Legislation Would Incentivize Relocation of Qualified Data Centers to New Jersey
(TRENTON) – Legislation sponsored by Assemblyman Andrew Zwicker to encourage businesses that specialize in processing, storing and distributing electronic data to relocate to New Jersey was released Monday by an Assembly panel.
“In our 21st-century global economy, just about every major business relies on complex hardware and software. The facilities that house these systems can benefit from relocating to New Jersey and hiring from the state’s highly-educated talent pool,” said Zwicker (D-Hunterdon/Mercer/Middlesex/Somerset). “The state is lagging behind in this sector. By encouraging data centers to relocate, the state can take advantage of an opportunity to bring high-tech jobs to New Jersey as digital information continues to grow increasingly more essential to various industries.”
The bill (A-4033) would require the New Jersey Economic Development Authority (EDA) to establish a program to provide tax credits and exemptions to qualified data centers in order to encourage the facilities to remain in or relocate to New Jersey. With multinational technology companies and social networking services like Amazon, Microsoft and Facebook rapidly expanding their existing data centers and seeking spaces for new facilities, the program will make the state more attractive to high-profile leaders in computer engineering and information technology, Zwicker said.
To qualify for the EDA program, a data center must have at least one facility in service in New Jersey, make a capital investment of at least $50 million in the state and hire at least ten full-time employees. Thereafter, in order to maintain eligibility following initial EDA approval, a data center must employ at least 50 full-time workers during the three-year period of qualification for the program. A data center would qualify for tax credits and exemptions for an extended period if it redevelops and relocates to a vacant and abandoned commercial property and employs at least 50 full-time workers for five years.
The legislation addresses two main considerations that influence where a data center ultimately will be located – upfront construction costs and ongoing operational costs, Zwicker said.
“When modern corporate CEOs and tech leaders look for a new place to settle, the cost of IT infrastructure is a major factor,” said Zwicker. “New Jersey ranks just about last in the nation when it comes to the availability of economic development programs specifically geared toward the cloud computing and data center industries. That has to change if we want our state’s economy to be more competitive.”
Zwicker, head of science education at the Princeton Plasma Physics Lab, noted that, just as the laboratory employs experienced physicists, its operation also depends upon workers from other sectors, such as electricians and plumbers. Likewise, opportunities available at data centers in New Jersey drawn in by the EDA program would not be limited only to IT professionals, he said.
“In addition to the direct IT jobs this legislation will create, the supporting electrical, utility and construction demands of data centers will provide good jobs for skilled workers from a variety of other disciplines,” said Zwicker.
The measure was released by the Assembly Commerce and Economic Development Committee.