A person intending to own, operate, or be a colocation tenant in a qualified data center must apply to the Commissioner of Economic and Community Development and obtain an approved agreement to receive the statutory tax exemptions.

To qualify for the agreement, the facility must be used as a qualified data center and must achieve a qualified investment of at least $50 million in an enterprise zone or federal qualified opportunity zone, or at least $200 million elsewhere, by the fifth anniversary of the agreement.

A developer or owner may not begin construction, rehabilitation, renovation, or repair of a qualified data-center facility until it has entered into a negotiated host municipality fee agreement with the municipality; facilities spanning contiguous municipalities require an agreement with each municipality.

The host municipality fee agreement must address payment of otherwise-exempt municipal property taxes and penalties and interest if the agreement's requirements are not met.

A qualified data center must pay an annual administrative and operational fee, set by the Commissioner of Economic and Community Development up to $50,000, during the qualifying period or until the required investment is reached, whichever occurs first.

The state agreement may include assessment and payment of exempted taxes, penalties, and interest if the data center fails to meet the agreement or statutory requirements.

If a municipality determines that a host-fee agreement is not being followed, the data center has 180 days to cure the noncompliance; otherwise, the municipality may terminate the agreement.

If the state agreement or host municipality fee agreement is terminated, the data center and relevant property become liable for previously exempted taxes, penalties, and interest, including amounts accruing from the applicable noncompliance or termination date.

A person planning to own, operate, or lease space in a qualified data center may apply to the Commissioner of Economic and Community Development for a tax-exemption agreement. Any person that anticipates it will own, operate or be a colocation tenant may apply.

The agreement can cover eligible investments including land, buildings, site improvements, construction, engineering, permitting, equipment, and operating costs. Eligible qualified data center costs include these categories.

A qualified data center can receive the state tax agreement if it reaches at least $50 million in qualified investment within five years in an enterprise zone or federal opportunity zone, or at least $200 million elsewhere. At least fifty million dollars is required in a qualifying zone, compared with two hundred million dollars outside one.

The tax agreement generally lasts 20 years, and it can be extended to 30 years if the facility reaches at least $200 million of investment in a qualifying zone or $400 million elsewhere. The period for which an agreement may be extended under these investment conditions.

The state provides a sales-and-use-tax exemption for qualified data center equipment, qualifying construction and related services, and all electricity used by the data center; the exemption also covers contractors and subcontractors. The sale of and the storage, use or other consumption is exempt for the specified items.

The state provides a property-tax exemption for real property, buildings, structures, and enterprise information-technology equipment located at or used by the qualified data center. Such exemption shall apply to real property, buildings or structures and qualifying equipment.

The exemptions can continue to cover additional buildings, structures, equipment, services, and electricity acquired after the original agreement, allowing the facility to expand during the agreement period. Any additional building or structure and any additional qualified data center equipment may be covered.

If the facility reaches the higher investment threshold required for a 30-year agreement, the qualified data center, its operator or affiliate, and its colocation tenants also receive a 30-year exemption from state financial-transactions taxes. Any qualified data center that enters into an agreement qualifies subject to that threshold.

A dedicated Office of Data Infrastructure Administration and Security serves as a liaison and provides assistance from the preapplication stage through post-operation, supporting coordinated state-agency responses. Provide assistance to applicants and qualified data centers from the preapplication phase to the post-operational stage.

The tax agreement applies to later owners, operators, operator affiliates, and colocation tenants as long as the facility continues to operate as a qualified data center, helping preserve the incentive when the facility or its occupants change. The provisions of the agreement shall be applicable to those successors and occupants.

Construction, rehabilitation, renovation, or repair cannot begin until the owner has entered into a negotiated host-municipality fee agreement, creating a statutory pathway for local approval of the project and its tax or fee terms. No developer or owner shall commence construction unless that agreement is in place.