Thread: Lawmakers: Don’t let state grant recipients hire illegal ali

http://www.easttexasreview.com/story.htm?StoryID=3790

Vol.10 No.406 Thursday, August 17, 2006

ISSUES IN DEPTH: Lawmakers: Don’t let state grant recipients hire illegal aliens
by Christine DeLoma

Do taxpayer dollars subsidize jobs for illegal immigrants? How do we know companies will create the number of jobs they say they will if they receive state money?

These were are among the questions lawmakers at a recent House Economic Development Committee meeting asked staff of the Texas Enterprise Fund.

As of June 2006, the state has awarded $308 million from the fund to job-creating businesses that relocate here. The 30 projects in which the state is investing are expected to create over 42,000 jobs, according to Aaron Demerron, executive director of the Economic Development and Tourism Division of the Governor’s office.

That costs taxpayers $7,333 per job created with the Fund. However, Demerron told lawmakers that the investment would create significant economic returns to the state. He estimated, for example, that the state’s efforts to attract new businesses to Texas would create $9.3 billion in capital investment over the next 10 to 20 years.

Companies must commit to creating a certain number of full-time employment (FTE) positions over a specified period of time in order to get state funds. The Economic Development and Tourism Division has a compliance officer to make sure companies stick to their contract. Creation of fewer jobs than specified in the contract activates a clawback provision that requires a company to give a portion of the grant back to the state.

How many FTE jobs go to undocumented workers isn’t known. Asked Rep. Rafael Anchia (D-Dallas): “Do the FTE positions include subcontractor positions? Because the big game companies play is that they take this money, and then they outsource a piece of their business function like janitorial services, and they hide behind subcontracts with companies who brazenly hire undocumented workers in violation of federal law. Do we ask in our applications whether the recipient companies are hiring undocumented workers directly and indirectly?”

Demerron said that the use of subcontractors, “could come up from time to time” by companies receiving enterprise fund money. However, he said, questions vary from project to project. If a subcontractor employs FTEs, Demerron said, those jobs must be held on-site in order to be counted as newly created jobs.

“So what I’m hearing from you,” replied Anchia, “is that it is entirely possible that companies that have received Enterprise Fund dollars have subcontracted with companies that hire undocumented workers in janitorial services or maybe in food processing or something like that? And we wouldn’t necessarily know, because we made that requirement on a case by case basis? Is that what I’m hearing?”

“At this point, we’re not asking if there are undocumented workers there,” answered Demerron.

Michael Chrobak, the division’s chief financial officer added, “Our office works regularly in reviewing...compliance not only of the companies but of the supporting wage requirement, full- time equivalent requirements. But we also engage and work closely with the Texas Workforce Commission in terms of proper employment practices that are in place in Texas by the Commission, and we certainly look to take your concerns… to improve our practices.”

Rep. Lois Kolkhorst (R-Brenham) asked if there was a clawback provision in a company’s contract to deal with the issue of undocumented workers. Demerron said if a company employs illegal workers, the clawback provision would apply because the hirings were outside the terms of the contractual agreement.

Chairman Allan Ritter (D-Nederland) wanted to know the percentage of FTEs from subcontracts in recipient companies.

“A few,” Chrobak said. “It typically comes up in remote instances. It’s not a regular practice that we have.”

Rep. Joe Deshotel (D-Beaumont) suggested that the contracts be more explicit with regard to companies hiring undocumented workers. “What I’m hearing [is], maybe we should have a provision that requires those FTEs not be undocumented workers or hiring those undocumented workers could trigger a clawback provision,” Deshotel said. “I think we possibly need to work on that because I think it’s quite clear some of these companies have large undocumented paid workers on their payroll particularly in processing areas. And what that does is basically takes good-paying jobs away from people who go through the process of becoming citizens. And I don’t think we should underwrite that process.”

If companies do not create the specified number of jobs within the terms of their contract with the state, they must pay back the state a portion of the taxpayer dollars they received. Chrobak said that of the 30 projects awarded state grants, one has been subject to the clawback provision. The outdoor sporting goods retailer, Cabela’s, returned over $28,000 of $400,000 in grant money because it came up 86 jobs short of its promised 400. The company also forfeited the remaining $200,000 it would have received at a later date.

In December. 2004, $5 million in Texas Enterprise Funds was awarded to Venezuelan-based CITGO Petroleum to move its operation’s headquarters from Tulsa to Houston. Kolkhorst informed Chrobak and Demerron that CITGO recently decided to halt distribution of gas in Texas. “Y’all might not be aware: I think they’re [Citgo] pulling out of Texas, so y’all might want to check on that one,” Kolkhorst said.

Demerron did not speak directly to CITGO’s halting of sales of gasoline in the state but said that CITGO “exceeded the 700 jobs that they committed to move from Tulsa to Houston and so they are well in excess of their job target. So we have a major oil producer that has relocated from Tulsa… this will bring 700 jobs each and every year over the next seven years.”

According to the company’s news release, CITGO has decided to realign sales of gasoline to the Northeast, the South, and the Mid-Atlantic area. The company does not own or operate any of the CITGO-branded gas stations.

Who decides which firms get state funds and which ones do not? The Texas Enterprise Fund is controlled by its trustees — the Governor, the Lt. Governor, and the Speaker of the House. All three must agree before using Enterprise Funds for a specific project. They also decide the amount of the award, the terms of the agreement, and the recipients.

Demerron said the arrangement provides the state flexibility in allowing trustees to negotiate on a project-by-project basis. “The enterprise fund,” he said, “provides the flexibility to compete in the global economy,and the program has created significant new jobs [and] capital investment that will provide money for education, health care and other important state priorities that will benefit all Texans.”

It's good they want to keep illegals from getting grant funded job creation, however I see other problems.

Demerron said if a company employs illegal workers, the clawback provision would apply because the hirings were outside the terms of the contractual agreement.

Get it in writing!

“Y’all might not be aware: I think they’re [Citgo] pulling out of Texas, so y’all might want to check on that one,” Kolkhorst said.

Did this go right over Demerron's head? Dud, you gave them 5 million dollars away only 2 years ago and they are bugging out on you!!!! You are not yielding anything on the long term investment because they are not long term.

Who decides which firms get state funds and which ones do not? The Texas Enterprise Fund is controlled by its trustees — the Governor, the Lt. Governor, and the Speaker of the House. All three must agree before using Enterprise Funds for a specific project. They also decide the amount of the award, the terms of the agreement, and the recipients.

This makes me feel real good because they could easily be from the same party. Where is the oversight?

Time for a new Governor!

Dixie