Bill Text: TX HB2780 | 2013-2014 | 83rd Legislature | Engrossed

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Bill Title: Relating to the establishment of research technology corporations by institutions of higher education; providing for tax exemptions.

Spectrum: Bipartisan Bill

Status: (Engrossed - Dead) 2013-05-10 - Referred to Higher Education [HB2780 Detail]

Download: Texas-2013-HB2780-Engrossed.html

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83R17064 JSA-F
By: Elkins, N. Gonzalez of El Paso H.B. No. 2780

A BILL TO BE ENTITLED
AN ACT
relating to the establishment of research technology corporations
by institutions of higher education; providing for tax exemptions.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle H, Title 3, Education Code, is amended
by adding Chapter 157 to read as follows:
CHAPTER 157. UNIVERSITY RESEARCH TECHNOLOGY CORPORATIONS
Sec. 157.001. PURPOSE AND FINDINGS. The legislature finds
that the development and commercialization of technology by public
and private institutions of higher education are critical
components of the educational and research missions of those
institutions and key contributors to the economic development and
well-being of this state. The activities authorized by this
chapter directly support those important public purposes.
Sec. 157.002. DEFINITIONS. In this chapter:
(1) "Creating institution" means an institution of
higher education or private or independent institution of higher
education that creates a corporation under this chapter.
(2) "Institution of higher education" and "private or
independent institution of higher education" have the meanings
assigned by Section 61.003.
(3) "Technology" means the application of scientific
knowledge for practical purposes and includes inventions,
discoveries, trade secrets, copyrighted materials, tools,
machines, materials, processes to do work, processes to produce
goods, processes to perform services, processes to carry out other
useful activities, trademarks, and computer software.
Sec. 157.003. CREATION OF CORPORATION. (a) An institution
of higher education or private or independent institution of higher
education may create a special-purpose corporation for the
exclusive purpose of supporting development and commercialization
of technologies owned wholly or partly by the institution. A
corporation created under this chapter that engages in other
purposes that are not incidental to that authorized purpose is not
entitled to the benefits of this chapter, including any special tax
treatment.
(b) The certificate of formation of a corporation created
under this chapter must state that the corporation is governed by
this chapter and state the name and purposes of the corporation and
other information required by law. Except as otherwise provided by
this chapter, a corporation created under this chapter is governed
by Chapter 21, Business Organizations Code.
Sec. 157.004. MANAGEMENT OF CORPORATION; RIGHTS OF CREATING
INSTITUTION. (a) The creating institution shall name the persons
constituting the initial board of directors of the corporation.
Directors other than the initial directors shall be determined as
otherwise provided by this chapter and Chapter 21, Business
Organizations Code.
(b) The creating institution must at all times be a
shareholder in the corporation. The creating institution shall be
issued shares in the corporation when the corporation is created as
agreed on by the organizers of the corporation according to any
contribution of the institution.
(c) The creating institution may be issued shares in the
corporation in exchange for the contribution of rights in the
technology of the institution or of other contractual obligations,
as agreed on by the board of directors.
Sec. 157.005. TECHNOLOGY LICENSING. The creating
institution may license to the corporation any technology owned by
the institution.
Sec. 157.006. REQUIRED OPERATIONS IN TEXAS. The principal
offices of the corporation must be located in this state and the
majority of any goods or services produced by the corporation must
be produced in this state.
Sec. 157.007. DURATION. (a) A corporation created under
this chapter is limited in duration to 15 years. At the expiration
of that period, the corporation may file a restated and amended
certificate of formation under which the corporation becomes a
for-profit corporation governed by Chapter 21, Business
Organizations Code.
(b) Subsection (a) does not limit the time or manner in
which the corporation may be terminated as otherwise provided by
law.
Sec. 157.008. RESEARCH AND DEVELOPMENT AUTHORITY. (a) The
creating institution may establish a research and development
authority to act on behalf of the institution to support the
corporation. The creating institution shall appoint a director or
board of directors to manage the authority on the institution's
behalf and may adopt any procedures necessary for the
administration of the authority.
(b) An authority established under this section by an
institution of higher education is an instrumentality of this state
and of the creating institution. An authority established under
this section by a private or independent institution of higher
education shall be organized as a nonprofit organization and is
considered to be acting for educational and charitable purposes.
(c) An authority may acquire, own, hold title to, lease, or
operate real property and facilities. The corporation may transfer
real property, facilities, or other assets of the corporation to
the authority for any consideration to which the corporation
agrees, including:
(1) in exchange for a license, right, or other
interest in any technology of the creating institution;
(2) a charge against the creating institution's share
of any anticipated future earnings or increase in capital; or
(3) other consideration, including a contribution of
research or other services to the corporation.
(d) The corporation by lease or other agreement with the
authority may conduct any activities of the corporation on real
property or facilities owned by the authority.
(e) The real property and facilities of an authority,
including those used by the corporation for purposes of research,
development, or other commercialization of technology owned by an
institution of higher education, are considered to be used for
public, educational, and charitable purposes and are exempt from ad
valorem taxation by any taxing unit as long as the property and
facilities are used for those purposes or are under active
construction or improvement to make the property and facilities
suitable to be used for those purposes.
Sec. 157.009. TAX EXEMPT STATUS OF CORPORATION. (a) A
corporation created under this chapter is exempt from taxation
under Chapter 171, Tax Code.
(b) The corporation is exempt from other taxation by this
state or a political subdivision of this state to the same extent
that the creating institution is exempt from that taxation.
(c) This section does not limit the eligibility of the
corporation for any other available tax benefit, including under
Chapter 312 or 313, Tax Code.
Sec. 157.010. SANCTIONS FOR RELOCATION. (a) If a
corporation created under this chapter relocates its operations so
that the corporation does not remain in compliance with Section
157.006 regarding the location of its principal offices or the
majority of its production activities, the corporation is liable to
this state for a penalty in an amount equal to any taxes, including
property taxes, for which the corporation received an exemption
under Section 157.009, or for which an authority received an
exemption under Section 157.008 in connection with the activities
of the corporation, for the five calendar years preceding the year
of relocation. The comptroller shall determine the corporation's
liability for the penalty and assess the amount owed.
(b) A penalty assessed under this section is due on the date
designated by the comptroller, not later than the 90th day after the
date assessed, and shall be collected in the same manner as a state
tax. A lien exists on any property of the corporation to secure the
payment of any amount assessed under this section. The comptroller
by rule shall establish the methods of payment and shall adopt other
rules necessary to administer and enforce this section.
(c) Amounts received under this section shall be deposited
in the state treasury to the credit of the general revenue fund.
SECTION 2. This Act takes effect September 1, 2013.