Arizona House approves bill granting energy tax credits and exemptions for Apple data center

Energy Associated Press

The Arizona Legislature wants to help Apple Inc. by extending renewable energy tax credits and exemptions to cover the 1.3-million-square-foot data center it plans to open in the Phoenix suburb of Mesa.

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The House approved a bill Tuesday that expands a $5 million sales tax credit passed last year to include international operations centers that make a capital investment of $1.25 billion, such as the facility Apple plans to build next year.

The House swiftly debated the bill and passed it 57-3 after amending it to match the Senate version. That will allow a speedy trip to the governor's desk when the Senate acts. Two Republicans and one Democrat voted against the bill.

To qualify for the sales tax credit, Cupertino, California-based Apple would have to invest at least $100 million in new renewable energy facilities and use some portion of that energy to power its data center.

The bill by Sen. Bob Worsley, R-Mesa, also exempts Apple's facility from sales taxes on electricity or natural gas, resulting in a $1.3 million loss of revenue for the state's general fund for the budget year starting July 1, 2016, according to the Legislature's budget analysts.

Worsley said the bill helps Arizona get its foot in the door with Apple and could lead to bigger projects in the future.

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"We think we have a real shot at being a secondary place for Cupertino," he said.

The Greater Phoenix Economic Council supported the Senate version of the bill as an economic incentive to attract more businesses.

"Senate Bill 1468 certainly enhances Arizona's ability to compete in the global economy to attract these high-wage companies," said Chris Camacho, president and CEO of the Greater Phoenix Economic Council.

Opponents said the bill was specialty legislation.

"I just don't believe in picking winners and losers," said Rep. Michelle Ugenti, R-Scottsdale, echoing a refrain often heard from Republicans opposed to business incentives. "I just don't think it's a good economic tool."

Apple originally bought the facility in 2013 for Merrimack, New Hampshire-based GT Advanced, which planned to make sapphire glass for Apple products, but the company went bankrupt in October 2013.

After those plans fell through, Apple said it would find a new use for the plant and committed to building and financing 70 megawatts of new solar power generation, enough to power more than 14,500 homes.

The company said the facility will now control Apple's global networks, employ about 150 permanent workers and run on 100 percent renewable energy. Construction is expected to begin next year.