By: Parker, Button H.B. No. 4525
Substitute the following for H.B. No. 4525:
By: Parker C.S.H.B. No. 4525
A BILL TO BE ENTITLED
AN ACT
relating to qualified manufacturing project zones.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The Legislature of the State of Texas finds that
a qualified manufacturing project and the enhancement of
manufacturing workforce development, as defined in this Act, serves
the public purposes of development and diversification of the
economy of this state, the elimination of unemployment or
underemployment in this state, and the development or expansion of
commerce in this state.
SECTION 2. Subtitle C, Title 12, Local Government Code, is
amended by adding Chapter 399 to read as follows:
CHAPTER 399. QUALIFIED MANUFACTURING PROJECT ZONES
Sec. 399.001. DEFINITION. In this chapter, "qualified
manufacturing project" means a proposed new or expanded facility
that, on the date of qualification under section 399.002:
(1) is subject to an agreement entered into on or after
January 1, 2008, but before January 1, 2015, with a county,
municipality, or other taxing unit under Chapter 312, Tax Code, or
with a school district under Chapter 313, Tax Code, under which the
investment in the facility is at least $200 million;
(2) will be engaged in manufacturing, as that term is
defined by Section 151.318, Tax Code, the construction of which
begins on or after September 1, 2009;
(3) is forecasted to create at least 300 full-time
equivalent employment positions; and
(4) the owner of which is considering at least one
alternative site for the facility that is not located in this state
or is competing against similar projects located outside this state
for federal funds or financial support, including loan guarantees,
that would benefit the project.
Sec. 399.002. DATE OF QUALIFICATION. A proposed facility
becomes a qualified manufacturing project on the date the owner of
the facility files an election to become a qualified manufacturing
project with the comptroller.
Sec. 399.003. ECONOMIC IMPACT STUDY. (a) The owner of a
qualified manufacturing project must conduct an economic impact
study of the county in which the qualified manufacturing project is
located and submit the study to the comptroller for certification
within 120 days of the date the owner files an election under
section 399.002.
(b) The economic impact study must provide an estimate of:
(1) the general economic impact likely to occur in the
county as a result of the qualified manufacturing project;
(2) the anticipated amount of increase in the tax
receipts to this state from the taxes imposed under Chapter 151, Tax
Code, that:
(A) will occur in the county during the 10 year
period that the qualified manufacturing project zone is designated;
and
(B) is directly attributable to the economic
impact from the design, construction, and/or operation of the
qualified manufacturing project;
(3) the projected number of full-time equivalent
employment positions likely to be available at the qualified
manufacturing project; and
(4) the investment projected to be made at the
qualified manufacturing project.
Sec. 399.004. COMPTROLLER CERTIFICATION OF ECONOMIC IMPACT
STUDY. (a) Not later than the 30th day after receiving the
economic impact study from an owner of a qualified manufacturing
project, the comptroller shall certify the study if the comptroller
determines that the study accurately estimates the information
required by Section 399.003(b)(2-4).
(b) If the comptroller determines that the economic impact
study submitted by the owner of the qualified manufacturing project
does not accurately estimate the information required by Section
399.003(b)(2-4), the comptroller not later than the 30th day after
receiving the study shall:
(1) submit a preliminary determination to the owner of
the qualified manufacturing project; and
(2) provide the owner of the qualified manufacturing
project with an opportunity to respond or submit a new or amended
economic impact study to the comptroller.
(c) The comptroller shall certify the economic impact study
submitted by an owner if the study is conducted by an independent
third party engaged by the owner, utilizing generally accepted
economic impact forecasting methods.
Sec. 399.005. QUALIFIED MANUFACTURING PROJECT ZONE. (a)
The owner of a qualified manufacturing project for which the
comptroller has certified an economic impact study may apply to the
comptroller for designation of the county in which the project is
located as a qualified manufacturing project zone. The comptroller
shall approve the application upon a determination that the
qualified manufacturing project is the first facility in the county
to apply for the designation. The designation takes effect on
September 1 preceding the date of approval of a request for
designation as a qualified manufacturing project zone.
(b) Only one qualified manufacturing project that is in a
qualified manufacturing project zone may qualify for benefits under
this chapter at any one time.
(c) If more than one qualified manufacturing project
applies for zone designation from a single county within a calendar
month the comptroller shall approve the qualified request or
requests with the most investment in the proposed new or expanded
facility, as determined by the economic impact study certified
under Section 399.004.
(d) A qualified manufacturing project zone designation
remains in effect until the expiration of any tax limitations,
credits, abatements, or other benefits under an agreement entered
into under Chapter 312 or 313, Tax Code, for the qualified
manufacturing project.
Sec. 399.006. ANNUAL CERTIFICATION. (a) To receive
benefits under this chapter, the owner of a qualified manufacturing
project must make one of the following annual certifications to the
comptroller, as of the last day of the state fiscal year for each
year the zone is designated:
(1) If the qualified manufacturing project zone has
been designated for three years or less and the qualified
manufacturing project has not begun commercial operation, the owner
must certify the forecast of at least 300 full-time equivalent
employment positions for the year that the facility will commence
commercial operation;
(2) If the qualified manufacturing project zone has
been designated for more than three years and the qualified
manufacturing project has not begun commercial operation, the owner
must certify
(i) the creation of at least 300 full-time
equivalent employment positions; or
(ii) the expenditure of $1 billion on the
new or expanded facility, the year that the facility will commence
commercial operation, and the forecast of at least 300 full-time
equivalent employment positions that shall be created no more than
eight years after the zone has been designated; or
(3) If the qualified manufacturing project has begun
commercial operation, the owner must certify the creation of at
least 300 full-time equivalent employment positions at the
facility.
(b) If the owner fails to make one of the certifications
under Section 399.006(a), then the owner shall forfeit all future
benefits received under this chapter and shall pay to the
applicable governmental body within 60 calendar days the entire
amount of all refunds previously received under this chapter.
(c) For purposes of this section, "commercial operation"
means to have begun to operate for the intended purpose of the
facility.
Sec. 399.007. STATE BENEFITS. The owner of a qualified
manufacturing project in a qualified manufacturing project zone is
eligible for a refund of state sales and use taxes as provided by
Section 151.429(h-1), Tax Code.
Sec. 399.008. LOCAL GOVERNMENT BENEFITS. (a) In this
section, "eligible taxable proceeds" means an amount, as determined
by a finding of the applicable governmental body, of taxable
proceeds generated, paid, or collected by a qualified manufacturing
project zone that are a direct or indirect result of the design,
construction, or operation of the qualified manufacturing project,
including hotel occupancy taxes, ad valorem taxes, sales and use
taxes, and mixed beverage taxes.
(b) For a period beginning on the date that a county in which
a qualified manufacturing project is located is designated as a
qualified manufacturing project zone under Section 399.005 and
ending on a date not later than the 10th anniversary of that date, a
governmental body, including a municipality, county, or political
subdivision, may agree to rebate, refund, or pay eligible taxable
proceeds to the owner of a qualified manufacturing project.
(c) A governmental body that makes an agreement under this
section shall make the rebate, refund, or payment directly to the
owner.
SECTION 3. Section 151.429(e), Tax Code, is amended by
adding Subdivisions (6), (7), (8), and (9) to read as follows:
(6) "Qualified manufacturing project" has the meaning
assigned that term by Section 399.001, Local Government Code.
(7) "Sales tax base" means the amount of the sales and
use taxes collected under this chapter on purchases of all taxable
items purchased within the boundaries of a qualified manufacturing
project zone for the state fiscal year ending before the date the
zone is designated.
(8) "Additional sales and use tax" means the total
amount of sales and use taxes collected under this chapter on
purchases of all taxable items purchased within a qualified
manufacturing project zone for each state fiscal year for the
duration of the qualified manufacturing project zone designation
less the sales tax base, not otherwise due as a rebate or refund
under any other applicable law.
(9) "Manufacturing workforce development" means any
expenditures incurred in the state by the owner, or a contractor or
subcontractor of the owner, of a qualified manufacturing project
for recruiting or training present, prospective, or potential
employees for jobs in this state presently available or expected to
be available for the planning, designing, construction,
fabrication, or operation of a qualified manufacturing project, and
the salaries, wages, and benefits of those employees through the
first two years of commercial operation of the qualified
manufacturing project.
SECTION 4. Section 151.429, Tax Code, is amended by adding
Subsection (h-1) to read as follows:
(h-1) (1) Notwithstanding any other provision of this
section, the owner of a qualified manufacturing project in a
qualified manufacturing project zone is entitled to receive a
payment of a refund of 50 percent of the additional sales and use
tax for the preceding state fiscal year provided the owner has made
the applicable certification to the comptroller required under
Section 399.006, Local Government Code. The comptroller shall pay
the refund within sixty days of the later of the receipt of the
employment certification or the end of the state fiscal year for the
duration of a qualified manufacturing project zone designation, but
not to exceed 10 years. The total amount of refunds that a
qualified manufacturing project may receive over the course of the
designation of the county in which it is located as a qualified
manufacturing project zone may not exceed an amount equal to the
lesser of $50 million or five percent of the qualified
manufacturing project's investments in the facility under Chapter
399, Local Government Code. A refund received under this section
shall be used to pay for or to refund eligible expenses incurred
before or after designation of the county in which the project is
located as a qualified manufacturing project zone for manufacturing
workforce development for the project.
(2) If the owner of a qualified manufacturing project
fails to make the applicable certification required by Section
399.006, Local Government Code, then the owner shall forfeit all
future benefits received under this section and shall pay to the
comptroller within 60 calendar days the entire amount of all
refunds previously received under this section.
SECTION 5. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2009.