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House committee releases bill to bar large data centers from some business tax credits
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Summary
A Delaware House committee voted to release House Bill 3 10, which would remove large energy‑use facilities — defined at a 30‑megawatt threshold — from eligibility for certain business tax credits under Title 30 and the Blue Collar Jobs Act after testimony for and against the change.
Representative Heffernan, the sponsor of House Bill 3 10, told a House committee the measure would remove "large energy use facilities" from eligibility for business tax credits and deductions under Title 30 of the Delaware Code and the Blue Collar Jobs Act. He said the bill uses a 30‑megawatt threshold and is designed to target projects that do not deliver substantial permanent jobs to the state. "We chose the 30 megawatts…because that's the same definition that we've used in other legislation that we put forward this year," Heffernan said.
Heffernan outlined the tax credits the bill would affect, saying "eligible businesses can receive credits of up to $500 per employee and $500 per $100,000 invested," and that certain conditions could raise those amounts to $900 per employee and $100,000 invested. He also said businesses "potentially could also qualify for reduction in gross receipts taxes for up to 10 to 100% for their first five years of operation under the Blue Collar Jobs Act," a figure Heffernan presented as part of current law and incentive practice.
Committee members pressed the sponsor on edge cases, including whether a large facility that generated its own power and returned excess energy to the grid would still be excluded. One member suggested substituting "net use" for plain "use" in the bill's language so that facilities producing more energy than they consume could be treated differently; Heffernan said he would "be willing to look into that" and to refine the draft if necessary. The exchange centered on weighing long‑term job creation against energy benefits and local economic development.
Two members of the public spoke during the in‑person comment period. Marissa McClendon, chapter environmental justice organizer for the Sierra Club Delaware chapter, urged support for the bill and warned of impacts associated with large data centers, including higher utility bills and local air and noise pollution. "House Bill 3 10 is an opportunity to heed the warning of the folks in Virginia," McClendon said, citing Loudoun County as a case study and urging lawmakers to ensure incentives do not exempt server equipment.
Megan Fries of Fitzgerald Consulting, speaking for the New Castle County Chamber of Commerce, urged the committee to oppose the bill, saying the 30‑megawatt threshold and the bill's application by NAICS code could reduce Delaware's competitiveness for location and expansion. "The chamber opposes HB 3 10 and strongly recommends that it be tabled or not released from committee," Fries said; she said the chamber would submit detailed written testimony for the record.
After questions and public comment, Representative Dee Short moved to release HB 3 10 from committee for possible signatures and further action; Representative Romer seconded. The clerk called the roll and the motion carried by roll call. Members were asked to sign the backer and staff said the bill would be offered for signatures to members not present and posted on the legislative website if released.
The committee adjourned after completing the agenda item. The bill's text and any written testimony will appear on the General Assembly website and the committee sponsor indicated he would consider drafting clarifications — including possible "net use" language — before further action.