Bill Summary – FastDemocracy

0444.01000
     Sixty-seventh
     Legislative Assembly                   SENATE BILL NO. 2155
     of North Dakota
     Introduced by
       Senators Bekkedahl, Meyer
       Representatives Dockter, Hatlestad, Nathe, Owens
  A BILL for an Act to create and enact a new section to chapter 57-39.2 of the North Dakota
  Century Code, relating to a sales and use tax exemption for enterprise information technology
  equipment and computer software purchased for use in a qualified data center; to provide an
  effective date; and to provide an expiration date.
  BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
      SECTION 1. A new section to chapter 57-39.2 of the North Dakota Century Code is created
  and enacted as follows:
      Sales and use tax exemption for enterprise information technology equipment and
  computer software used in a qualified data center.
     1.   Gross receipts from sales of enterprise information technology equipment and
          computer software purchased for use by a qualifying business in a qualified data
          center are exempt from the tax imposed by this chapter. To qualify for the exemption,
          the enterprise information technology equipment or computer software must be
          incorporated into or physically located within the qualified data center. Purchases of
          upgraded or replacement enterprise information technology equipment and computer
          software for use in a qualified data center also are exempt.
     2.   The future owner of a proposed data center shall apply to the tax commissioner to be
          certified as a qualified data center. The exemption provided in this section is limited to
          the first four facilities approved by the tax commissioner as qualified data centers.
          Applications must be processed in the order received by the tax commissioner. An
          applicant shall respond to a request for additional information from the tax
          commissioner within thirty days of the request or the application may no longer be
          considered.
                                               Page No. 1                         21.0444.01000
     Sixty-seventh
     Legislative Assembly
      3.   To receive the exemption at the time of purchase, the qualified business shall obtain
           from the tax commissioner a certificate that the enterprise information technology
           equipment or computer software the qualified business intends to purchase qualifies
           for the exemption. If a certificate is not received before the purchase, the qualified
           business shall pay the applicable tax imposed by this chapter and apply to the tax
           commissioner for a refund.
      4.   If the enterprise information technology equipment is purchased or installed by a
           contractor subject to the tax imposed by this chapter, the qualified business may apply
           for a refund of the difference between the amount remitted by the contractor and the
          exemption imposed or allowed by this section. Application for a refund must be made
          at the times and in the manner directed by the tax commissioner and must include
          sufficient information to permit the tax commissioner to verify the sales and use taxes
          paid and the exempt status of the sale or use.
     5.   For purposes of this section:
          a.   "Computer software" includes software used or loaded at a qualified data center,
               software maintenance, software licensing, and software customization.
          b.   "Data center" means a centralized repository for the storage, management, and
               dissemination of electronic data and information organized around a particular
               body or bodies of knowledge.
          c.   "Enterprise information technology equipment" includes:
               (1)   Computer hardware, servers, routers, cooling systems, and cooling towers.
               (2)   Temperature control infrastructure and power infrastructure used for
                     transformation, distribution, or management of electricity used for the
                     maintenance and operation of a qualified data center.
               (3)   Exterior dedicated business-owned substations, backup power generation
                     systems, battery systems, or other related infrastructure.
               (4)   Racking systems, raised flooring, cabling, or trays necessary for the
                     maintenance and operation of a qualified data center.
          d.   "Qualified business" means the owner, operator, or tenants of a qualified data
               center.
                                              Page No. 2                          21.0444.01000
     Sixty-seventh
     Legislative Assembly
           e.   "Qualified data center" means a newly constructed or substantially refurbished
                facility located in this state:
                (1)   Comprised of one or more buildings, the primary purpose of which is to
                      contain a data center, consisting of an aggregate amount of sixteen
                      thousand square feet [1486 square meters] or more;
                (2)   Located on a single parcel or on contiguous parcels;
                (3)   On which construction is completed or which is substantially refurbished
                      after December 31, 2020;
                (4)   Having the following attributes:
                     (a)   Uninterrupted power supplies, generator backup, or both;
                     (b)   Sophisticated fire suppression and prevention systems;
                     (c)   Enhanced security with security features including permanent security
                           guards; video camera surveillance; an electronic system requiring
                           pass codes, key cards, or biometric scans such as hand scans or
                           retinal or fingerprint recognition to restrict access to selected
                           personnel; or other similar security features; and
               (5)   Certified by the tax commissioner as a qualified data center.
          f.   "Substantially refurbished" means a data center used to house enterprise
               information technology equipment in which sixteen thousand square feet [1486
               square meters] or more has been rebuilt, modified, or improved through methods
               including energy efficiency improvements, building improvements, and the
               installation of enterprise information technology equipment, environmental
               controls, and computer software.
     6.   In determining the total square footage of a qualified data center, the square footage
          of office space, meeting space, mechanical space, and other support facility spaces
          must be included if those spaces are used to support the operation of enterprise
          information technology equipment.
     7.   Qualified data center owners that intend to collocate operators or tenants within the
          center shall provide the operators or tenants with documentation from the tax
          commissioner that the center meets the definition of a qualified data center under this
          section. Operators or tenants shall obtain and submit a copy of the documentation with
                                                 Page No. 3                        21.0444.01000
    Sixty-seventh
    Legislative Assembly
           all applications for sales tax exemption on information technology equipment and
           computer software purchased for use in the qualified data center.
     SECTION 2. EFFECTIVE DATE. This Act is effective for taxable events occurring after
 June 30, 2021.
     SECTION 3. EXPIRATION DATE. This Act is effective through June 30, 2027, and after that
 date is ineffective.
                                             Page No. 4                       21.0444.01000