The House Committee on International Relations & Economic Development interim report to the 88th Legislature covers Texas-Mexico trade, economic recovery, inflation, economic incentive programs, semiconductor investment, labor shortages, and trade with Russia. For more information see the full report here.
Spotlight on Recommendations
Charge 1. Monitor the agencies and programs under the Committee’s jurisdiction and oversee the implementation of relevant legislation passed by the 87th Legislature, including HB 619, relating to developing a strategic plan to support the child-care workforce; HB 1792, relating to the evaluation of child-care providers participating in the Texas Rising Star Program; HB 2607, relating to the powers and duties of the Texas Workforce Commission and local workforce development boards regarding the provision of childcare and the subsidized childcare program; HB 3767, relating to measures to support the alignment of education and workforce development with state workforce needs, including the establishment of the Tri-Agency Workforce Initiative; and SB 1555, relating to establishing reimbursement rates for certain child-care providers participating in the subsidized childcare program.
- There is a need to conduct robust employer engagement in state workforce planning. Embracing Texas employers as partners in developing workforce goals and strategies should be a focus for the Tri-Agency. Employers do not operate on the same timelines as state institutions. The time it takes a Texas student to earn a post-secondary credential is not always conducive to filling today’s open jobs. Additionally, if the state’s career pathways do not accommodate the rapidly changing demands of the labor market, Texans’ education and training will not be aligned with future workforce needs. By regularly and organically engaging Texas employers, the Tri-Agency can focus education and workforce systems to better meet our state’s regional and local workforce current and future needs.
- In order for the Tri-Agency Workforce Initiative to best serve our diverse state, workforce goals should be disaggregated by demographic data.
- Access to quality affordable childcare is essential for our workforce. Not only do caregivers need care for children while working, by increasing access to quality care, young Texans will be better equipped to begin their academic careers prepared with the foundation needed for success.
- The cost of care and dearth of quality programs in some areas leave Texas parents and caregivers with little to no choice when they consider arrangements for their children. Strategies that empower parents with options and the ability to make informed choices on early education programs that work for them should be considered.
- Childcare educators are paramount to ensuring quality childcare is available to families, yet centers struggle to maintain adequate staffing to meet demand. Without enough qualified providers, centers cannot operate at full capacity, further reducing an already limited childcare supply. To meet the growing demand for skilled workers in the industry, Texas should support legislative, regulatory, and funding efforts to attract and retain childcare educators and strengthen the childcare workforce ecosystem, including educational partnerships and partnerships with local industries.
- By bolstering partnerships between public schools and high-quality childcare providers, the capacity for pre-k and childcare for working families can increase. The Legislature took steps to support a more integrated early learning system with the passage of HB 3 (86R). Additional work is needed to strengthen partnerships between school districts and quality childcare programs. Policies that better support the administration of partnerships, provide increased and improved technical assistance, and break down bureaucratic barriers to make these partnerships easier to set up and more effective should be considered. These steps will increase the number of children ready to succeed in school while offering solutions to districts that struggle to meet demand.
Charge 2. Review the impact that trade across the Texas-Mexico border has on the Texas economy. Consider the impact of the recent increase in border migration on transnational trade, including its effects on the communities along the border, points of entry, and access by Texas businesses to supplies, labor, materials, and markets in Mexico. (Joint charge with Committee on Transportation)
- The state should invest in infrastructure that supports this amount of trade. The Legislature should continue to work collaboratively with relevant agencies to stay updated on the effects migration has on international trade across the Texas-Mexico border while ensuring that fluctuating migration does not impede our international trade infrastructure.
Charge 3. Monitor the state’s economic recovery and identify obstacles impeding the state’s economic recovery. Examine the economic impact of inflation on both employers and employees. Examine global supply chain disruptions on state commerce and the flow of trade at Texas ports. Explore opportunities to attract businesses to Texas that have outsourced elements of their supply chain to foreign countries.
- Texas should take steps to make more products to strengthen our national security and better insulate our economy from supply interruptions. Now is the time to use our economic development expertise and move critical industries back to Texas with an immediate focus on industry jobs and sensitive technologies that currently leave us venerable to global unrest.
- Strategic investments are already planned for numerous projects involving carbon capture, aerospace defense, space exploration, electric vehicles, semiconductors, and other critical sectors. Texas should lead the nation for these investments.
- Today, there are two primary sources for manufacturing investment wanting to locate or relocate to the U.S. First, companies are reshoring their production back to the U.S. These are industries that took production offshore decades ago to secure lower labor and material costs. Second, new Foreign Direct Investment (FDI) includes companies coming to the U.S., the world’s largest economy. Further efforts should be made to draw these investments to Texas.
- Returning manufacturing to the United States, improves trade and budget deficits, boosts employment, and can lower production costs. Reshoring also allows more secure and efficient research & development and intellectual product innovation. In order for Texas to recruit industries that may be considering other states and nations, we must continue to fund our current economic development programs while exploring ways to encourage these vital sectors to consider Texas.
Charge 4. Examine current economic development incentive programs and identify opportunities to enhance job creation in Texas. Make recommendations to promote transparency and enhance effectiveness of such programs.
- Texas should continue to take the initiative to invest in its future by offering competitive incentives to companies who are creating jobs and driving innovation in Texas. For economic development programs to be successful, they must operate in a transparent and efficient manner that ensures tax-payer dollars are used appropriately and that the public confidence in the operation of these programs is maintained. To that end, the Economic Incentive Oversight Board was established by HB 26 (84R) by the 84th Legislature and tasked with examining the effectiveness and efficiency of programs and funds. The development of a performance matrix that establishes the economic performance indicators, measures, and metrics that will guide the Board’s evaluations of those programs and funds, and with the development of a schedule for the periodic review of each state incentive program or fund that meets the statutory requirement for review by the Board. The Legislature should ensure the Board is operating as intended and continue to look to the reports issued by the Board and work towards addressing any issues identified on an ongoing basis.
- The expiration of the widely used Chapter 313 will leave a void in the tools local governments have to engage in economic development activities. The Legislature should consider possible programs that will empower local communities to play an active role in bringing jobs and desired industries to their communities.
Charge 5. Evaluate Texas’ current efforts to attract semiconductor investment to the state. Identify potential strengths and vulnerabilities that could impact the success of Texas’ semiconductor industry and the ability to create and maintain a reliable semiconductor supply chain.
- As a result of rising overall demand for semiconductors and their ever-increasing importance to the global economy along with the vital role the industry plays in the supply chain and the paramount importance domestic chip manufacturing is to our national security, Texas should work to reinforce its position by fostering legislative, regulatory, and targeted incentives to make semiconductor supply chains more resilient.
- The time is now for Texas to capitalize on its existing semiconductor ecosystem, strengthening the economy and facilitating job creation, by hardening and improving infrastructure, including access to stable power, natural gas, and water supplies to retain and grow the industry.
- The U.S. semiconductor industry is vital to the U.S. and Texas economy, significantly contributing to U.S. GDP, encouraging innovation, and paying good wages to workers. The industry continues to grow and modernize; however, companies are faced with many challenges to growing its workforce with skilled technicians and engineers. To meet the growing demand for skilled workers for the industry, Texas should support legislative, regulatory, and funding efforts to attract skilled talent and strengthen the domestic semiconductor workforce ecosystem, including educational partnerships and curriculum developments.
Charge 6. Evaluate labor shortages and Texas’ unemployment numbers. Identify initiatives within the Texas Workforce Commission to expand job training and apprenticeship opportunities to help meet labor demands. Identify opportunities to increase outreach and information regarding career development.
- Texans continue to benefit from the Texas Workforce Commission’s Skills Development Fund, the Jobs & Education for Texans (JET) program, and apprenticeship programs. Efforts should be made to continue and where appropriate, expand these programs.
- Workforce challenges can be further met with the expansion of community colleges’ quality dual credit offerings that meet local workforce needs and reduce cost barriers to students.
- Texas should continue to expand broadband availability to better facilitate remote work and learning.
Charge 7. Review the impact that trade with Russia has on the Texas economy, including Texas manufacturers. Consider the impact of Texas investment in businesses and funds owned or controlled by the Russian government or Russian nationals, and determine the need for investment restrictions. Consider the impacts of any proposed investment restrictions on access by Texas businesses and the Texas scientific and technological community to capital investment, global markets, and competitive knowledge.
- While allowing markets to determine where goods are produced and purchased and which assets are acquired, there are circumstances where compelling public or humanitarian interests override normal optimal patterns. If the Legislature determines that curtailing trade and investment activities with Russia is one of these circumstances, the Committee finds that potential effects on the Texas economy would be minimal.