Bill Text: TX HB2506 | 2015-2016 | 84th Legislature | Comm Sub
Bill Title: Relating to an exemption for certain tangible personal property related to medical data centers from the sales and use tax.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2015-04-20 - Committee report sent to Calendars [HB2506 Detail]
Download: Texas-2015-HB2506-Comm_Sub.html
84R16206 ADM-F | |||
By: Parker | H.B. No. 2506 | ||
Substitute the following for H.B. No. 2506: | |||
By: Button | C.S.H.B. No. 2506 |
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relating to an exemption for certain tangible personal property | ||
related to medical data centers from the sales and use tax. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Sections 151.317(a) and (b), Tax Code, are | ||
amended to read as follows: | ||
(a) Subject to Sections 151.359, 151.360, and 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 medical data | ||
center that is certified by the comptroller as a qualifying data | ||
center or qualifying medical data center under Section 151.359 or | ||
151.360 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)[ |
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exempted from the taxes imposed by a municipality under Chapter 321 | ||
except as provided by Sections 151.359(j), 151.360(j), and 321.105. | ||
SECTION 2. Subchapter H, Chapter 151, Tax Code, is amended | ||
by adding Section 151.360 to read as follows: | ||
Sec. 151.360. PROPERTY USED IN CERTAIN MEDICAL DATA | ||
CENTERS; 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) "Health care corporation" means a corporation | ||
whose primary business is the ownership and operation of hospitals | ||
and related health care facilities. | ||
(3) "Medical data center" means at least 75,000 square | ||
feet of space in a single building or portion of a single building, | ||
or cumulatively in multiple buildings or portions of multiple | ||
buildings that are occupied by a single health care corporation, | ||
one or more of its subsidiaries, or both, which space: | ||
(A) is located in this state; | ||
(B) is actually used primarily by the health care | ||
corporation or a subsidiary of the corporation to house servers and | ||
related equipment and support staff for the processing, storage, | ||
and distribution of medical data, including electronic patient | ||
records, financial information, and business records; | ||
(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. | ||
(4) "Permanent job" means an employment position that | ||
will exist for at least five years after the date the job is | ||
created. | ||
(5) "Primarily" means at least 50 percent. | ||
(6) "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 medical data center" means a medical | ||
data center that meets the qualifications prescribed by Subsection | ||
(d). | ||
(8) "Subsidiary" has the meaning assigned by Section | ||
1.002, Business Organizations Code. | ||
(b) Except as otherwise provided by this section, tangible | ||
personal property that is necessary and essential to the operation | ||
of a qualified medical 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 medical data center by a | ||
health care corporation or a subsidiary of the corporation, 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; or | ||
(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; or | ||
(6) tangible personal property that is rented or | ||
leased for a term of one year or less. | ||
(d) Subject to Subsection (k), a medical data center may be | ||
certified by the comptroller as a qualifying medical data center | ||
for purposes of this section if, on or after September 1, 2015, a | ||
health care corporation or a subsidiary of the corporation: | ||
(1) builds, leases, or operates a medical data center; | ||
(2) makes or agrees to make a capital investment, on or | ||
after September 1, 2015, of at least $200 million in that medical | ||
data center over a five-year period beginning on the date the | ||
medical data center is certified by the comptroller as a qualifying | ||
medical data center; and | ||
(3) creates at least 20 qualifying jobs in the county | ||
in which the medical data center is located, not including a job | ||
moved from one county in this state to another county in this state. | ||
(e) A medical data center that is eligible under Subsection | ||
(d) shall apply to the comptroller for certification as a | ||
qualifying medical 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 health care corporation or the | ||
subsidiary of the corporation that 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 by the health care | ||
corporation or the subsidiary of the corporation within the time | ||
period prescribed by Subsection (d)(2). | ||
(f) The exemption provided by this section begins on the | ||
date the medical data center is certified by the comptroller as a | ||
qualifying medical data center and expires on the date that the | ||
medical data center ceases operating as a medical data center. | ||
(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 medical 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 medical data center; | ||
(2) issuance and revocation of a registration number | ||
required under this section; and | ||
(3) reporting and other procedures necessary to ensure | ||
that a qualifying medical data center complies with this section | ||
and remains entitled to the exemption authorized by this section. | ||
(j) The exemption in this section does not apply to the | ||
taxes imposed under Chapter 321, 322, or 323. | ||
(k) A medical data center is not eligible to receive an | ||
exemption under this section if the medical data center is subject | ||
to an agreement limiting the appraised value of the medical data | ||
center's property under Subchapter B or C, Chapter 313. | ||
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 | ||
151.360 is not eligible to receive a limitation on appraised value | ||
under this chapter. | ||
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), 151.360(j), and 151.317(b). | ||
SECTION 5. 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), 151.360(j), and 151.317(b). | ||
SECTION 6. 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. | ||
SECTION 7. This Act takes effect September 1, 2015. |