Bill Text: TX HB3853 | 2015-2016 | 84th Legislature | Introduced
Bill Title: Relating to creation of the university research initiative fund, the abolishment of the Texas emerging technology fund, and the disposition of balances from the Texas emerging technology fund.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2015-04-09 - No action taken in committee [HB3853 Detail]
Download: Texas-2015-HB3853-Introduced.html
By: Villalba | H.B. No. 3853 |
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relating to creation of the university research initiative fund, | ||
the abolishment of the Texas emerging technology fund, and the | ||
disposition of balances from the Texas emerging technology fund. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Subtitle H, Title 3, Education Code, is amended | ||
by adding Chapter 156 to read as follows: | ||
CHAPTER 156. UNIVERSITY RESEARCH INITIATIVE FUND | ||
SUBCHAPTER A. GENERAL PROVISIONS | ||
Sec. 156.001. DEFINITIONS. In this chapter: | ||
(1) "Coordinating board" means the Texas Higher | ||
Education Coordinating Board. | ||
(2) "Fund" means the university research initiative | ||
fund established under Subchapter B. | ||
(3) "Institution of higher education" has the meaning | ||
assigned by Section 61.003. | ||
SUBCHAPTER B. OPERATION OF FUND AND PROGRAM | ||
Sec. 156.051. UNIVERSITY RESEARCH INITIATIVE FUND. (a) | ||
The 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; | ||
(2) any financial benefits realized from | ||
commercialization of intellectual or other property developed in | ||
connection with a grant award as provided by an agreement entered | ||
into under Section 156.053; and | ||
(3) gifts, grants, and other donations received for | ||
the fund. | ||
(c) The fund may be used by the coordinating board only for: | ||
(1) the purpose specified by Section 156.052; and | ||
(2) necessary expenses incurred in the administration | ||
of the fund and this chapter. | ||
Sec. 156.052. RECRUITMENT OF NATIONALLY OR INTERNATIONALLY | ||
RENOWNED RESEARCHERS; MATCHING GRANTS. (a) The coordinating board | ||
shall provide grants from the fund to institutions of higher | ||
education to match available funding from those institutions for | ||
the recruitment and retention of: | ||
(1) members of recognized national academies in the | ||
fields of science, technology, engineering, or mathematics or other | ||
nationally recognized researchers in those fields and any | ||
associated assistants; or | ||
(2) researchers who are Nobel laureates in the fields | ||
of science or mathematics or other internationally recognized | ||
researchers in the fields described by this subsection or the | ||
fields of technology or engineering and any associated assistants. | ||
(b) In awarding grants, the coordinating board shall give | ||
priority to proposals that involve the recruiting of researchers in | ||
fields that are reasonably likely to contribute substantially to | ||
this state's national and global economic competitiveness. | ||
(c) The coordinating board may appoint one or more advisory | ||
committees to assist the board with the review and evaluation of | ||
grant proposals under this section. | ||
Sec. 156.053. MATCHING GRANT AGREEMENT. (a) Before | ||
awarding a matching grant under this chapter, the coordinating | ||
board shall enter into a written agreement with the institution of | ||
higher education selected to receive the grant. | ||
(b) The agreement between the coordinating board and a grant | ||
recipient under this chapter must provide for the distribution of | ||
royalties, revenue, or other financial benefits realized from the | ||
commercialization of intellectual or real property developed in | ||
connection with receipt of a grant under this chapter. To the extent | ||
authorized by law and not in conflict with another agreement, the | ||
agreement shall appropriately allocate by assignment, licensing, | ||
or other means 50 percent of the royalties, revenue, or other | ||
financial benefits to this state for deposit in the fund. | ||
(c) An agreement under this section may include a provision | ||
specifying that if, as of a date certain provided in the agreement, | ||
the grant recipient has not used the money received under this | ||
chapter for the purposes for which the grant was intended, the | ||
grant recipient shall repay that amount and any related interest | ||
applicable under the agreement to the coordinating board for | ||
deposit to the fund at the agreed rate and on the agreed terms. | ||
Sec. 156.054. AUTHORIZED EXPENSES. Money awarded from the | ||
fund may be used by the grant recipient to pay any expense | ||
reasonably related to the purposes described by Section 156.052(a), | ||
including for research and research capability, salaries and | ||
benefits, travel, consumable supplies, and equipment. | ||
Sec. 156.055. PROHIBITED ACTIVITIES. (a) An institution | ||
of higher education may not knowingly attempt to recruit a person | ||
described by Section 156.052(a)(1) or (2) who is an individual | ||
researcher of another institution of higher education. | ||
(b) An institution of higher education that violates this | ||
section is ineligible to receive a grant under this chapter before | ||
the third anniversary of the date the institution last engaged in | ||
conduct prohibited by this section. | ||
Sec. 156.056. DOCUMENTATION OF BENEFITS TO STATE. An | ||
institution of higher education must document specific benefits | ||
that this state may expect to gain as a result of recruiting | ||
researchers described by Section 156.052(a)(1) or (2) to the | ||
institution and enhancing the research capabilities and programs of | ||
the institution before the institution may enter into an agreement | ||
to receive a grant under this chapter. | ||
Sec. 156.057. ANNUAL REPORT. (a) Not later than January 31 | ||
of each year, the coordinating board shall submit to the governor, | ||
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 a report that includes the following information regarding | ||
grants awarded under this chapter during the preceding state fiscal | ||
year: | ||
(1) the total number and amount of grants awarded; and | ||
(2) the name of each grant recipient and the amount of | ||
the grant awarded to the recipient. | ||
(b) The coordinating board shall post and maintain on the | ||
coordinating board's Internet website each report submitted under | ||
this section. | ||
SECTION 2. 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 3. 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 | ||
non-profit 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 office of the trust company's | ||
Internet website a report of any valuation performed under this | ||
section during the preceding state fiscal year. | ||
SECTION 4. Section 481.078, Government Code, is amended by | ||
adding Subsection (m) to read as follows: | ||
(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 | ||
award of grants; | ||
(2) procedures for evaluating grant applications; | ||
(3) provisions governing the grant agreement process; | ||
and | ||
(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. | ||
SECTION 5. Subchapter D, Chapter 490, Government Code, is | ||
repealed. | ||
SECTION 6. Section 490.001(4), Government Code, is amended | ||
to read as follows: | ||
(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 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 7. 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 [ |
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(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 any [ |
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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. | ||
(b) The annual report must also contain: | ||
(1) the total number of jobs actually created by each | ||
project receiving funding under this chapter; | ||
(2) an analysis of the number of jobs actually created | ||
by each project receiving funding under this chapter; and | ||
(3) a brief description regarding[ |
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information provided under Subdivisions (1) and (2), which may be | ||
developed in consultation with the comptroller's office[ |
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SECTION 8. Subchapter A, Chapter 490, Government Code, is | ||
amended by adding Section 490.007 to read as follows: | ||
Sec. 490.007. TRANSFER OF EQUITY INVESTMENTS AND | ||
CONVERTIBLE NOTES. | ||
All investments in the form of equity or convertible notes | ||
made by the fund under the former Subchapter D and under Subchapter | ||
E prior to September 1, 2015 are hereby transferred to the Texas | ||
Technology Investment Portfolio, an investment portfolio, and | ||
governed by Subchapter R, Chapter 403, Government Code. | ||
SECTION 9. Section 490.102(a), Government Code, 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 [ |
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initiative fund under Subchapter B, Chapter 156, Education Code, as | ||
added by this Act.; and | ||
(2) 50 [ |
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acquisition of research superiority as provided by Subchapter F. | ||
SECTION 10. Section 490.303, Government Code, is amended to | ||
read as follows: | ||
Sec. 490.303. ELIGIBILITY OF CLEAN COAL PROJECT FOR MONEY. | ||
Notwithstanding any other provision of this subchapter, a clean | ||
coal project constitutes an opportunity for emerging technology | ||
suitable for consideration for a grant under Subchapter C, | ||
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provided by Subchapter E, and acquisition of research superiority | ||
under Subchapter F. | ||
SECTION 11. Subchapter R, Chapter 403, Government Code, is | ||
added to read as follows: | ||
Sec. 403.501. DEFINITIONS. | ||
In this subchapter: | ||
(1) "Board" or "board" means the board of the | ||
non-profit organization managing the Texas Technology Investment | ||
Portfolio. | ||
(2) "Institution" and "institutional fund" have the | ||
meanings assigned by Chapter 163, Property Code. | ||
(3) "Participated" means to have taken action as an | ||
officer or employee through decision, approval, disapproval, | ||
recommendation, giving advice, investigation, or similar action. | ||
(4) "Particular matter" means a specific | ||
investigation, application, request for a ruling or determination, | ||
rulemaking proceeding, contract, claim, charge, accusation, | ||
arrest, or judicial or other proceeding. | ||
Sec. 403.502. TEXAS TECHNOLOGY INVESTMENT PORTFOLIO | ||
MANAGEMENT; AUTHORITY. | ||
(a) The office of the comptroller is hereby delegated | ||
investment authority for the management of the former Subchapter D, | ||
Section 490, Government Code investments, hereafter referred to as | ||
the Texas Technology Investment Portfolio, to the same extent as an | ||
institution with respect to an institutional fund under Chapter | ||
163, Property Code. | ||
(b) The office of the comptroller may enter into a contract | ||
with a nonprofit corporation for the corporation to manage the | ||
Texas Technology Investment Portfolio and appoint the members of | ||
the board of the nonprofit corporation. The corporation may not | ||
engage in any business other than portfolio management and | ||
investment/re-investment of funds designated by the board under the | ||
contract. | ||
Sec. 403.503. PORTFOLIO MANAGEMENT; BOARD AUTHORITY, | ||
MEMBERSHIP, REQUIREMENTS. | ||
(a) The board of the nonprofit corporation must approve the: | ||
(1) articles of incorporation and bylaws of the | ||
corporation and any amendment to the articles of incorporation or | ||
bylaws; | ||
(2) investment policies of the corporation, including | ||
changes to those policies; | ||
(3) audit and ethics committee of the corporation; | ||
(4) code of ethics of the corporation; | ||
(5) hiring and firing of the officers of the | ||
corporation; | ||
(6) annual operating budget for the corporation; and | ||
(6) approving material amendments or changes to any | ||
existing contract with a recipient. | ||
(b) The board of directors of the corporation shall have | ||
five members; | ||
(c) The appointed board of directors shall possess | ||
background and expertise in law, finance and/or investment | ||
portfolio management; and | ||
(d) Each appointed member of the board of directors of the | ||
corporation is subject to removal and replacement by and at the | ||
pleasure of the comptroller. | ||
(e) The corporation shall file quarterly reports with the | ||
board concerning matters required by the board. | ||
(h) The corporation is subject to the Texas Non-Profit | ||
Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil | ||
Statutes). | ||
Sec. 403.504. CONFIDENTIAL INFORMATION; CONFLICTS. | ||
(a) Information collected by the corporation, the board or | ||
the office of the comptroller concerning the identity, background, | ||
finance, marketing plans, trade secrets, or other commercially or | ||
academically sensitive information of an individual or entity 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 | ||
corporation, the board or the office of the comptroller under this | ||
chapter is public information and may be disclosed under Chapter | ||
552: | ||
(1) the name and address of each individual or entity | ||
that comprises the portfolio; | ||
(2) the balances of funds advanced and encumbered to | ||
each portfolio company; | ||
(3) a brief description of the project for which the | ||
funds have been applied; and | ||
(4) if applicable, a brief description of the equity | ||
position taken in an entity that has received funds from the state. | ||
(c) The corporation may not enter into an agreement or | ||
transaction with a: | ||
(1) director, officer, or employee of the corporation | ||
acting in other than an official capacity on behalf of the | ||
corporation; or | ||
(2) business entity in which a director, officer, or | ||
employee of the corporation has an interest | ||
(d) An agreement or transaction entered into in violation of | ||
Subsection (c) is void. | ||
(e) For purposes of this section, a person has an interest | ||
in a business entity if: | ||
(1) the person owns five percent or more of the voting | ||
stock or shares of the business entity; | ||
(2) the person owns five percent or more of the fair | ||
market value of the business entity; or | ||
(3) money received by the person from the business | ||
entity exceeds five percent of the person's gross income for the | ||
preceding calendar year. | ||
(f) A former director of the corporation may not make any | ||
communication to or appearance before a director, officer, or | ||
employee of the corporation before the second anniversary of the | ||
date an individual ceased to be a director of the corporation if the | ||
communication or appearance is made: | ||
(1) with the intent to influence; and | ||
(2) on behalf of any person in connection with any | ||
matter on which the person seeks action by the corporation. | ||
(g) A former officer or employee of the corporation may not | ||
represent any person or receive compensation for services rendered | ||
on behalf of any person regarding a particular matter in which the | ||
former officer or employee participated during the period of | ||
service or employment with the corporation, either through | ||
personal involvement or because the particular matter was within | ||
the officer's or employee's responsibility. | ||
(h) An individual who violates Subsection (f) or (g) | ||
commits an offense. An offense under this subsection is a Class A | ||
misdemeanor. | ||
SECTION 12. (a) The repeal by this Act of Subchapter D, | ||
Chapter 490, Government Code, relating to certain | ||
commercialization of emerging technology activities funded by the | ||
Texas emerging technology fund, does not affect the validity of an | ||
agreement between the governor and the recipient of an award | ||
awarded under Subchapter D, Chapter 490, or a person to be awarded | ||
money under that subchapter that is entered into under Chapter 490 | ||
before September 1, 2015. | ||
(b) Money from the Texas emerging technology fund that is | ||
encumbered because the money is awarded under Subchapter D, Chapter | ||
490, Government Code, 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 is now subject to | ||
Subchapter R, Section 403, Government Code and shall be distributed | ||
in accordance with the terms of the award or agreement. | ||
SECTION 13. (a) Notwithstanding Section 490.005(a), | ||
Government Code, as amended by this Act, the report due under that | ||
section by January 31, 2016, must also include the specified | ||
information required by Subdivisions (1)-(5) of that section | ||
regarding awards made under Subchapter D, Chapter 490, Government | ||
Code, during the 2015 state fiscal year and each preceding state | ||
fiscal year. | ||
(b) Notwithstanding Sections 490.005(a) and (b), Government | ||
Code, as amended by this Act, the report due under Section | ||
490.005(a) by January 31, 2016, must also contain the specified | ||
information required by Section 490.005(b) regarding projects | ||
receiving funding under Subchapter D, Chapter 490, Government Code, | ||
during the 2015 state fiscal year and each preceding state fiscal | ||
year. | ||
SECTION 14. 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 Act, and the office shall retain the minutes for the | ||
period prescribed by that section. | ||
SECTION 15. 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. | ||
SECTION 16. Except as otherwise provided by this Act, this | ||
Act takes effect September 1, 2015. |