1Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An 
2act relating to tax reform and State taxation by codifying 
3and enumerating certain subjects of taxation and imposing 
4taxes thereon; providing procedures for the payment, 
5collection, administration and enforcement thereof; providing 
6for tax credits in certain cases; conferring powers and 
7imposing duties upon the Department of Revenue, certain 
8employers, fiduciaries, individuals, persons, corporations 
9and other entities; prescribing crimes, offenses and 
10penalties," providing for a computer data center equipment 
11incentive program.

12The General Assembly of the Commonwealth of Pennsylvania
13hereby enacts as follows:

14Section 1. The act of March 4, 1971 (P.L.6, No.2), known as
15the Tax Reform Code of 1971, is amended by adding an article to
16read:

17ARTICLE XXIX-D

18COMPUTER DATA CENTER EQUIPMENT INCENTIVE PROGRAM

19Section 2901-D. Definitions.

20The following words and phrases when used in this article
21shall have the meanings given to them in this section unless the
22context clearly indicates otherwise:

1"Colocation tenant." An entity that contracts with the owner
2or operator of a computer data center to use or occupy part of
3the computer data center.

4"Computer data center." All or part of a facility that may
5be composed of multiple businesses or owners and no fewer than
6five colocation tenants, that is or will be predominantly used
7to house working servers and that may have uninterruptible
8energy supply or generator backup power, or both, cooling
9systems, towers and other temperature control infrastructure.

10"Computer data center equipment." Equipment that is used to
11outfit, operate or benefit a computer data center and component
12parts, installations, refreshments, replacements and upgrades to
13the equipment, whether any of the equipment is affixed to or
14incorporated into real property, including:

15(1) All equipment necessary for the transformation,
16generation, distribution or management of electricity that is
17required to operate computer server equipment, including
18generators, uninterruptible energy supplies, conduit, gaseous
19fuel piping, cabling, duct banks, switches, switchboards,
20batteries and testing equipment.

21(2) All equipment necessary to cool and maintain a
22controlled environment for the operation of the computer
23servers and other components of the computer data center,
24including mechanical equipment, refrigerant piping, gaseous
25fuel piping, adiabatic and free cooling systems, cooling
26towers, water softeners, air handling units, indoor direct
27exchange units, fans, ducting and filters.

28(3) All water conservation systems, including facilities
29or mechanisms that are designed to collect, conserve and
30reuse water.

1(4) All enabling software, computer server equipment,
2chassis, networking equipment, switches, racks, cabling,
3trays and conduit.

4(5) All monitoring equipment and security systems.

5(6) Modular data centers and preassembled components of
6any item described in this paragraph, including components
7used in the manufacturing of modular data centers.

8(7) Other tangible personal property that is essential
9to the operations of a computer data center.

10"Department." The Department of Revenue of the Commonwealth.

11"Existing computer data center." A computer data center in
12operation prior to January 1, 2014.

13"Facility." One or more parcels of land in this Commonwealth
14and any structures and personal property contained on the land.

15"New computer data center." A computer data center that
16first commences operation on or after January 1, 2014.

17"New investment." Construction, expansion or build out of
18data center space at either a new computer data center or an
19existing computer data center on or after January 1, 2014, and
20the purchase and installation of computer data center equipment.

21"Owner or operator." Includes a single entity and multiple
22or affiliated entities.

23"Qualification period." As follows:

24(1) With respect to the owner or operator of a computer
25data center certified under this article, a period of time
26beginning on the date of certification of the computer data
27center and expiring at the end of the fifteenth full calendar
28year following the calendar year in which the owner or
29operator filed the form for certification.

30(2) With respect to a qualified colocation tenant of the

1owner or operator of a computer data center certified under
2this article, a period of time beginning on the date that the
3qualified colocation tenant enters into an agreement
4concerning the use or occupancy of the computer data center
5and expiring at the earlier of the expiration of the term of
6the agreement or the end of the tenth full calendar year
7following the calendar year in which the qualified colocation
8tenant enters into the agreement.

9"Qualified colocation tenant." An entity that contracts with
10the owner or operator of a computer data center that is
11certified pursuant to this article to use or occupy part of the
12computer data center for at least 100 kilowatts per month for
13two or more years.

14"Tax exemption." The tax exemption provided for under this
15article.

16"Telecommunications provider." A provider of
17telecommunications services, as defined in 61 Pa. Code § 60.20 
18(relating to telecommunications service).

19Section 2902-D. Sales and use tax exemption.

20(a) State sales and use tax.--The tax imposed by section 202
21shall not be imposed upon the sale at retail or use of computer
22data center equipment for installation in a computer data
23center, purchased by:

24(1) An owner or operator of a computer data center
25certified under this article.

26(2) A qualified colocation tenant of a new computer data
27center certified under this article.

28(b) Local sales and use tax.--The sale at retail or use of
29computer data center equipment for installation in a computer
30data center shall be exempt from a city or county tax on

1purchase price authorized under Article XXXI-B of the act of
2July 28, 1953 (P.L.723, No.230), known as the Second Class
3County Code, and the act of June 5, 1991 (P.L.9, No.6), known as
4the Pennsylvania Intergovernmental Cooperation Authority Act for
5Cities of the First Class, if purchased by:

6(1) An owner or operator of a computer data center
7certified under this article.

8(2) A qualified colocation tenant of a new computer data
9center certified under this article.

10(c) Restriction.--Telecommunications providers are not
11eligible for a tax exemption under this article.

12(d) Applicability.--A tax exemption shall apply during the
13qualification period.

14Section 2903-D. Application.

15To be considered for a tax exemption, an owner or operator of
16a computer data center shall submit to the department an
17application on a form prescribed by the department that includes
18the following:

19(1) The owner's or operator's name, address and
20telephone number.

21(2) The address of the site where the facility is or
22will be located, including, if applicable, information
23sufficient to identify the specific portion or portions of
24the facility comprising the computer data center.

25(3) If the computer data center is to qualify under
26section 2906-D(1), the following:

27(i) The anticipated investment associated with the
28computer data center for which the tax exemption is being
29sought.

30(ii) An affirmation, signed by an authorized

1executive representing the owner or operator, that the
2computer data center is expected to satisfy the
3certification requirements prescribed in section 2906-
4D(1) and that the computer data center will not be used
5in violation of section 2913-D.

6(4) If the computer data center is to qualify under
7section 2906-D(2), an affirmation, signed by an authorized
8executive representing the owner or operator, that the
9computer data center has satisfied, or will satisfy, the
10certification requirements prescribed in section 2906-D(2)
11and that the computer data center will not be used in
12violation of section 2913-D.

13Section 2904-D. Review of application.

14(a) General rule.--Within 60 days after receiving a complete
15and correct application, the department shall review the
16application and either issue a written certification that the
17computer data center qualifies for the tax exemption or provide
18written reasons for its denial.

19(b) Deemed approval.--Failure of the department to approve
20or deny an application within 60 days after the date the owner
21or operator of a computer data center submits the application to
22the department constitutes certification of the computer data
23center, and the department shall issue written certification to
24the owner or operator within 14 days. The department may not
25certify any new computer data center after December 31, 2029.

26Section 2905-D. Separation of facilities.

27(a) Separate certification.--An owner or operator of a
28computer data center may separate a facility into one or more
29computer data centers, which may each receive a separate
30certification, if each computer data center individually meets

1the requirements prescribed in section 2906-D.

2(b) Limitation.--A portion of a facility or an article of
3computer data equipment shall not be deemed to be a part of more
4than one computer data center.

5(c) Aggregation.--An owner or operator may aggregate one or
6more parcels, buildings or condominiums in a facility into a
7single computer data center if, in the aggregate, the parcels,
8buildings and condominiums meet the requirements of this
9article.

10Section 2906-D. Eligibility requirements.

11A computer data center must meet one of the following
12requirements, after taking into account the combined investments
13made and annual compensation paid by the owner or operator of a
14computer data center or a qualified colocation tenant:

15(1) On or before the fourth anniversary of
16certification, the computer data center creates a minimum
17investment of at least:

18(i) twenty-five million dollars of new investment,
19including costs of buildings and computer data center
20equipment, if the computer data center is located in a
21county with a population of 250,000 or fewer individuals;
22or

23(ii) fifty million dollars of new investment,
24including costs of buildings and computer data center
25equipment, if the computer data center is located in a
26county with a population of more than 250,000
27individuals.

28(2) On or before the fourth anniversary of
29certification, one or more taxpayers operating or occupying a
30data center, in the aggregate, pay annual compensation of at

1least $1,000,000 to employees at the certified computer data
2center site for each year of the certification.

3Section 2907-D. Notification.

4(a) Requirements satisfied.--On or before the fourth
5anniversary of the certification of a new computer data center,
6the owner or operator of a computer data center shall notify the
7department in writing whether the computer data center for which
8the certification is requested has satisfied the requirements
9prescribed in section 2906-D.

10(b) Records.--Until a new computer data center satisfies the
11requirements prescribed in section 2906-D, the owner, operator
12and qualified colocation tenants shall maintain detailed records
13of all investment created by the new computer data center,
14including costs of buildings and computer data center equipment,
15and all tax exemption directly received by the owner, operator
16or qualified colocation tenant.

17Section 2908-D. Revocation of certification.

18(a) Revocation.--If the department determines that the
19requirements of section 2906-D have not been satisfied or that
20there has been a violation of section 2913-D, the department may
21revoke the certification of a new computer data center.

22(b) Appeal.--The owner or operator of the new computer data
23center may appeal the revocation. Appeals filed under this
24section shall be governed by Article II.

25(c) Recapture.--If certification is revoked pursuant to this
26section, the qualification period of any owner, operator or
27qualified colocation tenant of the new computer data center
28expires, and the department may recapture from the owner,
29operator or qualified colocation tenant all or part of the tax
30exemption provided directly to the owner or operator. The

1department may give special consideration or allow a temporary
2exemption from recapture of the tax exemption if there is
3extraordinary hardship due to factors beyond the control of the
4owner or operator. The department may require the owner or
5operator to file appropriate amended tax returns to reflect any
6recapture of the tax exemption.

7Section 2909-D. Regulations.

8The department shall promulgate regulations and prescribe
9forms and procedures as necessary for the purposes of this
10article.

11Section 2910-D. Confidential information.

12Proprietary business information contained in the application
13form described in section 2903-D and the written notice
14described in 2907-D, as well as information concerning the
15identity of a qualified colocation tenant, are confidential and
16may not be disclosed to the public. The department may disclose
17the name of a computer data center that has been certified under
18this article.

19Section 2911-D. List of colocation tenants.

20An owner or operator of a computer data center shall provide
21the department with a list of qualified colocation tenants,
22including the commencement and expiration dates of each
23qualified colocation tenant's agreement to use or occupy part of
24the computer data center, and shall notify the department within
2530 days of any change to the list.

26Section 2912-D. Sale or transfer.

27Except as provided in 2908-D, a computer data center retains
28its certification regardless of a transfer, sale or other
29disposition, directly or indirectly, of the computer data
30center.

1Section 2913-D. Limitations.

2A computer data center certified under this article may not
3be used to:

4(1) Generate electricity for resale purposes.

5(2) Generate, provide or sell electricity outside of the
6computer data center.

7Section 2914-D. Exemption certificate.

8An owner, operator or colocation tenant must prepare and
9deliver a properly executed exemption certificate to a vendor
10from which the owner, operator or colocation tenant purchases
11exempt property.

12Section 2. This act shall take effect January 1, 2015.