Louisiana Voice

Will Livingston Parish give away the store in making too generous concessions the way Louisiana Economic Development would prefer in order to obtain that data center in Walker or will parish leaders follow the example of West Feliciana Parish and dig their heels in refusing to grant a 10-year property tax exemption?

West Feliciana leaders, casting their eyes northward to Richland Parish, must’ve have seen the concessions being granted Meta for its $50 billion data center being built there. The state, in surrendering sales tax revenue of up to 80 percent on the purchase of materials and equipment will cost the state MORE THAN $3.3 BILLION, according to Sherwood News. And that doesn’t even take into consideration the loss to the parish in the 10-year property tax exemptions.

Louisiana Economic Development (LED), of course, wanted to offer similar concessions to Hut-8 in West Feliciana for its $10 billion data center but the parish was determined not to cede property tax revenue. State sales tax exemptions were granted by LED on the purchase of steel, cement and other equipment and materials.

Louisiana provides a sales and use tax exemption for purchases related to data centers certified by LED. The exemption applies to eligible data center equipment and certain expenditures made for the development, acquisition, construction, lease, repair, refurbishment, expansion, or renovation of a qualified data center. 

The exemption may also apply to other parties involved in the project, including affiliates of the data center and contractors or subcontractors performing work at the project site.

The West Feliciana Parish School Board did a major construction project with dales tax revenues from the River Bend Nuclear Plant but that money was denied the board by Gov. Jeff Landry and the legislature from the Hut-8 project.

HOUSE BILL 827 of the 2024 regular session of the Louisiana Legislature, authored by Rep. Christopher Turner (R-Ruston) passed the Senate on final vote of 35-0 and likewise breezed through the House by 83-4 in becoming Act 827.

As originally written, HB 827 provided state and local sales and use tax rebates on the sale of “certain communications service equipment and data center equipment” and was originally intended for rebates on FIBER-OPTIC AND DATA CENTER equipment.

But by the November special session that year, it had become HOUSE BILL 10 by Rep. Mark Wright (R-Covington). You have to scroll down to the bottom of page 130 to find the changes which scrapped the rebates and offered instead garden-variety tax exemptions.

Like HB 827, this one also passed easily in the Senate by a 38-0 vote and by an 80-19 vote in the House on the way to becoming Act 11.

Those two bills were for the benefit of Meta’s huge data center in Richland Parish. But West Feliciana, as already pointed, out opted out of the 10-year property tax exemption in its insistence on not giving away the farm.

The bottom line is West Feliciana has received $10 million from the $10 billion project while the State of Louisiana will reap a comparatively low $25 million from the $100 billion Space X venture in Vermilion Parish. West Feliciana is also getting $16 million in water system improvements that Hut-8 is installing to have adequate fire protections numbers. Additionally, the parish is expected to see about $90 million a year through its PILOT scheme but to date has received only the aforementioned $10 million.

It should be noted that Anthropic will be paying the bulk of that money the parish gets because its equipment will be in Hut-8’s buildings.

So, with all those numbers being bandied about, what are the options for Livingston Parish?

Will LED prevail in granting exemptions galore in order to attract whoever it is that will preside over the facility in Walker (early but unofficial reports identify the company as Microsoft) or will parish officials insist on not giving up property tax revenue that can help build infrastructure, pay teachers and law enforcement more?

HOUSE BILL 922 by Rep. Rodney Schamerhorn (R-Hornbeck) would have done just that but efforts by the Louisiana Public Service Commission and the House Commerce Committee killed his bill in committee.

Schamerhorn said the only thing his bill did was to codify assurances made by Entergy officials in meetings in Washington and later in Shreveport that it would be responsible for bearing 100 percent of the costs of improvements and expansions to generating capacity for the data centers. “We have to protect the citizens of this state” from increases in electricity costs, he said in testifying in support of the bill back in March

Instead, Louisiana citizens have zero statutory protection from significant rate hikes, prompting one opponent of the data centers, a member of Louisiana Citizen Advocacy Group (LACAG) to say, “Multi-billion-dollar corporations get our money. We get a ‘pledge’ from them and the NDA-signing Louisiana politicians covering for them. We deserve better.

“Data centers consume massive amounts of power. If tech giants don’t pay 100 percent of their infrastructure costs, your monthly electric bill goes up to subsidize them. Right now there is no law stopping Entergy from offloading those costs onto your family,” the LACAG member said.

Her concern appears to be well-placed.

In Arkansas, Entergy FILED A LAWSUIT against the Arkansas Democrat-Gazette in an effort to keep the newspaper from publishing leaked details of a major electricity deal for a new Google data center in that state.

The documents revealed that Google might be responsible for only about one-third of its actual $1.6 billion infrastructure costs for a solar plant built to power the data center. Arkansas residents would be on the hook for the remainder.

Fortunately for freedom of the press, a federal judge ruled in favor of the newspaper—this time.

Many industry sources downplay claims that data centers will be responsible for rate hikes but the truth is it’s far too early to say with any certainty.

Other energy experts, however, DISAGREE. They say energy demand from data centers cannot help but create a demand for more and more energy and as these energy-ravenous centers continue to be built, the result will ultimately result in increases in costs of electricity for U.S. households.

Consumers in the West and Northeast have already seen electricity costs increase and experts say there is no reason to believe the trend won’t continue.

Livingston Parish, like West Feliciana, may have no say in what the state does in granting exemptions on state sales taxes. The state, in fact, has already thwarted an effort to codify an informal agreement by Entergy that would have committed the utility to bear 100 percent of the cost of infrastructure and generating upgrades for the benefit of Meta.

Livingston Parish President Randy Delatte, while denying he or any parish officials have signed nondisclosure agreements, admitted at much in testimony before the parish planning commission in may of 2024 and Parish Council member Ricky Goff also admitted signing an NDA in his testimony before the zoning commission last November.

Meanwhile, Delatte, in saying there was no data center project he could announce, nonetheless told the Baton Rouge Advocate last week that a data center would result in $140 million in annual property taxes, lending speculation that preliminary talks about such a project are more than mere conjecture.