Why is Apple building a $1 billion server farm? – UPDATED

North Carolina lawmakers are pushing to give Apple Inc. a multi-million dollar tax break should the company bring an East Coast computer server farm to the state – an estimated $1 billion investment, according to a state official with knowledge of the recruitment efforts…

While it has been known that North Carolina lawmakers were working on changing tax rules to benefit one company, the name of the outfit has been kept secret. The state official said Catawba and Cleveland counties are potential sites…

The House Finance Committee on Thursday altered the proposed tax change so companies could qualify only if they locate in one of North Carolina’s poorest counties, provide health insurance, meet a wage standard, and forego other state grants or tax breaks.

“The bill ensures it’s going to go to an area of high unemployment. This reflects concerns many of us have had about economic development policy, that priority should be given to the neediest counties,” said committee chairman Rep. Paul Luebke, D-Durham.

The tax breaks could be worth about $46 million in the next decade, assuming the company reaches its $1 billion investment target within nine years of starting, according to a memo by legislative fiscal staffers that does not identify the company. The memo said no current company meets the criteria to receive the tax break and the Commerce Department knows of just one with the potential to qualify.

“It’s very specific to this project,” Luebke said of the tax breaks.

The conditions adopted Thursday, if approved by both legislative chambers and the governor, would push the project from the state’s urbanized corridor connecting Raleigh to Greensboro and Charlotte. In 2007, Google Inc. committed to spending $600 million for a server farm near Lenoir in the western North Carolina foothills. It opened last year…

“Given our economic situation in this state, with the rising unemployment, this really is critical,” said Rep. Jennifer Weiss, D-Wake, before the committee approved the bill and its changes.

My, oh my. Apple’s existing server facilities do a truly crappy and underpowered job at handling the traffic they already have. But, this sounds like a Google-level facility.

Whatever do they have in mind?

UPDATE: NC state legislature debated less than a minute – and approved the package.