83S20125 RWG-D
	By: Menendez	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.