LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 83RD LEGISLATIVE REGULAR SESSION April 19, 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 institutions of higher education; providing for tax exemptions.), Committee Report 1st House, Substituted 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 or private or independent institution of higher education may create a special purpose corporation for the exclusive purpose of supporting development and commercializing technologies owned wholly or partly by the institution. The principal offices of the corporation must be located in the state of Texas and the majority of any goods or services produced by the corporation must be produced in the state. The corporation is exempt from taxation under Chapter 171, Tax Code. Under provisions of the bill, the creating institution may establish a research and development authority to act on behalf of the institution to support the corporation. The corporation would be limited in duration to 15 years. On expiration of that period, 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. The bill provides for sanctions if the corporation relocates. If a corporation does not remain in compliance regarding the location of its principal offices or majority of its production activities, the corporation is liable to the state for an amount equal to any taxes, including property taxes or business taxes, for which the corporation received a tax exemption or for which a research and development authority received a tax exemption in conjunction with the activities of the corporation, for the five calendar years preceding the year of 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 September 1, 2103. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies:768 Texas Tech University 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, 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 19, 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 institutions of higher education; providing for tax exemptions.), Committee Report 1st House, Substituted
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 institutions of higher education; providing for tax exemptions.), Committee Report 1st House, Substituted
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 institutions of higher education; providing for tax exemptions.), Committee Report 1st House, Substituted
HB2780 by Elkins (Relating to the establishment of research technology corporations by institutions of higher education; providing for tax exemptions.), Committee Report 1st House, Substituted
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 or private or independent institution of higher education may create a special purpose corporation for the exclusive purpose of supporting development and commercializing technologies owned wholly or partly by the institution. The principal offices of the corporation must be located in the state of Texas and the majority of any goods or services produced by the corporation must be produced in the state. The corporation is exempt from taxation under Chapter 171, Tax Code. Under provisions of the bill, the creating institution may establish a research and development authority to act on behalf of the institution to support the corporation. The corporation would be limited in duration to 15 years. On expiration of that period, 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. The bill provides for sanctions if the corporation relocates. If a corporation does not remain in compliance regarding the location of its principal offices or majority of its production activities, the corporation is liable to the state for an amount equal to any taxes, including property taxes or business taxes, for which the corporation received a tax exemption or for which a research and development authority received a tax exemption in conjunction with the activities of the corporation, for the five calendar years preceding the year of 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 September 1, 2103.
Under provisions of the bill, an institution of higher education or private or independent institution of higher education may create a special purpose corporation for the exclusive purpose of supporting development and commercializing technologies owned wholly or partly by the institution. The principal offices of the corporation must be located in the state of Texas and the majority of any goods or services produced by the corporation must be produced in the state. The corporation is exempt from taxation under Chapter 171, Tax Code. Under provisions of the bill, the creating institution may establish a research and development authority to act on behalf of the institution to support the corporation. The corporation would be limited in duration to 15 years. On expiration of that period, 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.
The bill provides for sanctions if the corporation relocates. If a corporation does not remain in compliance regarding the location of its principal offices or majority of its production activities, the corporation is liable to the state for an amount equal to any taxes, including property taxes or business taxes, for which the corporation received a tax exemption or for which a research and development authority received a tax exemption in conjunction with the activities of the corporation, for the five calendar years preceding the year of 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 September 1, 2103.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 768 Texas Tech University 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, 769 University of North Texas System Administration, 781 Higher Education Coordinating Board, 783 University of Houston System Administration
768 Texas Tech University 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, 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