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Minutes for SB51 - Committee on Taxation
Short Title
Providing a sales tax exemption for the construction or remodeling of a qualified data center in Kansas and the purchase of data center equipment, eligible data center costs and certain labor costs to qualified firms that commit to a minimum investment of at least $250,000,000 and meet new Kansas jobs and other requirements.
Minutes Content for Thu, Mar 6, 2025
Chairperson Smith opened the hearing for SB51.
Adam Siebers, Office of Revisor of Statutes, provided an overview for SB51 that provides a sales tax exemption for the construction or remodeling of a qualified data center in Kansas, the purchase of data center equipment, eligible data center costs and certain labor costs to qualified firms that commit to a minimum investment of $250,000,000 and meet new Kansas jobs and other requirements.(Attachment 1) Mr. Siebers stood for questions from Committee members.
Kathleen Smith, Kansas Department of Revenue, stated SB51 does have the potential to decrease state and local sales tax revenues by unknown amounts due to not knowing the number of projects that will qualify. Ms. Smith stood for questions from Committee members.
Proponents: (Speaking before the Committee)
Brad Smoot, NetChoice testified as a proponent for SB51 stating data centers are the infrastructure backbone of the internet system. Data centers are proposing to come to Kansas and build multi-million dollar facilities in urban and rural areas and invest billions of dollars of private money. SB51 is requesting a sales tax exemption on their machinery, equipment and construction. The bill will generate millions in local property taxes, state taxes on salaries and wages for construction and operation of the facilities and new economic activity.(Attachment 2)
Bob Johnson, Polsinelli, testified on behalf of Sunflower Redevelopment, LLC, the owner and operator of the Astra Enterprise Park, formerly known as the Sunflower Army Ammunition Plant now incorporated into DeSoto, Kansas as a proponent for SB51. The bill directly addressed the infrastructure needs of the innovative companies by incentivizing data center development. (Attachment 3)
Kara Lowe, KC Tech Council, testified as a proponent for SB51 stating their organization is committed to advancing innovation, creating and expanding high quality jobs in the region and driving economic growth and prosperity for Kansas. There is a significant increase of what companies are looking for to invest globally. Ms. Lowe stated they have tracked some economic data in the state of Kansas and Missouri within the telecom, cloud infrastructure, data processing and hosting sub sectors of each industry. She noted Kansas experienced a 3.0 percent reduction in jobs year over year within that sub sector and during the same time frame Missouri experienced a 10.0 percent increase. (Attachment 4)
Chad Tenpenny, Geiger Ready Mix, testified as a proponent for SB51 that establishes a sales tax exemption for qualified data centers in Kansas and aims to incentivize the construction and operation of data centers in Kansas. (Attachment 5)
Brad Hardin, Diode Ventures, LLC, testified via WEBEX as a proponent for SB51 that can bring significant benefits investing in data center infrastructure to the state of Kansas. Market opportunities with the right set of incentives will bring the best projects forward to Kansas with skilled data center partners and developers. The technology world is moving at a rapid pace and now is the time that Kansas continues to grow and take advantage of the significant benefits the projects can bring to the communities in Kansas. (Attachment 6)
Kimberly Gencur Svaty on behalf of Kansas Power Alliance, testified as a proponent for SB51 stating the APA member companies have invested more than $20 billion in private capital in Kansas in twenty years and created more than 20,000 direct and indirect jobs. Advance Power Alliance are the developers of wind, solar, energy storage, and hydrogen energy systems in Kansas. APA can use Kansas wind, solar or behind the meter generation solutions to power data centers thereby saving the traditional generation resources for homes, businesses and manufacturing. The cost of the power load will be assumed by the data center, but the additional system usage will help level or lower electric costs for other users. (Attachment 7)
Mitch Robinson, Kansas Economic Develoment Alliance (KEDA) testified as a proponent for SB51 which provides sales tax exemptions for the construction, remodeling, and equipping of qualified data centers in Kansas. The bill will bring economic growth, job creation, technological advancement and support for local communities in Kansas. (Attachment 8)
The conferees stood for questions from Committee members.
The following provided written proponent testimony for SB51:
Steve DelBianco, NetChoice (Attachment 9)
Rachel Willis, Kansas Department of Commerce (Attachment 10)
Laura Lutz, Evergy, (Attachment 11)
Eric Stafford, Kansas Chamber, (Attachment 12)
Gregory Kindle, Wyandotte Economic Development Council, (Attachment 13)
Tim Holverson, DeSoto Economic Development Council, (Attachment 14)
Opponent: (Speaking before the Committee)
Zack Pistora, Kansas Sierra Club, testified as an opponent for SB51 stating the concern is about the implications on this bill regarding energy and water resources. Data centers need large amounts of water and have required huge build outs of new electricity generation and infrastructures which results in rate increases for ratepayers and diminishing water resources. SB51 is a taxpayer handout to now profitable businesses which the environment cannot afford. (Attachment 15) Mr. Pistora stood for questions from Committee members.
In response to a request, Mr. Pistora will work on language for SB51 that addresses water and energy concerns regarding the prospective increased need for the establishment of data centers.
Written only neutral SB51 testimony was submitted by Clara Stein, Midwest Energy Efficiency Alliance, (Attachment 16)
Chairperson Smith closed the hearing for SB51.
