| 1 | 1 | | 89R15034 RDS-D |
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| 2 | 2 | | By: Parker S.B. No. 2222 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | |
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| 6 | 6 | | |
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| 7 | 7 | | A BILL TO BE ENTITLED |
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| 8 | 8 | | AN ACT |
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| 9 | 9 | | relating to an exemption from ad valorem taxation of the total |
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| 10 | 10 | | appraised value of real property used as a data center and the |
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| 11 | 11 | | tangible personal property used by the data center to meet the data |
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| 12 | 12 | | center's demand for energy. |
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| 13 | 13 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 14 | 14 | | SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by |
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| 15 | 15 | | adding Section 11.38 to read as follows: |
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| 16 | 16 | | Sec. 11.38. DATA CENTER GENERATING ELECTRICITY. (a) In |
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| 17 | 17 | | this section: |
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| 18 | 18 | | (1) "Data center" means at least 100,000 square feet |
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| 19 | 19 | | of space in a single building or portion of a single building, which |
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| 20 | 20 | | space: |
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| 21 | 21 | | (A) is specifically constructed or refurbished |
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| 22 | 22 | | and actually used primarily to house servers and related equipment |
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| 23 | 23 | | and support staff for the processing, storage, and distribution of |
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| 24 | 24 | | data; |
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| 25 | 25 | | (B) is used for the processing, storage, and |
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| 26 | 26 | | distribution of data; |
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| 27 | 27 | | (C) is not used primarily by a telecommunications |
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| 28 | 28 | | provider to place tangible personal property that is used to |
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| 29 | 29 | | deliver telecommunications services; and |
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| 30 | 30 | | (D) has an uninterruptible power source, |
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| 31 | 31 | | generator backup power, a sophisticated fire suppression and |
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| 32 | 32 | | prevention system, and enhanced physical security that includes |
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| 33 | 33 | | restricted access, video surveillance, and electronic systems. |
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| 34 | 34 | | (2) "Qualified data center" means a data center that: |
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| 35 | 35 | | (A) uses the data center's uninterruptible power |
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| 36 | 36 | | source and generator backup power to meet all of the data center's |
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| 37 | 37 | | demands for energy; and |
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| 38 | 38 | | (B) has entered into a contract to provide energy |
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| 39 | 39 | | or ancillary services to the ERCOT power grid or another power grid. |
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| 40 | 40 | | (3) "Qualified property" means: |
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| 41 | 41 | | (A) a single building or portion of a single |
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| 42 | 42 | | building used as a qualified data center; |
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| 43 | 43 | | (B) the parcel of land on which the qualified |
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| 44 | 44 | | data center is located; and |
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| 45 | 45 | | (C) tangible personal property located at the |
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| 46 | 46 | | qualified data center that is used to meet the data center's demands |
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| 47 | 47 | | for energy as described by Subdivision (2)(A). |
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| 48 | 48 | | (b) A person is entitled to an exemption from taxation of |
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| 49 | 49 | | the total appraised value of qualified property the person owns. |
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| 50 | 50 | | SECTION 2. The changes in law made by this Act apply only to |
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| 51 | 51 | | an ad valorem tax year that begins on or after the effective date of |
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| 52 | 52 | | this Act. |
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| 53 | 53 | | SECTION 3. This Act takes effect January 1, 2026, but only |
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| 54 | 54 | | if the constitutional amendment proposed by the 89th Legislature, |
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| 55 | 55 | | Regular Session, 2025, to authorize the legislature to exempt from |
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| 56 | 56 | | ad valorem taxation the total appraised value of real property used |
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| 57 | 57 | | as a data center and the tangible personal property used by the data |
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| 58 | 58 | | center to meet the data center's demand for energy is approved by |
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| 59 | 59 | | the voters. If that amendment is not approved by the voters, this |
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| 60 | 60 | | Act has no effect. |
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