LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 83RD LEGISLATIVE REGULAR SESSION April 8, 2013 TO: Honorable Gary Elkins, Chair, House Committee on Technology FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB2780 by Elkins (Relating to the establishment of research technology corporations by public institutions of higher education.), As Introduced The fiscal implication is indeterminate as the number of special corporations that might be formed, their business activities, and whether they would have otherwise been formed are unknown. Under provisions of the bill, an institution of higher education may create a special purpose corporation for the exclusive purpose of commercializing technologies owned by the institution. The principal offices of the corporation must be in the state of Texas and the majority of any products manufactured by or under contract with the corporation must be manufactured in the state. Members of the corporation must make a capital contribution in an amount set by the board of directors but the institution of higher education, which is also a member, does not have to make a capital contribution. The corporation would be limited in duration to 15 years. The corporation is exempt from taxation under the laws of the state to the same extent that the organizing institution is exempt. On expiration of the corporation, the corporation may file a restated and amended certificate of formation under which the corporation becomes a for-profit corporation governed by Chapter 21, Business Organizations Code. If under a restated certificate of formation, the corporation relocates its principal offices or the majority of manufacturing operations outside the state, the corporation is liable to the state for an amount equal to any taxes, including property taxes or business taxes, for which the corporation would have been liable for the five years preceding the relocation. The Comptroller of Public Accounts would be required to determine the corporation's liability and assess the amount owed. This amount would be deposited in the state treasury to the credit of the general revenue fund. The bill would take effect immediately if it received the vote of two-thirds of all the members elected to each house. Otherwise, the bill would take effect September 1, 2013. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies:304 Comptroller of Public Accounts, 710 Texas A&M University System Administrative and General Offices, 720 The University of Texas System Administration, 758 Texas State University System, 768 Texas Tech University System Administration, 769 University of North Texas System Administration, 781 Higher Education Coordinating Board, 783 University of Houston System Administration LBB Staff: UP, RB, SK, GO, KK
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 83RD LEGISLATIVE REGULAR SESSION
April 8, 2013
TO: Honorable Gary Elkins, Chair, House Committee on Technology FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB2780 by Elkins (Relating to the establishment of research technology corporations by public institutions of higher education.), As Introduced
TO: Honorable Gary Elkins, Chair, House Committee on Technology
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: HB2780 by Elkins (Relating to the establishment of research technology corporations by public institutions of higher education.), As Introduced
Honorable Gary Elkins, Chair, House Committee on Technology
Honorable Gary Elkins, Chair, House Committee on Technology
Ursula Parks, Director, Legislative Budget Board
Ursula Parks, Director, Legislative Budget Board
HB2780 by Elkins (Relating to the establishment of research technology corporations by public institutions of higher education.), As Introduced
HB2780 by Elkins (Relating to the establishment of research technology corporations by public institutions of higher education.), As Introduced
The fiscal implication is indeterminate as the number of special corporations that might be formed, their business activities, and whether they would have otherwise been formed are unknown.
The fiscal implication is indeterminate as the number of special corporations that might be formed, their business activities, and whether they would have otherwise been formed are unknown.
Under provisions of the bill, an institution of higher education may create a special purpose corporation for the exclusive purpose of commercializing technologies owned by the institution. The principal offices of the corporation must be in the state of Texas and the majority of any products manufactured by or under contract with the corporation must be manufactured in the state. Members of the corporation must make a capital contribution in an amount set by the board of directors but the institution of higher education, which is also a member, does not have to make a capital contribution. The corporation would be limited in duration to 15 years. The corporation is exempt from taxation under the laws of the state to the same extent that the organizing institution is exempt. On expiration of the corporation, the corporation may file a restated and amended certificate of formation under which the corporation becomes a for-profit corporation governed by Chapter 21, Business Organizations Code. If under a restated certificate of formation, the corporation relocates its principal offices or the majority of manufacturing operations outside the state, the corporation is liable to the state for an amount equal to any taxes, including property taxes or business taxes, for which the corporation would have been liable for the five years preceding the relocation. The Comptroller of Public Accounts would be required to determine the corporation's liability and assess the amount owed. This amount would be deposited in the state treasury to the credit of the general revenue fund. The bill would take effect immediately if it received the vote of two-thirds of all the members elected to each house. Otherwise, the bill would take effect September 1, 2013.
Under provisions of the bill, an institution of higher education may create a special purpose corporation for the exclusive purpose of commercializing technologies owned by the institution. The principal offices of the corporation must be in the state of Texas and the majority of any products manufactured by or under contract with the corporation must be manufactured in the state. Members of the corporation must make a capital contribution in an amount set by the board of directors but the institution of higher education, which is also a member, does not have to make a capital contribution. The corporation would be limited in duration to 15 years. The corporation is exempt from taxation under the laws of the state to the same extent that the organizing institution is exempt. On expiration of the corporation, the corporation may file a restated and amended certificate of formation under which the corporation becomes a for-profit corporation governed by Chapter 21, Business Organizations Code. If under a restated certificate of formation, the corporation relocates its principal offices or the majority of manufacturing operations outside the state, the corporation is liable to the state for an amount equal to any taxes, including property taxes or business taxes, for which the corporation would have been liable for the five years preceding the relocation. The Comptroller of Public Accounts would be required to determine the corporation's liability and assess the amount owed. This amount would be deposited in the state treasury to the credit of the general revenue fund.
The bill would take effect immediately if it received the vote of two-thirds of all the members elected to each house. Otherwise, the bill would take effect September 1, 2013.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 304 Comptroller of Public Accounts, 710 Texas A&M University System Administrative and General Offices, 720 The University of Texas System Administration, 758 Texas State University System, 768 Texas Tech University System Administration, 769 University of North Texas System Administration, 781 Higher Education Coordinating Board, 783 University of Houston System Administration
304 Comptroller of Public Accounts, 710 Texas A&M University System Administrative and General Offices, 720 The University of Texas System Administration, 758 Texas State University System, 768 Texas Tech University System Administration, 769 University of North Texas System Administration, 781 Higher Education Coordinating Board, 783 University of Houston System Administration
LBB Staff: UP, RB, SK, GO, KK
UP, RB, SK, GO, KK