Texas

Texas Mulls Adding State Tax Credits to Enhance NMTC Investments

On May 7, 2013, the Texas House Committee on Calendars placed HB 2061 on the General State Calendar.

Texas Capitol Dome

Texas Capitol Dome (photo – house.state.tx.us)

This is a prelude to a full debate and a vote in the Texas House of Representatives for this economic development bill, which aims to create a program for offering state tax credits to private sector investors who put up equity for business projects in economically distressed areas in Texas.

The bill, sponsored by State Rep. Jim Murphy, was introduced in Feb 2013 and has already made its way through the House Committee on Economic and Small Business Development, followed by a public hearing, and has now been placed on the calendar.

The program will work pretty much in the same way that the federal New Market Tax Credits (NMTC) program works, but there are a few important differences. Texas has no income tax, so the tax credits are instead being offered to insurance companies who can get credits against the taxes they have to pay on policy premiums.

Secondly, the program won’t be providing tax credits for real estate development projects. The only construction projects that may qualify are those undertaken by business owners themselves.

The intention of the program is solely to encourage investments into low-income community businesses that can create jobs. The investments will be made through a qualified community development entity (CDE), same as the NMTC program.

The state tax credits would be taken by CDEs already certified as eligible to receive federal tax credits under the NMTC program by the federal CDFI Fund and the Texas Economic Development and Tourism Office. This way, project investors would qualify for both federal and state tax credits.

The bill caps the amount of qualified equity investments to a maximum of $750 million. This would cost the state $292.5 million in insurance premium tax credits, starting with $52.5 million in FY 2016 and $60 million each year thereafter from 2017-20.

The state tax credit program is likely to attract additional private investments under the federal NMTC program too. This would combine with the $750 million cap set by the state to add up to more than $1.2 billion in new private investments attributed to this bill over the next seven years.

They expect this scale of investment will create thousands of new jobs in economically distressed areas in Texas and will generate additional state tax revenues worth millions.

Austin Tech Council CEO Summit to Discuss Economic Impact

The Austin Technology Council (ATC) will be hosting its third annual CEO Summit on May 8, 2013 at ACL Live at the Moody Theater in Austin, Texas.

ATC CEO Summit

ATC CEO Summit (photo – austintechnologycouncil.org)

The CEO Summit is a one-day gathering of technology company CEOs from across Texas.

The first one in 2011 was organized to include 100 CEOs of Austin-based companies, and expanded in 2012 to include business leaders from all over the state.

These are the CEOs of companies responsible for the fastest growing sector in Texas, and they will be sharing their vision and best practices.

After a welcome by ATC President Julie Huls and a “state of the industry” address by ATC Chairman Joel Trammell, the next item on the agenda is a discussion of the results of the Technology Economic Impact Report released today by ATC.

The report suggests that the Austin tech sector has a $21 billion economic impact. Around 80 percent of all technology companies in the city are planning to hire this year. More than 10,000 new tech positions are likely to open up by 2017, and one out of every five new jobs created between 2012-2017 in Texas will be in Austin.

ATC President Julie Huls said that the tech sector had a responsibility towards the community, and not just for creating jobs, but also for investing into building a sustainable growth engine and becoming a national driver of innovation.

The CEO Summit agenda also includes panels that will explore leadership models for the tech sector that allow effective engagement of economic development initiatives. Specifically, there will be discussions on supporting Central Texas educational institutions in creating STEM programs that will train students for joining the technology workforce.

ATC Chairman Trammell said they were energized by the tech industry’s impact on the region, but there must be more focus on ensuring that an adequate talent pool exists to sustain the growth.

The CEOs will also discuss the strategic needs of regional capital investment and alignment with creative and non-technology industries.

What: Austin Technology Council CEO Summit

When: May 8, 2013

Where: ACL Live at the Moody Theater, Austin, Texas

Site Selection’s U.S. Best to Invest Winners

The latest issue of Site Selection magazine includes their listing of the “Best to Invest” winners for 2012. This is their annual list of the top-performing economic development organizations across the nation.

Greater Houston

Greater Houston (photo – houston.org)

The evaluations were based on four main criteria – jobs, jobs per capita, capital investment, and investment per capita.

They also looked at other aspects such as creativity in the organization’s economic development strategy, and their ability to generate breakthrough deals.

This year’s list includes the following organizations:-

Austin Chamber of Commerce, Austin, Texas;

Baton Rouge Area Chamber, Baton Rouge, Louisiana;

Economic Futures Group, Spartanburg Area Chamber of Commerce, and the Upstate Alliance, Greenville-Spartanburg, South Carolina;

Greater Houston Partnership, Houston, Texas;

Metro Atlanta Chamber of Commerce, Atlanta, Georgia;

Mobile Chamber of Commerce, Mobile, Alabama;

Pittsburgh Regional Alliance, Pittsburgh, Pennsylvania;

Salt Lake County Economic Development, Salt Lake City, Utah;

The Siouxland Initiative, Sioux City, Iowa;

Southwest Louisiana Economic Development Alliance, Lake Charles, Louisiana; and

Wayne County Economic Development Growth Engine, Detroit, Michigan.

Greater Houston leads the pack in terms of sheer numbers, having raked in $14.2 billion in capital investments and 17,500 jobs in 2012. The magazine notes it’s not just because of the energy boom, because the Greater Houston Partnership secured big projects in diverse fields including chemicals manufacturing, aerospace and the medical industry.

In their previous issue, Site Selection magazine had named the Houston MSA as the top metro for relocations and expansion, having racked up 325 projects in 2012.

Economic development projects in Austin accounted for $1.8 billion in capital investment and 7,512 jobs.

The Mobile Chamber of Commerce was named largely based on the $600 million Airbus assembly plant announcement. The significance of this one deal can be judged from the fact that the chamber had been working on it for eight years, and because it makes up such as huge part of the $731 million in capital investment scored by Mobile, Alabama in 2012.

Site Selection has also named the EADS Airbus deal with Mobile as one of its top 10 U.S. deals for 2012.

Texas Launches New Economic Development Tool

The Texas Workforce Commission (TWC) and Texas Economic Development Council (TEDC) have teamed up with the Texas A&M Engineering Extension Service (TEEX) to offer Texas communities a new online geographic mapping tool called SitesOnTexas 2.0.

SitesonTexas 2.0

SitesonTexas 2.0 (photo – sitesontexas.com)

SitesOnTexas 2.0 can help communities attract new business and development opportunities.

It is a GIS tool developed by TEEX and Decision Data Resources, and can create data-oriented maps and reports to support economic decisions and help communities monitor progress across the region.

Users can access extensive demographic information on labor market and economic data through easy to understand charts and maps. Apart from Census data and Texas Labor Market information, the tool also makes use of datasets from Dun & Bradstreet’s business location data.

TWC Chairman Andres Alcantar said that SitesOnTexas 2.0 would allow economic development and workforce professionals in their collaboration efforts with employers to plan for expansions, workforce training and job retention.

TWC has entered into a three-year licensing agreement with TEEX, and will be providing each of the 28 Local Workforce Development Boards in Texas with two SitesOnTexas 2.0 licenses.

Other organizations such as economic development agencies, chambers of commerce, utility economic developers, educational institutions and government agencies may apply separately for an annual SitesOnTexas 2.0 license.

Ronny Congleton, TWC Commissioner representing labor, said the tool will help connect potential employers with the state’s talented workforce, and would ensure that Texans willing and able to work would find quality jobs.

Hope Andrade, TWC Commissioner representing employers, said this research tool would provide employers all the information they needed to relocate to Texas or expand in the state. She said use of the tool would encourage employers from outside the state to include their sites on it.

TEEX is part of the Texas A&M University System, but is also a state agency for extension training, and houses the National Emergency Response and Rescue Training Center. TEEX, which has a well-developed infrastructure training campus, specializes in the delivery of workforce training, emergency response, exercises and economic development.

Texas Launches Ad Campaign Targeting Chicago Companies

Texas Gov. Rick Perry announced that the state has launched a week-long mixed media ad campaign in Chicago tailored to encourage Illinois-based companies to relocate to Texas.

Texas ad campaign in Chicago

Texas ad campaign in Chicago (photo – texaswideopenforbusiness.com)

The $38,450 ad buy is paid for by the TexasOne public-private partnership which markets the state as a business destination.

It will include week-long print and web ads on Crain’s Chicago Business Journal and their website chicagobusiness.com.

Specifically, Texas is getting a two-day takeover of the website, ads through email marketing, and a full page ad in the Monday print edition of Crain’s Chicago Business Journal.

If anything, these Chicago ads are even more scathing than the similar California ad campaign a couple of months ago.

You can see the ad graphics if you visit chicagobusiness.com. One says “Get Out while There’s Still Time and Come to Texas.” The other one says “The Escape Route to Economic Freedom Leads to Texas.”

The detailed text in the print ad (pdf) expands on the “escape from Illinois” theme and compares companies in Illinois to people stuck in a burning building about to collapse.

“With rising taxes and government interference on the upswing, your situation is not unlike a burning building on the verge of collapse. if you’re thinking of “just riding it out” you might want to reconsider. There is an escape route to economic freedom… a route to Texas.”

This exit/escape theme is further hammered home if you click on the ad link and visit the page created for Illinois on texaswideopenforbusiness.com, where it says “To start your escape to Texas, contact us at 512-655-EXIT (3948) or exit@texaswideopenforbusiness.com.”

It’s just a $38,450 ad buy and it will be history in a week, but as California found out the hard way, the free media coverage of these Texas ads goes a long way. Gov. Perry told Site Selection magazine last month that the $24,000 ad buy in California and criticism of the ads by state officials had earned Texas $4 million worth of free media.

If Illinois wants to escape this kind of free media heat, state officials need to entirely ignore the campaign, or at the very least downplay its impact without being overly critical of Texas.

Borusan Mannesmann Pipe Selects Texas for First U.S. Steel Plant

Turkish steel manufacturer Borusan Mannesmann Boru (BMB) announced that its American subsidiary Borusan Mannesmann Pipe U.S. Inc., will be setting up its first U.S. steel pipe manufacturing plant in Baytown, Texas.

Borusan Mannesmann

Photo – Borusan Mannesmann

The company will be making an investment of $148 million to set up the plant, and will create 250 new jobs.

The Bayton plant in Chambers County will fulfill the increased demand for Borusan’s thick walled pipes used in fracking.

Borusan Chairman A. Ahmet Kocabıyık cast the choice as the start of a new era of improved economic relations not just between Turkey and the U.S., but also between the steel sectors of the two nations, with one of Turkey’s largest and reputed steel manufacturers becoming the first Turkish steel manufacturer in the U.S.

Borusan already has a significant presence in Europe, and this plant makes the company a global player in the steel pipe sector as an international manufacturer.

The company has previously stated that their decision to invest in the U.S. at this time was partly due to “favorable changes to the energy policies in the United States,” and also because of technological advancements in shale oil extraction which have triggered a boom in the U.S. oil and gas industry, resulting in increased demand for steel pipes.

Borusan had been engaged in negotiations for the plant with both Texas and Oklahoma. The company had made it clear their final choice would depend on state and local incentives. Texas has offered the company $1.6 million from the Texas Enterprise Fund (TEF).

Texas has successfully leveraged TEF funds worth $490 million so far to secure projects that added $19.9 billion in capital investment and created 67,000 new jobs.

The new plant in Bayton is scheduled to begin production by mid-year 2014, and will produce 300,000 tons of OCTG and ERW line pipes for the oil and gas industry.

Borusan hopes to generate $500 million in revenues from this one plant alone. Not all of this revenue will be new, because 40 percent of the company’s exports already makes its way into the U.S. market through an established office in Dallas, Texas.

U.S. Approves $91M Flu Vaccine Manufacturing Facility in Texas

The Texas A&M University System and GlaxoSmithKline plc (GSK) announced that the U.S. Department of Health and Human Services (HHS) has approved a $91 million influenza manufacturing facility in Bryan-College Station, Texas.

Dr. Brett Giroir, TX Gov. Rick Perry at Texas A&M announcement

Dr. Brett Giroir and TX Gov. Rick Perry at Texas A&M announcement (photo – Governor’s Office)

The new facility will be the anchor for the Texas A&M Center for Innovation in Advanced Development and Manufacturing (CIADM).

The announcement was made by Texas Gov. Rick Perry at the State Capitol, flanked by executives and officials from Texas A&M, GSK and HHS.

Governor Perry said the announcement was a big win for the Lone Star State and for the nation.

As per an economic impact study, CIADM is expected to attract $41 billion in spending over a 25-year period, and will lead to the creation of 6,873 jobs. Local governments will earn $339.93 million in revenue, while the state will get $849.12 million.

SK Vaccines already makes 30 vaccines around the world, including facilities in Germany and Quebec, Canada which manufacture the influenza vaccine. In 2012, the company was required to provide 20 million flu shots in the U.S.

Once the TAMUS-GSK facility is fully operational, CIADM will be capable of manufacturing and supplying 50 million influenza vaccine doses within four months of a pandemic outbreak. A GSK operational hub in Marietta, Pennsylvania will be getting a lot more work too, since they will be packaging and distributing the flu shots.

Dr. Brett Giroir, head of CIADM and also the vice chancellor for strategic initiatives at TAMUS, said that GSK’s selection of Texas for vaccine manufacturing was “a testament to the investments that the A&M System and the State of Texas have made in the people, infrastructure and technologies, much of which came from critical state programs such as the Emerging Technology Fund.”

CIADM was established in 2012 as a public-private partnership to enhance emergency preparedness against pandemic influenza and other threats. The initial funding level for CIADM was set at $285.6 million, with the U.S. government providing $176.6 million.

Magpul Looking at TX, WY, NE for Relocation from Colorado

Erie, Colorado-based Magpul Industries, a manufacturer of firearms accessories, had last month threatened to relocate out of the state if Colorado passed House Bill 1224, a law banning standard capacity magazines which Magpul makes in Colorado.

Magpul relocation from Colorado

Magpul relocation from Colorado (photo – Magpul Industries)

Colorado Gov. John Hickenlooper made good on his commitment to gun control by signing three new gun laws last week, including one that bans magazines holding more than 15 rounds.

For its part, Magpul has now announced that it too will make good on its threat to relocate, and said in a Facebook posting that it will manufacture its first PMAGs (holding 30 rounds) outside Colorado within a month.

The company added that they are looking at setting up operations in multiple locations.

“We will likely become a multi-state operation as a result of this move, and not all locations have been selected. We have made some initial contacts and evaluated a list of new potential locations for additional manufacturing and the new company headquarters, and we will begin talks with various state representatives in earnest if the Governor indeed signs this legislation.”

The company’s COO Doug Smith is reportedly planning on meeting with economic development officials from Texas, Wyoming and Nebraska.

Magpul has 200 employees in Colorado, and claims that it contributes $85 million to the state economy. They also claim to support another 400 jobs in their supply chain.

“We could choose to stay in a state that wants our jobs and revenue, but not our products, and lose half the jobs we are fighting to save, or potentially the entire business, when our customers stop buying,” said COO Smith. “Or, we can take the company and those 600 jobs out of Colorado to continue our growth and the growth of American manufacturing in a state that shares our values. This is not really a choice.”

Some of these suppliers have indeed confirmed that they too will follow Magpul to its new location. One of them is Denver-based Lawrence Tool & Molding, which gets more than half of its business from Magpul, and has confirmed that it will also move out of Colorado if Magpul does. Lawrence Tool & Molding has 82 employees in the state.

“It is heartbreaking to me, my employees, and their families, to think that we will be forced to leave,” said Richard Fitzpatrick, founder, president, and CEO of Magpul Industries.

Study – UAS Industry to Create 70,000 Jobs in Three Years

The Association for Unmanned Vehicle Systems International (AUVSI) unveiled a new study which finds that the unmanned aircraft industry is poised to create more than 70,000 new American jobs in the first three years following the integration of unmanned aircraft systems (UAS) into U.S. national airspace system (NAS).

UAS economic impact study

UAS economic impact study (photo – auvsi.org)

Integration is scheduled to take place in 2015. Beyond the first three years, the study projects that more than 100,000 new jobs will be created by 2025.

Highlights from the study:-

1. Economic impact of UAS-NAS integration will total more than $13.6 billion in the first three years, and will cumulatively add up into $82.1 billion for the decade from 2015 to 2025.

2. Out of the more than 70,000 jobs created in the first three years, 34,000 or more will be manufacturing jobs. The industry will support 103,776 jobs by 2025.

3. Tax revenue to the states will total more than $482 million in the first 11 years.

4. Every year the UAS-NAS integration is put off results in a loss of $10 billion in economic impact, or $27.6 million per day.

The economic impact and benefits are skewed heavily in favor of a handful of states. The top five are California, Washington, Texas, Florida and Arizona.

California has the biggest slice of the pie, with an economic impact of $2.39 billion and 12,292 jobs by 2017. Washington gets $1.312 billion and 6746 jobs, while Texas is the last member of the billion-dollar impact club with $1.087 billion in economic impact and 5588 jobs.

You can see an interactive map of the state-by-state economic impact here.

“This is an incredibly exciting time for an industry developing technology that will benefit society, as well as the economy,” said Michael Toscano, president and CEO of AUVSI. “Integrating UAS into the national airspace will lead to new and expanded uses, which means the creation of quality, high-paying American jobs.”

The study notes that future events – such as the establishment of FAA Test Sites – will ultimately determine where many of the tens of thousands of new jobs will flow.

“While we project more than 100,000 new jobs by 2025, states that create favorable regulatory and business environments for the industry and the technology will likely siphon jobs away from states that do not,” wrote the report’s author, Darryl Jenkins, a former professor at George Washington University and Embry Riddle Aeronautical University.

Read the full UAS economic impact report from AUVSI.

USAA Announces Expansions With 3500 New Jobs

San Antonio, Texas-based financial services firm United Services Automobile Association (USAA) announced expansion plans in San Antonio and Phoenix, Arizona.

USAA HQ in San Antonio, TX

USAA HQ in San Antonio, TX (photo – usaa.com)

The company will be adding as many as 3,500 net new jobs over the next three years, starting with 1,000 jobs each in San Antonio and Phoenix by 2015.

“Demand has never been stronger for all that USAA offers, and we need to continue to have the best employees in sufficient numbers,” said USAA CEO Joe Robles. “We’re committed to every community where we currently have operations and are expanding first in San Antonio and Phoenix.”

The San Antonio expansion could bring as many as 1,000 new jobs by the end of 2015 to its headquarters community where it already employs more than 16,400 people.

To supplement its main campus, which USAA estimates is at nearly 90 percent capacity, it will occupy additional leased space in the San Antonio area.

“When you consider jobs, local investment and community involvement, USAA is at the top of the list of corporate partners in San Antonio,” Mayor Julián Castro said. “This expansion represents the coming together of USAA’s stellar business performance and San Antonio’s status as one of the top-performing local economies in the nation.”

In Phoenix, USAA plans to break ground next month on construction of a 380,000-square-foot expansion of its existing campus in northern Phoenix. The larger office space is expected to house as many as 1,000 new employees by the end of 2015.

“We have always had a close working relationship with USAA since they moved to Phoenix, and their decision to increase employment is a reflection of that close working relationship,” Phoenix Mayor Greg Stanton said. “USAA creates great jobs for Phoenix and great work for veterans. We will continue to work relentlessly on bringing high-quality jobs like these to Phoenix.”

USAA also announced that, as per their hiring policy, 25 percent of all the new hires will be military veterans or spouses.

“Providing career opportunities for veterans is more than simply doing what is right,” says USAA chief administrative officer Shon Manasco. “The skills these men and women are able to bring to the table should be valuable to any employer.”

Since 2005, USAA has hired more than 6,000 military veterans and spouses. Overall, USAA has 24,000 employees, of which around 16,400 are located in San Antonio, Texas.

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