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Kansas House approves data-center incentives after amendments limiting modular units and requiring power purchase commitments; water conservation language added
Summary
The House passed Senate Bill 98, a conference committee report creating a tax and sales-exemption framework for large data centers, while adding provisions restricting modular, unattended 'huts', requiring long-term local power purchases and stating commitments to water-conservation practices.
The Kansas House adopted the conference committee report on Senate Bill 98 on April 11, approving a framework for sales- and tax-exemptions for qualifying data centers after amendments and debate over electric rates, water use and local impacts.
Representative Delperdang, who carried the conference report, described provisions the committee had added or removed. He told the chamber that large data centers previously could qualify for substantial discounted electric rates under existing law (citing K.S.A. 66-101(j) language in committee discussion). Delperdang summarized committee changes that limit inclusion of modular, unattended “hut” installations, require data centers to commit to purchase electricity from the local provider for at least 10 years, and add a set of water-conservation commitments. “We stopped that part of it. We moved it over to where they are obligated to purchase off of the local power company . . . for a minimum period of 10 years,” Delperdang said.
Because water use was a central concern, the conference language added that qualifying firms must “commit to undertake practices that will conserve, reuse, [and] replace water,” listing measures such as efficient fixtures, treating and reusing discharge water, partnering for irrigation reuse and employing reclaimed water when possible. Representative Vaughn questioned how binding the water language was; Delperdang acknowledged the statutory text set a commitment standard rather than imposing a specified deadline or numerical cap on usage.
Supporters emphasized construction employment and long-term local tax revenues from completed projects. Representative Sawyer noted the labor and construction impact of a local project and said data centers had generated years of construction work and tax receipts in the Kansas City area.
Opponents raised both environmental and process concerns. Representative Helgerson, among others, urged caution on water impacts and criticized rushing a large statutory change with limited time for review: “We're on the verge of a water calamity in the state… I can't support it because there are too many iffy questions,” he said.
The conference report also set a flat 20-year exemption term (removing previously tiered 10/40-year markers) for qualifying projects and narrowed the list of exempt equipment by excluding distributed modular centers without local employment and by reaffirming that local utilities should provide primary power for at least a decade.
Vote and implementation: The House adopted the conference committee report; the clerk recorded 85 yeas and 37 nays. The bill directs regulatory and water permitting agencies to remain involved as projects proceed—division-level industrial permits for large water uses will still be required under Kansas water law.
Provenance: Conference report introduced in the House by Representative Delperdang and debated through votes recorded later in the session.
