroelectric;
(VI) Recycled energy;
Page 11, Line 1(VII) Battery energy storage systems;
(VIII) Nuclear energy; and
Page 11, Line 2(IX) Coal mine methane when the commission determines
Page 11, Line 3it is captured in a manner that conforms with environmental regulations;
Page 11, Line 4(b) Other clean energy resources as determined by the commission, including:
Page 11, Line 5(I) Green hydrogen; and
(II) Other emerging zero-carbon technologies; or
Page 11, Line 6(c) Any combination of resources specified in this subsection (12).
Page 11, Line 724-48.5-804. Data center development incentive program.
Page 11, Line 8(1) The data center development incentive program is created
Page 11, Line 9in the office to facilitate efficient data center development by
Page 11, Line 10allowing tax relief to a data center operator that owns or
Page 11, Line 11operates a data center or to a participating data center tenant
Page 11, Line 12of a data center that obtains certification pursuant to this part 8.
Page 11, Line 13(2) The office shall administer the program and
Page 11, Line 14coordinate with the commission and the energy office as necessary to maximize the effectiveness of the program.
Page 11, Line 15(3) The office shall perform an evaluation of the program
Page 11, Line 16in 2031 to evaluate the effectiveness of the program and to determine if any modifications to the program are required.
Page 11, Line 17(4) (a) The office shall receive and evaluate applications
Page 11, Line 18that are submitted by data center operators to obtain the following:
Page 12, Line 1(I) Certification for a data center, which allows the data
Page 12, Line 2center operator a sales and use tax exemption for qualified
Page 12, Line 3purchases in connection with the data center pursuant to sections 24-48.5-808 and 39-26-735; and
Page 12, Line 4(II) A benefit extension pursuant to section 24-48.5-814 for a data center that has obtained certification.
Page 12, Line 5(b) To obtain certification for a data center or to obtain
Page 12, Line 6a benefit extension, a data center operator must file a
Page 12, Line 7completed application with the office pursuant to section 24-48.5-806.
Page 12, Line 8(3) The office shall begin processing applications for
Page 12, Line 9certification as specified in section 24-48.5-807 within one
Page 12, Line 10hundred eighty days after the effective date of this part 8. The
Page 12, Line 11office shall complete its review of any application that is
Page 12, Line 12submitted on or before December 31, 2034, pursuant to the
Page 12, Line 13policies, procedures, and guidelines established pursuant to this part 8.
Page 12, Line 14(4) If the office approves a data center for certification,
Page 12, Line 15the office shall use the reports that a data center operator is required to submit to the office pursuant to section 24-48.5- 809
Page 12, Line 16to monitor the certified data center to ensure that the certified
data center remains in compliance with program requirements.
Page 12, Line 17(5) The office shall issue state sales and use tax
Page 12, Line 18exemption certificates required for a data center operator that
Page 12, Line 19obtains certification or a certified data center benefit
Page 12, Line 20extension to claim the sales and use tax exemption allowed in sections 24-48.5-808 and 39-26-735.
Page 13, Line 1(6) In implementing the program, the office shall
Page 13, Line 2facilitate efficient data center development by establishing
Page 13, Line 3clear qualification criteria and consistently administering a
Page 13, Line 4predictable application, review, and approval processfor data center certification pursuant to this part 8.
Page 13, Line 5(7) The office may create and modify policies, procedures,
Page 13, Line 6and guidelines as necessary to implement the program and the tax and other benefits that may be claimed pursuant to this part
Page 13, Line 78.
24-48.5-805. Certification - data center operators - minimum
Page 13, Line 8requirements. (1) To qualify for data center certification
Page 13, Line 9pursuant to this part 8, a data center operator or a data center
Page 13, Line 10operator collectively with its participating data center tenants shall commit to:
Page 13, Line 11(a) Making a minimum capital investment of two hundred
Page 13, Line 12fifty million dollars in data center qualifying purchases within sixty months of obtaining data center certification;
Page 13, Line 13(b) Creating, within sixty months of the data center's
Page 13, Line 14receipt of a final certificate of occupancy for the first phase of
Page 13, Line 15the data center project, and maintaining twenty-five new
Page 13, Line 16full-time equivalent jobs with an average compensation of at
Page 13, Line 17least one hundred ten percent of the county average wage in the county in which the data center will be located;
Page 13, Line 18(c) Verifying that the data center will not result in
Page 13, Line 19unreasonable cost impacts to other utility ratepayers. This
Page 13, Line 20requirement may be satisfied by:
Page 14, Line 1(I) Securing approval of the data center through the
Page 14, Line 2targeted resource acquisition framework described in section 40-2-140 for jurisdictional utilities;
Page 14, Line 3(II) Providing a letter or statement from the host utility,
Page 14, Line 4a municipal utility's governing board, or a relevant regulatory
Page 14, Line 5entity confirming that the utility infrastructure costs
Page 14, Line 6associated with the data center are reasonably allocated and
Page 14, Line 7are not expected to cause unjustified rate increases for other customers;
Page 14, Line 8(III) Providing documentation of a proposed
Page 14, Line 9interconnection agreement, electric service agreement, or
Page 14, Line 10similar agreement that identifies required utility
Page 14, Line 11infrastructure upgrades and confirms that the data center
Page 14, Line 12operator has agreed or will agree to cover its fair share of costs in accordance with the utility's policy; or
Page 14, Line 13(IV) Another pathway identified through the rulemaking for large new loads pursuant to section 40-2-141.
Page 14, Line 14(d) implementing Water stewardship measures that
Page 14, Line 15optimize operational water management through one or more of the following:
Page 14, Line 16(I) Implementation of closed-loop cooling systems;
Page 14, Line 17(II) Use of available recycled water sources or water rights previously reserved for retiring thermal power units; or
Page 14, Line 18(III) Deployment of water-efficient technologies;
Page 14, Line 19(e) provide Certification under one of the following
Page 14, Line 20standards within twenty-four months of the data center's
Page 14, Line 21receipt of a final certificate of occupancy:
(I) LEED for data centers at silver level or higher;
Page 15, Line 1(II) Energy Star certification;
(III) Green Globes certification;
Page 15, Line 2(IV) ISO 50001 energy management certification;
Page 15, Line 3(V) ISO 14001 standard for environmental management systems; or
Page 15, Line 4(VI) Other equivalent standards approved by the office; or
Page 15, Line 5(f) Consulting with the department of natural resources
Page 15, Line 6regarding wildlife areas, wildfire and urban interface, and water.
Page 15, Line 7(g) Breaking ground on the data center within sixty months of obtaining certification;
Page 15, Line 8(h) Complying with the craft labor requirements in part
Page 15, Line 93 of article 92 of this title 24, if the data center is an energy sector public works project, as defined in section 24-92-303 (5);
Page 15, Line 10(i) Complying with the apprenticeship utilization
Page 15, Line 11requirements in section 24-92-115 and the prevailing wage
Page 15, Line 12requirements in part 2 of article 92 of this title 24 as if the data center satisfied the criteria for a public project as described in
Page 15, Line 13sections 24-92-115 (1) and 24-92-203 (1); and
Page 15, Line 14(j) Committing to satisfying the data center requirements after certification specified in section 24-48.5-812.
Page 15, Line 15(2) Upon receipt of an application for certification from
Page 15, Line 16a data center operator, the office shall review the application
Page 15, Line 17pursuant to section 24-48.5-807. If the office approves the data
Page 15, Line 18center for certification, the data center operator becomes
Page 16, Line 1eligible, as of the date of certification, for the benefits specified in section 24-48.5-808.
Page 16, Line 224-48.5-806. Application process - data center operators - requirements. (1) A data center operator seeking certification
Page 16, Line 3for a data center pursuant to this part 8 must submit an application to the office, in a form and manner determined by the
Page 16, Line 4office, that includes the following:
Page 16, Line 5(a) Information about the data center for which the data center operator is seeking certification including:
Page 16, Line 6(I) The identity and qualifications of the data center operator to own or operate a data center;
Page 16, Line 7(II) Evidence of site control or a pathway to site control;
(III) A proposed development timeline and phasing;
Page 16, Line 8(IV) An estimated timeline for capital investments in data
Page 16, Line 9center construction and equipment reaching a minimum of two
Page 16, Line 10hundred fifty million dollars within thirty-six months of the
Page 16, Line 11data center being placed in service or receipt of a final certificate of occupancy;
Page 16, Line 12(V) An estimated job creation plan by the data center
Page 16, Line 13operator or by the data center operator collectively with its
Page 16, Line 14participating data center tenants showing at least twenty-five
Page 16, Line 15new full-time equivalent positions, within sixty months after
Page 16, Line 16the data center's receipt of a final certificate of occupancy for
Page 16, Line 17the first phase of the data center project, with compensation of
Page 16, Line 18at least one hundred ten percent of the county average wage for the county in which the data center will be located; and
Page 16, Line 19(VI) An environmental sustainability plan for the data
center that includes:
Page 17, Line 1(A) A facility certification commitment, including LEED,
Page 17, Line 2Energy Star, Green Globes, ISO 50001, ISO 14001, or the equivalent; and
Page 17, Line 3(B) Consultation with department of natural resources;
Page 17, Line 4(b) The identity of the utility or utilities that will serve the data center; and
Page 17, Line 5(c) Local government documentation in connection with the data center including:
Page 17, Line 6(I) Documentation of the status of the application from
Page 17, Line 7the local governmental entity that will provide the permit for the data center, if available;
Page 17, Line 8(II) A description of applicable local incentives; and
(III) The status of local permits and approvals.
Page 17, Line 924-48.5-807. Application review and certification process.
Page 17, Line 10(1) The office shall review all applications submitted pursuant
Page 17, Line 11to section 24-48.5-806. The office shall determine whether an
Page 17, Line 12application is complete within thirty days after the office's
Page 17, Line 13receipt of the application. Within ninety days of determining
Page 17, Line 14that an application is complete, the office shall conduct a full application review.
Page 17, Line 15(2) If the office determines that an application is deficient,
Page 17, Line 16the office shall provide written notification to the applicant
Page 17, Line 17that identifies the specific deficiencies. The office shall allow
Page 17, Line 18thirty days for the applicant to cure any deficiencies in the
Page 17, Line 19application and complete a review of the revised application
Page 17, Line 20within thirty days after receipt.
Page 18, Line 1(3) The office shall approve an application for
Page 18, Line 2certification for a data center if it has met or will meet all of the application criteria in section 24-48.5-805.
Page 18, Line 3(4) The office may reject an application only if:
Page 18, Line 4(a) The office finds that the data center operator materially misrepresented facts in the application;
Page 18, Line 5(b) The office finds that the data center operator failed
Page 18, Line 6to provide required documentation after the office provided an opportunity to cure pursuant to subsection (2) of this section; or
Page 18, Line 7(c) The office determines that the applicant does not meet minimum certification requirements under section 24-48.5-805.
Page 18, Line 8(5) Before rejecting any application that meets the
Page 18, Line 9minimum investment and job creation thresholds set forth in section 24-48.5-805 (1)(a), the office must:
Page 18, Line 10(a) Provide the applicant an opportunity to address the office's concerns; and
Page 18, Line 11(b) Explore alternative paths to approval with conditions if possible.
Page 18, Line 12(6) The office may revoke certification that it has
Page 18, Line 13awarded pursuant to this section if the office determines that the data center operator:
Page 18, Line 14(a) Has failed to make substantial progress toward
Page 18, Line 15satisfying the requirements specified in section 24-48.5-805 within
Page 18, Line 16two years of the data center being placed in service or receipt of a final certificate of occupancy;
Page 18, Line 17(b) Has materially changed the data center in a way that
Page 18, Line 18would have disqualified it from certification; or
Page 19, Line 1(c) Has failed to maintain compliance with the criteria that formed the basis of approval.
Page 19, Line 224-48.5-808. Certification benefits - state sales and use tax
Page 19, Line 3exemption. (1) (a) A data center that has obtained certification
Page 19, Line 4is eligible for a one-hundred-percent state sales and use tax exemption on qualified purchases pursuant to section 39-26-735.
Page 19, Line 5(b) A data center that obtains certification and is eligible
Page 19, Line 6to claim a state sales and use tax exemption pursuant to
Page 19, Line 7subsection (1)(a) of this section is eligible for the exemption for
Page 19, Line 8twenty years from the date that the data center received certification, so long as the data center:
Page 19, Line 9(I) Maintains the qualifying employment levels specified in section 24-48.5-805 (1)(b); and
Page 19, Line 10(II) Submits annual compliance reports to the office as required in section 24-48.5-809 (2).
Page 19, Line 1124-48.5-809. Certified data center - qualification - compliance
Page 19, Line 12reports. (1) The office shall issue a state sales and use tax
Page 19, Line 13exemption certificate to a data center operator that has
Page 19, Line 14obtained certification for a data center as evidence that the
Page 19, Line 15data center operator is eligible for a one-hundred-percent sales
Page 19, Line 16and use tax exemption for qualified purchases pursuant to
Page 19, Line 17sections 24-48.5-808 and 39-26-735. The sales and use tax
Page 19, Line 18exemption certificate must specify that the data center
Page 19, Line 19operator is entitled to the sales and use tax exemption for
Page 19, Line 20twenty years, beginning on the date that the certificate is
Page 19, Line 21issued. A state sales and use tax exemption certificate is
Page 19, Line 22nontransferable. The office shall certify to the department of
Page 20, Line 1revenue the name of each data center operator that receives a
Page 20, Line 2state sales and use tax exemption certificate and other
Page 20, Line 3relevant information relating to the sales and use tax exemption.
Page 20, Line 4(2) A data center operator of a data center that has
Page 20, Line 5obtained certification shall submit an annual compliance report
Page 20, Line 6to the office, in a form and manner to be determined by the
Page 20, Line 7office, to verify that the data center operator is making timely
Page 20, Line 8progress in satisfying the requirements of section 24-48.5-805
Page 20, Line 9and is on track to satisfy the requirements within the periods
Page 20, Line 10specified in that section. A data center operator shall submit
Page 20, Line 11the report required in this subsection (2) to maintain
Page 20, Line 12certification. The data center operator shall include in the
Page 20, Line 13report the total amount of the sales and use tax exemption
Page 20, Line 14claimed each year and any other information requested by the office.
Page 20, Line 15(3) If the office revokes the certification pursuant to
Page 20, Line 16section 24-48.5-807 (6), the data center operator is required to
Page 20, Line 17pay the entire amount of the sales and use tax on any qualified
Page 20, Line 18purchase for which the sales and use tax exemption was claimed pursuant to this part 8.
Page 20, Line 1924.48.5-810. Targeted resource acquisition framework.
Page 20, Line 20(1) Before submitting an application for certification for a data center, a data center operator shall:
Page 20, Line 21(a) Conduct and document a preliminary consultation
Page 20, Line 22with the electric utility that will provide electricity for the
Page 20, Line 23data center regarding interconnection feasibility, capacity, and infrastructure requirements; and
Page 21, Line 1(b) Obtain a written feasibility assessment from the
Page 21, Line 2utility that will provide electricity for the data center including a timeline of service.
Page 21, Line 3(2) A data center customer of the utility that will
Page 21, Line 4provide electricity may enter into a generation contract with
Page 21, Line 5an independent power producer if the electric utility is unable
Page 21, Line 6to provide initial energization within thirty-six months of the
Page 21, Line 7execution of a service agreement or fails to provide
Page 21, Line 8seventy-five percent of such power within thirty months of the execution of a service agreement.
Page 21, Line 9(3) For a data center located in the service territory of
Page 21, Line 10a municipally-owned utility, a data center operator shall
Page 21, Line 11comply with a substantially similar process to the process established in section 40-2-140.
Page 21, Line 12(4) A data center operator shall include the
Page 21, Line 13documentation of the consultation and the written feasibility
Page 21, Line 14assessment obtained pursuant to subsection (1) of this section in the data center operator's application to the office.
Page 21, Line 15(5) A data center operator is responsible for paying for
Page 21, Line 16all costs that the utility will incur for the planning and
Page 21, Line 17feasibility assessment to provide electricity to the new data center.
Page 21, Line 1824-48.5-811. Local government authority and coordination.
Page 21, Line 19This part 8 does not limit local government authority regarding
Page 21, Line 20the regulation of data centers, including taxation, incentives,
Page 21, Line 21land use, permitting, and nuisance, which regulation may
Page 22, Line 1include consideration of environmental sustainability. In
Page 22, Line 2addition, this part 8 does not restrict additional local
Page 22, Line 3incentives including utility incentives in the case of a
Page 22, Line 4municipally-owned utility. This part 8 does not require local governments to participate in the program.
Page 22, Line 524-48.5-812. Data center requirements after certification -
Page 22, Line 6community benefit requirements - workforce development -
Page 22, Line 7economic development integration. (1) A data center that has
Page 22, Line 8obtained certification shall participate in at least one state workforce development program, including:
Page 22, Line 9(a) Partnerships with local educational institutions including:
Page 22, Line 10(I) Technical training programs;
(II) Apprenticeship initiatives;
Page 22, Line 11(III) Career pathway development; and
Page 22, Line 12(IV) Science, technology, engineering, and math (STEM) education support; and
Page 22, Line 13(b) Local workforce initiatives including:
(I) Job training programs;
Page 22, Line 14(II) Skills development workshops;
(III) Professional certification support; and
Page 22, Line 15(IV) Career advancement opportunities.
Page 22, Line 16(2) A data center that has obtained certification shall participate in economic development integration by:
Page 22, Line 17(a) Participating in regional economic planning;
(b) Supporting supply chain development;
Page 22, Line 18(c) Enabling technology cluster formation; and
(d) Fostering innovation ecosystem growth.
Page 23, Line 1(3) A data center that has obtained certification shall:
Page 23, Line 2(a) Comply with the apprenticeship utilization
Page 23, Line 3requirements in section 24-92-115 and the prevailing wage
Page 23, Line 4requirements in part 2 of article 92 of this title 24 as if the data
Page 23, Line 5center satisfied the criteria for a public project as described in sections 24-92-115 (1) and 24-92-203 (1); and
Page 23, Line 6(b) Comply with the craft labor requirements in part 3 of
Page 23, Line 7article 92 of this title 24, if the data center is an energy sector public works project as defined in section 24-92-303 (5).
Page 23, Line 824-48.5-813. Preservation of existing data center certification.
Page 23, Line 9(1) A data center that is certified prior to January 1, 2035, is
Page 23, Line 10required to comply with the following requirements to maintain its certification:
Page 23, Line 11(a) Maintain all commitments through its twenty-year benefit period;
Page 23, Line 12(b) Retain eligibility for extensions pursuant to section 24-48.5-814;
Page 23, Line 13(c) Continue compliance obligations; and
Page 23, Line 14(d) Submit the performance reports required in section 24-48.5-809 (2).
Page 23, Line 1524-48.5-814. Benefit extension and modification - duration -
Page 23, Line 16extension eligibility - extension terms. (1) A data center operator
Page 23, Line 17that has obtained certification for a data center may apply to
Page 23, Line 18the office for an extension of the certification benefits. To be
Page 23, Line 19eligible for a benefit extension, a data center operator must
Page 23, Line 20demonstrate that:
Page 24, Line 1(a) The certified data center has made additional grid
Page 24, Line 2enhancement investments in a total amount of at least five million dollars during the initial twenty-year benefit period;
Page 24, Line 3(b) The certified data center has created at least ten new
Page 24, Line 4qualifying jobs in addition to the jobs that the data center operator is required to create pursuant to section 24-48.5-805;
Page 24, Line 5(c) The certified data center continues to comply with environmental requirements; and
Page 24, Line 6(d) The certified data center has satisfied its community benefit commitments pursuant to section 24-48.5-812.
Page 24, Line 7(2) A certified data center that is approved for a benefit extension pursuant to this section is eligible for:
Page 24, Line 8(a) An additional ten years of eligibility to claim the sales and use tax exemption allowed pursuant to this part 8; and
Page 24, Line 9(b) The ability of the certified data center to maintain the requirements of its certification.
Page 24, Line 1024-48.5-815. Program cost recovery. (1) (a) To recover the
Page 24, Line 11direct costs of establishing and implementing the program, the office may:
Page 24, Line 12(I) Establish and collect a nonrefundable application fee
Page 24, Line 13not to exceed ten thousand dollars for each application for certification submitted pursuant to this part 8; and
Page 24, Line 14(II) Establish and collect a nonrefundable certification
Page 24, Line 15fee not to exceed twenty thousand dollars for each certification awarded pursuant to this part 8.
Page 24, Line 16(b) The office shall deposit all fees collected pursuant to
Page 24, Line 17subsection (1)(a) of this section into the Colorado economic development fund created in section 24-46-105.
Page 25, Line 1(2) The office shall:
Page 25, Line 2(a) Set the amount of any fees established pursuant to
Page 25, Line 3subsection (1) of this section at the minimum amount necessary
Page 25, Line 4to offset the office's direct costs of implementing its responsibilities under this part 8; and
Page 25, Line 5(b) Review the fees annually and adjust the amounts as
Page 25, Line 6necessary to ensure that the fees do not exceed the direct costs of implementation.
Page 25, Line 7SECTION 2. In Colorado Revised Statutes, add 40-2-140 and 40-2-141 as follows:
Page 25, Line 840-2-140. Targeted resource acquisition - emerging large load
Page 25, Line 9customers - process - funding. (1) Eligibility for targeted resource
Page 25, Line 10acquisition.A utility regulated under the commission's resource
Page 25, Line 11planning authority may submit to the commission a targeted
Page 25, Line 12resource acquisition application describing how the utility
Page 25, Line 13intends to meet energy and capacity needs created by one or
Page 25, Line 14more emerging large load customers. Emerging large load customers must:
Page 25, Line 15(a) Have projected load requirements of at least one
Page 25, Line 16hundred megawatts, either individually or in the aggregate, through co-located customers;
Page 25, Line 17(b) Enter into a contractual agreement with the utility, which agreement includes:
Page 25, Line 18(I) Minimum demand, duration, and billing commitments; or
Page 25, Line 19(II) Participation in any applicable large load tariff intended to balance load factor;
Page 26, Line 1(c) Agree to exit fee provisions that address early
Page 26, Line 2departure or reduced demand, including but not limited to a three-year exit fee structure to ensure revenue stability;
Page 26, Line 3(d) Provide appropriate credit securitization; and
Page 26, Line 4(e) Demonstrate site control and submit signed development agreements to the utility.
Page 26, Line 5(2) Resource acquisition process. (a) Prior to filing a
Page 26, Line 6targeted resource acquisition application under this section, a
Page 26, Line 7utility may issue a competitive solicitation to identify potential resources to serve the emerging load.
Page 26, Line 8(b) As part of the targeted resource acquisition
Page 26, Line 9application, the utility may propose system assets funded in
Page 26, Line 10whole or in part by the emerging large-load customer. All such assets must:
Page 26, Line 11(I) Operate as system assets for the benefit of all customers;
Page 26, Line 12(II) Provide net additional clean or renewable energy
Page 26, Line 13resources as described in part 8 of article 48.5 of title 24, beyond what is already required under the renewable
Page 26, Line 14energy standard established in section 40-2-124; and
(III) Maintain alignment with the resource eligibility and
Page 26, Line 15emissions reduction objectives of the renewable energy standard and other applicable clean energy laws.
Page 26, Line 16(c) Any resources proposed in the targeted resource
Page 26, Line 17acquisition application must have sufficient cumulative
Page 26, Line 18accredited capacity, as determined by the utility, to meet the
Page 27, Line 1needs of the emerging large load within the required
Page 27, Line 2interconnection time frame, which time frame may be phased as the load scales.
Page 27, Line 3(d) The utility must:
Page 27, Line 4(I) Use the request for proposal documents most recently
Page 27, Line 5approved by the commission, with customization allowed to
Page 27, Line 6reflect the specific solicitation and avoid cost shifts to other customers; and
Page 27, Line 7(II) Be permitted to bring forward recent bids received
Page 27, Line 8within the past two years if the bid prices remain generally consistent with the previously submitted terms.
Page 27, Line 9(e) The utility must include an updated emissions workbook that reflects:
Page 27, Line 10(I) Total megawatt-hours and associated emissions attributable to the emerging load; and
Page 27, Line 11(II) Separate reporting for each discrete emerging load in the case of co-located arrangements, to the extent practicable.
Page 27, Line 12(f) Approval of a targeted resource acquisition
Page 27, Line 13application under this section creates a presumption of prudence
Page 27, Line 14for all infrastructure or resource investments necessary to serve the emerging load.
Page 27, Line 15(g) The standard of review for the targeted resource
Page 27, Line 16acquisition application is whether the proposed acquisition and associated infrastructure are in the public interest.
Page 27, Line 17(h) The utility need not obtain a certificate of public
Page 27, Line 18convenience and necessity pursuant to section 40-5-102 for
Page 27, Line 19specific resources identified in and approved through the application.
Page 28, Line 1(i) The commission shall act on the application within one
Page 28, Line 2hundred twenty days of filing. The period for other persons to intervene in the matter is ten days.
Page 28, Line 3(3) Funding and cost recovery. (a) A utility may include
Page 28, Line 4pre-funding commitments from the emerging large load
Page 28, Line 5customer for pre-development and early construction costs of
Page 28, Line 6resources or infrastructure, including transmission and distribution.
Page 28, Line 7(b) The costs may be entirely borne by the emerging large
Page 28, Line 8load customer, but the utility may also propose partial reimbursement through an existing cost-recovery mechanism.
Page 28, Line 9(c) (I) The commission shall approve the reimbursement if
Page 28, Line 10the acquired resources or infrastructure provide system-wide benefits.
Page 28, Line 11(II) Costs associated with approved resources may be
Page 28, Line 12recovered through an adjustment clause until included in the
Page 28, Line 13rate base in a future rate case. Transmission costs may be
Page 28, Line 14recovered through a transmission adjustment clause and
Page 28, Line 15distribution costs may be recovered through a grid modernization adjustment clause.
Page 28, Line 16(4) Advanced energy technologies fund. (a) A utility may
Page 28, Line 17propose the creation of a fund for advanced energy
Page 28, Line 18technologies, to which fund customers that necessitate emerging new large loads may contribute voluntarily.
Page 28, Line 19(b) A utility may use the fund to:
Page 28, Line 20(I) Cover pre-development and early construction costs for system resources and infrastructure;
Page 29, Line 1(II) Support utility exploration or deployment of clean firm dispatchable technologies;
Page 29, Line 2(III) Allow customers that necessitate emerging new
Page 29, Line 3large loads to benefit from clean firm capacity located near their operations in exchange for their contributions;and
Page 29, Line 4(IV) Mitigate or allocate technology performance risk
Page 29, Line 5associated with advanced resources, subject to the commission's review and approval.
Page 29, Line 6(c) If an emerging large new load project does not
Page 29, Line 7materialize, money that is contributed to the fund may be used
Page 29, Line 8to offset infrastructure costs for the benefit of other
Page 29, Line 9customers or reallocated to finance clean firm resource development.
Page 29, Line 1040-2-141. Rule-making for large new loads. (1) On or before
Page 29, Line 11June 30, 2027, the commission shall begin a rule-making
Page 29, Line 12procedure to establish oversight, reporting requirements, and
Page 29, Line 13cost allocation principles related to investor-owned utilities serving large load customers. At a minimum, the rules must:
Page 29, Line 14(a) Define a large load customer as a customer
Page 29, Line 15interconnecting at transmission-level service with an estimated
Page 29, Line 16demand of at least one hundred megawatts, or such other
Page 29, Line 17threshold as determined by the commission through rule-making;
Page 29, Line 18(b) Establish processes to evaluate and monitor the
Page 29, Line 19impacts and opportunities associated with large load customers,
Page 29, Line 20including:
Page 30, Line 1(I) System investments and upgrades needed to accommodate the load;
Page 30, Line 2(II) The potential to enhance system reliability and grid flexibility;
Page 30, Line 3(III) Opportunities to reduce transmission and distribution line losses, improve voltage support, and alleviate congestion;
Page 30, Line 4(IV) Opportunities to serve large load customers with
Page 30, Line 5zero-emission resources, including continuous clean energy supply options and curtailed renewable tariffs; and
Page 30, Line 6(V) The impact of serving large load customers on the
Page 30, Line 7utility's ability to meet its clean energy targets under approved
Page 30, Line 8clean energy plans, and avoid delays in achieving beneficial electrification, housing, or resilience objectives;
Page 30, Line 9(c) Require utilities to report regarding:
Page 30, Line 10(I) Payments, contracts, or financial contributions made by large load customers;
Page 30, Line 11(II) System investments resulting from interconnection of large load customers; and
Page 30, Line 12(III) The manner in which the investments align with
Page 30, Line 13renewable energy standard requirements set forth in section 40-2-124 and grid modernization objectives;
Page 30, Line 14(d) Establish principles to ensure that rate structures and tariffs:
Page 30, Line 15(I) Are just and reasonable for all customers;
(II) Avoid cost shifts to nonparticipating customers;
Page 30, Line 16(III) Promote rate stability;
Page 30, Line 17(IV) Ensure that utilities can fully recover investments
Page 31, Line 1from a large load customer if the customer reduces usage or
Page 31, Line 2ceases operations, including, as appropriate, through minimum
Page 31, Line 3contract lengths, termination fees, reasonable up-front
Page 31, Line 4payments directly tied to utility investments or upgrades
Page 31, Line 5necessary to serve the load, or minimum demand or infrastructure-related charges; and
Page 31, Line 6(V) Enable consideration of customer-specific tariffs or enable clean and renewable power tariffs;
Page 31, Line 7(e) Encourage utility planning and customer integration
Page 31, Line 8practices that maximize the value of new load for grid stability, emissions reductions, and equitable cost recovery;
Page 31, Line 9(f) Ensure a transparent process for stakeholder
Page 31, Line 10participation in utility proceedings involving large load interconnections; and
Page 31, Line 11(g) Support economic and business development in the state.
Page 31, Line 12(2) Each investor-owned utility shall submit an annual report to the commission summarizing:
Page 31, Line 13(a) New or anticipated large load interconnections;
(b) Infrastructure investments and their status;
Page 31, Line 14(c) Tariff structures and cost recovery mechanisms; and
Page 31, Line 15(d) Impacts on emissions, renewable energy compliance, and system resilience.
Page 31, Line 16(3) The commission shall establish standards for
Page 31, Line 17maintaining confidentiality of proprietary or competitive business information.
Page 31, Line 18(4) (a) Rules adopted under this section must complement
Page 32, Line 1and not conflict with existing requirements under sections
Page 32, Line 240-2-124, 40-2-125.5, and 40-3-101, and support Colorado's clean energy, economic development, and grid reliability goals.
Page 32, Line 3(b) Any incremental cost of serving a large load
Page 32, Line 4customer that is paid directly by the customer is excluded from
Page 32, Line 5the maximum rate impact calculation used in evaluating a retail utility's clean energy plan under section 40-2-125.5.
Page 32, Line 6(5) Prior to the adoption of final rules under this section,
Page 32, Line 7the commission shall consider the principles outlined in this
Page 32, Line 8section in any electric resource planning or infrastructure
Page 32, Line 9proceeding involving a large load customer, including pending
Page 32, Line 10second-stage rate case filings initiated prior to the effective date of this section.
Page 32, Line 11SECTION 3. In Colorado Revised Statutes, 29-2-105, add (1)(d)(V) as follows:
Page 32, Line 1229-2-105. Contents of sales tax ordinances and proposals.
Page 32, Line 13(1) The sales tax ordinance or proposal of any incorporated town, city,
Page 32, Line 14or county adopted pursuant to this article 2 shall be imposed on the sale
Page 32, Line 15of tangible personal property at retail or the furnishing of services, as
Page 32, Line 16provided in subsection (1)(d) of this section. Any countywide or
Page 32, Line 17incorporated town or city sales tax ordinance or proposal shall include the following provisions:
Page 32, Line 18(d) (V) The exemption for sales of information technology
Page 32, Line 19infrastructure, data center infrastructure, mechanical
Page 32, Line 20systems, or other equipment essential to data center operations as specified in section 29-26-735 (3).
Page 32, Line 21SECTION 4. In Colorado Revised Statutes, add 39-26-735 as follows:
Page 33, Line 139-26-735. Certified data centers - qualified purchases -
Page 33, Line 2information technology infrastructure - data center infrastructure -
Page 33, Line 3electric grid enhancement equipment - tax preference performance
Page 33, Line 4statement - legislative declaration - definitions. (1) (a) In
Page 33, Line 5accordance with section 39-21-304 (1), which requires each bill
Page 33, Line 6that creates a new tax expenditure to include a tax preference
Page 33, Line 7performance statement as part of a statutory legislative
Page 33, Line 8declaration, the general assembly finds and declares that the
Page 33, Line 9purposes of the tax expenditure created in subsection (3) of this section are to:
Page 33, Line 10(I) Improve industry competitiveness, specifically in data center development and electric grid modernization; and
Page 33, Line 11(II) Provide tax relief to certain businesses, specifically
Page 33, Line 12data center operators that own or operate a certified data center in the state.
Page 33, Line 13(b) The general assembly and the state auditor shall
Page 33, Line 14measure the effectiveness of the tax expenditure in achieving
Page 33, Line 15the purposes specified in subsection (1)(a) of this section based on
Page 33, Line 16the number of certified data centers that are constructed and
Page 33, Line 17placed in service in the state and the number and value of the
Page 33, Line 18exemptions claimed pursuant to this section. The Colorado
Page 33, Line 19office of economic development shall provide the state auditor
Page 33, Line 20with any available information that would assist the state auditor's analysis.
Page 33, Line 21(2) As used in this section, unless the context otherwise
Page 33, Line 22requires:
Page 34, Line 1(a) "Certified data center" means a data center that has
Page 34, Line 2obtained certification from the Colorado office of economic development pursuant to part 8 of article 48.5 of title 24.
Page 34, Line 3(b) "State sales and use tax exemption certificate" means
Page 34, Line 4a certificate issued by the Colorado office of economic
Page 34, Line 5development to a certified data center pursuant to part 8 of article 48.5 of title 24.
Page 34, Line 6(3) Beginning January 1, 2026, all sales, storage, and use
Page 34, Line 7of information technology infrastructure, data center
Page 34, Line 8infrastructure, mechanical systems, or other equipment
Page 34, Line 9essential to data center operations as described in section
Page 34, Line 1024-48.5-803 (12) that will be used in connection with a certified
Page 34, Line 11data center that has a state sales and use tax exemption
Page 34, Line 12certificate is exempt from taxation under parts 1 and 2 of this article 26.
Page 34, Line 13(4) Notwithstanding section 39-21-304 (4), the exemption allowed pursuant to this section continues indefinitely.
Page 34, Line 14SECTION 5. Applicability. This act applies to data centers for
Page 34, Line 15which building or the purchase of equipment or regulated resource acquisitions commence on or after the effective date of this act.
Page 34, Line 16SECTION 6. Safety clause. The general assembly finds,
Page 34, Line 17determines, and declares that this act is necessary for the immediate
Page 34, Line 18preservation of the public peace, health, or safety or for appropriations for
Page 34, Line 19the support and maintenance of the departments of the state and state institutions.