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SANTA FE, N.M. — New Mexico may use public funds to help Facebook pay for water rights at a major new data center proposed at Los Lunas.
The social media company is negotiating for tax breaks and subsidies as it weighs whether to locate the facility in Los Lunas or Utah.
A water and sewer service agreement with the village of Los Lunas obtained by the Associated Press outlines potential water demands and includes provisions to acquire water rights for the data center with money from New Mexico's closing fund. The Los Lunas village council approved the agreement Thursday evening by a unanimous vote.
New Mexico's Local Economic Development Act fund helps pay for a range of infrastructure improvements for businesses that expand or relocate to the state and may spur economic development by doing business beyond the state.
The Department of Economic Development, which negotiates closing fund agreements, has declined requests to comment on possible state incentives to attract Facebook.
Los Lunas Village Attorney Larry Guggino said it was unclear how much money might come from the state's closing fund because village officials are not involved in those negotiations.
The fund had an available balance of about $50 million at the start of the year.
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Facebook representatives could not immediately be reached.
Data centers use significant amounts of water to cool computer equipment as they process vast quantities of secure information, powering everything from online shopping to streaming movies.
If Facebook decides to build in Los Lunas, the water agreement would guarantee an initial supply of 1.5 million gallons a day for the first two data center buildings and as much as 4.5 million gallons a day if the facility expands to a fifth and sixth building. Some of that water capacity is a precaution. Facebook's exact needs were unclear.
The village of 15,000 residents on the edge of the Rio Grande south of Albuquerque used an average of 2.8 million gallons of water a day in 2015, drawing its water supply from four interconnected wells.
Guggino said Los Lunas will be able meet the water demands of the full data center expansion under its permit with the state engineer's office that allows the diversion of roughly 5.6 million gallons a day from underground aquifers.
"It will not cause us to have to, in any way, diminish our supply of water to our citizens at all," he said.
The agreement would allow the city to speed up existing plans to drill a fifth supply well, with Facebook paying its portion of costs.
In the event of a water shortage, the agreement gives the data center top priority.
The agreement is one small component of government efforts to lure Facebook to Los Lunas. West Jordan also is competing for the data center.
The village council in June approved an industrial revenue bond agreement that would waive all property taxes on the data facility over a 30-year period in exchange for annual payments that start at $50,000 and could go as high as $450,000. The village would also waive gross receipts taxes and compensating taxes on billions of dollars worth of equipment.
It's unclear how much potential tax revenue the town would forgo.