The House Committee on Economic & Small Business Development met to take up the following interim charge: Study the impacts of the declining price of oil and the continuously depressed price of natural gas on the Texas economy and the fiscal implications for the Texas budget. Consider impacts on local communities most dependent on oil and gas activity, including impacts on supporting economies such as retail, manufacturing, housing industries, etc. Recommend strategies for sustained energy development and workforce growth during times of depressed energy prices.
Bryan Daniel, Economic Development and Tourism Division in the Governor’s Office
- Discussed various realignments of programs
- Make considerations for helping small businesses that are already here and help to create new small businesses – have dedicated staff for this initiative
- Partnered with Workforce Commission to create a number of workshops for small businesses
- Spotlight on various programs – not really focus on Enterprise Fund, looking at businesses even smaller
- Product Development and Small Business Incubator Fund – active loans in portfolio
- Texas Leverage Fund – Local economic development corporations get the funds and can make direct loans to a business entity, etc
- Tourism impact to small businesses as well
- Abbott plans to make Texas the no 1 state for women-owned businesses
- Deployed Women’s commission
- No particular funding set aside – putting focus on specific goal helps identify the goal
- Film program used to illustrate how programs can help economic growth, looking at the large enterprises (including music program, etc) to determine impact on community as a whole
- Button – concerned about what is coming out of the pipeline, job growth rate is forecasted at just 1% at only half the national rate
- Will be watching the energy numbers but also optimistic about other sectors of the economy
- Vo – numbers on companies with 10 employees or below, other demographics about small business, what range do they focus on?
- Will get that information to him later
- For small business they tend to focus on companies that have 1 to 100 employees
- Vo – asked about programs and loans, inquired about various barriers for small businesses
- State should not be creating obstacles to loan programs and they provide technical help to application process
- Look to public sector and private sector solutions and will try to help businesses find solutions
- Faircloth – Is there a list of small businesses that have sent in applications for the programs?
- Will provide that to the committee, across the board he sees small manufacturing and some technology so it is not just for one industry
- Isaac – is there help for workforce issues small businesses must comply with
- That is a role the small business advocate could provide
- Discussion attracting business suppliers to Texas
- Some is private sector driven effort
- Gov. office helps with supporting the effort as well
Annie Spilman, National Independent Federation of Small Business in Texas
- Regulation can be a hidden tax in way for small businesses and uncertainty regarding regulation can make it difficult to plan for future growth
- Next Problems and Priorities report will come out in Spring
- Small businesses tend to prepare a disproportionate weight in regulatory cost in comparison to large businesses
- Other helpful tools, TWC had a portal to help small businesses find workforce and TWC is working with TEA
- Instead of tax incentives would suggest they look at removing tax burdens and regulatory burdens
- Recommendations include: reduce mandates, reduce job killing penalties and fines.
- Vo – inquired on focus area?
- State and national level
- Will get numbers to committee on how members have benefitted from franchise tax reduction
- Isaac – $12k per employee each year in regulation costs, inquires about bill from last session to clarify costs of regulations
- Did not recall but it is an issue they are working on
- Isaac – largest concentration of distillers in the state, maybe next in line for brewer. Spirits are big in HD 45 and there are a lot of antiquated regulations
Brad Farbstein, Real Ale Brewing
- Offer living wages, benefits to all employees
- Texas craft beer market is growing – end of last year 189 breweries in the state
- Brewers know there are existing laws that give advantage to out of state brewers
- Multiplier effect when local sales grows, increases tourism in the Hill Country
- Wants to take limits off what can be sold at brewery
- It is a novelty purchase
- Home brewers are advocates for the industry – but it is illegal for home brewers to have contests or offer bottle share and illegal for other samples to be on the premise
- Wants to support the home brewing community and wants to hold competitions for brewers
- Would like the committee to consider to modernize the laws
- Isaac – remarks that witness is asking them to consider more free market principles
- Encourages competition and the more good beer out in the market will bring more people to the market
Sabari Raja, Nepris Education
- Technology in classrooms, brings workforce discussions into classroom
- Should be clear incentives to help connect industry and education
- There is not clear access to funding for companies innovating in technology but that also have a clear social impact
- Deloitte study talked about creating loyal millennials – workforce wants to work for a purpose
- Funding and policies should follow social entrepreneurship
- Vo – asked more about what Nepris does and says they need to contact TEA
- Cloud based platform but for connecting industry and education
- They are a TEA sole source vendor and work with 150 districts in Texas, mostly rural districts
- Faircloth – how do you recruit industry to participate? Do you retain presentations?
- Approach companies, look at top 100 companies with STEM focus
- Also working closely with Economic Development Council (EDC)
- Leverage power of social platform, LinkedIn
- Yes, presentations are retained
- Vo – invited her back to come present testimony during Public Ed hearing
Nathaniel Gates, Cloud 49
- Through DIR offering cloud resources to number of state agencies
- Need to look at how jobs will look 10 years from now – are workers being trained for that future?
- Lawmakers could help spur development
- Need new mindset around vocational training
- Texas taxes data processing – sales tax policy should be addressed maybe a floor for companies or a tax holiday
- Fund something like a technology corridor
- Recruitment can be a huge burden, would like some sort of grant or program for recruiting expense reimbursement
- Isaac – recalls company looking for talent on Craig’s list to grade STAAR test, could they help
- Crowd – will be competent and capable
- Track reputation of all the workers
- Isaac – any concerns of states or municipalities regulating workers who are working from home or on their own (Uber/Lyft example)
- Yes, need to make sure it is for the good of the people
Patrick Hitchins, FitRankings
- Corporate wellness and fitness company
- Biggest challenge – access to good tech developer talent
- Thinks the, Louisiana Tech credit – under economic development, is valuable
- Raising funding will continue to be an issue
- Would like to see any incentive to encourage businesses to do business with those based in Texas
- Considers Emerging Technology Fund a failure in that many of the businesses who received the funding are no longer in existence
Jamie Rhodes, Alliance of Texas Angels Networks
- Was an advisor to ETF and thinks it was a great idea but the whole goal was access to capital
- Angel investors are generally local and there are about 100 angel deals for every 1 venture capital
- Would like help in the following areas: high growth startups, help small businesses, would like to fund some legislation that pass and maybe update the legislation