TX
Texas House Bill HB2482

Texas 2023 - 88th Regular

Texas House Bill HB2482 Compare Versions

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11 By: Capriglione H.B. No. 2482
22
33
44 A BILL TO BE ENTITLED
55 AN ACT
66 relating to the temporary exemption of certain tangible personal
77 property related to data centers from the sales and use tax.
88 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
99 SECTION 1. Subtitle H, Chapter 151.359 Subsections (a) (b)
1010 (d) (e) and (f), Tax Code are amended to read as follows:
1111 Sec. 151.359. PROPERTY USED IN CERTAIN DATA CENTERS;
1212 TEMPORARY EXEMPTION. (a) In this section:
1313 (1) "County average weekly wage" means the average
1414 weekly wage in a county for all jobs during the most recent four
1515 quarterly periods for which data is available, as computed by the
1616 Texas Workforce Commission, at the time a data center creates a job
1717 used to qualify under this section.
1818 (2) "Data center" means at least 100,000 square feet
1919 of space in one or more buildings [a single building] located or to
2020 be located on a single parcel of land or on contiguous or
2121 noncontiguous parcels of land [or portion of a single building,
2222 which space]:
2323 (A) [is] located in this state;
2424 (B) [is] specifically constructed or refurbished
2525 and actually used primarily to house servers and related equipment
2626 and support staff for the processing, storage, and distribution of
2727 data;
2828 (C) [is] used by one or more [a single]
2929 qualifying occupants [occupant] for the processing, storage, and
3030 distribution of data;
3131 (D) [is] not used primarily by a
3232 telecommunications provider to place tangible personal property
3333 that is used to deliver telecommunications services; [and]
3434 (E) has an uninterruptible power source,
3535 [generator] backup electricity generation system [power], [a]
3636 sophisticated fire suppression and prevention system, and enhanced
3737 physical security that includes restricted access, video
3838 surveillance, and electronic systems; and
3939 (F) noncontiguous parcels must be located in the
4040 same county or an adjacent county and connected by fiber and
4141 associated equipment required for operating a fiber transmission
4242 network between data center buildings or parcels and for the sole
4343 use of the qualifying occupants or their agent(s).
4444 (3) "Permanent job" means an employment position that
4545 will exist for at least five years after the date the job is
4646 created.
4747 (4) "Qualifying data center" means a data center that
4848 meets the qualifications prescribed by Subsection (d).
4949 (5) "Qualifying job" means a full-time, permanent job
5050 that pays at least 120 percent of the county average weekly wage in
5151 the county in which the data center position [job] is located
5252 [based]. The term includes a new employment position staffed by a
5353 third-party employer if a written contract exists between the
5454 third-party employer and a qualifying owner, qualifying operator,
5555 or qualifying occupant that provides that the employment position
5656 is [permanently] assigned to an associated qualifying data center.
5757 (6) "Qualifying operator" means a person who controls
5858 access to a qualifying data center, regardless of whether that
5959 person owns each item of tangible personal property located at the
6060 qualifying data center. A qualifying operator may also be the
6161 qualifying owner.
6262 (7) "Qualifying owner" means a person who owns the
6363 building or buildings in which a qualifying data center is located.
6464 A qualifying owner may also be the qualifying operator.
6565 (8) "Qualifying occupant" means a person who:
6666 (A) contracts with a qualifying owner or
6767 qualifying operator to place, or cause to be placed, and to use
6868 tangible personal property at the qualifying data center; or
6969 (B) in the case of a qualifying occupant who is
7070 also the qualifying owner and the qualifying operator, places or
7171 causes to be placed, and uses tangible personal property at the
7272 qualifying data center.
7373 (b) Except as otherwise provided by this section, tangible
7474 personal property that is necessary and essential to the operation
7575 of a qualified data center is exempted from the taxes imposed by
7676 this chapter if the tangible personal property is purchased for
7777 installation at, incorporation into, or in the case of Subdivision
7878 (1), use in a qualifying data center by a qualifying owner,
7979 qualifying operator, or qualifying occupant, and the tangible
8080 personal property is:
8181 (1) electricity;
8282 (2) an electrical system;
8383 (3) a cooling system;
8484 (4) a backup electricity generation system [an
8585 emergency generator];
8686 (5) hardware or a distributed mainframe computer or
8787 server;
8888 (6) a data storage device;
8989 (7) network connectivity equipment;
9090 (8) a rack, cabinet, and raised floor system;
9191 (9) a peripheral component or system;
9292 (10) software;
9393 (11) a mechanical, electrical, or plumbing system that
9494 is necessary to operate any tangible personal property described by
9595 Subdivisions (2)-(10);
9696 (12) any other item of equipment or system necessary
9797 to operate any tangible personal property described by Subdivisions
9898 (2)-(11), including a fixture; and
9999 (13) a component part of any tangible personal
100100 property described by Subdivisions (2)-(10).
101101 (d) Subject to Subsection (k), a data center may be
102102 certified by the comptroller as a qualifying data center for
103103 purposes of this section if, on or after September 1, 2013:
104104 (1) one or more [a single] qualifying occupants
105105 [occupant]:
106106 (A) contract [contracts] with a qualifying owner
107107 or qualifying operator to lease or license via service agreement
108108 space in which at least one [the] qualifying occupant will locate a
109109 data center; [or]
110110 (B) occupy [occupies] a space that was not
111111 previously used as a data center in which at least one [the]
112112 qualifying occupant will locate a data center[, in the case of a
113113 qualifying occupant who is also the qualifying operator and the
114114 qualifying owner]; or
115115 (C) refurbish a space in which at least one
116116 qualifying occupant will locate a data center; and
117117 (2) the qualifying owner, qualifying operator, or
118118 qualifying occupant or occupants, jointly or independently:
119119 (A) create [creates] at least 20 qualifying jobs.
120120 All qualifying jobs must be located in the county or counties in
121121 which the data center is located.[, not including jobs] Jobs moved
122122 from one county in this state to another county in this state may
123123 not be included; and
124124 (B) make [makes] or agree [agrees] to make a
125125 capital investment, on or after September 1, 2013, of at least $200
126126 million in that particular data center over a five-year period
127127 beginning on the date the data center is certified by the
128128 comptroller as a qualifying data center.
129129 (e) A data center that is eligible under Subsection (d) to
130130 be certified by the comptroller as a qualified data center shall
131131 apply to the comptroller for certification as a qualifying data
132132 center and for issuance of a registration number or numbers by the
133133 comptroller. The application must be made on a form prescribed by
134134 the comptroller and include the information required by the
135135 comptroller. The application must include the name and contact
136136 information for the qualifying occupant and, if applicable, the
137137 name and contact information for the qualifying owner and the
138138 qualifying operator who will claim the exemption authorized under
139139 this section. The application form must include a section for the
140140 applicant to certify that the capital investment required by
141141 Subsection (d)(2)(B) will be met independently or jointly by the
142142 qualifying occupant or occupants, qualifying owner, or qualifying
143143 operator within the time period prescribed by that subsection
144144 [Subsection (d)(2)(B)].
145145 (f) The exemption provided by this section begins on the
146146 date the data center is certified by the comptroller as a qualifying
147147 data center and expires:
148148 (1) on the 10th anniversary of that date, if the
149149 qualifying occupant or occupants, qualifying owner, or qualifying
150150 operator independently or jointly makes a capital investment of at
151151 least $200 million but less than $250 million as provided by
152152 Subsection (d)(2)(B); or
153153 (2) on the 15th anniversary of that date, if the
154154 qualifying occupant or occupants, qualifying owner, or qualifying
155155 operator independently or jointly makes a capital investment of
156156 $250 million or more as provided by Subsection (d)(2)(B).
157157 SECTION 2. Subtitle H, Chapter 151.3595 Subsections (a) (b)
158158 (d) (e) and (f), Tax Code are amended to read as follows:
159159 Sec. 151.3595. PROPERTY USED IN CERTAIN LARGE DATA CENTER
160160 PROJECTS; TEMPORARY EXEMPTION. (a) In this section:
161161 (1) "County average weekly wage" means the average
162162 weekly wage in a county for all jobs during the most recent four
163163 quarterly periods for which data is available, as computed by the
164164 Texas Workforce Commission, at the time a large data center project
165165 creates a job used to qualify under this section.
166166 (2) "Large data center project" means a project that:
167167 (A) is located in this state;
168168 (B) is composed of one or more buildings
169169 comprising at least 250,000 square feet of space located or to be
170170 located on one or more [a single parcel of land or on] contiguous or
171171 noncontiguous parcels of land that are commonly owned or owned by
172172 affiliation with the qualifying operator;
173173 (C) is specifically constructed or refurbished
174174 and actually used primarily to house servers and related equipment
175175 and support staff for the processing, storage, and distribution of
176176 data;
177177 (D) is used by one or more [a single] qualifying
178178 occupants or operators [occupant] for the processing, storage, and
179179 distribution of data;
180180 (E) is not used primarily by a telecommunications
181181 provider to place tangible personal property used to deliver
182182 telecommunications services; and
183183 (F) has an uninterruptible power source, [a]
184184 backup electricity generation system [generator], [a] fire
185185 suppression and prevention system, and physical security that
186186 includes restricted access, video surveillance, and electronic
187187 systems; and
188188 (G) may include noncontiguous parcels only if the
189189 noncontiguous parcels are located in the same or adjacent county
190190 and connected by fiber and associated equipment required for
191191 operating a fiber transmission network between data center
192192 buildings or parcels and for the sole use of the qualifying
193193 occupants or their agent(s).
194194 (3) "Permanent job" means an employment position that
195195 will exist for at least five years after the date the job is
196196 created.
197197 (4) "Qualifying job" means a full-time, permanent job
198198 that pays at least 120 percent of the county average weekly wage in
199199 the county in which the large data center project position [job] is
200200 located [based]. The term includes a new employment position
201201 staffed by a third-party employer if a written contract exists
202202 between the third-party employer and a qualifying owner, qualifying
203203 operator, or qualifying occupant that provides that the employment
204204 position is [permanently] assigned to an associated qualifying
205205 large data center project.
206206 (5) "Qualifying large data center project" means a
207207 large data center project that meets the qualifications prescribed
208208 by Subsection (d).
209209 (6) "Qualifying operator" means a person who controls
210210 access to a qualifying large data center project, regardless of
211211 whether that person owns each item of tangible personal property
212212 located at the qualifying large data center project. A qualifying
213213 operator may also be the qualifying owner.
214214 (7) "Qualifying owner" means a person who owns a
215215 building in which a qualifying large data center project is
216216 located. A qualifying owner may also be the qualifying operator.
217217 (8) "Qualifying occupant" means a person who:
218218 (A) contracts with a qualifying owner or
219219 qualifying operator to place, or cause to be placed, and to use
220220 tangible personal property at the qualifying large data center
221221 project; or
222222 (B) in the case of a qualifying occupant who is
223223 also the qualifying owner and the qualifying operator, places or
224224 causes to be placed and uses tangible personal property at the
225225 qualifying large data center project.
226226 (b) Except as otherwise provided by this section, tangible
227227 personal property that is necessary and essential to the operation
228228 of a qualifying large data center project is exempted from the taxes
229229 imposed by this chapter if the tangible personal property is
230230 purchased for installation at, incorporation into, or in the case
231231 of electricity, use in a qualifying large data center project by a
232232 qualifying owner, qualifying operator, or qualifying occupant, and
233233 the tangible personal property is:
234234 (1) electricity;
235235 (2) an electrical system;
236236 (3) a cooling system;
237237 (4) a backup electricity generation system [an
238238 emergency generator];
239239 (5) hardware or a distributed mainframe computer or
240240 server;
241241 (6) a data storage device;
242242 (7) network connectivity equipment;
243243 (8) a rack, cabinet, and raised floor system;
244244 (9) a peripheral component or system;
245245 (10) software;
246246 (11) a mechanical, electrical, or plumbing system that
247247 is necessary to operate any tangible personal property described by
248248 Subdivisions (2)-(10);
249249 (12) any other item of equipment or system necessary
250250 to operate any tangible personal property described by Subdivisions
251251 (2)-(11), including a fixture; and
252252 (13) a component part of any tangible personal
253253 property described by Subdivisions (2)-(10).
254254 (d) Subject to Subsection (j), a large data center project
255255 may be certified by the comptroller as a qualifying large data
256256 center project for purposes of this section if, on or after June 1,
257257 2015:
258258 (1) one or more [a single] qualifying occupants
259259 [occupant]:
260260 (A) contract [contracts] with a qualifying owner
261261 or qualifying operator to lease, license, or enter into a service
262262 agreement for space in which at least one [the] qualifying occupant
263263 will locate a large data center project; [or]
264264 (B) occupy [occupies] a space that was not
265265 previously used as a data center in which at least one [the]
266266 qualifying occupant will locate a large data center project, if at
267267 least one [in the case] of the [a] qualifying occupants [occupant
268268 who] is also the qualifying operator and the qualifying owner; or
269269 (c) refurbishes a space in which at least one
270270 qualifying occupant will locate a large data center project, if at
271271 least one of the qualifying occupants is also the qualifying
272272 operator and the qualifying owner; and
273273 (2) the qualifying owner, qualifying operator, or
274274 qualifying occupant or occupants, independently or jointly:
275275 (A) create [creates] at least 40 qualifying jobs.
276276 All jobs must be in the county or counties in which the large data
277277 center project is located.[, not including jobs] Jobs moved from
278278 one county in this state to another county in this state may not be
279279 included;
280280 (B) on or after May 1, 2015, make [makes] or agree
281281 [agrees] to make a capital investment of at least $500 million in
282282 that particular large data center project, the amount of which may
283283 not include a capital investment to replace personal property
284284 previously placed in service in that large data center project,
285285 over a five-year period beginning on the earlier of:
286286 (i) the date the large data center project
287287 submits the application described by Subsection (e); or
288288 (ii) the date the large data center project
289289 is certified by the comptroller as a qualifying large data center
290290 project; and
291291 (C) agrees to contract for at least 20 megawatts
292292 of transmission capacity for operation of the large data center
293293 project.
294294 (e) A large data center project that is eligible under
295295 Subsection (d) to be certified by the comptroller as a qualifying
296296 large data center project shall apply to the comptroller for
297297 certification and for the issuance of a registration number or
298298 numbers by the comptroller. The application must be made on a form
299299 prescribed by the comptroller and must include the information
300300 required by the comptroller. The application must include the name
301301 and contact information for each [the] qualifying occupant, and, if
302302 applicable, the name and contact information for the qualifying
303303 owner and the qualifying operator who will claim the exemption
304304 authorized under this section. The application form must include a
305305 section for the applicant to certify that the capital investment
306306 required by Subsection (d)(2)(B) will be met independently or
307307 jointly by the qualifying occupant or occupants, qualifying owner,
308308 or qualifying operator within the time period prescribed by that
309309 subsection [Subsection (d)(2)(B)].
310310 (f) The exemption provided by this section begins on the
311311 date the large data center project is certified by the comptroller
312312 as a qualifying large data center project and expires on the 20th
313313 anniversary of that date, if the qualifying occupant or occupants,
314314 qualifying owner, or qualifying operator, independently or jointly
315315 makes the capital investment of at least $500 million as provided by
316316 Subsection (d)(2)(B).
317317 SECTION 3. The change in law made by this Act does not
318318 affect tax liability accruing before the effective date of this
319319 Act. That liability continues in effect as if this Act had not been
320320 enacted, and the former law is continued in effect for the
321321 collection of taxes due and for civil and criminal enforcement of
322322 the liability for those taxes.
323323 SECTION 4. This Act takes effect September 1, 2023.