H.B. No. 1188

	AN ACT
	relating to the Texas emerging technology fund.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 490.001, Government Code, as added by
	Chapter 280, Acts of the 79th Legislature, Regular Session, 2005,
	is amended by amending Subdivision (1) and adding Subdivision (4)
	to read as follows:
	(1)  "Committee" means the Texas Emerging Technology
	Advisory Committee.
	(4)  "Award" means:
	(A)  for purposes of Subchapter D, an investment
	in the form of equity or a convertible note;
	(B)  for purposes of Subchapter E, an investment
	in the form of a debt instrument;
	(C)  for purposes of Subchapter F, a grant; or
	(D)  other forms of contribution or investment as
	recommended by the committee and approved by the governor,
	lieutenant governor, and speaker of the house of representatives.
	SECTION 2.  Section 490.003(a), Government Code, as added by
	Chapter 280, Acts of the 79th Legislature, Regular Session, 2005,
	is amended to read as follows:
	(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 or a breakthrough in the area of clean
	energy.
	SECTION 3.  The heading to Subchapter B, Chapter 490,
	Government Code, as added by Chapter 280, Acts of the 79th
	Legislature, Regular Session, 2005, is amended to read as follows:
	SUBCHAPTER B. TEXAS EMERGING TECHNOLOGY ADVISORY COMMITTEE
	SECTION 4.  Section 490.051, Government Code, as added by
	Chapter 280, Acts of the 79th Legislature, Regular Session, 2005,
	is amended to read as follows:
	Sec. 490.051.  COMPOSITION OF COMMITTEE. The Texas Emerging
	Technology Advisory Committee is composed of 17 members.
	SECTION 5.  Section 490.052(b), Government Code, as added by
	Chapter 280, Acts of the 79th Legislature, Regular Session, 2005,
	is amended to read as follows:
	(b)  The following persons may nominate one or more
	individuals who are industry leaders in this state or who are
	nationally recognized leaders [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;
	(2)  [(3)     the members of the Texas Workforce
	Commission;
	[(4)]  a representative of the governor's office
	involved in economic development activities;
	(3) [(5)]  a representative of the lieutenant
	governor's office involved in economic development activities;
	(4) [(6)]  a representative of the office of the
	speaker of the house involved in economic development activities;
	and
	(5) [(7)]  other persons considered appropriate by the
	governor.
	SECTION 6.  Section 490.054, Government Code, as added by
	Chapter 280, Acts of the 79th Legislature, Regular Session, 2005,
	is amended to read as follows:
	Sec. 490.054.  TERMS.  Members of the committee serve
	staggered two-year terms, subject to the pleasure of the governor.
	SECTION 7.  Section 490.055, Government Code, as added by
	Chapter 280, Acts of the 79th Legislature, Regular Session, 2005,
	is amended to read as follows:
	Sec. 490.055.  [COMMITTEE] STAFF AND FUNDING. Necessary
	staff and funding for the administration of the fund [committee]
	shall be provided by:
	(1)  the office of the governor; and
	(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 office of the governor [entities listed in
	Subdivisions (1)-(5)].
	SECTION 8.  Section 490.101, Government Code, as added by
	Chapter 280, Acts of the 79th Legislature, Regular Session, 2005,
	is amended by amending Subsections (c), (f), and (g) and adding
	Subsections (h) and (i) to read as follows:
	(c)  The fund may be used only for:
	(1)  the purposes described by Section 490.002; and
	(2)  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.
	(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 [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 making an award [awarding a grant] under this
	chapter, the governor shall enter into a written agreement with the
	entity to receive the award [be awarded the grant money]. An
	agreement may specify that:
	(1)  if all or any portion of the amount of the award
	[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
	award [grant] amount used to pay for the capital improvement; and
	(B)  the recipient of the award [grant] shall, if
	the capital improvement is sold:
	(i)  repay to the state the award [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 award [grant] recipient has not used the award received [grant
	money awarded] under this chapter for the purposes for which the
	award [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.
	(h)  The governor may make awards in the form of loans,
	charge and receive reasonable interest for the loans, take an
	equity position in the form of stock or other security in
	consideration of an award, and sell or otherwise trade or exchange
	the security for the benefit of the fund. Interest or proceeds
	received as a result of a transaction authorized by this subsection
	shall be deposited to the corpus of the fund and may be used in the
	same manner as the corpus of the fund.
	(i)  The contract between the governor and a recipient of an
	award under this chapter may set the terms relating to an award.
	SECTION 9.  Section 490.102(a), Government Code, as added by
	Chapter 280, Acts of the 79th Legislature, Regular Session, 2005,
	is amended to read as follows:
	(a)  Money appropriated to the fund by the legislature, less
	amounts necessary to administer the fund under Section 490.055,
	shall be allocated as follows:
	(1)  50 percent of the money for incentives for
	collaboration between certain entities as provided by Subchapter D;
	(2)  16.67 [25] percent of the money for research award
	[grant] matching as provided by Subchapter E; and
	(3)  33.33 [25] percent of the money for acquisition of
	research superiority as provided by Subchapter F.
	SECTION 10.  Section 490.103(a), Government Code, as added
	by Chapter 280, Acts of the 79th Legislature, Regular Session,
	2005, is amended to read as follows:
	(a)  The contract between the governor and a recipient of an
	award [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 award [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.
	SECTION 11.  The heading to Subchapter D, Chapter 490,
	Government Code, as added by Chapter 280, Acts of the 79th
	Legislature, Regular Session, 2005, is amended to read as follows:
	SUBCHAPTER D. INCENTIVES FOR [TO CREATE REGIONAL CENTERS OF
	INNOVATION AND] COMMERCIALIZATION ACTIVITIES
	SECTION 12.  Section 490.153, Government Code, as added by
	Chapter 280, Acts of the 79th Legislature, Regular Session, 2005,
	is amended to read as follows:
	Sec. 490.153.  PRIORITY FOR FUNDING. (a) In allocating
	[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
	or a breakthrough in the area of clean energy;
	(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.
	(b)  An amount not to exceed two percent of the amount
	allocated for a fiscal biennium for incentives under this
	subchapter may be invested directly in the regional centers of
	innovation and commercialization as recommended by the committee
	and approved by the governor, lieutenant governor, and speaker of
	the house of representatives to support commercialization
	activities.
	SECTION 13.  Section 490.155, Government Code, as added by
	Chapter 280, Acts of the 79th Legislature, Regular Session, 2005,
	is amended to read as follows:
	Sec. 490.155.  GUARANTEE OF COMMERCIALIZATION OR
	MANUFACTURING IN TEXAS. A person or entity receiving [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.
	SECTION 14.  Section 490.156(a), Government Code, as added
	by Chapter 280, Acts of the 79th Legislature, Regular Session,
	2005, is amended to read as follows:
	(a)  A person receiving [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 office of the governor [committee].
	SECTION 15.  The heading to Subchapter E, Chapter 490,
	Government Code, as added by Chapter 280, Acts of the 79th
	Legislature, Regular Session, 2005, is amended to read as follows:
	SUBCHAPTER E. RESEARCH AWARD [GRANT] MATCHING
	SECTION 16.  The heading to Section 490.201, Government
	Code, as added by Chapter 280, Acts of the 79th Legislature, Regular
	Session, 2005, is amended to read as follows:
	Sec. 490.201.  USE OF MONEY FOR RESEARCH AWARD [GRANT]
	MATCHING.
	SECTION 17.  Section 490.202, Government Code, as added by
	Chapter 280, Acts of the 79th Legislature, Regular Session, 2005,
	is amended to read as follows:
	Sec. 490.202.  PRIORITY FOR FUNDING. In allocating
	[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 a breakthrough in the area of clean energy; or
	(5)  have a demonstrable economic development benefit
	to this state.
	SECTION 18.  Section 490.253(a), Government Code, as added
	by Chapter 280, Acts of the 79th Legislature, Regular Session,
	2005, is amended to read as follows:
	(a)  The committee shall review and consider [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.
	SECTION 19.  Section 490.254, Government Code, as added by
	Chapter 280, Acts of the 79th Legislature, Regular Session, 2005,
	is amended to read as follows:
	Sec. 490.254.  PRIORITY FOR FUNDING. In allocating
	[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
	or a breakthrough in the area of clean energy;
	(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.
	SECTION 20.  Section 490.255, Government Code, as added by
	Chapter 280, Acts of the 79th Legislature, Regular Session, 2005,
	is amended to read as follows:
	Sec. 490.255.  AUTHORIZED EXPENSES. Money allocated
	[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.
	SECTION 21.  (a)  The changes in law made by this Act to
	Sections 490.052 and 490.054, Government Code, as added by Chapter
	280, Acts of the 79th Legislature, Regular Session, 2005, apply
	only to a member of the Texas Emerging Technology Advisory
	Committee for a term beginning on or after September 1, 2007.
	(b)  At the first meeting of the Texas Emerging Technology
	Advisory Committee after September 1, 2007, the committee members
	shall draw lots to determine which eight members will serve
	one-year terms beginning on the date on which the next term
	beginning on or after September 1, 2007, begins.
	SECTION 22.  This Act takes effect September 1, 2007.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I certify that H.B. No. 1188 was passed by the House on May 3,
	2007, by the following vote:  Yeas 133, Nays 6, 2 present, not
	voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 1188 was passed by the Senate on May
	21, 2007, by the following vote:  Yeas 31, Nays 0.
	______________________________
	Secretary of the Senate
	APPROVED:  _____________________
	Date
	_____________________
	Governor