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A BILL TO BE ENTITLED
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AN ACT
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relating to an exemption for certain tangible personal property |
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related to medical data centers from the sales and use tax. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Sections 151.317(a) and (b), Tax Code, are |
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amended to read as follows: |
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(a) Subject to Sections 151.359, 151.360, and 151.1551 and |
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Subsection (d) of this section, gas and electricity are exempted |
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from the taxes imposed by this chapter when sold for: |
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(1) residential use; |
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(2) use in powering equipment exempt under Section |
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151.318 or 151.3185 by a person processing tangible personal |
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property for sale as tangible personal property, other than |
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preparation or storage of prepared food described by Section |
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151.314(c-2); |
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(3) use in lighting, cooling, and heating in the |
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manufacturing area during the actual manufacturing or processing of |
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tangible personal property for sale as tangible personal property, |
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other than preparation or storage of prepared food described by |
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Section 151.314(c-2); |
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(4) use directly in exploring for, producing, or |
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transporting, a material extracted from the earth; |
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(5) use in agriculture, including dairy or poultry |
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operations and pumping for farm or ranch irrigation; |
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(6) use directly in electrical processes, such as |
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electroplating, electrolysis, and cathodic protection; |
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(7) use directly in the off-wing processing, overhaul, |
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or repair of a jet turbine engine or its parts for a certificated or |
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licensed carrier of persons or property; |
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(8) use directly in providing, under contracts with or |
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on behalf of the United States government or foreign governments, |
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defense or national security-related electronics, classified |
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intelligence data processing and handling systems, or |
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defense-related platform modifications or upgrades; |
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(9) use directly by a data center or medical data |
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center that is certified by the comptroller as a qualifying data |
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center or qualifying medical data center under Section 151.359 or |
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151.360 in the processing, storage, and distribution of data; |
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(10) a direct or indirect use, consumption, or loss of |
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electricity by an electric utility engaged in the purchase of |
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electricity for resale; or |
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(11) use in timber operations, including pumping for |
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irrigation of timberland. |
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(b) The sale, production, distribution, lease, or rental |
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of, and the use, storage, or other consumption in this state of, gas |
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and electricity sold for the uses listed in Subsection (a)[,] are |
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exempted from the taxes imposed by a municipality under Chapter 321 |
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except as provided by Sections 151.359(j), 151.360(j), and 321.105. |
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SECTION 2. Subchapter H, Chapter 151, Tax Code, is amended |
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by adding Section 151.360 to read as follows: |
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Sec. 151.360. PROPERTY USED IN CERTAIN MEDICAL DATA |
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CENTERS; EXEMPTION. (a) In this section: |
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(1) "County average weekly wage" means the average |
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weekly wage in a county for all jobs during the most recent four |
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quarterly periods for which data is available, as computed by the |
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Texas Workforce Commission, at the time a data center creates a job |
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used to qualify under this section. |
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(2) "Health care corporation" means a corporation |
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whose primary business is the ownership and operation of hospitals |
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and related health care facilities. |
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(3) "Medical data center" means at least 75,000 square |
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feet of space in a single building or portion of a single building, |
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or cumulatively in multiple buildings or portions of multiple |
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buildings that are occupied by a single health care corporation, |
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one or more of its subsidiaries, or both, which space: |
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(A) is located in this state; |
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(B) is actually used primarily by the health care |
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corporation or a subsidiary of the corporation to house servers and |
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related equipment and support staff for the processing, storage, |
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and distribution of medical data, including electronic patient |
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records, financial information, and business records; |
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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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(4) "Permanent job" means an employment position that |
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will exist for at least five years after the date the job is |
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created. |
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(5) "Primarily" means at least 50 percent. |
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(6) "Qualifying job" means a full-time, permanent job |
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that pays at least 120 percent of the county average weekly wage in |
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the county in which the job is based. |
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(7) "Qualifying medical data center" means a medical |
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data center that meets the qualifications prescribed by Subsection |
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(d). |
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(8) "Subsidiary" has the meaning assigned by Section |
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1.002, Business Organizations Code. |
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(b) Except as otherwise provided by this section, tangible |
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personal property that is necessary and essential to the operation |
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of a qualified medical data center is exempted from the taxes |
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imposed by this chapter if the tangible personal property is |
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purchased for installation at, incorporation into, or, in the case |
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of Subdivision (1), use in a qualifying medical data center by a |
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health care corporation or a subsidiary of the corporation, and the |
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tangible personal property is: |
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(1) electricity; |
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(2) an electrical system; |
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(3) a cooling system; |
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(4) an emergency generator; |
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(5) hardware or a distributed mainframe computer or |
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server; |
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(6) a data storage device; |
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(7) network connectivity equipment; |
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(8) a rack, cabinet, and raised floor system; |
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(9) a peripheral component or system; |
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(10) software; |
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(11) a mechanical, electrical, or plumbing system that |
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is necessary to operate any tangible personal property described by |
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Subdivisions (2)-(10); |
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(12) any other item of equipment or system necessary |
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to operate any tangible personal property described by Subdivisions |
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(2)-(11), including a fixture; or |
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(13) a component part of any tangible personal |
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property described by Subdivisions (2)-(10). |
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(c) The exemption provided by this section does not apply |
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to: |
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(1) office equipment or supplies; |
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(2) maintenance or janitorial supplies or equipment; |
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(3) equipment or supplies used primarily in sales |
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activities or transportation activities; |
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(4) tangible personal property on which the purchaser |
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has received or has a pending application for a refund under Section |
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151.429; |
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(5) tangible personal property not otherwise exempted |
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under Subsection (b) that is incorporated into real estate or into |
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an improvement of real estate; or |
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(6) tangible personal property that is rented or |
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leased for a term of one year or less. |
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(d) Subject to Subsection (k), a medical data center may be |
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certified by the comptroller as a qualifying medical data center |
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for purposes of this section if, on or after September 1, 2015, a |
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health care corporation or a subsidiary of the corporation: |
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(1) builds, leases, or operates a medical data center; |
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(2) makes or agrees to make a capital investment, on or |
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after September 1, 2015, of at least $200 million in that medical |
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data center over a five-year period beginning on the date the |
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medical data center is certified by the comptroller as a qualifying |
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medical data center; and |
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(3) creates at least 20 qualifying jobs in the county |
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in which the medical data center is located, not including a job |
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moved from one county in this state to another county in this state. |
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(e) A medical data center that is eligible under Subsection |
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(d) shall apply to the comptroller for certification as a |
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qualifying medical data center and for issuance of a registration |
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number or numbers by the comptroller. The application must be made |
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on a form prescribed by the comptroller and include the information |
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required by the comptroller. The application must include the name |
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and contact information for the health care corporation or the |
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subsidiary of the corporation that will claim the exemption |
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authorized under this section. The application form must include a |
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section for the applicant to certify that the capital investment |
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required by Subsection (d)(2) will be met by the health care |
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corporation or the subsidiary of the corporation within the time |
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period prescribed by Subsection (d)(2). |
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(f) The exemption provided by this section begins on the |
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date the medical data center is certified by the comptroller as a |
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qualifying medical data center and expires on the date that the |
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medical data center ceases operating as a medical data center. |
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(g) Each person who is eligible to claim an exemption |
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authorized by this section must hold a registration number issued |
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by the comptroller. The registration number must be stated on the |
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exemption certificate provided by the purchaser to the seller of |
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tangible personal property eligible for the exemption. |
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(h) The comptroller shall revoke all registration numbers |
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issued in connection with a qualifying medical data center that the |
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comptroller determines does not meet the requirements prescribed by |
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Subsection (d). Each person who has the person's registration |
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number revoked by the comptroller is liable for taxes, including |
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penalty and interest from the date of purchase, imposed under this |
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chapter on purchases for which the person claimed an exemption |
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under this section, regardless of whether the purchase occurred |
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before the date the registration number was revoked. |
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(i) The comptroller shall adopt rules consistent with and |
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necessary to implement this section, including rules relating to: |
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(1) a qualifying medical data center; |
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(2) issuance and revocation of a registration number |
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required under this section; and |
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(3) reporting and other procedures necessary to ensure |
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that a qualifying medical data center complies with this section |
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and remains entitled to the exemption authorized by this section. |
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(j) The exemption in this section does not apply to the |
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taxes imposed under Chapter 321, 322, or 323. |
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(k) A medical data center is not eligible to receive an |
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exemption under this section if the medical data center is subject |
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to an agreement limiting the appraised value of the medical data |
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center's property under Subchapter B or C, Chapter 313. |
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SECTION 3. Section 313.010, Tax Code, as added by Chapter |
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1274 (H.B. 1223), Acts of the 83rd Legislature, Regular Session, |
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2013, is amended to read as follows: |
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Sec. 313.010. CERTAIN ENTITIES INELIGIBLE. An entity that |
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has been issued a registration number under Section 151.359 or |
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151.360 is not eligible to receive a limitation on appraised value |
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under this chapter. |
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SECTION 4. Section 321.208, Tax Code, is amended to read as |
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follows: |
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Sec. 321.208. STATE EXEMPTIONS APPLICABLE. The exemptions |
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provided by Subchapter H, Chapter 151, apply to the taxes |
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authorized by this chapter, except as provided by Sections |
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151.359(j), 151.360(j), and 151.317(b). |
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SECTION 5. Section 323.207, Tax Code, is amended to read as |
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follows: |
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Sec. 323.207. STATE EXEMPTIONS APPLICABLE. The exemptions |
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provided by Subchapter H, Chapter 151, apply to the taxes |
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authorized by this chapter, except as provided by Sections |
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151.359(j), 151.360(j), and 151.317(b). |
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SECTION 6. The change in law made by this Act does not |
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affect tax liability accruing before the effective date of this |
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Act. That liability continues in effect as if this Act had not been |
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enacted, and the former law is continued in effect for the |
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collection of taxes due and for civil and criminal enforcement of |
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the liability for those taxes. |
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SECTION 7. This Act takes effect September 1, 2015. |