Thursday, March 28, 2013

TX Congress Courting Gun Manufacturers

The Texas legislature has two bills introduced that intend to court gun manufacturers, distributors, accessory companies, and ammunition manufacturers to the state.

The senate bill, SB 1467, plans to offer tax exemptions to US-based weapons companies. The exemptions will be proportionate to the size and scope of the business being brought to Texas.

S.B. No. 1467 
relating to economic development incentives for firearms manufacturers, firearms accessory manufacturers, and ammunition manufacturers. 
       SECTION 1.  Chapter 481, Government Code, is amended by adding Section 481.0297 as follows: 
(a)  The office shall facilitate the location, expansion, and retention of firearms manufacturers, firearms accessory manufacturers, and ammunition manufacturers to the state, including: 
             (1)  identifying domestic and international firearms manufacturers, firearms accessory manufacturers, and ammunition manufacturers interested in expanding or relocating to the state; and 
             (2)  issuing requests for proposals for the location, relocation or expansion of firearms manufacturers, firearms accessory manufacturers, and ammunition manufacturers to the state. 
       (b)  Upon receipt of proposals under subsection(a), the office shall negotiate on behalf of the state the issuance of funds provided by Section 481.078, franchise tax exemptions, sales tax exemptions, and other incentives as provided by this Chapter or other provisions of the law commensurate with the size and scope of the proposed project. 
       SECTION 2.  EFFECTIVE DATE. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2013.

The house companion bill, HB3190, is almost identical with no identifiable difference in meaning, scope, or intent.

Several companies that make and sell products directly affiliated with firearms have indicated intentions to leave their current headquarter states. The primary reason are the knee-jerk infringements to the Second Amendment many states plan to enact. One primary example is Magpul, Inc. Due to recent legislation passed in Colorado, the company plans to move to a state more favorable to their industry.

The prospect of relocation or expansions in the firearm industry may become necessary for many of these companies as their products may become illegal for sale, distribution, production, or transportation in many states. For example, a recent law passed in New York would make most semi-automatic handguns illegal to produce, sell, or transport because most are made with magazine sizes larger than the 7 round restriction.

Should companies wish to remain in those more-restrictive states, they would require special permits. those permits may not be granted, preventing the companies from operating. In addition, the increased costs of production could cost more than building a whole new facility and relocating. 

This was predicted by this article back in late February 2013.

This is similar to many US-based corporations who have moved segments of their companies, to include manufacturing, overseas. Current US regulations and laws make those parts of their businesses not cost-efficient in the US.

Texas wooed several companies away from California including the aerospace corporation XCOR.  The strategy coupled with no state individual income tax is very lucrative for companies seeking to expand or relocate. Those actions increase employment opportunities in Texas and the state's overall prosperity.