Below is the HillCo client report on the October 20 House Appropriations Subcommittee on Articles I, IV & V hearing.
The subcommittee met to hear invited testimony related to the Speaker's Strategic Fiscal Review Charge and testimony regarding agencies in those articles undergoing SFR. This report focuses on testimony related to the Trusteed Programs within the Office of the Governor and DIR.
MacGregor Stephenson and staff, Trusteed Programs within the Office of the Governor
- 33 trustee programs – will later submit timeline of programs
- Committee Chair Sylvester Turner asked more details about the programs
- Total GR for all program FY2014-15 was approx. $366 million in GR
- $360 million in GRD
- $124 million in federal dollars
- $56 million in other funds
- Within office of Trusteed Programs the Criminal Justice division is in charge of administering the criminal justice funds – 17 programs
- Funding can range from $50k for bullet proof vest up to $60 million in crimes victim account
- Crimes victim program provides service
- AG office would give monetary assistance – focus on individuals
- LBB is still in the process of collecting and distributing information and will provide more details in January in time for the 84th Session
- Texas Film Commission saw an increase in funding
- 2013-2015 of appropriations from hotel tax revenue
- $22 million per year and have seen this increase over the last 3 years
- Program is now up to $89 million
- Music Program
- Have network of 2k foreign based network – Texas Music International sheet
- Governor’s Commission for Women has 1 FTE
- Texas Enterprise Fund
- $30 million currently in the fund
- 37 audit recommendations
- They agree with 31 and working to implement or have implemented those recommendations
- Others they have questions so they are still working on – may not apply with the way they do business today
- Jonathan Taylor, Director of Economic Development testified further on Texas Enterprise Fund
- This is the market to get business – this is one of the tools used to compete in the market
- Don’t always win but this tool helps Texas to be competitive
- Since 2005 have had an application on each one and application is online – Texas Wide Open for Business
- One of the projects that did not have an application had a specific appropriation from the legislature that specified the fund amount and purpose
- 2003 follows rider right after creation of the fund – LEARN
- Website has details as well about award amounts and clawbacks, etc.
- Funds are subject to clawback if targets are not hit
- $14 million in clawbacks and $19 million in terminations for company not hitting their target
- 70k jobs created and $496 million spent to date by the fund
- Every other state has some sort of program of job incentives program
- About half of the states in the U.S. have a program similar to Texas’ Enterprise Fund
- Rep. Susan King inquired about amount of detail available and easiest way to find it
- King stated finding the information needs to be user friendly
- Business Development is GR funded approx. and a small amount of HOT tax $14 million per biennium
- It is not a specific fund said Taylor – this runs the enterprise fund
- Personnel and travel – what it takes to run all of the economic development programs (ie indirect administration)
- Tourism is funded with primarily HOT tax
- Economic Development and Tourism Bank program (other staff joined to complete testimony)
- $11.7 million in the bank
- GR dedicated fund
- PDSBI program for technology clusters – bonding authority of $45 million and proceeds go to make loans – it is a loan program
- There could be overlap in the programs
- 5 outstanding loans currently
- Largest loan is $17 million to bio-medical company in College Station which was issued last year
- Have had one default, it was in 2012 – $450k
- Reviewed FTEs in other Trusteed programs such as the Texas Military Preparedness and Homeland Security, each have one FTE
- Texas Emerging Technology Fund
- Has $93.3 million left and 7 FTEs
- Half of funding is grants and the other half in equity investments
Karen Robinson, Todd Kimbriel and Nick Villalpando of DIR
- Overview of agency was provided by Karen Robinson
- Robinson has been executive director for 5 years and will be retiring
- DIR has 198 FTEs and oversees 750 cooperative contracts
- DIR oversees $2 billion annually in purchase volume of contracts
- In regards to data center build – 2018 is when original contract term is up and then they may re-procure or execute annual renewal as provided for in the contract
- Rep. King asked about a state agency that has a contract with an out of state vendor and how they would receive data/sensitive data
- There is guidance on data and cyber security and they promote education but security is up to the agency
- Rep. Tuner stated cyber security is becoming increasing concern
- That program has been ramped up since last session
- More education, assessment program for identifying risks, and putting together report
- Cyber security framework provided to agencies
- DIR cannot enforce anything upon the agencies