Bill Text: MI HB5128 | 2019-2020 | 100th Legislature | Introduced
Bill Title: Sales tax; definitions; definition of enterprise data center; include as qualified data center. Amends sec. 4ee of 1933 PA 167 (MCL 205.54ee).
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2020-01-16 - Referred To Committee On Ways And Means, With Substitute (h-5) [HB5128 Detail]
Download: Michigan-2019-HB5128-Introduced.html
HOUSE BILL NO. 5128
October 17, 2019, Introduced by Reps. Warren,
Kahle, Marino, Sheppard, Lilly, Vaupel, Lasinski, Chirkun, Byrd and
Liberati and referred to the Committee on Commerce and Tourism.
A bill to amend 1933 PA 167, entitled
"General sales tax act,"
by amending section 4ee (MCL 205.54ee), as added by 2015 PA 251.
the people of the state of michigan enact:
Sec. 4ee. (1) Subject to subsections (2) and (3), beginning January 1, 2016 through December 31, 2035, 2055, a sale of data center equipment to the owner or operator of a qualified data center or a colocated business for assembly, use, or consumption in the operations of the qualified data center or a sale of data center equipment to a person engaged in the business of constructing, altering, repairing, or improving real estate for others to the extent the data center equipment is to be affixed to or made a structural part of a qualified data center is exempt from the tax under this act.
(2) The exemption under this section only continues to apply after January 1, 2022, if the numbers gathered by the local economic development corporations are certified and reported to the department of talent and economic development labor and economic opportunity and subsequently forwarded to the department and demonstrate that the qualified data centers, the colocated businesses, and the contractors of the qualified data centers, collectively, have, in aggregate, established in this state at least 400 data center industry jobs or data center industry related jobs, or a combination of both, since January 1, 2016. The department of talent and economic development labor and economic opportunity shall submit a report no later than April 1, 2022 related to the number of data center industry jobs or data center industry related jobs that have been established since January 1, 2016 to the speaker and minority leader of the house of representatives, the majority and minority leaders of the senate, and the governor.
(3) The exemption under this section only continues to apply after January 1, 2026, if the numbers gathered by the local economic development corporations are certified and reported to the department of talent and economic development labor and economic opportunity and subsequently forwarded to the department and demonstrate that the qualified data centers, the colocated businesses, and the contractors of the qualified data centers, collectively, have, in aggregate, established in this state at least 1,000 data center industry jobs or data center industry related jobs, or a combination of both, since January 1, 2016. The department of talent and economic development labor and economic opportunity shall submit a report no later than April 1, 2026 related to the number of data center industry jobs or data center industry related jobs that have been established since January 1, 2016 to the speaker and minority leader of the house of representatives, the majority and minority leaders of the senate, and the governor.
(4) As used in this section:
(a) "Affiliate" means a person that directly, or indirectly through 1 or more intermediaries, controls, is controlled by, or is under common control with a specified person.
(b) "Colocated business" means a person that has entered into a contract with the owner or operator of a qualified data center to use or deploy data center equipment physically located within the qualified data center for a period of 1 or more years.
(c) "Data center equipment" means only computers, servers, routers, switches, peripheral computer devices, racks, shelving, cabling, wiring, storage batteries, back-up generators, uninterrupted power supply units, environmental control equipment, other redundant power supply equipment, and prewritten computer software used in operating, managing, or maintaining the qualified data center or the business of the qualified data center or a colocated business. Data center equipment also includes any construction materials used or assembled under the qualified data center's proprietary method for the construction or modification of a qualified data center, including, but not limited to, building materials, infrastructure, machinery, wiring, cabling, devices, tools, and equipment that would otherwise be considered a fixture or related equipment. Data center equipment does not include any equipment owned by a third party that is used to supply the qualified data center's primary power.
(d) "Enterprise data center" means a facility composed of 1 or more buildings located in this state that meets all of the following requirements:
(i) The facility is owned and operated by an entity operating a group of networked computers for the purpose of centralizing the storage and processing of data.
(ii) The capital investment in the facility is at least $250,000,000.00.
(iii) The facility employs 30 or more full-time equivalent employees at wage rates exceeding 120% of the county average wage. As used in this subparagraph, "county average wage" means the average annual wage for the county where the facility is located based on the most recent data made available by the Michigan bureau of labor market information and strategic initiatives.
(e) (d) "Qualified data center" means a either of the following:
(i) A facility composed of 1 or more buildings located in this state and the facility is owned or operated by an entity engaged at that facility in operating, managing, or maintaining a group of networked computers or networked facilities for the purpose of centralizing, or allowing 1 or more colocated businesses to centralize, the storage, processing, management, or dissemination of data of 1 or more other persons who is not an affiliate of the owner or operator of a qualified data center or of a colocated business and that entity receives 75% or more of its revenue from colocated businesses that are not an affiliate of the owner or operator of the qualified data center.
(ii) An enterprise data center.
