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H.B. No. 1765
AN ACT
relating to the creation of programs and funding for emerging
technology industries.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle F, Title 4, Government Code, is amended
by adding Chapter 490 to read as follows:
CHAPTER 490. FUNDING FOR EMERGING TECHNOLOGY
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 490.001. DEFINITIONS. In this chapter:
(1) "Committee" means the Texas Emerging Technology
Committee.
(2) "Fund" means the Texas emerging technology fund.
(3) "Institution of higher education" has the meaning
assigned by Section 61.003, Education Code.
Sec. 490.002. PURPOSES. The fund is established under this
chapter to develop and diversify the economy of this state by:
(1) expediting innovation and commercialization of
research;
(2) attracting, creating, or expanding private sector
entities that will promote a substantial increase in high-quality
jobs; and
(3) increasing higher education applied technology
research capabilities.
Sec. 490.003. EMERGING TECHNOLOGY INDUSTRIES. (a) An
emerging technology industry participant 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.
(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) other pursuits, as determined by the governor in
consultation with the lieutenant governor and the speaker of the
house of representatives.
[Sections 490.004-490.050 reserved for expansion]
SUBCHAPTER B. TEXAS EMERGING TECHNOLOGY COMMITTEE
Sec. 490.051. COMPOSITION OF COMMITTEE. The Texas Emerging
Technology Committee is composed of 17 members.
Sec. 490.052. APPOINTMENT BY GOVERNOR; NOMINATIONS. (a)
The governor shall appoint to the committee individuals nominated
as provided by Subsection (b).
(b) The following persons may nominate one or more
individuals who are industry leaders in this state or who are
nationally recognized researchers from public or private
institutions of higher education in this state for appointment to
the committee:
(1) the Texas Higher Education Coordinating Board;
(2) a president of a public or private institution of
higher education in this state;
(3) the members of the Texas Workforce Commission;
(4) a representative of the governor's office involved
in economic development activities;
(5) a representative of the lieutenant governor's
office involved in economic development activities;
(6) a representative of the office of the speaker of
the house involved in economic development activities; and
(7) other persons considered appropriate by the
governor.
(c) The governor may prescribe a date after which a
nomination under Subsection (b) for appointment for the next term
will not be considered.
(d) If an insufficient number of qualified individuals are
nominated as provided by Subsection (b) before the date set by the
governor under Subsection (c), the governor may appoint any
qualified individual to the board for that term.
Sec. 490.053. PRESIDING MEMBER. The governor shall appoint
a presiding member of the committee.
Sec. 490.054. TERMS. Members of the committee serve
two-year terms, subject to the pleasure of the governor.
Sec. 490.055. COMMITTEE STAFF AND FUNDING. Necessary staff
and funding for the committee shall be provided by:
(1) the office of the governor;
(2) the Texas Higher Education Coordinating Board;
(3) the Texas Education Agency;
(4) the Texas Workforce Commission;
(5) another public entity represented by a committee
member; and
(6) gifts, grants, and donations for overhead expenses
to the entities listed in Subdivisions (1)-(5).
Sec. 490.056. RECOMMENDATIONS FOR FUNDING. (a) The
committee shall make recommendations, through peer review and
evaluation processes established by the committee, to the governor,
lieutenant governor, and speaker of the house of representatives
for the award of money from the fund as provided by this chapter.
(b) The committee may establish advisory panels of
knowledgeable individuals from industry, state government, or
academic occupations to assist in peer review activities under this
chapter.
Sec. 490.057. CONFIDENTIALITY. Information collected by
the governor's office, the 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 being considered
for an award from the fund is confidential unless the individual or
entity consents to disclosure of the information.
[Sections 490.058-490.100 reserved for expansion]
SUBCHAPTER C. TEXAS EMERGING TECHNOLOGY FUND
Sec. 490.101. TEXAS EMERGING TECHNOLOGY FUND. (a) The
Texas emerging technology fund is a dedicated account in the
general revenue fund.
(b) The following amounts shall be deposited in the fund:
(1) any amounts appropriated by the legislature for
the fund;
(2) benefits realized from a project undertaken with
money from the fund, as provided by a contract entered into under
Section 490.103;
(3) gifts, grants, and other donations received for
the fund; and
(4) interest earned on the investment of money in the
fund.
(c) The fund may be used only for the purposes described by
Section 490.002.
(d) The committee may solicit and accept gifts and grants
for the fund from public and private entities.
(e) The fund may be temporarily used by the comptroller for
cash management purposes.
(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 awarding, by grant,
money appropriated from the fund. The governor may award money
appropriated from the fund only with the express written prior
approval of the lieutenant governor and speaker of the house of
representatives.
(g) Before awarding a grant under this chapter, the governor
shall enter into a written agreement with the entity to be awarded
the grant money. An agreement may specify that:
(1) if all or any portion of the amount of the grant is
used to build a capital improvement:
(A) the state retains 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) the recipient of the grant shall, if the
capital improvement is sold:
(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
(2) if, as of a date certain provided in the agreement,
the grant recipient has not used grant money awarded under this
chapter for the purposes for which the grant was intended, the
recipient shall repay that amount and any related interest
applicable under the agreement to the state at the agreed rate and
on the agreed terms.
Sec. 490.102. ALLOCATION OF FUND. (a) Money appropriated
to the fund by the legislature shall be allocated as follows:
(1) 50 percent of the money for incentives for
collaboration between certain entities as provided by Subchapter D;
(2) 25 percent of the money for research grant
matching as provided by Subchapter E; and
(3) 25 percent of the money for acquisition of
research superiority as provided by Subchapter F.
(b) The governor may reallocate money from one component of
the fund to another component subject to the prior approval of the
lieutenant governor and speaker of the house of representatives.
Sec. 490.103. ALLOCATION OF PROCEEDS. (a) The contract
between the governor and a recipient awarded a grant under this
chapter shall provide for the distribution of royalties, revenue,
or other financial benefits realized from the commercialization of
intellectual or real property developed from any grant awarded from
the fund. To the extent authorized by law and not in conflict with
another agreement, the contract shall appropriately allocate by
assignment, licensing, or other means the royalties, revenue, or
other financial benefits among identifiable collaborating parties
and in a specified percentage to this state for deposit in the fund.
(b) The contract under Subsection (a) shall also specify
other matters considered necessary by the governor, lieutenant
governor, and speaker of the house of representatives.
[Sections 490.104-490.150 reserved for expansion]
SUBCHAPTER D. INCENTIVES TO CREATE REGIONAL CENTERS OF INNOVATION
AND COMMERCIALIZATION
Sec. 490.151. USE OF MONEY FOR INCENTIVES. (a) Amounts
allocated from the fund for use as provided by this subchapter shall
be reserved for incentives for private or nonprofit entities to
collaborate with public or private institutions of higher education
in this state on emerging technology projects with a demonstrable
economic benefit to this state.
(b) The committee shall recommend proposals eligible for
funding under this section to the governor, lieutenant governor,
and speaker of the house of representatives.
Sec. 490.152. REGIONAL CENTERS OF INNOVATION AND
COMMERCIALIZATION. (a) 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
Section 490.151(a) may collaborate to form a regional center of
innovation and commercialization to serve a region of this state.
(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.
(d) Subject to the availability of suitable partners and
resources, the 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. 490.153. PRIORITY FOR FUNDING. In awarding money from
the fund under this subchapter, priority shall be given to
proposals that:
(1) involve emerging scientific or technology fields
that have a reasonable probability of enhancing this state's
national and global economic competitiveness;
(2) may result in a medical or scientific
breakthrough;
(3) are collaborative between any combination of
private or nonprofit entities and public or private agencies or
institutions in this state;
(4) are matched with other available funds, including
funds from the private or nonprofit entity or institution of higher
education collaborating on the project; or
(5) have a demonstrable economic development benefit
to this state.
Sec. 490.154. GUARANTEE OF ACTION BY PARTICIPATING ENTITY.
(a) An entity participating in a regional center of innovation and
commercialization 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.
(b) If an entity fails to perform an action guaranteed by
contract under Subsection (a) before a time specified by the
contract, the entity shall return to the fund the money received by
the entity under this subchapter.
Sec. 490.155. GUARANTEE OF COMMERCIALIZATION OR
MANUFACTURING IN TEXAS. A person or entity awarded money from the
fund under this subchapter must guarantee by contract that a
substantial percentage of any new or expanded commercialization or
manufacturing of any real or intellectual product resulting from
the award will be established in this state.
Sec. 490.156. AUTHORIZED EXPENSES. (a) A person awarded
money from the fund under this subchapter may use the money to
expedite commercialization that will lead to an increase in
high-quality jobs in this state and shall use the money in
accordance with a contract between the person and the committee.
(b) Authorized expenses under this section include salaries
and benefits, travel, consumable supplies, other operating
expenses, contracted research and development, capital equipment,
construction or renovation of state or private facilities, and
workforce training.
[Sections 490.157-490.200 reserved for expansion]
SUBCHAPTER E. RESEARCH GRANT MATCHING
Sec. 490.201. USE OF MONEY FOR RESEARCH GRANT MATCHING. (a)
Amounts allocated from the fund for use as provided by this
subchapter shall be reserved to match funding from research
sponsors other than this state, including federal research
sponsors.
(b) The committee shall recommend proposals eligible for
funding under this section to the governor, lieutenant governor,
and speaker of the house of representatives.
Sec. 490.202. PRIORITY FOR FUNDING. In awarding money from
the fund under this subchapter, priority shall be given to
proposals that accelerate commercialization into production by
targeting programs that:
(1) address federal or other major research sponsors'
priorities in emerging scientific or technology fields;
(2) are interdisciplinary;
(3) are collaborative with a combination of public or
private institutions of higher education in this state;
(4) are likely to result in a medical or scientific
breakthrough; or
(5) have a demonstrable economic development benefit
to this state.
Sec. 490.203. GUARANTEE OF ACTION BY PARTICIPATING ENTITY.
(a) An entity receiving funding or another incentive under this
subchapter shall guarantee by contract with the governor's office
that the entity will perform specific actions that are expected to
provide benefits to this state.
(b) If an entity fails to perform an action guaranteed by
contract under Subsection (a) before a time specified by the
contract, the entity shall return the funding received by the
entity under this subchapter.
[Sections 490.204-490.250 reserved for expansion]
SUBCHAPTER F. ACQUISITION OF RESEARCH SUPERIORITY
Sec. 490.251. USE OF MONEY FOR ACQUISITION OF RESEARCH
SUPERIORITY. Amounts allocated from the fund for use as provided by
this subchapter shall be used to acquire new or enhance existing
research superiority at public institutions of higher education in
this state.
Sec. 490.252. RESEARCH SUPERIORITY. For purposes of this
subchapter, the employment by an institution of higher education of
one or more world-class or nationally recognized researchers and
associated assistants in an industry eligible to receive funding
under Section 490.003 is considered "research superiority."
Sec. 490.253. PROPOSALS FOR FUNDING. (a) The committee
shall solicit and identify proposals by public institutions of
higher education 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 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.
Sec. 490.254. PRIORITY FOR FUNDING. In awarding money from
the fund under this subchapter, priority shall be given to
proposals that:
(1) involve scientific or technical fields that have a
reasonable probability of enhancing this state's national and
global economic competitiveness;
(2) may result in a medical or scientific
breakthrough;
(3) are interdisciplinary;
(4) have attracted or may attract federal and other
funding for research superiority;
(5) are likely to create a nationally or
internationally recognized locus of research superiority; or
(6) are matched with other funds available to the
institution seeking funding under this subchapter.
Sec. 490.255. AUTHORIZED EXPENSES. Money awarded from the
fund under this subchapter may be used for research and research
capability acquisition, including salaries and benefits, travel,
consumable supplies, other operating expenses, capital equipment,
and construction or renovation of facilities.
Sec. 490.256. PROHIBITED ACTIVITIES. (a) An institution
of higher education may not knowingly attempt to attract an
individual key researcher or research superiority identified for
consideration for funding by another public or private institution
of higher education in this state under this subchapter.
(b) An institution that violates this section is ineligible
to participate in a program or receive funding under this chapter
before the third anniversary of the date the institution last
engaged in an activity prohibited by this section.
Sec. 490.257. DOCUMENTATION OF BENEFITS TO STATE. (a) A
public institution of higher education must document specific
benefits that this state may expect to gain as a result of
attracting the research superiority before the institution may
enter into a contract to receive funding or incentives under this
subchapter.
(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 committee.
SECTION 2. (a) As soon as practicable after the effective
date of this Act, a person seeking to nominate an individual for
appointment to the Texas Emerging Technology Committee under
Section 490.052, Government Code, as added by this Act, shall make
any nominations.
(b) The governor shall appoint the Texas Emerging
Technology Committee as required by Section 490.052, Government
Code, as added by this Act, on or before September 1, 2005, or as
soon as practicable after giving persons nominating individuals for
appointment to the committee a reasonable time to make any
nominations.
SECTION 3. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect on the 91st day after the last day of the
legislative session.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1765 was passed by the House on May
11, 2005, by the following vote: Yeas 136, Nays 1, 1 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 1765 on May 26, 2005, by the following vote: Yeas 138, Nays 2,
2 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 1765 was passed by the Senate, with
amendments, on May 24, 2005, by the following vote: Yeas 29, Nays
2.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor