{"id":38,"date":"2026-05-08T04:05:24","date_gmt":"2026-05-08T04:05:24","guid":{"rendered":"https:\/\/coloradorelocationreport.com\/?p=38"},"modified":"2026-05-08T04:05:24","modified_gmt":"2026-05-08T04:05:24","slug":"effort-to-attract-data-centers-to-colorado-with-tax-incentives-fails","status":"publish","type":"post","link":"https:\/\/coloradorelocationreport.com\/?p=38","title":{"rendered":"Effort to attract data centers to Colorado with tax incentives fails"},"content":{"rendered":"
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Colorado lawmakers have pulled the plug on a bill to offer steep tax breaks for data centers, the energy-hungry facilities behind the artificial intelligence boom and other cloud-based software products.<\/p>\n

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After rescheduling its hearing three times, state Rep. Alex Valdez, D-Denver, presented the legislation, House Bill 1030, to its first committee on Thursday along with a substantial amendment to strengthen some environmental guardrails. Valdez then proposed his bill be postponed indefinitely, and the House Energy and Environment committee voted down the legislation 11-2, putting an end to the measure first introduced in January.\u00a0<\/p>\n

Valdez expected the outcome. After months of negotiations with environmental groups backing a dueling data center bill, he said it was clear that his approach \u2014 supported by labor groups and the data center industry \u2014 wouldn\u2019t survive the final weeks of the legislative session.<\/p>\n

\u201cNothing satisfied the \u2018enviro\u2019 coalition. What would have been the most robust framework in the nation has now become a signal to industry that Colorado remains closed,\u201d Valdez said ahead of the hearing. \u201cWe will watch our neighbors in Wyoming reap all of the economic benefits.\u201d<\/p>\n

The bill\u2019s failure comes as elected officials nationwide are rolling back deals with data center companies amid mounting public opposition. Concerns over the facilities\u2019 massive demands on natural resources, rising utility bills and limited job creation have cost some lawmakers their seats over their support for the industry. Denver is considering a moratorium on data center development; Larimer County already has one.<\/p>\n

While there are 56 data centers in Colorado, according to Data Center Map, industry experts say the state does not have many large-scale facilities seen in neighboring states.<\/p>\n

Valdez\u2019s bill, meant to incentivize data center development in Colorado, was similar to a proposal from last year that lawmakers rejected. House Bill 1030 would have offered 20- to 30-year sales and use tax exemptions to data center companies for computer equipment, software, energy storage and environmental control systems.<\/p>\n

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In exchange for the tax breaks, data center companies would have had to invest $250 million in infrastructure in the first five years and create an unspecified number of jobs that pay at least 110% of the average local wage. In the Denver Metro area, that would have been roughly $46.65 an hour, based on the most recent salary estimates from the Federal Reserve.<\/p>\n

The centers would have had to meet certain environmental requirements \u2014 like using a closed-loop cooling, or similar system, that recycles water to cool their massive computer networks \u2014 and ensure that the data center didn\u2019t increase costs for other energy users.<\/p>\n

Valdez\u2019s amendment, introduced Thursday, beefed up those environmental requirements but was not enough to sway his colleagues into voting yes.<\/p>\n

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\u201cThere\u2019s a humongous difference between where we landed and where we started,\u201d he said about the amended version. \u201cUnfortunately we have to continue with the status quo, and that\u2019s not good for us.\u201d<\/p>\n

Rep. Junie Joseph, D-Boulder, raised concerns about the tax breaks in the bill and the energy data centers use. She called for a moratorium on development until Colorado puts more strict regulations in place.<\/p>\n

\u201cWe cannot build Colorado\u2019s economic future around highly automated facilities that extract public resources while creating limited, sustained employment opportunities for working people,\u201d she said. \u201cWe should not allow ourselves to become so desperate for the promise of economic development that we fail to ask whether the deal is actually good for working families, taxpayers and future generations.\u201d<\/p>\n

House Majority Leader Monica Duran, D-Wheat Ridge, and state Sen. Kyle Mullica, D-Thornton, originally sponsored the bill along with Valdez. Last month, Duran asked that her name be taken off the bill. She said she preferred to work on negotiations behind the scenes with labor, environmental and industry groups.<\/p>\n

The rival data center bill from state Sen. Cathy Kipp, D-Fort Collins, and Rep. Kyle Brown, D-Louisville, does not offer any tax breaks. Instead, Senate Bill 102 would put more robust environmental rules on development to make sure data centers coming to Colorado do not raise electricity prices or blow the state\u2019s greenhouse gas emission reductions targets needed to stave off the worst effects of climate change.<\/p>\n

Kipp has said she is negotiating with labor groups to get them on board with her bill. The bill would have to pass committee and get preliminary approval by the Senate on Monday to have enough time to be passed by the full legislature.<\/p>\n

\u201cThe negotiations are still in flux,\u201d Kipp said. \u201cWe\u2019re trying to see if we can get there or not.\u201d<\/p>\n

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This story was produced by the Capitol News Alliance, a collaboration between KUNC News, Colorado Public Radio, Rocky Mountain PBS, and The Colorado Sun, with support from news outlets throughout the state. Startup funding for the Alliance was provided in part by the Corporation for Public Broadcasting.<\/p>\n

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