Bill > SB2888

This bill modifies the requirements for data centers and large data center projects to qualify for temporary sales and use tax exemptions in Texas by adding new energy efficiency criteria. Specifically, to be certified as a qualifying data center or large data center project, businesses must now implement three specific energy conservation measures: (1) use liquid cooling systems instead of air cooling systems, (2) use row- or rack-based air cooling systems instead of room-based systems, and (3) use Energy Star-certified servers. The existing qualification criteria remain largely the same, including creating a minimum number of jobs (20 for data centers and 40 for large data center projects) and making significant capital investments ($200 million for data centers and $500 million for large data center projects) over a five-year period. These new requirements will only apply to certifications submitted on or after September 1, 2026, and the bill itself will take effect on September 1, 2025. The changes aim to incentivize more energy-efficient data center operations while maintaining existing economic development goals for attracting large technology investments to the state.

Budget and Finance

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=SB2888