83R5241 CJC-D
By: Hilderbran H.B. No. 1223
A BILL TO BE ENTITLED
AN ACT
relating to tax incentives with respect to certain data centers.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter I, Chapter 151, Tax Code, is amended
by adding Section 151.4292 to read as follows:
Sec. 151.4292. TAX REFUNDS RELATING TO QUALIFYING DATA
CENTERS. (a) In this section:
(1) "County average weekly wage" means the average
weekly wage in a county for all jobs during the most recent four
quarterly periods for which data is available, as computed by the
Texas Workforce Commission, at the time a data center creates a job
used to qualify under this section.
(2) "Data center" means a facility:
(A) located in this state;
(B) composed of a single building or a portion of
a single building specifically constructed or refurbished and
actually used primarily to house servers and related equipment and
support staff for the processing, storage, and distribution of
data; and
(C) that has an uninterruptible power source, a
generator backup power, a sophisticated fire suppression and
prevention system, and enhanced physical security that includes
restricted access, video surveillance, and electronic systems.
(3) "Permanent job" means an employment position that
will exist for at least five years after the date the job is
created.
(4) "Qualifying data center" means a data center that
meets the qualifications prescribed by Subsection (d).
(5) "Qualifying job" means a full-time, permanent job
that pays at least 120 percent of the county average weekly wage in
the county in which the job is based.
(6) "Qualifying operator" means a person who controls
access to a qualifying data center, regardless of whether that
person owns each item of tangible personal property located at the
data center.
(7) "Qualifying tenant" means a person who contracts
with a qualifying operator to place, or cause to be placed, and to
use tangible personal property at a qualifying data center.
(b) Except as provided by Subsection (c), a qualifying data
center, a qualifying operator, and a qualifying tenant are entitled
to receive a refund in the amount provided by this section of the
taxes imposed on the purchase of tangible personal property that is
necessary to manage or operate the data center, including:
(1) electricity;
(2) an electrical system;
(3) a cooling system;
(4) an emergency generator;
(5) hardware or a distributed mainframe computer or
server;
(6) a data storage device;
(7) network connectivity equipment;
(8) a rack, cabinet, and raised floor system;
(9) a peripheral component or system;
(10) software;
(11) a mechanical, electrical, or plumbing system that
is necessary to operate any tangible personal property described by
Subdivisions (2)-(10);
(12) any other item of equipment or system necessary
to operate any tangible personal property described by Subdivisions
(2)-(11), including a fixture; and
(13) a component part of any tangible personal
property described by Subdivisions (2)-(10).
(c) This section does not apply to:
(1) office equipment or supplies;
(2) equipment or supplies used primarily in sales or
distribution activities or in transportation activities; or
(3) tangible personal property purchased by an
applicant for a refund under this section with respect to which the
applicant received or has a pending application for a refund under
Section 151.429.
(d) A data center is eligible to be a qualifying data center
for purposes of this section if the data center, an operator of the
data center, or a tenant of the data center, independently or as a
group:
(1) creates at least 20 qualifying jobs in the county
in which the data center is located; and
(2) makes or agrees to make a capital investment, on or
after September 1, 2013, of at least $150 million in this state
related to improvements to real and tangible personal property
installed at the data center over a four-year period after initial
construction or refurbishing of the data center facility.
(e) A data center may apply to the comptroller for
qualification as a qualifying data center. The application must be
made on a form prescribed by the comptroller and include the
information required by the comptroller. The application form must
include a section for the data center to certify that the data
center, an operator of the data center, or a tenant of the data
center, independently or as a group, will make the investment
required by Subsection (d)(2).
(f) Beginning on the date a data center becomes a qualifying
data center, the data center, a qualifying operator of the data
center, and a qualifying tenant of the data center are entitled to
receive a refund as provided by this section on an annual basis as
provided by Subsection (j) for the purchase of tangible personal
property occurring on or after that date and before:
(1) the 10th anniversary of the date the data center
becomes a qualifying data center, if the data center, operator, or
tenant makes a capital investment of at least $150 million but less
than $200 million as provided by Subsection (d)(2); or
(2) the 15th anniversary of the date the data center
becomes a qualifying data center, if the data center, operator, or
tenant makes a capital investment of $200 million or more as
provided by Subsection (d)(2).
(g) The amount of the refund authorized by this section for
each annual period with respect to the taxes imposed on the purchase
during that period of an item of tangible personal property to which
this section applies is equal to the greater of:
(1) an amount equal to the amount by which the taxes
paid under this chapter exceed the amount of taxes that would have
been imposed under this chapter on the purchase of the item if the
rate of the tax imposed under this chapter were one percent; or
(2) the amount by which the taxes paid under this
chapter exceed $80.
(h) To receive a refund as provided by this section, a data
center must apply to the comptroller.
(i) The comptroller shall adopt rules necessary to
implement this section, including rules relating to the:
(1) qualification and disqualification of a data
center, operator, or tenant under this section;
(2) determination of the date a data center, operator,
or tenant initially qualifies for a refund as provided by this
section; and
(3) reporting and other procedures necessary to ensure
that a qualifying data center, qualifying operator, and qualifying
tenant comply with this section and remain entitled to receive a
refund as provided by this section.
(j) The rules adopted by the comptroller under Subsection
(i) must allow for a qualifying data center, qualifying operator,
or qualifying tenant to apply for and receive annually the refund
provided under this section. The rules must prescribe the period
each year during which an application may be filed requesting a
refund of taxes imposed and paid during the preceding state fiscal
year.
SECTION 2. Section 313.024(b), Tax Code, is amended to read
as follows:
(b) To be eligible for a limitation on appraised value under
this subchapter, the entity must use the property in connection
with:
(1) manufacturing;
(2) research and development;
(3) a clean coal project, as defined by Section 5.001,
Water Code;
(4) an advanced clean energy project, as defined by
Section 382.003, Health and Safety Code;
(5) renewable energy electric generation;
(6) electric power generation using integrated
gasification combined cycle technology;
(7) nuclear electric power generation; [or]
(8) a computer center primarily used in connection
with one or more activities described by Subdivisions (1) through
(7) conducted by the entity; or
(9) a data center that is eligible to receive a tax
refund under Section 151.4292.
SECTION 3. The change in law made by this Act does not
affect tax liability accruing before the effective date of this
Act. That liability continues in effect as if this Act had not been
enacted, and the former law is continued in effect for the
collection of taxes due and for civil and criminal enforcement of
the liability for those taxes.
SECTION 4. This Act takes effect September 1, 2013.