Texas 2015 - 84th Regular

Texas Senate Bill SB608 Compare Versions

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1	1	84R3440 ADM-F
2	2	By: Hancock S.B. No. 608
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to an exemption for certain tangible personal property
8	8	related to medical data centers from the sales and use tax.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Sections 151.317(a) and (b), Tax Code, are
11	11	amended to read as follows:
12	12	(a) Subject to Sections 151.359, 151.360, and 151.1551 and
13	13	Subsection (d) of this section, gas and electricity are exempted
14	14	from the taxes imposed by this chapter when sold for:
15	15	(1) residential use;
16	16	(2) use in powering equipment exempt under Section
17	17	151.318 or 151.3185 by a person processing tangible personal
18	18	property for sale as tangible personal property, other than
19	19	preparation or storage of prepared food described by Section
20	20	151.314(c-2);
21	21	(3) use in lighting, cooling, and heating in the
22	22	manufacturing area during the actual manufacturing or processing of
23	23	tangible personal property for sale as tangible personal property,
24	24	other than preparation or storage of prepared food described by
25	25	Section 151.314(c-2);
26	26	(4) use directly in exploring for, producing, or
27	27	transporting, a material extracted from the earth;
28	28	(5) use in agriculture, including dairy or poultry
29	29	operations and pumping for farm or ranch irrigation;
30	30	(6) use directly in electrical processes, such as
31	31	electroplating, electrolysis, and cathodic protection;
32	32	(7) use directly in the off-wing processing, overhaul,
33	33	or repair of a jet turbine engine or its parts for a certificated or
34	34	licensed carrier of persons or property;
35	35	(8) use directly in providing, under contracts with or
36	36	on behalf of the United States government or foreign governments,
37	37	defense or national security-related electronics, classified
38	38	intelligence data processing and handling systems, or
39	39	defense-related platform modifications or upgrades;
40	40	(9) use directly by a data center or medical data
41	41	center that is certified by the comptroller as a qualifying data
42	42	center or qualifying medical data center under Section 151.359 or
43	43	151.360 in the processing, storage, and distribution of data;
44	44	(10) a direct or indirect use, consumption, or loss of
45	45	electricity by an electric utility engaged in the purchase of
46	46	electricity for resale; or
47	47	(11) use in timber operations, including pumping for
48	48	irrigation of timberland.
49	49	(b) The sale, production, distribution, lease, or rental
50	50	of, and the use, storage, or other consumption in this state of, gas
51	51	and electricity sold for the uses listed in Subsection (a)[,] are
52	52	exempted from the taxes imposed by a municipality under Chapter 321
53	53	except as provided by Sections 151.359(j), 151.360(k), and 321.105.
54	54	SECTION 2. Subchapter H, Chapter 151, Tax Code, is amended
55	55	by adding Section 151.360 to read as follows:
56	56	Sec. 151.360. PROPERTY USED IN CERTAIN MEDICAL DATA
57	57	CENTERS; EXEMPTION. (a) In this section:
58	58	(1) "Medical data center" means at least 75,000 square
59	59	feet of space in a single building or portion of a single building,
60	60	or cumulatively in multiple buildings or portions of multiple
61	61	buildings that are owned by a single qualifying owner, operated by a
62	62	single qualifying operator, and occupied by a single qualifying
63	63	occupant, which space:
64	64	(A) is located in this state;
65	65	(B) is specifically constructed or refurbished
66	66	and actually used primarily to house servers and related equipment
67	67	and support staff for the processing, storage, and distribution of
68	68	data and services used to directly and indirectly support health
69	69	care, including electronic patient records, medical data, and
70	70	business records;
71	71	(C) is used by a single qualifying occupant for
72	72	the purposes described by Paragraph (B);
73	73	(D) is not used primarily by a telecommunications
74	74	provider to place tangible personal property that is used to
75	75	deliver telecommunications services; and
76	76	(E) has an uninterruptible power source,
77	77	generator backup power, a sophisticated fire suppression and
78	78	prevention system, and enhanced physical security that includes
79	79	restricted access, video surveillance, and electronic systems.
80	80	(2) "Qualifying medical data center" means a medical
81	81	data center that meets the qualifications prescribed by Subsection
82	82	(e).
83	83	(3) "Qualifying occupant" means a person who:
84	84	(A) contracts with a qualifying owner or
85	85	qualifying operator to place, or cause to be placed, and to use
86	86	tangible personal property at the qualifying medical data center;
87	87	or
88	88	(B) in the case of a qualifying occupant who is
89	89	also the qualifying owner and the qualifying operator, places, or
90	90	causes to be placed, and uses tangible personal property at the
91	91	qualifying medical data center.
92	92	(4) "Qualifying operator" means a person who controls
93	93	access to a qualifying medical data center, regardless of whether
94	94	that person owns each item of tangible personal property located at
95	95	the qualifying medical data center. A qualifying operator may also
96	96	be the qualifying owner.
97	97	(5) "Qualifying owner" means a person who owns a
98	98	building in which a qualifying medical data center is located. A
99	99	qualifying owner may also be the qualifying operator.
100	100	(b) For purposes of this section:
101	101	(1) multiple buildings occupied by a qualifying
102	102	occupant or a subsidiary or affiliate of the occupant who meets the
103	103	requirements prescribed by Subsection (a)(3) are considered to be
104	104	occupied by a single qualifying occupant;
105	105	(2) multiple buildings operated by a qualifying
106	106	operator or a subsidiary or affiliate of the operator who meets the
107	107	requirements prescribed by Subsection (a)(4) are considered to be
108	108	operated by a single qualifying operator; and
109	109	(3) multiple buildings owned by a qualifying owner or
110	110	a subsidiary or affiliate of the owner who meets the requirements
111	111	prescribed by Subsection (a)(5) are considered to be owned by a
112	112	single qualifying owner.
113	113	(c) Except as otherwise provided by this section, tangible
114	114	personal property that is necessary and essential to the operation
115	115	of a qualified medical data center is exempted from the taxes
116	116	imposed by this chapter if the tangible personal property is
117	117	purchased for installation at, incorporation into, or in the case
118	118	of Subdivision (1), use in a qualifying medical data center by a
119	119	qualifying owner, qualifying operator, or qualifying occupant, and
120	120	the tangible personal property is:
121	121	(1) electricity;
122	122	(2) an electrical system;
123	123	(3) a cooling system;
124	124	(4) an emergency generator;
125	125	(5) hardware or a distributed mainframe computer or
126	126	server;
127	127	(6) a data storage device;
128	128	(7) network connectivity equipment;
129	129	(8) a rack, cabinet, and raised floor system;
130	130	(9) a peripheral component or system;
131	131	(10) software;
132	132	(11) a mechanical, electrical, or plumbing system that
133	133	is necessary to operate any tangible personal property described by
134	134	Subdivisions (2)-(10);
135	135	(12) any other item of equipment or system necessary
136	136	to operate any tangible personal property described by Subdivisions
137	137	(2)-(11), including a fixture; or
138	138	(13) a component part of any tangible personal
139	139	property described by Subdivisions (2)-(10).
140	140	(d) The exemption provided by this section does not apply
141	141	to:
142	142	(1) office equipment or supplies;
143	143	(2) maintenance or janitorial supplies or equipment;
144	144	(3) equipment or supplies used primarily in sales
145	145	activities or transportation activities;
146	146	(4) tangible personal property on which the purchaser
147	147	has received or has a pending application for a refund under Section
148	148	151.429;
149	149	(5) tangible personal property not otherwise exempted
150	150	under Subsection (c) that is incorporated into real estate or into
151	151	an improvement of real estate; or
152	152	(6) tangible personal property that is rented or
153	153	leased for a term of one year or less.
154	154	(e) Subject to Subsection (l), a medical data center may be
155	155	certified by the comptroller as a qualifying medical data center
156	156	for purposes of this section if, on or after September 1, 2015:
157	157	(1) a single qualifying occupant:
158	158	(A) contracts with a qualifying owner or
159	159	qualifying operator to lease space in which the qualifying occupant
160	160	will locate a medical data center; or
161	161	(B) occupies a space that was not previously used
162	162	as a medical data center in which the qualifying occupant will
163	163	locate a medical data center, in the case of a qualifying occupant
164	164	who is also the qualifying operator and the qualifying owner; and
165	165	(2) the qualifying owner, qualifying operator, or
166	166	qualifying occupant jointly or independently makes or agrees to
167	167	make a capital investment, on or after September 1, 2015, of at
168	168	least $200 million in that medical data center over a five-year
169	169	period beginning on the date the medical data center is certified by
170	170	the comptroller as a qualifying medical data center.
171	171	(f) A medical data center that is eligible under Subsection
172	172	(e) to be certified by the comptroller as a qualified medical data
173	173	center shall apply to the comptroller for certification as a
174	174	qualifying medical data center and for issuance of a registration
175	175	number or numbers by the comptroller. The application must be made
176	176	on a form prescribed by the comptroller and include the information
177	177	required by the comptroller. The application must include the name
178	178	and contact information for the qualifying occupant and, if
179	179	applicable, the name and contact information for the qualifying
180	180	owner and the qualifying operator who will claim the exemption
181	181	authorized under this section. The application form must include a
182	182	section for the applicant to certify that the capital investment
183	183	required by Subsection (e)(2) will be met independently or jointly
184	184	by the qualifying owner, qualifying operator, or qualifying
185	185	occupant within the time period prescribed by Subsection (e)(2).
186	186	(g) The exemption provided by this section begins on the
187	187	date the medical data center is certified by the comptroller as a
188	188	qualifying medical data center and expires on the date that the
189	189	medical data center ceases operating as a medical data center.
190	190	(h) Each person who is eligible to claim an exemption
191	191	authorized by this section must hold a registration number issued
192	192	by the comptroller. The registration number must be stated on the
193	193	exemption certificate provided by the purchaser to the seller of
194	194	tangible personal property eligible for the exemption.
195	195	(i) The comptroller shall revoke all registration numbers
196	196	issued in connection with a qualifying medical data center that the
197	197	comptroller determines does not meet the requirements prescribed by
198	198	Subsection (e). Each person who has the person's registration
199	199	number revoked by the comptroller is liable for taxes, including
200	200	penalty and interest from the date of purchase, imposed under this
201	201	chapter on purchases for which the person claimed an exemption
202	202	under this section, regardless of whether the purchase occurred
203	203	before the date the registration number was revoked.
204	204	(j) The comptroller shall adopt rules consistent with and
205	205	necessary to implement this section, including rules relating to:
206	206	(1) a qualifying medical data center, qualifying
207	207	owner, qualifying operator, and qualifying occupant;
208	208	(2) issuance and revocation of a registration number
209	209	required under this section; and
210	210	(3) reporting and other procedures necessary to ensure
211	211	that a qualifying medical data center, qualifying owner, qualifying
212	212	operator, and qualifying occupant comply with this section and
213	213	remain entitled to the exemption authorized by this section.
214	214	(k) The exemption in this section does not apply to the
215	215	taxes imposed under Chapter 321, 322, or 323.
216	216	(l) A medical data center is not eligible to receive an
217	217	exemption under this section if the medical data center is subject
218	218	to an agreement limiting the appraised value of the medical data
219	219	center's property under Subchapter B or C, Chapter 313.
220	220	SECTION 3. Section 313.010, Tax Code, as added by Chapter
221	221	1274 (H.B. 1223), Acts of the 83rd Legislature, Regular Session,
222	222	2013, is amended to read as follows:
223	223	Sec. 313.010. CERTAIN ENTITIES INELIGIBLE. An entity that
224	224	has been issued a registration number under Section 151.359 or
225	225	151.360 is not eligible to receive a limitation on appraised value
226	226	under this chapter.
227	227	SECTION 4. Section 321.208, Tax Code, is amended to read as
228	228	follows:
229	229	Sec. 321.208. STATE EXEMPTIONS APPLICABLE. The exemptions
230	230	provided by Subchapter H, Chapter 151, apply to the taxes
231	231	authorized by this chapter, except as provided by Sections
232	232	151.359(j), 151.360(k), and 151.317(b).
233	233	SECTION 5. Section 323.207, Tax Code, is amended to read as
234	234	follows:
235	235	Sec. 323.207. STATE EXEMPTIONS APPLICABLE. The exemptions
236	236	provided by Subchapter H, Chapter 151, apply to the taxes
237	237	authorized by this chapter, except as provided by Sections
238	238	151.359(j), 151.360(k), and 151.317(b).
239	239	SECTION 6. The change in law made by this Act does not
240	240	affect tax liability accruing before the effective date of this
241	241	Act. That liability continues in effect as if this Act had not been
242	242	enacted, and the former law is continued in effect for the
243	243	collection of taxes due and for civil and criminal enforcement of
244	244	the liability for those taxes.
245	245	SECTION 7. This Act takes effect September 1, 2015.