By: Parker, et al. (Senate Sponsor - Ellis) H.B. No. 4525
(In the Senate - Received from the House May 8, 2009;
May 8, 2009, read first time and referred to Committee on Economic
Development; May 26, 2009, reported adversely, with favorable
Committee Substitute by the following vote: Yeas 4, Nays 1;
May 26, 2009, sent to printer.)
COMMITTEE SUBSTITUTE FOR H.B. No. 4525 By: Eltife
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. DEFINITIONS. In this chapter:
(1) "Qualified manufacturing project":
(A) means a proposed new or expanded facility
that, on the date of qualification under Section 399.002:
(i) is not subject to either an agreement
with a county or other taxing unit under Chapter 312, Tax Code, or
with a school district under Chapter 313, Tax Code, entered into on
or before the effective date of this Act; and
(ii) is subject to an agreement entered
into after the effective date of this Act, but before September 1,
2013, with a county 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:
(a) is at least $200 million; or
(b) is at least $100 million if the
facility is related to:
(1) renewable energy generation,
including solar, wind, biomass, geothermal, tidal, or small
hydroelectric generation;
(2) advanced battery technology
or other advanced energy storage technology; or
(3) waste recycling;
(iii) 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;
(iv) is forecasted to create at least 300
full-time equivalent employment positions; and
(v) 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;
and
(B) does not include a proposed new or expanded
facility that produces a stream of carbon dioxide if the facility
involves the generation of electricity or the creation of liquid
fuels outside of the existing fuel production infrastructure while
co-generating electricity, other than a facility that generates
electricity from biomass or biofuels, unless the facility captures
and sequesters, by geologic storage or other means, not less than 60
percent of the carbon dioxide from the facility's emissions stream.
(2) "Waste recycling" means the process of extracting
resources or value from waste by recovering or reusing the
materials, including the collection and reuse of everyday waste
materials.
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 to estimate the information
required by Section 399.003(b); 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 meet the requirements of Subsection (a)(1) or (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. Subject to Subsections (b) and (c),
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 after the date of approval of an application
for designation of the county as a qualified manufacturing project
zone for the project.
(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 for
a qualified manufacturing project 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 submit the
report required by Subsection (b) and 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) At the time the applicable certification required under
Subsection (a) is submitted, the owner of a qualified manufacturing
project shall also submit an annual report to the comptroller that
contains a summary of wages, salaries, and health care benefits
associated with the jobs created by the qualified manufacturing
project.
(c) If the owner of a qualified manufacturing project fails
to make the applicable certification required under Subsection (a)
and submit the report required by Subsection (b), the owner
forfeits the right to receive future state benefits under this
chapter 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 as provided by this
chapter.
(d) 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. Subject to Section 399.006,
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 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. The
term:
(A) does not include any expenditures incurred
for recruiting or training, or the salaries, wages, and benefits of
persons 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.);
and
(B) notwithstanding Paragraph (A), includes any
expenditures incurred for recruiting or training, or the salaries,
wages, and benefits of operating staff, maintenance staff, and
engineering staff.
(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, and submits
the report required under that section. A refund may not be made
under this subsection for any sales and use taxes paid before the
date an application for designation of a qualified manufacturing
project zone is approved for the project. For the duration of a
qualified manufacturing project zone designation for a qualified
manufacturing project, 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) Subject to Subsection (f), 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 and submit the report 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.
(f) At least 10 percent of the amount received as a refund
under this section in each state fiscal year must be expended for
job skills training programs that serve persons who are unemployed
or whose incomes are at or below 200 percent of the federal poverty
level.
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.
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