83R6410 CLG-F

By: Parker, et al. H.B. No. 3092

A BILL TO BE ENTITLED

AN ACT

relating to qualified manufacturing project zones and the creation and funding of the Texas workforce investment program.

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

SECTION 1. The legislature finds that a qualified manufacturing project, as defined by Section 399.001, Local Government Code, as added by this Act, and the enhancement of manufacturing workforce development serve the public purposes of:

(1) developing and diversifying employment in this state;

(2) eliminating unemployment or underemployment in this state; and

(3) developing and expanding commerce in this state.

SECTION 2. Subtitle C, Title 12, Local Government Code, is amended by adding Chapter 399 to read as follows:

CHAPTER 399. QUALIFIED MANUFACTURING PROJECT ZONES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 399.001. DEFINITIONS. In this chapter:

(1) "Eligible manufacturing facility" means a proposed new or expanded facility that, on the date of the facility's designation as a qualified manufacturing project under Section 399.051:

(A) is subject to an agreement entered into on or after January 1, 2014, but before January 1, 2019, 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 $100 million;

(B) will be engaged in manufacturing, as that term is defined by Section 151.318, Tax Code, the construction of which begins on or after September 1, 2013;

(C) is forecasted to create at least 200 new full-time jobs; and

(D) is owned by a person or entity that is:

(i) considering at least one alternative site for the facility that is not located in this state; or

(ii) competing against similar projects located outside this state for federal funds or financial support, including loan guarantees, that would benefit the project.

(2) "New full-time job" means a newly created permanent full-time job that:

(A) requires at least 1,600 hours of work a year;

(B) is not transferred from one area in this state to another area in this state; and

(C) is not created to replace a previous employee.

(3) "Qualified manufacturing project" means an eligible manufacturing facility the owner of which has filed an election under Section 399.051 to establish the facility's status as a qualified manufacturing project.

SUBCHAPTER B. QUALIFIED MANUFACTURING PROJECT; DESIGNATION OF ZONE

Sec. 399.051. DESIGNATION OF ELIGIBLE MANUFACTURING FACILITY AS QUALIFIED MANUFACTURING PROJECT; DATE OF QUALIFICATION. An eligible manufacturing facility becomes a qualified manufacturing project on the date the owner of the facility files an election for automatic designation of the facility as a qualified manufacturing project, without further qualification, with the comptroller.

Sec. 399.052. ECONOMIC IMPACT STUDY. (a) Before applying for designation of the applicable county as a qualified manufacturing project zone under Section 399.054, the owner of a qualified manufacturing project must conduct an economic impact study of the county in which the project is located and submit the study to the comptroller for certification not later than the 120th day after the date the owner files an election to establish the facility's status as a qualified manufacturing project under Section 399.051.

(b) The economic impact study must provide an estimate of:

(1) the general economic impact likely to occur in the county as a result of the qualified manufacturing project;

(2) the anticipated amount of increase in the tax receipts to this state from the taxes imposed under Chapter 151, Tax Code, that:

(A) will occur in the county during the period the county is designated as a qualified manufacturing project zone; and

(B) is directly attributable to the economic impact from the design, construction, or operation of the qualified manufacturing project;

(3) the projected number of new full-time jobs likely to be available at the qualified manufacturing project; and

(4) the investment projected to be made at the qualified manufacturing project.

Sec. 399.053. COMPTROLLER CERTIFICATION OF ECONOMIC IMPACT STUDY. (a) Not later than the 30th day after receiving the economic impact study from an owner of a qualified manufacturing project, the comptroller shall certify the study if the comptroller determines that the study accurately estimates the information required by Sections 399.052(b)(2)-(4).

(b) If the comptroller determines that the economic impact study does not accurately estimate the information required by Sections 399.052(b)(2)-(4), the comptroller, not later than the 30th day after the date of receipt of the study, shall:

(1) notify the owner of the qualified manufacturing project in writing of the comptroller's preliminary determination and the basis for that determination; and

(2) provide the owner of the qualified manufacturing project with an opportunity to respond or submit a new or amended economic impact study to the comptroller.

(c) In evaluating a new or amended economic impact study submitted by the owner of a qualified manufacturing project following the comptroller's rejection of the owner's initial study, the comptroller shall determine whether to accept or certify the new or amended study not later than the 30th day after the date of receipt of the new or amended study.

(d) If, not later than the 90th day after receiving notice of the comptroller's rejection of the owner's initial economic impact study, the owner of a qualified manufacturing project either fails to receive the comptroller's certification of a new or amended economic impact study the owner submitted within that period or fails to submit a new or amended study to the comptroller, the qualified manufacturing project loses its status as a qualified manufacturing project at the end of the 90-day period.

Sec. 399.054. DESIGNATION OF QUALIFIED MANUFACTURING PROJECT ZONE; APPLICATION. (a) The owner of a qualified manufacturing project for which the comptroller has certified an economic impact study in accordance with Section 399.053 may apply to the comptroller for designation of the county in which the project is located as a qualified manufacturing project zone. The comptroller shall approve the application on a determination that the qualified manufacturing project is the first facility in the county to apply for the designation. The designation takes effect on September 1 preceding the date of approval of an application for designation of the county as a qualified manufacturing project zone.

(b) Only one qualified manufacturing project that is in a qualified manufacturing project zone may qualify for benefits under this chapter at any one time.

(c) If the owner of more than one qualified manufacturing project applies for zone designation from a single county within a calendar month, the comptroller shall approve the qualified application that the comptroller determines will have the greatest economic impact on that county.

(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.

(e) The comptroller may charge an application fee in an amount sufficient to cover the comptroller's costs in administering this chapter.

Sec. 399.055. ANNUAL CERTIFICATION. (a) In this section, "commercial operation," with respect to a facility, means that the facility has started to operate for the facility's intended purpose.

(b) To receive state benefits under this chapter, the owner of a qualified manufacturing project in a qualified manufacturing project zone must make the following applicable annual certification to the comptroller, as of the last day of the state fiscal year for each year of the zone's designation:

(1) if the qualified manufacturing project zone designation has been in effect for three years or less and the qualified manufacturing project has not started commercial operation, the owner must certify the forecast of at least 200 new full-time jobs for the year that the facility will begin commercial operation;

(2) if the qualified manufacturing project zone designation has been in effect for more than three years and the qualified manufacturing project has not started commercial operation, the owner must certify:

(A) the creation of at least 200 new full-time jobs; or

(B) all of the following:

(i) the expenditure of at least $500 million on the new or expanded facility has occurred;

(ii) the year in which the facility will begin commercial operation; and

(iii) the forecast of at least 200 new full-time jobs that will be created not later than the eighth anniversary of the date of the zone's designation; or

(3) if the qualified manufacturing project has started commercial operation, the owner must certify the creation of at least 200 new full-time jobs at the facility.

(c) If the owner of a qualified manufacturing project fails to make the applicable certification required under Subsection (b):

(1) the owner forfeits the right to participate in the Texas workforce investment program under Subchapter C;

(2) the owner shall pay to the applicable governmental body within 60 calendar days the entire amount of all funds previously remitted from the Texas workforce investment fund under Subchapter C from any memorandum of understanding entered into by the owner in connection with the project; and

(3) the qualified manufacturing project loses its status as a qualified manufacturing project for purposes of this chapter.

Sec. 399.056. STATE BENEFITS. The owner of a qualified manufacturing project in a qualified manufacturing project zone is eligible for participation in the Texas workforce investment program as provided by Subchapter C.

Sec. 399.057. REPORT ON COMPLIANCE WITH JOB OR CAPITAL INVESTMENT CERTIFICATION. (a) Before the beginning of each regular session of the legislature, the comptroller shall submit to the lieutenant governor, the speaker of the house of representatives, and each other member of the legislature a report assessing the progress of qualified manufacturing projects receiving state benefits under this chapter. The report must be based on data annually certified to the comptroller by each owner of a qualified manufacturing project under this chapter and state for each project:

(1) the number of new full-time jobs the owner of the project committed to create;

(2) the number of new full-time jobs the owner of the project created;

(3) the median wage of the new full-time jobs created;

(4) the amount of capital investment the owner of the project committed to expend in the facility; and

(5) the amount of capital investment the owner expended in the facility.

(b) The report may not include information that is made confidential by law.

(c) The comptroller may require an owner of a qualified manufacturing project to submit, on a form the comptroller provides, information required to complete the report.

Sec. 399.058. COMPTROLLER DUTIES. The comptroller shall adopt rules, forms, and fees necessary to perform the comptroller's duties under this chapter.

SUBCHAPTER C. TEXAS WORKFORCE INVESTMENT FUND

Sec. 399.101. DEFINITIONS. In this subchapter:

(1) "Additional sales and use tax" means the total amount of sales and use taxes collected under Chapter 151, Tax Code, on purchases of all taxable items purchased within a qualified manufacturing project zone for each state fiscal year for the duration of the qualified manufacturing project zone designation less the sales tax base, not otherwise due as a rebate or refund under any other applicable law.

(2) "Fund" means the Texas workforce investment fund established under Section 399.102.

(3) "Qualified educational participant" means any public community college, public university, state licensed career and vocational school, and public high school in good standing with the state.

(4) "Sales tax base" means the amount of the sales and use taxes collected under Chapter 151, Tax Code, on purchases of all taxable items purchased within the boundaries of a qualified manufacturing project zone for the state fiscal year ending before the date the zone is designated.

Sec. 399.102. TEXAS WORKFORCE INVESTMENT FUND. (a) The Texas workforce investment fund is a special fund in the state treasury outside the general revenue fund to be administered by the comptroller under this subchapter. Money in the fund may be used for the workforce investment program established under Section 399.103 and for any other purpose of this subchapter.

(b) The fund consists of:

(1) the amounts deposited by the comptroller under Section 399.104;

(2) refunds received by the comptroller under Section 399.107;

(3) interest earned on money credited to the fund; and

(4) money from gifts, grants, or donations to the fund.

(c) Sections 403.095 and 404.071, Government Code, do not apply to the fund.

Sec. 399.103. WORKFORCE INVESTMENT PROGRAM. (a) The comptroller shall establish and implement the Texas workforce investment program to remit money from the Texas workforce investment fund to qualified educational participants to provide job training and education for the current and future workforce needs of qualified manufacturing projects participating in the program.

(b) A qualified manufacturing project is eligible to participate in the program to the extent that the fund has on hand amounts deposited by the comptroller under Section 399.104 that are directly attributable to the project.

(c) To receive funding under the program, a qualified educational participant must enter into a memorandum of understanding with the owner of a qualified manufacturing project eligible to participate in the program. The memorandum of understanding must outline specifically how money from the fund will be used by the qualified educational participant to provide the educational courses and workforce training needed by the workforce of the qualified manufacturing project.

(d) The comptroller by rule shall adopt the form of the memorandums of understanding entered into by owners of qualified manufacturing projects and qualified educational participants under this section.

Sec. 399.104. ALLOCATION OF TAXES. (a) Not later than October 1 of each state fiscal year, the comptroller shall deposit to the credit of the fund 25 percent of the additional sales and use tax collected in the preceding state fiscal year that is directly attributable, as determined by the comptroller in accordance with procedures developed by the comptroller, to the economic activity derived from the presence of each qualified manufacturing project, if the owner of the project has made the applicable employment certification to the comptroller required under Section 399.055.

(b) If the comptroller determines that none of the additional sales and use tax for the preceding state fiscal year is directly attributable to the economic activity derived from the presence of the qualified manufacturing project, then no money that is attributed to the qualified manufacturing project shall be deposited into the fund and the comptroller shall notify the owner of the project of the comptroller's determination and the basis for that determination.

Sec. 399.105. PAYMENTS FROM FUND. (a) For the duration of a qualified manufacturing project zone designation, but not to exceed 10 years, the comptroller shall remit payments from the fund to a qualified educational participant who enters into a memorandum of understanding with the owner of a qualified manufacturing project under Section 399.103.

(b) The amounts remitted from the fund on behalf of an individual qualified manufacturing project may not exceed the amount of additional sales and use tax deposited in the fund that is directly attributable to the economic activity derived from the project as determined by the comptroller under Section 399.104.

(c) The total amount of money deposited into the fund that will be made available to a qualified manufacturing project for use as prescribed under this subchapter may not exceed an amount equal to the lesser of $50 million or five percent of the qualified manufacturing project's investments in the facility under Subchapter B.

Sec. 399.106. USE OF FUNDS. (a) After designation of the county in which a qualified manufacturing project is located as a qualified manufacturing project zone, money may be remitted from the fund and used to pay for or to refund workforce training expenses incurred by a qualified educational participant who has entered into a memorandum of understanding with the owner of the qualified manufacturing project.

(b) Money from the fund may not be allocated under this subchapter for the training and workforce development of an employee or future employee of a qualified manufacturing project working in a "bona fide executive, administrative, or professional capacity," as that phrase is used for purposes of establishing an exemption to the overtime provisions of the federal Fair Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.).

Sec. 399.107. MONITORING OF PROJECT. If the owner of a qualified manufacturing project fails to make the applicable certification required by Section 399.055 or if the comptroller elects to audit the certification and determines that the qualified manufacturing project has started commercial operation and failed to meet the job creation requirement, the owner forfeits the right to enter into memorandums of understanding with qualified educational participants under this subchapter. The owner shall pay to the comptroller the entire amount of all funds previously allocated from the fund through memorandums of understanding entered into by the owner under Section 399.103. Payment of a refund under this section shall be made not later than the 60th day after, as applicable, the date the certification is due or the date the comptroller completes the audit.

Sec. 399.108. UNEXPENDED FUNDS; NOTICE. (a) For the duration of a qualified manufacturing project zone's designation, the comptroller periodically shall notify the owner of a qualified manufacturing project in writing of any money in the fund attributable to the project that currently remains unexpended but may be spent by the owner by participating in the workforce investment program.

(b) Any money in the fund that remains unexpended by a project when its designation as a qualified manufacturing project ends shall be deposited by the comptroller to the credit of the general revenue fund.

SECTION 3. This Act takes effect September 1, 2013.