Bill Text: TX SB36 | 2027-2028 | 90th Legislature Regular Session | Introduced

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Bill Title: Relating to the eligibility of data centers and large data center projects to participate in certain incentive programs offered by the state and local governments.

Sponsorship: Partisan Bill (Democrat 1)

Status: (Introduced) 2026-11-09 - Filed [SB36 Detail]

Download: Texas-2027-SB36-Introduced.html

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90R2352 RDS-D
By: Zaffirini S.B. No. 36

A BILL TO BE ENTITLED
AN ACT
relating to the eligibility of data centers and large data center
projects to participate in certain incentive programs offered by
the state and local governments.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 380, Local Government Code, is amended
by adding Section 380.005 to read as follows:
Sec. 380.005. ENTITIES NOT ELIGIBLE FOR LOCAL DEVELOPMENT
AGREEMENTS. (a) In this section, "data center" and "large data
center project" have the meanings assigned by Section 312.0022, Tax
Code.
(b) Notwithstanding any other provision of this chapter,
the governing body of a municipality, or an entity with which the
governing body may contract to administer a program under this
chapter, may not enter into an agreement under this chapter if the
subject of the agreement is a data center or a large data center
project.
(c) An agreement prohibited under Subsection (b) that was
entered into before September 1, 2027, may not be renewed.
SECTION 2. Chapter 381, Local Government Code, is amended
by adding Section 381.006 to read as follows:
Sec. 381.006. ENTITIES NOT ELIGIBLE FOR LOCAL DEVELOPMENT
AGREEMENTS. (a) In this section, "data center" and "large data
center project" have the meanings assigned by Section 312.0022, Tax
Code.
(b) Notwithstanding any other provision of this chapter, a
county, county industrial commission, or development board, or an
entity with which the county, commission, or board may contract to
administer a program under this chapter, may not enter into an
agreement under this chapter if the subject of the agreement is a
data center or a large data center project.
(c) An agreement prohibited under Subsection (b) that was
entered into before September 1, 2027, may not be renewed.
SECTION 3. Section 151.359(k), Tax Code, is amended to read
as follows:
(k) A data center is not eligible to receive an exemption
under this section if the data center is the subject of:
(1) an agreement under Chapter 380 or 381, Local
Government Code;
(2) a tax abatement agreement under Chapter 312 of
this code; or
(3) [to] an agreement limiting the appraised value of
the data center's property under former Subchapter B or C, Chapter
313 of this code.
SECTION 4. Section 151.3595(j), Tax Code, is amended to
read as follows:
(j) A data center is not eligible to receive an exemption
under this section if the data center is the subject of:
(1) an agreement under Chapter 380 or 381, Local
Government Code;
(2) a tax abatement agreement under Chapter 312 of
this code; or
(3) [to] an agreement limiting the appraised value of
the data center's property under former Subchapter B or C, Chapter
313 of this code.
SECTION 5. Subchapter A, Chapter 312, Tax Code, is amended
by adding Section 312.0022 to read as follows:
Sec. 312.0022. PROHIBITION ON ABATEMENT OF TAXES ON CERTAIN
DATA CENTER PROPERTY. (a) In this section:
(1) "Data center" means a data center that has been
issued a registration number or numbers by the comptroller under
Section 151.359(e).
(2) "Large data center project" means a large data
center project that has been issued a registration number or
numbers by the comptroller under Section 151.3595(e).
(b) Notwithstanding any other provision of this chapter,
the governing body of a taxing unit may not enter into an agreement
under this chapter to exempt from taxation a portion of the value of
real property on which a data center or a large data center project
is located or is planned to be located during the term of the
agreement, or of tangible personal property located on the real
property during that term.
SECTION 6. The changes in law made by this Act apply only
to:
(1) an agreement entered into under Chapter 380 or
381, Local Government Code, or Chapter 312, Tax Code, on or after
the effective date of this Act; and
(2) an application for certification as a qualifying
data center or a qualifying large data center project submitted to
the comptroller of public accounts by a data center or a large data
center project on or after the effective date of this Act.
SECTION 7. The changes in law made by this Act do 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 8. This Act takes effect September 1, 2027.