The Oscars of the Motions to Instruct the House Conferees on HB 1:

Most Likely to Succeed:  Chairman Darby’s no tax policy changes in HB 1. 

Least Likely to Succeed: Representative Simpson’s request that the House approve every instance when the conference committee goes outside the bounds. We’d need to add 100 days to session to cover that debate, and who wants that?

Most Likely to Harm the Texas Economy: Representative Leach request to include a ban on embryonic stem cell research for the first time in Texas history. Its hard to recruit biomedical researchers and biomedical research firms to Texas when the legislative landscape attacks their research to cure cancer, MS, and repair spinal injuries. 

The Greater Houston Partnership is asking the Texas Supreme Court to allow it to not disclose information under an open records request.

The Dallas Morning News sent a public information request to the Greater Houston Partnership. The Attorney General issued an opinion that was expansive calling for the Partnerhsip to disclose information, after which the issue moved into the court system.

The Texas Association of Business, joined by other Chambers of Commerce are asking the Texas Supreme Court to protect the information at the Greater Houston Partnership because the entity is private and should be protected to support economic development projects. In short, making the Greater Houston Partnership comply with an open records request is bad for business. 

Texas Association of Business April 17, 2015 Amicus Letter

February 29, 2012 Open Records Opinion which found GHP to be within the definition of governmental entity

Institute on Taxation & Economic Policy’s (ITEP) Who Pays? A Distributional Analysis of the Tax Systems in All Fifty States, also known as An Insomniac’s Guide to Sound Sleep, declared:

• Texas has one of the most regressive tax systems
• California has one the least regressive tax systems

Federal Funds Information for States retorted that fairness is but one aspect of analyzing taxes. Tax analysis should also include:

• adequacy
• simplicity
• transparency and
• ease of administration. 

Governing

Specific border contracts at the Department of Public Safety were being investigated by the Public Integrity Unit. Chupacabras, while a possibility on the border, were not involved.

That investigation halted, some say, due to the 2013 veto of funding for the Public Integrity Unit. Commissioner McCraw, wanting an all clear for his agency, called on the Public Integrity Unit to continue its investigation. KUT

The State Auditor issued its last report on DPS contracts in June 2013. While different contracts were audited, DPS was found to  have “sufficiently performed several planning, procurement, formation, and oversight activities.” That’s auditor speak for PASS on a PASS/FAIL scale.  SAO

An event called Space ATX is launching in Austin to promote commercialization in space. KUT

Might seem like Space ATX is light years ahead, but SpaceX (Elon Musk) publicly supports SB 458 by Lucio to add space projects to the Governor’s economic development office.

Space X has invested $70M in infrastructure at its McGregor, TX facility according to Space X testimony on SB 458 in Senate Natural Resources.  SB 458 has passed the Senate and has been received by the House. 

Rio Grande Guardian

TPPF says the Committee Substitute for Chairman Bonnen’s HB 32 will result in the following economic benefits, if HB 32 also includes repeal of the margins tax (that’s in the fine print):   

• $10.8 billion in new real (inflation-adjusted) personal income in the 1st year
• $16 billion, cumulative in 5 years
• 67,800 new, private sector, nonfarm jobs in the 1st year
• 129,200 new, private sector, nonfarm jobs, cumulative, in 5 years

TPPF

Taxpayer Rights:

• RIGHT to Fair and Equitable Treatment
• RIGHT to Privacy and Confidentiality
• RIGHT to Understand the Taxes You Pay
• RIGHT to Pay Only What You Owe
• RIGHT to Representation
• RIGHT to Contest a Decision
• RIGHT to Request a Waiver of Penalties
• RIGHT to Simpler Tax Filing
• RIGHT to Courteous, Accessible Assistance from a Real Person
• RIGHT to Know How Government Spends Your Tax Dollars

Comptroller’s Taxpayer Bill of Rights

A study at the Royal Holloway University in London shows that fee has higher negatives than taxes. Additionally, people would “overwhelmingly” rather pay a tax than a fee. 

Washington Post 

Governor Abbott had a tax day press conference with vcfo promoting his plan to reduce the business franchise tax. The Governor says reducing the business franchise tax will:

• create more jobs
• spur economic growth

He also refers to the economic benefits of eliminating the margins tax. 

Governor Abbott Press Release   SE Texas Legal Record  RioGrande Guardian

Wind generates electricity and revenue in Texas. In the last 14 years it has:

• Generated $85 million in taxes annually in rural Texas counties
• Added more than $9 billion in new taxable assets 
• Created 30,000 jobs

Big Country

House

• Tax Relief in the form of a sales tax cut & 25% cut in margins tax rate
• $4.87 Billion total tax savings 
• First ever sales tax cut to a 6% state sales tax rate
• TPPF commends lowering the margins tax rate on wholesalers & retailers to .375% and the top rate for other businesses at .75%, but calls it a starting point
• HB 31 (sales tax relief) & HB 32 (margins tax relief)
• Senator Patrick’s Response: “is out of step with Texans, my office, the Senate and the governor.”

Senate

• Tax relief in the form of a property tax cut & margins tax reform
• $4.4 Billion total tax cut
• $2.4 billion margins tax relief hailed by TPPF
• SB 1 (property tax relief), SB 7 (margins tax relief) , SB 8  (Margins tax exception expansion)
• Chairman Bonnen’s Response: ““I respect the work of Lieutenant Governor Patrick and the Senate in crafting a tax cut plan. Our plan shrinks government, provides permanent tax relief, and protects the state spending cap. It is the most fiscally conservative plan on the table. That’s why it has widespread support from members of the business community.”

Austin Business Journal   Statesman  Dallas Morning News  Brietbart (Fireworks over Taxes)

Option #3

Senator Eltife is firm in his position that tax cuts are not a solution. He supports focusing on:

• paying down debt
• stopping the pattern of deferred maintenance
• focusing on unfunded liabilities in pensions 

Texas Tribune 

Montgomery County Judge Doyle talks of a needed long term mobility plan to address road congestion. To combat road congestion, a $350 million bond package was proposed. 

Gordy Bunch responded by creating an online petition opposing the bond package. Former Representative Steve Toth commented that bond packages do not equal mobility. 

Empower Texas regales us with stories of activists, and refers to the Woodland Parkway extension as the poison pill in the bond package.

The Strike Force Report on the 21CT Contract at HHSC 

State Auditor on the 21CT Contract at HHSC

State Auditor on Terrell State Hospital Contract Issues at DSHS and HHSC

State Auditor Report on Recent Contract Audits January 2015

State Auditor on the Telecommunication Contract (AT&T) at HHSC

State Auditor on delegations of authority to contract for state entities to contract for external audits

State Auditor on the Health Select Contract

John and Ann Arnold Foundation is the largest contributor to pension reform pushes. The foundation supports no one specific cause and supports pension reform efforts through out the country. To follow the money, read this Inside Philanthropy article. 

In the fall of 2014, Moody’s estimated the unfunded liability of states pension systems at $2 Trillion. 

The quirky layers of local government taxation are revealed by HB 2389, like when you stick a fork in tiramisu as a kid and realize that lady fingers aren’t actual fingers.The City of Houston has statutory authority to enter into contracts with special purpose districts, like MUDs. These contracts allow:

• The City of Houston can levy a 1% sales tax outside the city limits
• In exchange, the City will not annex the area for 30 years

There are as may as 200 of these contracts that generate revenue of $100M per year. 

HB2389 would require 1/2 of the sales tax collected in these areas under these contracts, must be spent on projects within 5 miles of the special purpose district’s boundaries. 

Opponents say:

• An agreement is an agreement (City of Houston)
• This is a way for Counties to get a piece of the revenue pie

Supporters Say:

• Citizens who live outside special purpose districts are hit with higher sales taxes when they shop in these areas (Ft. Bend Commissioner Meyers)

Houston Chronicle 

Average California property taxes: $1,431

Average Texas property taxes: $3,327

In 1978 California passed a constitutional amendment to cap property tax at 1% home value at the time of purchase & restrict annual increases to 2% per year until the property is sold.

In total taxes, Californians pay about $9,509 in state and local taxes on average.  

Sacramento Business Journal

A new study on Louisianna Entertrainment tax Credits revealed that for every $1 the state kicks into the programs, it costs the state $4.48.

The incentive programs involved were the:

• Film Production
• Sound Production
• Live Performance Production
• Film Infrastructure
• Sound Recording infrastructure
• Live Performance Infrastructure 

The report conducted by Loren C Scott & Associates also found:

• State spending on these programs is decreasing
• The cost per job is between $6,983 and $14,157 per job in 2014
• Low return on investment for big name projects, because the big names are not Louisiana residents

Recommendations for the entertainment incentive program are:

• “removing qualification for the programs for some expenses like finance fees, air fare and interest payments”
• “improving the quality of independent application audits, which area already mandated by the programs; “
• ” automating the application process for film expenditure reviews.”   

NOLA.com

The 14th Court of Appeals sided with the Appraisal District to restore the value of a Valero refinery.

A jury had shaved off $190 Million from Valero’s appraised value, siding with Valero’s comparable value comparisions. 

The 14th Court of Appeals opinion states, “…the evidence is legally insufficient to support the jury’s equal and uniform valuation of Valero’s refinery,”

It’s a short term win for the appraisal district because the 14th Court of Appeals ordered a new trial.

Why it matters to the Lege: A legal win for appraisal districts on commerical comparable value analysis will encourage property tax reformers, who believe lower commercial appraisals shift the property tax burden to residential tax payers.  Southeast Record

Smithee: Senator Eltife and Representatives Bonnen, Larson, and Pickett have all sounded the bell on the rising state debt.

The state debt is estimated to be $44 Billion, and here’s what legislators are saying it: 

• Larson: “…we need to be talking about reducing our debt when we are spending $3.6 billion (a year) on debt service…”
• Pickett: ““In cash, TxDOT is paying more on debt than on road construction and maintenance.” “So, we are actually paying more on the credit card than we’re paying cash.”
• Hughes: “If you look at us compared to other states, we are still better off than most. It is manageable but it is becoming a problem.”
• Price:  is confident that in addition to the proposed tax cuts (the Senate has already voted for a $4.6 billion package), the Legislature will approve debt reduction.
• Smithee: “I don’t think anything that has happened yet that is a crisis situation.”

Lubbock Avalanche Journal

Think vouchers is the only fight over public education revenue? Think again. Here’s what’s whirling around the country:

• Nevada: Tax credits for businesses that support private-school scholarships
• Mississippi: education savings accounts
  • Arizona and Florida implemented education savings accounts in 2014
• 34 states are considering proposals to create or amend programs that offer private education options (Wall Street Journal maps the state plans)
• Minnesota: education savings accounts to parents of special-needs students

Today General Paxton announced Attorney General Opinion KP-011 settling “Whether a public school district may expend funds for the management of county school lands to determine if a lessee of a mineral estate is fulfilling its duty to explore and develop the mineral estate?”

The answer: 

• No, a school district cannot pay for this. A County has to pay to fulfill its obligation as trustee over the school lands.
• Also, the county can’t get clever, sell the trustee lands, with potential miineral rights, to the school disrrict for $1. Trustees over school lands have fiduciary duties, a $1 sale doesn’t meet those duties. 

California, home of the moving picture industry, is proposing to amend their film incentive program by requiring that more of a film’s music be sourced from California to qualify for the full California film incentive credit. 

From Deadline Hollywood:

“AB 1199, however, would require that a minimum of 75%, or an expenditure of $100,000, for music scoring and track-recording be done in-state for productions to qualify for the added 5% credit.” 

In Audit Report 15-030, the State Auditor lays out a laundry list of what to do & what not to do when negotiating a state contract. Failing to complete all the flagged items below led to the cancellation of the $30M contract.

What to do, the good things:

• Have the solicitation reviewed by the State’s Contract Advisory Team
• Publicly post the solicitation
• Screen vendor proposals for completeness
• Evaluating the only vendor proposal that it determined was complete​

The auditor flagged these items:

• Make certain the agency, in this case HHSC, complies with its policies to complete a needs assessment and cost-benefit analysis to support outsourcing those operations
• Ensure there is documentation to support the contract amount
• Make certain the AG looks at big contracts, especially if it falls in nor near the thresholds of Government Code Section 531.018 
• If the solicitiation removed price as part of the best value analysis flags will fly. 
• If you’re bidding on a solicitiation and it references appendices and the agency doesn’t have appendices for the solicitation drafted. Heed this warning:
  • The State Auditor will notice abnd it will impact your contract
  • Your attorneys should be crying foul. Appendices and words matter in contracts.
• After 2015, agencies will do a better job of verifying information provided by vendors. None of the information provided byt he vendor was verified by the agency in this contract.
• If your contract requires the Executive Director’s approval, and after 2015 many more contracts will, make sure you get it.
• If your bidding, make sure your legal entity is qualified to do business in Texas. A quick informal check is by searching the Comptroller’s tax records. 

SAO 15-030  Statesman

• Abilene $45,975,000  for Streets & Roads 
• Abilene $2,810,000  for a Civic Center
• Abilene  $3,820,000  for Sidewalks 
• Abilene  $12,865,000  for Police & Fire $
• Abilene  $1,030,000 for Zoo 
• Abilene  $6,000,000 for Aquatic Facilities 
• Abilene $2,500,000 for Splash Pads 
•  Abilene  $1,490,000 for Parks & Recreation
• Abilene $4,200,000 for Airport Improvements 
• Alief ISD  $341,000,000 New Construction, Safety & Security, Transportation 
• Bremond ISD $3,000,000 School Building & Buses 
• Bullard ISD I$40,000,000 School Additions & Renovations
•  Canyon ISD $34,800,000 School Building 
• Carthage ISD $8,570,000 School Building & Buses 
•  Carthage ISD $19,750,000 Auditorium
•  Carthage ISD$905,000 Athletic Field 
• Chapel Hill ISD (Smith County)  $45,000,000 School Construction and Renovations 
• Chico ISD $7,000,000 Building Upgrades 
• Cleburne ISD  $150,000,000 for School Building 
• Clint ISD $80,000,000 School Additions & Renovations, Safety and Security 
• Coleman County Hospital District $12,000,000 Hospital Addition 
• Comal ISD $147,400,000 New Schools, Renovations 
• Decatur ISD  $9,988,500  Transportation, Security, Technology, Facilities
• Decatur ISD $3,500,000 Multi-Purpose Center 
• Eanes ISD  $52,500,000  School Building & Technology
• El Campo $10,500,000 Public Safety Facility 
• Fairfield ISD $3,000,000 Maintenance, Technology, and Transportation 
• Fredericksburg ISD  $16,000,000 School Renovations
• Frisco  $41,500,000 Public Safety Projects 
• Frisco $125,000,000 Streets & Roads
• Frisco  $3,325,000  Fleet Center Improvement 
• Frisco $37,000,000 Municipal Center 
• Frisco  $9,000,000 Senior Citizen Center 
• Frisco $32,000,000  Parks & Rec
• Frisco  $10,000,000 Performing Arts
• Frisco  $10,000,000  Parks
• Georgetown $105,000,000 Roads
• Gilmer ISD $28,500,000 New High School Building 
• Gregory-Portland ISD $117,000,000 School Construction and Renovations 
• Harlandale ISD  $64,900,000 School Building & Security
• Joshua ISD  $50,000,000 Future Growth, Security & Technology 
•  Kerr County  $15,000,000  Jail Expansion
•  Klein ISD $498,100,000 Growth, Safety & Security, School Buses, Renovations, and Technology 
• Lancaster ISD $125,900,000 New Schools and Safety & Security
• LaPoynor ISD  $4,120,000 New School 
• LaPoynor ISD $4,870,000 Gymnasium 
•  Liberty ISD $33,500,000 School Building 
• Malakoff ISD $3,000,000 Transportation, Security & Technology, Athletic Fields 
• Marshall ISD  $109,210,000 New Schools, Renovations
• McAllen ISD $297,000,000 School Upgrades 
• Mesquite ISD  $280,000,000 New School Construction, Renovations, Purchasing Sites, & Technology 
•  Milano ISD $3,825,000 School Building 
• Montgomery County $350,000,000 Roads 
• Montgomery ISD $256,750,000 Growth, Renovations, Safety, Security Upgrades 
• New Caney ISD $173,000,000 New Campuses, Renovations, Purchase of Land for Future Growth 
• New Summerfield ISD $8,000,000 School Building and Gymnasiums 
• Pecos County  $35,000,000 Hospital Upgrades 
• Pettus ISD $32,300,000 New Schools, Renovations, Athletics 
• Pleasanton ISD $63,000,000 New School Building
• Post ISD  $18,000,000 New School Building 
• Rowlett $18,932,340 Streets 
• Rowlett $4,206,110  Parks 
• Rowlett $2,631,050  Public Safety Projects 
• Selma $9,000,000 Roads 
• Slaton ISD $14,400,000 School Buildings 
• Thrall ISD  $15,000,000  School Building & Technology 
• Travis County WCID 10 $45,900,000 Fire- safety water system 
•  Waxahachie ISD $125,000,000 Growth & Facility Improvements
•   Weatherford ISD  $18,800,000 Renovations 
•  Weatherford ISD $49,500,000 Growth 
•  Weatherford ISD $6,600,000 Safety & Security 
• Whitney ISD $11,000,000 Athletic Facilities 
• Wichita Falls ISD $59,500,000 Career and Technical Education Center, Renovations, Athletic Facility
•  Wylie ISD (Taylor County) $15,000,000 School Building & Security 
•  Ysleta ISD $451,000,000 Repurposing, Consolidating & Rebuilding Schools 

Texas Transparency by Comptroller Hegar

Minnesota, Home of the Vikings, is hosting the 2018 Super Bowl. Minnesotans are working on how to fund hosting a large event. The funding scheme includes:

• No sales tax on super bowl taxes. (Enacted for the 1992 Super Bowl)
• New tax proposals include exempting:
  • events related to the game, such as:
    • an interactive zone for fans or certain tailgating events.
• Tax Incentives that are a NO-GO:
  • Waiving player income taxes for the time they’re in Minnesota. 

Most Super Bowl expenses will be paid for by private donations, a total of $30 million-$40 million. The income tax on the players will also be covered by private donations.

CPA Practice Advisor

Small Businesses thus far seem to be leading the race on tax cuts in 2015. Here’s why:

• Small Business Saturday, a sales tax holiday after Black Friday, is getting a warm reception
• The inventory tax cut that faovrs manufacturing and large businesses got scrapped by Senate FInance
• $2.1 billion of SB 1 tax cuts favor small business directly

CPA Pratice Advisor

Taxing e-cigs can take many forms:

• taxing the volume of the liquid nicotine
• tax the vapor device
• tax the businesses that sell e-cigarette products

To this end, Hawaii is proposing a 80% tax on e-cigs. Hawaii also proposes an 80% sales tax on  snuff, chewing tobacco, small cigars, & loose tobacco. 

CPA Practive Advisor

Empower Texas purports that Senator Seliger’s SB 1027  will allow a 100% tax cut for race tracks. The short statement links the bill to:

• Speaker Straus
• Wallace Hall’s persecution
• Historical Racing rulemaking at the Racing Commission
• The Senate Republican Caucus opposition to the Racing Commission rulemaking

Empower Texas

This week the U.S. Supreme Court denied cert to review the Texas Supreme Court ruling upholding the $5 strip club tax. Law 360

HB2694 filed by Chair Chen Button creates a tax free holiday, Small Business Saturday, to help small business retailers during Black Friday. 

Statesman

Senate Finance favorably voting out of committee its $4Billion tax cuts garnered quite the headline.  Won’t be the last time we see this tag line.  WOAI 

In discussing legislation to address the Denton fracking ban, Texas Association of Business, ties local ordinances to harm to economic development:

“You cannot have rational economic development at the state level if every home-rule city can adopt an ordinance through referendum or initiative that trumps the state law,” said Steven Minick of the business association.

Dallas Morning News

The Director of strategic programs for the National Association of State Procurement offers 4 best practices for e-procurement by following in Virginia’s footsteps, and creating:

• A single online point of entry
•  Self-service supplier registration
• A centralized bidders’ list
• Use of push technology

​​Governing 

TPPF is announcing the formation of the Economic Development Transparency Coalition. It will include:

• Texas Public Policy Foundation
• Public Citizen
• Texas Public Interest Research Group
• Americans for Prosperity
• Freedom of Information Foundation, and
• Grassroots America We the People. 

TPPF  Economic Development Transperancy Coalition Letter

• SB 1 & SJR 1 provide for more than $2 billion in property tax relief by:
  • setting the homestead exemption to 25%  of the state’s home median market value.
• SB 7 provides $1.8 billion in business tax relief by:
  • reducing the business franchise tax rate, also known as the margins tax, by 15%
  • Increase the availability of the E-Z tax calculation to businesses with revenue of $20 million, or less, and decrease the E-Z tax rate.

Senator Nelson Press Release

Gov. Brian Sandoval (R-NV) and the Nevada Legislature have been battling budget shortfalls which go hand in hand with pension issues.  

Pension ideas from the very libertarian-like Nevada:

• Assembly Bill 387, by Minority Leader Marilyn Kirkpatrick, D-North Las Vegas, would allow public employees to purchase up to 5 years of retirement credits.
  • Purchased retirement credits could not be used to calculate an earlier retirement date
  • Purchased retirement credits could be used to increase annuity payments
  • Applies to only new employees
• Another bill aligns the state retirement age with social security eligibility
  • Police and firefighter retirement age would be social security eligibility minus 10 years
• Assembly Bill 312 by Assemblyman Glenn Trowbridge, R-Las Vegas, would require a pension to be calculated using 5 years of the highest annual earnings instead of 3.
  • The change could lower pension amounts  upon retirement.
  • Applies to only new employees
• A defined contribution plan to replace the current NV pension system appears DOA due to the large fiscal note.

Las Vegas Review Journal

By the end of bill filing Friday the 13th, 6,017 house bills and senate bills had been filed. It beats last session’s 5,868 filed house bills and senate bills. 

Where did the big issues end up?

Revenue: State Contracting, the bills to watch:

• The contracting rider in HB 1
• Chair Nelson/ Chair Price omnibus contracting bills SB 20, SB 353, HB 3241 and HB 1027
• Uresti’s let’s address the AT&T contract issue at HHSC, SB 705
• HB 15 by the Chairman of Appropriations

Revenue: Economic Development, reading the tea leaves from the 90+ bill filings.

• Chair Chen Button has a reform package deal with fancy bill numbers: HB 26, HB27, and HB 28
• The list of Major Events for tax reimbursmeent will grow. NASCAR, big rodeos, Ultimate Fighting, and presidential election debates. Pretty much any big event that exudes Texas machismo.
  • HB3613 wants to move the funds from their current home at the Comptroller’s Office.
  • Rectify a drafting error from 2013 that was pointed out in Attorney General Opinion [GA-1052]
• Film and Video might divorce their incentives with HB 2729 and HB 2786
• Increase the public private partnerships with HB 2475, HB 1991, SB 598
• SB 458 will brighten aero space’s role in economic development 
• Some want to abolish economic devleopment programs, like SB 1047 and SB 1156 but those ill filings are in the minority 

Revenue: Taxes.

• 97 franchise tax/margins tax bills were filed. 
  • Chairman Bonnen leads the pack with HB 32, HB 33, Hb3482
  • Chairs Nelson and Schwertner offer SB 7, SB 8, SB 52, SB 134
  • Sen. Creighton has a package of franchise bills SBs 186, 330, 331& SJR 23
• 319 property tax bills were filed.
  • Including SB 1 by Nelson
  • The Taxman, Sen. Bettencourt’s offerings are: SBs 182, 515, 516, 758, 762, 763, 766, 767, 849,1062, 1215, 1220, 1452, 1680, 1692, 1693, 1694, 1807, 1809, 1981 and SJRs 28, 29, 35, 36, 56, 57

Transportation: Ride Share & Self Driving Cars, the haute transportation issues of 2015:

• HB 2440 by Paddie. Supported by Texas Association of Business. TAB Press Release
• Self driving cars get instruction from Guillen, Ellis and Larry Gonzales.  Texas wants to compete with other states that offer statutory protections and guidelines for testing self driving cars. The future is here now.

Transportation: Funding. TXDOT needs Billions just to keep up.

• 32 ways to reform the motor fuels tax for transportation funding

Data Security: Protect private information. Protect student information.

• HB4046 by Alvarado wants to protect student data
• Sen. Kolkhorst offer property rights in DNA and protect your personal information at state agencies
• Also watch protecting proprietary information in economic devleopment negotiations and decision making

Eminent Domain: Private Property Rights reign supreme in Texas. 

• Odds are super high for No eminent domain authority for toll roads and high speed rail 
• Improving compensation to land owners gains ground
•  28 bills that favor land owners, plus all the special districts being created or given eminent domain authority. Those districts matter, just ask the landowners suing in the Panhandle over a grab by a water district or Rep. Isaac and the groundwater fight he is leading.

Energy and Water Regulation: Groundwater Fighting. Local Control is it out of control?

• Groundwater fights in Central Texas being led by Isaac, and a new lawsuits by Panhandle land owners
• Local control over fracking or not? Watch HB 40 by Darby.
• Economic Development to give energy development near Mexico a leg up after Mexico’s deregulation.
• Let’s not forget the 2013 common carrier fight. It’s back.

Senator Ellis has filed SB 1084 to address what some view as a loop hole in the appraisal system that allows for challenges to an apprised value if it is appraised unequally.  The Senator says the reduced commercial appraisals  that make use of the current law are overburdening appraisal districts.

SB 1084 will :

• require that comparable values be from within the same appraisal district.
• law suit can only commence for properties valued above $1 million that can show a minimum of 10% discrepancy in appraised value

The LBB has recommended taking up this issue.

The Building Owners and Management Association told the Houston Business Journal the following will happen if SB 1084 passes:

• business leases will increase

Houston Business Journal

Rep. Tan Parker appointed Rep. Capriglione Chair of the Sub-Committee Chairman on State and Local Bonded Indebtedness. Members include:

• Capriglione, Chair
• Dan Flynn
• Brooks Landgraf
•  Phil Stephenson and
• Oscar Longoria

Tan Parker Press Release  Capriglione Press Release

HB 26 Relating to state economic development measures, including administration of the Texas Enterprise Fund, creation of the Economic Incentive Oversight Board, abolishment of the Texas emerging technology fund and certain programs and funds administered by the Texas Economic Development Bank, renaming the Major Events trust fund to the Major Events Reimbursement Program, and disposition of balances from the Texas emerging technology fund.

HB 27 Relating to state economic development measures, including administration of the Texas Enterprise Fund, the abolishment of the Texas emerging technology fund, and the disposition of balances from the Texas emerging technology fund.

HB 28 Relating to an audit by the state auditor of certain programs and funds providing economic development incentives to entities and other persons.

Chen Button Press Release

“Tax Policy Division

• indirect tax development;
• direct tax development; and
• a tax training and Web development area.

Indirect taxes include sales and use tax, motor vehicle taxes, hotel tax and mixed beverage taxes. Direct taxes include insurance taxes, motor fuels taxes, severance taxes and franchise tax.”   Comptroller Tax Policy Monthly News

A county court in Illinois ruled that the pension reforms enacted in 2013, that fixed a $105 Billion of unfunded pension liability, violate the state constitution. 

The state argues that funding the pensions system conflicts with its ability to fund and provide police powers. 

Illinois has the worst funded pension system and lowest credit rating of all 50 states. Both are blamed on a structural budget deficit. 

Reuters

7 Reasons to support eliminating the franchise tax brought to you by the Conservative Coalition:

• Economist Brian Domitrovic says Texas is making the mistake of becoming California. It needs to cut taxes.
• “displacement of the private sector economy is underway, and it is a path to economic calamity”
•  Sen. Kevin Eltife, R-Tyler, said the franchise tax “was a failure, and I’m all for repealing it.”
• Sen. Craig Estes, R-Wichita Falls supports his bill that would immediately repeal the tax
• The House’ has $7 billion available below the state’s spending limit
• The Senate has $4 billion in tax relief and still has $4.5 billion left below the limit
• Beacon Hill Institute at Suffolk University estimates that 4 years after repeal:
  • 42,000 new jobs created
  • net new investment of $3.4 billion
  • and new personal disposable income of $9.8 billion.

Ft. Worth Star Telegram

On Friday the Houston Pension Board approved a 3 year deal with the City of Houston creating a cease fire in this lengthy pension dispute.  The deal includes:

• firefighters will contribute 12 % up from 9 %
• In year 1 of the deal, Houston will contribute city’s 25.8%, a decrease from the current 33%
• In the last 2 years, the City will contribute 24% 

State Representative Sylvester Turner is credited for helping negotiate the agreement.

In exchange for the agreement, the City of Houston is dropping its 2 lawsuits against the Houston Firefighter Pension System.

Houston Chronicle 

The California legislature has provided several mechanisms to build stadiums more quickly. One of these tools is to allow for eminent domain before environmental studies are completed. 

The City of Sacramento and the Sacramento Kings have won 2 court cases upholding their ability to move quickly to build the new stadium.

National Law Review

Advocates for film incentives along with the Texas Association of Business and Hotel and Lodging Association are asking for Film Incentives to be separated from video gaming incentives. 

Texas Association of Business Lays Out the Reasons Why to Support the Divorce:

• different business models
• video games are made in brick and mortar buildings
• video games take years to complete

How does industry spending break down?

• video game developers received more than $16 million in grants and spent nearly $96 million on projects in Texas (16% return on investment)
  • 180 video game companies in Texas, making Texas #2 in the nation 
• Television, commercial and film companies were granted about $36 million and spent $200 million in the state. (18% return on investment)
  • Texas has 210 film and television production companies

Texas Tribune

TPPF looks at the economic impact of eliminating the margins tax without replacing it with another tax. The economic impact of eliminating the margins tax is:

• In the 1st year, a gain of $10.8 billion in personal income
• In 5 years, a gain of $16 billion in personal income
• In 5 years, an addition of 129,200 jobs
   

  ​NFIB also studied the economic impact of if the  margins tax had never been enacted, and found:

  • Texas would have gained 16,000 in 5 years.

  TPPF

The Center for State and Local Government Excellence released a report this week that examines what strong pension plans have in common. The Center looked at pension plans that have a funding ratio from 87.6% to 99.8%. No Texas pension system was examined. 

Attributes of strong pension plans are:

• ” a commitment to fund the annual required contribution in both good and bad financial times;

• conservative, realistic assumptions that are adjusted based on experience; and

• changes to benefit levels and contribution rates as needed.” 

L.A. Mayor Garcetti is encouragaing better relationship with the film industry by:

• The mayor ordered city agencies to designate a film liaison to cooperate with groups that facilitate film permits for the film industry
• The mayor directed city departments to adopt “predictable and consistent” fees that “cover only incremental costs to the city.”
• “The mayor is requiring certain city employees to attend an annual training seminar to “emphasize the importance of filming to our city” and provide a comprehensive list of buildings, facilities and open spaces that could accommodate production shoots and base camps.”
• The city film office will begin promoting the state’s newly expanded film tax credits.

LA Times

• TTARA, Dale Craymer, property tax cuts more important than business tax cuts
  • Houston Business Journal        Texas Tribune 
  • Also boarding this train:
    • TX Assoc. of Business
    • TX Oil & Gas Assoc.
    • TX Chemical Council
• TTARA: A meaningful margins tax cut would be inventory exemptions 
  • Austin Business Journal
  • Also, on Board:
    • Retailers
  • House Bill 2136 by Angie Chen Button 
• NFIB: Cut the Franchise Tax
  • Houston Business Journal

Chair Chen Button’s Select Interim Committee on Economic Incentives issued a committee report that established 10 ways to analyze economic development programs. These 10 key points are re-emerging in Chair Chen Button’s House Committee on Small Business and Economic Development.

Let’s refresh the 10 points for economic development programs:

Two bills will be filed shortly to address DIR’s Cooperative Contracts program.  Watch for bill filings by Elkins & Zaffiniri.

Houston Chronicle

Document transparency has arrived in House Appropriations.  LBB is posting all House decision documents for the 84th Legislature. 

LBB

11 Ship Channel mayors signed a letter opposing bills that cap cities rollback rates. The Ship Channel cities require flexibility to remain competitive in economic development negotiations to bring more business to the area. 

Second item of importance: Transportation. The Ship Channel has been deepened and widened to allow more container traffic into the port, which will then require transportation network for distribution.    

Houston Business Journal

Chairman Oliveira filed HB 1936 implementing notification requirements of the House Committee on Business and Industry interim committee report. HB 1936 will:

• Require notice to a mortgage lien holder
• That the property owner intends to enter into a contract with a property tax lender

Previously on Information Intelligence:

“Tax lien lenders are nothing more than payday lenders for homeowners,” said Eric Sandberg Jr., president of the Texas Bankers Association.

As a counter, Propel CEO compares tax lien lending rates to mortgage lending rates. 

What do Banks want to do about it?

• 12-day cooling off period for consumers
• Notice to the mortgage lender, giving the lender the ability to pay off the tax lien

                                                                                                                      Statesman

What did Business & Industry Interim Committee Report recommend?

• 10 day notification period for property owners to notify their mortgage lender before signing a property tax loan

• Require the Office of Consumer Credit Commissioner to collect information “regarding how often mortgage companies pay off the loans, and whether they do so because the borrower has defaulted and the company is trying to protect is collateral. “

In a new move, Chambers of Commerce for Dallas and Ft. Worth are tracking lawmaker votes on “pro-growth” issues. They’ve named their new toy, the Pro-Growth Legislative Accountability Index and put it online. 

These Chambers of Commerce are only targeting local elected officials, but expect this pro-growth tracking to blossom throughout the state. 

Dallas Morning News 

Responding to the Bigy City Mayors opposition to property tax relief proposals, TPPF says that real property tax relief is necessary for 3 reasons:

• Texas is the 15th worst state in the nation for property taxes.
  • They cite the  Tax Foundation’s latest national rankings that local government in Texas collects $1557 per person in 2010, up from $1393 in 2008. 
• “Texas homeowners are getting pummeled.” 
  • ​They cite the U.S. Census Bureau’s American Community Survey  ​that from 2010 to 2012, the 3 year average annual property tax burden for a homeowner in Texas was $2,477. “By comparison, the same three-year tax average for an OOD in the South Region was $1,411 annually while the average U.S. taxpayer paid $2,091.”
• “Texas businesses bear a heavy burden.”
  •  From 2007 to 2011, property taxes as a percentage of total business taxes grew from 38.4 percent to 44.1 percent, according to the Business Tax Advisory Committee’s report to the 83rd Legislature.

TPPF

• $51 Billion: 2014 tax revenue 
• 88.7% of the tax revenue is from sources that are not oil and gas production and regulation taxes
• $42.2 Billion: all sales tax exemptions, exclusions & discounts total for fiscal year 2015
• $1.88 Billion: franchise tax exemptions total for fiscal year 2015.
• 41% of sales tax revenue is paid by businesses
• 59% of sales tax revenue is paid by consumers 
• 1837: Year local property taxes were enacted
• Comptroller’s Field Guide to Texas Taxes has a chart for everyone. Need a graph to send a client about a tax issue- this guide has it. 

In 2014, the Texas Supreme Court upheld the admission fee for strip clubs. Now, the case is moving to the US Supreme Court as lawyers are asking the US Supreme Court whether this fee violates the 1st amendment. Law 360

Republican Governor Kasich (OH) proposes taxing 30 mL of liquid nicotine for a total price of $33.75. For reference, 30mL is about 2 table spoons, or roughly 1 ounce. This will generate $22.3 million in revenue over 2 years. 

The liquid nicotine tax is in addition to sales tax. Gov. Kasich also proposes increasing the tax on traditional cigarettes by $1 for a total tax of $2.25.

How have e-cig taxes fared?

• In 2014 12 states attempted to ban e-cigs. All 12 failed to ban the product. 
• NC tax for liquid nicotine is 5 cents per mL
• MN taxes liquid nicotine at 95% the wholesale cost

Columbus Dispatch

Wood County Commissioner Court passed a resolution allowing for donations to the sheriff’s lake patrol project.  So how does it work when a county wants to accept funds for a sheriff’s program?

Can the sheriff ‘s office receive the donations? No. A sheriff can only act in manners prescribed by the Legislature. No statute allows a sheriff to accept donations from the public to the county. 

Where can donations be accepted? The County Commissioners Court. Local Government Code Section 81.032 sets up the framework. 

AG Opinion KA-003

HB 1537 by Dutton adds to Sunset’s task list- tax collection. Sunset will be required to review local government’s ability to contract out collection of delinquent taxes. 

When reviewing whether delinquent tax collections should be a contracted service, Sunset will consider:

• Appropriateness of the terms and conditions of contracts 
• Reasonableness of the compensation set in these contracts
•   Quality of the actual representation of attorneys contracted to represent taxing units
• Effectiveness of attorneys with which taxing units have contracted 
• Procedure for determining the property owners against which delinquent tax suits should be brought by attorneys with which taxing units have contracted.

Lt. Governor Patrick alluded that the solution for eliminating the property tax burden and inequities in the margins tax/franchise tax is with sales tax changes. Statesman

This  big reveal is nothing more than a refresher course in consistent policies. Let’s look:

• The year, 2007, Senator Dan Patrick co–authors SB 407 , which would allow citiies, upon voter approval, to add a 1/4 sales tax increase. 
• The year, 2011, Senator Dan Patrick authors S.B. 1215/SJR 36, which would allow school districts to  receover lost revenue through sales tax exemptions. 
• The year, 2014, Senator Dan Patrick explains his concept of swapping property tax for sales tax, including a revenue cap, while at the University of Texas forum. Statesman 

HB 1548 by Harless sets up comprehensive review cycles every 6 years for special districts.

Its all districts that impose debts, fees, taxes or assessments, but not School Districts or Junior College Districts.  The comprehensive review triggers public hearings for every special purpose district- MUDs, PUDS, TIRZ, Management Districts, Groundwater Districts… the list is ad infinitum. 

There’s a new code project this session for special districts too. TX Legislative Council  

The big city mayors oppose appraisal caps and revenue caps, both of which will tie the hands of local government officials. Local control helps cities maintain their value. 

Refresher: What’s an appraisal cap?

• Appraisal caps limit the amount that the taxable value of property can be raised each year. 
• Bills this session push for either a 5% or 10% cap on an increase in taxable value.

Refresher: What’s a revenue cap?

• Revenue caps limit a city’s ability to raise overall tax revenue without voter approval.
• Bills this session would trigger an election to lower the property tax rate when a city’s revenue reaches a limit.

Dallas Morning News

Muncipalities are finding it easier to borrow from banks than from going out on the bond market, which requires more disclosures. Low interest rates at banks make it an alluring market for municipalities. But leaves bond and credit types frustrated for more transparency. 

Municipal Securities Rulemaking Board isn’t pleased with bank financing. They have asked the SEC to step up and require municipalities to disclose of bank financing. Credit Ratings Agencies have also voiced support for municipal disclsoure of bank financing.  

Governing 

Emile Moline Jr. is the new economic development director for Alvarado. He will be  working with the Johnson County Economic Development Commission. 

via Texas Government Insider 
 

A new bonding mechanism may soon be available for P3 projects. The new bonding option is Qualified Public Infrastructure Bonds. These bonds allow for:

• A cross between governmental bonds and private-activity bonds
• Not subject to the restrictions of Public Activity Bonds
• Increases funding flexibilty
• Lower Costs
• Ability to generate more private sector participation in large-scale P3 projects.
• More infrastructure projects:
  •  airports
  • ports
  • mass transit
  • solid waste disposal
  • sewer
  • water
  • more surface transportation projects.   National Law Review

The 6 Objectives of the Conservative Budget Coalition:

• Eliminate the Margins Tax
• Stronger Spending Limits
• Real Time Budget Transperancy
• Property Tax Limits
  • Require voter approval for property tax increases that exceed the lesser of 5% of population growth plus inflation
• Cut Sales tax & Spending through STaR Fund
  • STaR is the Sales Tax Relief Fund
• Spending Limits:
  • $217.1 B in all Funds
  • $142.2 B in state funds
  • 6.5% growth (popuation + inflations) over 2014-2015

The Coalition Members:

• Texas Public Policy Foundation
• Texans for Fiscal Responsibility
• Americans for Prosperity, Texas
• Americans for Tax Reform
• Tea Party Caucus Legislative Advisory Committee
• Young Conservatives of Texas
• Grassroots America We the People
• NFIB Texas
• R Street Institute
• Our American Initiative
• Texas Eagle Forum
• State Budget Solutions
• Heritage Alliance
• National Taxpayers Union
• Institute for Policy Innovation

www.conservativetexasbudget.com    TPPF 

Mississippi Lt. Gov. has a tax plan to phase out its franchise tax. The plan is called the Taxpayer Pay Act. Here’s what it does:

• Phase Out Franchise Tax (following the footsteps of WV & PA)
•  Tax relief for self-employed taxpayers
• Income tax cut for the first $5,000 of income

The Taxpayer Pay Act goals are:

• Make the state more competitive
• Foster economic growth
• Keep taxpayer dollars with the taxpayers 

Americans for Tax Reform       Forbes

Georgia is proposing a no-bid process for agencies purchasing automobiles produced in Georgia. Ostensibly, the goal is to lure more vehicle manufacturers to Georgia by lowering contracting standards for purchasing Georgia made vehicles. 

Go Georgian, no bid contracts await you.

Atlanta Journal Constitution

The bills:  

• SB 182 by Bettencourt: Lower the roll back effective tax rate to 4%; exceeding that rate automatically triggers an election 
• SB 156 and SJR 14 by Nichols: 5% appraisal cap

Dallas Morning News  breaks down the opposition & support. Opponents Say:

• These bills shift tax burdens (Dallas County Judge Clay Jenkins)
• Cities account for 16% of local taxes while school districts account for 55% (TML)

Supporters Say:

• Lt. Governor Patrick a long time supporter of property tax relief, calling recently for “real tax relief now, and [at] bringing down the value increases that are beyond the reach of many homeowners to keep up with.”
• Senator Bettencourt has pointed to these bills having died in sessions past in the House

TPPF tells us that from 2005-2014, state debt increased 123%. State debt totals $44.3 Billion, which means every human in Texas would need to fork over $1,479.

TPPF offers legislative debt solutions that include:

• requiring the principal cost of debt (debt outstanding)  be provided to taxpayers
• requuiring the total cost of future interest payments (debt service outstanding) be provided to taxpayers

To read more about informing tax payers about state debt: TPPF

In the last five years, there has been a 30% increase in the number of people who sought property tax lending.  What’s on the horizon in 2015 for property tax lending?

• House Business & Industry interim report recommended a 10 day notification period.  
• Consumer Credit Commissioner Pettijohn says technical tweaks are necessary. 
• Banking types are concerned about the loan priority assigned to tax liens which put the tax lender ahead of the original mortgage

Property Tax Lenders Say:

• Banks step in and help homeowners just 12% of the time
• 10 day notice requirement would limit consumer choice

Houston Chronicle

State contracting is under the microscope. This is no junior high science microscope where everything looks grainy, this is an electron microscope fitting of a PhD in neuroscience. 

HB 1, Rider 7.12, sets up new contracting requirements. The big picture:

• Contracts  over $10M or $1M in contracting/purchase will require notifications
• Notification to the LBB, SAO, Governor, and Finance/Appropriations Chairs
• Establish the basis for their contracting methods
• Establish that the contracting methods comply with state contract management and procurement standards

Text of the full rider:

Governor Abbott & Comptroller Hegar announced that the Major Events Trust Fund and the Other Events Trust Fund will be housed in the Governor’s Economic Development and Tourism Division.

The Funds, which return incremental tax increases for events to local governments, have been housed since their creation with the Comptroller’s Office. 

The purposes for the move:

• “maximize efficiency and accountability in state government”
• to optimize our state’s economic development strategy
• “will leverage our existing economic resources and promote Texas as a world-class commercial destination nationally and globally.”  

Governor Abbott and Comptroller Hegar Joint Press Release

A goup of young conservatives, Reformicons, are bucking the broad based tax cut trend and are promoting these options:

• subsidies (certianly not the word conservatives are using)
• tax credits
• incentives

Which conservatives are changing the tone on broad based tax cuts and substituting targeted tax fixes to address the middle class?

• Rick Perry
• Jeb Bush
• Mark Rubio
• Eric Cantor

The young conservatives are pushing targeted ideas as times change, requiring innovative economic thinking.  WSJ

Who is in the corner of tax cuts first?

• Lt. Gov., Senator Nelson, Governor Dallas Business Journal
• State Reps. Murphy & Huberty want to phase out the margins tax Dallas Business Journal
• Senator Creighton  wants to use excess Rainy Day Fund revenue for tax rebates Dallas Business Journal
• Senator Schwertner wants to raise the margins tax trigger to $5 Million Dallas Business Journal

Who is laser focused on reducing state debt obligations?

• State Rep. Lyle Larson Texas Public Radio  
• Senator Eltife Dallas Business Journal Houston Chronicle
• State Rep. Otto wants to use excess Rainy Day Funds to reduce debt Texas Public Radio
• Senator Nelson is flexible, saying “I’m not dug in on almost anything. “  Houston Chronicle

In August Speaker Straus called for Strategic Fiscal Review  (SFR) that consists of:

• fundamental questions about the services provided by agencies
• agency use of state funds
• the extent to which the agency could carry out their missions with fewer employees and resources.

Fall 2014, House Appropriations focused its SFR on these agencies, with the LBB being the information gatherer:

• Trusteed Programs within the Office of the Governor
• Department of Information Resources
• General Revenue-funded programs at the Department of Assistive and Rehabilitative Services
• Higher Education Coordinating Board
• System Offices of General Academic Institutions
• Available University Fund
• Texas State Law Library
• Juvenile Justice Department
• Department of Public Safety
• Department of Transportation
• Public Utility Commission   Speaker Straus August 12, 2014 Press Release 

State Representative John Otto filed HB 5 which codifies SFRs. It will require biennial written reports of selected agencies that include:

• a description of the discrete activities the state  agency is charged with conducting or performing together with:
  •  a justification
  • an evaluation of the effectiveness and efficiency of the state agency’s policies, management, fiscal affairs, and operations in relation to each activity;including:
    •  a quantitative estimate of reasonable adverse effects if the activity ceased
    • an itemized account of expenditures required to maintain the activity at the minimum level of service 
    • an itemized account of expenditures required to maintain the activity at the current level 
    • a ranking of activities by relative importance of each  activity to the overall goals and purposes of the state agency at current service or performance levels;
• recommendations to the legislature regarding whether the legislature should continue funding each activity & at what level HB 5

Total State & Local Debt: $249,600,000,000

• Local Debt: $ 205,300,000,000 or 82.3%
• State Debt: $44,300,000,000 or 17.7%

Bonds backed by the full faith and credit of the state, General Obligation Bonds:

• $10,445,700 in self supporting
• $4,642,700 in non-self supporting

Total Revenue Bonds: $23,562,700

Everyone knows NFIB opposes the impact of the franchise tax. In supporting the Lt. Governor and Governor who have made business tax cuts a priority, NFIB lays out why it supports a repeal:

• 96% of all businesses in TX are small businesses
• Small businesses have “smaller profit margin partly due to competition and pressure from larger firms”
• Small businesses are “hurt most by the state franchise tax.”

Dallas Business Journal

Glendale, AZ, home to the 2015 Super Bowl, is broke according to Americans for Tax Reform. 

Americans for Tax Reform (ATR) opposes public financing of stadiums, among other things. Here’s why ATR is outraged over the Super Bowl Stadium:

• Glendale is small- 230,000 residents
• Moody’s lists its debt at 4.9% of its tax base. Bad, very bad.
  • Glendale’s debt is 4 times the national median & 2 times the average AZ city
  • 40% of the city’s debt is dedicated to paying off sports arenas
• AZ is probably on the hook for $150M for the stadium. A court found the mechanism to pay the stadium debt, an increased rental car tax, is unconstitutional in AZ (the rental car tax is constitutionally dedicated to other things, not stadiums)
• If you tax it, visitors will not come to your state
• Glendale is in Maricopa County which financed $1.2B of the stadium relying on hotel taxes
  • Super Bowl visitors stayed in other counties, thereby not helping with the stadium debt.

Americans for Tax Reform

Florida is asking state economists to rank the economic vitality of sport stadium projects to determine when, and if, state economic development or tax reimbursements should be granted.

What team projects are in the bullseye?

• Jacksonville Jaguars
•  Miami Dolphins
• Orlando City Lions soccer team
• Daytona International Speedway.

The State​ Economic Development agency says no ranking is required. The Speaker of the House requested the rankings. The Speaker Wins & Rankings are moving forward.

Why the drama over pro sports teams?

In 2013, a bill that would have provided financial incentives to the Miami Dolphins died because of concerns of aiding the team’s owner.  Lawmakers returned vowing to protect taxpayers. 

Washington Times

Streamlining Economic Development, Governor Abbott announced that 4 economic development & tourism offices will report to the new Director of Economic Development, Bryan Daniel.

Reporting to Daniel will be:

• Texas Film Commission
• Texas Music Office
• Women’s Commission
• Workforce Investment Council 

Governor Abbott Press Release

Governor Abbott proposed elimination of the Emerging Technology Fund. Fund proceeds would be used to create the new University Research Initiative. Governor Abbott Press Release

Business support includes:

• Texas Association of Business Bill Hammond “praises” the plan.
• John Sharp, Texas A&M Chancellor, “applauds” the move to support university research
• Bill Sproull, CEO of the Metroplex Economic Development Partnership in Dallas-Fort Worth, supports the Governor’s plan

Bill Filed by David Simpson to eliminate Emerging Technology Fund: HB 1037

Austin Business Journal  

Texas House Republican Caucus Chair Tan Parker lays out the following priorities:

• fully funding public school enrollment growth

• strengthening our border security

• bold step toward fully meeting our public highway needs.　 

• keeping spending flat

• leaving billions of available revenue unspent

• Make a strong investment in tax relief for hardworking Texans   The Leader

The Republican Governor of Maine is calling for tax cuts for families and businesses, but the cut could come with a cost to non-profits.

Maine is poised to be the first state to assess a reduced rate property tax on large non-profits, such as colleges and hospitals. Churches would remain exempt.

WSJ

The home page of Governing Magazine features this headline: 

Motorola Gets (Another) No-Bid Contract with Texas County.

The County is Harris. The Contract amount is $7.5 million. Harris County is justifying theno-bid contract because it piggy backed onto a contract that Motorola had received through competitive bidding.

News clips, bill filings, and Governor Abbott press release have all raised concerned about no-bid contracts. See Nelson’s SB 353

As state contracting is under the microscope, local government contracts are prepping their slides for a turn under the microscope.  Governing 

Surgeon General Vivek Murthy said that its unclear if e-cigarettes are friend or foe.

If the associated costs of e-cigarettes are like those of cigarettes, then taxation seems par for the course.

If e-cigarettes lead to cessation of smoking traditional cigarettes, then maybe not so much. 

There are FDA rules on e-cigarettes, like prohibiting sales to minors, but research is inconclusive on the effect of e-cigarettes. ABC 13

TPPF shares its 3 reasons pension reform is crucial:

• Higher taxes and fees are on the horizon.
• Unfunded liabilities are an “astonishing” $56.99 billion.
• Defined benefit pensions are government entitlement programs.
  • “entitlement programs lead to unsustainable government spending growth.”  TPPF

The Comptroller’s annual review of the Texas Economic Development Act is hot off the presses.

What you need to know to be conversant:

• Chapter 313 projects have invested approximately $59.5 billion in Texas through 2013

• 259 active projects (as of May 2014) 
  • 45% are manufacturing
  • 53% are renewable energy 
• $123 billion estimated investment under the 259 agreements
  • 76%of the investments are in manufacturing
  • 21% are in renewable energy.
  • 3% of the investments are in research and development and electric power generation (Integrated Gasification Combined Cycle)
• Jobs breakdown. Total jobs: 5,487 qualifying jobs
  • 89% are in manufacturing
  • 10% are in renewable energy.
  • 1% of jobs are in research and development. 
• Gross tax benefit break down. Total benefit:  $5.5 billion
  • ​72% for manufacturing projects
  • 26% for renewable energy projects
  • 2% for research & development

Making good on her promise to improve transparency in state contracting, Senator Nelson filed SB 353 which will require:

• Ethics training for state agency purchasing personnel
• Disclosures of conflicts of interests for those involved in contract procurement and contract management
• Prohibits contracts if:
  • Agency governing body member(s) have a financial interest
  • Governing official, executive director, general counsel, chief procurement officer, or procurement director of the agency has a financial interest; or
  • A family member of the above has a financial interest
• All no-bid contracts are going online for the world to see
• Big Contracts, over $1 Million and $5Million, have new reporting requirements
• Agencies must have risk analysis procedures.

In the spring of 2014, Attorney General Opinion, [GA-1052], illuminated a drafting error in SB 1678 (2013) that prohibited funds from being awarded when the site selection committee for an event isn’t on the statutory laundry list.

A quagmire emerged for events that thought they qualified for reimbursements. Unhappy event organizers. Happy lawyers.

Welcome to the Remedy:  HB 902 , a short bill that adds NASCAR to the site selection list. 

Refreshing Recollection: Previously on Information Intelligence

SB 1678 (2013) added events to the Major Events Trust Fund recipient pool.

Nobel goal to draw events and the corresponding tax revenue to Texas.

But, when you draft these bills you have to remember that just adding an event to the list isn’t enough.  You have to add the ability to award those funds to the event too. Want to know how to draft a bill like this? Read [GA-1052]

“Tax lien lenders are nothing more than payday lenders for homeowners,” said Eric Sandberg Jr., president of the Texas Bankers Association.

As a counter, Propel CEO compares tax lien lending rates to mortgage lending rates. 

What do Banks want to do about it?

• 12-day cooling off period for consumers
• Notice to the mortgage lender, giving the lender the ability to pay off the tax lien

                                                                                                                      Statesman

What did Business & Industry Interim Committee Report recommend?

• 10 day notification period for property owners to notify their mortgage lender before signing a property tax loan

• Require the Office of Consumer Credit Commissioner to collect information “regarding how often mortgage companies pay off the loans, and whether they do so because the borrower has defaulted and the company is trying to protect is collateral. “

Republicans are voting to raise taxes. No, not D.C. Republicans, but Republicans in state legislatures. So, what taxes are they raising?

NV: Gross receipts tax & mining tax |  Information Intelligence 

MI: Sales tax 

UT: E-cigarettes tax | Information Intelligence

SC & SD: Gas tax | Information Intelligence    Transportation funding has been shown to return 400% return on investment, which makes it a safer bet. Information Intelligence

NYTimes

The hottest of hot topics are: Open government & Open Access to government records. There has been ongoing war waging over records in the Tarrant County Water Board. Wars breed bill filings.

Van Taylor’s  SB 335 , SB 336 & SB 337  clarifiy access to local governmental records.

This brewing war over eminent domain and transparency has resulted in :

• $235,000 in campaign contributions for  a local water board Information Intelligence
• Texas Tea Party Requests Information Concerning Eminent Domain from a Texas Water District  Information Intelligence 

Georgia Techies are actively pushing for tax credits like:   

• Extend Angel Investor Tax Credit
• More Film Tax Credits
• “…triple the qualifying period on a sales-tax exemption for companies buying more than $15 million in computer equipment, from one year to three”
  • This tax credit has made Georgia a hot spot for data centers
• Create a committee to make Georgia a leader in data and cyber security
  • Georgia is home to IBM and to U.S. military’s cyber command, which they believe make Georgia the perfect leader in data and cyber security

Athens Online 

5 California mayors are proposing a constitutional initiative to reform pensions which would:

• Give governments authority to negotiate changes to existing employee pensions.
• This will include retiree health benefits would be affected as well.

Remember 2014 GASB rules now require accounting for health care costs to pension systems. Governing