81R10451 DAK-F

By: Parker H.B. No. 4525

A BILL TO BE ENTITLED

AN ACT

relating to qualified manufacturing project zones.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. The Legislature of the State of Texas finds that a qualified manufacturing project, as defined in this Act, serves the public purposes of development and diversification of the economy of this state, the elimination of unemployment or underemployment in this state, and development or expansion of commerce in this state.

SECTION 2. Chapter 2303, Government Code, is amended by adding Subchapter H to read as follows:

SUBCHAPTER H. QUALIFIED MANUFACTURING PROJECT ZONE

Sec. 2303.551. DEFINITION. In this subchapter, "qualified manufacturing project" means a proposed new or expanded facility that:

(1) is subject to an agreement entered into on or after January 1, 2008, but before January 1, 2015, with a county, municipality, or other taxing unit under Chapter 312, Tax Code, or with a school district under Chapter 313, Tax Code, under which the investment in the facility is at least $200 million;

(2) is a facility engaged in manufacturing, as that term is defined by Section 151.318, Tax Code, the construction of which begins on or after September 1, 2009; and

(3) is forecasted to create at least 300 full-time equivalent employment positions.

Sec. 2303.552. DATE OF QUALIFICATION. A proposed facility becomes a qualified manufacturing project on the later of:

(1) the date an agreement under Chapter 312 or 313, Tax Code, is effective; or

(2) the date the owner of the facility files an election to become a qualified manufacturing project with the comptroller.

Sec. 2303.553. QUALIFIED MANUFACTURING PROJECT ZONE. (a) The county in which a qualified manufacturing project is proposed to be built may apply to the office for designation of the project as a qualified manufacturing project zone. If the office approves a request under this subsection, the designation takes effect on the date that a proposed facility becomes a qualified manufacturing project.

(b) A county may contain only one qualified manufacturing project that is a qualified manufacturing project zone at any one time.

(c) A qualified manufacturing project that is a qualified manufacturing project zone automatically qualifies for designation as an enterprise project under this chapter, except that it is not subject to Subchapters C and D.

(d) A qualified manufacturing project zone designation remains in effect until the expiration of any tax limitations, credits, abatements, or other benefits under an agreement entered into under Chapter 312 or 313, Tax Code, for the qualified manufacturing project.

Sec. 2303.554. BENEFITS. In addition to the benefits described in Subchapter G, a qualified manufacturing project zone is eligible for a refund of state sales and use taxes as provided by Section 151.429(h-1), Tax Code.

Sec. 2303.555. ELIGIBLE TAXABLE PROCEEDS. (a) In this section, "eligible taxable proceeds" means:

(1) taxable proceeds generated, paid, or collected by a qualified manufacturing project zone; or

(2) an amount, as determined by a finding of the applicable governmental body, of taxable proceeds that are a direct or indirect result of the design, construction, or operation of the qualified manufacturing project, including hotel occupancy taxes, ad valorem taxes, sales and use taxes, and mixed beverage taxes.

(b) For a period beginning on the date that a qualified manufacturing project becomes a qualified manufacturing project zone under Section 2303.553 and ending on a date not later than the 10th anniversary of that date, a governmental body, including a municipality, county, or political subdivision, may agree to rebate, refund, or pay eligible taxable proceeds to the owner of a qualified manufacturing project at which the eligible taxable proceeds were generated.

(c) A governmental body that makes an agreement under this section shall make the rebate, refund, or payment directly to the beneficiary.

SECTION 3. Section 151.429(e), Tax Code, is amended by adding Subdivisions (6), (7), (8), and (9) to read as follows:

(6) "Qualified manufacturing project" has the meaning assigned that term by Section 2303.551, Government Code.

(7) "Sales tax base" means the amount of the sales and use taxes collected under this chapter on purchases of all taxable items purchased within the boundaries of a qualified manufacturing project zone for the four calendar quarters ending before the date the zone is designated.

(8) "Additional sales and use tax" means the total amount of sales and use taxes collected under this chapter on purchases of all taxable items purchased within a qualified manufacturing project zone for each calendar quarter for the duration of the qualified manufacturing project zone designation less the sales tax base for the corresponding calendar quarter, not otherwise due as a rebate or refund under any other applicable law.

(9) "Manufacturing workforce development" means any expenditures incurred by the owner, or a contractor or subcontractor of the owner, of a qualified manufacturing project for recruiting or training present, prospective, or potential employees for jobs in this state presently available or expected to be available for the planning, designing, construction, fabrication, or operation of a qualified manufacturing project, and the salaries, wages, and benefits of those employees through the first two years of commercial operation of the qualified manufacturing project.

SECTION 4. Section 151.429, Tax Code, is amended by adding Subsection (h-1) to read as follows:

(h-1) Notwithstanding any other provision of this section, the owner of a qualified manufacturing project is entitled to receive a payment of a refund of 50 percent of the additional sales and use tax for the preceding calendar quarter. The comptroller shall pay the refund at the end of the state fiscal quarter after that calendar quarter for the duration of the designation of the project as a qualified manufacturing project zone, but not to exceed 10 years. The total amount of refunds that a qualified manufacturing project may receive over the course of its designation as a qualified manufacturing project zone may not exceed an amount equal to five percent of the qualified manufacturing project's investments in the facility under Subchapter H, Chapter 2303, Government Code. A refund received under this section shall be used to pay for or to refund eligible expenses incurred before or after designation of the project as a qualified manufacturing project zone for manufacturing workforce development for the qualified manufacturing project.

SECTION 5. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2009.