The Senate Economic Development Committee's Subcommittee on Private Sector Business Financing Examines Funding Sources
AUSTIN - The Senate Economic Development Committee's Subcommittee on Private Sector Business Financing held a hearing Tuesday, April 25, in the Senate Chamber. Members of the subcommittee include Senators John Carona of Dallas serving as chair, David Sibley of Waco, and Troy Fraser of Horseshoe Bay.
Private Sector Business Financing is one of the divisions of the Senate Economic Development Committee. The subcommittee is holding public hearings to gather information about charge 1, issued by Lt.Gov. Rick Perry to be studied during this legislative interim. Charge 1 orders the committee to study the availability of private sector business financing, in an effort to find ways to promote entrepreneurship, job creation and economic development in Texas. The committee's recommendations will be aimed at making business financing easier to obtain.
Jan Triplett of Texas Entrepreneurs' Association and Business Success Center, and Tom Kowalski, of Texas Healthcare and Bioscience Institute provided invited testimony. Kowalski said that a lot of money is needed to develop new drugs and obtain approval from the Food and Drugs Administration (FDA). Although in its infancy, he says the bioscience industry has great potential in Texas. Kowalski also said Texas should emulate states like New York and Massachusets, where this industry receives state funds, in addition to private financing. These states become the industry's business partner, receiving royalties as they do in other investments. He recommended the state become part of these pools of capital, to fund at least the early steps of new companies. He also asked for more business tax cuts, and the establishment of a life-science task force to work for the design of the industry's blueprint in Texas.
Jan Triplett said that thanks to small business, the state is enjoying increased exports, job creation, growth in research and development, increased earnings in certain areas like technology, more self-employment, and a surge in women and minorities-owned businesses. Triplett told the members that entrepreneurs tend to be much more innovative than big businesses, and reminded them to thank small businesses for the development of computers, and the creation of pacemakers, zippers, contact lenses and a myriad of other useful products. However, Triplett said she is concerned about the low growth rate of small businesses in most of the state's big cities. She said that, except for those in the technology sector, they are having difficulty finding financing. She added that big banks refuse to give them loans because they are not profitable enough, while community bankers are willing to help but do not have enough funds to cover the demand.
The subcommittee stands recessed subject to the call of the chair. The members will submit a report to the Economic Development Committee before the end of the legislative interim.