Texas 2023 - 88th Regular

Texas House Bill HB2223 Compare Versions

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1	1	88R4033 CJD-F
2	2	By: Capriglione H.B. No. 2223
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the temporary exemption of certain tangible personal
8	8	property related to virtual currency mines from sales and use
9	9	taxes.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Subchapter H, Chapter 151, Tax Code, is amended
12	12	by adding Section 151.360 to read as follows:
13	13	Sec. 151.360. PROPERTY USED IN CERTAIN VIRTUAL CURRENCY
14	14	MINES; TEMPORARY EXEMPTION. (a) In this section:
15	15	(1) "County average weekly wage" means the average
16	16	weekly wage in a county for all jobs during the most recent four
17	17	quarterly periods for which data is available, as computed by the
18	18	Texas Workforce Commission, on the date a virtual currency mine
19	19	creates a job used to qualify under this section.
20	20	(2) "Permanent job" means an employment position that
21	21	will exist for at least five years after the date the job is
22	22	created.
23	23	(3) "Qualifying job" means a full-time, permanent job
24	24	that pays at least 120 percent of the county average weekly wage in
25	25	the county in which the job is based. The term includes a new
26	26	employment position staffed by a third-party employer if a written
27	27	contract exists between the third-party employer and a qualifying
28	28	owner, qualifying operator, or qualifying occupant that provides
29	29	that the employment position is permanently assigned to an
30	30	associated qualifying virtual currency mine.
31	31	(4) "Qualifying occupant" means a person who:
32	32	(A) contracts with a qualifying owner or
33	33	qualifying operator to place, or cause to be placed, and to use
34	34	tangible personal property at the qualifying virtual currency mine;
35	35	or
36	36	(B) in the case of a qualifying occupant who is
37	37	also the qualifying owner and the qualifying operator, places or
38	38	causes to be placed and uses tangible personal property at the
39	39	qualifying virtual currency mine.
40	40	(5) "Qualifying operator" means a person who controls
41	41	access to a qualifying virtual currency mine, regardless of whether
42	42	that person owns each item of tangible personal property located at
43	43	the qualifying virtual currency mine. A qualifying operator may
44	44	also be the qualifying owner.
45	45	(6) "Qualifying owner" means a person who owns the
46	46	building in which a qualifying virtual currency mine is located. A
47	47	qualifying owner may also be the qualifying operator.
48	48	(7) "Qualifying virtual currency mine" means a virtual
49	49	currency mine that meets the qualifications prescribed by
50	50	Subsection (d).
51	51	(8) "Virtual currency" has the meaning assigned by
52	52	Section 12.001, Business & Commerce Code.
53	53	(9) "Virtual currency mine" means at least 5,000
54	54	square feet of space on a single parcel of land that is:
55	55	(A) located in this state; and
56	56	(B) specifically constructed or refurbished and
57	57	actually used primarily to house servers and related equipment and
58	58	support staff for the purpose of validating virtual currency
59	59	transactions.
60	60	(b) Except as otherwise provided by this section, tangible
61	61	personal property that is necessary and essential to the operation
62	62	of a qualifying virtual currency mine is exempted from the taxes
63	63	imposed by this chapter if the tangible personal property is
64	64	purchased for installation at, incorporation into, or in the case
65	65	of electricity, use in a qualifying virtual currency mine by a
66	66	qualifying owner, qualifying operator, or qualifying occupant, and
67	67	the tangible personal property is:
68	68	(1) electricity;
69	69	(2) an electrical system;
70	70	(3) a cooling system;
71	71	(4) an emergency generator;
72	72	(5) an electrical substation;
73	73	(6) on-site power generation; or
74	74	(7) a mechanical, electrical, or plumbing system that
75	75	is necessary to operate any systems related to virtual currency
76	76	mining.
77	77	(c) The exemption provided by this section does not apply
78	78	to:
79	79	(1) office equipment or supplies;
80	80	(2) maintenance or janitorial supplies or equipment;
81	81	(3) equipment or supplies used primarily in sales
82	82	activities or transportation activities;
83	83	(4) tangible personal property on which the purchaser
84	84	has received or has a pending application for a refund under Section
85	85	151.429;
86	86	(5) tangible personal property not otherwise exempted
87	87	under Subsection (b) that is incorporated into real estate or into
88	88	an improvement of real estate;
89	89	(6) tangible personal property that is rented or
90	90	leased for a term of one year or less;
91	91	(7) equipment used for the purpose of validating
92	92	virtual currency transactions; or
93	93	(8) notwithstanding Section 151.3111, a taxable
94	94	service that is performed on tangible personal property exempted
95	95	under this section.
96	96	(d) Subject to Subsection (j), a virtual currency mine may
97	97	be certified by the comptroller as a qualifying virtual currency
98	98	mine for purposes of this section if, on or after September 1, 2023:
99	99	(1) a single qualifying occupant:
100	100	(A) contracts with a qualifying owner or
101	101	qualifying operator to lease space in which the qualifying occupant
102	102	will locate a virtual currency mine; or
103	103	(B) if the qualifying occupant is also the
104	104	qualifying operator and the qualifying owner, occupies a space that
105	105	was not previously used as a virtual currency mine in which the
106	106	qualifying occupant will locate a virtual currency mine;
107	107	(2) the qualifying owner, qualifying operator, or
108	108	qualifying occupant, independently or jointly:
109	109	(A) creates at least 20 qualifying jobs in the
110	110	county in which the virtual currency mine is located, not including
111	111	jobs moved from one county in this state to another county in this
112	112	state; and
113	113	(B) makes or agrees to make a capital investment
114	114	of at least $100 million in that particular virtual currency mine
115	115	over a three-year period beginning on the date the virtual currency
116	116	mine is certified by the comptroller as a qualifying virtual
117	117	currency mine; and
118	118	(3) the virtual currency mine is subject to an
119	119	agreement to participate in a flexible load category for a period of
120	120	at least 10 years, including:
121	121	(A) a large flexible load category developed by
122	122	the independent organization certified under Section 39.151,
123	123	Utilities Code, for the ERCOT power region; or
124	124	(B) a market notice issued for the ERCOT power
125	125	region that allows large flexible loads to self-select and
126	126	guarantee power curtailment when the reserve capacity on the ERCOT
127	127	grid reaches 3,000 megawatts of physical responsive capacity.
128	128	(e) A virtual currency mine that is eligible under
129	129	Subsection (d) to be certified by the comptroller as a qualified
130	130	virtual currency mine shall apply to the comptroller for
131	131	certification and for issuance of a registration number or numbers
132	132	by the comptroller. The application must be made on a form
133	133	prescribed by the comptroller and include the information required
134	134	by the comptroller. The application must include the name and
135	135	contact information for the qualifying occupant and, if applicable,
136	136	the name and contact information for the qualifying owner and the
137	137	qualifying operator who will claim the exemption authorized under
138	138	this section. The application form must include a section for the
139	139	applicant to certify that the capital investment required by
140	140	Subsection (d)(2)(B) will be met independently or jointly by the
141	141	qualifying occupant, qualifying owner, or qualifying operator
142	142	within the time period prescribed by Subsection (d).
143	143	(f) The exemption provided by this section begins on the
144	144	date the virtual currency mine is certified by the comptroller as a
145	145	qualifying virtual currency mine and expires:
146	146	(1) on the 10th anniversary of that date, if the
147	147	qualifying occupant, qualifying owner, or qualifying operator
148	148	independently or jointly makes a capital investment of at least
149	149	$100 million but less than $150 million as provided by Subsection
150	150	(d)(2)(B); or
151	151	(2) on the 15th anniversary of that date, if the
152	152	qualifying occupant, qualifying owner, or qualifying operator
153	153	independently or jointly makes a capital investment of $150 million
154	154	or more as provided by Subsection (d)(2)(B).
155	155	(g) Each person who is eligible to claim an exemption
156	156	authorized by this section must hold a registration number issued
157	157	by the comptroller. The registration number must be stated on the
158	158	exemption certificate provided by the purchaser to the seller of
159	159	tangible personal property eligible for the exemption.
160	160	(h) The comptroller shall revoke all registration numbers
161	161	issued in connection with a qualifying virtual currency mine on the
162	162	date:
163	163	(1) the comptroller determines that the virtual
164	164	currency mine does not meet the requirements prescribed by
165	165	Subsection (d);
166	166	(2) the virtual currency mine fails to cooperate with
167	167	an emergency response request from the independent organization
168	168	certified under Section 39.151, Utilities Code, for the ERCOT power
169	169	region; or
170	170	(3) the virtual currency mine's emergency demand
171	171	response contract lapses and is not renewed.
172	172	(i) Each person who has the person's registration number
173	173	revoked by the comptroller under Subsection (h) is liable for
174	174	taxes, including penalty and interest from the date of purchase,
175	175	imposed under this chapter on purchases for which the person
176	176	claimed an exemption under this section, regardless of whether the
177	177	purchase occurred before the date the registration number was
178	178	revoked.
179	179	(j) The comptroller may not certify more than 12 qualifying
180	180	virtual currency mines in a state fiscal year. If more than 12
181	181	virtual currency mines apply for certification under this section
182	182	in a state fiscal year, the comptroller shall give priority to those
183	183	applicants that create the most qualifying jobs in the county in
184	184	which the virtual currency mine that is the subject of the
185	185	application is located.
186	186	(k) The comptroller shall adopt rules consistent with and
187	187	necessary to implement this section, including rules relating to:
188	188	(1) a qualifying virtual currency mine, qualifying
189	189	owner, qualifying operator, and qualifying occupant;
190	190	(2) certification of a qualifying virtual currency
191	191	mine, including the process for prioritizing applicants for
192	192	certification under Subsection (j);
193	193	(3) issuance and revocation of a registration number
194	194	required under this section; and
195	195	(4) reporting and other procedures necessary to ensure
196	196	that a qualifying virtual currency mine, qualifying owner,
197	197	qualifying operator, and qualifying occupant comply with this
198	198	section and remain entitled to the exemption authorized by this
199	199	section.
200	200	SECTION 2. The change in law made by this Act does not
201	201	affect tax liability accruing before the effective date of this
202	202	Act. That liability continues in effect as if this Act had not been
203	203	enacted, and the former law is continued in effect for the
204	204	collection of taxes due and for civil and criminal enforcement of
205	205	the liability for those taxes.
206	206	SECTION 3. This Act takes effect September 1, 2023.