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INTRODUCED
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HOUSE COMMITTEE
SUBSTITUTE
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SECTION 1. Sections
151.359(a)(2), (3), (5), (7), and (8), Tax Code, are amended to read as
follows:
(2) "Data center"
means all or part of a new or redeveloped facility that [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 composed of one or
more buildings and related improvements specifically constructed or
refurbished, repaired, restored, remodeled, or otherwise modified
and actually used primarily to house servers and related equipment and
support staff for the processing, storage, and distribution of data;
(C) is designed for use
[used] by one or more [a single] qualifying occupants
[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, 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 three [five]
years after the date the job is created.
(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.
(7) "Qualifying
owner" means a person who owns the building or buildings 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:
(i) for at least one
megawatt of critical IT load per month for a period of at least two years;
and
(ii) 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.
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No
equivalent provision. (But see Section 151.3591(a), Tax Code,
below.)
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SECTION 2. Section 151.359,
Tax Code, is amended by amending Subsections (c), (d), (e), and (f) and
adding Subsections (e-1) and (l) to read as follows:
(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, other than a charge for labor to install or
maintain tangible personal property described by Subsection (b) that is
separately itemized.
(d) Subject to Subsection
(k), 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 occupants of the data center
[occupant], jointly or independently:
(1) create [(A) creates]
at least five [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
(2) make or agree [(B)
makes or agrees] to make a capital investment, on or after September 1,
2013, of at least $100 [$200] 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 each [the]
qualifying occupant, if any, as of the date on which the application is
filed with the comptroller, and [, if applicable,] the name and
contact information for the qualifying owner and, if applicable, 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) [Subsection
(d)(2)(B)] will be met independently or jointly by the [qualifying
occupant,] qualifying owner, [or] qualifying operator, or
qualifying occupants within the time period prescribed by that
subsection [Subsection (d)(2)(B)].
(e-1) A person who is not
listed as a qualifying occupant on an application filed under Subsection
(e) may submit an application to the comptroller for a registration number
in relation to a certified qualifying data center on a form prescribed by
the comptroller. The comptroller shall issue the registration number to the
applicant on receipt of information sufficient for the comptroller to determine
that the applicant is a qualifying occupant of the certified qualifying
data center.
(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 owner, qualifying operator [occupant,
qualifying owner], or qualifying occupants, [operator]
independently or jointly, make [makes] a capital investment
of at least $100 [$200] million but less than $150 [$250]
million as provided by Subsection (d)(2) [Subsection (d)(2)(B)];
or
(2) on the 15th anniversary
of that date, if the qualifying owner, qualifying operator [occupant,
qualifying owner], or qualifying occupants, [operator]
independently or jointly, make [makes] a capital investment
of $150 [$250] million or more as provided by Subsection
(d)(2) [Subsection (d)(2)(B)].
(l) A qualifying owner,
qualifying operator, or qualifying occupant of a qualifying data center may
apply to the comptroller for a refund of the taxes imposed by this chapter
paid on the purchase of an item of tangible personal property described by
Subsection (b) that occurred before the date the qualifying data center is
certified by the comptroller if the item was purchased after the earlier
of:
(1) the date the data
center submits the application described by Subsection (e); or
(2) the 180th day before
the date the data center is certified by the comptroller.
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No
equivalent provision. (But see Section 151.3591(c), Tax Code,
below.)
No
equivalent provision. (But see Section 151.3591(d), Tax Code,
below.)
No
equivalent provision. (But see Section 151.3591(e), Tax Code,
below.)
No
equivalent provision. (But see Section 151.3591(f), Tax Code,
below.)
No
equivalent provision. (But see Section 151.3591(g), Tax Code,
below.)
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No
equivalent provision. (But see Section 151.359(a), Tax Code, above.)
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SECTION 1. Subchapter H,
Chapter 151, Tax Code, is amended by adding Section 151.3591 to read as
follows:
Sec. 151.3591. PROPERTY
USED IN CERTAIN MULTI-USER 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 multi-user
data center creates a job used to qualify under this section.
(2) "Multi-user data
center" means all or part of a new or redeveloped facility that:
(A) is located in this
state;
(B) is composed of a
building or a series of buildings and related improvements located on a
parcel of land or on parcels of land that are in close proximity to each
other;
(C) is specifically
constructed or refurbished, repaired, restored, remodeled, or otherwise
modified and actually used primarily to house servers and related equipment
and support staff for the processing, storage, and distribution of data;
(D) is designed for use by
one or more qualifying occupants for the processing, storage, and
distribution of data;
(E) is not used primarily
by a telecommunications provider to place tangible personal property that
is used to deliver telecommunications services; and
(F) 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.
(3) "Permanent
job" means an employment position that will exist for at least three
years after the date the job is created.
(4) "Qualifying
job" means a full-time, permanent job that pays at least the county
average weekly wage in the county in which the job is based.
(5) "Qualifying
multi-user data center" means a multi-user data center that meets the
qualifications prescribed by Subsection (d).
(6) "Qualifying
occupant" means a person who:
(A) contracts with a
qualifying owner or qualifying operator:
(i) for at least 1,000
kilowatts of critical IT load capacity per month for a period of at least
two years; and
(ii) to place, or cause to
be placed, and to use tangible personal property at the qualifying
multi-user 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 multi-user data center.
(7) "Qualifying
operator" means a person who controls access to a qualifying
multi-user data center, regardless of whether that person owns each item of
tangible personal property located at the qualifying multi-user data
center. A qualifying operator may also be the qualifying owner.
(8) "Qualifying
owner" means a person who owns the building or buildings in which a
qualifying multi-user data center is located. A qualifying owner may also
be the qualifying operator.
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No
equivalent provision.
No
equivalent provision. (But see Section 151.359(c), Tax Code,
above.)
No
equivalent provision. (But see Section 151.359(d), Tax Code,
above.)
No
equivalent provision. (But see Section 151.359(e), Tax Code,
above.)
No
equivalent provision. (But see Section 151.359(e-1), Tax Code,
above.)
No
equivalent provision. (But see Section 151.359(f), Tax Code,
above.)
No
equivalent provision.
No
equivalent provision.
No
equivalent provision.
No
equivalent provision.
No
equivalent provision.
No
equivalent provision.
No
equivalent provision.
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(b) Except as otherwise
provided by this section, tangible personal property that is necessary and
essential to the operation of a qualifying multi-user 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 electricity, use in a qualifying multi-user 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) Subject to Subsection
(l), a multi-user data center may be certified by the comptroller as a
qualifying multi-user data center for purposes of this section if, on or
after September 1, 2015, the qualifying owner, qualifying operator, or
qualifying occupants of the multi-user data center, independently or
jointly:
(1) create at least five
qualifying jobs in the county in which the multi-user data center is
located, not including jobs moved from one county in this state to another
county in this state; and
(2) make or agree to make,
on or after September 1, 2015, a capital investment of at least $100
million in that particular multi-user data center over a five-year period
beginning on the date the multi-user data center is certified by the
comptroller as a qualifying multi-user data center.
(e) A multi-user data
center that is eligible under Subsection (d) to be certified by the
comptroller as a qualifying multi-user data center shall apply to the
comptroller for certification and for the issuance of a registration number
or numbers by the comptroller. The application must be made on a form
prescribed by the comptroller and must include the information required by
the comptroller. The application must include the name and contact
information for each qualifying occupant, if any, as of the date on which
the application is filed with the comptroller, and the name and contact
information for the qualifying owner and, if applicable, 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) will be met
independently or jointly by the qualifying owner, qualifying operator, or
qualifying occupants within the time period prescribed by that subsection.
(f) A person who is not
listed as a qualifying occupant on an application filed under Subsection
(e) may submit an application to the comptroller for a registration number
in relation to a certified qualifying multi-user data center on a form
prescribed by the comptroller. The comptroller shall issue the registration
number to the applicant on receipt of information sufficient for the
comptroller to determine that the applicant is a qualifying occupant of the
certified qualifying multi-user data center.
(g) The exemption provided
by this section begins on the date the multi-user data center is certified
by the comptroller as a qualifying multi-user data center and expires:
(1) on the 10th
anniversary of that date, if the qualifying owner, qualifying operator, or
qualifying occupants, independently or jointly, make a capital investment
of at least $100 million but less than $150 million as provided by
Subsection (d)(2); or
(2) on the 15th
anniversary of that date, if the qualifying owner, qualifying operator, or
qualifying occupants, independently or jointly, make a capital investment
of $150 million or more as provided by Subsection (d)(2).
(h) 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.
(i) The comptroller shall
revoke all registration numbers issued in connection with a qualifying
multi-user 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.
(j) The comptroller shall
adopt rules consistent with and necessary to implement this section,
including rules relating to:
(1) a qualifying
multi-user 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 multi-user data center,
qualifying owner, qualifying operator, and qualifying occupant comply with
this section and remain entitled to the exemption authorized by this
section.
(k) Except as provided by
Section 321.211, the exemption provided under this section does not apply
to the taxes imposed under Chapter 321, 322, or 323.
(l) A multi-user data
center is not eligible to receive an exemption under this section if the
data center is subject to an agreement limiting the appraised value of the
data center's property under Subchapter B or C, Chapter 313.
(m) A qualifying owner,
qualifying operator, or qualifying occupant of a qualifying multi-user data
center may apply to the comptroller for a refund of the taxes imposed by
this chapter paid on the purchase of an item of tangible personal property
described by Subsection (b) that occurred before the date the qualifying
multi-user data center is certified by the comptroller if the item was
purchased after the earlier of:
(1) the date the
multi-user data center submits the application described by Subsection (e);
or
(2) the 180th day before
the date the multi-user data center is certified by the comptroller.
(n) Notwithstanding any
other law, a data center that was certified as a qualifying data center
under Section 151.359 between January 1, 2014, and December 31, 2014, and
that otherwise meets the qualifications for certification as a qualifying
multi-user data center prescribed by Subsection (d), may elect, on written
notice to the comptroller, to become a certified qualifying multi-user data
center subject to this section. Any capital investment made, and any
qualifying jobs created, by the certified qualifying data center before the
date the data center provides written notice to the comptroller under this
section shall be considered in determining whether the data center meets
the qualifications prescribed by Subsection (d), regardless of whether the
investment was made, or the jobs created, before September 1, 2015. For
purposes of Subsections (g) and (m), the date on which a qualifying data
center was certified as a qualifying data center by the comptroller under
Section 151.359 is considered to be the date on which the qualifying
multi-user data center is certified as a certified qualifying multi-user
data center for purposes of this section.
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No
equivalent provision.
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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 151.3591 [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 or multi-user data center that is certified by the
comptroller as a qualifying data center under Section 151.359 or a
qualifying multi-user data center under Section 151.3591 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.
(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),
151.3591(k), and 321.105.
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No
equivalent provision.
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SECTION 3. Section 313.010,
Tax Code, as added by Chapter 1274 (H.B. 1223), Acts of the 83rd
Legislature, Regular Session, 2013, is amended to read as follows:
Sec. 313.010. CERTAIN
ENTITIES INELIGIBLE. An entity that has been issued a registration number
under Section 151.359 or 151.3591 is not eligible to receive a
limitation on appraised value under this chapter.
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No
equivalent provision.
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SECTION 4. Section 321.208,
Tax Code, is amended to read as follows:
Sec. 321.208. STATE EXEMPTIONS
APPLICABLE. The exemptions provided by Subchapter H, Chapter 151, apply to
the taxes authorized by this chapter, except as provided by Sections [151.359(j)
and] 151.317(b), 151.359(j), and 151.3591(k), and subject to Section
321.211.
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No
equivalent provision.
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SECTION 5. Subchapter C,
Chapter 321, Tax Code, is amended by adding Section 321.211 to read as
follows:
Sec. 321.211. MULTI-USER
DATA CENTER EXCEPTION. The governing body of a municipality with a
population of 35,000 or less may by ordinance provide that the exemption
provided by Section 151.3591 applies to the taxes imposed by the
municipality under this chapter.
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No
equivalent provision.
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SECTION 6. Section 323.207,
Tax Code, is amended to read as follows:
Sec. 323.207. STATE
EXEMPTIONS APPLICABLE. The exemptions provided by Subchapter H, Chapter
151, apply to the taxes authorized by this chapter, except as provided by
Sections [151.359(j) and] 151.317(b), 151.359(j), and 151.3591(k).
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No
equivalent provision.
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SECTION 7. 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.
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SECTION 3. The changes in law
made by this Act apply to a data center
certified as a qualifying data center by the comptroller of public
accounts, regardless of whether the certification occurred before, on, or
after the effective date of this Act.
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SECTION 8. Section 151.3591,
Tax Code, as added by this Act, applies only
to:
(1)
a multi-user data center that becomes a qualifying multi-user data center
on or after the effective date of this Act;
(2)
an occupant of a multi-user data center that becomes a qualifying occupant
on or after the effective date of this Act; or
(3)
a certified qualifying data center under Section 151.359 that elects to
become a certified qualifying multi-user data center under Section
151.3591(n), Tax Code, as added by this Act.
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SECTION 4. This Act takes
effect September 1, 2015.
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SECTION 9. Same as introduced
version.
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