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  83S20125 RWG-D
 
  By: J. Davis of Harris H.B. No. 43
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the Texas emerging technology fund; redesignating the
  fund as the Texas Research Technology Fund.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Sections 490.001(1), (2), and (4), Government
  Code, are amended to read as follows:
               (1)  "Board" ["Committee"] means the Texas Research 
  [Emerging] Technology Fund Board [Advisory Committee].
               (2)  "Fund" means the Texas Research Technology Fund
  [emerging technology fund].
               (4)  "Award" means:
                     (A)  for purposes of Subchapter D, an investment
  in the form of equity or a convertible note;
                     (B)  for purposes of Subchapter E, an investment
  in the form of a debt instrument;
                     (C)  for purposes of Subchapter F, a grant; or
                     (D)  other forms of contribution or investment as
  recommended by the board [committee] and approved by the governor,
  lieutenant governor, and speaker of the house of representatives.
         SECTION 2.  Section 490.003, Government Code, is amended to
  read as follows:
         Sec. 490.003.  EMERGING TECHNOLOGY INDUSTRIES. (a) An
  emerging technology industry participant may be [is] eligible for
  funding under this chapter if the activity to be funded:
               (1)  will result in the creation of high-quality new
  jobs in this state, immediately or over a longer period; [or]
               (2)  has the potential to result in a medical or
  scientific breakthrough or a breakthrough in the area of clean
  energy; or
               (3)  will result in the commercialization of a
  scientific breakthrough derived from research conducted at or owned
  by a research institution.
         (b)  Emerging technology industries include industries
  related to:
               (1)  semiconductors;
               (2)  information;
               (3)  computer and software technology;
               (4)  energy;
               (5)  manufactured energy systems;
               (6)  micro-electromechanical systems;
               (7)  nanotechnology;
               (8)  biotechnology;
               (9)  medicine;
               (10)  life sciences;
               (11)  petroleum refining and chemical processes;
               (12)  aerospace;
               (13)  defense; [and]
               (14)  water; and
               (15)  other pursuits, as determined by the governor in
  consultation with the lieutenant governor and the speaker of the
  house of representatives.
         SECTION 3.  Sections 490.005(a) and (b), Government Code,
  are amended to read as follows:
         (a)  Not later than January 31 of each year, the governor
  shall submit to the lieutenant governor, the speaker of the house of
  representatives, and the standing committee of each house of the
  legislature with primary jurisdiction over economic development
  matters and post on the office of the governor's Internet website a
  report that includes the following information regarding awards
  made under the fund during each preceding state fiscal year:
               (1)  the total number and amount of awards made;
               (2)  the number and amount of awards made under
  Subchapters D, E, and F;
               (3)  the aggregate total of private sector investment,
  federal government funding, and contributions from other sources
  obtained in connection with awards made under each of the
  subchapters listed in Subdivision (2);
               (4)  the name of each award recipient and the amount of
  the award made to the recipient; [and]
               (5)  a brief description of the equity position that
  the governor, on behalf of the state, may take in companies
  receiving awards and the names of the companies in which the state
  has taken an equity position; and
               (6)  a description of the types of securities the
  governor, on behalf of the state, has taken in companies that have
  received an award.
         (b)  The annual report must also contain:
               (1)  the aggregate total number of jobs, broken down
  according to the industry sectors described by Section 490.003(b),
  actually created by all projects [each project] receiving funding
  under this chapter;
               (2)  an analysis of the number of jobs, broken down
  according to the industry sectors described by Section 490.003(b),
  actually created by all projects [each project] receiving funding
  under this chapter; [and]
               (3)  a brief description regarding:
                     (A)  the methodology used to determine the
  information provided under Subdivisions (1) and (2), which may be
  developed in consultation with the comptroller's office;
                     (B)  the intended outcomes of projects funded
  under Subchapter D during each preceding state fiscal year; and
                     (C)  the actual outcomes of all projects funded
  under Subchapter D during each preceding state fiscal year,
  including any financial impact on the state resulting from a
  liquidity event involving a company whose project was funded under
  that subchapter;
               (4)  the total number of jobs created by each project
  receiving funds under this chapter, expressed:
                     (A)  in increments of 10 jobs created by the
  project; or
                     (B)  as a number that is within five percent over
  or under the total number of jobs created by the project; and
               (5)  the average annual salaries in the award
  recipients' industries.
         SECTION 4.  The heading to Subchapter B, Chapter 490,
  Government Code, is amended to read as follows:
  SUBCHAPTER B. TEXAS RESEARCH [EMERGING] TECHNOLOGY FUND BOARD
  [ADVISORY COMMITTEE]
         SECTION 5.  Section 490.051, Government Code, is amended to
  read as follows:
         Sec. 490.051.  TEXAS RESEARCH TECHNOLOGY FUND BOARD
  [COMPOSITION OF COMMITTEE]. (a) The Texas Research [Emerging]
  Technology Fund Board is administratively attached to the office of
  the governor.  The governor's office shall provide staff and other
  administrative support for the board.
         (b)  The board [Advisory Committee] is composed of 17
  members.
         SECTION 6.  The heading to Section 490.052, Government Code,
  is amended to read as follows:
         Sec. 490.052.  APPOINTMENT TO BOARD [COMMITTEE];
  NOMINATIONS.
         SECTION 7.  Sections 490.052(a), (a-1), (a-2), and (b),
  Government Code, are amended to read as follows:
         (a)  The governor shall appoint to the board [committee] 13
  individuals nominated as provided by Subsection (b).
         (a-1)  The lieutenant governor shall appoint two individuals
  to the board [committee].
         (a-2)  The speaker of the house of representatives shall
  appoint two individuals to the board [committee].
         (b)  The following persons may nominate one or more
  individuals who are industry leaders in this state or who are
  nationally recognized leaders from public or private institutions
  of higher education in this state for appointment to the board
  [committee]:
               (1)  a president of a public or private institution of
  higher education in this state;
               (2)  a representative of the governor's office involved
  in economic development activities;
               (3)  a representative of the lieutenant governor's
  office involved in economic development activities;
               (4)  a representative of the office of the speaker of
  the house involved in economic development activities; and
               (5)  other persons considered appropriate by the
  governor, lieutenant governor, or speaker of the house of
  representatives.
         SECTION 8.  Section 490.0521(a), Government Code, is amended
  to read as follows:
         (a)  Each member of the board [committee] shall file with the
  office of the governor a verified financial statement complying
  with Sections 572.022 through 572.0252 as is required of a state
  officer by Section 572.0252.
         SECTION 9.  Subchapter B, Chapter 490, Government Code, is
  amended by adding Section 490.0522 to read as follows:
         Sec. 490.0522.  COMPENSATION; EXPENSES. Members of the
  board serve without compensation but are entitled to reimbursement
  for actual and necessary expenses incurred in attending board
  meetings or in performing other board duties approved by the office
  of the governor.
         SECTION 10.  Section 490.053, Government Code, is amended to
  read as follows:
         Sec. 490.053.  PRESIDING MEMBER. The governor shall appoint
  a presiding member of the board [committee].
         SECTION 11.  Section 490.054, Government Code, is amended to
  read as follows:
         Sec. 490.054.  TERMS.  (a)  Members of the board [committee]
  appointed by the governor serve staggered two-year terms, with as
  near as possible to one-half of the members' terms expiring each
  year, subject to the pleasure of the governor.
         (b)  Members of the board [committee] appointed by the
  lieutenant governor or the speaker of the house of representatives
  serve two-year terms.
         (c)  Members of the board are not state officers.
         SECTION 12.  Section 490.055, Government Code, is amended to
  read as follows:
         Sec. 490.055.  STAFF AND FUNDING.  Necessary staff and
  funding for the administration of the fund shall be provided by:
               (1)  the office of the governor; [and]
               (2)  gifts, grants, and donations for overhead expenses
  to the office of the governor; and
               (3)  the fund as provided by Section 490.101.
         SECTION 13.  Section 490.056, Government Code, is amended by
  amending Subsections (a) and (c) and adding Subsection (a-1) to
  read as follows:
         (a)  The board [committee] shall make recommendations,
  through peer review and evaluation processes established by the
  board [committee], to the governor, lieutenant governor, and
  speaker of the house of representatives for the award of money from
  the fund under Subchapters E and F as provided by this chapter.
         (a-1)  Regional centers of innovation and commercialization
  formed under Subchapter I shall make recommendations to the board
  for the award of money from the fund under Subchapter D as provided
  by this chapter.
         (c)  Each entity recommended by a regional center of
  innovation and commercialization [the committee] for an award of
  money from the fund under Subchapter D as provided by this chapter
  shall obtain and provide the following information to the office of
  the governor:
               (1)  a federal criminal history background check for
  each principal of the entity;
               (2)  a state criminal history background check for each
  principal of the entity;
               (3)  a credit check for each principal of the entity;
               (4)  a copy of a government-issued form of photo
  identification for each principal of the entity; and
               (5)  information regarding whether the entity or a
  principal of the entity has ever been subject to a sanction imposed
  by the Securities and Exchange Commission for a violation of
  applicable federal law.
         SECTION 14.  Section 490.057, Government Code, is amended to
  read as follows:
         Sec. 490.057.  CONFIDENTIALITY. (a)  Except as provided by
  Subsection (b), information collected or received by the governor's
  office, the board [committee], or the board's [committee's]
  advisory panels concerning the [identity,] background, finances 
  [finance], marketing plans, trade secrets, or other commercially or
  academically sensitive information of an individual or entity
  having applied for, being considered for, receiving, or having
  received an award from the fund is confidential unless the
  individual or entity consents to disclosure of the information.
         (b)  The following information collected by the governor's
  office, the board [committee], or the board's [committee's]
  advisory panels under this chapter is public information and may be
  disclosed under Chapter 552:
               (1)  the name and address of an individual or entity
  receiving or having received an award from the fund;
               (2)  the amount of funding received by an award
  recipient from the fund;
               (3)  a brief description of the project that is funded
  under this chapter;
               (4)  if applicable, [a brief description of] the type
  of equity [position] that the governor, on behalf of the state, has
  taken in an entity that has received an award from the fund; [and]
               (5)  any other information [designated by the
  committee] with the consent of[:
                     [(A)]  the individual or entity [receiving or
  having received an award from the fund, as applicable]; and
               (6)  any other information otherwise available to the
  public
                     [(B)  the governor;
                     [(C)  the lieutenant governor; and
                     [(D)     the speaker of the house of
  representatives].
         SECTION 15.  Subchapter B, Chapter 490, Government Code, is
  amended by adding Sections 490.058, 490.059, and 490.060 to read as
  follows:
         Sec. 490.058.  DIVISION OF RESPONSIBILITIES. The board
  shall develop and implement policies that clearly separate the
  policy-making responsibilities of the board and the management
  responsibilities of the staff of the board.
         Sec. 490.059.  APPLICABILITY OF OPEN MEETINGS LAW. The
  board is subject to Chapter 551.
         Sec. 490.060.  MEETINGS. (a)  The board shall hold four
  regular meetings each year and special meetings at the call of the
  presiding member.
         (b)  Notwithstanding Chapter 551 or any other law, the board
  may use a telephone conference call, videoconference, or other
  similar telecommunication method in accordance with this section to
  establish a quorum, to hold an open or closed meeting, to vote, or
  for any other meeting purpose.  This subsection applies without
  regard to the subject matter discussed or considered by the board at
  the meeting.
         (c)  A meeting held by telephone conference call,
  videoconference, or other similar telecommunication method:
               (1)  is subject to the notice requirements applicable
  to other board meetings;
               (2)  may not be held unless notice of the meeting
  specifies the location where the public may observe the meeting;
  and
               (3)  must be open and audible to the public at the
  location specified in the notice under Subdivision (2) during the
  open portions of the meeting.
         (d)  The board may conduct a closed meeting under Section
  551.101 to:
               (1)  discuss or consider a matter that contains
  information that is confidential under Section 490.057; or
               (2)  hear testimony or presentations from an
  individual, entity, or group that contains information that is
  confidential under Section 490.057.
         (e)  This section does not prohibit the board from requesting
  the attendance at a closed meeting of a person who is not a member of
  the board and who has information regarding an applicant for or
  recipient of an award from the fund.
         SECTION 16.  The heading to Subchapter C, Chapter 490,
  Government Code, is amended to read as follows:
  SUBCHAPTER C.  TEXAS RESEARCH [EMERGING] TECHNOLOGY FUND
         SECTION 17.  The heading to Section 490.101, Government
  Code, is amended to read as follows:
         Sec. 490.101.  TEXAS RESEARCH [EMERGING] TECHNOLOGY FUND.
         SECTION 18.  Sections 490.101(a), (c), (d), (f), and (f-1),
  Government Code, are amended to read as follows:
         (a)  The Texas Research Technology Fund [emerging technology
  fund] is a dedicated account in the general revenue fund.
         (c)  The fund may be used only [for]:
               (1)  for the purposes described by Section 490.002;
  [and]
               (2)  for necessary staff, administration of the fund
  including administration by the office of the governor, and
  services and expenses related to the fund as provided for by Section
  490.055; and
               (3)  to compensate the fund manager under Section
  490.157.
         (d)  The board [committee] may solicit and accept gifts and
  grants for the fund from public and private entities.
         (f)  The administration of the fund is considered to be a
  trusteed program within the office of the governor.  The governor
  may negotiate on behalf of the state regarding awards from the fund.  
  The governor may award money appropriated from the fund for awards
  under Subchapters E and F only with the prior approval of the
  lieutenant governor and speaker of the house of representatives.  
  The governor may award money appropriated from the fund for awards
  under Subchapter D or may allocate money from the fund for use as
  provided by Subchapter I, only with the prior approval of the board.
         (f-1)  For purposes of Subsection (f), an award of money
  appropriated from the fund for awards under Subchapters E and F is
  considered disapproved by the lieutenant governor or speaker of the
  house of representatives if that officer does not approve the
  proposal to award funding before the 91st day after the date of
  receipt of the proposal from the governor.  The lieutenant governor
  or the speaker of the house of representatives may extend the review
  deadline applicable to that officer for an additional 14 days by
  submitting a written notice to that effect to the governor before
  the expiration of the initial review period.
         SECTION 19.  Section 490.102(a), Government Code, is amended
  to read as follows:
         (a)  Money appropriated to or otherwise deposited to the fund
  under Section 490.101(b), including money retained in the fund from
  a previous biennium [by the legislature], less amounts necessary to
  administer the fund under Section 490.055, shall be allocated as
  follows:
               (1)  46 [50] percent of the money for incentives for
  collaboration between certain entities as provided by Subchapter D;
               (2)  16.67 percent of the money for research award
  matching as provided by Subchapter E; [and]
               (3)  33.33 percent of the money for acquisition of
  research superiority as provided by Subchapter F; and
               (4)  four percent of the money for regional centers of
  innovation and commercialization as provided by Subchapter I.
         SECTION 20.  Section 490.151, Government Code, is amended by
  adding Subsection (a-1) and amending Subsection (b) to read as
  follows:
         (a-1)  The following private and nonprofit entities are
  eligible for incentives under this subchapter:
               (1)  a private entity that is partially owned by an
  institution of higher education and is seeking to commercialize
  technology acquired from the partnering institution;
               (2)  a private entity that is a qualified spin-out, as
  determined by the board, of an institution of higher education;
               (3)  a private entity seeking to commercialize
  technology acquired from the Lyndon B. Johnson Space Center of the
  National Aeronautics and Space Administration;
               (4)  a private or nonprofit entity partnering with a
  research institution through a sponsored research agreement or
  qualified collaborative agreement; or
               (5)  a private entity that has received an award under
  this chapter and has received an equity investment commitment from
  a qualified investor, as determined by the board, for
  commercialization and growth purposes.
         (b)  The regional centers of innovation and
  commercialization formed under Subchapter I [committee] shall
  recommend proposals eligible for funding under this subchapter
  [section] to the board [governor, lieutenant governor, and speaker
  of the house of representatives].
         SECTION 21.  Section 490.154(a), Government Code, is amended
  to read as follows:
         (a)  An entity participating in a regional center of
  innovation and commercialization formed under Subchapter I that
  receives funding or another incentive under this subchapter shall
  guarantee by contract with the governor's office that the entity
  will perform specific actions expected to provide benefits to this
  state.
         SECTION 22.  Subchapter D, Chapter 490, Government Code, is
  amended by adding Section 490.157 to read as follows:
         Sec. 490.157.  FUND MANAGER. (a)  The office of the governor
  shall employ or contract with a fund manager to manage equity
  positions or other investments received by the office of the
  governor in consideration for an award made.  The fund manager shall
  perform such duties for the purpose of managing equity positions or
  other investments made under this subchapter.
         (b)  The board may recommend an entity or individual to the
  office of the governor to serve as the fund manager under Subsection
  (a).  The board may also recommend to the office of the governor:
               (1)  the duties of the fund manager;
               (2)  the appropriate compensation of the fund manager;
  and
               (3)  the termination of the employment of or contract
  with the fund manager.
         SECTION 23.  Chapter 490, Government Code, is amended by
  adding Subchapter I, and a heading is added to that subchapter to
  read as follows:
  SUBCHAPTER I. REGIONAL CENTERS OF
  INNOVATION AND COMMERCIALIZATION
         SECTION 24.  Sections 490.152 and 490.1521, Government Code,
  are transferred to Subchapter I, Chapter 490, Government Code, as
  added by this Act, redesignated as Sections 490.401 and 490.402,
  Government Code, and amended to read as follows:
         Sec. 490.401 [490.152].  USE OF MONEY FOR REGIONAL CENTERS
  OF INNOVATION AND COMMERCIALIZATION. (a)  Amounts allocated from
  the fund for use as provided by this subchapter may be used by an
  entity described by Section 490.151(a) or an [In recommending
  proposals for funding, the committee shall give specific emphasis
  to the formation of regional centers of innovation and
  commercialization.
         [(b)  An] appropriate combination of any entities described
  by that subsection [Section 490.151(a) may collaborate] to form and
  maintain a regional center of innovation and commercialization to
  serve a region of this state.
         (b) [(c)]  A regional center of innovation and
  commercialization shall provide for a specified region:
               (1)  research and development activities that may
  include initiatives to prove the feasibility of an idea;
               (2)  commercialization of the results of research and
  development;
               (3)  incubators for new businesses and expansion of
  existing businesses related to research and development; and
               (4)  workforce training for businesses resulting from
  research and development.
         (c) [(d)]  Subject to the availability of suitable partners
  and resources, the board [committee] shall propose and initiate the
  establishment of a regional center of innovation and
  commercialization in:
               (1)  Harris County;
               (2)  Lubbock County;
               (3)  Bexar County;
               (4)  the Dallas-Fort Worth Metroplex;
               (5)  El Paso County;
               (6)  the Middle and Lower Rio Grande Valley; and
               (7)  other suitable locations as determined by the
  governor in consultation with the lieutenant governor and the
  speaker of the house of representatives.
         Sec. 490.402 [490.1521].  MINUTES OF CERTAIN MEETINGS.
  (a)  Each regional center of innovation and commercialization
  established under Section 490.401 [490.152, including the Texas
  Life Science Center for Innovation and Commercialization,] shall
  keep minutes of each meeting at which applications for funding
  under Subchapter D [this subchapter] are evaluated.  The minutes
  must:
               (1)  include the name of each applicant recommended by
  the regional center of innovation and commercialization to the
  board [committee] for funding under Subchapter D; and
               (2)  indicate the vote of each member of the governing
  body of the regional center of innovation and commercialization,
  including any recusal by a member and the member's reason for
  recusal, with regard to each application reviewed.
         (b)  Each regional center of innovation and
  commercialization shall retain a copy of the minutes of each
  meeting to which this section applies for at least three years.
         SECTION 25.  Section 490.201(b), Government Code, is amended
  to read as follows:
         (b)  The board [committee] shall recommend proposals
  eligible for funding under this section to the governor, lieutenant
  governor, and speaker of the house of representatives.
         SECTION 26.  Section 490.253, Government Code, is amended to
  read as follows:
         Sec. 490.253.  PROPOSALS FOR FUNDING. (a)  The board
  [committee] shall review and consider proposals by research
  institutions for:
               (1)  creating new research superiority;
               (2)  attracting existing research superiority from
  institutions not located in this state and other research entities;
  or
               (3)  enhancing existing research superiority by
  attracting from outside this state additional researchers and
  resources.
         (b)  The board [committee] shall recommend proposals
  eligible for funding under Section 490.251 and proposals solicited
  and identified under this section to the governor, lieutenant
  governor, and speaker of the house of representatives.
         SECTION 27.  Section 490.257(b), Government Code, is amended
  to read as follows:
         (b)  The governor, with the express written prior approval of
  the lieutenant governor and the speaker of the house of
  representatives, may terminate funding to an institution if the
  institution fails to realize a benefit specified in the contract
  before a time specified in the contract, as determined by a periodic
  program review conducted by the board [committee].
         SECTION 28.  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 Texas Research Technology Fund's
  [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 29.  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 Research Technology Fund [emerging
  technology fund] established under Section 490.101, Government
  Code.
         SECTION 30.  Sections 490.056(e) and 490.153(b), Government
  Code, are repealed.
         SECTION 31.  The terms of the members of the Texas Emerging
  Technology Advisory Committee serving immediately before the
  effective date of this Act expire November 1, 2013.
         SECTION 32.  (a)  As soon as practicable after the effective
  date of this Act:
               (1)  the governor, lieutenant governor, and speaker of
  the house of representatives shall appoint members to the Texas
  Research Technology Fund Board established under Subchapter B,
  Chapter 490, Government Code, in a manner that complies with that
  subchapter, as amended by this Act; and
               (2)  the governor shall appoint the initial presiding
  member of the board.
         (b)  At the first meeting of members of the Texas Research
  Technology Fund Board appointed under Subchapter B, Chapter 490,
  Government Code, as amended by this Act, occurring on or after
  November 1, 2013, the members appointed by the governor shall draw
  lots to determine which seven members will serve terms expiring
  November 1, 2014, and which six members will serve terms expiring
  November 1, 2015.
         SECTION 33.  This Act takes effect November 1, 2013.