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limit costs and risks associated with electricity use by data centers and impose a moratorium.

This bill creates new rules requiring electric utilities to charge data centers the full cost of providing them electricity, including any infrastructure upgrades needed to serve them, rather than spreading those costs to other customers. The bill also prevents data centers from leaving other customers responsible for paying stranded costs if the data center shuts down early or for decommissioning expenses. These rules apply to all data centers, with special definitions for "large data centers" using 20 megawatts or more of electricity.

provide a sales and use tax exemption for goods and services related to data center operations.

This bill creates a sales and use tax exemption for companies operating data centers in South Dakota, allowing them to avoid paying sales tax on computer equipment, software, cooling systems, power infrastructure, and other specialized machinery needed to run the facilities. The exemption applies to items used solely for data center operations, excluding equipment related to cryptocurrency mining. This tax break is designed to attract data center investment to the state by reducing operational costs for qualifying businesses.

modify provisions pertaining to the purchasing of goods and services related to data center operations.

This bill creates new definitions for data center operations in South Dakota law, establishing what qualifies as a "data center," "computer software," and "enterprise information technology equipment" used to run these facilities. The definitions cover physical equipment like servers, cooling systems, power infrastructure, and networking equipment, but specifically exclude digital currency mining operations. These definitions appear designed to establish a framework for how the state will regulate or manage purchases related to qualifying data centers.

protect residents from increased utility costs and utility shortages caused by data centers, to clarify authority to regulate data centers, and to modify provisions pertaining to the purchasing of goods and services by a data center.

SB 235 exempts data centers from sales taxes on their purchases and requires data center operators to pay the full cost of their own electricity without shifting expenses to residential customers. The bill also prohibits electric utilities from raising rates or adding surcharges on residential customers to cover data center infrastructure or electricity costs. This protects South Dakota homeowners from subsidizing the utility expenses of large data center operations.

modify provisions relating to the reinvestment payment program, and relating to the purchasing of goods and services used by projects approved for the reinvestment payment program.

SB 239 modifies South Dakota's reinvestment payment program by updating key definitions used in the program, including adding a new definition for "cryptocurrency" and clarifying what counts as a "data center" for purposes of the program. The bill also adjusts how goods and services purchased for reinvestment-approved projects are treated under state law. These changes appear designed to modernize the reinvestment program to cover new types of businesses and clarify eligibility requirements.

allow the Public Utilities Commission to assess actual costs to data centers that are customers of public utilities.

The Public Utilities Commission can now charge large data centers (those using 10 megawatts or more of power) for the actual costs of reviewing their electricity service contracts with utilities. Any fees collected go into a state fund rather than reducing costs for other utility customers.

prohibit nondisclosure of certain agreements related to data centers.

State agencies and local governments in South Dakota are prohibited from signing confidentiality or nondisclosure agreements when they deal with private companies or individuals about building, developing, or locating data centers. Any data center agreements must be treated as public records that citizens can access. This ensures transparency in how public entities spend money and make decisions about major data infrastructure projects.