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Summary: The Texas Emerging Technology Fund (ETF) was created to help develop research and innovation in Texas by investing in start-up technology companies as well as provide grants and awards for higher education institutions' research. Current law requires businesses who receive funding to annually report the total number of jobs each company created, requires ETF recipients to get a background check for each application, regardless of how many times they apply for funding; and, during the application process, only at the time the applicant is accepted does the ETF keep the applicant's private information confidential.
HB 468 changes current law by reporting the total number of jobs created within the Fund rather than each company's job numbers. Also, the legislation requires only Subchapter D recipients to get a background check (businesses or non-profit organizations that pair with institutions of higher education). Each background check lasts for five years regardless of how many times an entity applies for funding during that period. Lastly, HB 468 includes keeping private information of businesses who apply to the ETF confidential regardless of whether or not they receive funding from ETF.
Analysis: HB 468 protects private property and free-market interaction as well as limits government's scope. This legislation will protect companies from exposing their corporate vitality to their competitors as well as protecting valuable information that can interfere with market transactions. Also, HB 468 reduces an administrative burden and lowers cost for businesses, non-profit organizations, and higher education institutions by requiring the principals in a project agreement to get one background check that lasts for five years. While we have not commented on the value, necessity, or desirability of the EFT Fund itself, we support this legislation to the extent that it improves the program and makes it more efficient in fulfilling its mission.
Recommendation: We recommend that the Legislature require each company that receives funding from the EFT to disclose the number of jobs it is creating based on the need to provide the taxpayers with transparency.
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