By BOB PALMER
Jimplecute News Editor
A bill introduced by State Rep. Chris Paddie, R-Marshall, touted to improve access to capital for rural employers, passed an initial committee test this week.
“I thought it went very well,” a pleased Paddie told the Jimplecute after the hearing before the House International Relations and Economic Development Committee.
“The committee was very receptive,” Paddie continued. “We had good witnesses. People recognized there is a need for increased access to capital in rural areas.”
The Texas Rural and Opportunity Zone Jobs Act (HB1000) is expected to encourage job creation and local economic development, by facilitating access to private sector capital for small businesses in Texas, as well as those looking to relocate.
Paddie noted safeguards built into the bill help make the proposal more attractive. “This is quite a bit different from the Enterprise Fund,” Paddie said.
“This is more about setting up a framework to incentivize the private sector.” Following passage of the Rural Opportunity Zone, private lenders and equity firms can receive state tax credits for loaning money or taking an equity position in a firm expanding or locating in a rural area creating jobs.
Paddie noted although the Texas jobs creation engine leads the country, too often growth has not come in rural areas.
Paddie gave an example of a business needing $5 million to expand. “Let’s say the business has $500,000 and can borrow another $2 million,” Paddie explained. “The additional $2.5 million would go to the company as a loan or equity position.
”The governor’s office of Economic Development and Tourism would approve funds that can be used. The most they can do is $5 million. If jobs goals are met, the lending companies can qualify for tax credits from the state. Rural Opportunity Zones will be limited to counties with less than 200,000 population and cities with less than 50,000.
HB1000 also has a friend in the Senate.State Sen. Kelly Hancock, R-North Richland Hills, chairs the Senate Business and Commerce Committee and is the Senate sponsor of the Rural Opportunity Zone bill.
“This program is a fair, responsible and sustainable way to strengthen businesses and communities across Texas that need a lift – particularly in our rural areas – while boosting our state’s economic competitiveness and growth,” Hancock said. “At the same time, it encourages the innovators, business owners and hard-working people of our great state to drive our economy and create new jobs.”
Hancock also said the legislation provides transparency, safeguards and a free market, private sector focus to protect taxpayers and ensure a strong return on investment.
About the Texas Rural and Opportunity Zone Jobs Act
- Prioritizes the creation and retention of jobs in important growth industries and rural communities
- Empowers private sector investment, ensuring a pro-growth, independent program to create high-quality jobs and benefit small businesses
- Encourages workforce development and on-the-job training, helping businesses compete in a tight labor market
- Contains important safeguards to protect the state and its taxpayers, including an independent economic impact analysis that demonstrates a positive return on investment, along with job creation requirements and profit-sharing
Paddie expressed the bottom line of HB1000.
“This is something that works for us small guys in the rural communities,” Paddie said.
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