82R19522 CLG-F
By: Parker, Creighton, Taylor of Collin, H.B. No. 433
Legler, Button, et al.
Substitute the following for H.B. No. 433:
By: Murphy C.S.H.B. No. 433
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 finds that a qualified
manufacturing project, as defined by Section 399.001, Local
Government Code, as added by this Act, and the enhancement of
manufacturing workforce development serve the public purposes of:
(1) developing and diversifying employment in this
state;
(2) eliminating unemployment or underemployment in
this state; and
(3) developing and expanding 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) "Eligible manufacturing facility" means a
proposed new or expanded facility that, on the date of the
facility's designation as a qualified manufacturing project under
Section 399.002:
(A) is subject to an agreement entered into on or
after January 1, 2012, but before January 1, 2017, 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 $100 million;
(B) 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, 2011;
(C) is forecasted to create at least 200 new
full-time jobs; and
(D) is owned by a person or entity that is:
(i) considering at least one alternative
site for the facility that is not located in this state; or
(ii) competing against similar projects
located outside this state for federal funds or financial support,
including loan guarantees, that would benefit the project.
(2) "New full-time job" means a newly created
permanent full-time job that:
(A) requires at least 1,600 hours of work a year;
(B) is not transferred from one area in this
state to another area in this state; and
(C) is not created to replace a previous
employee.
(3) "Qualified manufacturing project" means an
eligible manufacturing facility the owner of which has filed an
election under Section 399.002 to establish the facility's status
as a qualified manufacturing project.
Sec. 399.002. DESIGNATION OF ELIGIBLE MANUFACTURING
FACILITY AS QUALIFIED MANUFACTURING PROJECT; DATE OF
QUALIFICATION. An eligible manufacturing facility becomes a
qualified manufacturing project on the date the owner of the
facility files an election for automatic designation of the
facility as a qualified manufacturing project, without further
qualification, with the comptroller.
Sec. 399.003. ECONOMIC IMPACT STUDY. (a) Before applying
for designation of the applicable county as a qualified
manufacturing project zone under Section 399.005, the owner of a
qualified manufacturing project must conduct an economic impact
study of the county in which the 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 to establish the
facility's status as a qualified manufacturing project 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
the county is designated as a qualified manufacturing project zone;
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 new full-time jobs 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 Sections 399.003(b)(2)-(4).
(b) If the comptroller determines that the economic impact
study does not accurately estimate the information required by
Sections 399.003(b)(2)-(4), the comptroller, not later than the
30th day after the date of receipt of the study, shall:
(1) notify the owner of the qualified manufacturing
project in writing of the comptroller's preliminary determination
and the basis for that determination; 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) In evaluating a new or amended economic impact study
submitted by the owner of a qualified manufacturing project
following the comptroller's rejection of the owner's initial study,
the comptroller shall determine whether to accept or certify the
new or amended study not later than the 30th day after the date of
receipt of the new or amended study.
(d) If, not later than the 90th day after receiving notice
of the comptroller's rejection of the owner's initial economic
impact study, the owner of a qualified manufacturing project either
fails to receive the comptroller's certification of a new or
amended economic impact study the owner submitted within that
period or fails to submit a new or amended study to the comptroller,
the qualified manufacturing project loses its status as a qualified
manufacturing project at the end of the 90-day period.
Sec. 399.005. DESIGNATION OF QUALIFIED MANUFACTURING
PROJECT ZONE; APPLICATION. (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 the owner of 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 that the comptroller determines will have the greatest
economic impact on that county.
(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.
(e) The comptroller may charge an application fee in an
amount sufficient to cover the comptroller's costs in administering
this chapter.
Sec. 399.006. ANNUAL CERTIFICATION. (a) In this section,
"commercial operation," with respect to a facility, means that the
facility has started to operate for the facility's intended
purpose.
(b) 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 started commercial
operation, the owner must certify the forecast of at least 200 new
full-time jobs 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 200 new full-time
jobs; or
(B) all of the following:
(i) the expenditure of at least $500
million 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 200 new
full-time jobs 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 200 new full-time jobs at the facility.
(c) If the owner of a qualified manufacturing project fails
to make the applicable certification required under Subsection (b):
(1) the owner forfeits the right to receive future
benefits under this chapter;
(2) the owner shall pay to the applicable governmental
body within 60 calendar days the entire amount of all refunds
previously received under this chapter; and
(3) the qualified manufacturing project loses its
status as a qualified manufacturing project for purposes of this
chapter and Section 151.4292, Tax Code.
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. REPORT ON COMPLIANCE WITH JOB OR CAPITAL
INVESTMENT CERTIFICATION. (a) Before the beginning of each regular
session of the legislature, the comptroller shall submit to the
lieutenant governor, the speaker of the house of representatives,
and each other member of the legislature a report assessing the
progress of qualified manufacturing projects receiving state
benefits under this chapter. The report must be based on data
annually certified to the comptroller by each owner of a qualified
manufacturing project under this chapter and state for each
project:
(1) the number of new full-time jobs the owner of the
project committed to create;
(2) the number of new full-time jobs the owner of the
project created;
(3) the median wage of the new full-time jobs created;
(4) the amount of capital investment the owner of the
project committed to expend in the facility; and
(5) the amount of capital investment the owner
expended in the facility.
(b) The report may not include information that is made
confidential by law.
(c) The comptroller may require an owner of a qualified
manufacturing project to submit, on a form the comptroller
provides, information required to complete the report.
Sec. 399.009. COMPTROLLER DUTIES. The comptroller shall
adopt rules, forms, and fees 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 any
expenditures incurred in this 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 the recruiting or training of, 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 the recruiting or training of, 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 that is directly
attributable, as determined by the comptroller in accordance with
procedures developed by the comptroller, to the economic activity
derived from the presence of the qualified manufacturing project,
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 120th day after the later of the date
of receipt of the employment certification or the last day of the
state fiscal year.
(c) If the comptroller determines that none of the
additional sales and use tax for the preceding state fiscal year is
directly attributable to the economic activity derived from the
presence of the qualified manufacturing project, the owner of the
project is not entitled to receive a refund under this section and
the comptroller shall notify the owner of the comptroller's
determination and the basis for that determination.
(d) 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.
(e) A refund received under this section shall be used to
pay for or to refund eligible expenses incurred after designation
of the county in which the project is located as a qualified
manufacturing project zone for manufacturing workforce development
for the project.
(f) If the owner of a qualified manufacturing project fails
to make the applicable certification required by Section 399.006,
Local Government Code, or if the comptroller elects to audit the
certification and determines that the qualified manufacturing
project has started commercial operation and failed to meet the job
creation requirement, the owner forfeits the right to receive all
future benefits under this section and shall pay to the comptroller
the entire amount of all refunds previously received under this
section. Payment of a refund under this subsection shall be made
not later than the 60th calendar day after, as applicable, the date
the certification is due or the date the comptroller completes the
audit.
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, 2011.