AN ACT to: establish a two‑year moratorium on the issuance of permits required for siting of datacenters; direct the collaboratory to study various impacts of datacenters; require datacenters to annually submit detailed documentation and apply for an exemption certificate from sales and use taxes; and require the department of commerce to report to the general assembly on the revenue impacts to the state from the sales and use tax exemptions for datacenters.

The General Assembly of North Carolina enacts:

SECTION 1.(a)  Definitions. – For purposes of this act, the term datacenter means a facility that is designed to have a load of 100 megawatts or more and the primary purpose of which is the storage, management, and processing of digital data via the interconnection and operation of information technology and network telecommunications equipment, including all related facilities and infrastructure for backup electricity generation, power distribution, environmental control, cooling, and security.

SECTION 1.(b)  Moratorium Established. – There is hereby established a moratorium on the issuance of any permits, certifications, or approvals required by a State agency or a local government for the siting of datacenters in this State. The purpose of this moratorium is to allow the General Assembly time to evaluate the extent and scope of impacts from datacenters proposed to be constructed and operated in the State as directed in subsection (c) of this section. No State agency, including the Department of Environmental Quality and the Utilities Commission, or local government in the State shall issue a permit, certification, or approval for the siting of a datacenter for the period beginning August 1, 2026, and ending August 1, 2028.

SECTION 1.(c)  Study. – The North Carolina Collaboratory at the University of North Carolina at Chapel Hill (Collaboratory) shall study the impacts of datacenters and provide any recommendations for legislation that the Collaboratory finds is needed to mitigate or eliminate negative impacts identified. In conducting this study, the Collaboratory shall examine impacts occurring in other states from the siting of datacenters. As part of its study, the Collaboratory shall review all of the following:

(1)        In collaboration with the Utilities Commission and the Public Staff, potential impacts to: demands on the State's electric grid from the siting of datacenters within the State; the projected need for expansion of current grid resources to accommodate potential datacenters; and electricity rates paid by non‑datacenter customers due to datacenter growth in the State.

(2)        In collaboration with the Department of Environmental Quality, potential impacts to: the water supplies of the State; demands on wastewater treatment facilities; and air quality and noise in areas within a 3‑mile radius of datacenters.

(3)        In collaboration with the League of Municipalities and the Association of County Commissioners, potential impacts to property values within a 3‑mile radius of a proposed datacenter.

(4)        Any other pertinent matters as determined by the Collaboratory.

SECTION 1.(d)  Report. – No later than December 1, 2027, the Collaboratory shall report its findings, together with any proposed legislation, to the Environmental Review Commission, the Joint Legislative Commission on Energy Policy, and the Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources.

SECTION 1.(e)  The sum of two hundred thousand dollars ($200,000) in nonrecurring funds for the 2026‑2027 fiscal year is appropriated from the General Fund to the Collaboratory to conduct the study required pursuant to subsection (c) of this section.

SECTION 2.(a)  Article 5 of Chapter 105 of the General Statutes is amended by adding a new section to read:

§ 105‑164.13G.  Exemption for datacenters.

(a)        Definition. – For purposes of this section, a datacenter means an eligible internet datacenter or a qualifying datacenter as defined in G.S. 105‑164.3.

(b)        Exemption. – A datacenter that purchases an item exempt from sales tax under G.S. 105‑164.13 must obtain an exemption certificate from the Department to receive the exemption. An exemption certificate issued under this section is valid for the taxable year in which the certificate is issued and must be renewed annually. In order to receive an exemption certificate under this section, an eligible datacenter or a qualifying datacenter must submit to the Secretary the information listed in subsection (d) of this section for the prior taxable year.

(c)        Conditional Exemption. – A datacenter that has not commenced construction may apply to the Department for a conditional exemption certificate. A datacenter with a conditional exemption certificate is allowed to purchase items exempt from sales and use tax to the same extent as a datacenter with an exemption certificate under subsection (b) of this section. A conditional exemption certificate issued under this subsection is valid for the taxable year in which the certificate is issued. Within 90 days following the end of the taxable year, a datacenter must submit all of the information listed in subsection (d) of this section for the taxable year covered by the conditional exemption certificate. A datacenter that fails to meet the requirements of this subsection becomes liable for any taxes for which an exemption under this subsection was claimed. The taxes become due and payable at the expiration of the conditional exemption certificate, and interest accrues from the date of the original purchase.

(d)       Documentation Required. – Except as otherwise provided in subsection (c) of this section, a datacenter must provide the following information to the Secretary to receive an exemption certificate under this section:

(1)        Facility ownership and location, including the county in which it is located.

(2)        Local benefits provided by the datacenter to the jurisdiction in which the datacenter is located, including tax paid on both real and personal property or donations of land.

(3)        Local incentives provided to the datacenter by the jurisdiction in which the datacenter is located, including property tax relief, grants, or other incentives.

(4)        Employee information, including the number of full‑time and part‑time employees, and the average wage.

(5)        Start‑up expenditures grouped by expense type for the datacenter, including all costs of construction. This information needs to be provided to the Department only once upon completion of construction.

(6)        Itemized expenditures for all of the following:

a.         IT and networking‑related expenses, including servers and other computer equipment, as well as computer software purchased.

b.         Power infrastructure, including transformers, generators, etc.

c.         Cooling infrastructure.

d.         Utilities, including water, sewer, and electricity.

e.         Service contracts and repair, maintenance, and installation services.

f.          Equipment not otherwise specified by sub‑subdivisions a. through c. of this subdivision.

SECTION 2.(b)  No later than December 1, 2026, each datacenter sited or under construction in the State as of the effective date of this act shall provide to the Department of Revenue and the Department of Commerce the information listed in G.S. 105‑164.13G(d), as enacted by this section and notwithstanding its effective date, for the five most recent taxable years the datacenter has claimed an exemption under G.S. 105‑164.13. The Department of Commerce shall aggregate the data received under this subsection and estimate the amount of lost revenue to the State due to the exemptions from sales and use taxes for datacenters under G.S. 105‑164.13 for the five most recent taxable years and submit an annual report by March 1 of each year to the chairs of the House and Senate Finance Committees.

SECTION 2.(c)  Subsection (a) of this section becomes effective July 1, 2027, and applies to purchases occurring on or after that date. The remainder of this section is effective when it becomes law.

SECTION 3.  Except as otherwise provided, this act is effective when it becomes law.