89R15034 RDS-D
By: Parker S.B. No. 2222
A BILL TO BE ENTITLED
AN ACT
relating to an exemption from ad valorem taxation of the total
appraised value of real property used as a data center and the
tangible personal property used by the data center to meet the data
center's demand for energy.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by
adding Section 11.38 to read as follows:
Sec. 11.38. DATA CENTER GENERATING ELECTRICITY. (a) In
this section:
(1) "Data center" means at least 100,000 square feet
of space in a single building or portion of a single building, which
space:
(A) is specifically constructed or refurbished
and actually used primarily to house servers and related equipment
and support staff for the processing, storage, and distribution of
data;
(B) is used for the processing, storage, and
distribution of data;
(C) is not used primarily by a telecommunications
provider to place tangible personal property that is used to
deliver telecommunications services; and
(D) has an uninterruptible power source,
generator backup power, a sophisticated fire suppression and
prevention system, and enhanced physical security that includes
restricted access, video surveillance, and electronic systems.
(2) "Qualified data center" means a data center that:
(A) uses the data center's uninterruptible power
source and generator backup power to meet all of the data center's
demands for energy; and
(B) has entered into a contract to provide energy
or ancillary services to the ERCOT power grid or another power grid.
(3) "Qualified property" means:
(A) a single building or portion of a single
building used as a qualified data center;
(B) the parcel of land on which the qualified
data center is located; and
(C) tangible personal property located at the
qualified data center that is used to meet the data center's demands
for energy as described by Subdivision (2)(A).
(b) A person is entitled to an exemption from taxation of
the total appraised value of qualified property the person owns.
SECTION 2. The changes in law made by this Act apply only to
an ad valorem tax year that begins on or after the effective date of
this Act.
SECTION 3. This Act takes effect January 1, 2026, but only
if the constitutional amendment proposed by the 89th Legislature,
Regular Session, 2025, to authorize the legislature to exempt from
ad valorem taxation the total appraised value of real property used
as a data center and the tangible personal property used by the data
center to meet the data center's demand for energy is approved by
the voters. If that amendment is not approved by the voters, this
Act has no effect.