Bill Text: TX SB608 | 2015-2016 | 84th Legislature | Introduced
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) 2015-02-23 - Referred to Finance [SB608 Detail]
Download: Texas-2015-SB608-Introduced.html
84R3440 ADM-F | ||
By: Hancock | S.B. No. 608 |
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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(k), 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) "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 owned by a single qualifying owner, operated by a | ||
single qualifying operator, and occupied by a single qualifying | ||
occupant, which space: | ||
(A) is located in this state; | ||
(B) is specifically constructed or refurbished | ||
and actually used primarily to house servers and related equipment | ||
and support staff for the processing, storage, and distribution of | ||
data and services used to directly and indirectly support health | ||
care, including electronic patient records, medical data, and | ||
business records; | ||
(C) is used by a single qualifying occupant for | ||
the purposes described by Paragraph (B); | ||
(D) is not used primarily by a telecommunications | ||
provider to place tangible personal property that is used to | ||
deliver telecommunications services; and | ||
(E) 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. | ||
(2) "Qualifying medical data center" means a medical | ||
data center that meets the qualifications prescribed by Subsection | ||
(e). | ||
(3) "Qualifying occupant" means a person who: | ||
(A) contracts with a qualifying owner or | ||
qualifying operator to place, or cause to be placed, and to use | ||
tangible personal property at the qualifying medical data center; | ||
or | ||
(B) in the case of a qualifying occupant who is | ||
also the qualifying owner and the qualifying operator, places, or | ||
causes to be placed, and uses tangible personal property at the | ||
qualifying medical data center. | ||
(4) "Qualifying operator" means a person who controls | ||
access to a qualifying medical data center, regardless of whether | ||
that person owns each item of tangible personal property located at | ||
the qualifying medical data center. A qualifying operator may also | ||
be the qualifying owner. | ||
(5) "Qualifying owner" means a person who owns a | ||
building in which a qualifying medical data center is located. A | ||
qualifying owner may also be the qualifying operator. | ||
(b) For purposes of this section: | ||
(1) multiple buildings occupied by a qualifying | ||
occupant or a subsidiary or affiliate of the occupant who meets the | ||
requirements prescribed by Subsection (a)(3) are considered to be | ||
occupied by a single qualifying occupant; | ||
(2) multiple buildings operated by a qualifying | ||
operator or a subsidiary or affiliate of the operator who meets the | ||
requirements prescribed by Subsection (a)(4) are considered to be | ||
operated by a single qualifying operator; and | ||
(3) multiple buildings owned by a qualifying owner or | ||
a subsidiary or affiliate of the owner who meets the requirements | ||
prescribed by Subsection (a)(5) are considered to be owned by a | ||
single qualifying owner. | ||
(c) 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 | ||
qualifying owner, qualifying operator, or qualifying occupant, 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). | ||
(d) 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 (c) 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. | ||
(e) Subject to Subsection (l), 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: | ||
(1) a single qualifying occupant: | ||
(A) contracts with a qualifying owner or | ||
qualifying operator to lease space in which the qualifying occupant | ||
will locate a medical data center; or | ||
(B) occupies a space that was not previously used | ||
as a medical data center in which the qualifying occupant will | ||
locate a medical data center, in the case of a qualifying occupant | ||
who is also the qualifying operator and the qualifying owner; and | ||
(2) the qualifying owner, qualifying operator, or | ||
qualifying occupant jointly or independently 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. | ||
(f) A medical data center that is eligible under Subsection | ||
(e) to be certified by the comptroller as a qualified medical data | ||
center 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 qualifying occupant and, if | ||
applicable, the name and contact information for the qualifying | ||
owner and the qualifying operator who 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 (e)(2) will be met independently or jointly | ||
by the qualifying owner, qualifying operator, or qualifying | ||
occupant within the time period prescribed by Subsection (e)(2). | ||
(g) 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. | ||
(h) 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. | ||
(i) 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 (e). 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. | ||
(j) The comptroller shall adopt rules consistent with and | ||
necessary to implement this section, including rules relating to: | ||
(1) a qualifying medical data center, qualifying | ||
owner, qualifying operator, and qualifying occupant; | ||
(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, qualifying owner, qualifying | ||
operator, and qualifying occupant comply with this section and | ||
remain entitled to the exemption authorized by this section. | ||
(k) The exemption in this section does not apply to the | ||
taxes imposed under Chapter 321, 322, or 323. | ||
(l) 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(k), 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(k), 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. |