BILL ANALYSIS C.S.H.B. 1268 By: Button Trade, Workforce & Economic Development Committee Report (Substituted) BACKGROUND AND PURPOSE The U.S. Small Business Administration (SBA) provides grants through the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs to start-ups and small businesses across technology areas to stimulate technological innovation and increase product commercialization. Highly competitive federal grants from these programs serve as seed funding for new technologies and innovations and, according to SBA, come from 11 different federal agencies, including the National Science Foundation, the Department of Defense, the Department of Health and Human Services, NASA, and others. However, only U.S. small businesses with 500 employees or less are eligible to participate in the SBIR and STTR programs. Companies must be for-profit, have a place of business located in the United States, and be more than 50 percent owned and controlled by U.S. citizens or permanent legal residents. The author has informed the committee that more than half of the states currently have matching programs which provide some level of funding to the state-based companies that receive federal SBIR and STTR awards. C.S.H.B. 1268 seeks to address this issue by establishing the Texas Technology and Innovation Program to provide opportunities to bring more of these projects to Texas. CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision. RULEMAKING AUTHORITY It is the committee's opinion that rulemaking authority is expressly granted to the Texas Economic Development and Tourism Office in SECTION 2 of this bill. ANALYSIS C.S.H.B. 1268 amends the Government Code to require the Texas Economic Development and Tourism Office (TEDTO) to establish and administer the Texas Technology and Innovation Program to foster job creation and economic development in Texas by matching or supplementing money received by a business entity through the federal funding program, defined by the bill as the small business innovation research and small business technology transfer programs established under federal law. The bill requires a business entity to satisfy the following criteria to be eligible to receive money under the Texas program: be organized under the laws of, maintain a domestic headquarters or at least one manufacturing facility in, or have more than half of the entity's employees residing in Texas; meet all requirements to receive money under phase one or phase two, or a similar stage, of the federal funding program; not receive concurrent funding from another state program or fund that serves the same purpose as the Texas program; and meet any additional requirements under the bill's provisions for the applicable phase under which the business entity applies to receive money. C.S.H.B. 1268 authorizes a business entity to apply to receive money under the Texas program by submitting an application under oath to TEDTO on a form prescribed by TEDTO. The application must include the business entity's name and business organization structure, the business entity's address and any principals listed at a different address, certification of the required eligibility information, and any other information required by TEDTO. The bill also requires a business entity to provide to TEDTO the following documentation for the applicable phase of the federal funding program process: for "phase one" or a similar stage: o a notice of award to the entity from a funding agency under the federal funding program; o a final report for the applicable stage as required by the federal funding program; and o a proposal for money under the next stage of the federal funding program; and for "phase two" or a similar stage: o a notice of award to the entity from a funding agency under the federal funding program; and o a final report for the applicable stage as required by the federal funding program. The bill authorizes TEDTO to award a grant immediately on fulfillment of the documentation requirements applicable to the phase for which the grant is awarded. C.S.H.B. 1268 authorizes a business entity to assign a received grant only with the prior written consent of TEDTO. The bill prohibits a business entity from receiving more than one grant in each state fiscal year or more than five grants in each phase. The bill requires TEDTO to award program grants from available money and any additional money appropriated for purposes of the program and authorizes TEDTO to solicit and receive gifts, grants, and donations from any source to provide additional funding for the grants. The bill requires TEDTO to adopt the rules necessary to implement the bill's provisions. C.S.H.B. 1268 establishes that TEDTO is not required in a state fiscal year to implement a provision of the bill that is drafted as a mandatory provision imposing a duty on TEDTO to take an action unless money is specifically appropriated to TEDTO for that fiscal year to carry out that duty. TEDTO may implement the provision in that fiscal year to the extent other funding is available to TEDTO to do so. The bill requires TEDTO, if it does not implement the mandatory provision in a state fiscal year, to certify that fact to the Legislative Budget Board in its legislative budget request for the next state fiscal biennium and include in that request a written estimate of the costs of implementing the provision in each year of that next state fiscal biennium. EFFECTIVE DATE September 1, 2025. COMPARISON OF INTRODUCED AND SUBSTITUTE While C.S.H.B. 1268 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill. While both the introduced and substitute require a business entity, in order to be eligible to receive money under the Texas Technology and Innovation Program, to meet all the requirements to receive money under the federal funding program, the substitute includes a specification absent from the introduced that the business entity must meet all the requirements to receive money under phase one or phase two, or a similar stage, of the federal funding program. The substitute omits the following provisions that were present in the introduced: the requirement for a business entity to provide to TEDTO, as an additional application requirement for "phase zero" or a similar stage of the federal funding program process, a notification of receipt for an application for funding under that program; and the authorization for TEDTO to immediately award a "phase zero" grant on fulfillment of the documentation requirements for that phase.
BILL ANALYSIS
# BILL ANALYSIS
C.S.H.B. 1268
By: Button
Trade, Workforce & Economic Development
Committee Report (Substituted)
C.S.H.B. 1268
By: Button
Trade, Workforce & Economic Development
Committee Report (Substituted)
BACKGROUND AND PURPOSE The U.S. Small Business Administration (SBA) provides grants through the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs to start-ups and small businesses across technology areas to stimulate technological innovation and increase product commercialization. Highly competitive federal grants from these programs serve as seed funding for new technologies and innovations and, according to SBA, come from 11 different federal agencies, including the National Science Foundation, the Department of Defense, the Department of Health and Human Services, NASA, and others. However, only U.S. small businesses with 500 employees or less are eligible to participate in the SBIR and STTR programs. Companies must be for-profit, have a place of business located in the United States, and be more than 50 percent owned and controlled by U.S. citizens or permanent legal residents. The author has informed the committee that more than half of the states currently have matching programs which provide some level of funding to the state-based companies that receive federal SBIR and STTR awards. C.S.H.B. 1268 seeks to address this issue by establishing the Texas Technology and Innovation Program to provide opportunities to bring more of these projects to Texas.
CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY It is the committee's opinion that rulemaking authority is expressly granted to the Texas Economic Development and Tourism Office in SECTION 2 of this bill.
ANALYSIS C.S.H.B. 1268 amends the Government Code to require the Texas Economic Development and Tourism Office (TEDTO) to establish and administer the Texas Technology and Innovation Program to foster job creation and economic development in Texas by matching or supplementing money received by a business entity through the federal funding program, defined by the bill as the small business innovation research and small business technology transfer programs established under federal law. The bill requires a business entity to satisfy the following criteria to be eligible to receive money under the Texas program: be organized under the laws of, maintain a domestic headquarters or at least one manufacturing facility in, or have more than half of the entity's employees residing in Texas; meet all requirements to receive money under phase one or phase two, or a similar stage, of the federal funding program; not receive concurrent funding from another state program or fund that serves the same purpose as the Texas program; and meet any additional requirements under the bill's provisions for the applicable phase under which the business entity applies to receive money. C.S.H.B. 1268 authorizes a business entity to apply to receive money under the Texas program by submitting an application under oath to TEDTO on a form prescribed by TEDTO. The application must include the business entity's name and business organization structure, the business entity's address and any principals listed at a different address, certification of the required eligibility information, and any other information required by TEDTO. The bill also requires a business entity to provide to TEDTO the following documentation for the applicable phase of the federal funding program process: for "phase one" or a similar stage: o a notice of award to the entity from a funding agency under the federal funding program; o a final report for the applicable stage as required by the federal funding program; and o a proposal for money under the next stage of the federal funding program; and for "phase two" or a similar stage: o a notice of award to the entity from a funding agency under the federal funding program; and o a final report for the applicable stage as required by the federal funding program. The bill authorizes TEDTO to award a grant immediately on fulfillment of the documentation requirements applicable to the phase for which the grant is awarded. C.S.H.B. 1268 authorizes a business entity to assign a received grant only with the prior written consent of TEDTO. The bill prohibits a business entity from receiving more than one grant in each state fiscal year or more than five grants in each phase. The bill requires TEDTO to award program grants from available money and any additional money appropriated for purposes of the program and authorizes TEDTO to solicit and receive gifts, grants, and donations from any source to provide additional funding for the grants. The bill requires TEDTO to adopt the rules necessary to implement the bill's provisions. C.S.H.B. 1268 establishes that TEDTO is not required in a state fiscal year to implement a provision of the bill that is drafted as a mandatory provision imposing a duty on TEDTO to take an action unless money is specifically appropriated to TEDTO for that fiscal year to carry out that duty. TEDTO may implement the provision in that fiscal year to the extent other funding is available to TEDTO to do so. The bill requires TEDTO, if it does not implement the mandatory provision in a state fiscal year, to certify that fact to the Legislative Budget Board in its legislative budget request for the next state fiscal biennium and include in that request a written estimate of the costs of implementing the provision in each year of that next state fiscal biennium.
EFFECTIVE DATE September 1, 2025.
COMPARISON OF INTRODUCED AND SUBSTITUTE While C.S.H.B. 1268 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill. While both the introduced and substitute require a business entity, in order to be eligible to receive money under the Texas Technology and Innovation Program, to meet all the requirements to receive money under the federal funding program, the substitute includes a specification absent from the introduced that the business entity must meet all the requirements to receive money under phase one or phase two, or a similar stage, of the federal funding program. The substitute omits the following provisions that were present in the introduced: the requirement for a business entity to provide to TEDTO, as an additional application requirement for "phase zero" or a similar stage of the federal funding program process, a notification of receipt for an application for funding under that program; and the authorization for TEDTO to immediately award a "phase zero" grant on fulfillment of the documentation requirements for that phase.
BACKGROUND AND PURPOSE
The U.S. Small Business Administration (SBA) provides grants through the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs to start-ups and small businesses across technology areas to stimulate technological innovation and increase product commercialization. Highly competitive federal grants from these programs serve as seed funding for new technologies and innovations and, according to SBA, come from 11 different federal agencies, including the National Science Foundation, the Department of Defense, the Department of Health and Human Services, NASA, and others. However, only U.S. small businesses with 500 employees or less are eligible to participate in the SBIR and STTR programs. Companies must be for-profit, have a place of business located in the United States, and be more than 50 percent owned and controlled by U.S. citizens or permanent legal residents. The author has informed the committee that more than half of the states currently have matching programs which provide some level of funding to the state-based companies that receive federal SBIR and STTR awards. C.S.H.B. 1268 seeks to address this issue by establishing the Texas Technology and Innovation Program to provide opportunities to bring more of these projects to Texas.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that rulemaking authority is expressly granted to the Texas Economic Development and Tourism Office in SECTION 2 of this bill.
ANALYSIS
C.S.H.B. 1268 amends the Government Code to require the Texas Economic Development and Tourism Office (TEDTO) to establish and administer the Texas Technology and Innovation Program to foster job creation and economic development in Texas by matching or supplementing money received by a business entity through the federal funding program, defined by the bill as the small business innovation research and small business technology transfer programs established under federal law. The bill requires a business entity to satisfy the following criteria to be eligible to receive money under the Texas program:
be organized under the laws of, maintain a domestic headquarters or at least one manufacturing facility in, or have more than half of the entity's employees residing in Texas;
meet all requirements to receive money under phase one or phase two, or a similar stage, of the federal funding program;
not receive concurrent funding from another state program or fund that serves the same purpose as the Texas program; and
meet any additional requirements under the bill's provisions for the applicable phase under which the business entity applies to receive money.
C.S.H.B. 1268 authorizes a business entity to apply to receive money under the Texas program by submitting an application under oath to TEDTO on a form prescribed by TEDTO. The application must include the business entity's name and business organization structure, the business entity's address and any principals listed at a different address, certification of the required eligibility information, and any other information required by TEDTO. The bill also requires a business entity to provide to TEDTO the following documentation for the applicable phase of the federal funding program process:
for "phase one" or a similar stage:
o a notice of award to the entity from a funding agency under the federal funding program;
o a final report for the applicable stage as required by the federal funding program; and
o a proposal for money under the next stage of the federal funding program; and
for "phase two" or a similar stage:
o a notice of award to the entity from a funding agency under the federal funding program; and
o a final report for the applicable stage as required by the federal funding program.
The bill authorizes TEDTO to award a grant immediately on fulfillment of the documentation requirements applicable to the phase for which the grant is awarded.
C.S.H.B. 1268 authorizes a business entity to assign a received grant only with the prior written consent of TEDTO. The bill prohibits a business entity from receiving more than one grant in each state fiscal year or more than five grants in each phase. The bill requires TEDTO to award program grants from available money and any additional money appropriated for purposes of the program and authorizes TEDTO to solicit and receive gifts, grants, and donations from any source to provide additional funding for the grants. The bill requires TEDTO to adopt the rules necessary to implement the bill's provisions.
C.S.H.B. 1268 establishes that TEDTO is not required in a state fiscal year to implement a provision of the bill that is drafted as a mandatory provision imposing a duty on TEDTO to take an action unless money is specifically appropriated to TEDTO for that fiscal year to carry out that duty. TEDTO may implement the provision in that fiscal year to the extent other funding is available to TEDTO to do so. The bill requires TEDTO, if it does not implement the mandatory provision in a state fiscal year, to certify that fact to the Legislative Budget Board in its legislative budget request for the next state fiscal biennium and include in that request a written estimate of the costs of implementing the provision in each year of that next state fiscal biennium.
EFFECTIVE DATE
September 1, 2025.
COMPARISON OF INTRODUCED AND SUBSTITUTE
While C.S.H.B. 1268 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.
While both the introduced and substitute require a business entity, in order to be eligible to receive money under the Texas Technology and Innovation Program, to meet all the requirements to receive money under the federal funding program, the substitute includes a specification absent from the introduced that the business entity must meet all the requirements to receive money under phase one or phase two, or a similar stage, of the federal funding program.
The substitute omits the following provisions that were present in the introduced:
the requirement for a business entity to provide to TEDTO, as an additional application requirement for "phase zero" or a similar stage of the federal funding program process, a notification of receipt for an application for funding under that program; and
the authorization for TEDTO to immediately award a "phase zero" grant on fulfillment of the documentation requirements for that phase.