K.S.A. § 74-50,332 — KS Code / Chapter 74 / Article 50 / Section 74-50,332
74-50,332 - Exemption for certain costs and services used for the construction and operation of a qualified data center; eligibility requirements; agreement with secretary of commerce; certification of eligibility; confidentiality of records.
Status: in_force

74-50,332. Exemption for certain costs and services used for the construction and operation of a qualified data center; eligibility requirements; agreement with secretary of commerce; certification of eligibility; confidentiality of records. (a) A qualified firm that makes an investment in eligible data center costs in a qualified data center of at least $250,000,000 in the aggregate by the fifth year of operations and creates and maintains at least 20 new jobs at the qualified data center within two calendar years after the commencement of operations shall receive a sales tax exemption, as provided by K.S.A. 79-3606(xxxx), and amendments thereto, and K.S.A. 2025 Supp. 74-50,333, and amendments thereto, for:

(1) Eligible data center costs of the qualified data center; and

(2) labor services to install, apply, repair, service, alter or maintain data center equipment.

(b) To be eligible to receive such sales tax exemption, a qualified firm shall:

(1) Submit an application to the secretary in the form and manner as required by the secretary;

(2) commit to an investment in eligible data center costs of at least $250,000,000 in the qualified data center, to be completed by the fifth year of operations or on such earlier date as specified in the agreement pursuant to paragraph (6);

(3) commit to begin construction of the project within 10 years of the date of the agreement with the secretary or on such earlier date as specified in the agreement pursuant to paragraph (6);

(4) commit to purchase electricity for 10 years from the public utility that is certified to provide retail electric service in the territory where the qualified data center is located;

(5) commit to undertake practices that will conserve, reuse and replace water, including, but not limited to:

(A) Using water efficient fixtures and practices;

(B) treating, infiltrating and harvesting rainwater;

(C) recirculating and recycling water before discharging;

(D) partnering with state and local governmental entities and private individuals and entities to use discharged water for irrigation, water conservation or other beneficial purposes;

(E) using reclaimed water when possible; and

(F) supporting water restoration efforts in local watersheds; and

(6) if the application is approved by the secretary, enter into an agreement with the secretary upon such terms and conditions as the secretary may require, including the commitments or conditions required by paragraphs (2) through (5) and subsections (c) and (d)(1) and (2). The agreement shall be entered into before any sales tax exemption may be provided under this act.

(c) If it is determined by the secretary that the qualified firm has breached a term or condition of the agreement, the secretary shall provide written notice to the qualified firm as to which terms or conditions were breached and allow the qualified firm 120 days to cure the breached terms or conditions. If the breached terms or conditions have not been cured within such time, the secretary may require the qualified firm to repay all or a part of the amount of the sales tax exemption received, terminate the sales tax exemption or suspend all or a part of the sales tax exemption until the breach is cured.

(d) As a condition of receiving the sales tax exemption, a qualified firm shall agree to:

(1) Cooperate with audits undertaken by the secretary of revenue as provided by subsection (f); and

(2) provide the secretary of commerce information required:

(A) For publication in the economic development incentive program information database pursuant to K.S.A. 74-50,226, and amendments thereto;

(B) for the secretary's report pursuant to K.S.A. 74-50,320, and amendments thereto; and

(C) by the secretary of commerce or the secretary of revenue pursuant to subsection (e)(1).

(e) (1) Every five years, the secretary may conduct a review of the activities undertaken by a qualified firm to ensure that the qualified firm remains in good standing with the state, is in compliance with the provisions of this act, any rules and regulations adopted by the secretary with respect to this act and any agreement entered into pursuant to this section and continues to meet the requirements for the sales tax exemption provided under this act. The secretary of commerce shall certify every five years to the secretary of revenue whether the qualified firm meets the criteria for designation as a qualified firm and is eligible for such sales tax exemption. The qualified firm shall provide the secretary of commerce all information reasonably necessary to determine such eligibility. Except as provided by paragraph (2), information obtained under this paragraph shall not be subject to disclosure pursuant to K.S.A. 45-215 et seq., and amendments thereto, unless such information is subject to disclosure pursuant to subsection (d)(1) or (2), but shall, upon request, be made available to the legislative post audit division. The provisions of this paragraph providing for confidentiality of records shall expire on July 1, 2030, unless the legislature reviews and acts to continue such provisions pursuant to K.S.A. 45-229, and amendments thereto, prior to July 1, 2030.

(2) If, in the judgment of the secretary, any confidential information, trade secret or other information obtained under this section would place the qualified firm at a disadvantage in the marketplace or would significantly interfere with the purposes of this act, if known, shall not be subject to disclosure pursuant to K.S.A. 45-215 et seq., and amendments thereto, but shall, upon request, be made available to the legislative post audit division. The provisions of this paragraph providing for confidentiality of records shall expire on July 1, 2030, unless the legislature reviews and acts to continue such provisions pursuant to K.S.A. 45-229, and amendments thereto, prior to July 1, 2030.

(f) The books and records that pertain to eligibility for benefits or compliance with the requirements of this act shall be available for inspection by the secretary or the secretary's duly authorized agents or employees during business hours on at least 60 days' prior written notice. The secretary may request the department of revenue to audit the qualified firm, or a third party if applicable, for compliance with the provisions of this act.

(g) The secretary of commerce shall certify to the secretary of revenue when the qualified firm has met the conditions to receive a sales tax exemption as provided by K.S.A. 2025 Supp. 74-50,333 and 74-50,334, and amendments thereto, and shall provide notice when the sales tax exemption is modified, suspended or terminated pursuant to subsection (c).

(h) The secretary of commerce or the secretary of revenue may adopt rules and regulations for the implementation of this act.