Daily Business Brief | 87th Legislative Session Updates, Retail Sales Fell in February, and more

March 19, 2021

87TH LEGISLATIVE SESSION UPDATES

Speaker Phelan Addresses Power Outages

Now that the senate has passed its first legislative package dealing with the power outages, the ball is in the hands of the House. Speaker Dade Phelan has presented seven bills to address the power outages the state faced last month. We are keeping a close eye on the committee hearings and actions on these, and other related, bills. The bottom line is we need to make sure Texas has the infrastructure necessary to maintain its powerhouse status and provide critical infrastructure to support and grow the Texas business community.

Alcohol-to-go Voted Out of House Committee Unanimously

HB 1024, the "alcohol-to-go" bill, has been voted out of the House Licensing and Administrative Procedures Committee. This bill makes alcohol to go sales that were put in place to help restaurants survive during the pandemic permanent.

Bills to Watch:

SB 144 - Economic Development/Chapter 313, reauthorizing school districts’ ability to provide tax abatement for economic development projects. Referred to Natural Resources and Economic Development Committee.
HB 1511 - Creation of the connectivity office within the Office of the Governor to work with the Governor’s Broadband Development Council and others in developing a statewide connectivity plan expanding access to high-speed internet service in Texas. Referred to State Affairs Committee.
HB 593 - Establishing an intergovernmental development corporation to foster minority- or women-owned construction businesses. Referred to International Relations and Economic Development Committee.
HB 1195/SB 372 – The amount of the forgiveness of a loan made under the Paycheck Protection Program is not considered part of a business’ total revenue for franchise tax purposes. Pending in House Ways and Means Committee and referred to Senate Finance Committee.
SB 551 – Prohibiting local authorities to require an employer to provide employment benefits to workers. Referred to the State Affairs Committee.

Click here for the Chamber's Legislative Agenda or to reach out to our Government Affairs team.

FEMA OFFERS TIPS FOR TAPPING INTO DISASTER ASSISTANCE

Taylor County is one of 108 Texas counties where residents can apply for federal assistance in the wake of February’s winter storm. Following February’s historic winter storm, the Federal Emergency Management Agency is offering assistance for residents recovering from damages to homes. Officials determined assistance eligibility on a case by case, and provide grants for emergency home repairs and temporary housing assistance. Because of COVID-19, FEMA is also offering virtual inspections for residents to assess any damages. Nate Custer, media relations specialist with FEMA, offers advice for newly insured or underinsured residents who may have suffered damages to home properties, “If you have insurance, contact your insurance company. But then register with FEMA. You may be underinsured. FEMA may be able to fill in the gap between what your insurance provides and the repair costs that you are facing.” Applicants can apply for assistance from FEMA and find more information by visiting Disasterassistance.gov, or by downloading the FEMA app. (Source: KACU)

FEBRUARY RETAIL SALES FELL FOLLOWING JANUARY SURGE

The recent $600 and the in-process $1,400 per person checks as part of federal pandemic relief are causing economic data to bounce all over the place. Retail sales are a prime example. The Census Department released February’s figures this week. They showed retail sales fell 3%. However, that comes after a 7.6% surge in January.

Big picture: Even with the downturn in February, retail sales are more than 6% above their level in February 2020 (pre-pandemic). They have been above that level every month since June.

What’s happening: Month-to-month swings like the last few months are unusual. Clearly the payments are impacting behavior in a big way. Consumers spent liberally in January, as the $600 checks were hitting their bank accounts, even while savings spiked at the same time. Spending fell off in February as the checks stopped. As $1,400 checks are hitting accounts now, expect March retail sales to surge again, above even the record-high January level.

All categories of retail sales increased sharply in January and all of them fell in February. The lone exception was gas stations (food and beverage stores were flat). Spending at gas stations increased 3.6% in February. That is in part because of increased gas prices, but also (hopefully) reflects that people are driving more, because they are leaving the house more for work, shopping, and other economic activities.

Bottom line: The monthly swings will stop once the government support wanes as the pandemic slows. But even with the withdrawal of support, the economy is in position to continue thriving as industries long-shuttered or operating at curtailed capacity open and consumers spend pent up savings on services they have not been able to spend on for over a year now.

—Curtis Dubay, Senior Economist, U.S. Chamber of Commerce

SUPPLY CHAINS NEED A FACTORY RESET

The global economy relies on a highly intricate system that brings raw materials to places at precisely the moment when they're required.

That system is completely out of whack right now, reports the WSJ.

You know about the pandemic-induced chip shortage—but manufacturers are also lacking other materials. This week, Toyota and Honda said they're cutting production in North America because they don’t have enough petrochemicals.

The deep freeze that hit Texas in February knocked many chemical plants out of commission, and they won't be fully firing again for at least a few months.
Without chemicals, it's hard to create plastic. Now, a plastic shortage is causing headaches for companies making smartphones, medical equipment, and siding for houses.

Got room for one more? How about a wood shortage. Demand for lumber by home builders has outstripped supply to the point where prices have shot up more than 180% since last spring.

Bottom line: There isn't one primary driver of supply chain chaos—it's simply a series of unfortunate events.

NOMINATE YOUR FAVORITE SMALL BUSINESS FOR THIS YEAR'S SMALL BUSINESS AWARDS

You interact with hundreds of businesses each week. Now, think of those that are doing exceptional work, whose contributions to our community are elevating our region and who make your life just a little bit better. Got them in mind? Nominate them for the Small Business Awards Luncheon sponsored by America's SBDC at Texas Tech, Keep It Local Driven by First Financial Bank, Star Dodge Chrysler Jeep Ram and Hyundai.

Deadline is March 31

NEW BUSINESS OF THE YEAR AWARD The New Business of the Year Award is to recognize a new business Chamber member operating for more than one year and less than three years that has gained an expanding positive reputation. Nominees must have fewer than 25 full-time equivalent employees. Judging for this award will be based on potential community impact, use of innovation and technology as well as business growth.

SMALL BUSINESS YOUNG ENTREPRENEUR OF THE YEAR Chamber member, business owner who has owned their business for more than one year, under the age of 40 who has taken risks in business – started a new venture; expanded into a new area; taken on a difficult project; someone whose thinking is “outside the box”; an astute businessperson with a vision for the future.

THE COMMUNITY INVESTMENT AWARD is to recognize a local Chamber member business with fewer than 25 full-time equivalent employees, for its outstanding community service contributions such as special programs, partnerships, in-kind support of goods and services, employee volunteerism or other activities that have resulted in a positive impact on our community and citizens. Judges will consider all nominees for their impact, creativity, commitment and employee participation.

FAMILY-OWNED BUSINESS OF THE YEAR AWARD This award honors a family-owned and operated business with less than 25 full-time employees. The owner must also serve as a majority owner and operator or bear principal responsibility for operating a small business with at least 10 years. They must demonstrate increased employment opportunities for family members and non-family members.

Nominate here | List of Previous Recipients

Reserve this space here.

WHAT WE'RE READING

Oil prices fall nearly 10% on renewed demand concerns

West Texas Intermediate fell nearly 10% on Thursday and is poised to extend its stretch of daily losses to the longest in over a year. Brent also slid more than 8%. The Bloomberg Dollar Spot Index rose as much as 0.5%, weakening the appeal of commodities priced in the currency.