83R23855 RWG-F
By: J. Davis of Harris, Button H.B. No. 3162
Substitute the following for H.B. No. 3162:
By: Isaac C.S.H.B. No. 3162
A BILL TO BE ENTITLED
AN ACT
relating to the Texas emerging technology fund.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 490.001(1) and (4), Government Code,
are amended to read as follows:
(1) "Board" ["Committee"] means the Texas Emerging
Technology Fund Board [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
recommended by the board [committee] and approved by the governor,
lieutenant governor, and speaker of the house of representatives.
SECTION 2. Section 490.003, Government Code, is amended to
read as follows:
Sec. 490.003. EMERGING TECHNOLOGY INDUSTRIES. (a) An
emerging technology industry participant may be [is] eligible for
funding under this chapter if the activity to be funded:
(1) will result in the creation of high-quality new
jobs in this state, immediately or over a longer period; [or]
(2) has the potential to result in a medical or
scientific breakthrough or a breakthrough in the area of clean
energy; or
(3) will result in the commercialization of a
scientific breakthrough derived from research conducted at or owned
by a research institution.
(b) Emerging technology industries include industries
related to:
(1) semiconductors;
(2) information;
(3) computer and software technology;
(4) energy;
(5) manufactured energy systems;
(6) micro-electromechanical systems;
(7) nanotechnology;
(8) biotechnology;
(9) medicine;
(10) life sciences;
(11) petroleum refining and chemical processes;
(12) aerospace;
(13) defense; [and]
(14) water; and
(15) other pursuits, as determined by the governor in
consultation with the lieutenant governor and the speaker of the
house of representatives.
SECTION 3. Sections 490.005(a) and (b), Government Code,
are amended to read as follows:
(a) Not later than January 31 of each year, the governor
shall submit to the lieutenant governor, the speaker of the house of
representatives, and the standing committee of each house of the
legislature with primary jurisdiction over economic development
matters and post on the office of the governor's Internet website a
report that includes the following information regarding awards
made under the fund during each preceding state fiscal year:
(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 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; and
(6) a description of the types of securities the
governor, on behalf of the state, has taken in companies that have
received an award.
(b) The annual report must also contain:
(1) the aggregate total number of jobs, broken down
according to the industry sectors described by Section 490.003(b),
actually created by all projects [each project] receiving funding
under this chapter;
(2) an analysis of the number of jobs, broken down
according to the industry sectors described by Section 490.003(b),
actually created by all projects [each project] receiving funding
under this chapter; [and]
(3) a brief description regarding:
(A) the methodology used to determine the
information provided under Subdivisions (1) and (2), which may be
developed in consultation with the comptroller's office;
(B) the intended outcomes of projects funded
under Subchapter D during each preceding state fiscal year; and
(C) the actual outcomes of all projects funded
under Subchapter D during each preceding state fiscal year,
including any financial impact on the state resulting from a
liquidity event involving a company whose project was funded under
that subchapter;
(4) the total number of jobs created by each project
receiving funds under this chapter, expressed;
(A) in increments of 10 jobs created by the
project; or
(B) as a number that is within five percent over
or under the total number of jobs created by the project; and
(5) the average annual salaries in the award
recipients' industries.
SECTION 4. The heading to Subchapter B, Chapter 490,
Government Code, is amended to read as follows:
SUBCHAPTER B. TEXAS EMERGING TECHNOLOGY FUND BOARD [ADVISORY
COMMITTEE]
SECTION 5. Section 490.051, Government Code, is amended to
read as follows:
Sec. 490.051. TEXAS EMERGING TECHNOLOGY FUND BOARD
[COMPOSITION OF COMMITTEE]. (a) The Texas Emerging Technology Fund
Board is administratively attached to the office of the governor.
The governor's office shall provide staff and other administrative
support for the board.
(b) The board [Advisory Committee] is composed of 15 [17]
members.
SECTION 6. The heading to Section 490.052, Government Code,
is amended to read as follows:
Sec. 490.052. APPOINTMENT TO BOARD [COMMITTEE];
NOMINATIONS.
SECTION 7. Sections 490.052(a), (a-1), (a-2), and (b),
Government Code, are amended to read as follows:
(a) The governor shall appoint to the board five [committee
13] individuals nominated as provided by Subsection (b).
(a-1) The lieutenant governor shall appoint five [two]
individuals to the board [committee].
(a-2) The speaker of the house of representatives shall
appoint five [two] individuals to the board [committee].
(b) The following persons may nominate one or more
individuals who are industry leaders in this state or who are
nationally recognized leaders from public or private institutions
of higher education in this state for appointment to the board
[committee]:
(1) a president of a public or private institution of
higher education in this state;
(2) a representative of the governor's office involved
in economic development activities;
(3) a representative of the lieutenant governor's
office involved in economic development activities;
(4) a representative of the office of the speaker of
the house involved in economic development activities; and
(5) other persons considered appropriate by the
governor, lieutenant governor, or speaker of the house of
representatives.
SECTION 8. Section 490.0521(a), Government Code, is amended
to read as follows:
(a) Each member of the board [committee] shall file with the
office of the governor a verified financial statement complying
with Sections 572.022 through 572.0252 as is required of a state
officer by Section 572.0252.
SECTION 9. Subchapter B, Chapter 490, Government Code, is
amended by adding Section 490.0522 to read as follows:
Sec. 490.0522. COMPENSATION; EXPENSES. Members of the
board serve without compensation but are entitled to reimbursement
for actual and necessary expenses incurred in attending board
meetings or in performing other board duties approved by the office
of the governor.
SECTION 10. Section 490.053, Government Code, is amended to
read as follows:
Sec. 490.053. PRESIDING MEMBER. The governor shall appoint
a presiding member of the board [committee].
SECTION 11. Section 490.054(a), Government Code, is amended
to read as follows:
(a) Members of the board [committee appointed by the
governor] serve staggered two-year terms, with as near as possible
to one-half of the members' terms expiring each year [subject to the
pleasure of the governor].
SECTION 12. Section 490.055, Government Code, is amended to
read as follows:
Sec. 490.055. 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; and
(3) the fund as provided by Section 490.101.
SECTION 13. Section 490.056, Government Code, is amended by
amending Subsections (a) and (c) and adding Subsection (a-1) to
read as follows:
(a) The board [committee] shall make recommendations,
through peer review and evaluation processes established by the
board [committee], to the governor, lieutenant governor, and
speaker of the house of representatives for the award of money from
the fund under Subchapters E and F as provided by this chapter.
(a-1) Regional centers of innovation and commercialization
formed under Subchapter I shall make recommendations to the
governor and the board for the award of money from the fund under
Subchapter D as provided by this chapter.
(c) Each entity recommended by a regional center of
innovation and commercialization [the committee] for an award of
money from the fund under Subchapter D as provided by this chapter
shall obtain and provide the following information to the office of
the governor:
(1) a federal criminal history background check for
each principal of the entity;
(2) a state criminal history background check for each
principal of the entity;
(3) a credit check for each principal of the entity;
(4) a copy of a government-issued form of photo
identification for each principal of the entity; and
(5) information regarding whether the entity or a
principal of the entity has ever been subject to a sanction imposed
by the Securities and Exchange Commission for a violation of
applicable federal law.
SECTION 14. Section 490.057, Government Code, is amended to
read as follows:
Sec. 490.057. CONFIDENTIALITY. (a) Except as provided by
Subsection (b), information collected or received by the governor's
office, the board [committee], or the board's [committee's]
advisory panels concerning the [identity,] background, finances
[finance], marketing plans, trade secrets, or other commercially or
academically sensitive information of an individual or entity
having applied for, being considered for, receiving, or having
received an award from the fund is confidential unless the
individual or entity consents to disclosure of the information.
(b) The following information collected by the governor's
office, the board [committee], or the board's [committee's]
advisory panels under this chapter is public information and may be
disclosed under Chapter 552:
(1) the name and address of an individual or entity
receiving or having received an award from the fund;
(2) the amount of funding received by an award
recipient from the fund;
(3) a brief description of the project that is funded
under this chapter;
(4) if applicable, [a brief description of] the type
of equity [position] that the governor, on behalf of the state, has
taken in an entity that has received an award from the fund; [and]
(5) any other information [designated by the
committee] with the consent of[:
[(A)] the individual or entity [receiving or
having received an award from the fund, as applicable]; and
(6) any other information otherwise available to the
public
[(B) the governor;
[(C) the lieutenant governor; and
[(D) the speaker of the house of
representatives].
SECTION 15. Subchapter B, Chapter 490, Government Code, is
amended by adding Sections 490.058, 490.059, and 490.060 to read as
follows:
Sec. 490.058. DIVISION OF RESPONSIBILITIES. The board
shall develop and implement policies that clearly separate the
policy-making responsibilities of the board and the management
responsibilities of the staff of the board.
Sec. 490.059. APPLICABILITY OF OPEN MEETINGS LAW. The
board is subject to Chapter 551.
Sec. 490.060. MEETINGS. (a) The board shall hold four
regular meetings each year and special meetings at the call of the
presiding member.
(b) Notwithstanding Chapter 551 or any other law, the board
may use a telephone conference call, videoconference, or other
similar telecommunication method in accordance with this section to
establish a quorum, to hold an open or closed meeting, to vote, or
for any other meeting purpose. This subsection applies without
regard to the subject matter discussed or considered by the board at
the meeting.
(c) A meeting held by telephone conference call,
videoconference, or other similar telecommunication method:
(1) is subject to the notice requirements applicable
to other board meetings;
(2) may not be held unless notice of the meeting
specifies the location where the public may observe the meeting;
and
(3) must be open and audible to the public at the
location specified in the notice under Subdivision (2) during the
open portions of the meeting.
(d) The board may conduct a closed meeting under Section
551.101 to:
(1) discuss or consider a matter that contains
information that is confidential under Section 490.057; or
(2) hear testimony or presentations from an
individual, entity, or group that contains information that is
confidential under Section 490.057.
(e) This section does not prohibit the board from requesting
the attendance at a closed meeting of a person who is not a member of
the board and who has information regarding an applicant for or
recipient of an award from the fund.
SECTION 16. Sections 490.101(c), (d), (f), and (f-1),
Government Code, are amended to read as follows:
(c) The fund may be used only [for]:
(1) for the purposes described by Section 490.002;
[and]
(2) for necessary staff, administration of the fund
including administration by the office of the governor, and
services and expenses related to the fund as provided for by Section
490.055; and
(3) to compensate the fund manager under Section
490.157.
(d) The board [committee] may solicit and accept gifts and
grants for the fund from public and private entities.
(f) The administration of the fund is considered to be a
trusteed program within the office of the governor. The governor
may negotiate on behalf of the state regarding awards from the fund.
The governor may award money appropriated from the fund for awards
under Subchapters E and F only with the prior approval of the
lieutenant governor and speaker of the house of representatives.
The governor may award money appropriated from the fund for awards
under Subchapter D only with the prior approval of the board.
(f-1) For purposes of Subsection (f), an award of money
appropriated from the fund for awards under Subchapters E and F is
considered disapproved by the lieutenant governor or speaker of the
house of representatives if that officer does not approve the
proposal to award funding before the 91st day after the date of
receipt of the proposal from the governor. The lieutenant governor
or the speaker of the house of representatives may extend the review
deadline applicable to that officer for an additional 14 days by
submitting a written notice to that effect to the governor before
the expiration of the initial review period.
SECTION 17. Section 490.102(a), Government Code, is amended
to read as follows:
(a) Money appropriated to or otherwise deposited to the fund
under Section 490.101(b), including money retained in the fund from
a previous biennium [by the legislature], less amounts necessary to
administer the fund under Section 490.055, shall be allocated as
follows:
(1) 46 [50] percent of the money for incentives for
collaboration between certain entities as provided by Subchapter D;
(2) 16.67 percent of the money for research award
matching as provided by Subchapter E; [and]
(3) 33.33 percent of the money for acquisition of
research superiority as provided by Subchapter F; and
(4) four percent of the money for regional centers of
innovation and commercialization as provided by Subchapter I.
SECTION 18. Section 490.151, Government Code, is amended by
adding Subsection (a-1) and amending Subsection (b) to read as
follows:
(a-1) The following private and nonprofit entities are
eligible for incentives under this subchapter:
(1) a private entity that is partially owned by an
institution of higher education and is seeking to commercialize
technology acquired from the partnering institution;
(2) a private entity that is a qualified spin-out, as
determined by the board, of an institution of higher education;
(3) a private entity seeking to commercialize
technology acquired from the Lyndon B. Johnson Space Center of the
National Aeronautics and Space Administration;
(4) a private or nonprofit entity partnering with a
research institution through a sponsored research agreement or
qualified collaborative agreement; or
(5) a private entity that has received an award under
this chapter and has received an equity investment commitment from
a qualified investor, as determined by the board, for
commercialization and growth purposes.
(b) The regional centers of innovation and
commercialization formed under Subchapter I [committee] shall
recommend proposals eligible for funding under this subchapter
[section] to the governor and the board[, lieutenant governor, and
speaker of the house of representatives].
SECTION 19. Section 490.154(a), Government Code, is amended
to read as follows:
(a) An entity participating in a regional center of
innovation and commercialization formed under Subchapter I that
receives funding or another incentive under this subchapter shall
guarantee by contract with the governor's office that the entity
will perform specific actions expected to provide benefits to this
state.
SECTION 20. Subchapter D, Chapter 490, Government Code, is
amended by adding Section 490.157 to read as follows:
Sec. 490.157. FUND MANAGER. The office shall employ or
contract with a fund manager, designated by the board, to manage
equity positions or other investments received by the office of the
governor in consideration for an award made. The fund manager shall
perform such duties, as determined by the board, for the purpose of
managing equity positions or other investments made under this
subchapter.
SECTION 21. Chapter 490, Government Code, is amended by
adding Subchapter I, and a heading is added to that subchapter to
read as follows:
SUBCHAPTER I. REGIONAL CENTERS OF
INNOVATION AND COMMERCIALIZATION
SECTION 22. Sections 490.152 and 490.1521, Government Code,
are transferred to Subchapter I, Chapter 490, Government Code, as
added by this Act, redesignated as Sections 490.401 and 490.402,
Government Code, and amended to read as follows:
Sec. 490.401 [490.152]. USE OF MONEY FOR REGIONAL CENTERS
OF INNOVATION AND COMMERCIALIZATION. (a) Amounts allocated from
the fund for use as provided by this subchapter may be used by an
entity described by Section 490.151(a) or an [In recommending
proposals for funding, the committee shall give specific emphasis
to the formation of regional centers of innovation and
commercialization.
[(b) An] appropriate combination of any entities described
by that subsection [Section 490.151(a) may collaborate] to form and
maintain a regional center of innovation and commercialization to
serve a region of this state.
(b) [(c)] A regional center of innovation and
commercialization shall provide for a specified region:
(1) research and development activities that may
include initiatives to prove the feasibility of an idea;
(2) commercialization of the results of research and
development;
(3) incubators for new businesses and expansion of
existing businesses related to research and development; and
(4) workforce training for businesses resulting from
research and development.
(c) [(d)] Subject to the availability of suitable partners
and resources, the board [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
governor in consultation with the lieutenant governor and the
speaker of the house of representatives.
Sec. 490.402 [490.1521]. MINUTES OF CERTAIN MEETINGS.
(a) Each regional center of innovation and commercialization
established under Section 490.401 [490.152, including the Texas
Life Science Center for Innovation and Commercialization,] shall
keep minutes of each meeting at which applications for funding
under Subchapter D [this subchapter] are evaluated. The minutes
must:
(1) include the name of each applicant recommended by
the regional center of innovation and commercialization to the
governor and board [committee] for funding under Subchapter D; and
(2) indicate the vote of each member of the governing
body of the regional center of innovation and commercialization,
including any recusal by a member and the member's reason for
recusal, with regard to each application reviewed.
(b) Each regional center of innovation and
commercialization shall retain a copy of the minutes of each
meeting to which this section applies for at least three years.
SECTION 23. Section 490.201(b), Government Code, is amended
to read as follows:
(b) The board [committee] shall recommend proposals
eligible for funding under this section to the governor, lieutenant
governor, and speaker of the house of representatives.
SECTION 24. Section 490.253, Government Code, is amended to
read as follows:
Sec. 490.253. PROPOSALS FOR FUNDING. (a) The board
[committee] shall review and consider proposals by research
institutions for:
(1) creating new research superiority;
(2) attracting existing research superiority from
institutions not located in this state and other research entities;
or
(3) enhancing existing research superiority by
attracting from outside this state additional researchers and
resources.
(b) The board [committee] shall recommend proposals
eligible for funding under Section 490.251 and proposals solicited
and identified under this section to the governor, lieutenant
governor, and speaker of the house of representatives.
SECTION 25. Section 490.257(b), Government Code, is amended
to read as follows:
(b) The 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 board [committee].
SECTION 26. Sections 490.054(b), 490.056(e), and
490.153(b), Government Code, are repealed.
SECTION 27. The terms of the members of the Texas Emerging
Technology Advisory Committee serving immediately before the
effective date of this Act expire September 1, 2013.
SECTION 28. (a) As soon as practicable after the effective
date of this Act:
(1) the governor, lieutenant governor, and speaker of
the house of representatives shall appoint members to the Texas
Emerging Technology Fund Board established under Subchapter B,
Chapter 490, Government Code, in a manner that complies with that
subchapter, as amended by this Act; and
(2) the governor shall appoint the initial presiding
member of the board.
(b) At the first meeting of members of the Texas Emerging
Technology Fund Board appointed under Subchapter B, Chapter 490,
Government Code, as amended by this Act, occurring on or after
September 1, 2013:
(1) the members appointed by the governor shall draw
lots to determine which three members will serve terms expiring
September 1, 2014, and which two members will serve terms expiring
September 1, 2015;
(2) the members appointed by the lieutenant governor
shall draw lots to determine which two members will serve terms
expiring September 1, 2014, and which three members will serve
terms expiring September 1, 2015; and
(3) the members appointed by the speaker of the house
of representatives shall draw lots to determine which two members
will serve terms expiring September 1, 2014, and which three
members will serve terms expiring September 1, 2015.
SECTION 29. This Act takes effect September 1, 2013.