82R5123 ATP-D
By: Carona S.B. No. 991
A BILL TO BE ENTITLED
AN ACT
relating to the administration of the Texas Enterprise Fund and the
Texas emerging technology fund and of awards from those funds.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle F, Title 4, Government Code, is amended
by adding Chapter 490F to read as follows:
CHAPTER 490F. TEXAS ENTERPRISE FUND
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 490F.001. DEFINITIONS. In this chapter:
(1) "Committee" means the Texas Enterprise Fund
Oversight Committee.
(2) "Fund" means the Texas Enterprise Fund.
[Sections 490F.002-490F.050 reserved for expansion]
SUBCHAPTER B. TEXAS ENTERPRISE FUND OVERSIGHT COMMITTEE
Sec. 490F.051. COMPOSITION OF COMMITTEE. (a) The Texas
Enterprise Fund Oversight Committee is composed of the following 11
members:
(1) three members appointed by the governor;
(2) three members appointed by the lieutenant
governor;
(3) three members appointed by the speaker of the
house of representatives;
(4) the comptroller or the comptroller's designee; and
(5) the attorney general or the attorney general's
designee.
(b) The members of the committee must represent the
geographic and cultural diversity of the state.
(c) A person may not be a member of the committee if the
person or the person's spouse:
(1) is employed by or participates in the management
of a business entity receiving money from the fund;
(2) owns or controls, directly or indirectly, more
than a five percent interest in a business entity or other
organization receiving grant money from the fund; or
(3) uses or receives a substantial amount of grant
money from the fund, other than authorized reimbursement.
Sec. 490F.052. REMOVAL. (a) It is a ground for removal from
the committee that a member:
(1) is ineligible for membership under Section
490F.051(c);
(2) cannot, because of illness or disability,
discharge the member's duties for a substantial part of the member's
term; or
(3) is absent from more than half of the regularly
scheduled committee meetings that the member is eligible to attend
during a calendar year without an excuse approved by a majority vote
of the committee.
(b) The validity of an action of the committee is not
affected by the fact that the action is taken when a ground for
removal of a committee member exists.
(c) If the governor has knowledge that a potential ground
for removal exists, the governor shall notify the presiding member
of the committee of the potential ground. The presiding member
shall then notify the appointing authority and the attorney general
that a potential ground for removal exists. If the potential ground
for removal involves the presiding member, the governor shall
notify the next highest ranking officer of the committee, who shall
then notify the appointing authority and the attorney general that
a potential ground for removal exists.
Sec. 490F.053. PRESIDING MEMBER. The committee shall
select from among its members a presiding member.
Sec. 490F.054. TERMS. Members of the committee appointed
by the governor, lieutenant governor, and speaker of the house of
representatives serve staggered six-year terms, with the terms of
three members expiring on January 31 of each odd-numbered year.
Sec. 490F.055. STAFF AND FUNDING. Necessary staff and
funding for the administration of the fund shall be provided by:
(1) the office of the governor; and
(2) gifts, grants, and donations for overhead expenses
to the office of the governor.
Sec. 490F.056. ADVISORY SUBCOMMITTEES. The committee may
establish advisory subcommittees as necessary to advise the
committee.
Sec. 490F.057. CONFIDENTIALITY. Information collected by
the governor's office, the committee, or the committee's advisory
subcommittees concerning the identity, background, finance,
marketing plans, trade secrets, or other commercially sensitive
information of an individual or entity being considered for an
award from the fund is confidential unless the individual or entity
consents to disclosure of the information.
SECTION 2. Sections 481.078 and 481.079, Government Code,
are transferred to Chapter 490F, Government Code, redesignated as
Sections 490F.101 and 490F.102, Government Code, designated as
Subchapter C, Chapter 490F, Government Code, and amended, and a
heading is added for Subchapter C, Chapter 490F, Government Code,
to read as follows:
SUBCHAPTER C. TEXAS ENTERPRISE FUND
Sec. 490F.101 [481.078]. TEXAS ENTERPRISE FUND. (a) The
Texas Enterprise Fund is a dedicated account in the general revenue
fund.
(b) The following amounts shall be deposited in the fund:
(1) any amounts appropriated by the legislature for
the fund for purposes described by this section;
(2) interest earned on the investment of money in the
fund; and
(3) gifts, grants, and other donations received for
the fund.
(c) Except as provided by Subsection (d), the fund may be
used only for economic development, infrastructure development,
community development, job training programs, and business
incentives.
(d) The fund may be temporarily used by the comptroller for
cash management purposes.
(e) [The administration of the fund is considered to be a
trusteed program within the office of the governor.] The committee
[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.
[(e-1)] To be eligible to receive a grant under this
section, the entity must:
(1) be in good standing under the laws of the state in
which the entity was formed or organized, as evidenced by a
certificate issued by the secretary of state or the state official
having custody of the records pertaining to entities or other
organizations formed under the laws of that state; and
(2) owe no delinquent taxes to a taxing unit of this
state.
(f) Before awarding a grant under this section, the
committee [governor] shall enter into a written agreement with the
entity to be awarded the grant money specifying that:
(1) if the committee [governor] finds that the grant
recipient has not met each of the performance targets specified in
the agreement as of a date certain provided in the agreement:
(A) the recipient shall repay the grant and any
related interest to the state at the agreed rate and on the agreed
terms;
(B) the committee [governor] will not distribute
to the recipient any grant money that remains to be awarded under
the agreement; and
(C) the committee [governor] may assess
specified penalties for noncompliance against the recipient;
(2) if all or any portion of the amount of the grant is
used to build a capital improvement, the state may:
(A) retain a lien or other interest in the
capital improvement in proportion to the percentage of the grant
amount used to pay for the capital improvement; and
(B) require the recipient of the grant, if the
capital improvement is sold, to:
(i) repay to the state the grant money used
to pay for the capital improvement, with interest at the rate and
according to the other terms provided by the agreement; and
(ii) share with the state a proportionate
amount of any profit realized from the sale; and
(3) if, as of a date certain provided in the agreement,
the grant recipient has not used grant money awarded under this
section for the purposes for which the grant was intended, the
recipient shall repay that amount and any related interest to the
state at the agreed rate and on the agreed terms.
(g) The grant agreement may include a provision providing
that a reasonable percentage of the total amount of the grant will
be withheld until specified performance targets are met by the
entity as of the date described by Subsection (f)(1).
(h) The committee [governor], after consultation with the
speaker of the house of representatives and the lieutenant
governor, shall determine:
(1) the performance targets and date required to be
contained in the grant agreement as provided by Subsection (f)(1);
and
(2) if the grant agreement includes the provision
authorized by Subsection (g), the percentage of grant money
required to be withheld.
(i) An entity entering into a grant agreement under this
section shall submit to the committee, governor, lieutenant
governor, and speaker of the house of representatives an annual
progress report containing the information compiled during the
previous calendar year regarding the attainment of each of the
performance targets specified in the agreement.
(j) Repayment of a grant under Subsection (f)(1)(A) may be
prorated to reflect a partial attainment of performance targets.
(k) To encourage the development and location of small
businesses in this state, the committee [governor] shall consider
making grants from the fund:
(1) to recipients that are small businesses in this
state that commit to using the grants to create additional jobs;
(2) to recipients that are small businesses from
outside the state that commit to relocate to this state; or
(3) for individual projects that create 100 or fewer
additional jobs.
(l) For purposes of Subsection (k), "small business" means a
legal entity, including a corporation, partnership, or sole
proprietorship, that:
(1) is formed for the purpose of making a profit;
(2) is independently owned and operated; and
(3) has fewer than 100 employees.
Sec. 490F.102 [481.079]. REPORT ON USE OF MONEY IN TEXAS
ENTERPRISE FUND. (a) Before the beginning of each regular session
of the legislature, the committee [governor] shall submit to the
governor, the lieutenant governor, the speaker of the house of
representatives, and each other member of the legislature a report
on grants made under Section 490F.101 [481.078] that states:
(1) the number of direct jobs each recipient committed
to create in this state;
(2) the number of direct jobs each recipient created
in this state;
(3) the median wage of the jobs each recipient created
in this state;
(4) the amount of capital investment each recipient
committed to expend or allocate per project in this state;
(5) the amount of capital investment each recipient
expended or allocated per project in this state;
(6) the total amount of grants made to each recipient;
(7) the average amount of money granted in this state
for each job created in this state by grant recipients;
(8) the number of jobs created in this state by grant
recipients in each sector of the North American Industry
Classification System (NAICS); and
(9) of the number of direct jobs each recipient
created in this state, the number of positions created that provide
health benefits for employees.
(b) The report may not include information that is made
confidential by law.
(c) The committee [governor] may require a recipient of a
grant under Section 490F.101 [481.078] to submit, on a form the
committee [governor] provides, information required to complete
the report.
SECTION 3. Section 481.080(a), Government Code, is amended
to read as follows:
(a) Before the Texas Enterprise Fund Oversight Committee
[governor] awards a grant under Chapter 490F [Section 481.078] to
an entity for a proposed initiative, the office shall prepare a
statement that, specifically and in detail, assesses the direct
economic impact that approval of the grant will have on the
residents of this state.
SECTION 4. Sections 490.001(1) and (4), Government Code,
are amended to read as follows:
(1) "Committee" means the Texas Emerging Technology
Oversight [Advisory] Committee.
(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, a grant; or
(D) other forms of contribution or investment as
determined [recommended] by the committee [and approved by the
governor, lieutenant governor, and speaker of the house of
representatives].
SECTION 5. Section 490.005(a), Government Code, is amended
to read as follows:
(a) Not later than January 1 of each year, the committee
[governor] shall submit to the legislature and post on the office of
the governor's Internet website a report that includes the
following information regarding the fund for the preceding three
state fiscal years:
(1) the total number and amount of awards made;
(2) the number and amount of awards made under
Subchapters D, E, and F;
(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 committee [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.
SECTION 6. The heading to Subchapter B, Chapter 490,
Government Code, is amended to read as follows:
SUBCHAPTER B. TEXAS EMERGING TECHNOLOGY OVERSIGHT [ADVISORY]
COMMITTEE
SECTION 7. Section 490.051, Government Code, is amended to
read as follows:
Sec. 490.051. COMPOSITION OF COMMITTEE. (a) The Texas
Emerging Technology Oversight [Advisory] Committee is composed of
the following 11 [17] members:
(1) three members appointed by the governor;
(2) three members appointed by the lieutenant
governor;
(3) three members appointed by the speaker of the
house of representatives;
(4) the comptroller or the comptroller's designee; and
(5) the attorney general or the attorney general's
designee.
(b) The members of the committee must represent the
geographic and cultural diversity of the state.
(c) A person may not be a member of the committee if the
person or the person's spouse:
(1) is employed by or participates in the management
of a business entity receiving an award from the fund;
(2) owns or controls, directly or indirectly, more
than a five percent interest in a business entity or other
organization receiving an award from the fund; or
(3) uses or receives a substantial amount of money
awarded from the fund, other than authorized reimbursement.
SECTION 8. Subchapter B, Chapter 490, Government Code, is
amended by adding Section 490.0511 to read as follows:
Sec. 490.0511. REMOVAL. (a) It is a ground for removal from
the committee that a member:
(1) is ineligible for membership under Section
490.051(c);
(2) cannot, because of illness or disability,
discharge the member's duties for a substantial part of the member's
term; or
(3) is absent from more than half of the regularly
scheduled committee meetings that the member is eligible to attend
during a calendar year without an excuse approved by a majority vote
of the committee.
(b) The validity of an action of the committee is not
affected by the fact that the action is taken when a ground for
removal of a committee member exists.
(c) If the governor has knowledge that a potential ground
for removal exists, the governor shall notify the presiding member
of the committee of the potential ground. The presiding member
shall then notify the appointing authority and the attorney general
that a potential ground for removal exists. If the potential ground
for removal involves the presiding member, the governor shall
notify the next highest ranking officer of the committee, who shall
then notify the appointing authority and the attorney general that
a potential ground for removal exists.
SECTION 9. Sections 490.053, 490.054, 490.056, and 490.057,
Government Code, are amended to read as follows:
Sec. 490.053. PRESIDING MEMBER. The committee [governor]
shall select from among its members [appoint] a presiding member
[of the committee].
Sec. 490.054. TERMS. Members of the committee appointed by
the governor, lieutenant governor, and speaker of the house of
representatives serve staggered six-year [two-year] terms, with
the terms of three members expiring on January 31 of each
odd-numbered year [subject to the pleasure of the governor].
Sec. 490.056. ADVISORY SUBCOMMITTEES [RECOMMENDATIONS FOR
FUNDING]. [(a) The committee shall make recommendations, through
peer review and evaluation processes established by the committee,
to the governor, lieutenant governor, and speaker of the house of
representatives for the award of money from the fund as provided by
this chapter.
[(b)] The committee may establish advisory subcommittees as
necessary to advise the committee. The subcommittees may include
[panels of] knowledgeable individuals from industry, state
government, or academic occupations to assist in peer review
activities under this chapter.
Sec. 490.057. CONFIDENTIALITY. Information collected by
the governor's office, the committee, or the committee's advisory
subcommittees [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 an award from the fund is confidential unless the
individual or entity consents to disclosure of the information.
SECTION 10. Subchapter B, Chapter 490, Government Code, is
amended by adding Section 490.058 to read as follows:
Sec. 490.058. CONFLICT OF INTEREST. The committee shall
adopt conflict of interest rules to govern committee members.
SECTION 11. Sections 490.101(f), (g), (h), and (i),
Government Code, are amended to read as follows:
(f) [The administration of the fund is considered to be a
trusteed program within the office of the governor.] The committee
[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.]
(g) Before making an award under this chapter, the committee
[governor] shall enter into a written agreement with the entity to
receive the award. An agreement may specify that:
(1) if all or any portion of the amount of the award is
used to build a capital improvement:
(A) the state retains a lien or other interest in
the capital improvement in proportion to the percentage of the
award amount used to pay for the capital improvement; and
(B) the recipient of the award shall, if the
capital improvement is sold:
(i) repay to the state the award used to pay
for the capital improvement, with interest at the rate and
according to the other terms provided by the agreement; and
(ii) share with the state a proportionate
amount of any profit realized from the sale; and
(2) if, as of a date certain provided in the agreement,
the award recipient has not used the award received under this
chapter for the purposes for which the award was intended, the
recipient shall repay that amount and any related interest
applicable under the agreement to the state at the agreed rate and
on the agreed terms.
(h) The committee [governor] may make awards in the form of
loans, charge and receive reasonable interest for the loans, take
an equity position in the form of stock or other security in
consideration of an award, and sell or otherwise trade or exchange
the security for the benefit of the fund. Interest or proceeds
received as a result of a transaction authorized by this subsection
shall be deposited to the corpus of the fund and may be used in the
same manner as the corpus of the fund.
(i) The contract between the committee [governor] and a
recipient of an award under this chapter may set the terms relating
to an award.
SECTION 12. Section 490.102(b), Government Code, is amended
to read as follows:
(b) The committee [governor] may reallocate money from one
component of the fund to another component subject to the prior
approval of the lieutenant governor and speaker of the house of
representatives.
SECTION 13. Section 490.103, Government Code, is amended
to read as follows:
Sec. 490.103. ALLOCATION OF PROCEEDS. (a) The contract
between the committee [governor] and a recipient of an award under
this chapter shall provide for the distribution of royalties,
revenue, or other financial benefits realized from the
commercialization of intellectual or real property developed from
any award from the fund. To the extent authorized by law and not in
conflict with another agreement, the contract shall appropriately
allocate by assignment, licensing, or other means the royalties,
revenue, or other financial benefits among identifiable
collaborating parties and in a specified percentage to this state
for deposit in the fund.
(b) The contract under Subsection (a) shall also specify
other matters considered necessary by the committee [governor,
lieutenant governor, and speaker of the house of representatives].
SECTION 14. Sections 490.152(a) and (d), Government Code,
are amended to read as follows:
(a) In determining which proposals will receive
[recommending proposals for] funding under this subchapter, the
committee shall give specific emphasis to the formation of regional
centers of innovation and commercialization.
(d) Subject to the availability of suitable partners and
resources, the committee shall propose and initiate the
establishment of a regional center of innovation and
commercialization in:
(1) Harris County;
(2) Lubbock County;
(3) Bexar County;
(4) the Dallas-Fort Worth Metroplex;
(5) El Paso County;
(6) the Middle and Lower Rio Grande Valley; and
(7) other suitable locations as determined by the
committee [governor] in consultation with the lieutenant governor
and the speaker of the house of representatives.
SECTION 15. Section 490.153(b), Government Code, is amended
to read as follows:
(b) An amount not to exceed two percent of the amount
allocated for a fiscal biennium for incentives under this
subchapter may be invested directly in the regional centers of
innovation and commercialization as recommended by the committee
and approved by the [governor,] lieutenant governor[,] and speaker
of the house of representatives to support commercialization
activities.
SECTION 16. Section 490.154(a), Government Code, is amended
to read as follows:
(a) An entity participating in a regional center of
innovation and commercialization that receives funding or another
incentive under this subchapter shall guarantee by contract with
the committee [governor's office] that the entity will perform
specific actions expected to provide benefits to this state.
SECTION 17. Section 490.156(a), Government Code, is amended
to read as follows:
(a) A person receiving money from the fund under this
subchapter may use the money to expedite commercialization that
will lead to an increase in high-quality jobs in this state and
shall use the money in accordance with a contract between the person
and the committee [office of the governor].
SECTION 18. Section 490.203(a), Government Code, is amended
to read as follows:
(a) An entity receiving funding or another incentive under
this subchapter shall guarantee by contract with the committee
[governor's office] that the entity will perform specific actions
that are expected to provide benefits to this state.
SECTION 19. Section 490.257(b), Government Code, is amended
to read as follows:
(b) The committee [governor], with the express written
prior approval of the lieutenant governor and the speaker of the
house of representatives, may terminate funding to an institution
if the institution fails to realize a benefit specified in the
contract before a time specified in the contract, as determined by a
periodic program review conducted by the committee.
SECTION 20. Section 490.302, Government Code, is amended to
read as follows:
Sec. 490.302. USE OF MONEY FOR CLEAN COAL PROJECT.
(a) Notwithstanding Section 490.102, the committee [governor] may
allocate money appropriated to the fund by the legislature to
provide matching money for a clean coal project as described by
Section 2305.037 if the committee [governor] has the express
written prior approval of the lieutenant governor and the speaker
of the house of representatives to do so.
(b) The committee [governor] may allocate proceeds
deposited in the fund as provided by an agreement described by
Section 490.103 to provide matching money for a clean coal project
as described by Section 2305.037 if the committee [governor] has
the express written prior approval of the lieutenant governor and
the speaker of the house of representatives to do so.
SECTION 21. Section 1372.031(b), Government Code, is
amended to read as follows:
(b) Until August 1 of the program year, within the category
described by Section 1372.022(a)(6), the board shall grant priority
to the Texas Economic Development Bank for projects that the Texas
Economic Development and Tourism Office determines meet the Texas
Enterprise Fund Oversight Committee's [governor's] criteria for
funding from the Texas Enterprise Fund. Notwithstanding the
priority, the Texas Economic Development Bank may not receive an
amount greater than one-sixth of the portion of the state ceiling
available under Section 1372.022(a)(6) on January 1 of the program
year.
SECTION 22. Section 1372.063, Government Code, is amended
to read as follows:
Sec. 1372.063. PRIORITY 1 CARRYFORWARD CLASSIFICATION. The
priority 1 carryforward classification applies to:
(1) an issuer of a state-voted issue; and
(2) a state agency, other than an issuer of a
state-voted issue, that applies for a carryforward designation for
a project that:
(A) is described by Section 1372.067(a)(2); and
(B) the Texas Economic Development and Tourism
Office determines meets the Texas Enterprise Fund Oversight
Committee's [governor's] criteria for funding from the Texas
Enterprise Fund.
SECTION 23. Section 204.123(a), Labor Code, is amended to
read as follows:
(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 Chapter 490F [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:
(i) 75 percent to the Texas Enterprise Fund
created under Chapter 490F [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 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.
SECTION 24. Section 303.005(a), Labor Code, is amended to
read as follows:
(a) An employer may not apply both to a public community or
technical college for customized training and assessment from the
college through a grant issued to the college under the skills
development fund program established under this chapter and for a
grant under the Texas Enterprise Fund program established under
Chapter 490F [Subchapter E, Chapter 481], Government Code, unless
the employer and the college file an application for concurrent
participation in both programs that complies with any rules adopted
by the Texas Workforce Commission on concurrent participation.
SECTION 25. Sections 490.052, 490.151(b), 490.201(b), and
490.253(b), Government Code, are repealed.
SECTION 26. Not later than October 1, 2011, the members of
the Texas Enterprise Fund Oversight Committee established under
Subchapter B, Chapter 490F, Government Code, as added by this Act,
shall be appointed in a manner that complies with that subchapter,
as added by this Act.
SECTION 27. (a) The terms of the members of the Texas
Emerging Technology Advisory Committee serving on the effective
date of this Act expire October 1, 2011.
(b) Not later than October 1, 2011, the members of the Texas
Emerging Technology Oversight Committee established under
Subchapter B, Chapter 490, Government Code, as amended by this Act,
shall be appointed in a manner that complies with that subchapter,
as amended by this Act.
SECTION 28. This Act takes effect September 1, 2011.