88R13363 CJD-F
By: Shine H.B. No. 4371
A BILL TO BE ENTITLED
AN ACT
relating to an exemption from sales and use taxes for certain items
used by or for certain life sciences campuses.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter H, Chapter 151, Tax Code, is amended
by adding Section 151.360 to read as follows:
Sec. 151.360. ITEMS USED FOR CERTAIN LIFE SCIENCES
CAMPUSES. (a) In this section:
(1) "Affiliated group" has the meaning assigned by
Section 171.0001.
(2) "Life sciences activity" includes, when conducted
with respect to an existing or potential life sciences product or
service:
(A) discovery;
(B) research, including pre-clinical and
clinical;
(C) development;
(D) testing;
(E) clinical trials;
(F) regulatory application and review;
(G) dispensation;
(H) administration;
(I) prescription;
(J) manufacture; and
(K) production.
(3) "Life sciences campus" means a building that has
at least 1,500,000 square feet of space and any other buildings and
improvements to real property:
(A) that are owned by a single owner or by
multiple owners that are members of the same affiliated group;
(B) that are located or to be located on a single
parcel of land, or on multiple parcels of land, if each parcel of
land is:
(i) located entirely within a county:
(a) with a population of one million
or more;
(b) in which all or part of a
municipality with a population of one million or more is located;
and
(c) that is located adjacent to a
county with a population of 2.5 million or more; and
(ii) owned by a single owner or by multiple
owners that are members of the same affiliated group;
(C) the owner or owners of which, on or before
January 1, 2030, make a capital investment of at least $1 billion to
construct, refurbish, repair, restore, remodel, or modify for use
primarily to conduct life sciences activities and other activities
necessary and essential to life sciences activities; and
(D) that, on completion of the construction,
refurbishment, repair, restoration, remodeling, or modification,
are used by an owner or tenant primarily to conduct life sciences
activities and other activities necessary and essential to life
sciences activities.
(4) "Life sciences product or service" includes a
drug, medicine, therapeutic appliance, device, or supply, another
similar or related item, or an item intended for use with or as a
component of an item listed in this subdivision if the item is
intended to:
(A) be dispensed, administered, or prescribed
for use in the diagnosis, cure, mitigation, treatment, or
prevention of disease in humans or other animals; or
(B) affect the structure or function of the body
of humans or other animals.
(5) "Tenant" means a person who rents space in a life
sciences campus and whose activities at the campus are primarily
life sciences activities.
(b) The following are exempted from the taxes imposed by
this chapter:
(1) tangible personal property that is used to
construct, refurbish, repair, restore, remodel, or modify an
improvement to real property that is:
(A) part of a life sciences campus; or
(B) installed at or incorporated into an
improvement to real property that is part of a life sciences campus;
(2) labor to construct, refurbish, repair, restore,
remodel, or modify an improvement to real property that is part of a
life sciences campus;
(3) tangible personal property that is purchased,
leased, or rented by a tenant or an owner of a life sciences campus
for use primarily in the conduct of life sciences activities at the
life sciences campus; and
(4) gas and electricity that is purchased by a tenant
or an owner of a life sciences campus for use at the life sciences
campus.
(c) The exemption provided by this section does not apply to
the taxes imposed under Chapter 321, 322, or 323.
SECTION 2. Sections 151.317(a) and (b), Tax Code, are
amended to read as follows:
(a) Subject to Sections 151.1551, 151.359, [and] 151.3595,
and 151.360 and Subsection (d) of this section, gas and electricity
are exempted from the taxes imposed by this chapter when sold for:
(1) residential use;
(2) use in powering equipment exempt under Section
151.318 or 151.3185 by a person processing tangible personal
property for sale as tangible personal property, other than
preparation or storage of prepared food described by Section
151.314(c-2);
(3) use in lighting, cooling, and heating in the
manufacturing area during the actual manufacturing or processing of
tangible personal property for sale as tangible personal property,
other than preparation or storage of prepared food described by
Section 151.314(c-2);
(4) use directly in exploring for, producing, or
transporting, a material extracted from the earth;
(5) use in agriculture, including dairy or poultry
operations and pumping for farm or ranch irrigation;
(6) use directly in electrical processes, such as
electroplating, electrolysis, and cathodic protection;
(7) use directly in the off-wing processing, overhaul,
or repair of a jet turbine engine or its parts for a certificated or
licensed carrier of persons or property;
(8) use directly in providing, under contracts with or
on behalf of the United States government or foreign governments,
defense or national security-related electronics, classified
intelligence data processing and handling systems, or
defense-related platform modifications or upgrades;
(9) use directly by a data center or large data center
project that is certified by the comptroller as a qualifying data
center under Section 151.359 or a qualifying large data center
project under Section 151.3595 in the processing, storage, and
distribution of data;
(10) a direct or indirect use, consumption, or loss of
electricity by an electric utility engaged in the purchase of
electricity for resale; [or]
(11) use in timber operations, including pumping for
irrigation of timberland; or
(12) use at a life sciences campus that qualifies for
the exemption provided by Section 151.360.
(b) The sale, production, distribution, lease, or rental
of, and the use, storage, or other consumption in this state of, gas
and electricity sold for the uses listed in Subsection (a), are
exempted from the taxes imposed by a municipality under Chapter 321
except as provided by Sections 151.359(j), 151.360(c), and 321.105.
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, 2023.