Wednesday, July 10, 2013

Texas Proposes Taxpayer Funding "Green" Tech

The Texas 83rd Special Session includes a proposal to create a state-level "Texas Research Technology Fund". HB 43 would increase the size of the state's "emerging technology fund" and change its name.

The bill is designed to allot taxpayer money to a fund that would disburse funding to applied science and technology research and design projects. These are mostly private projects, to include some non-profit research organizations.

The projects must meet certain criteria that will be determined, within guidelines, by a board appointed by the Governor. The listed intent is to promote technological research and development in the state of Texas that will, hopefully, increase private sector employment positions.
       Sec. 490.003.  EMERGING TECHNOLOGY INDUSTRIES. (a) An emerging technology industry participant may be [is] eligible for funding under this chapter if the activity to be funded:
             (1)  will result in the creation of high-quality new jobs in this state, immediately or over a longer period; [or]
             (2)  has the potential to result in a medical or scientific breakthrough or a breakthrough in the area of clean energy; or
             (3)  will result in the commercialization of a scientific breakthrough derived from research conducted at or owned by a research institution.
       (b)  Emerging technology industries include industries related to:
             (1)  semiconductors;
             (2)  information;
             (3)  computer and software technology;
             (4)  energy;
             (5)  manufactured energy systems;
             (6)  micro-electromechanical systems;
             (7)  nanotechnology;
             (8)  biotechnology;
             (9)  medicine;
             (10)  life sciences;
             (11)  petroleum refining and chemical processes;
             (12)  aerospace;
             (13)  defense; [and]
             (14)  water; and
             (15)  other pursuits, as determined by the governor in consultation with the lieutenant governor and the speaker of the house of representatives. [Full Text Available Here]

The project has to be within one of the listed fields. It must also be a potential "job creator".

             (6)  a description of the types of securities the governor, on behalf of the state, has taken in companies that have received an award
                (b)  The annual report must also contain:
                   (1)  the aggregate total number of jobs, broken down according to the industry sectors described by Section 490.003(b), actually created by all projects [each project] receiving funding under this chapter;

Employment is emphasized later in the bill under (6)(b)(4) and (b)(5) as is a reporting requirement for salaries:

                   (4)  the total number of jobs created by each project receiving funds under this chapter, expressed:
                      (A)  in increments of 10 jobs created by the project; or 
                      (B)  as a number that is within five percent over or under the total number of jobs created by the project; and 
                   (5)  the average annual salaries in the award recipients' industries.

Potential Issues With The Tech Bill

The bill may appear, on the surface, to be a community investment and jobs creation bill. It seems, on the surface, innocuous enough. Read through the bill again, carefully.

First, it amounts to state residents being forced to invest into these projects, risking the funding, without any potential gain from that risk. The government has no authority to participate in "venture capitalism" or risky market investments. If a government body is expected to regulate and audit investment and security activities, it cannot do so objectively if it is one of the investors. This practice amounts to a gross conflict of interests.

The bill creates a new bureaucracy to govern and manage the proposed fund. That puts more government control into place, further restricting and tampering with the market. That would move the Tech and Energy industries further away from the free market, reducing the propensity for prosperity.  

This sort of practice also dances dangerously close to the economic systems employed in National Socialism or Fascism. This is not meant as a form of pejorative. It refers directly to the ideologies and economic systems employed under these political ideologies in the past. Some research into the histories of Germany and Italy in the 1930s and 1940s will confirm. For more modern or recent applications, research the economic policies under the Ba'ath Party, particularly under Saddam Hussain.

A better program would be to set up a system that better promotes private investment rather than making the government a direct investor using citizen-supplied funding (tax revenue). This sort of bill rings too closely to the Keynesian "stimulus" plans employed in 2008-2012. They proved disastrous failures with well-known wastes of tax payer money invested, against their wills, in companies such as Fisker and Solyndra.

The last main issue with HB 43 is that it is just another "sidebar" bill. It is not an issue or topic that relates directly to the stated purpose of the 83rd Legislature's Second Special Session. It does not apply to toll roads or state highways. It does not apply to abortion regulation reform. It does not apply to the sentencing of minors found guilty of capital crimes. It amounts to a re-election campaign stunt for its author.