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A BILL TO BE ENTITLED
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AN ACT
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relating to the creation of research technology corporations by |
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institutions of higher education; providing for tax exemptions; |
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providing a penalty. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle H, Title 3, Education Code, is amended |
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by adding Chapter 157 to read as follows: |
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CHAPTER 157. UNIVERSITY RESEARCH TECHNOLOGY CORPORATIONS |
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Sec. 157.001. PURPOSE AND FINDINGS. The legislature finds |
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that the development and commercialization of technology by public |
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and private institutions of higher education are critical |
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components of the educational and research missions of those |
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institutions and key contributors to the economic development and |
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well-being of this state. The activities authorized by this |
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chapter directly support those important public purposes. |
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Sec. 157.002. DEFINITIONS. In this chapter: |
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(1) "Contribution" has the meaning assigned by Section |
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1.002, Business Organizations Code. |
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(2) "Creating institution" means an institution of |
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higher education or private or independent institution of higher |
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education that creates a corporation under this chapter. |
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(3) "Institution of higher education" and "private or |
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independent institution of higher education" have the meanings |
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assigned by Section 61.003. |
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(4) "Technology" means the application of scientific |
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knowledge for practical purposes and includes inventions, |
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discoveries, trade secrets, copyrighted materials, tools, |
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machines, materials, processes to do work, processes to produce |
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goods, processes to perform services, processes to carry out other |
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useful activities, trademarks, and computer software. |
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Sec. 157.003. CREATION OF CORPORATION. (a) An institution |
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of higher education or private or independent institution of higher |
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education may create a special-purpose corporation for the |
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exclusive purpose of developing and commercializing one or more |
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technologies owned wholly or partly by the institution. A |
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corporation created under this chapter that engages in other |
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purposes that are not incidental to that authorized purpose is not |
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entitled to the benefits of this chapter, including any tax |
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exemption authorized by Section 157.008. |
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(b) The certificate of formation of a corporation created |
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under this chapter must state that the corporation is governed by |
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this chapter and state the name and purposes of the corporation and |
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other information required by law. Except as otherwise provided by |
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this chapter, a corporation created under this chapter is governed |
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by Chapters 20 and 21, Business Organizations Code, and Title 1 of |
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that code. |
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Sec. 157.004. MANAGEMENT OF CORPORATION; RIGHTS OF CREATING |
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INSTITUTION. (a) The creating institution shall name the persons |
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constituting the initial board of directors of the corporation. |
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Directors other than the initial directors shall be determined as |
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provided by Chapter 21, Business Organizations Code. |
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(b) The creating institution must at all times be a |
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shareholder in the corporation. The creating institution shall be |
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issued shares in the corporation when the corporation is created as |
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agreed on by the organizers of the corporation according to any |
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contribution of the institution. |
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(c) The creating institution may be issued shares in the |
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corporation in exchange for the contribution of rights in the |
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technology of the institution or of other contractual obligations, |
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as agreed on by the board of directors. |
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Sec. 157.005. TECHNOLOGY LICENSING. The creating |
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institution may license to the corporation any technology owned by |
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the institution. |
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Sec. 157.006. REQUIRED OPERATIONS IN TEXAS. The principal |
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offices of the corporation must be located in this state, and the |
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majority of any goods produced or services performed by the |
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corporation must be produced or performed in this state. |
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Sec. 157.007. DURATION. (a) A corporation created under |
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this chapter is limited in duration to 15 years. At the expiration |
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of that period, the corporation may file a restated and amended |
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certificate of formation under which the corporation continues in |
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existence as a for-profit corporation governed by Chapters 20 and |
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21, Business Organizations Code, and Title 1 of that code. A |
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corporation that files a restated and amended certificate of |
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formation as authorized by this subsection is not governed by the |
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other provisions of this chapter, except that the corporation must |
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comply with Section 157.008 to obtain a tax exemption authorized by |
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that section and is subject to the penalty provided by Section |
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157.009 for noncompliance. |
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(b) Subsection (a) does not limit the time or manner in |
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which the corporation may be terminated as otherwise provided by |
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law. |
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Sec. 157.008. TAX EXEMPT STATUS OF CORPORATION. (a) This |
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section applies only to a corporation created under this chapter, |
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including a corporation that files a restated and amended |
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certificate of formation as authorized by Section 157.007, that: |
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(1) is engaged exclusively in developing and |
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commercializing one or more technologies owned wholly or partly by |
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the creating institution, including activities that are incidental |
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to developing and commercializing those technologies; and |
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(2) complies with Section 157.006. |
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(b) The corporation is entitled to an exemption from ad |
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valorem taxation of: |
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(1) the real and tangible personal property owned by |
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the corporation that is used for a purpose described by Subsection |
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(a)(1); and |
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(2) the real property owned by the corporation that |
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consists of: |
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(A) an incomplete improvement that is under |
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active construction or other physical preparation to make the |
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property suitable to be used for a purpose described by Subsection |
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(a)(1); and |
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(B) the land on which the incomplete improvement |
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is located that will be reasonably necessary for the corporation's |
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use of the improvement. |
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(c) The corporation is exempted from the franchise tax |
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imposed by Chapter 171, Tax Code. |
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(d) The sale, storage, use, or other consumption of a |
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taxable item directly used or consumed by the corporation is |
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exempted from the sales and use taxes imposed by Chapter 151, Tax |
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Code. |
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(e) This section does not limit the eligibility of the |
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corporation for any other available tax benefit, including a tax |
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benefit under Chapter 312 or 313, Tax Code. |
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(f) If the corporation acquires property after January 1 of |
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a tax year, the corporation may receive an exemption authorized by |
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Subsection (b) for the applicable portion of that tax year |
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immediately on qualification for the exemption. Sections 11.43(d) |
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and 26.113, Tax Code, apply to an exemption authorized by |
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Subsection (b) of this section in the same manner as those |
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provisions apply to an exemption covered by Section 11.42(d). |
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(g) The corporation must maintain a complete record of all |
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taxes that the corporation would have been liable for if the |
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corporation had not been entitled to the exemptions authorized by |
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this section. The corporation shall submit the records to the |
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comptroller without delay on request of the comptroller when |
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determining the corporation's liability for any penalty assessed |
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under Section 157.009. |
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Sec. 157.009. PENALTY FOR NONCOMPLIANCE WITH CORPORATE |
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OPERATIONS REQUIREMENTS. (a) A corporation created under this |
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chapter, including a corporation that files a restated and amended |
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certificate of formation as authorized by Section 157.007, that |
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ceases to comply with Section 157.006 is liable to the state for a |
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penalty in an amount equal to any taxes, including ad valorem taxes, |
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for which the corporation received an exemption under Section |
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157.008 for the five calendar years preceding the year in which the |
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noncompliance began. The comptroller shall determine the |
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corporation's liability for the penalty and assess the amount owed. |
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(b) A penalty assessed under this section is due on the date |
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designated by the comptroller, not later than the 90th day after the |
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date assessed, and shall be collected in the same manner as a state |
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tax. A lien exists on any property of the corporation to secure the |
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payment of any amount assessed under this section. The comptroller |
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by rule shall establish the methods of payment and shall adopt other |
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rules necessary to administer and enforce this section. |
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(c) Amounts received under this section shall be deposited |
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in the state treasury to the credit of the general revenue fund. |
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Sec. 157.010. CONFLICT WITH BUSINESS ORGANIZATIONS CODE. |
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To the extent of any conflict between a provision of this chapter |
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and a provision of the Business Organizations Code, the provision |
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of this chapter controls. |
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SECTION 2. (a) Except as provided by Subsection (b) of this |
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section, this Act takes effect January 1, 2016. |
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(b) Sections 157.008(b) and (f), Education Code, as added by |
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this Act, take effect January 1, 2016, but only if the |
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constitutional amendment proposed by the 84th Legislature, Regular |
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Session, 2015, authorizing the legislature to provide for an |
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exemption from ad valorem taxation of certain property owned by |
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research technology corporations created by public or private |
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institutions of higher education to develop and commercialize |
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technologies owned by the institutions is approved by the voters. |
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If that amendment is not approved by the voters, Sections |
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157.008(b) and (f), Education Code, as added by this Act, have no |
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effect. |