Concerning facilitation of data center development while supporting utility resources, and, in connection therewith, creating the "Colorado Data Center Workforce, Clean Energy, Grid Modernization, and Consumer and Environmental Protection Act".
HB26-1030 would create a new Colorado Data Center Development Authority within the Office of Economic Development and establish a data center development and incentive program aimed at attracting large data center projects to the state. The bill offers a 100% state sales and use tax exemption for qualified purchases used in certified data centers, beginning in 2027, and allows the exemption to run for 20 years with a possible 10-year extension if the project continues to meet ongoing requirements. To qualify, a project must meet substantial investment, job creation, labor, energy-efficiency, water stewardship, and backup-power standards, and must submit annual compliance reports to keep its certification.
The bill also creates a parallel utility-planning process for large electric loads. It allows regulated utilities to file targeted resource acquisition applications with the Public Utilities Commission to plan for emerging large-load customers, such as data centers, and to recover certain infrastructure and resource costs through utility mechanisms. The bill includes provisions intended to reduce cost shifting to other ratepayers, require customer contributions or commitments in some cases, and support clean energy, storage, and grid modernization investments tied to these projects.
The bill would add new statutory provisions in Title 24 and Title 39 to create a state-level certification and tax incentive structure for data centers, while also amending local sales tax rules so municipalities and counties must expressly opt in if they want the new data center exemption to apply locally. It would also create a new cash fund for program administration and exempt that fund from state reserve limitations. In utility law, the bill would add a new process before the Public Utilities Commission for serving emerging large-load customers, including data centers, and would affect how utilities plan, finance, and recover costs for related generation, transmission, distribution, and other infrastructure.
The bill’s stated purpose is strongly pro-development, pro-workforce, and pro-clean-energy, and the text frames data centers as an opportunity for high-wage jobs, grid modernization, and expanded clean energy deployment. The committee history provided shows the bill was ultimately postponed indefinitely in the House Energy & Environment Committee, which indicates it did not advance at that stage. No vote record or transcript was provided, so the available context does not show a formal recorded split, but the disposition suggests significant concerns or insufficient support in committee.
The main points of contention appear to be the size and duration of the tax expenditure, the potential impact on utility rates and infrastructure costs, and whether the bill adequately protects water resources and the environment. The bill tries to address these concerns by requiring consultation with utilities, imposing labor and environmental conditions, and limiting certification revocation based on later utility or regulatory changes, but those same provisions may have raised questions about enforceability and cost allocation. Local control is another likely issue, because the bill preserves local authority but also creates a state incentive structure that could affect local tax policy, land use, and permitting decisions.