Datacenter Transparency Act.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 1
HOUSE BILL 1189

Short Title: Datacenter Transparency Act. (Public)
Sponsors: Representatives Loftis, Ward, and Harrison (Primary Sponsors).
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
Referred to: Rules, Calendar, and Operations of the House
May 5, 2026
*H1189-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO: ESTABLISH A TWO -YEAR MORATORI UM ON THE ISSUANCE O F 2
PERMITS REQUIRED FOR SITING OF DATACENTE RS; DIRECT THE 3
COLLABORATORY TO STUDY VARIOUS IMPACTS OF DATACENTERS; REQUIRE 4
DATACENTERS TO ANNUA LLY SUBMIT DETAILED DOCUMENTATION AND 5
APPLY FOR AN EXEMPTION CERTIFICATE FROM SALES AND USE TAXES; AND 6
REQUIRE THE DEPARTME NT OF COMMERCE TO RE PORT TO THE GENERAL 7
ASSEMBLY ON THE REVENUE IMPACTS TO THE STATE FROM THE SALES AND 8
USE TAX EXEMPTIONS FOR DATACENTERS. 9
The General Assembly of North Carolina enacts: 10
SECTION 1.(a) Definitions. – For purposes of this act, the term "datacenter" means 11
a facility that is designed to have a load of 100 megawatts or more and the primary purpose of 12
which is the storage, management, and processing of digital data via the interconnection a nd 13
operation of information technology and network telecommunications equipment, including all 14
related facilities and infrastructure for backup electricity generation, power distribution, 15
environmental control, cooling, and security. 16
SECTION 1.(b) Moratorium Established. – There is hereby established a 17
moratorium on the issuance of any permits, certifications, or approvals required by a State agency 18
or a local government for the siting of datacenters in this State. The purpose of this moratorium 19
is to allo w the General Assembly time to evaluate the extent and scope of impacts from 20
datacenters proposed to be constructed and operated in the State as directed in subsection (c) of 21
this section. No State agency, including the Department of Environmental Quality and the 22
Utilities Commission, or local government in the State shall issue a permit, certification, or 23
approval for the siting of a datacenter for the period beginning August 1, 2026, and ending August 24
1, 2028. 25
SECTION 1.(c) Study. – The North Carolina Co llaboratory at the University of 26
North Carolina at Chapel Hill (Collaboratory) shall study the impacts of datacenters and provide 27
any recommendations for legislation that the Collaboratory finds is needed to mitigate or 28
eliminate negative impacts identified. In conducting this study, the Collaboratory shall examine 29
impacts occurring in other states from the siting of datacenters. As part of its study, the 30
Collaboratory shall review all of the following: 31
(1) In collaboration with the Utilities Commission and the Public Staff, potential 32
impacts to: demands on the State's electric grid from the siting of datacenters 33
within the State; the projected need for expansion of current grid resources to 34
General Assembly Of North Carolina Session 2025
Page 2 House Bill 1189-First Edition
accommodate potential datacenters; and electricity rates paid by 1
non-datacenter customers due to datacenter growth in the State. 2
(2) In collaboration with the Department of Environmental Quality, potential 3
impacts to: the water supplies of the State; demands on wastewater treatment 4
facilities; and air quality and noise in areas within a 3 -mile radius of 5
datacenters. 6
(3) In collaboration with the League of Municipalities and the Association of 7
County Commissioners, potential impacts to property values within a 3 -mile 8
radius of a proposed datacenter. 9
(4) Any other pertinent matters as determined by the Collaboratory. 10
SECTION 1.(d) Report. – No later than December 1, 2027, the Collaboratory shall 11
report its findings, together with any proposed legislation, to the Environmental Review 12
Commission, the Joint Legislative Commissi on on Energy Policy, and the Joint Legislative 13
Oversight Committee on Agriculture and Natural and Economic Resources. 14
SECTION 1.(e) The sum of two hundred thousand dollars ($200,000) in 15
nonrecurring funds for the 2026 -2027 fiscal year is appropriated from the General Fund to the 16
Collaboratory to conduct the study required pursuant to subsection (c) of this section. 17
SECTION 2.(a) Article 5 of Chapter 105 of the General Statutes is amended by 18
adding a new section to read: 19
"§ 105-164.13G. Exemption for datacenters. 20
(a) Definition. – For purposes of this section, a datacenter means an eligible internet 21
datacenter or a qualifying datacenter as defined in G.S. 105-164.3. 22
(b) Exemption. – A datacenter that purchases an item exempt from sales tax under 23
G.S. 105-164.13 must obtain an exemption certificate from the Department to receive the 24
exemption. An exemption certificate issued under this section is valid for the taxable year in 25
which the certificate is issued and must be renewed annually . In order to receive an exemption 26
certificate under this section, an eligible datacenter or a qualifying datacenter must submit to the 27
Secretary the information listed in subsection (d) of this section for the prior taxable year. 28
(c) Conditional Exemption. – A datacenter that has not commenced construction may 29
apply to the Department for a conditional exemption certificate. A datacenter with a conditional 30
exemption certificate is allowed to purchase items exempt from sales and use tax to the same 31
extent as a datacenter with an exemption certificate under subsection ( b) of this section. A 32
conditional exemption certificate issued under this subsection is valid for the taxable year in 33
which the certificate is issued. Within 90 days following the end of the taxable year, a datacenter 34
must submit all of the information listed in subsection (d) of this section for the taxable year 35
covered by the conditional exemption certificate. A datacenter that fails to meet the requirements 36
of this subsection becomes liable for any taxes for which an exemption under this subsection was 37
claimed. The taxes become due and payable at the expiration of the conditional exemption 38
certificate, and interest accrues from the date of the original purchase. 39
(d) Documentation Required. – Except as otherwise provided in subsection (c) of this 40
section, a datacenter must provide the following information to the Secretary to receive an 41
exemption certificate under this section: 42
(1) Facility ownership and location, including the county in which it is located. 43
(2) Local benefits provided by the datacenter to the jurisdiction in which the 44
datacenter is located, including tax paid on both real and personal property or 45
donations of land. 46
(3) Local incentives provided to the datacenter by the jurisdiction in which the 47
datacenter is located, including property tax relief, grants, or other incentives. 48
(4) Employee information, including the number of full -time and part -time 49
employees, and the average wage. 50
General Assembly Of North Carolina Session 2025
House Bill 1189-First Edition Page 3
(5) Start-up expenditures grouped by expense type for the datacenter , including 1
all costs of construction. This information need s to be provided to the 2
Department only once upon completion of construction. 3
(6) Itemized expenditures for all of the following: 4
a. IT and networking -related expenses, including servers and other 5
computer equipment, as well as computer software purchased. 6
b. Power infrastructure, including transformers, generators, etc. 7
c. Cooling infrastructure. 8
d. Utilities, including water, sewer, and electricity. 9
e. Service contracts and repair, maintenance, and installation services. 10
f. Equipment not otherwise specified by sub-subdivisions a. through c. 11
of this subdivision." 12
SECTION 2.(b) No later than December 1, 2026, each datacenter sited or under 13
construction in the State as of the effective date of this act shall provide to the Department of 14
Revenue and the Department of Commerce the information listed in G.S. 105-164.13G(d), as 15
enacted by this section and notwithstanding its effective date, for the five most recent taxable 16
years the datacenter has claimed an exemption under G.S. 105-164.13. The Department of 17
Commerce shall aggregate the data received under this subsection and estimat e the amount of 18
lost revenue to the State due to the exemptions from sales and use taxes for datacenters under 19
G.S. 105-164.13 for the five most recent taxable years and submit an annual report by March 1 20
of each year to the chairs of the House and Senate Finance Committees. 21
SECTION 2.(c) Subsection (a) of this section becomes effective July 1, 2027, and 22
applies to purchases occurring on or after that date. The remainder of this section is effective 23
when it becomes law. 24
SECTION 3. Except as otherwise prov ided, this act is effective when it becomes 25
law. 26