SB 903 — Data Centers: Fast Track Pass for Co‑Location and Sales & Use Tax (Maryland)
Status (as provided)
- Bill: SB 903 (5lr2284) — introduced Jan 28, 2025 by Sen. Hester. Assigned to Education, Energy & the Environment and Budget & Taxation. Hearing initially scheduled but later canceled (per available docket).
- Purpose: Establish expedited regulatory review for certain energy generation projects co‑located with data centers (a “fast track pass”) and modify sales & use tax rules for data‑center personal property.
Summary — Purpose and Intent
- Create an expedited Certificate of Public Convenience and Necessity (CPCN) process for “fast track projects”: generating stations that include a co‑located data center awarded a “Fast Track Pass.”
- Establish a Data Center Fast Track Advisory Committee to set selection criteria and help administer the fast‑track process.
- Change sales & use tax treatment for qualified data center personal property (clarifying eligibility and authorizing limits), and require the Maryland Energy Administration (MEA) to set related guidelines.
- Overall intent: accelerate deployment of data‑center infrastructure (and associated generation capacity) while creating a structured, state‑level review and eligibility framework for tax incentives.
Key provisions
1. Fast Track CPCN process (new § 7‑207.4 & amendments to § 7‑207)
- “Fast Track Project” defined as a generating station that includes a co‑located data center awarded a Fast Track Pass (per § 7‑218).
- Applicant may request verification that the project is a Fast Track Project as part of its CPCN filing.
- Commission must verify Fast Track status within 90 days of application submission and notify applicant and statutory stakeholders.
- Commission must prioritize proceedings and take final action on the CPCN within 6 months after verification.
- State agencies must submit recommended licensing conditions/testimony within 90 days of verification.
- The Commission and impacted state agencies (e.g., environment, natural resources) must waive or expedite any regulatory requirements/decisions necessary to meet these deadlines.
Data Center Fast Track Advisory Committee (§ 7‑218)
- Created within the Public Service Commission to facilitate selection and award of Fast Track Passes.
- Membership (ex officio or designees) includes: Comptroller; Secretary of the Environment; Chair of the Public Service Commission; Director of the Maryland Energy Administration; Secretary of Commerce; Secretary of General Services; Secretary of Natural Resources (per the draft text).
- Committee duties include consulting with the Commission and establishing criteria for selecting projects eligible for expedited review.
Sales & use tax / qualified data center personal property (amend § 11‑239, Tax‑General)
- Alters or clarifies requirements for what personal property of a qualified data center can be exempt from sales & use tax.
- Authorizes the State Department of Assessments and Taxation (SDAT) to limit the exemption in certain circumstances.
- Directs MEA to develop guidelines (criteria, documentation, or other standards) governing eligibility for any tax exemption.
Affected parties
- Primary: data center operators and developers; electric generating project developers co‑located with data centers.
- Utilities and the Public Service Commission (administration of CPCNs).
- State agencies with permitting/regulatory roles (Environment, Natural Resources, MEA, General Services, Commerce, Comptroller).
- State and local tax authorities (SDAT, Comptroller) and potentially State revenues (due to tax exemptions).
- Local governments and communities near proposed projects (faster review, but statutory notice requirements remain).
Procedural/timeline highlights
- Verification of fast‑track eligibility: within 90 days of CPCN filing (upon request).
- Final CPCN decision for fast‑track projects: Commission must act within 6 months after verification.
- State agencies to provide licensing comments within 90 days of verification; required to expedite/waive processes to meet deadlines.
- MEA to issue guidelines (timing unspecified in draft).
- Sales & use tax changes grant SDAT rule/limit authority (implementation timing depends on agency actions and MEA guidance).
Potential impacts and considerations
- Acceleration: Could materially speed project approvals for large data centers paired with generation, enabling quicker construction and operation.
- Grid & environment: Faster approvals for co‑located generation could help data centers secure reliable on‑site power but may raise environmental or land‑use concerns if permitting is truncated.
- Fiscal: Expanded or clarified sales & use tax exemptions for data center equipment could reduce State and local tax revenues; SDAT’s limiting authority and MEA guidelines may constrain fiscal exposure.
- Oversight and legal risk: Time‑compressed review and waivers of regulatory steps may increase administrative burden, heighten litigation risk, or invite stakeholder pushback (local governments, environmental groups).
- Implementation detail: Much depends on committee criteria, MEA guidelines, and how narrowly SDAT applies limits to exemptions.
Notes and caveats
- The provided draft is partial/truncated in places; some statutory cross‑references and exact tax language were not fully included.
- The bill text shown is for Maryland (SB 903, 5lr2284). The docket materials provided also include other states’ bills and procedural items which are not part of this Maryland measure. Readers should consult the official Maryland bill text and fiscal/legal analyses for final language and estimated revenue or environmental impacts.
