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