Texas 2015 - 84th Regular

Texas House Bill HB2506 Compare Versions

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Version 2 (New)

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1	1	84R16206 ADM-F
2	2	By: Parker H.B. No. 2506
3	3	Substitute the following for H.B. No. 2506:
4	4	By: Button C.S.H.B. No. 2506
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to an exemption for certain tangible personal property
10	10	related to medical data centers from the sales and use tax.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Sections 151.317(a) and (b), Tax Code, are
13	13	amended to read as follows:
14	14	(a) Subject to Sections 151.359, 151.360, and 151.1551 and
15	15	Subsection (d) of this section, gas and electricity are exempted
16	16	from the taxes imposed by this chapter when sold for:
17	17	(1) residential use;
18	18	(2) use in powering equipment exempt under Section
19	19	151.318 or 151.3185 by a person processing tangible personal
20	20	property for sale as tangible personal property, other than
21	21	preparation or storage of prepared food described by Section
22	22	151.314(c-2);
23	23	(3) use in lighting, cooling, and heating in the
24	24	manufacturing area during the actual manufacturing or processing of
25	25	tangible personal property for sale as tangible personal property,
26	26	other than preparation or storage of prepared food described by
27	27	Section 151.314(c-2);
28	28	(4) use directly in exploring for, producing, or
29	29	transporting, a material extracted from the earth;
30	30	(5) use in agriculture, including dairy or poultry
31	31	operations and pumping for farm or ranch irrigation;
32	32	(6) use directly in electrical processes, such as
33	33	electroplating, electrolysis, and cathodic protection;
34	34	(7) use directly in the off-wing processing, overhaul,
35	35	or repair of a jet turbine engine or its parts for a certificated or
36	36	licensed carrier of persons or property;
37	37	(8) use directly in providing, under contracts with or
38	38	on behalf of the United States government or foreign governments,
39	39	defense or national security-related electronics, classified
40	40	intelligence data processing and handling systems, or
41	41	defense-related platform modifications or upgrades;
42	42	(9) use directly by a data center or medical data
43	43	center that is certified by the comptroller as a qualifying data
44	44	center or qualifying medical data center under Section 151.359 or
45	45	151.360 in the processing, storage, and distribution of data;
46	46	(10) a direct or indirect use, consumption, or loss of
47	47	electricity by an electric utility engaged in the purchase of
48	48	electricity for resale; or
49	49	(11) use in timber operations, including pumping for
50	50	irrigation of timberland.
51	51	(b) The sale, production, distribution, lease, or rental
52	52	of, and the use, storage, or other consumption in this state of, gas
53	53	and electricity sold for the uses listed in Subsection (a)[,] are
54	54	exempted from the taxes imposed by a municipality under Chapter 321
55	55	except as provided by Sections 151.359(j), 151.360(j), and 321.105.
56	56	SECTION 2. Subchapter H, Chapter 151, Tax Code, is amended
57	57	by adding Section 151.360 to read as follows:
58	58	Sec. 151.360. PROPERTY USED IN CERTAIN MEDICAL DATA
59	59	CENTERS; EXEMPTION. (a) In this section:
60	60	(1) "County average weekly wage" means the average
61	61	weekly wage in a county for all jobs during the most recent four
62	62	quarterly periods for which data is available, as computed by the
63	63	Texas Workforce Commission, at the time a data center creates a job
64	64	used to qualify under this section.
65	65	(2) "Health care corporation" means a corporation
66	66	whose primary business is the ownership and operation of hospitals
67	67	and related health care facilities.
68	68	(3) "Medical data center" means at least 75,000 square
69	69	feet of space in a single building or portion of a single building,
70	70	or cumulatively in multiple buildings or portions of multiple
71	71	buildings that are occupied by a single health care corporation,
72	72	one or more of its subsidiaries, or both, which space:
73	73	(A) is located in this state;
74	74	(B) is actually used primarily by the health care
75	75	corporation or a subsidiary of the corporation to house servers and
76	76	related equipment and support staff for the processing, storage,
77	77	and distribution of medical data, including electronic patient
78	78	records, financial information, and business records;
79	79	(C) is not used primarily by a telecommunications
80	80	provider to place tangible personal property that is used to
81	81	deliver telecommunications services; and
82	82	(D) has an uninterruptible power source,
83	83	generator backup power, a sophisticated fire suppression and
84	84	prevention system, and enhanced physical security that includes
85	85	restricted access, video surveillance, and electronic systems.
86	86	(4) "Permanent job" means an employment position that
87	87	will exist for at least five years after the date the job is
88	88	created.
89	89	(5) "Primarily" means at least 50 percent.
90	90	(6) "Qualifying job" means a full-time, permanent job
91	91	that pays at least 120 percent of the county average weekly wage in
92	92	the county in which the job is based.
93	93	(7) "Qualifying medical data center" means a medical
94	94	data center that meets the qualifications prescribed by Subsection
95	95	(d).
96	96	(8) "Subsidiary" has the meaning assigned by Section
97	97	1.002, Business Organizations Code.
98	98	(b) Except as otherwise provided by this section, tangible
99	99	personal property that is necessary and essential to the operation
100	100	of a qualified medical data center is exempted from the taxes
101	101	imposed by this chapter if the tangible personal property is
102	102	purchased for installation at, incorporation into, or, in the case
103	103	of Subdivision (1), use in a qualifying medical data center by a
104	104	health care corporation or a subsidiary of the corporation, and the
105	105	tangible personal property is:
106	106	(1) electricity;
107	107	(2) an electrical system;
108	108	(3) a cooling system;
109	109	(4) an emergency generator;
110	110	(5) hardware or a distributed mainframe computer or
111	111	server;
112	112	(6) a data storage device;
113	113	(7) network connectivity equipment;
114	114	(8) a rack, cabinet, and raised floor system;
115	115	(9) a peripheral component or system;
116	116	(10) software;
117	117	(11) a mechanical, electrical, or plumbing system that
118	118	is necessary to operate any tangible personal property described by
119	119	Subdivisions (2)-(10);
120	120	(12) any other item of equipment or system necessary
121	121	to operate any tangible personal property described by Subdivisions
122	122	(2)-(11), including a fixture; or
123	123	(13) a component part of any tangible personal
124	124	property described by Subdivisions (2)-(10).
125	125	(c) The exemption provided by this section does not apply
126	126	to:
127	127	(1) office equipment or supplies;
128	128	(2) maintenance or janitorial supplies or equipment;
129	129	(3) equipment or supplies used primarily in sales
130	130	activities or transportation activities;
131	131	(4) tangible personal property on which the purchaser
132	132	has received or has a pending application for a refund under Section
133	133	151.429;
134	134	(5) tangible personal property not otherwise exempted
135	135	under Subsection (b) that is incorporated into real estate or into
136	136	an improvement of real estate; or
137	137	(6) tangible personal property that is rented or
138	138	leased for a term of one year or less.
139	139	(d) Subject to Subsection (k), a medical data center may be
140	140	certified by the comptroller as a qualifying medical data center
141	141	for purposes of this section if, on or after September 1, 2015, a
142	142	health care corporation or a subsidiary of the corporation:
143	143	(1) builds, leases, or operates a medical data center;
144	144	(2) makes or agrees to make a capital investment, on or
145	145	after September 1, 2015, of at least $200 million in that medical
146	146	data center over a five-year period beginning on the date the
147	147	medical data center is certified by the comptroller as a qualifying
148	148	medical data center; and
149	149	(3) creates at least 20 qualifying jobs in the county
150	150	in which the medical data center is located, not including a job
151	151	moved from one county in this state to another county in this state.
152	152	(e) A medical data center that is eligible under Subsection
153	153	(d) shall apply to the comptroller for certification as a
154	154	qualifying medical data center and for issuance of a registration
155	155	number or numbers by the comptroller. The application must be made
156	156	on a form prescribed by the comptroller and include the information
157	157	required by the comptroller. The application must include the name
158	158	and contact information for the health care corporation or the
159	159	subsidiary of the corporation that will claim the exemption
160	160	authorized under this section. The application form must include a
161	161	section for the applicant to certify that the capital investment
162	162	required by Subsection (d)(2) will be met by the health care
163	163	corporation or the subsidiary of the corporation within the time
164	164	period prescribed by Subsection (d)(2).
165	165	(f) The exemption provided by this section begins on the
166	166	date the medical data center is certified by the comptroller as a
167	167	qualifying medical data center and expires on the date that the
168	168	medical data center ceases operating as a medical data center.
169	169	(g) Each person who is eligible to claim an exemption
170	170	authorized by this section must hold a registration number issued
171	171	by the comptroller. The registration number must be stated on the
172	172	exemption certificate provided by the purchaser to the seller of
173	173	tangible personal property eligible for the exemption.
174	174	(h) The comptroller shall revoke all registration numbers
175	175	issued in connection with a qualifying medical data center that the
176	176	comptroller determines does not meet the requirements prescribed by
177	177	Subsection (d). Each person who has the person's registration
178	178	number revoked by the comptroller is liable for taxes, including
179	179	penalty and interest from the date of purchase, imposed under this
180	180	chapter on purchases for which the person claimed an exemption
181	181	under this section, regardless of whether the purchase occurred
182	182	before the date the registration number was revoked.
183	183	(i) The comptroller shall adopt rules consistent with and
184	184	necessary to implement this section, including rules relating to:
185	185	(1) a qualifying medical data center;
186	186	(2) issuance and revocation of a registration number
187	187	required under this section; and
188	188	(3) reporting and other procedures necessary to ensure
189	189	that a qualifying medical data center complies with this section
190	190	and remains entitled to the exemption authorized by this section.
191	191	(j) The exemption in this section does not apply to the
192	192	taxes imposed under Chapter 321, 322, or 323.
193	193	(k) A medical data center is not eligible to receive an
194	194	exemption under this section if the medical data center is subject
195	195	to an agreement limiting the appraised value of the medical data
196	196	center's property under Subchapter B or C, Chapter 313.
197	197	SECTION 3. Section 313.010, Tax Code, as added by Chapter
198	198	1274 (H.B. 1223), Acts of the 83rd Legislature, Regular Session,
199	199	2013, is amended to read as follows:
200	200	Sec. 313.010. CERTAIN ENTITIES INELIGIBLE. An entity that
201	201	has been issued a registration number under Section 151.359 or
202	202	151.360 is not eligible to receive a limitation on appraised value
203	203	under this chapter.
204	204	SECTION 4. Section 321.208, Tax Code, is amended to read as
205	205	follows:
206	206	Sec. 321.208. STATE EXEMPTIONS APPLICABLE. The exemptions
207	207	provided by Subchapter H, Chapter 151, apply to the taxes
208	208	authorized by this chapter, except as provided by Sections
209	209	151.359(j), 151.360(j), and 151.317(b).
210	210	SECTION 5. Section 323.207, Tax Code, is amended to read as
211	211	follows:
212	212	Sec. 323.207. STATE EXEMPTIONS APPLICABLE. The exemptions
213	213	provided by Subchapter H, Chapter 151, apply to the taxes
214	214	authorized by this chapter, except as provided by Sections
215	215	151.359(j), 151.360(j), and 151.317(b).
216	216	SECTION 6. The change in law made by this Act does not
217	217	affect tax liability accruing before the effective date of this
218	218	Act. That liability continues in effect as if this Act had not been
219	219	enacted, and the former law is continued in effect for the
220	220	collection of taxes due and for civil and criminal enforcement of
221	221	the liability for those taxes.
222	222	SECTION 7. This Act takes effect September 1, 2015.