SECTION 1. Subchapter I,
Chapter 151, Tax Code, is amended by adding Section 151.4292 to read as
follows:
Sec. 151.4292. TAX
REFUNDS RELATING TO QUALIFYING DATA CENTERS. (a) In this section:
(1) "County average
weekly wage" means the average weekly wage in a county for all jobs
during the most recent four quarterly periods for which data is available,
as computed by the Texas Workforce Commission, at the time a data center
creates a job used to qualify under this section.
(2) "Data
center" means a facility:
(A) located in this
state;
(B) composed of a single building or a portion
of a single building 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; and
(C) that has an
uninterruptible power source, a generator backup power, a sophisticated
fire suppression and prevention system, and enhanced physical security that
includes restricted access, video surveillance, and electronic systems.
(3) "Permanent
job" means an employment position that will exist for at least five
years after the date the job is created.
(4) "Qualifying data
center" means a data center that meets the qualifications prescribed
by Subsection (d).
(5) "Qualifying
job" means a full-time, permanent job that pays at least 120 percent
of the county average weekly wage in the county in which the job is based.
(6) "Qualifying
operator" means a person who controls access to a qualifying data
center, regardless of whether that person owns each item of tangible
personal property located at the data center.
(7) "Qualifying tenant" means a person who contracts
with a qualifying operator to place, or cause to be placed, and to use
tangible personal property at a qualifying data center.
(b) Except as provided by Subsection (c), a qualifying
data center, a qualifying operator, and a qualifying tenant are entitled to
receive a refund in the amount provided by this section of the taxes
imposed on the purchase of tangible personal property that is necessary to
manage or operate the data center, including:
(1) electricity;
(2) an electrical system;
(3) a cooling system;
(4) an emergency generator;
(5) hardware or a
distributed mainframe computer or server;
(6) a data storage
device;
(7) network connectivity
equipment;
(8) a rack, cabinet, and
raised floor system;
(9) a peripheral
component or system;
(10) software;
(11) a mechanical,
electrical, or plumbing system that is necessary to operate any tangible
personal property described by Subdivisions (2)-(10);
(12) any other item of
equipment or system necessary to operate any tangible personal property
described by Subdivisions (2)-(11), including a fixture; and
(13) a component part of
any tangible personal property described by Subdivisions (2)-(10).
(c) This section does not apply to:
(1) office equipment or
supplies;
(2) equipment or supplies
used primarily in sales or distribution
activities or in transportation activities; or
(3) tangible personal
property purchased by an applicant for a
refund under this section with respect to which the applicant
received or has a pending application for a refund under Section 151.429.
(d) A data center is eligible to be a qualifying data center
for purposes of this section if
the data center, an operator of the data center, or a tenant of the
data center, independently or as a group:
(1) creates at least 20
qualifying jobs in the county in which the data center is located; and
(2) makes or agrees to
make a capital investment, on or after September 1, 2013, of at least $150
million in this state related to improvements
to real and tangible personal property installed at the data center over a
four-year period after initial construction or refurbishing of the data
center facility.
(e) A data center may apply to the comptroller for qualification as
a qualifying data center.
The application must be
made on a form prescribed by the comptroller and include the information
required by the comptroller.
The application form must
include a section for the data center to
certify that the data center, an operator of
the data center, or a tenant of the data center, independently or as a
group, will make the investment required by Subsection (d)(2).
(f) Beginning on the date a data center becomes a qualifying data
center, the data center, a qualifying operator of the data center, and a
qualifying tenant of the data center are entitled to receive a refund as
provided by this section on an annual basis as provided by Subsection (j)
for the purchase of tangible personal property occurring on or after that
date and before:
(1) the 10th anniversary
of the date the data center becomes a
qualifying data center, if the data center, operator, or tenant
makes a capital investment of at least $150 million but less than $200
million as provided by Subsection (d)(2); or
(2) the 15th anniversary
of the date the data center becomes a
qualifying data center, if the data center, operator, or tenant makes
a capital investment of $200 million or more as provided by Subsection (d)(2).
(g) The amount of the refund authorized by this section for each
annual period with respect to the taxes imposed on the purchase during that
period of an item of tangible personal property to which this section
applies is equal to the greater of:
(1) an amount equal to the amount by which the taxes paid under this
chapter exceed the amount of taxes that would have been imposed under this
chapter on the purchase of the item if the rate of the tax imposed under
this chapter were one percent; or
(2) the amount by which the taxes paid under this chapter exceed
$80.
(h) To receive a refund as provided by this section, a data center
must apply to the comptroller.
(i) The comptroller shall
adopt rules necessary to implement this section, including rules relating
to the:
(1) qualification and disqualification of a data center, operator,
or tenant under this section;
(2) determination of the date a data center, operator, or tenant
initially qualifies for a refund as provided by this section; and
(3) reporting and other
procedures necessary to ensure that a qualifying data center, qualifying
operator, and qualifying tenant comply
with this section and remain entitled to receive
a refund as provided by this section.
(j) The rules adopted by the comptroller under Subsection (i) must
allow for a qualifying data center, qualifying operator, or qualifying
tenant to apply for and receive annually the refund provided under this
section. The rules must prescribe the period each year during which an
application may be filed requesting a refund of taxes imposed and paid
during the preceding state fiscal year.
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SECTION 1. Subchapter H,
Chapter 151, Tax Code, is amended by adding Section 151.359 to read as
follows:
Sec. 151.359. PROPERTY
USED IN CERTAIN DATA CENTERS; TEMPORARY EXEMPTION. (a) In this section:
(1) "County average
weekly wage" means the average weekly wage in a county for all jobs
during the most recent four quarterly periods for which data is available,
as computed by the Texas Workforce Commission, at the time a data center
creates a job used to qualify under this section.
(2) "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 located in this
state;
(B) 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;
(C) is used by a single qualifying occupant for the processing,
storage, and distribution of data;
(D) is not used primarily by a telecommunications provider to place
tangible personal property that is used to deliver telecommunications
services; and
(E) has an
uninterruptible power source, a generator backup power, a sophisticated
fire suppression and prevention system, and enhanced physical security that
includes restricted access, video surveillance, and electronic systems.
(3) "Permanent
job" means an employment position that will exist for at least five
years after the date the job is created.
(4) "Qualifying data
center" means a data center that meets the qualifications prescribed
by Subsection (d).
(5) "Qualifying
job" means a full-time, permanent job that pays at least 120 percent
of the county average weekly wage in the county in which the job is based.
(6) "Qualifying
operator" means a person who controls access to a qualifying data
center, regardless of whether that person owns each item of tangible
personal property located at the qualifying
data center. A qualifying operator may also
be the qualifying owner.
(7) "Qualifying owner" means a person who owns the
building in which a qualifying data center is located. A qualifying owner
may also be the qualifying operator.
(8) "Qualifying occupant" means a person who:
(A) contracts with a
qualifying owner or qualifying
operator to place, or cause to be placed,
and to use tangible personal property at the qualifying data center; or
(B) in the case of a qualifying occupant who is also the qualifying
owner and the qualifying operator, places or causes to be placed, and uses
tangible personal property at the qualifying data center.
(b) Except as otherwise provided this section, tangible
personal property that is necessary and essential to the operation of a
qualified data center is exempted from the taxes imposed by this chapter if
the tangible personal property is purchased for installation at,
incorporation into, or in the case of Subdivision (1), use in a qualifying
data center by a qualifying owner, qualifying operator, or qualifying
occupant, and the tangible personal property is:
(1) electricity;
(2) an electrical system;
(3) a cooling system;
(4) an emergency
generator;
(5) hardware or a
distributed mainframe computer or server;
(6) a data storage
device;
(7) network connectivity
equipment;
(8) a rack, cabinet, and
raised floor system;
(9) a peripheral
component or system;
(10) software;
(11) a mechanical,
electrical, or plumbing system that is necessary to operate any tangible
personal property described by Subdivisions (2)-(10);
(12) any other item of
equipment or system necessary to operate any tangible personal property
described by Subdivisions (2)-(11), including a fixture; and
(13) a component part of
any tangible personal property described by Subdivisions (2)-(10).
(c) The exemption provided by this section does
not apply to:
(1) office equipment or
supplies;
(2) maintenance or janitorial supplies or equipment;
(3) equipment or supplies
used primarily in sales activities or transportation activities;
(4) tangible personal
property on which the purchaser has
received or has a pending application for a refund under Section 151.429;
(5) tangible personal property not otherwise exempted under
Subsection (b) that is incorporated into real estate or into an improvement
of real estate;
(6) tangible personal property that is rented or leased for a term
of one year or less; or
(7) notwithstanding Section 151.3111, a taxable service that is
performed on tangible personal property exempted under this section.
(d) A data center may be certified by the comptroller as a
qualifying data center for purposes of this section if, on or after September 1, 2013:
(1) a single qualifying occupant:
(A) contracts with a qualifying owner or qualifying operator to
lease space in which the qualifying occupant will locate a data center; or
(B) occupies a space that was not previously used as a data center
in which the qualifying occupant will locate a data center, in the case of
a qualifying occupant who is also the qualifying operator and the
qualifying owner; and
(2) the qualifying owner, qualifying operator, or qualifying
occupant, jointly or independently:
(A) creates at least 20
qualifying jobs in the county in which the data center is located, not including jobs moved from one county in this
state to another county in this state; and
(B) makes or agrees to
make a capital investment, on or after September 1, 2013, of at least $150
million in that particular data center over a
five-year period beginning on the date the data center is certified by the
comptroller as a qualifying data center.
(e) A data center that is eligible under Subsection (d) to be
certified by the comptroller as a qualified data center shall apply to the
comptroller for certification as a qualifying data center and for issuance
of a registration number or numbers by the comptroller.
The application must be
made on a form prescribed by the comptroller and include the information
required by the comptroller. The application
must include the name and contact information for the qualifying occupant,
and, if applicable, the name and contact information for the qualifying
owner and the qualifying operator who will claim the exemption authorized
under this section.
The application form must
include a section for the applicant to
certify that the capital investment required
by Subsection (d)(2)(B) will be met independently or jointly by the
qualifying occupant, qualifying owner, or qualifying operator within the
time period prescribed by Subsection (d)(2)(B).
(f) The exemption provided by this section begins on the date the data
center is certified by the comptroller as a qualifying data center and
expires:
(1) on the 10th
anniversary of that date, if the qualifying
occupant, qualifying owner, or qualifying operator, independently or
jointly makes a capital investment of at least $150 million but less
than $200 million as provided by Subsection
(d)(2)(B); or
(2) on the 15th
anniversary of that date, if the qualifying
occupant, qualifying owner, or qualifying operator, independently or
jointly makes a capital investment of $200 million or more as
provided by Subsection (d)(2)(B).
(g) Each person who is eligible to claim an exemption authorized by
this section must hold a registration number issued by the comptroller.
The registration number must be stated on the exemption certificate
provided by the purchaser to the seller of tangible personal property
eligible for the exemption.
(h) The comptroller shall revoke all registration numbers issued in
connection with a qualifying data center that the comptroller determines
does not meet the requirements prescribed by Subsection (d). Each person
who has the person's registration number revoked by the comptroller is
liable for taxes, including penalty and interest from the date of purchase,
imposed under this chapter on purchases for which the person claimed an
exemption under this section, regardless of whether the purchase occurred
before the date the registration number was revoked.
(i) The comptroller shall
adopt rules consistent with and
necessary to implement this section, including rules relating to:
(1) a qualifying data
center, qualifying owner, qualifying operator, and qualifying occupant;
(2) issuance and
revocation of a registration number required under this section; and
(3) reporting and other
procedures necessary to ensure that a qualifying data center, qualifying owner, qualifying operator, and
qualifying occupant comply with this
section and remain entitled to the exemption
authorized by this section.
(j) The exemption in this section does not apply to the taxes
imposed under Chapters 321, 322, or 323.
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No
equivalent provision.
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SECTION 2. Sections
151.317(a), (b), and (d), Tax Code, are amended to read as follows:
(a) Subject to Sections
151.359 and [Section] 151.1551 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 that is certified by the comptroller as a qualifying data center
under Section 151.359 in the processing, storage, and distribution of data;
10[(9)] a
direct or indirect use, consumption, or loss of electricity by an electric
utility engaged in the purchase of electricity for resale; or
11[(10)] use
in timber operations, including pumping for irrigation of timberland.
(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) and [Section]
321.105.
(d) To qualify for the
exemptions in Subsections (a)(2)-(9)[(8)], the gas or
electricity must be sold to the person using the gas or electricity in the
exempt manner. For purposes of this subsection, the use of gas or
electricity in an exempt manner by an independent contractor engaged by the
purchaser of the gas or electricity to perform one or more of the exempt
activities identified in Subsections (a)(2)-(9)[(8)] is
considered use by the purchaser of the gas or electricity.
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