Governmental Issues

TAB Issue Area:  Economic Development

Texas' economy continues to diversify and expand, creating a marketplace that is unrivaled in the United States. Last legislative session, TAB supported an aggressive state program to attract new industrial expansion and give every Texan a chance to benefit from this prosperity. The success of past legislative reforms is evident:

Texas now leads all states in net job creation

Texas recorded a net gain of 247,800 jobs between June 1999 and June 2000

Texas is the only state to have added over 100,000 manufacturing jobs between 1990 and 2000

Texas exports have grown by 51.7 percent since 1994 reaching $91 billion in 1999

Texas must continue to find ways not only to fuel growth of businesses, but to economically empower consumers. Last legislative session, bill supporting competitive electricity, rural development and a tax-free holiday for school supplies and clothes were passed. All have had or will have a positive effect on the pocketbooks of Texas consumers.

This session, TAB's economic development agenda is centered around making Texas more competitive compared to other states by improving our state's worker training programs, adding to our state's development incentives and increasing the efficiency with which our economic development entities work to promote growth in our state.

During the 77th Texas Legislative Session, TAB will work to encourage legislative action in the following areas to push Texas' economic growth beyond the U.S. averages:

Texas Department of Economic Development.

The Texas Department of Economic Development (TDED) will face Sunset Review this legislative session. During the Sunset process, all programs and activities of the Department will be assessed for effectiveness and efficiency. TAB will propose means by which TDED can more effectively serve the economic development interests of the State.

Provide TDED with the resources necessary to undertake a full-scale economic development and business promotion effort that will rival the efforts of our competitor states.

Redefine the role of TDED to better serve the needs of the economic development community as they work to attract business to the State of Texas. TDED should be given clearly defined goals and charged with the primary task of attracting businesses to the State of Texas.

Continue the Smart Jobs training program or any subsequent training program which is designed to prepare workers for skilled employment.

Review the effectiveness of TDED's international offices. Require TDED's foreign offices to place a greater emphasis on serving the small business community in order to facilitate their expansion into foreign markets.

Rural Economic Development.

Target economic development funds for rural areas of the state.

Utilize the Texas Department of Economic Development's Tourism Division to encourage rural tourism.

Expand the ability of Texas Agriculture Finance Authority (TAFA) to finance economic development activities in rural areas. Streamline TAFA to make it more "user-friendly."

Provide additional resources, including authorization and funding for travel, to the Texas Department of Agriculture as it works to address the economic development needs of rural communities.

Tax Abatements and Other Economic Development Incentives. TAB continues to support local control and flexibility in the use of tax abatements, tax increment financing, reinvestment zones and other incentives to promote economic development and job creation. Additionally, TAB supports the ability of local taxing districts to phase in tax abatements.

In recent years, Texas has seen its competitiveness relative to other states fall. In a first-step effort to remedy this, TAB will support an interim legislative study, which would assess Texas' competitiveness and the role that tax and other incentives play in making the state more attractive to moving or expanding business.

Sales Tax for Economic Development.

Support continued use of a locally approved 1/2 cent sales tax collected by cities to fund economic development efforts.

Oppose efforts to reduce local control of these funds or efforts to limit the uses of these funds. Because these funds are local funds, taxpayers should retain the right to manage their use.

Support the removal of county average wage restrictions that limit a local government's use of these funds for local job training purposes.

Support efforts to clarify the purpose of the sales tax funds as an economic development tool and prevent raids on the funds for projects that are not related to economic development.

Transportation.

Support development and funding of "international trade corridors" to accommodate current and future Texas transportation demands resulting from the North American Free Trade Agreement; support improved highways, ports of entry, and other infrastructures that facilitate the movement of goods and people through Texas.

Support efforts to develop a Texas transportation plan which pays particular attention to ports of entry including locations along the Texas-Mexico international border. In addition, support the development of a strategic plan for our state's deepwater ports including assessing their competitiveness with the port facilities of competitor states.

At the federal level, TAB will support efforts to:

• Modernize the nation's antiquated aviation infrastructure by reauthorizing federal aviation programs and ensuring that revenues from the Aviation Trust Fund are used for their intended purposes.
• Continue to strengthen our national transportation infrastructure by ensuring full funding for TEA-21 and the reauthorization of aviation and ports and waterways infrastructure programs

Economic Development Tax Incentives. Texas' ranking as a site for major capital investment has fallen from first to sixth in the nation due to the advent of innovative tax incentive programs in our competitor states. We must provide greater incentives to regain our place as a preferred site for investment. TAB will encourage the expansion of the recently enacted franchise tax credits including:

Capital Investment Tax Credits. This credit should be expanded to serve more Texas counties and should make provision for mega-investments such as those over $500 million.

Research and Development Tax Credits. Fortify the R&D Credit by lowering threshold requirements for participation.

Electric Industry Deregulation. Continue to support the timely implementation of retail competition, as established by Senate Bill 7, by January 1, 2002, because fair competition is in the best interest of all businesses, energy producers and consumers.

Education/Worker Training.

Support increased funding for the Skills Development Program administered by the Texas Workforce Commission.

Maintain Skills Development Fund grants at the Texas Workforce Commission to improve workforce training.

Establish guidelines to make the Skills Development Program and the Smart Jobs Program more complementary.

Encourage the expansion of charter schools charged with the task of promoting science and technology.

Improve the Skills Development Program and the Smart Jobs Program to make them more effective as marketing and recruiting tools to attract economic development to Texas.

Provide tax incentives to encourage business participation in education initiatives.

General Business.

Support state legislation that would discourage local government from enacting "living wage" ordinances. These ordinances, contrary to free-market principles, create an unfair competitive disadvantage in those localities and are detrimental to the state's economy.

Oppose anything that would undermine legislation regarding free contract.

At the federal level, TAB will oppose any effort to increase the minimum wage as doing so would have a detrimental effect on business, especially small business.

Telemarketing. Support efforts to develop additional jobs while maintaining the more than 300,000 jobs held by Texans in the telemarketing industry. TAB will work to support better enforcement of existing fraud and consumer protection laws while opposing efforts to impose additional regulatory burdens on businesses that use telemarketing. Efforts should support adequate resources to law enforcement and various state agencies to eliminate fraud and provide protection to Texas consumers and businesses, while not placing undue restraints on legitimate telemarketing businesses.

Privacy & Information Practices. Encourage and support businesses in their efforts to develop and disclose comprehensive, market-driven privacy policies. Oppose efforts that would create a "patchwork-quilt" of state laws that would further impede the growth of Internet commerce. Work to ensure an environment that supports increased high-tech business development in Texas and the continued development of electronic business-to-business transactions.

Auto Insurance Premiums.

No Pay, No Play. Support reforms that would prevent uninsured motorists from collecting pain and suffering damages if they are in an accident with an insured driver.

Auto Choice. Support changes in state law allowing drivers to choose between the current system, in which they can sue for pain and suffering damages and a new system under which they would be given the option to recover non-economic damages.

File and Use. Support changing the current benchmark system with one that would allow a "file and use" system for auto rating.