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State lawmakers consider bill to exempt Utah spy center from having to pay a utility tax

Published: Wednesday, Feb. 12 2014 9:11 a.m. MST

In this June 6, 2013, file photo, shows an aerial view of the NSA's Utah Data Center in Bluffdale, Utah. Utah lawmakers are considering exempting the National Security Agency's Utah Data Center from paying a utility tax that would bring $6 million a year to the state. (Rick Bowmer, Associated Press) In this June 6, 2013, file photo, shows an aerial view of the NSA's Utah Data Center in Bluffdale, Utah. Utah lawmakers are considering exempting the National Security Agency's Utah Data Center from paying a utility tax that would bring $6 million a year to the state. (Rick Bowmer, Associated Press)

SALT LAKE CITY — One of Utah's largest energy users might not have to pay a utility tax.

Utah lawmakers are considering exempting the National Security Agency's Utah Data Center from the tax that would bring $6 million a year to the state.

Rep. Jerry Stevenson, R-Layton, said the state agreed to not impose the tax as a condition of the NSA constructing the 1.6 million-square-foot facility in Bluffdale.

"We need to adhere to the commitment that we made," Stevenson said Tuesday on the Senate floor.

His bill, SB45, would allow the state's Military Installation Development Authority to waive the utility tax. The Legislature previously created the authority to develop property on and next to military bases. The authority's board has the power to impose franchise taxes, much like cities do.

Several senators said they couldn't support the bill because the Legislature did not negotiate the agreement, which Stevenson said he believes was verbal and not written.

"I don’t remember that I made any commitment to giving tax subsidies to a spy center," said Sen. Wayne Harper, R-West Jordan.

The $1.5 billion data center, which opened last fall, is estimated to consume $40 million in electricity annually and could require as much as 1.7 million gallons of water per day to cool its supercomputers. It employs about 200 people.

Noting the center is one of the state's biggest energy users, Sen. Jim Dabakis, D-Salt Lake City, said, "I just don't see why we want to give up this local money from the federal government."

The utility tax wouldn't be passed along to local ratepayers if the bill passes, Stevenson said. If the tax were collected, the military development authority board would decide how to distribute it, he said.

Sen. Stuart Reid, R-Ogden, said he was conflicted but voted in favor of the bill because if the state made a commitment verbally or in writing, it has an obligation to honor it. But, he added, the Senate deserves further explanation.

The Senate preliminarily approved the bill Tuesday 22-7, with many senators signaling they might change their votes when it comes up for final passage.

Stevenson said afterward that he knows he has a lot of work to do with his Senate colleagues and the House to get the measure passed.

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