84R21676 CLG-D
By: Button, Rodriguez of Travis, Ashby, H.B. No. 26
Parker, et al.
Substitute the following for H.B. No. 26:
By: Johnson C.S.H.B. No. 26
A BILL TO BE ENTITLED
AN ACT
relating to state economic development measures, including
administration of the Texas Enterprise Fund, creation of the
Economic Incentive Oversight Board and the governor's university
research initiative, abolishment of the Texas emerging technology
fund and certain programs administered by the Texas Economic
Development Bank, and renaming the Major Events trust fund to the
Major Events Reimbursement Program.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. TRUSTEED PROGRAMS WITHIN OFFICE OF GOVERNOR
SECTION 1.01. Section 481.078, Government Code, is amended
by amending Subsections (c), (d-1), (e), (e-1), (f), and (k) and
adding Subsections (e-2) and (m) to read as follows:
(c) Except as provided by Subsections (d) and (d-1), the
fund may be used only for:
(1) economic development, infrastructure development,
community development, job training programs, and business
incentives; and
(2) projects for commercialization of property
derived from research developed at or through public or private
institutions of higher education as provided by Section 481.081.
(d-1) The fund may be used for the Texas homeless housing
and services program administered by the Texas Department of
Housing and Community Affairs under Section 2306.2585. The
governor may transfer appropriations from the fund to the Texas
Department of Housing and Community Affairs to fund the Texas
homeless housing and services program. Subsections (e-2) [(e-1)],
(f), (f-1), (f-2), (g), (h), (h-1), (i), and (j) and Section 481.080
do not apply to a grant awarded for a purpose specified by this
subsection.
(e) 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 awarding, by grant,
money appropriated from the fund.
(e-1) The governor may award money appropriated from the
fund only with the prior approval of the lieutenant governor and
speaker of the house of representatives. For purposes of this
subsection, an award of money appropriated from the fund is
considered disapproved by the lieutenant governor or speaker of the
house of representatives if that officer does not approve the
proposal to award the grant before the 31st [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.
(e-2) [(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 from the fund [under this
section], the governor shall enter into a written agreement with
the entity to be awarded the grant money. If the entity is awarded a
grant for a purpose described by Subsection (c)(1), the agreement
must specify [specifying] that:
(1) if the 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 governor will not distribute to the
recipient any grant money that remains to be awarded under the
agreement; and
(C) the 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.
(k) To encourage the development and location of small
businesses in this state, the governor shall make [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.
(m) The office of the governor shall adopt rules for the
operation of the trusteed program established under this section.
The rules must include:
(1) forms and procedures for applications for and the
award of grants;
(2) procedures for evaluating grant applications;
(3) provisions governing the grant agreement process;
(4) methods and procedures for monitoring grant
recipients and projects or activities for which a grant is awarded
from the fund to determine whether and to what extent the grant
recipients comply with job creation performance targets, capital
investment commitments, or other specified performance targets in
the grant agreement, including requirements that grant recipients
provide to the office periodic compliance updates;
(5) document retention requirements for grant
recipients that are consistent with applicable state law; and
(6) conflict of interest provisions to ensure that
persons involved in the operation of the program, including persons
involved in evaluating applications for or awarding grants from the
fund or in monitoring grant recipients or determining compliance
with the terms of grant agreements, do not have a substantial
interest in any grant recipient or grant awarded from the fund.
SECTION 1.02. Section 481.079(a-1), Government Code, is
amended to read as follows:
(a-1) For grants awarded for a purpose specified by Section
481.078(d-1) or 481.081, the report must include only the amount
and purpose of each grant.
SECTION 1.03. Subchapter E, Chapter 481, Government Code,
is amended by adding Section 481.081 to read as follows:
Sec. 481.081. TEXAS ENTERPRISE FUND: GRANT FOR UNIVERSITY
RESEARCH DEVELOPMENT WITH PRIVATE SPONSORSHIP. (a) In this
section:
(1) "Fund" means the Texas Enterprise Fund under
Section 481.078.
(2) "Public or private institution of higher
education" means an institution of higher education or a private or
independent institution of higher education as those terms are
defined by Section 61.003, Education Code.
(b) The governor shall provide grants to public or private
institutions of higher education from the fund to supplement other
funding for projects involving the commercialization of
intellectual property or other property derived from research
developed at or through a public or private institution of higher
education. To be eligible for a grant under this section, a project
must be supported by funding provided by one or more private
entities participating in the project, in addition to any funding
provided by the public or private institution of higher education.
(c) The amount of a grant awarded under this section may not
exceed 50 percent of the total amount of investment in the project
provided by the applicable public or private institution of higher
education and the participating private entity or entities.
SECTION 1.04. Subchapter G, Chapter 404, Government Code,
is amended by adding Section 404.1031 to read as follows:
Sec. 404.1031. MANAGEMENT OF INVESTMENT PORTFOLIO FROM
FORMER TEXAS EMERGING TECHNOLOGY FUND. (a) In this section,
"state's emerging technology investment portfolio" means:
(1) the equity positions in the form of stock or other
security the governor took, on behalf of the state, in companies
that received awards under the former Texas emerging technology
fund; and
(2) any other investments made by the governor, on
behalf of the state, in connection with an award made under the
former Texas emerging technology fund.
(b) The trust company shall manage the state's emerging
technology investment portfolio in a manner that a prudent investor
would employ exercising reasonable care, skill, and caution, taking
into consideration the investment of all assets of the portfolio.
The trust company may recover its reasonable and necessary costs
incurred in the management of the portfolio from the earnings on the
investments in the portfolio.
(c) Any proceeds or other earnings from the sale of stock or
other investments in the state's emerging technology investment
portfolio, less the amount permitted to be retained for payment of
its costs for managing the portfolio as provided by Subsection (b),
shall be remitted by the trust company to the comptroller for
deposit in the general revenue fund.
SECTION 1.05. Effective September 1, 2016, Subchapter G,
Chapter 404, Government Code, is amended by adding Section 404.1032
to read as follows:
Sec. 404.1032. VALUATION OF INVESTMENTS FROM FORMER FUND;
ANNUAL REPORT. (a) To the maximum extent practicable, the trust
company annually shall perform a valuation of the equity positions
the governor took, on behalf of the state, in companies that
received awards under the former Texas emerging technology fund and
of other investments made by the governor, on behalf of the state,
in connection with an award under that fund. The valuation must be
based on a methodology that is consistent with generally accepted
accounting principles.
(b) Not later than January 31 of each year, the trust
company 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 trust company's Internet
website a report of any valuation performed under this section
during the preceding state fiscal year.
SECTION 1.06. The heading to Chapter 490, Government Code,
is amended to read as follows:
CHAPTER 490. PROVISIONS RELATING TO FORMER TEXAS [FUNDING FOR]
EMERGING TECHNOLOGY FUND
SECTION 1.07. Sections 490.001(2) and (4), Government Code,
are amended to read as follows:
(2) "Fund" means the former Texas emerging technology
fund.
(4) "Award" means:
(A) for purposes of former Subchapter D, an
investment in the form of equity or a convertible note;
(B) for purposes of former Subchapter E, an
investment in the form of a debt instrument;
(C) for purposes of former Subchapter F, a grant;
or
(D) other forms of contribution or investment as
recommended by the former Texas Emerging Technology Advisory
Committee [committee] and approved by the governor, lieutenant
governor, and speaker of the house of representatives before
amendment of this chapter by the 84th Legislature, Regular Session,
2015.
SECTION 1.08. The heading to Section 490.005, Government
Code, is amended to read as follows:
Sec. 490.005. REPORT ON AWARDS FROM FORMER FUND [ANNUAL
REPORT].
SECTION 1.09. Section 490.005, Government Code, is amended
by amending Subsections (a) and (b) and adding Subsection (d) to
read as follows:
(a) Not later than January 31, 2016 [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 for each preceding state
fiscal year 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 former
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, has taken [may take] in
companies that received [receiving] awards and the names of the
companies in which the state has taken an equity position.
(b) The [annual] report must also contain:
(1) the total number of jobs actually created by each
project that received an award from the fund [receiving funding
under this chapter];
(2) an analysis of the number of jobs actually created
by each project that received an award from the fund [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 former Subchapter D [during each preceding state fiscal
year]; and
(C) the actual outcomes of all projects funded
under former 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.
(d) This section expires September 1, 2017.
SECTION 1.10. Effective September 1, 2016, Subchapter A,
Chapter 490, Government Code, is amended by adding Section 490.0051
to read as follows:
Sec. 490.0051. ANNUAL REPORT ON PROJECTS FUNDED; JOB
CREATION AND OUTCOMES. (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 contains for each preceding state
fiscal year the following information regarding awards made under
the fund:
(1) the total number of jobs actually created by each
project that received an award from the fund;
(2) an analysis of the number of jobs actually created
by each project that received an award from the fund; 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 all projects funded
under former Subchapter D; and
(C) the actual outcomes of all projects funded
under former Subchapter D, including any financial impact on the
state resulting from a liquidity event involving a company whose
project was funded under that subchapter.
(b) The governor shall exclude from the report information
that is made confidential by law.
(c) This section expires September 1, 2030.
SECTION 1.11. Section 490.006, Government Code, is amended
to read as follows:
Sec. 490.006. VALUATION OF INVESTMENTS; [INCLUSION IN]
ANNUAL REPORT. (a) To the maximum extent practicable, the office
of the governor shall annually perform a valuation of the equity
positions taken by the governor, on behalf of the state, in
companies that received [receiving] awards under the fund and of
other investments made by the governor, on behalf of the state, in
connection with an award under the fund. The valuation must[:
[(1)] be based on a methodology that:
(1) [(A)] may be developed in consultation with the
comptroller's office; and
(2) [(B)] is consistent with generally accepted
accounting principles[; and
[(2) be included with the annual report required under
Section 490.005].
(b) Except as provided by Subsection (c), not later than
January 31, 2016, 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 of any valuation
performed under this section during the preceding state fiscal
year.
(c) A valuation performed for the state fiscal year ending
August 31, 2015, must be included with the report required under
Section 490.005.
(d) This section expires September 1, 2016.
SECTION 1.12. The heading to Subchapter B, Chapter 490,
Government Code, is amended to read as follows:
SUBCHAPTER B. MISCELLANEOUS PROVISIONS [TEXAS EMERGING TECHNOLOGY
ADVISORY COMMITTEE]
SECTION 1.13. Section 490.057, Government Code, is amended
to read as follows:
Sec. 490.057. CONFIDENTIALITY. (a) Except as provided by
Subsection (b), information collected by the governor's office, the
former Texas Emerging Technology Advisory Committee [committee],
or the committee's advisory panels concerning the identity,
background, finance, marketing plans, trade secrets, or other
commercially or academically sensitive information of an
individual or entity that was [being] considered for or [,
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 former Texas Emerging Technology Advisory Committee
[committee], or the 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
that [receiving or having] received an award from the fund;
(2) the amount of funding received by an award
recipient;
(3) a brief description of the project [that is]
funded under this chapter;
(4) if applicable, a brief description of the 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 that [receiving or
having] received an award from the fund[, as applicable];
(B) the governor;
(C) the lieutenant governor; and
(D) the speaker of the house of representatives.
SECTION 1.14. Section 50D.013(a), Agriculture Code, is
amended to read as follows:
(a) The policy council shall:
(1) provide a vision for unifying this state's
agricultural, energy, and research strengths in a successful launch
of a cellulosic biofuel and bioenergy industry;
(2) foster development of cellulosic-based and
bio-based fuels and build on the former Texas emerging technology
fund's investments in leading-edge energy research and efforts to
commercialize the production of bioenergy;
(3) pursue the creation of a next-generation biofuels
energy research program at a university in this state;
(4) work to procure federal and other funding to aid
this state in becoming a bioenergy leader;
(5) study the feasibility and economic development
effect of a blending requirement for biodiesel or cellulosic fuels;
(6) pursue the development and use of thermochemical
process technologies to produce alternative chemical feedstocks;
(7) study the feasibility and economic development of
the requirements for pipeline-quality, renewable natural gas; and
(8) perform other advisory duties as requested by the
commissioner regarding the responsible development of bioenergy
resources in this state.
SECTION 1.15. Section 203.021(e), Labor Code, is amended to
read as follows:
(e) Money in the compensation fund may not be transferred to
the[:
[(1)] Texas Enterprise Fund created under Section
481.078, Government Code[; or
[(2) Texas emerging technology fund established under
Section 490.101, Government Code].
SECTION 1.16. The following laws are repealed:
(1) Sections 490.001(1), (3), and (5), Government
Code;
(2) Sections 490.002 and 490.003, Government Code;
(3) Sections 490.051, 490.052, 490.0521, 490.053,
490.054, 490.055, and 490.056, Government Code; and
(4) Subchapters C, D, E, F, and G, Chapter 490,
Government Code.
SECTION 1.17. (a) On September 1, 2015, the Texas emerging
technology fund is abolished. Any unencumbered balance of the fund
may be appropriated only to any of the following:
(1) the Texas Research Incentive Program (TRIP) under
Subchapter F, Chapter 62, Education Code;
(2) the Texas research university fund, subject to
Subsection (b) of this section;
(3) the governor's university research initiative fund
established under Subchapter H, Chapter 62, Education Code, as
added by this Act; and
(4) the comptroller for the purposes of expenses
incurred in managing the state's portfolio of equity positions and
other investments in connection with awards from the former Texas
emerging technology fund in accordance with Section 404.1031,
Government Code, as added by this article.
(b) The authority of the Texas research university fund to
receive the appropriation described by Subsection (a) of this
section is contingent on passage and enactment of H.B. 1000, or
similar legislation relating to state support for general academic
teaching institutions in this state by the 84th Legislature,
Regular Session, 2015, that renames the existing Texas competitive
knowledge fund and changes the purposes for which the fund can be
used.
(c) The abolishment by this article of the Texas emerging
technology fund and the repeal of provisions of Chapter 490,
Government Code, relating to that fund do not affect the validity of
an agreement between the governor and an award recipient or a person
to be awarded money that is entered into under Chapter 490 before
September 1, 2015.
(d) Money that was deposited in the Texas emerging
technology fund as a gift, grant, or donation under Chapter 490,
Government Code, and that is encumbered by the specific terms of the
gift, grant, or donation may be spent only in accordance with the
terms of the gift, grant, or donation.
(e) Money from the Texas emerging technology fund that is
encumbered because the money is awarded or otherwise obligated by
agreement before September 1, 2015, but under the terms of the award
or agreement will not be distributed until a later date shall be
distributed in accordance with the terms of the award or agreement.
If the governor determines that the money will not be distributed in
accordance with the terms of the award or agreement, the governor
shall certify that fact to the comptroller. On that certification,
the comptroller shall make that money available in the general
revenue fund to be used in accordance with legislative
appropriation.
(f) On or after the effective date of this Act, subject to
any amounts used to recover costs under Section 404.1031(b),
Government Code, as added by this article, the following payments
or other amounts shall be sent to the comptroller for deposit to the
general revenue fund to be used in accordance with legislative
appropriation:
(1) any royalties, revenues, and other financial
benefits realized from a project undertaken with money from the
Texas emerging technology fund, as provided by a contract described
by former Section 490.103, Government Code;
(2) any interest or proceeds received as a result of a
transaction authorized by former Section 490.101(h), Government
Code;
(3) any money returned or repaid to the state by an
award recipient pursuant to an agreement entered into under former
Section 490.101, Government Code;
(4) any money derived from an interest the state
retained in a capital improvement pursuant to an agreement entered
into under former Section 490.101, Government Code; and
(5) any fund money returned by an entity that fails to
perform an action guaranteed by a contract entered into under
former Section 490.154 or 490.203, Government Code.
SECTION 1.18. A regional center of innovation and
commercialization established under Section 490.152, Government
Code, is abolished on the effective date of this Act. Each center
shall transfer to the office of the governor a copy of any meeting
minutes required to be retained under Section 490.1521, Government
Code, as that section existed immediately before that section's
repeal by this article, and the office shall retain the minutes for
the period prescribed by that section.
SECTION 1.19. On September 1, 2015, the Texas Emerging
Technology Advisory Committee established under Subchapter B,
Chapter 490, Government Code, is abolished.
SECTION 1.20. Except as provided by this Act, on September
1, 2015, the following powers, duties, functions, and activities
performed by the office of the governor immediately before that
date are transferred to the Texas Treasury Safekeeping Trust
Company:
(1) all powers, duties, functions, and activities
related to equity positions in the form of stock or other security
the governor has taken, on behalf of the state, in companies that
received awards under the Texas emerging technology fund before
September 1, 2015; and
(2) all powers, duties, functions, and activities
related to other investments made by the governor, on behalf of the
state, in connection with an award made under the Texas emerging
technology fund before September 1, 2015.
SECTION 1.21. If a conflict exists between this Act and
another Act of the 84th Legislature, Regular Session, 2015, that
relates to the Texas emerging technology fund, this Act controls
without regard to the relative dates of enactment.
ARTICLE 2. ECONOMIC INCENTIVE OVERSIGHT BOARD
SECTION 2.01. Subtitle F, Title 4, Government Code, is
amended by adding Chapter 490G to read as follows:
CHAPTER 490G. ECONOMIC INCENTIVE OVERSIGHT BOARD
Sec. 490G.001. DEFINITIONS. In this chapter:
(1) "Board" means the Economic Incentive Oversight
Board.
(2) "Monetary incentive" means a grant, loan, or other
form of monetary incentive paid from state revenues, including a
state trust fund, that a business entity or other person may receive
in exchange for or as a result of conducting an activity with an
economic development purpose.
(3) "Tax incentive" means any exemption, deduction,
credit, exclusion, waiver, rebate, discount, deferral, or other
abatement or reduction of state tax liability of a business entity
or other person that the person may receive in exchange for or as a
result of conducting an activity with an economic development
purpose.
Sec. 490G.002. ESTABLISHMENT AND COMPOSITION. (a) The
Economic Incentive Oversight Board is an advisory body composed of
eight members as follows:
(1) two public members appointed by the speaker of the
house of representatives, one of whom must be from a rural county;
(2) two public members appointed by the lieutenant
governor, one of whom must be from a rural county;
(3) two public members appointed by the comptroller;
and
(4) two public members appointed by the governor.
(b) In appointing members of the board, each appointing
officer shall appoint one member who has expertise in the area of
economic development.
(c) A member of the board serves at the pleasure of the
appointing officer.
(d) The board members are entitled to reimbursement for
actual and necessary expenses incurred by the members in serving on
the board as provided by Chapter 660 and the General Appropriations
Act.
(e) The office of the governor shall provide administrative
support and staff to the board.
Sec. 490G.003. PRESIDING OFFICER. The governor shall
appoint the presiding officer of the board.
Sec. 490G.004. MEETINGS. The board shall meet at least
quarterly at the call of the presiding officer.
Sec. 490G.005. REVIEW OF CERTAIN STATE INCENTIVE PROGRAMS;
PERFORMANCE MATRIX. (a) The board shall examine the effectiveness
and efficiency of programs and funds administered by the office of
the governor, the comptroller, or the Department of Agriculture
that award to business entities and other persons state monetary or
tax incentives for which the governor, comptroller, or department
has discretion in determining whether or not to award the
incentives.
(b) The board shall develop a performance matrix that
clearly establishes the economic performance indicators, measures,
and metrics that will guide the board's evaluations of those
programs and funds.
(c) The performance matrix must be designed to evaluate, in
relation to each business entity or other person that receives a
state monetary or tax incentive under a program or from a fund
described by Subsection (a), the benefits and costs to this state,
local governments, and residents of this state that result directly
from the economic development activity for which the person
received the incentive and indirectly from activities ancillary to
that economic development activity.
Sec. 490G.006. SCHEDULE OF REVIEW; RECOMMENDATION TO
LEGISLATIVE AUDIT COMMITTEE. (a) The board shall develop a
schedule for the periodic review of each state incentive program or
fund described by Section 490G.005 for the purposes of making
recommendations on whether to continue the program or fund or
whether to improve program or fund effectiveness and efficiency.
The board shall review and make recommendations to the legislature
regarding each program or fund according to the review schedule.
(b) After conducting a review of a state incentive program
or fund under this chapter, the board may recommend to the
legislative audit committee that an audit of the program or fund be
included in the audit plan under Section 321.013.
Sec. 490G.007. ANNUAL REPORT. Not later than January 1 of
each year, the board shall submit to the lieutenant governor, the
speaker of the house of representatives, and each standing
committee of the senate and house of representatives with primary
jurisdiction over economic development a report containing
findings and recommendations resulting from each review of state
incentive programs and funds conducted by the board under this
chapter during the preceding calendar year.
Sec. 490G.008. CONFLICTS OF INTEREST. (a) A member of the
board who has a substantial interest in a business entity or other
person that previously applied for or received a state monetary or
tax incentive from a program or fund subject to review by the board
shall disclose that interest in writing to the board.
(b) A board member who has a business, commercial, or other
relationship, other than an interest described by Subsection (a),
that could reasonably be expected to diminish the person's
independence of judgment in the performance of the person's
responsibilities in relation to the board shall disclose the
relationship in writing to the board.
(c) A member of the board may not make a political
contribution to the governor, the comptroller, the lieutenant
governor, or the speaker of the house of representatives or to a
candidate for election or selection to any of those offices.
Sec. 490G.009. CONFIDENTIALITY OF INFORMATION. The
provision of information that is confidential by law to the board
does not affect the confidentiality of the information.
SECTION 2.02. (a) As soon as practicable after the effective
date of this Act, the appointing officials shall appoint members to
the Economic Incentive Oversight Board established under Chapter
490G, Government Code, as added by this article.
(b) Notwithstanding Section 490G.007, Government Code, as
added by this article, the Economic Incentive Oversight Board shall
submit the report required by that section beginning with the
report due on January 1, 2017.
ARTICLE 3. ONLINE INFORMATION AND APPLICATION SYSTEM FOR
STATE INCENTIVES
SECTION 3.01. Subtitle G, Title 10, Government Code, is
amended by adding Chapter 2301 to read as follows:
CHAPTER 2301. ELECTRONIC ECONOMIC DEVELOPMENT INCENTIVES
INFORMATION AND APPLICATION SYSTEM
Sec. 2301.001. DEFINITIONS. In this chapter:
(1) "Department," "electronic government project,"
and "state electronic Internet portal" have the meanings assigned
by Section 2054.003.
(2) "Monetary incentive" means a grant, loan, or other
form of monetary incentive paid from state revenues, including a
state trust fund, that a business entity or other person may receive
in exchange for or as a result of conducting an activity with an
economic development purpose.
(3) "State agency" means a department, commission,
board, office, council, authority, or other state agency in the
executive branch of state government.
(4) "Tax incentive" means any exemption, deduction,
credit, exclusion, waiver, rebate, discount, deferral, or other
abatement or reduction of state tax liability of a business entity
or other person that the person may receive in exchange for or as a
result of conducting an activity with an economic development
purpose.
Sec. 2301.002. ESTABLISHMENT OF PROJECT. The department
shall establish an electronic government project to develop an
Internet website accessible through the state electronic Internet
portal that:
(1) provides a single location that a business entity
considering relocating to or expanding in this state may use to
receive information relating to state monetary and tax incentives
for which the entity may be qualified;
(2) includes an interactive tool that allows a
business entity to determine whether the entity may be eligible for
any state monetary or tax incentive in this state;
(3) allows, when feasible, the business entity to fill
out one application for all:
(A) state monetary incentives for which the
entity may be eligible; and
(B) state tax incentives for which the entity may
be eligible, other than a tax incentive for which the entity, or a
transaction involving the entity, qualifies for by operation of
law; and
(4) allows, when feasible, for the application to be
submitted to each state agency that offers the monetary or tax
incentive described by Subdivision (3).
Sec. 2301.003. ESTABLISHING AND OPERATING PROJECT;
COORDINATION. In establishing and operating the electronic
government project under this chapter, the department, in
coordination with the Texas Economic Development and Tourism Office
and the comptroller, shall direct, coordinate, and assist state
agencies in establishing and using:
(1) a common electronic application and reporting
system, including:
(A) a standard format for announcing monetary and
tax incentive opportunities;
(B) standard data elements for use in creating
monetary and tax incentive opportunity announcement summaries,
including existing monetary and tax incentives and search
functions; and
(C) a common application form for a person to use
in applying for the following from multiple state agencies:
(i) all state monetary incentives for which
the entity may be eligible; and
(ii) all state tax incentives for which the
entity may be eligible, other than a tax incentive for which the
entity, or a transaction involving the entity, qualifies for by
operation of law; and
(2) a process for:
(A) improving interagency coordination of
information collection and sharing of data relating to monetary and
tax incentives; and
(B) improving the timeliness, completeness, and
quality of applications received by a state agency for monetary and
tax incentives described by Subdivision (1).
ARTICLE 4. PROGRAMS ADMINISTERED BY TEXAS ECONOMIC DEVELOPMENT
BANK
SECTION 4.01. The following laws are repealed:
(1) Subchapter N, Chapter 481, Government Code; and
(2) Chapter 503, Local Government Code.
SECTION 4.02. Section 447.013(i), Government Code, is
amended to read as follows:
(i) A recipient of a grant or loan under this section is
encouraged to purchase goods and services from small businesses and
historically underutilized businesses, as those terms are defined
by former Section 481.191, as that section existed on January 1,
2015 [Government Code].
SECTION 4.03. Section 489.108, Government Code, is amended
to read as follows:
Sec. 489.108. PROGRAMS, SERVICES, AND FUNDS UNDER BANK'S
DIRECTION. Notwithstanding any other law, the bank shall perform
the duties and functions of the office with respect to the following
programs, services, and funds:
(1) [the Texas Small Business Industrial Development
Corporation established under Chapter 503, Local Government Code;
[(2)] the capital access program established under
Section 481.405;
(2) [(3)] the Texas leverage fund;
(3) [(4) the linked deposit program established under
Section 481.193;
[(5)] the enterprise zone program established under
Chapter 2303;
(4) [(6)] the industrial revenue bond program;
(5) [(7)] the defense economic readjustment zone
program established under Chapter 2310;
(6) [(8)] the Empowerment Zone and Enterprise
Community grant program established under Section 481.025; and
(7) [(9)] the renewal community program.
SECTION 4.04. Section 39.909(a), Utilities Code, is amended
to read as follows:
(a) In this section, "small business" and "historically
underutilized business" have the meanings assigned by former
Section 481.191, Government Code, as that section existed on
January 1, 2015.
SECTION 4.05. Section 52.256(a), Utilities Code, is amended
to read as follows:
(a) In this section, "small business" and "historically
underutilized business" have the meanings assigned by former
Section 481.191, Government Code, as that section existed on
January 1, 2015.
SECTION 4.06. (a) The Texas Economic Development Bank shall
reject any application for a linked deposit loan submitted to the
bank before the effective date of this Act for which a linked
deposit has not been made in accordance with Subchapter N, Chapter
481, Government Code, as that subchapter existed immediately before
being repealed by this article.
(b) Notwithstanding the repeal by this article of
Subchapter N, Chapter 481, Government Code, Subchapter N is
continued in effect for the limited purpose of allowing the Texas
Economic Development Bank to administer linked deposits made before
the effective date of this Act and to pursue the bank's remedies
under that subchapter if:
(1) a recipient of a loan to which a deposit is linked
defaults on the loan; or
(2) a lending institution that makes a loan for which a
linked deposit is made fails to comply with that subchapter.
SECTION 4.07. As soon as practicable after the effective
date of this Act, the Texas Economic Development Bank shall send to
the comptroller for deposit in the general revenue fund any revenue
or other money of the Texas Small Business Industrial Development
Corporation held in financial institutions as provided by Section
503.055, Local Government Code, as that section existed immediately
before that section's repeal by this article.
ARTICLE 5. GOVERNOR'S UNIVERSITY RESEARCH INITIATIVE
SECTION 5.01. Chapter 62, Education Code, is amended by
adding Subchapter H to read as follows:
SUBCHAPTER H. GOVERNOR'S UNIVERSITY RESEARCH INITIATIVE
Sec. 62.161. DEFINITIONS. In this subchapter:
(1) "Advisory board" means the governor's university
research initiative advisory board.
(2) "Distinguished researcher" means a researcher who
is:
(A) a Nobel laureate or the recipient of an
equivalent honor; or
(B) a member of a national honorific society,
such as the National Academy of Sciences, the National Academy of
Engineering, or the Institute of Medicine, or an equivalent
honorific organization.
(3) "Eligible institution" means a general academic
teaching institution or health-related institution.
(4) "Fund" means the governor's university research
initiative fund established under this subchapter.
(5) "General academic teaching institution" has the
meaning assigned by Section 61.003.
(6) "Governing board" has the meaning assigned by
Section 61.003.
(7) "Health-related institution" means a medical and
dental unit as defined by Section 61.003 and any other public health
science center, public medical school, or public dental school
established by statute or in accordance with Chapter 61.
(8) "Office" means the Texas Economic Development and
Tourism Office within the office of the governor.
(9) "Private or independent institution of higher
education" has the meaning assigned by Section 61.003.
Sec. 62.162. ADMINISTRATION OF INITIATIVE. (a) The
governor's university research initiative is administered by the
Texas Economic Development and Tourism Office within the office of
the governor.
(b) From the governor's university research initiative
fund, the office shall award matching grants to assist eligible
institutions in recruiting distinguished researchers.
(c) The office may adopt any rules the office considers
necessary to administer this subchapter.
Sec. 62.163. MATCHING GRANTS. (a) An eligible institution
may apply to the office for a matching grant from the fund. Before
approval or disapproval of a grant application, the office shall
consider the recommendation of the advisory board regarding the
grant proposal. If the office approves a grant application, the
office shall award to the applicant institution a grant amount
equal to the amount committed by the institution for the
recruitment of a distinguished researcher, except as provided by
Subsection (c)(2).
(b) A grant application must identify the source and amount
of the eligible institution's matching funds and must demonstrate
that the proposed use of the grant has the support of the
institution's president and of the institution's governing board,
the chair of the institution's governing board, or the chancellor
of the university system, if the institution is a component of a
university system. An applicant eligible institution may commit
for matching purposes any funds of the institution available for
that purpose other than appropriated general revenue.
(c) The office may set a deadline for grant applications for
each state fiscal year. After fully funding approved grant
applications received during an application period for a state
fiscal year, the office may reopen applications for that year and:
(1) award the full amount of matching funds from the
fund for new applications; or
(2) approve previously disapproved applications
submitted before the original application deadline for receipt of a
reduced grant amount.
(d) A matching grant received by an eligible institution
under this subchapter may not be considered as a basis to reduce,
directly or indirectly, the amount of money otherwise appropriated
to the institution.
(e) A matching grant may not be used by an eligible
institution to recruit a distinguished researcher or other employee
from:
(1) another eligible institution; or
(2) a private or independent institution of higher
education.
(f) The office shall require an application and all
supporting documentation to be submitted to the office
electronically in the manner prescribed by the office.
Sec. 62.164. GRANT AWARD CRITERIA; PRIORITIES. (a) In
awarding grants, the office shall give priority to grant proposals
that involve the recruitment of distinguished researchers in the
fields of science, technology, engineering, and mathematics. With
respect to proposals involving those fields, the office shall give
priority to proposals that:
(1) demonstrate a reasonable probability of enhancing
Texas' national and global economic competitiveness;
(2) demonstrate a reasonable probability of creating a
nationally or internationally recognized locus of research
superiority or a unique locus of research;
(3) are matched with a significant amount of funding
from a federal or private source that may be transferred to the
eligible institution;
(4) are interdisciplinary and collaborative; or
(5) include a strategic plan for intellectual property
development and commercialization of technology.
(b) The office may award a grant to a proposal that:
(1) supports the recruitment of a distinguished
researcher distinguished in, or to be engaged in, basic,
translational, or applied research; or
(2) proposes the recruitment of a distinguished
researcher for new research capabilities of the eligible
institution or to expand the institution's existing research
capabilities.
(c) A grant proposal should identify a specific
distinguished researcher being recruited. In addition to the
factors considered in evaluating proposals considered a priority
under Subsection (a), the office may consider:
(1) the likelihood that the researcher being recruited
will not accept a research position with the applicant eligible
institution without the institution's receipt of a matching grant
under this subchapter;
(2) the extent to which the subject matter of the
researcher's research offers the opportunity for interdisciplinary
and collaborative research at the applicant eligible institution
and with other eligible institutions; and
(3) any commercialization track record of the
researcher being recruited.
Sec. 62.165. CONFIDENTIALITY. Information collected or
obtained by the office or the advisory board concerning the
identity of a particular distinguished researcher who is the
subject of a grant proposal under this subchapter is confidential
unless the researcher and the applicant eligible institution
consent to disclosure of the information. The information remains
confidential until the date, if any, on which the researcher enters
into an employment relationship with the recruiting institution as
contemplated in the grant proposal.
Sec. 62.166. ADVISORY BOARD. (a) The governor's university
research initiative advisory board is established to assist the
office with the review and evaluation of applications for funding
of grant proposals under this subchapter. The advisory board shall
make recommendations to the office for approval or disapproval of
those applications.
(b) The advisory board must be composed of at least nine
members appointed by the governor. Of the members of the board:
(1) one-third of the members, as nearly as possible,
must have a background in finance;
(2) one-third of the members, as nearly as possible,
must have an academic background in science, technology,
engineering, or mathematics; and
(3) one-third of the members, as nearly as possible,
must be public members.
(c) Chapter 2110, Government Code, does not apply to the
size, composition, or duration of the advisory board.
(d) A member of the advisory board who is or has been
employed by, is or has been a party to a contract for any purpose
with, or is a student or former student of an applicant eligible
institution may not be involved in the review, evaluation, or
recommendation of a grant proposal made by that institution.
(e) An advisory board member is not required to be a
resident of this state.
(f) Appointments to the advisory board shall be made without
regard to the race, color, disability, sex, religion, age, or
national origin of the appointees.
(g) Members of the advisory board serve without
compensation but are entitled to reimbursement for actual and
necessary expenses in attending meetings of the board or performing
other official duties authorized by the office.
Sec. 62.167. TIMELY ACTION ON APPLICATIONS. (a) The
advisory board shall meet in person or by teleconference to
consider grant applications under this subchapter and shall strive
to present to the office the board's recommendation for approval or
disapproval of an application not later than the 14th day after the
date the board receives the application.
(b) The office shall make a final decision regarding
approval of a grant application not later than the 14th day after
the date the office receives the advisory board's recommendation.
Sec. 62.168. GOVERNOR'S UNIVERSITY RESEARCH INITIATIVE
FUND. (a) The governor's university research initiative fund is a
dedicated account in the general revenue fund.
(b) The fund consists of:
(1) amounts appropriated or otherwise allocated or
transferred by law to the fund; and
(2) gifts, grants, and other donations received for
the fund.
(c) Sections 403.095 and 404.071, Government Code, do not
apply to the fund.
(d) The fund may be used by the office only for the purposes
of this subchapter, including for necessary expenses incurred in
the administration of the fund and this subchapter.
ARTICLE 6. RENAMING OF MAJOR EVENTS TRUST FUND
SECTION 6.01. The heading to Section 5A, Chapter 1507 (S.B.
456), Acts of the 76th Legislature, Regular Session, 1999 (Article
5190.14, Vernon's Texas Civil Statutes), is amended to read as
follows:
Sec. 5A. PAYMENT OF STATE AND MUNICIPAL OR COUNTY
OBLIGATIONS UNDER[;] MAJOR EVENTS REIMBURSEMENT PROGRAM [TRUST
FUND].
SECTION 6.02. Sections 5A(a-1), (d), (d-1), (e), (f), (g),
(h), (j), (k), (l), (m), (w), and (y), Chapter 1507 (S.B. 456), Acts
of the 76th Legislature, Regular Session, 1999 (Article 5190.14,
Vernon's Texas Civil Statutes), are amended to read as follows:
(a-1) An event not listed in Subsection (a)(4) of this
section is ineligible for funding under this section. A listed
event may receive funding through the Major Events Reimbursement
Program under this section only if:
(1) a site selection organization selects a site
located in this state for the event to be held one time or, for an
event scheduled to be held each year for a period of years under an
event contract, or an event support contract, one time each year for
the period of years, after considering, through a highly
competitive selection process, one or more sites that are not
located in this state;
(2) a site selection organization selects a site in
this state as:
(A) the sole site for the event; or
(B) the sole site for the event in a region
composed of this state and one or more adjoining states;
(3) the event is held not more than one time in any
year; and
(4) the amount of the incremental increase in tax
receipts determined by the comptroller under Subsection (b) of this
section equals or exceeds $1 million, provided that for an event
scheduled to be held each year for a period of years under an event
contract or event support contract, the incremental increase in tax
receipts shall be calculated as if the event did not occur in the
prior year.
(d) Each endorsing municipality or endorsing county
participating in the Major Events Reimbursement Program shall remit
to the comptroller and the comptroller shall deposit into a trust
fund created by the comptroller and designated as the Major Events
reimbursement program [trust] fund the amount of the municipality's
or county's hotel occupancy tax revenue determined under Subsection
(b)(4) or (b)(5) of this section, less any amount of the revenue
that the municipality or county determines is necessary to meet the
obligations of the municipality or county. The comptroller shall
retain the amount of sales and use tax revenue and mixed beverage
tax revenue determined under Subsection (b)(2) or (b)(3) of this
section from the amounts otherwise required to be sent to the
municipality under Sections 321.502 and 183.051(b), Tax Code, or to
the county under Sections 323.502 and 183.051(b), Tax Code, and
deposit into the [trust] fund the tax revenues, less any amount of
the revenue that the municipality or county determines is necessary
to meet the obligations of the municipality or county. The
comptroller shall begin retaining and depositing the local tax
revenues with the first distribution of that tax revenue that
occurs after the first day of the one-year period described by
Subsection (b) of this section or at a time otherwise determined to
be practicable by the comptroller and shall discontinue retaining
the local tax revenues under this subsection when the amount of the
applicable tax revenue determined under Subsection (b)(2) or (b)(3)
of this section has been retained. The Major Events reimbursement
program [trust] fund is established outside the state treasury and
is held in trust by the comptroller for administration of this
Act. Money in the [trust] fund may be disbursed by the comptroller
without appropriation only as provided by this section.
(d-1) Not later than the 90th day after the last day of an
event eligible for funding under the Major Events Reimbursement
Program and in lieu of the local tax revenues remitted to or
retained by the comptroller under Subsection (d) of this section, a
municipality or county may remit to the comptroller for deposit in
the Major Events reimbursement program [trust] fund other local
funds in an amount equal to the total amount of local tax revenue
determined under Subsections (b)(2) through (5) of this
section. The amount deposited by the comptroller into the Major
Events reimbursement program [trust] fund under this subsection is
subject to Subsection (f) of this section.
(e) In addition to the tax revenue deposited in the Major
Events reimbursement program [trust] fund under Subsection (d) of
this section, an endorsing municipality or endorsing county may
guarantee its obligations under an event support contract and this
section by pledging surcharges from user fees, including parking or
ticket fees, charged in connection with the event. An endorsing
municipality or endorsing county may collect and remit to the
comptroller surcharges and user fees attributable to the event for
deposit into the Major Events reimbursement program [trust] fund.
(f) The comptroller shall deposit into the Major Events
reimbursement program [trust] fund a portion of the state tax
revenue not to exceed the amount determined under Subsection (b)(1)
of this section in an amount equal to 6.25 times the amount of the
local revenue retained or remitted under this section, including:
(1) local sales and use tax revenue;
(2) mixed beverage tax revenue;
(3) hotel occupancy tax revenue; and
(4) surcharge and user fee revenue.
(g) To meet its obligations under a game support contract or
event support contract to improve, construct, renovate, or acquire
facilities or to acquire equipment, an endorsing municipality by
ordinance or an endorsing county by order may authorize the
issuance of notes. An endorsing municipality or endorsing county
may provide that the notes be paid from and secured by amounts on
deposit or amounts to be deposited into the Major Events
reimbursement program [trust] fund or surcharges from user fees,
including parking or ticket fees, charged in connection with the
event. Any note issued must mature not later than seven years from
its date of issuance.
(h) The funds in the Major Events reimbursement program
[trust] fund may be used to pay the principal of and interest on
notes issued by an endorsing municipality or endorsing county under
Subsection (g) of this section and to fulfill obligations of the
state or an endorsing municipality or endorsing county to a site
selection organization under a game support contract or event
support contract. Subject to Subsection (k) of this section, the
obligations may include the payment of costs relating to the
preparations necessary or desirable for the conduct of the event
and the payment of costs of conducting the event, including
improvements or renovations to existing facilities or other
facilities and costs of acquisition or construction of new
facilities or other facilities.
(j) Not later than the 30th day after the date a request of a
local organizing committee, endorsing municipality, or endorsing
county is submitted to the comptroller under Subsection (b-1) of
this section, the comptroller shall provide an estimate of the
total amount of tax revenue that would be deposited in the Major
Events reimbursement program [trust] fund under this section in
connection with that event, if the event were to be held in this
state at a site selected pursuant to an application by a local
organizing committee, endorsing municipality, or endorsing county.
A local organizing committee, endorsing municipality, or endorsing
county may submit the comptroller's estimate to a site selection
organization.
(k) The comptroller may make a disbursement from the Major
Events reimbursement program [trust] fund on the prior approval of
each contributing endorsing municipality or endorsing county for a
purpose for which a local organizing committee, an endorsing
municipality, or an endorsing county or the state is obligated
under a game support contract or event support contract. If an
obligation is incurred under a games support contract or event
support contract to make a structural improvement to the site or to
add a fixture to the site for purposes of an event and that
improvement or fixture is expected to derive most of its value in
subsequent uses of the site for future events, a disbursement from
the [trust] fund made for purposes of that obligation is limited to
five percent of the cost of the improvement or fixture and the
remainder of the obligation is not eligible for a disbursement from
the [trust] fund, unless the improvement or fixture is for a
publicly owned facility. In considering whether to make a
disbursement from the [trust] fund, the comptroller may not
consider a contingency clause in an event support contract as
relieving a local organizing committee's, endorsing
municipality's, or endorsing county's obligation to pay a cost
under the contract. A disbursement may not be made from the
[trust] fund that the comptroller determines would be used for the
purpose of soliciting the relocation of a professional sports
franchise located in this state.
(l) If a disbursement is made from the Major Events
reimbursement program [trust] fund under Subsection (k), the
obligation shall be satisfied proportionately from the state and
local revenue in the [trust] fund.
(m) On payment of all state, municipal, or county
obligations under a game support contract or event support contract
related to the location of any particular event in the state, the
comptroller shall remit to each endorsing entity, in proportion to
the amount contributed by the entity, any money remaining in the
[trust] fund.
(w) Not later than 10 months after the last day of an event
eligible for disbursements from the Major Events reimbursement
program [trust] fund for costs associated with the event, the
comptroller using existing resources shall complete a study in the
market area of the event on the measurable economic impact directly
attributable to the preparation for and presentation of the event
and related activities. The comptroller shall post on the
comptroller's Internet website:
(1) the results of the study conducted under this
subsection, including any source documentation or other
information relied on by the comptroller for the study;
(2) the amount of incremental increase in tax receipts
for the event determined under Subsection (b) of this section;
(3) the site selection organization documentation
described in Subsection (p)(3) of this section;
(4) any source documentation or information described
under Subsection (i) of this section that was relied on by the
comptroller in making the determination of the amount of
incremental increase in tax receipts under Subsection (b) of this
section; and
(5) documentation verifying that:
(A) a request submitted by a local organizing
committee, endorsing municipality, or endorsing county under
Subsection (p) of this section is complete and certified as such by
the comptroller;
(B) the determination on the amount of
incremental increases in tax receipts under Subsection (b) of this
section considered the information submitted by a local organizing
committee, endorsing municipality, or endorsing county as required
under Subsection (b-1) of this section; and
(C) each deadline established under this section
was timely met.
(y) After the conclusion of an event, the comptroller shall
compare information on the actual attendance figures provided to
the comptroller under Subsection (i) of this section with the
estimated attendance numbers used to determine the incremental
increase in tax receipts under Subsection (b) of this section. If
the actual attendance figures are significantly lower than the
estimated attendance numbers, the comptroller may reduce the amount
of a disbursement for an endorsing entity under the Major Events
reimbursement program [trust] fund in proportion to the discrepancy
between the actual and estimated attendance and in proportion to
the amount contributed to the fund by the entity. The comptroller
by rule shall define "significantly lower" for purposes of this
subsection and provide the manner in which a disbursement may be
proportionately reduced. This subsection does not affect the
remittance of any money remaining in the fund in accordance with
Subsection (m) of this section.
ARTICLE 7. EFFECTIVE DATE
SECTION 7.01. Except as otherwise provided by this Act,
this Act takes effect September 1, 2015.