Honorable Gary Elkins, Chair, House Committee on Government Transparency & Operation
FROM:
Ursula Parks, Director, Legislative Budget Board
IN RE:
HB4038 by Bohac (Relating to the definition of "qualifying job" for purposes of certification by the comptroller of public accounts as a qualifying data center.), As Introduced
No significant fiscal implication to the State is anticipated.
The bill would amend Section 151.359 of the Tax Code, regarding sales and use taxation of property used by certain qualifying data centers.
The definition of "qualifying job" in Subsection (a)(5) of Section 151.359 would be amended to include a new employment position staffed by a third-party employer if a written contract exists between the employer and a qualifying owner, operator, or occupant that provides that the employment position is permanently assigned to the qualifying data center.
The amended definition would apply regardless of when a data center was certified as qualifying, including with respect to jobs at data centers certified as qualifying before the effective date of the bill.
Section 151.359 provides that data centers that meet specified criteria qualify for exemption from sales tax on most tangible personal property and taxable services. One of the criteria for qualification is creation of at least 20 qualifying jobs in the county in which the data center is located. This bill provides that the employer for a qualifying job may be a third-party employer, but does not otherwise alter the definition of qualifying job or the number of such jobs that must be created. This change in employer status for a qualifying job is not expected to materially affect the probability that data centers will be established that qualify for sales tax exemption under the section; accordingly, the bill would not be expected to have any significant fiscal implications.
This bill would take effect immediately upon enactment, assuming it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2017.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.