By: Parker, Button, Legler, Guillen, et al. 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, as defined in this Act, and the
enhancement of manufacturing workforce development serve the
public purposes of development and diversification of the
employment of this state, elimination of unemployment or
underemployment in this state, and 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:
(A) considering at least one alternative site for
the facility that is not located in this state; or
(B) 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
not later than the 120th day after the date the owner files an
election for that designation 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 period
that the qualified manufacturing project zone is designated; and
(B) is directly attributable to the economic
impact from the design, construction, 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:
(1) the study accurately estimates the information
required by Sections 399.003(b)(2)-(4); or
(2) the study:
(A) was conducted by an independent third party;
(B) was conducted using generally accepted
economic impact forecasting methods; and
(C) contains the information required by Section
399.003(b).
(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 Sections
399.003(b)(2)-(4) or that the study does not meet the requirements
of Subsection (a)(2), as applicable, the comptroller, not later
than the 30th day after the date of 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.
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 in accordance
with Section 399.004 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 on 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 an application for designation of the county
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 application 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 state
benefits under this chapter, the owner of a qualified manufacturing
project in a qualified manufacturing project zone must make the
following applicable annual certification to the comptroller, as of
the last day of the state fiscal year for each year of the zone's
designation:
(1) if the qualified manufacturing project zone
designation has been in effect for three years or less and the
qualified manufacturing project has not commenced commercial
operation, the owner must certify the forecast of at least 300
full-time equivalent employment positions for the year that the
facility will begin commercial operation;
(2) if the qualified manufacturing project zone
designation has been in effect for more than three years and the
qualified manufacturing project has not started commercial
operation, the owner must certify:
(A) the creation of at least 300 full-time
equivalent employment positions; or
(B) all of the following:
(i) the expenditure of at least $1 billion
on the new or expanded facility has occurred;
(ii) the year in which the facility will
begin commercial operation; and
(iii) the forecast of at least 300
full-time equivalent employment positions that will be created not
later than the eighth anniversary of the date of the zone's
designation; or
(3) if the qualified manufacturing project has started
commercial operation, the owner must certify the creation of at
least 300 full-time equivalent employment positions at the
facility.
(b) If the owner of a qualified manufacturing project fails
to make the applicable certification required under Subsection (a),
the owner forfeits the right to receive future benefits 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,"
with respect to a facility, means that the facility has begun to
operate for the facility's intended purpose.
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 151.4292, Tax Code.
Sec. 399.008. COMPTROLLER DUTIES. The comptroller shall
adopt rules and forms necessary to perform the comptroller's duties
under this chapter.
SECTION 3. Subchapter I, Chapter 151, Tax Code, is amended
by adding Section 151.4292 to read as follows:
Sec. 151.4292. TAX REFUNDS FOR QUALIFIED MANUFACTURING
PROJECTS. (a) In this section:
(1) "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.
(2) "Manufacturing workforce development" means,
solely for purposes of this section, 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 not employed
in a "bona fide executive, administrative, or professional
capacity," as that phrase is used for purposes of establishing an
exemption to the overtime provisions of the federal Fair Labor
Standards Act of 1938 (29 U.S.C. Section 201 et seq.), excluding
operating staff, maintenance staff, and engineering staff, 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.
(3) "Qualified manufacturing project" has the meaning
assigned that term by Section 399.001, Local Government Code.
(4) "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.
(b) 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 employment certification to the comptroller
required under Section 399.006, Local Government Code. For the
duration of a qualified manufacturing project zone designation, but
not to exceed 10 years, the comptroller shall pay the refund not
later than the 60th day after the later of the date of receipt of the
employment certification or the last day of the state fiscal year.
(c) 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.
(d) 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.
(e) If the owner of a qualified manufacturing project fails
to make the applicable certification required by Section 399.006,
Local Government Code, the owner forfeits the right to receive all
future benefits under this section and shall pay to the
comptroller, not later than the 60th calendar day after the date the
certification is due, the entire amount of all refunds previously
received under this section.
SECTION 4. 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.