Arizona’s Data Center Law Modernizes Economy

The move strengthens standing as top-tier state


PHOENIX, AZ (September 28, 2016) — Arizona has emerged in recent years as a key state in the fast-growing data center technology market.


Besides affordable energy costs, quality infrastructure and a talented workforce, the Grand Canyon State is situated in a geographic setting that’s largely free from natural disasters — an important attribute that safeguards these multimillion-dollar operations.


Arizona this past legislative session took another bold step forward in the competition for these facilities — and the 21st century jobs that support them.


Governor Doug Ducey in May signed into law enhancements for data center owners, operators and qualified colocation tenants. Working with business leaders, the Governor and state Legislature, among other changes, expanded the class of facilities qualifying as sustainable redevelopment projects.


Additionally, the process for satisfying the capital investment thresholds necessary for continued certification was streamlined by adding the costs of improvements and of leased equipment and buildings to those costs which constitute qualified capital investment.


These measures bolstered legislation passed in 2013 that incentivizes companies which make major investments in these computer and telecommunication operations. That legislation had already squarely established Arizona as a Tier 1 destination for data center development. In fact, the data center business in Arizona grew by more than $1 billion from 2013 to 2015.

Indeed, Arizona has seen a string of successful expansions by global corporations that recognize the state’s strong support for a modern economy. The state is home to more than 50 major data centers, including iconic companies like PayPal, Charles Schwab, and Apple, which is investing $2 billion in its Mesa, Arizona global command center. Arizona-based technology companies Go Daddy and IO Data Centers also have major data center operations here.


The passage of the most-recent legislation has primed an already promising pipeline of U.S. and global companies looking to expand in Arizona — and I couldn’t be more proud of our state for leading the way.

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