BILL ANALYSIS

 

 

 

H.B. 4921

By: Davis, Yvonne

State Affairs

Committee Report (Unamended)

 

 

 

BACKGROUND AND PURPOSE

 

The bill author has informed the committee that while Texas utilizes millions of taxpayer dollars to support tax breaks and incentives to attract businesses to the state, many businesses that enjoy the pro-business climate in Texas also outsource jobs overseas, which can cut company costs by exponential margins but usually results in the exploitation of various ethnic groups or nationalities. The bill author has further informed the committee that this free trade labor is not free, as the cost of outsourcing is a substantial loss in Texas jobs. H.B. 4921 seeks to address this issue by establishing restrictions on state investment in, and the provision of tax benefits to, entities that outsource jobs to foreign countries.

 

CRIMINAL JUSTICE IMPACT

 

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

 

RULEMAKING AUTHORITY

 

It is the committee's opinion that rulemaking authority is expressly granted to a state agency responsible for the issuance of a credit, exemption, or discount in relation to a tax or fee imposed by the state in SECTION 1 of this bill.

 

ANALYSIS

 

H.B. 4921 amends the Government Code to prohibit a state governmental entity from investing state funds in or purchasing obligations of a domestic private entity that, at any time during the previous two years, created employment suitable for performance in the United States in a country other than the United States and, as a result, eliminated or failed to create similar employment in the United States. The bill makes this prohibition applicable in connection with the management or investment of state funds managed or invested as follows:

·         under the Texas Constitution or other law, including statutory provisions relating to public funds investment and the state treasury operations of the comptroller of public accounts;

·         by or for any of the following:

o   a public retirement system, as defined by statutory provisions governing such a system, that provides service retirement, disability retirement, or death benefits for officers or employees of the state;

o   a public institution of higher education; or

o   another entity that is part of state government and that manages or invests state funds or for which state funds are managed or invested.

These provisions apply in connection with the management or investment of state funds without regard to whether the funds are held in the state treasury, but they do not apply to the extent that an investment standard prescribed by the Texas Constitution prohibits the legislature from restricting the investment discretion of an entity responsible for the management or investment of a fund.

 

H.B. 4921 makes a domestic private entity ineligible for a credit, exemption, or discount in relation to a tax or fee imposed by the state if the entity, at any time during the previous two years, created employment suitable for performance in the United States in a country other than the United States and, as a result, eliminated or failed to create similar employment in the United States. The bill requires a state agency responsible for the issuance of a credit, exemption, or discount in relation to a tax or fee imposed by the state to adopt rules in accordance with applicable provisions of the Administrative Procedure Act relating to the manner in which:

·         the agency will determine whether to deny the benefit; and

·         a person may ask the agency to reconsider the denial.

The bill requires the rules adopted by a state agency to require the state agency, as soon as practicable after making the decision to deny a credit, exemption, or discount to a domestic private entity that is ineligible for the benefit under the bill but is otherwise eligible for the benefit, to provide the domestic private entity with notice of and the factual basis for the denial and a description of the procedures available to request a reconsideration and to contest the factual or legal basis for the denial. These provisions do not apply to a credit, exemption, or discount for which the Texas Constitution specifically prescribes the eligibility requirements. The bill defines "state agency" as a department, board, commission, or other agency in the executive branch of state government, not including a public institution of higher education.

 

H.B. 4921 specifies that for purposes of its provisions, "domestic" means created or organized in the United States or under the laws of the United States or any state.

 

H.B. 4921 applies only to an investment made by a state governmental entity on or after September 1, 2026, and to a credit, exemption, or discount provided or denied on or after September 1, 2026, in relation to a tax or fee imposed by the state.

 

EFFECTIVE DATE

 

September 1, 2025.