A bill to create special tax districts for data centers cleared the Senate Economic Development Committee earlier today. The legislation, referenced as House Bill 2014, now moves to consideration by the full Senate.
The bill had previously passed the House of Delegates on April 1. The Economic Development Committee made a major change to the tax provisions of the bill to allow local governments to retain a significant amount of the property taxes resulting from new data center developments (see chart below).
The earlier House version followed the Governor’s proposal to divert most of the property taxes generated by new data centers to the state coffers — a provision that raised significant concerns among County Commissioners across the state.
County Commissioners Ask For Fair Share & Local Control
Eddie Gochenour, president of the Berkeley County Commission and Pasha Majdi, president of the Jefferson County Commission both spoke to the committee at the invitation of State Senator Jason Barrett who represents both counties. Gochenour spoke about the importance of property taxes to local governments that are tasked with providing fire, ambulance and other services. He emphasized that Berkeley County wants to be a partner — “a fair and equal partner.” Majdi echoed the concern that property tax revenues are “a key tool for the county to fund basic services.”
Gochenour and Majdi also spoke about the value of local land use regulation, but the Senators did not seem too interested in these concerns and made no changes to the provisions in the bill that prohibits counties and municipalities from imposing any zoning regulations on data centers in the “certified microgrid districts.”
For more detail on the provisions of the HB2014 legislation and how it would exempt data centers from local regulations, see The Observer’s April 7 article.
Really Big Numbers
Some of the numbers discussed during the committee meeting were truly astounding. An individual data center building could cost $1 billion to $2 billion and require 100 megawatts of power to operate.
The industry prefers to cluster data centers, so a multi-building data center complex could have a dozen or more data centers. A recently announced data center complex in Tucker County is projected to include a 1,656 megawatt gas-fired power generation facility — roughly the same size as the nearby Mt. Storm coal-fired power plant operated by Dominion Energy.
During the hearing, the senators discussed an even larger data center complex in Mason County (image) that is projected to need 3,600 megawatts of power. For comparison, the entire power generating capacity of West Virginia is 15,000 megawatts, according to data published by the U.S. Energy Information Administration.
The regular session is scheduled to end on April 12, so the full Senate is expected to move quickly to consider and vote on the HB2014 legislation.
By Steve Pearson