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House committee OKs data center bill
House Bill 3147, a bill with major bipartisan support, was passed by the House Finance Committee on a unanimous vote last month. The bill would make Washington much more competitive in attracting data center construction and development and would create thousands of jobs.
The Port of Quincy submitted testimony in favor of House Bill 3147, which would allow a 15-month sales-tax exemption on the purchase and installation of computers and energy for new data centers in rural counties.
Senate Bill 6789, a companion bill concerning sales and use tax exemptions for certain equipment and infrastructure contained in data centers, was scheduled for executive session Wednesday in the Senate Committee on Ways & Means.
The House bill, introduced at the request of the state Department of Revenue, has sponsors from both political parties and all parts of the state.
“The bill will create new economic development, new jobs and greatly increase our rural property tax base,” said Pat Boss, the Port of Quincy’s business consultant.
“If HB 3147 were to pass, it is highly likely that at least two major data center projects, valued at several hundred million dollars, would begin construction in Quincy later this year or early next year.”
The bills would re-establish Washington as a center for the fast-growing data center industry after several years without new projects. The data center business in Washington was brisk until November 2007, when the state attorney general determined that data centers did not qualify for an existing rural sales-tax exemption.
Since then, data centers have been built in other states across the country, including by several companies that had been strongly looking at Washington before the tax climate changed. Amazon, despite being located in Seattle, is building a data center in Oregon; Google has built a center in The Dalles, Oregon.; and just this month, Facebook announced it was building a data center in Prineville, Oregon. In some cases, the data centers that have located in Oregon are purchasing electrical power that is generated in Washington State.
“Washington needs to become competitive again for these facilities,” said Dean Allen, CEO of McKinstry, a Seattle mechanical contracting firm.
“Even though several globally known high tech companies have purchased land in Quincy or have recently wanted to locate data centers in Quincy, they postponed building in Quincy or have decided to locate elsewhere because other states’ sales-tax exemptions relating to certain types of equipment for data centers is more competitive,” Boss said. “As a result, it is critical that the Washington state legislature pass House Bill 3147 so that Quincy and other rural communities will be able to more competitively recruit and locate high-tech data centers and related facilities.”
A typical data center can provide up to 500 or more construction jobs.
Each center also provides 30-50 permanent operating jobs and at least as many jobs from businesses that support the facility and its employees.
“This legislation creates a window of opportunity to stimulate the economy in the short term with hundreds of badly needed construction jobs in Eastern Washington and, by restarting data center development in this state, to generate long-term high- tech jobs and spur additional technology investment,” said Rep. Timm Ormsby, D-Spokane, the lead sponsor of HB 3147.
Several data centers built in Central Washington before the tax climate changed have brought $1.17 billion to the economies of Douglas, Grant and Chelan counties, including new jobs and tax revenue, according to a study this month by the Washington Research Council.
“The data centers have provided a significant boost to our economy,” said Curt Morris, Port of Quincy commissioner. Morris added that Quincy’s property-tax rate declined by 10 percent because of the broader tax base created by the centers.
