A data center seeking electric service under a data-center service agreement must obtain approval from the Public Service Commission before the utility may provide service.

The data center must pay the costs attributable to serving its large electric load, including necessary generation, transmission, distribution, and other system-upgrade costs, rather than shifting those costs to other utility customers.

A data-center service agreement must address the facility’s demand, service duration, financial responsibility, and potential costs if the facility reduces or ends service.

The Public Service Commission must provide public notice and an opportunity for public participation when reviewing a proposed data-center service agreement.

Covered data centers and utilities have continuing operating and reporting obligations concerning electricity demand, service, and costs.

To qualify for the data-center incentive program, a project must provide networked server computers, dedicated cooling equipment, data-redundancy capacity that permits equipment replacement without a system shutdown, and physically isolated systems designed to avoid disruption from planned or unplanned events.

An owner, operator, or colocation tenant must make a minimum capital investment by the fifth anniversary of preliminary approval: $450 million in a county with at least 100,000 people, $100 million in a county with more than 50,000 but fewer than 100,000 people, or $25 million in a county with 50,000 or fewer people. minimum capital investment

A project organizer must invest at least $150 million in capital by the fifth anniversary of preliminary approval to qualify as a data-center project.

The incentive program excludes projects that would replace data centers already operating in Kentucky. replacement of data centers existing in the Commonwealth

A qualifying project may not apply for or accept another economic-development incentive under KRS Chapter 154. accepts any other economic development incentives

A project is excluded from the program if it benefits from the sales-and-use-tax exemption for electricity used in commercial cryptocurrency mining. commercial mining of cryptocurrency

Expands eligibility for the data-center incentive program to owners, operators, colocation tenants, and project organizers. Minimum investment thresholds for owners, operators, and colocation tenants are $450 million in counties with at least 100,000 people, $100 million in counties with more than 50,000 but fewer than 100,000 people, and $25 million in counties with 50,000 or fewer people; project organizers must invest at least $150 million.

Creates tax incentives for qualifying data-center projects, including credits or other tax benefits tied to required investment, employment, and wage commitments.

Provides sales-and-use-tax relief for qualifying data centers, including eligible equipment, construction materials, and other property used to construct or operate the facility, subject to eligibility and approval requirements.

Provides tax relief for electricity and other utility purchases used to operate a qualifying data center, subject to applicable project requirements and limits.

Allows local governments to provide additional incentives for qualifying data-center projects, including local tax abatements or exemptions, when statutory conditions are met.

Allows coordinated state and local review of qualifying data-center projects to reduce duplicative permitting and review requirements while preserving required permits and approvals.

Protects qualifying data-center projects from later local restrictions that would prohibit or materially limit a project approved under the measure, subject to stated exceptions and conditions.

Allows incentive agreements lasting up to 50 years for qualifying projects with at least $450 million in capital investment, up to 25 years for other qualifying projects, and up to 15 years for project-organizer projects.

Treats supporting infrastructure as qualified data-center infrastructure, including backup power, electrical substations, water and natural-gas service, physical security, infrastructure monitoring, and environmental controls for fire, flood, and other disasters.

Makes expenditures after preliminary approval for purchasing, installing, repairing, and replacing essential data-center equipment eligible costs under the program. Covered equipment includes servers, networking and fiber-optic equipment, power and backup-power systems, cooling systems, water-conservation systems, monitoring and security systems, software, and related tangible personal property.

Beginning January 1, 2023, website hosting services are subject to a 6% sales tax, increasing operating costs for data centers providing those services.

Beginning January 1, 2023, prewritten computer software access services are subject to a 6% sales tax, potentially increasing costs for qualifying data-center operations.

A public-private-partnership capital project valued at $25 million or more must receive General Assembly authorization before proceeding if it begins on or after July 1, 2024. Projects made public through a request for proposal or unsolicited-proposal notice before that date are exempt.

A company seeking the data-center incentive must apply to the authority and provide project details, including location, proposed capital investment, and eligible costs; the authority may require additional information.

The project requires preliminary approval by authority resolution and a memorandum of agreement before the company can proceed under the incentive program.

The Kentucky Cabinet for Economic Development must approve a data center before it can receive the available tax incentives.

The authority may review the applicant's creditworthiness, proposed investment, and likelihood of economic success, and may impose additional review and approval procedures and standards by regulation.

Access to the sales and use tax exemption requires an executed memorandum of agreement with the authority and use of equipment for a qualified data-center project; the Department issues a certificate of exemption only after receiving notice that the agreement has been executed.

A qualifying data center must meet applicable minimum capital-investment requirements, including at least $150 million under the measure's general qualification standard; under the project-specific thresholds, the minimum is $450 million in a county with at least 100,000 people, $100 million in a county with more than 50,000 but fewer than 100,000 people, $25 million in a county with 50,000 or fewer people, or $150 million for a project organizer.

A qualifying data center must create at least 20 new full-time jobs, with average wages of at least 125% of the county average wage.

The project must maintain the required investment and employment levels for the period specified in its incentive agreement; failure to do so can result in loss or recovery of incentives.

The company must meet the minimum capital investment in the memorandum of agreement by its fifth anniversary; otherwise, its sales and use tax exemption certificate must be revoked and previously unpaid tax must be paid.

To obtain final approval and continue the exemption for the agreement's term, the company must submit documentation showing that the agreement requirements were met, and the authority must approve that documentation by resolution.

Beginning September 1, 2025, and annually thereafter, each preliminarily approved company must report project and county information and an itemized schedule of qualifying equipment and tax not paid; the schedule must be verified and certified by an independent, unrelated third party.

If the authority terminates the available sales and use tax exemptions, the company may owe the aggregate tax avoided through the exemption plus applicable interest.

A qualified data-center project must provide specified infrastructure, including reliable power with backup generation, water and natural-gas service, physical and infrastructure monitoring security, and environmental controls for fire, flood, and other natural disasters.

A project involving buildings must acquire, lease, rehabilitate, expand, or construct buildings that house networked servers and provide dedicated cooling, redundancy and replacement capacity without shutdown, and physically isolated systems to prevent disruption.

A project may not replace data centers already existing in Kentucky.

A project may not apply for or accept other economic-development incentives under KRS Chapter 154.

A project may not receive the sales and use tax exemption for electricity used in commercial cryptocurrency mining.

The memorandum of agreement has a maximum term of 15 years for a project organizer, 50 years for a project with at least $450 million in capital investment, and 25 years for another project with less than $450 million in capital investment.

Only expenditures made after preliminary approval for purchasing, installing, repairing, or replacing data-center equipment qualify as eligible costs; expenditures made before preliminary approval are excluded.

Creates a Kentucky data-center tax-incentive program for projects approved by the Kentucky Economic Development Finance Authority. Eligibility generally requires at least $150 million in investment, at least 20 new full-time jobs, and average wages meeting the statutory threshold.

Provides sales-and-use-tax relief for qualifying tangible personal property and other purchases used to construct, renovate, expand, or operate an approved data center, subject to the program agreement and statutory requirements.

Exempts data-center equipment from sales and use tax when purchased, leased, installed, repaired, or replaced for a qualified project. The exemption can apply even when the seller is not responsible for incorporating the equipment into the real estate, and a contractor may jointly claim it with the approved company.

Requires the Department of Revenue to issue a certificate of exemption after the authority executes a memorandum of agreement with a preliminarily approved or approved company. The certificate generally lasts for the memorandum's term.

Allows preliminary approval to take effect before final approval, permitting the company to undertake the project, begin capital investment, and purchase or lease exempt equipment. If the required minimum investment is not reached by the fifth anniversary, the certificate is revoked and unpaid tax becomes due.

Provides sales-tax relief for electricity purchased and used by a qualifying data center to operate the facility, subject to the applicable eligibility and approval conditions.

Provides an income-tax and limited-liability-entity-tax credit for an approved data-center project, subject to statutory limits, the project agreement, and continued compliance with program requirements.

Allows qualified projects to acquire, lease, rehabilitate, expand, or construct buildings for centralized data storage and management, including required cooling, data-redundancy, and physically isolated systems.

Treats infrastructure such as uninterruptible power supplies, electrical substations, backup generators, water and natural-gas service, physical security, infrastructure monitoring, and environmental controls as qualified data-center infrastructure.

Includes servers, networking equipment, monitoring and security systems, fiber-optic cabling, power-generation and distribution equipment, cooling and water-conservation systems, software, warranty services, and other essential tangible personal property within the definition of data-center equipment.

Allows eligible costs incurred after preliminary approval for purchasing, installing, repairing, and replacing data-center equipment to qualify for the program's benefits.

Allows a memorandum of agreement to remain in effect for up to 15 years for a project organizer, up to 25 years for other projects with less than $450 million in capital investment, and up to 50 years for other projects with at least $450 million in capital investment.

Permits qualifying capital investments of $450 million, $100 million, or $25 million for an owner, operator, or colocation tenant, depending on county population, and $150 million for a project organizer. The required investment must generally be made by the fifth anniversary of preliminary approval.

Creates a refundable decontamination tax credit for qualifying remediation of a brownfield or other contaminated site, potentially reducing site-preparation costs. The credit equals qualifying remediation expenditures, is capped at $30 million per property, and generally may be claimed at no more than 25% per taxable year. Requirements include at least $10 million in qualifying expenditures, more than $30 million in capital investment, an approved corrective-action plan, and specified location conditions; it applies to taxable years beginning in 2022 through 2031.

Allows public-private partnerships for capital projects, providing a project-delivery structure that may be used for a qualifying data-center project. Beginning July 1, 2024, a capital project using this method with an aggregate value of $25 million or more generally requires specific General Assembly authorization, unless publicly initiated before that date.

Provides temporary income-tax exemptions for qualifying disaster-response businesses and employees performing requested work to restore critical infrastructure, including communications networks and electric systems. A data-center operator or contractor must generally have no ordinary Kentucky presence and perform qualifying restoration work during the defined disaster-response period; the exemption applies to taxable years beginning in 2021 through 2024.

If a data-center tax exemption is terminated, the total sales and use tax recovered cannot exceed the aggregate tax avoided through the exemption, plus required interest.