Data centers meeting specific requirements will receive 100% sales and use tax exemption for at least 20 years. Estimated cost: $38 million annually, $760 million over two decades. Colorado faces $850 million deficit in 2026. House Majority Leader Monica Duran (D-Wheat Ridge) and Rep. Alex Valdez (D-Denver) sponsor House Bill 26-1030. Hearing February 12 before House Energy & Environment Committee.
A nine-member Colorado Data Center Development Authority—appointed by governor and legislative leaders—decides which data centers qualify. Requirements: $250 million infrastructure investment within five years, jobs paying 110% of average local wage, energy efficiency standards, water-efficient cooling, craft labor at prevailing wages. The 2025 version of this bill was postponed indefinitely. Democrats reintroduced it in 2026.
TABOR restricts revenue growth to population plus inflation. Tax exemptions remove $760 million from TABOR calculations. That money never triggers TABOR rebates. Politicians keep money that would otherwise be refunded to taxpayers. Article X, Section 20 requires voter approval for tax increases and revenue kept above the cap.
The bill requires utilities to verify data centers won’t cause “unreasonable cost impacts to other utility ratepayers.” The Department of Energy estimates data center demand could increase residential electricity costs by 8%, with higher spikes in areas with data center concentrations. Colorado utilities face capacity constraints from renewable mandates and natural gas elimination efforts.
Sen. Cathy Kipp (D-Fort Collins) and Rep. Kyle Brown (D-Louisville) plan a competing bill requiring large data centers to offset energy with renewables, barring utilities from offering special rates, and requiring data centers pay for own infrastructure upgrades. Earthjustice, Natural Resources Defense Council, Colorado Fiscal Institute, and AARP Colorado support the competing approach.
Bill supporters claim 37 states offer data center incentives. The Data Center Coalition has eight members with Colorado headquarters but no large data centers currently operating here. Amazon Web Services, Google Cloud, and Microsoft Azure dominate the data center industry.
With Democrat supermajorities, the bill will likely advance. Constitutional challenges on TABOR grounds may follow.
Support Independent Local Journalism — High Country Advocate was created as a real alternative to regional media that too often silences dissenting voices while taking sides in the political struggle. Producing in-depth, unflinching reporting like this series and others is expensive: servers, editing, research time, and legal review all add up quickly. If these articles have informed you or given you new perspective, please consider supporting HCA with a paid subscription — every subscriber helps keep this reporting strong and independent. 