By: J. Davis of Harris, Reynolds H.B. No. 2457
(Senate Sponsor - Jackson)
(In the Senate - Received from the House April 26, 2011;
April 29, 2011, read first time and referred to Committee on
Economic Development; May 11, 2011, reported adversely, with
favorable Committee Substitute by the following vote: Yeas 6,
Nays 0; May 11, 2011, sent to printer.)
COMMITTEE SUBSTITUTE FOR H.B. No. 2457 By: Jackson
A BILL TO BE ENTITLED
AN ACT
relating to the Texas Enterprise Fund and the Texas emerging
technology fund.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 481.078, Government Code, is amended by
amending Subsection (e) and adding Subsections (f-1) and (h-1) to
read as follows:
(e) The administration of the fund is considered to be a
trusteed program within the office of the governor. The governor
may negotiate on behalf of the state regarding awarding, by grant,
money appropriated from the fund. The governor may award money
appropriated from the fund only with the [express written] prior
approval of the lieutenant governor and speaker of the house of
representatives. For purposes of this subsection, an award of
money appropriated from the fund is considered disapproved by the
lieutenant governor or speaker of the house of representatives if
that officer does not approve the proposal to award the grant before
the 91st day after the date of receipt of the proposal from the
governor. The lieutenant governor or the speaker of the house of
representatives may extend the review deadline applicable to that
officer for an additional 14 days by submitting a written notice to
that effect to the governor before the expiration of the initial
review period.
(f-1) A grant agreement must contain a provision:
(1) requiring the creation of a minimum number of jobs
in this state; and
(2) specifying the date by which the recipient intends
to create those jobs.
(h-1) At least 14 days before the date the governor intends
to amend a grant agreement, the governor shall notify and provide a
copy of the proposed amendment to the speaker of the house of
representatives, the lieutenant governor, and the presiding
officers of the standing committees of both houses of the
legislature with primary jurisdiction over economic development.
SECTION 2. Section 490.001(4), Government Code, is amended
to read as follows:
(4) "Award" means:
(A) for purposes of Subchapter D, an investment
in the form of equity or a convertible note;
(B) for purposes of Subchapter E, an investment
in the form of a debt instrument;
(C) for purposes of Subchapter F or J, a grant; or
(D) other forms of contribution or investment as
recommended by the committee and approved by the governor,
lieutenant governor, and speaker of the house of representatives.
SECTION 3. Sections 490.005(a) and (b), Government Code,
are amended to read as follows:
(a) Not later than January 1 of each year, the governor
shall submit to the lieutenant governor, the speaker of the house of
representatives, and the standing committee of each house of the
legislature with primary jurisdiction over economic development
matters and post on the office of the governor's Internet website a
report that includes the following information regarding awards
made under the fund during each [for the] preceding [three] state
fiscal year [years]:
(1) the total number and amount of awards made;
(2) the number and amount of awards made under
Subchapters D, E, [and] F, and J;
(3) the aggregate total of private sector investment,
federal government funding, and contributions from other sources
obtained in connection with awards made under each of the
subchapters listed in Subdivision (2);
(4) the name of each award recipient and the amount of
the award made to the recipient; and
(5) a brief description of the equity position that
the governor, on behalf of the state, may take in companies
receiving awards and the names of the companies in which the state
has taken an equity position.
(b) The annual report must also contain:
(1) the total number of jobs actually created by each
project receiving funding under this chapter;
(2) an analysis of the number of jobs actually created
by each project receiving funding under this chapter; and
(3) a brief description regarding:
(A) the methodology used to determine the
information provided under Subdivisions (1) and (2), which may be
developed in consultation with the comptroller's and state
auditor's offices;
(B) [(1)] the intended outcomes of projects
funded under Subchapter D during the preceding two state fiscal
years; and
(C) [(2)] the actual outcomes of all projects
funded under Subchapter D during the fund's existence, including
any financial impact on the state resulting from a liquidity event
involving a company whose project was funded under that subchapter.
SECTION 4. Subchapter A, Chapter 490, Government Code, is
amended by adding Section 490.006 to read as follows:
Sec. 490.006. VALUATION OF INVESTMENTS; INCLUSION IN ANNUAL
REPORT. The office of the governor shall annually perform a
valuation of the equity positions taken by the governor, on behalf
of the state, in companies receiving awards under the fund and of
other investments made by the governor, on behalf of the state, in
connection with an award under the fund. The valuation must:
(1) be based on a methodology that:
(A) may be developed in consultation with the
comptroller's and state auditor's offices; and
(B) is consistent with generally accepted
accounting principles; and
(2) be included with the annual report required under
Section 490.005.
SECTION 5. The heading to Section 490.052, Government Code,
is amended to read as follows:
Sec. 490.052. APPOINTMENT TO COMMITTEE [BY GOVERNOR];
NOMINATIONS.
SECTION 6. Section 490.052, Government Code, is amended by
amending Subsection (a) and adding Subsections (a-1) and (a-2) to
read as follows:
(a) The governor shall appoint to the committee 13
individuals nominated as provided by Subsection (b).
(a-1) The lieutenant governor shall appoint two senators to
the committee.
(a-2) The speaker of the house of representatives shall
appoint two members of the house of representatives to the
committee.
SECTION 7. Subchapter B, Chapter 490, Government Code, is
amended by adding Section 490.0521 to read as follows:
Sec. 490.0521. FINANCIAL STATEMENT REQUIRED. Each member
of the committee shall file with the office of the governor a
verified financial statement complying with Sections 572.022
through 572.0252 as is required of a state officer by Section
572.021.
SECTION 8. Section 490.054, Government Code, is amended to
read as follows:
Sec. 490.054. TERMS. (a) Members of the committee
appointed by the governor serve staggered two-year terms, subject
to the pleasure of the governor.
(b) Members of the committee appointed by the lieutenant
governor or the speaker of the house of representatives serve
two-year terms.
SECTION 9. Section 490.056, Government Code, is amended by
adding Subsections (c), (d), and (e) to read as follows:
(c) Each entity recommended by the committee for an award of
money from the fund as provided by this chapter shall obtain and
provide the following information to the office of the governor:
(1) a federal criminal history background check for
each principal of the entity;
(2) a state criminal history background check for each
principal of the entity;
(3) a credit check for each principal of the entity;
(4) a copy of a government-issued form of photo
identification for each principal of the entity; and
(5) information regarding whether the entity or a
principal of the entity has ever been subject to a sanction imposed
by the Securities and Exchange Commission for a violation of
applicable federal law.
(d) For purposes of Subsection (c), "principal" means:
(1) an officer of an entity; or
(2) a person who has at least a 10 percent ownership
interest in an entity.
(e) With each proposal to award funding submitted by the
governor to the lieutenant governor and speaker of the house of
representatives for purposes of obtaining prior approval, the
governor shall provide each officer with a copy of the information
provided by the appropriate entity under Subsection (c).
SECTION 10. Section 490.057, Government Code, is amended to
read as follows:
Sec. 490.057. CONFIDENTIALITY. (a) Except as provided by
Subsection (b), information [Information] collected by the
governor's office, the committee, or the committee's advisory
panels concerning the identity, background, finance, marketing
plans, trade secrets, or other commercially or academically
sensitive information of an individual or entity being considered
for, receiving, or having received an award from the fund is
confidential unless the individual or entity consents to disclosure
of the information.
(b) The following information collected by the governor's
office, the committee, or the committee's advisory panels under
this chapter is public information and may be disclosed under
Chapter 552:
(1) the name and address of an individual or entity
being considered for, receiving, or having received an award from
the fund;
(2) the amount of funding:
(A) applied for by an individual or entity being
considered for an award; or
(B) received by an award recipient;
(3) a brief description of the project that is the
subject of an application for funding or that is funded under this
chapter;
(4) if applicable, a brief description of the equity
position that the governor, on behalf of the state, has taken in an
entity that has received an award from the fund; and
(5) any other information designated by the committee
with the consent of:
(A) the individual or entity being considered
for, receiving, or having received an award from the fund, as
applicable;
(B) the governor;
(C) the lieutenant governor; and
(D) the speaker of the house of representatives.
SECTION 11. Section 490.101, Government Code, is amended by
amending Subsection (f) and adding Subsection (f-1) to read as
follows:
(f) The administration of the fund is considered to be a
trusteed program within the office of the governor. The governor
may negotiate on behalf of the state regarding awards from the
fund. The governor may award money appropriated from the fund only
with the [express written] prior approval of the lieutenant
governor and speaker of the house of representatives.
(f-1) For purposes of Subsection (f), an award of money
appropriated from the fund is considered disapproved by the
lieutenant governor or speaker of the house of representatives if
that officer does not approve the proposal to award funding before
the 91st day after the date of receipt of the proposal from the
governor. The lieutenant governor or the speaker of the house of
representatives may extend the review deadline applicable to that
officer for an additional 14 days by submitting a written notice to
that effect to the governor before the expiration of the initial
review period.
SECTION 12. Section 490.102, Government Code, is amended by
amending Subsection (a) and adding Subsection (c) to read as
follows:
(a) Subject to Subsection (c), money [Money] appropriated
to the fund by the legislature, less amounts necessary to
administer the fund under Section 490.055, shall be allocated as
follows:
(1) 50 percent of the money for incentives for
collaboration between certain entities as provided by Subchapter D;
(2) 16.67 percent of the money for research award
matching as provided by Subchapter E; and
(3) 33.33 percent of the money for acquisition of
research superiority as provided by Subchapter F.
(c) Each state fiscal biennium, $2 million deposited to the
fund must be allocated for making awards under this chapter to
companies that generate $250,000 or less in annual gross revenue.
SECTION 13. Subchapter D, Chapter 490, Government Code, is
amended by adding Section 490.1521 to read as follows:
Sec. 490.1521. MINUTES OF CERTAIN MEETINGS. (a) Each
regional center of innovation and commercialization established
under Section 490.152, including the Texas Life Science Center for
Innovation and Commercialization, shall keep minutes of each
meeting at which applications for funding under this subchapter are
evaluated. The minutes must:
(1) include the name of each applicant recommended by
the regional center of innovation and commercialization to the
committee for funding; and
(2) indicate the vote of each member of the governing
body of the regional center of innovation and commercialization,
including any recusal by a member and the member's reason for
recusal, with regard to each application reviewed.
(b) Each regional center of innovation and
commercialization shall retain a copy of the minutes of each
meeting to which this section applies for at least three years.
SECTION 14. Chapter 490, Government Code, is amended by
adding Subchapter J to read as follows:
SUBCHAPTER J. STRATEGIC RESEARCH INITIATIVE PROGRAMS
Sec. 490.451. USE OF MONEY FOR STRATEGIC RESEARCH
INITIATIVE PROGRAMS. (a) Notwithstanding Section 490.102, the
governor may allocate money appropriated to the fund by the
legislature to provide grants to public or private institutions of
higher education in this state for the creation of strategic
research initiative programs as provided by this subchapter.
(b) The committee shall recommend proposals eligible for
funding under this section to the governor, lieutenant governor,
and speaker of the house of representatives.
(c) The amount allocated for funding proposals under this
subchapter may not exceed $2 million in any state fiscal biennium.
Sec. 490.452. PURPOSE. In recommending proposals for
funding, the committee shall give specific emphasis to programs
designed to provide financial assistance to enable professors,
researchers, and other employees of public or private institutions
of higher education to obtain an increased amount of federal grant
money for research in this state.
Sec. 490.453. PRIORITY FOR FUNDING. In funding proposals
under this subchapter, priority shall be given to proposals that
strengthen this state's competitiveness in obtaining federal grant
money for research by:
(1) creating programs designed for and intended to
achieve this purpose;
(2) funding travel for professors, researchers, and
other employees of public or private institutions of higher
education in this state; and
(3) allowing public or private institutions of higher
education in this state to engage in innovative efforts to achieve
this purpose.
Sec. 490.454. GUARANTEE OF ACTION BY PARTICIPATING ENTITY.
(a) An institution of higher education participating in a
strategic research initiative program that receives funding under
this subchapter shall guarantee by contract with the governor's
office that the institution will perform specific actions expected
to provide benefits to this state.
(b) If an institution of higher education fails to perform
an action guaranteed by contract under Subsection (a) before a time
specified by the contract, the institution shall return to the fund
the grant money received by the institution under this subchapter.
Sec. 490.455. AUTHORIZED EXPENSES. Money awarded from the
fund under this subchapter may be used for authorized expenses,
including salaries and benefits, travel, consumable supplies,
other operating expenses, capital equipment, construction or
renovation of state or private facilities, and workforce training.
SECTION 15. Section 203.021, Labor Code, is amended by
adding Subsection (e) to read as follows:
(e) Money in the compensation fund may not be transferred to
the:
(1) Texas Enterprise Fund created under Section
481.078, Government Code; or
(2) Texas emerging technology fund established under
Section 490.101, Government Code.
SECTION 16. Section 204.123, Labor Code, is amended to read
as follows:
Sec. 204.123. TRANSFER TO [TEXAS ENTERPRISE FUND,] SKILLS
DEVELOPMENT FUND, TRAINING STABILIZATION FUND, AND COMPENSATION
FUND. (a) If, on September 1 of a year, the commission determines
that the amount in the compensation fund will exceed 100 percent of
its floor as computed under Section 204.061 on the next October 1
computation date, the commission shall transfer from the holding
fund created under Section 204.122:
(1) [from the first $160 million deposited in the
holding fund in any state fiscal biennium:
[(A) during the state fiscal biennium ending
August 31, 2007:
[(i) 67 percent to the Texas Enterprise
Fund created under Section 481.078, Government Code, except that
the amount transferred under this paragraph may not exceed the
amount appropriated by the legislature to the Texas Enterprise Fund
in that biennium; and
[(ii) 33 percent to the skills development
fund created under Section 303.003, except that the amount
transferred under this paragraph may not exceed the amount
appropriated by the legislature to the skills development program
strategies and activities in that biennium; and
[(B)] during any state fiscal biennium beginning
on or after September 1, 2007, 100 [:
[(i) 75 percent to the Texas Enterprise
Fund created under Section 481.078, Government Code, except that
the amount transferred under this paragraph may not exceed the
amount appropriated by the legislature to the Texas Enterprise Fund
in that biennium; and
[(ii) 25] percent to the skills development
fund created under Section 303.003, except that the amount
transferred under this subdivision [paragraph] may not exceed the
amount appropriated by the legislature to the skills development
program strategies and activities in that biennium; and
(2) any remaining amount in the holding fund after the
distribution under Subdivision (1) to the training stabilization
fund created under Section 302.101.
(b) If, on September 1 of a year, the commission determines
that the amount in the compensation fund will be at or below 100
percent of its floor as computed under Section 204.061 on the next
October 1 computation date, the commission shall transfer to the
compensation fund as much of the amount in the holding fund as is
necessary to raise the amount in the compensation fund to 100
percent of its floor, up to and including the entire amount in the
holding fund. The commission shall transfer any remaining balance
in the holding fund to the [Texas Enterprise Fund, the] skills
development fund[,] and the training stabilization fund in the
manner [in the percentages] prescribed by Subsection (a).
SECTION 17. Sections 302.101(b) and (c), Labor Code, are
amended to read as follows:
(b) Money in the training stabilization fund may be used in
a year in which the amounts in the employment and training
investment holding fund are insufficient to meet the legislative
appropriation for that fiscal year for [either the Texas Enterprise
Fund or] the skills development program strategies and activities.
(c) Money in the training stabilization fund shall be
transferred to the [Texas Enterprise Fund and the] skills
development fund under Subsection (b) not later than September
30. [The transfer under Subsection (b) shall consist of
transferring 67 percent of the money in the training stabilization
fund to the Texas Enterprise Fund and 33 percent of the money in the
training stabilization fund to the skills development fund.] The
amount transferred from the training stabilization fund may not
exceed the amounts appropriated to the [Texas Enterprise Fund and]
skills development program strategies and activities in the fiscal
year in which the transfer is made.
SECTION 18. Sections 481.078(e) and 490.101(f), Government
Code, as amended by this Act, and Section 490.101(f-1), Government
Code, as added by this Act, apply only to a proposal for an award
from the Texas Enterprise Fund or Texas emerging technology fund
submitted by the governor to the lieutenant governor or speaker of
the house of representatives for prior approval on or after the
effective date of this Act. A proposal submitted by the governor
for prior approval before the effective date of this Act is governed
by the law in effect on the date the proposal was submitted for that
approval, and the former law is continued in effect for that
purpose.
SECTION 19. Section 481.078(f-1), Government Code, as added
by this Act, applies only to a grant agreement that is entered into
on or after the effective date of this Act. A grant agreement that
is entered into before the effective date of this Act is governed by
the law in effect on the date the agreement was entered into, and
the former law is continued in effect for that purpose.
SECTION 20. (a) The terms of the members of the Texas
Emerging Technology Advisory Committee serving immediately before
the effective date of this Act expire September 1, 2011.
(b) As soon as practicable after this Act takes effect, the
governor, lieutenant governor, and speaker of the house of
representatives shall appoint members to the Texas Emerging
Technology Advisory Committee established under Subchapter B,
Chapter 490, Government Code, in a manner that complies with that
subchapter, as amended by this Act.
(c) At the first meeting of members of the Texas Emerging
Technology Advisory Committee established under Subchapter B,
Chapter 490, Government Code, as amended by this Act, occurring on
or after September 1, 2011, the members appointed by the governor
shall draw lots to determine which six members will serve a term
expiring September 1, 2012, and which seven members will serve a
term expiring September 1, 2013.
SECTION 21. Section 490.102, Government Code, as amended by
this Act, applies only to an award from the Texas emerging
technology fund that is made on or after the effective date of this
Act. An award from the Texas emerging technology fund made before
the effective date of this Act is governed by the law in effect on
the date the award was made, and the former law is continued in
effect for that purpose.
SECTION 22. This Act takes effect September 1, 2011.
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