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A BILL TO BE ENTITLED
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AN ACT
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relating to qualified manufacturing project zones. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. The legislature finds that a qualified |
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manufacturing project, as defined by Section 399.001, Local |
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Government Code, as added by this Act, and the enhancement of |
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manufacturing workforce development serve the public purposes of: |
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(1) developing and diversifying employment in this |
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state; |
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(2) eliminating unemployment or underemployment in |
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this state; and |
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(3) developing and expanding commerce in this state. |
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SECTION 2. Subtitle C, Title 12, Local Government Code, is |
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amended by adding Chapter 399 to read as follows: |
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CHAPTER 399. QUALIFIED MANUFACTURING PROJECT ZONES |
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Sec. 399.001. DEFINITIONS. In this chapter: |
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(1) "Eligible manufacturing facility" means a |
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proposed new or expanded facility that, on the date of the |
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facility's designation as a qualified manufacturing project under |
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Section 399.002: |
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(A) is subject to an agreement entered into on or |
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after January 1, 2011, but before January 1, 2017, with a county, |
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municipality, or other taxing unit under Chapter 312, Tax Code, or |
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with a school district under Chapter 313, Tax Code, under which the |
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investment in the facility is at least $100 million; |
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(B) will be engaged in manufacturing, as that |
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term is defined by Section 151.318, Tax Code, the construction of |
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which begins on or after September 1, 2011; |
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(C) is forecasted to create at least 200 |
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full-time equivalent employment positions; and |
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(D) is owned by a person or entity that is: |
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(i) considering at least one alternative |
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site for the facility that is not located in this state; or |
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(ii) competing against similar projects |
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located outside this state for federal funds or financial support, |
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including loan guarantees, that would benefit the project. |
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(2) "Qualified manufacturing project" means an |
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eligible manufacturing facility the owner of which has filed an |
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election under Section 399.002 to establish the facility's status |
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as a qualified manufacturing project. |
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Sec. 399.002. DESIGNATION OF ELIGIBLE MANUFACTURING |
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FACILITY AS QUALIFIED MANUFACTURING PROJECT; DATE OF |
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QUALIFICATION. An eligible manufacturing facility becomes a |
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qualified manufacturing project on the date the owner of the |
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facility files an election for automatic designation of the |
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facility as a qualified manufacturing project, without further |
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qualification, with the comptroller. |
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Sec. 399.003. ECONOMIC IMPACT STUDY. (a) Before applying |
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for designation of the applicable county as a qualified |
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manufacturing project zone under Section 399.005, the owner of a |
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qualified manufacturing project must conduct an economic impact |
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study of the county in which the project is located and submit the |
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study to the comptroller for certification not later than the 120th |
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day after the date the owner files an election to establish the |
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facility's status as a qualified manufacturing project under |
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Section 399.002. |
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(b) The economic impact study must provide an estimate of: |
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(1) the general economic impact likely to occur in the |
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county as a result of the qualified manufacturing project; |
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(2) the anticipated amount of increase in the tax |
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receipts to this state from the taxes imposed under Chapter 151, Tax |
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Code, that: |
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(A) will occur in the county during the period |
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the county is designated as a qualified manufacturing project zone; |
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and |
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(B) is directly attributable to the economic |
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impact from the design, construction, or operation of the qualified |
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manufacturing project; |
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(3) the projected number of full-time equivalent |
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employment positions likely to be available at the qualified |
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manufacturing project; and |
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(4) the investment projected to be made at the |
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qualified manufacturing project. |
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Sec. 399.004. COMPTROLLER CERTIFICATION OF ECONOMIC IMPACT |
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STUDY. (a) Not later than the 30th day after receiving the |
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economic impact study from an owner of a qualified manufacturing |
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project, the comptroller shall certify the study if the comptroller |
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determines that the study accurately estimates the information |
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required by Sections 399.003(b)(2)-(4). |
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(b) If the comptroller determines that the economic impact |
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study does not accurately estimate the information required by |
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Sections 399.003(b)(2)-(4), the comptroller, not later than the |
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30th day after the date of receiving the study, shall: |
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(1) notify the owner of the qualified manufacturing |
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project in writing of the comptroller's preliminary determination |
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and the basis for that determination; and |
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(2) provide the owner of the qualified manufacturing |
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project with an opportunity to respond or submit a new or amended |
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economic impact study to the comptroller. |
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(c) In evaluating a new or amended economic impact study |
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submitted by the owner of a qualified manufacturing project |
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following the comptroller's rejection of the owner's initial study, |
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the comptroller shall determine whether to accept or certify the |
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new or amended study not later than the 30th day after the date of |
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receipt of the new or amended study. |
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(d) If, not later than the 90th day after receiving notice |
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of the comptroller's rejection of the owner's initial economic |
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impact study, the owner of a qualified manufacturing project either |
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fails to receive the comptroller's certification of a new or |
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amended economic impact study the owner submitted within that |
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period or fails to submit a new or amended study to the comptroller, |
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the qualified manufacturing project loses its status as a qualified |
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manufacturing project at the end of the 90-day period. |
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Sec. 399.005. DESIGNATION OF QUALIFIED MANUFACTURING |
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PROJECT ZONE; APPLICATION. (a) The owner of a qualified |
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manufacturing project for which the comptroller has certified an |
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economic impact study in accordance with Section 399.004 may apply |
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to the comptroller for designation of the county in which the |
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project is located as a qualified manufacturing project zone. The |
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comptroller shall approve the application on a determination that |
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the qualified manufacturing project is the first facility in the |
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county to apply for the designation. The designation takes effect |
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on September 1 preceding the date of approval of an application for |
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designation of the county as a qualified manufacturing project |
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zone. |
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(b) Only one qualified manufacturing project that is in a |
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qualified manufacturing project zone may qualify for benefits under |
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this chapter at any one time. |
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(c) If the owner of more than one qualified manufacturing |
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project applies for zone designation from a single county within a |
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calendar month, the comptroller shall approve the qualified |
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application that the comptroller determines will have the greatest |
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economic impact on that county. |
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(d) A qualified manufacturing project zone designation |
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remains in effect until the expiration of any tax limitations, |
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credits, abatements, or other benefits under an agreement entered |
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into under Chapter 312 or 313, Tax Code, for the qualified |
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manufacturing project. |
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(e) The comptroller may charge an application fee in an |
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amount sufficient to cover the comptroller's costs in administering |
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this chapter. |
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Sec. 399.006. ANNUAL CERTIFICATION. (a) In this section, |
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"commercial operation," with respect to a facility, means that the |
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facility has started to operate for the facility's intended |
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purpose. |
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(b) To receive state benefits under this chapter, the owner |
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of a qualified manufacturing project in a qualified manufacturing |
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project zone must make the following applicable annual |
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certification to the comptroller, as of the last day of the state |
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fiscal year for each year of the zone's designation: |
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(1) if the qualified manufacturing project zone |
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designation has been in effect for three years or less and the |
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qualified manufacturing project has not started commercial |
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operation, the owner must certify the forecast of at least 200 |
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full-time equivalent employment positions for the year that the |
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facility will begin commercial operation; |
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(2) if the qualified manufacturing project zone |
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designation has been in effect for more than three years and the |
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qualified manufacturing project has not started commercial |
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operation, the owner must certify: |
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(A) the creation of at least 200 full-time |
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equivalent employment positions; or |
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(B) all of the following: |
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(i) the expenditure of at least $500 |
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million on the new or expanded facility has occurred; |
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(ii) the year in which the facility will |
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begin commercial operation; and |
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(iii) the forecast of at least 200 |
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full-time equivalent employment positions that will be created not |
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later than the eighth anniversary of the date of the zone's |
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designation; or |
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(3) if the qualified manufacturing project has started |
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commercial operation, the owner must certify the creation of at |
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least 200 full-time equivalent employment positions at the |
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facility. |
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(c) If the owner of a qualified manufacturing project fails |
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to make the applicable certification required under Subsection (b): |
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(1) the owner forfeits the right to receive future |
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benefits under this chapter; |
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(2) the owner shall pay to the applicable governmental |
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body within 60 calendar days the entire amount of all refunds |
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previously received under this chapter; and |
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(3) the qualified manufacturing project loses its |
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status as a qualified manufacturing project for purposes of this |
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chapter and Section 151.4292, Tax Code. |
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Sec. 399.007. STATE BENEFITS. The owner of a qualified |
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manufacturing project in a qualified manufacturing project zone is |
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eligible for a refund of state sales and use taxes as provided by |
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Section 151.4292, Tax Code. |
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Sec. 399.008. COMPTROLLER DUTIES. The comptroller shall |
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adopt rules, forms, and fees necessary to perform the comptroller's |
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duties under this chapter. |
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SECTION 3. Subchapter I, Chapter 151, Tax Code, is amended |
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by adding Section 151.4292 to read as follows: |
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Sec. 151.4292. TAX REFUNDS FOR QUALIFIED MANUFACTURING |
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PROJECTS. (a) In this section: |
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(1) "Additional sales and use tax" means the total |
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amount of sales and use taxes collected under this chapter on |
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purchases of all taxable items purchased within a qualified |
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manufacturing project zone for each state fiscal year for the |
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duration of the qualified manufacturing project zone designation |
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less the sales tax base, not otherwise due as a rebate or refund |
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under any other applicable law. |
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(2) "Manufacturing workforce development" means any |
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expenditures incurred in this state by the owner, or a contractor or |
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subcontractor of the owner, of a qualified manufacturing project |
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for recruiting or training present, prospective, or potential |
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employees for jobs in this state presently available or expected to |
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be available for the planning, designing, construction, |
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fabrication, or operation of a qualified manufacturing project, and |
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the salaries, wages, and benefits of those employees through the |
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first two years of commercial operation of the qualified |
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manufacturing project. The term: |
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(A) does not include any expenditures incurred |
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for the recruiting or training of, or the salaries, wages, and |
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benefits of, persons employed in a "bona fide executive, |
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administrative, or professional capacity," as that phrase is used |
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for purposes of establishing an exemption to the overtime |
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provisions of the federal Fair Labor Standards Act of 1938 (29 |
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U.S.C. Section 201 et seq.); and |
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(B) notwithstanding Paragraph (A), includes any |
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expenditures incurred for the recruiting or training of, or the |
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salaries, wages, and benefits of, operating staff, maintenance |
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staff, and engineering staff. |
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(3) "Qualified manufacturing project" has the meaning |
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assigned that term by Section 399.001, Local Government Code. |
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(4) "Sales tax base" means the amount of the sales and |
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use taxes collected under this chapter on purchases of all taxable |
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items purchased within the boundaries of a qualified manufacturing |
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project zone for the state fiscal year ending before the date the |
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zone is designated. |
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(b) The owner of a qualified manufacturing project in a |
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qualified manufacturing project zone is entitled to receive a |
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payment of a refund of 50 percent of the additional sales and use |
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tax for the preceding state fiscal year that is directly |
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attributable, as determined by the comptroller in accordance with |
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procedures developed by the comptroller, to the economic activity |
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derived from the presence of the qualified manufacturing project, |
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provided the owner has made the applicable employment certification |
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to the comptroller required under Section 399.006, Local Government |
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Code. For the duration of a qualified manufacturing project zone |
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designation, but not to exceed 10 years, the comptroller shall pay |
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the refund not later than the 60th day after the later of the date of |
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receipt of the employment certification or the last day of the state |
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fiscal year. |
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(c) If the comptroller determines that none of the |
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additional sales and use tax for the preceding state fiscal year is |
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directly attributable to the economic activity derived from the |
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presence of the qualified manufacturing project, the owner of the |
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project is not entitled to receive a refund under this section and |
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the comptroller shall notify the owner of the comptroller's |
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determination and the basis for that determination. |
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(d) The total amount of refunds that a qualified |
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manufacturing project may receive over the course of the |
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designation of the county in which it is located as a qualified |
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manufacturing project zone may not exceed an amount equal to the |
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lesser of $50 million or five percent of the qualified |
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manufacturing project's investments in the facility under Chapter |
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399, Local Government Code. |
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(e) A refund received under this section shall be used to |
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pay for or to refund eligible expenses incurred after designation |
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of the county in which the project is located as a qualified |
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manufacturing project zone for manufacturing workforce development |
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for the project. |
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(f) If the owner of a qualified manufacturing project fails |
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to make the applicable certification required by Section 399.006, |
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Local Government Code, the owner forfeits the right to receive all |
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future benefits under this section and shall pay to the |
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comptroller, not later than the 60th calendar day after the date the |
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certification is due, the entire amount of all refunds previously |
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received under this section. |
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SECTION 4. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2011. |