Wed April 29, 2015 9:12 am By R.G. Ratcliffe

 

The first report of golf ball-sized hail came into the Hidalgo County sheriff’s office at 5:20 p.m. on April 20, 2012. Within minutes, another report arrived of baseball-sized hail in Mission, with the winds blowing 50 miles per hour. Over the next 20 minutes, drivers tried to crowd their cars under business awnings. Windows were shattered. Hail knocked holes in rooftops. Unfortunate animals were beaten to death. The storm was a second wallop for the Lower Rio Grande Valley as it recovered from a similar storm a month earlier. The McAllen Monitor reported that the insurance industry paid out $556 million in claims to homeowners and another $47 million to vehicle owners.

Then the lawsuits began. There were thousands of lawsuits against insurance companies and adjusters, alleging low-ball payments on claims. These lawsuits led to Senate Bill 1628 by Senator Larry Taylor of Friendswood currently on the Intent Calendar for possible debate as early as today.

This legislation has pitted tort reform groups representing the insurance industry against the trial lawyers in what has become a biennial legislative rivalry. What makes this fight different this year is that there are major Texas businesses taking the trial lawyers’ side of the argument: car dealerships with vulnerable inventories of vehicles on open lots, Trammel Crow Residential, Centex Homes, Sovereign Bank and La Quinta Inns & Suites.

“My business clients have no interest in pursuing frivolous claims nor do they ever wish to engage in lawsuit abuse. However, they do expect the legislature to protect their interests against insurance companies which unfairly deny or delay legitimate claims,” wrote Dallas Haynes and Boone lawyer Ernest Martin Jr. in a letter delivered to senators last week on behalf of the businesses. Martin said his clients are worried about the “unintended consequences of a bill that does much more harm to business interests than it does to curb perceived abused in a single category of hailstorm claims.”

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Tue April 28, 2015 6:58 pm By Erica Grieder

Watching the Texas House today, I found myself wondering whether it would be sacrilegious and/or offensive to thank the Lord Jesus for Joe Straus, who as Speaker of the Texas House is effectively running state government right now.  

The main event on the floor, as R.G. previewed this morning, was the preliminary passage of two tax bills authored by Ways & Means Chairman Dennis Bonnen, one proposing a cut to the state sales tax rate, the other to the franchise tax rate. Taken together, the result would be $4.9 billion in biennial tax cuts, and a number of Democrats, including Donna Howard, Chris Turner, Sylvester Turner, and Armando Walle, offered cogent arguments against making such cuts, especially at a moment when the state economy is vulnerable as a result of lowish oil prices, and with the school finance ruling still pending.

Since this is Texas, however, the tax cuts passed. The only surprise was in the lopsided margins. 141 legislators voted for HB 31, the sales tax bill; no one voted against it. More than half the Democrats in the chamber voted against the franchise tax cuts, HB 32, but it nonetheless passed easily, 116-29. Perhaps most significant at all was a vote cast during the debate over the latter bill itself.

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Tue April 28, 2015 3:31 pm By R.G. Ratcliffe

Senate Bill 19 was described by sponsor Van Taylor during a floor debate today as “generational” ethics reform, but when an amendment was offered to bar employment and co-investing between legislators, Senator John Whitmire erupted with accusations that Taylor and Don Huffines were trying to turn the legislation into unethical political payback.

Whitmire said the core intent of Taylor’s bill was payback against former Senator Wendy Davis. During last year’s election, Governor Greg Abbott accused Davis of unethical behavior because she served as bond counsel to local governments while a sitting senator.

And when Senator Don Huffines tried to amend the bill to bar co-employment among legislators, Whitmire said that was aimed at the incumbent Huffines defeated last year: John Carona. The president of a homeowner association management company, Carona is known to have employed Senator Judith Zaffirini as a consultant.

“You and I know you’re trying to get at John Carona…and Taylor’s trying to get at Wendy Davis,” Whitmire said during the debate. Whitmire said they were just trying to settle scores.

Huffines fired back: “The score was settled when I won.” 

Whitmire also took exception with Taylor using the example of indicted state officials in New York on bribery charges as an example of why a new ethics bill is needed. “Senator Taylor implied we are all crooks,” Whitmire said.

Taylor did not immediately respond to Whitmire during the debate.

Senator Kirk Watson won passage 31-0 of amendments to require lobbyists to disclose expenditures of $50 or more for meals for legislators, their immediate family and staff and also prohibit lobbyists for splitting bills to get below disclosure thresholds.

The original bill would require legislators to wait for a two-year session before becoming lobbyists, but it would not apply to anyone currently in the Legislature. It also would require greater disclosure by legislators of contracts they have obtained and disclose whether they are serving as bond counsel. The original bill also would have banned incumbents from serving as bond counsel, but Taylor removed that provision to get the bill out of committee.

 

Update (April 28, 2015, 5:05 p.m.): During the course of debate, controversial amendments were added to prohibit legislators from receiving any compensatioin from a financial instition and to require drug testing of persons filing as candidates for office. The banking amendment by Senator Carlos Uresti of San Antonio was clearly aimed at Taylor because he serves on a banking board, and much of his original bill would have restrained the income of lawyer legislators. The drug testing amendment was added by Senator Eddie Lucio.

The Senate sent the bill to the House on an announced vote of 30-1, but the one opposition vote switched to an affirmative vote before it was recorded. 

After the Senate adjorned, Taylor declined to answer questions from reporters about Whitmire’s statements. He also attempted to avoid questions about the banking amendment being aimed at him.

Taylor: “When I’m here I focus only on the people and serving their interest.”

Reporter: “Are you on a bank board?”

Taylor: “When I’m here I focus only on the people serving their interests. Whatever I may do on the outside is well in the rearview mirror.”

Reporter: “Are you on a bank board?”

Taylor: “Sure.”

Reporter: “Are you compensated for being on the bank board?”

Taylor: “Yes.”

Reporter: “So you’ll have to be not compensated?”

Taylor: “We’ll see. I could quit.”

Taylor said he was not certain what the bill will look like in the House, but praised Abbott for pushing ethics legislation. “The governor’s leadership is going to shepard this through,” Taylor said. “At the end of the day, we have a stronger bill leaving the Senate than the bill that I filed.”

Tue April 28, 2015 8:26 am By R.G. Ratcliffe

For some childish reason, the theme song to the movie High Noon keeps playing in my head as I think about today’s upcoming House debate on sales tax cuts. Senator Jane Nelson is like the lonely sheriff going from the meeting hall to the saloon looking for someone to help her fight for property tax cuts. House Ways and Means Chair Dennis Bonnen is the bad hombre arriving on the noon train, holsters full of sales tax cuts, with his posse of tax-cutting Republicans backing him up for the final showdown. (Update: The House ended up giving initial approval to its sales-tax cut plan today by a vote of 141-0.)

Off to one side, tea party groups are backing Nelson, as is Michael Quinn Sullivan and his Empower Texans. His group ran one of those Internet surveys over the weekend asking whether Texans would prefer sales tax cuts or property tax cuts. Surprisingly, the first return was overwhelmingly for the House sales tax cuts.

Empower Texans “corrected” the posting, blaming the original results on technical problems. Here’s the revised version of the Empower Texans survey:

Sullivan, in an analysis, called the sales tax cuts “compelling,” but makes the argument for the Senate’s property tax cut plan as more in keeping with the Republican Party of Texas platform.

Lieutenant Governor Dan Patrick, Nelson and the rest of the Senate tax-cutters made one mistake as they designed their tax cuts for the homesteaders and the folks who run the general store. They left out the ranchers with the big spreads.

Not to be outdone, the consortium of the big spreads launched their own web site, called taxrelieftexas.com. It’s being paid for by the Texas Taxpayers and Research Association, the Texas Association of Business, the Texas Association of Manufacturers, the Texas Restaurant Association, the Texas Retailers Association, the Texas Oil & Gas Association, the Texas Independent Producers & Royalty Owners Association, the Texas Chemical Council and the Association of Electric Companies of Texas.

You see, homestead tax breaks and franchise tax breaks for small business, as in the Senate plan, don’t do much for the refineries, or the commercial real estate owners or those payers of the oil and gas severance taxes that have filled up the Rainy Day Fund. So here’s what the big spreads are saying on the web west of the picket wire:

Robert T. Garrett of The Dallas Morning News reported on an analysis showing sales tax cuts will be of most benefit to those earning $147,000 a year or more. The tax equity note on the Bonnen sales tax bill, HB 31,  shows business would receive a $602.7 million tax reduction in state fiscal year 2017 by lowering the sales tax rate from 6.25 percent to 5.95 percent, while households would receive a $867 million tax cut. The Senate plan, SB 1, would save homeowners an average of about $210 a year by increasing the homestead exemption, but it also would increase the state’s share of financing public education by about $1.6 billion a year by 2020. 

The high sheriff of them all, Governor Greg Abbott, is leaning toward those property taxes and yet also has declared himself neutral for the moment. However the dust settles, Abbott can claim victory by signing it, vetoing it or calling a special session to give him tax cuts. There was a blow-up at the leadership breakfast last Wednesday, as first reported on Burkablog. It usually takes something like that to get things moving.

To conclude the corny western movie theme of this tax cut item, the story awaits the action of the House today and how the two chambers come together to solve the impasse between the homesteaders and the ranchers. In the meantime, this seems appropriate: “This is the West, sir. When the legend becomes fact, print the legend.”

Mon April 27, 2015 10:28 am By R.G. Ratcliffe

At the Tax Day Capitol rally earlier this month, Representative Jonathan Stickland demonstrated why the hard-core tea party members of the House can’t gain traction with enough mainstream Republican members to get anything substantial accomplished.

Stickland complained to the crowd that legislation in the House was being “micromanaged” to delay bills, including proposals to revoke in-state tuition for undocumented immigrants, to allow the so-called constitutional carry of handguns, and to eliminate toll roads. “Conservative legislation is dying every single minute that ticks by, and we’re not going to take it any more, are we?” intoned Stickland, the Howard Beale of the Texas Legislature. Complaining about the leadership and bills stuck in committee is every member’s right. But then came the part of Stickland’s speech that distances the hard-core from the mainstream. 

“Everybody sounds like a tea party Reagan conservative during the election process, but when we force votes on this Texas House and we force representatives to pick a side, it lets you know back at home what’s really happening here in Texas,” Stickland said. “We are going to find conservatives to challenge RINOs in the Texas House.”

So much for Ronald Reagan’s 11th Commandment not to speak ill of other Republicans. Stickland declared war and promised re-election fights for the mainstream House leadership Republicans.

Contrary to the dreams of Stickland and other tea party activists, an analysis of the 2012 elections tells me the tea party has peaked in the gains it has made in the Legislature and actually may face setbacks in 2016. If the GOP primary between Ted Cruz and David Dewhurst is any indication, tea party strength in the Legislature has peaked.

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