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Texas House Bill HB433

Texas 2011 - 82nd Regular

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11 82R19522 CLG-F
22 By: Parker, Creighton, Taylor of Collin, H.B. No. 433
33 Legler, Button, et al.
44 Substitute the following for H.B. No. 433:
55 By: Murphy C.S.H.B. No. 433
66
77
88 A BILL TO BE ENTITLED
99 AN ACT
1010 relating to qualified manufacturing project zones.
1111 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1212 SECTION 1. The legislature finds that a qualified
1313 manufacturing project, as defined by Section 399.001, Local
1414 Government Code, as added by this Act, and the enhancement of
1515 manufacturing workforce development serve the public purposes of:
1616 (1) developing and diversifying employment in this
1717 state;
1818 (2) eliminating unemployment or underemployment in
1919 this state; and
2020 (3) developing and expanding commerce in this state.
2121 SECTION 2. Subtitle C, Title 12, Local Government Code, is
2222 amended by adding Chapter 399 to read as follows:
2323 CHAPTER 399. QUALIFIED MANUFACTURING PROJECT ZONES
2424 Sec. 399.001. DEFINITIONS. In this chapter:
2525 (1) "Eligible manufacturing facility" means a
2626 proposed new or expanded facility that, on the date of the
2727 facility's designation as a qualified manufacturing project under
2828 Section 399.002:
2929 (A) is subject to an agreement entered into on or
3030 after January 1, 2012, but before January 1, 2017, with a county,
3131 municipality, or other taxing unit under Chapter 312, Tax Code, or
3232 with a school district under Chapter 313, Tax Code, under which the
3333 investment in the facility is at least $100 million;
3434 (B) will be engaged in manufacturing, as that
3535 term is defined by Section 151.318, Tax Code, the construction of
3636 which begins on or after September 1, 2011;
3737 (C) is forecasted to create at least 200 new
3838 full-time jobs; and
3939 (D) is owned by a person or entity that is:
4040 (i) considering at least one alternative
4141 site for the facility that is not located in this state; or
4242 (ii) competing against similar projects
4343 located outside this state for federal funds or financial support,
4444 including loan guarantees, that would benefit the project.
4545 (2) "New full-time job" means a newly created
4646 permanent full-time job that:
4747 (A) requires at least 1,600 hours of work a year;
4848 (B) is not transferred from one area in this
4949 state to another area in this state; and
5050 (C) is not created to replace a previous
5151 employee.
5252 (3) "Qualified manufacturing project" means an
5353 eligible manufacturing facility the owner of which has filed an
5454 election under Section 399.002 to establish the facility's status
5555 as a qualified manufacturing project.
5656 Sec. 399.002. DESIGNATION OF ELIGIBLE MANUFACTURING
5757 FACILITY AS QUALIFIED MANUFACTURING PROJECT; DATE OF
5858 QUALIFICATION. An eligible manufacturing facility becomes a
5959 qualified manufacturing project on the date the owner of the
6060 facility files an election for automatic designation of the
6161 facility as a qualified manufacturing project, without further
6262 qualification, with the comptroller.
6363 Sec. 399.003. ECONOMIC IMPACT STUDY. (a) Before applying
6464 for designation of the applicable county as a qualified
6565 manufacturing project zone under Section 399.005, the owner of a
6666 qualified manufacturing project must conduct an economic impact
6767 study of the county in which the project is located and submit the
6868 study to the comptroller for certification not later than the 120th
6969 day after the date the owner files an election to establish the
7070 facility's status as a qualified manufacturing project under
7171 Section 399.002.
7272 (b) The economic impact study must provide an estimate of:
7373 (1) the general economic impact likely to occur in the
7474 county as a result of the qualified manufacturing project;
7575 (2) the anticipated amount of increase in the tax
7676 receipts to this state from the taxes imposed under Chapter 151, Tax
7777 Code, that:
7878 (A) will occur in the county during the period
7979 the county is designated as a qualified manufacturing project zone;
8080 and
8181 (B) is directly attributable to the economic
8282 impact from the design, construction, or operation of the qualified
8383 manufacturing project;
8484 (3) the projected number of new full-time jobs likely
8585 to be available at the qualified manufacturing project; and
8686 (4) the investment projected to be made at the
8787 qualified manufacturing project.
8888 Sec. 399.004. COMPTROLLER CERTIFICATION OF ECONOMIC IMPACT
8989 STUDY. (a) Not later than the 30th day after receiving the
9090 economic impact study from an owner of a qualified manufacturing
9191 project, the comptroller shall certify the study if the comptroller
9292 determines that the study accurately estimates the information
9393 required by Sections 399.003(b)(2)-(4).
9494 (b) If the comptroller determines that the economic impact
9595 study does not accurately estimate the information required by
9696 Sections 399.003(b)(2)-(4), the comptroller, not later than the
9797 30th day after the date of receipt of the study, shall:
9898 (1) notify the owner of the qualified manufacturing
9999 project in writing of the comptroller's preliminary determination
100100 and the basis for that determination; and
101101 (2) provide the owner of the qualified manufacturing
102102 project with an opportunity to respond or submit a new or amended
103103 economic impact study to the comptroller.
104104 (c) In evaluating a new or amended economic impact study
105105 submitted by the owner of a qualified manufacturing project
106106 following the comptroller's rejection of the owner's initial study,
107107 the comptroller shall determine whether to accept or certify the
108108 new or amended study not later than the 30th day after the date of
109109 receipt of the new or amended study.
110110 (d) If, not later than the 90th day after receiving notice
111111 of the comptroller's rejection of the owner's initial economic
112112 impact study, the owner of a qualified manufacturing project either
113113 fails to receive the comptroller's certification of a new or
114114 amended economic impact study the owner submitted within that
115115 period or fails to submit a new or amended study to the comptroller,
116116 the qualified manufacturing project loses its status as a qualified
117117 manufacturing project at the end of the 90-day period.
118118 Sec. 399.005. DESIGNATION OF QUALIFIED MANUFACTURING
119119 PROJECT ZONE; APPLICATION. (a) The owner of a qualified
120120 manufacturing project for which the comptroller has certified an
121121 economic impact study in accordance with Section 399.004 may apply
122122 to the comptroller for designation of the county in which the
123123 project is located as a qualified manufacturing project zone. The
124124 comptroller shall approve the application on a determination that
125125 the qualified manufacturing project is the first facility in the
126126 county to apply for the designation. The designation takes effect
127127 on September 1 preceding the date of approval of an application for
128128 designation of the county as a qualified manufacturing project
129129 zone.
130130 (b) Only one qualified manufacturing project that is in a
131131 qualified manufacturing project zone may qualify for benefits under
132132 this chapter at any one time.
133133 (c) If the owner of more than one qualified manufacturing
134134 project applies for zone designation from a single county within a
135135 calendar month, the comptroller shall approve the qualified
136136 application that the comptroller determines will have the greatest
137137 economic impact on that county.
138138 (d) A qualified manufacturing project zone designation
139139 remains in effect until the expiration of any tax limitations,
140140 credits, abatements, or other benefits under an agreement entered
141141 into under Chapter 312 or 313, Tax Code, for the qualified
142142 manufacturing project.
143143 (e) The comptroller may charge an application fee in an
144144 amount sufficient to cover the comptroller's costs in administering
145145 this chapter.
146146 Sec. 399.006. ANNUAL CERTIFICATION. (a) In this section,
147147 "commercial operation," with respect to a facility, means that the
148148 facility has started to operate for the facility's intended
149149 purpose.
150150 (b) To receive state benefits under this chapter, the owner
151151 of a qualified manufacturing project in a qualified manufacturing
152152 project zone must make the following applicable annual
153153 certification to the comptroller, as of the last day of the state
154154 fiscal year for each year of the zone's designation:
155155 (1) if the qualified manufacturing project zone
156156 designation has been in effect for three years or less and the
157157 qualified manufacturing project has not started commercial
158158 operation, the owner must certify the forecast of at least 200 new
159159 full-time jobs for the year that the facility will begin commercial
160160 operation;
161161 (2) if the qualified manufacturing project zone
162162 designation has been in effect for more than three years and the
163163 qualified manufacturing project has not started commercial
164164 operation, the owner must certify:
165165 (A) the creation of at least 200 new full-time
166166 jobs; or
167167 (B) all of the following:
168168 (i) the expenditure of at least $500
169169 million on the new or expanded facility has occurred;
170170 (ii) the year in which the facility will
171171 begin commercial operation; and
172172 (iii) the forecast of at least 200 new
173173 full-time jobs that will be created not later than the eighth
174174 anniversary of the date of the zone's designation; or
175175 (3) if the qualified manufacturing project has started
176176 commercial operation, the owner must certify the creation of at
177177 least 200 new full-time jobs at the facility.
178178 (c) If the owner of a qualified manufacturing project fails
179179 to make the applicable certification required under Subsection (b):
180180 (1) the owner forfeits the right to receive future
181181 benefits under this chapter;
182182 (2) the owner shall pay to the applicable governmental
183183 body within 60 calendar days the entire amount of all refunds
184184 previously received under this chapter; and
185185 (3) the qualified manufacturing project loses its
186186 status as a qualified manufacturing project for purposes of this
187187 chapter and Section 151.4292, Tax Code.
188188 Sec. 399.007. STATE BENEFITS. The owner of a qualified
189189 manufacturing project in a qualified manufacturing project zone is
190190 eligible for a refund of state sales and use taxes as provided by
191191 Section 151.4292, Tax Code.
192192 Sec. 399.008. REPORT ON COMPLIANCE WITH JOB OR CAPITAL
193193 INVESTMENT CERTIFICATION. (a) Before the beginning of each regular
194194 session of the legislature, the comptroller shall submit to the
195195 lieutenant governor, the speaker of the house of representatives,
196196 and each other member of the legislature a report assessing the
197197 progress of qualified manufacturing projects receiving state
198198 benefits under this chapter. The report must be based on data
199199 annually certified to the comptroller by each owner of a qualified
200200 manufacturing project under this chapter and state for each
201201 project:
202202 (1) the number of new full-time jobs the owner of the
203203 project committed to create;
204204 (2) the number of new full-time jobs the owner of the
205205 project created;
206206 (3) the median wage of the new full-time jobs created;
207207 (4) the amount of capital investment the owner of the
208208 project committed to expend in the facility; and
209209 (5) the amount of capital investment the owner
210210 expended in the facility.
211211 (b) The report may not include information that is made
212212 confidential by law.
213213 (c) The comptroller may require an owner of a qualified
214214 manufacturing project to submit, on a form the comptroller
215215 provides, information required to complete the report.
216216 Sec. 399.009. COMPTROLLER DUTIES. The comptroller shall
217217 adopt rules, forms, and fees necessary to perform the comptroller's
218218 duties under this chapter.
219219 SECTION 3. Subchapter I, Chapter 151, Tax Code, is amended
220220 by adding Section 151.4292 to read as follows:
221221 Sec. 151.4292. TAX REFUNDS FOR QUALIFIED MANUFACTURING
222222 PROJECTS. (a) In this section:
223223 (1) "Additional sales and use tax" means the total
224224 amount of sales and use taxes collected under this chapter on
225225 purchases of all taxable items purchased within a qualified
226226 manufacturing project zone for each state fiscal year for the
227227 duration of the qualified manufacturing project zone designation
228228 less the sales tax base, not otherwise due as a rebate or refund
229229 under any other applicable law.
230230 (2) "Manufacturing workforce development" means any
231231 expenditures incurred in this state by the owner, or a contractor or
232232 subcontractor of the owner, of a qualified manufacturing project
233233 for recruiting or training present, prospective, or potential
234234 employees for jobs in this state presently available or expected to
235235 be available for the planning, designing, construction,
236236 fabrication, or operation of a qualified manufacturing project, and
237237 the salaries, wages, and benefits of those employees through the
238238 first two years of commercial operation of the qualified
239239 manufacturing project. The term:
240240 (A) does not include any expenditures incurred
241241 for the recruiting or training of, or the salaries, wages, and
242242 benefits of, persons employed in a "bona fide executive,
243243 administrative, or professional capacity," as that phrase is used
244244 for purposes of establishing an exemption to the overtime
245245 provisions of the federal Fair Labor Standards Act of 1938 (29
246246 U.S.C. Section 201 et seq.); and
247247 (B) notwithstanding Paragraph (A), includes any
248248 expenditures incurred for the recruiting or training of, or the
249249 salaries, wages, and benefits of, operating staff, maintenance
250250 staff, and engineering staff.
251251 (3) "Qualified manufacturing project" has the meaning
252252 assigned that term by Section 399.001, Local Government Code.
253253 (4) "Sales tax base" means the amount of the sales and
254254 use taxes collected under this chapter on purchases of all taxable
255255 items purchased within the boundaries of a qualified manufacturing
256256 project zone for the state fiscal year ending before the date the
257257 zone is designated.
258258 (b) The owner of a qualified manufacturing project in a
259259 qualified manufacturing project zone is entitled to receive a
260260 payment of a refund of 50 percent of the additional sales and use
261261 tax for the preceding state fiscal year that is directly
262262 attributable, as determined by the comptroller in accordance with
263263 procedures developed by the comptroller, to the economic activity
264264 derived from the presence of the qualified manufacturing project,
265265 provided the owner has made the applicable employment certification
266266 to the comptroller required under Section 399.006, Local Government
267267 Code. For the duration of a qualified manufacturing project zone
268268 designation, but not to exceed 10 years, the comptroller shall pay
269269 the refund not later than the 120th day after the later of the date
270270 of receipt of the employment certification or the last day of the
271271 state fiscal year.
272272 (c) If the comptroller determines that none of the
273273 additional sales and use tax for the preceding state fiscal year is
274274 directly attributable to the economic activity derived from the
275275 presence of the qualified manufacturing project, the owner of the
276276 project is not entitled to receive a refund under this section and
277277 the comptroller shall notify the owner of the comptroller's
278278 determination and the basis for that determination.
279279 (d) The total amount of refunds that a qualified
280280 manufacturing project may receive over the course of the
281281 designation of the county in which it is located as a qualified
282282 manufacturing project zone may not exceed an amount equal to the
283283 lesser of $50 million or five percent of the qualified
284284 manufacturing project's investments in the facility under Chapter
285285 399, Local Government Code.
286286 (e) A refund received under this section shall be used to
287287 pay for or to refund eligible expenses incurred after designation
288288 of the county in which the project is located as a qualified
289289 manufacturing project zone for manufacturing workforce development
290290 for the project.
291291 (f) If the owner of a qualified manufacturing project fails
292292 to make the applicable certification required by Section 399.006,
293293 Local Government Code, or if the comptroller elects to audit the
294294 certification and determines that the qualified manufacturing
295295 project has started commercial operation and failed to meet the job
296296 creation requirement, the owner forfeits the right to receive all
297297 future benefits under this section and shall pay to the comptroller
298298 the entire amount of all refunds previously received under this
299299 section. Payment of a refund under this subsection shall be made
300300 not later than the 60th calendar day after, as applicable, the date
301301 the certification is due or the date the comptroller completes the
302302 audit.
303303 SECTION 4. This Act takes effect immediately if it receives
304304 a vote of two-thirds of all the members elected to each house, as
305305 provided by Section 39, Article III, Texas Constitution. If this
306306 Act does not receive the vote necessary for immediate effect, this
307307 Act takes effect September 1, 2011.