The Texas Legislature works with a lot of numbers: bill numbers, fiscal numbers, the number of votes needed to pass a bill. Just like small businesses, numbers matter. We thought it would be interesting to start out our 83rd Legislative End of Session report with comparisons of numbers from last session.
Number of: 82nd Legislative Session 2011 83rd Legislative Session 2013
Bills Introduced 6,326 6,379
Bills Passed 1,532 1,407
Bills NFIB/Texas Tracked 842 1,367
Bills Registered a Position/Testified113 142
Biennial Budget 2014-2015 $172.3 billion $197 billion
Here’s another number for you: $1.363 billion. That’s what the legislature gave taxpayers in tax relief. $710 million of that amount is “relief” from the Texas’ onerous franchise tax but relief is defined differently for each and every business.
NFIB/Texas worked to repeal the franchise tax entirely during this session but hit head winds early on in the process. Testimony was heard on legislation in the House Ways & Means Committee to reduce the rate of the tax incrementally over a period of time until it no longer existed. This would have weaned the state off this tax revenue but no action was taken on the bill. The Senate Finance Committee heard legislation that would have raised the threshold for businesses exempt from paying the tax from $1 million to $5 million but again, no action.
The more perplexing issue is there is little disagreement by legislators that the tax is burdensome, unfair and counter to a pro-business environment. Yet no action was taken despite a revenue surplus making this session the most opportune time to rid businesses of this tax. While we were not successful in repealing the tax, businesses grossing under approximately $3 million will receive a $1 million exemption and the $1 million deduction was made permanent. Auto repair shops who have long struggled under the tax will now pay at the .5% rate just as auto repair shops located on car dealership lots pay.
The rate of the tax was reduced albeit temporarily. In 2014, both the 1% and .5% rate will be reduced by 2.5%. In 2015, if the Comptroller certifies there is adequate available revenue, the rate will be reduced by an additional 2.5%. While this is certainly appreciated by businesses it isn’t the solution to one of the biggest franchise tax problems: paying the tax when a business is unprofitable.
You might be doing your math and thinking, well, you’ve accounted for $710 million in tax relief …. Where’s the other $653 million? The legislature eliminated the System Benefit Fund (SBF) which accounts for $300 million. The SBF was created in 1999 as part of Texas’ plan for electric deregulation and was meant to assist low-income individuals who struggle to pay their utility bill. The SBF received its revenue by charging businesses and individuals a fee on their electric bill. The fund will be wound down by providing low-income individuals significant rebates on their bills in 2014-2016 and by 2017 the fee would no longer be charged to rate payers.
Here’s the rest of the math: $239 million went to sales and margins tax exemptions for businesses’ research and development costs; $100 million went for sales tax rebates for software and equipment purchases by telecom, cable TV and internet service companies; and $14 million went for sales tax exemptions on computers and air conditioning equipment in new data centers.
NFIB/Texas was successful on many fronts this session. We supported legislation for drug testing of unemployment insurance benefits recipients and opposed legislation allowing employees who have retired from an employer to sue them for compensation discrimination. We have provided information on bills that may affect businesses along with NFIB/Texas’ position.
Legislative Agenda Issue Areas
BUSINESS GENERAL
LEGISLATION THAT PASSED
HB 489 – Representative Menendez (San Antonio)/Senator Uresti (San Antonio) – A recent news story regarding a veteran who entered a mattress store with a service animal prompted this legislation. The business owner forced the veteran to leave the store and is currently being sued in federal court. The introduced legislation was much more expansive and through NFIB/Texas’ opposition the bill ultimately was amended to make it easier to identify a service animal.
NFIB POSITION: Opposed in House
EFFECTIVE DATE: January 1, 2014
LEGISLATION THAT FAILED TO PASSED
HB 1706 – Representative Farrar (Houston) – This legislation would have prohibited interfering with or restricting the rights of mothers to breast feed in public. The introduced version would have allowed the mother, or blood relative, to bring a lawsuit if they believed their rights were violated.
NFIB: Opposed
HB 2261 – Representative Reynolds (Missouri City) – Small businesses often times have difficulty competing with their larger counterparts when bidding on contracts to provide goods and services to state government. This legislation would have required the Comptroller to give preference to smaller businesses for contracts with a value less than $500,000.
NFIB POSITION: Support
SB 522 – Senator Estes (Wichita Falls)/Representative Hunter (Corpus Christi) – This legislation brings the Texas Administrative Code in line with the Texas Civil Code of Procedures. Administrative law judges have difficulty in complying with notices and filings because of these differences. In addition, the state is required to notify persons involved in a contested case the particular statutes and codes allegedly violated. This does not always happen making it difficult for individuals to defend themselves.
NFIB POSITION: Support
SB 1166 – Senator Hegar (Katy) – The Texas Deceptive Trade Practices Act allows a civil penalty of not more than $20,000 per violation with no cap on businesses who have conducted false, misleading or deceptive acts or practices. This is excessive for those business owners whose actions were inadvertent or did not cause actual damages. SB 1166 allows a penalty of $10,000 per violation or $20,000 per violation if the court finds the business intentionally committed the violation.
NFIB POSITION: Support
ECONOMIC DEVELOPMENT
LEGISLATION THAT FAILED TO PASSED
HB 2061 – Representative Murphy (Houston)/Senator Hancock (North Richland Hills) – This legislation would have provided incentives for businesses, with an emphasis on small businesses, to move into economically distressed areas.
NFIB POSITION: Support
SB 931 – Senator Hancock (North Richland Hills) – Much like HB 2061, this legislation sought to incentivize businesses through tax credits to establish or relocate their business in economically distressed communities.
NFIB POSITION: Support
EMINENT DOMAIN
LEGISLATION THAT PASSED
HB 2586 – Representative P. King (Weatherford)/SB 18 – Senator Birdwell (Waco) – In the 2011 session, legislators passed several reforms for eminent domain proceedings. HB 2586 builds on those reforms by restricting the power of local water districts.
NFIB POSITION: Support
EFFECTIVE DATE: Effective Immediately
SB 655 – Senator Birdwell (Waco)/Representative P. King (Weatherford) – SB 655 clarifies the Texas Water Code regarding “public use” in eminent domain proceedings.
NFIB POSITION: Support
EFFECTIVE DATE: Effective Immediately
LEGISLATION THAT FAILED TO PASS
HB 20 – Representative Kolkhorst (Brenham) This legislation was a cleanup bill of SB 18 from the 82nd legislative session. The bill would require a public entity to state specifically in the initial and final offers what the public use of the property will be. Property owners would have been able to repurchase the property if it was not used for its original purpose.
NFIB POSITION: Support
HB 1250 – Representative Franks (Wichita Falls) – In some instances, government entities exert eminent domain to obtain private property for a specific purpose. Subsequently, the government entity amends the reasons for the use of the property allowing them to use the property for another purpose other than which it is acquired. HB 1250 would stop this practice.
NFIB POSITION: Support
EMPLOYER/EMPLOYEE RELATIONSHIP
LEGISLATION THAT FAILED TO PASS
HB 238 – Representative Villareal (San Antonio), HB 1146 – Representative Johnson (Dallas), SB 237 – Senator Van de Putte (San Antonio) These bills would have prohibited discrimination in the hiring process as well as with current employees regarding sexual orientation and gender identity. The bill would have allowed job applicants and employees to sue an employer for discrimination even if the employer is unaware of the individual’s sexual orientation or gender identity.
NFIB POSITION: Opposed
HB 298 – Representative E. Rodriguez (Austin) – Under this proposed legislation, employees who file a wage claim could not be retaliated against by their employer. The difficulty with this legislation is once an employee filed a wage claim it made any action taken by an employer, including the promotion of a coworker, a possible retaliatory act and susceptible to a lawsuit.
NFIB POSITION: Opposed
HB 667 – Representative Armando Martinez (Weslaco) – HB 667 would have mandated leave policy in a private business. The bill required employers who allow employees to use sick time for their children to also include foster children as well. Most employers do not make a distinction between biological children and foster children.
NFIB POSITION: Opposed
HB 731 – Representative Raymond (Laredo) – This bill would have mandated rest breaks on construction sites for contractors and subcontractors with government contracts. Employers are not mandated by OSHA to provide any type of break for employees.
NFIB POSITION: Opposed
HB 950/SB 248 – Representative Thompson (Houston)/Senator Davis (Ft. Worth) – HB 950 would have codified federal law regarding compensation discrimination. As written, the bill broadened the statute of limitations for an employee to sue their current or former employer for compensation discrimination. This included employees who are retired but receiving compensation in the form of a pension payment, 401k payment or other payments from the employer.
NFIB POSITION: Opposed
EFFECTIVE DATE: This legislation passed the legislature. Governor Perry subsequently vetoed this legislation at the request of NFIB.
HB 1031/SB 399 – Representative Lewis (Odessa)/Senator Hancock (North Richland Hills) – Some employers currently utilize an ombudsman program for employees to confidentially and anonymously report misconduct occurring in the workplace. The ombudsman programs are not currently protected communications and can employees or those who report can be required to testify in litigation. This legislation would have afforded the ombudsman program protection from being subpoenaed as a witness in lawsuits.
NFIB POSITION: Support
HB 1065 – Representative Hernandez-Luna (Houston) – This legislation would have mandated employers to provide time off to employees to attend court proceedings if they are victim of crime. Employers were prohibited from retaliating against an employee who used time off to attending court proceedings and could be sued for retaliation.
NFIB POSITION : 0pposed
HB 1131 – Representative M. Gonzalez (Clint) – Under this legislation, employers convicted of wage theft would have had their name, their business name and any partner’s names posted on the Texas Workforce Commission’s website for three years.
NFIB POSITION: Opposed
HB 1369 – Representative Jones-McClendon (San Antonio)/SB 1895 – Senator Garcia (Houston) – HB 1369 would have mandated employers provide time off to employees to attend their children’s school activities. Full time employees would be eligible for 8 hours per month up to 40 hours per year while part-time employees would be eligible for 4 hours per month up to 20 hours per year. Employers were prohibited from retaliation against an employee for using the time.
NFIB POSITION: Opposed
HB 1524 – Representative Anderson (Waco) – This legislation would have prevented labor unions from utilizing the card check method when organizing workers. The card check method only requires a majority of signatures for the union to be recognized and has no time constraints to gather a majority of signatures.
NFIB POSITION: Support
HB 1548 – Representative Callegari (Katy)/SB 1381 – Senator Hancock (North Richland Hills) – Project Labor Agreements (PLA) require contractors and subcontractors with government contracts to use union labor exclusively. Although PLA agreements are not mandatory in Texas, governmental entities that utilize this practice exclude other businesses from winning project bids. HB 1548 would have prohibited governmental entities, including institutions of higher education, from awarding projects to contractors based solely on the requirement of using union labor.
NFIB POSITION: Support
HB 3323 – Representative Coleman (Houston) – This legislation would have exposed employers to liability by allowing an individual who may already have a pending case before the Texas Workforce Commission for an unlawful employment practice, to also sue the employer in civil court for the same action.
NFIB POSITION: Opposed
SB 741 – Senator Rodriguez (El Paso)/HB 484 – Representative Hernandez Luna (Houston) – Employees currently have 180 days to file a wage claim against an employer if they feel they have not been paid appropriately. This legislation would have extended the 180 days to 2 years.
NFIB POSITION: Opposed
SB 990 – Senator West (Dallas)/Representative Turner (Houston) – Although this legislation focused on regulating businesses that provide the service of conducting background checks, it also included businesses that pay for the service. Under SB 990, if a business owner does not hire an applicant based on the background check, they would be required to disclose to the job applicant the contact information of the business that compiled the background information.
NFIB POSITION: Opposed
SB 1743 – Senator Rodriguez (El Paso) – Currently under federal law, employees who have filed a wage claim are protected from retaliation by the employer for doing so. SB 1743 would have created state law prohibiting employers from retaliating against an employee for filing a wage claim and if an employee alleged retaliation within 90 days of filing a wage claim, the employer could be sued.
NFIB POSITION: Opposed
ENVIRONMENTAL
LEGISLATION THAT PASSED
SB 1756 – Senator Uresti (San Antonio)/Representative Villalba (Dallas) – Many businesses wishing to establish themselves or expand are faced with long waits from the Texas Environmental Quality Commission for permits. This legislation allows businesses to pay for an expedited permit.
NFIB POSITION: Support
EFFECTIVE DATE: Effective Immediately
LEGISLATION THAT FAILED TO PASS
HB 147 – Representative Burkett (Mesquite) – Former Representative Ken Legler, an NFIB member, carried this legislation in past sessions. The legislation would have required the Texas Commission on Environmental Quality to provide an analysis of proposed regulations regarding their impact on small businesses.
NFIB POSITION: Support
HB 1473 – Representative E. Rodriguez (Austin)/SB 645 – Senator Ellis (Houston) – This legislation would have imposed a bottle deposit on beverage containers which Texas retailers would have collected at the point-of-sale and remitted to the Comptroller.
NFIB POSITION: Opposed
SB 467 – Senator Hegar (Katy) – Environmental regulations is one of the more difficult aspects of government for a small business owner to comply with. SB 467 would have required impact statements to detail the fiscal impact for proposed regulations including water.
NFIB POSITION: Support
HEALTH CARE REFORM
LEGISLATION THAT FAILED TO PASS
HCR 64 – Representative Creighton (Conroe) – This resolution requested the Comptroller to conduct a study to determine the costs to the state of implementing the Affordable Care Act and project the number of Texas citizens that would lose their health insurance coverage.
NFIB POSITION: Support
HCR 72 – Representative Creighton (Conroe) – This resolution opposed any new taxes as a result of the Affordable Care Act.
NFIB Position: Support
HEALTH INSURANCE
LEGISLATION THAT PASSED
HB 2783 – Representative Smithee (Amarillo)/SB 1332 – Senator Duncan (Amarillo) – Current Texas Insurance law defines a small employer as one who employs two to fifty employees for health insurance. The law does not include part-time employees. HB 2783 changes the methodology of how employees are counted to include part-time employees.
NFIB POSITION: Support
EFFECTIVE DATE: September 1, 2013
HB 3276 – Representative Simmons (Carrolton)/Senator Deuell (Mesquite) – This legislation would mandate health insurance coverage for screening 18 – 24 month old children for autism.
NFIB POSITION: Opposed
EFFECTIVE DATE: September 1, 2013
SB 1484 – Senator Watson (Austin)/Representative Gonzalez (Round Rock) – Health insurance coverage for treatment of autism up to the age of 10 is currently mandated in Texas. HB 3276 mandates coverage until the child reaches 18.
NFIB POSITION: Opposed
EFFECTIVE DATE: September 1, 2013
LEGISLATION THAT FAILED TO PASS
HB 170 – Representative Alonzo (Dallas) – This legislation would have mandated additional health insurance coverage for mammograms.
NFIB POSITION: Opposed
HB 1119 – Y. Davis (Houston) – This legislation would have mandated physicians to test all patients for HIV/AIDS unless the patient declined. Employer insurance, as well as Medicaid, would have been required to pay for the testing.
NFIB POSITION: Opposed
HB 3226 – Representative Coleman (Houston) – HB 3226 would have mandated health insurance plans cover self-inflicted physical injuries for minors.
NFIB POSITION: Opposed
HB 3227 – Representative Coleman (Houston) – This health insurance mandate would have mandated coverage for eating disorders.
NFIB POSITION: Opposed
SB 1485 – Senator Watson (Austin)/HB 592 – Representative Naishtat (Austin) – This legislation would have expanded health insurance coverage for mental illness by expanding the definition.
NFIB POSITION: Opposed
REGULATORY AND LICENSING
LEGISLATION THAT PASSED
HB 86 – Representative Callegari (Katy)/Senator Lucio (Brownsville) – Constituent complaints regarding how state agencies oversee licensed occupations prompted action this session. This legislation requires the Sunset Advisory Commission to review existing occupational licensing programs to ensure they serve a meaningful public interest. The bill also requires the Advisory Commission to provide legislators with additional criteria when determining whether to license an occupation.
NFIB POSITION: Support
EFFECTIVE DATE: September 1, 2013
HB 1950 – Representative Thompson (Houston)/ Senator Carona (Dallas) – Occupational license holders face administrative penalties and can also face criminal penalties as well for violating their license. HB 1950 eliminates some of the criminal penalties for certain occupations as determined by the Texas Department of Licensing and Regulation.
NFIB POSITION: Support
EFFECTIVE DATE: Effective Immediately
LEGISLATION THAT FAILED TO PASS
HB 87 – Representative Callegari (Katy) – Texas regulates and licenses over 500 occupations from physicians to hair shampooers. HB 87 would have required state agencies to determine whether licensing of an occupation benefited the public safety and welfare and if not, to eliminate the license.
NFIB POSITION: Support
HB 1331 – Representative Stephenson (Wharton)/SB 408 Senator Carona (Dallas) – Currently, complaints filed with the Texas Department of Licensing and Regulation against license holders is not confidential. HB 1331 would keep information used in determining whether a license violation has occurred confidential until a determination has been made. The information could only be released if the license holder has been found to be in violation of their license.
NFIB POSITION: Support
HB 2851 – Representative Callegari (Katy) – This legislation would have ensured state agencies do not adopt regulations beyond the scope of their agency.
NFIB POSITION: Support
HB 2953 – Representative Guillen (Rio Grande City) – Municipalities adopt ordinances that impose additional licensing requirements on individuals and businesses. Some ordinances are inconsistent with state law and create confusion for business owners and licensees. HB 2953 would have restricted municipalities from adding this additional layer of regulation.
NFIB POSITION: Support
SB 1466 – Senator Estes (Wichita Falls) – Currently, certain occupations must obtain a license from the state and in some instances local government as well. SB 1466 would have eliminated municipalities from licensing an occupation if a state license is required.
NFIB POSITION: Support
STATE/LOCAL GOVERNMENT
LEGISLATION THAT PASSED
SB 656 – Senator Paxton (McKinney)/Representative Button (Houston) – Current law requires local government to provide information to the public whether a proposed budget will increase the total property tax burden and to post the information on their website if they have one. SB 656 seeks additional transparency by requiring a record vote by a municipality or county commissioner’s court when adopting a budget.
NFIB POSITION: Support
EFFECTIVE DATE: September 1, 2013
LEGISLATION THAT FAILED TO PASS
HB 14/SB 14 – Representative Pitts (Waxahachie)/Senator Williams (The Woodlands) – This legislation was an omnibus bill that would have required more transparency by public school districts, charter schools and higher education institution regarding their finances. The bill also required an comprehensive review of special taxing districts if they had outstanding debt or impose a tax or fee.
NFIB POSITION: Support
HB 715/HJR 65 – Representative Creighton (Conroe)/SB 1656/SJR 56 – Senator Williams (The Woodlands) – This legislation would have limited the growth of state appropriations to population growth plus inflation.
NFIB POSITION: Support
HB 3394/HB 3833– Representative Harper-Brown (Irving) – Although state agencies are already under the Sunset Commission for review, these bills applied additional scrutiny to ensure state agencies are being operated as efficiently and effectively as possible.
NFIB POSITION: Support
SB 101/SJR 10 – Senator Patrick (Houston) – This constitutional amendment would have limited the rate of growth for state appropriations to population growth plus inflation. Unlike other proposals, SB 101 also limited the spending of dedicated revenue (motor fuels taxes, fees, fines and penalties, etc.).
NFIB POSITION: Support
SB 636 – Senator Paxton (McKinney) – State and local governments issue bonds but taxpayers have limited resources to understand the full indebtedness of a governmental entity. SB 636 would have required a searchable data base to assist the public when considering additional bond debt. Additional information would also be posted annually regarding a local government’s debt.
NFIB POSITION: Support
SJR 27 – Senator Birdwell (Waco)/HJR 83 – Representative Hughes (Mineola)/HJR 106 – Representative Callegari (Katy) – Currently the legislature can pass a tax increase with a simple majority vote. This legislation would have required two-thirds of the legislature to pass a tax increase.
NFIB POSITION: Support
FRANCHISE TAX
LEGISLATION THAT PASSED
HB 500 – Representative Hilderbran (Kerrville)/Senator Hegar (Katy) Prior to session starting, Governor Perry began publicly speaking about providing tax relief to Texans, whether citizens or businesses. HB 500 became the vehicle for such relief and contains “fixes” for the state’s franchise tax. NFIB/Texas advocated for repeal of the tax and although bills phasing out the franchise tax were heard in the House Ways & Means Committee, they did not advance. Listed below is a summary of all the franchise tax fixes included in the bill.
•Rent-to-own stores will begin to pay at the retail rate (.5%)
•Heavy construction equipment rental and leasing companies will pay at the retail rate (.5%)
•Businesses that rent and lease tools, party and event supplies, and furniture will pay at the retail rate (.5%)
•The $1 million small business exemption is made permanent
•Temporary rate reduction – 2014 the rate is reduced from 1% to .975% and from .5% to .4875%; 2015 the rate is reduced from 1% to .95% and from .5% to .475%. The rate reduction is contingent upon the Comptroller finding the state has the revenue available to offset the revenue loss.
•Small businesses would be allowed to reduce their gross revenue by $1 million and use the reduced amount to calculate their tax. Businesses may still calculate the tax using the calculation most to their advantage. Initial calculations indicate businesses grossing under $3 million would be able to take advantage of this deduction.
•Staff leasing businesses may only use the compensation method of calculation but can take the $1 million deduction.
•Pharmacy networks can now exclude from their gross revenue reimbursements to pharmacies in their networks.
•Aggregate haulers can exclude from total revenue subcontracting payments made to independent contractors for delivery services.
•Barite transporters can exclude from total revenue subcontracting payments made to nonemployee agents for transporting barite.
•Businesses performing landman services can now exclude from their total revenue subcontracting payments made to nonemployees for services provided. The services include title searches related to oil and gas, and negotiating for mineral rights.
•The cost of vaccines purchased by physicians’ offices can be deducted from total revenue.
•Barge businesses used to transport goods that do not use the cost of goods sold calculation can exclude from total revenue the direct costs of providing transportation services in the same manner as a business that sells real or tangible property.
•Motor carriers can exclude from total revenue flow through revenue derived from taxes and fees. (HB 1981 – Representative Murphy (Houston)
•Pipeline businesses can now exclude from total revenue the value of the oil they transport through pipelines. This does not include refineries.
•Movie theaters using the cost of goods sold deduction can exclude the cost of acquiring and showing movies.
•A combined group can now calculate its taxable revenue using cost of goods sold, total compensation paid, or $1 million.
•Receipts for internet hosting companies are defined as receipts from a business located in this state.
•Businesses relocating to Texas can deduct relocation costs from gross revenue. (HB 2370 – Representative Leach (Plano)
•Business entities involved in rehabilitation of a certified historic structure can receive a tax credit for costs and expenses of renovations if they exceed $5,000.
NFIB POSITION: Neutral
EFFECTIVE DATE: There are multiple effective dates.
HB 810 – Representative Murphy (Houston)/Senator Deuell (Mesquite) Many states provide a research and development tax credit for businesses to encourage growth and expansion of their facilities. When Texas implemented the state’s franchise tax, they also repealed this credit. HB 810 restores a sales and use tax credit for research and development as well as a franchise tax credit.
NFIB POSITION: Support
EFFECTIVE DATE: Effective January 1, 2014
HB 2766 – Representative Hunter (Corpus Christi)/SB 1315 – Senator Whitmire (Houston) – Current law allows a taxable entity to exclude from its total revenue for calculating the franchise tax, certain flow-through payments. HB 2766 amends current law to also exclude flow-through payments made by subcontractors.
NFIB POSITION: Support
EFFECTIVE DATE: January 1, 2014
HB 3169 – Representative Bohac (Houston)/Senator Lucio (Brownsville) – In 2009, the franchise tax was changed to allow travel agencies to exclude from gross revenue payments made to vendors. In addition, travel agencies were excluded from sales tax statutes because they do not collect and remit sales tax. HB 3169 clarifies which services provided by travel agencies are included such as car rentals and airport meet-and-greet services.
NFIB POSITION: Support
EFFECTIVE DATE: September 1, 2013
LEGISLATION THAT FAILED TO PASS
HB 427 – Representative Creighton (Conroe)/HB 1103 – Representative Harper-Brown (Irving) – Both bills would have made the $1 million exemption permanent. Although this legislation did not pass, this exemption was made permanent in HB 500.
NFIB POSITION: Support
HB 1316 – Representative Creighton (Conroe)/HB 1397 – Representative Fletcher (Tomball)/SB 594 – Senator Deuell (Mesquite) – All of these bills would have given all businesses a $1 million deduction from their gross revenue for purposes of calculating the franchise tax.
NFIB POSITION: Support
HB 1595 – Representative Button (Houston) – Businesses cannot deduct the cost of accepting credit and debit cards from their cost of goods sold. HB 1595 would have allowed this deduction.
NFIB POSITION: Support
HB 1722 – Representative N. Gonzalez (El Paso) – Businesses would have been allowed to deduct indirect or administrative overhead costs as a cost of goods sold.
NFIB POSITION: Support
HB 1836 – Representative Zedler (Arlington) – This legislation would have excluded contracts that could be considered flow-through funds. Some flow-through funds were included in HB 500.
NFIB POSITION: Support
HB 2168 – Representative Hilderbran (Kerrville) – In an effort to provide broad franchise tax relief but to also limit the revenue impact, HB 2168 would have given businesses grossing up to $20 million a $1 million deduction from their gross receipts.
NFIB POSITION: Support
HB 2583 – Representative Harper-Brown (Irving) – This legislation would have reduced the rate of the franchise tax by 25%. Taxpayers paying at the 1% rate would have begun paying at .75% while those paying at the .5% rate would begin paying at .25%.
NFIB POSITION: Support
HB 3109 – Representative Hilderbran (Kerrville) – Similar to HB 2168, this legislation would have allowed a $1 million deduction for businesses grossing under $20 million. In addition, businesses utilizing the EZ form calculation would have their rate lowered from .575% to .48%.
NFIB POSITION: Support
SB 100 – Senator Patrick (Houston)/HB 1944 – Representative Bohac (Houston) – Under this proposal, small businesses grossing under $5 million would be exempt from paying the state’s franchise tax.
NFIB POSITION: Support
SB 1619/SJR 51 – Senator Paxton (McKinney) – Texas is one of a few states that taxes inventory held for resale. SB 1619 would have exempted this property from taxation.
NFIB POSITION: Support
PROPERTY TAX
LEGISLATION THAT PASSED
SB 1510 – Senator Hinojosa (McAllen)/Representative Hilderbran (Kerrville) – This legislation requires local governments to provide notice of proposed property tax rates.
NFIB POSITION: Support
EFFECTIVE DATE: January 1, 2014
LEGISLATION THAT FAILED TO PASS
HB 3173 – Representative Bohac (Houston) – This legislation would have given property owners some certainty in their property taxes. If the appraised value of a property in a tax year is lowered by a district court order, the court ordered property value would be considered the appraised value of the property for the next three tax years.
NFIB POSITION: Support
HB 3441 – Representative Otto (Dayton) – Property owners currently are given 45 days to appeal a property tax decision. This legislation would have expanded that time to 60 days.
NFIB POSITION: Support
HB 3442 – Representative Otto (Dayton) – Currently, appraisal review boards are not required to respond for request for postponement of a hearing. HB 3442 would have required the board to respond.
NFIB POSITION: Support
SB 144 – Senator Williams (The Woodlands) – SB 144 is an effort to provide tax relief to property owners. The bill would have lowered the rollback tax rate or revenue cap from 8% to 5% providing some relief to property taxpayers by limiting the rate local taxing jurisdictions could set to raise revenue.
NFIB POSITION: Support
TORT REFORM
LEGISLATION THAT PASSED
HB 1325 – Representative Miller (New Braunfels)/Senator Duncan (Lubbock) – Individuals who have been exposed to asbestos and silica but have no symptoms of disease are allowed to file a court case which remains open on a docket. Those individuals may never develop symptoms but the case remains open. HB 1325 allows the dismissal of these cases from the docket to alleviate court congestion but plaintiffs are not prohibited from subsequently filing a claim if they are impaired in the future by their exposure.
NFIB POSITION: Support
EFFECTIVE DATE: September 1, 2013
LEGISLATION THAT FAILED TO PASS
HB 1595 – Representative Miller (New Braufels) – A new business model has appeared across the nation that allows third parties to finance lawsuits. This business model uses lawsuits as a financial investment and creates a financial interest in the outcome of a lawsuit. Currently, there is no regulation of this business model in Texas. HB 1595 would have implemented a regulatory scheme to ensure lawsuits are not occurring for financial investments rather than a legitimate legal action.
NFIB POSITION: Support
UNEMPLOYMENT INSURANCE
LEGISLATION THAT PASSED
HB 26 – Representative Martinez-Fischer (San Antonio)/Senator Zaffarini (Laredo) – Victims of sexual assault will now be able to collect unemployment benefits if their separation from work is due to the assault. This legislation is not anticipated to increase the tax rate employers must pay into the fund.
NFIB POSITION: Opposed
EFFECTIVE DATE: June 14, 2013
HB 916 – Representative Orr (Burleson)/Senator Birdwell (Waco) – A small family dairy was charged back unemployment benefits for an employee who they employed one day per week but who also had an additional part-time job working approximately 30 hours per week. When the dairy laid off the employee for two weeks, a quirk in Texas employment law required the dairy to pay the bulk of unemployment benefits even though the employee earned most of her wages elsewhere. HB 916 remedies this situation to ensure the appropriate employer is charged back for benefits.
NFIB POSITION: Support
EFFECTIVE DATE: September 1, 2013
HB 939 – Representative J. Davis (Houston)/Senator Hancock (North Richland Hills) –
The employment and training investment assessment is imposed on each employer paying contributions under the Texas Unemployment Compensation Act as a separate assessment of one-tenth of one percent of wages paid by an employer. Money from the assessment is deposited to the credit of the employment and training investment holding fund. The workforce training program is already funded by general revenue appropriations and the .1% assessment paid by employers is not necessary. The bill eliminates the assessment and requires at least 85% of the fund will be credited against amounts owed by employers for UI benefits contributions.
NFIB POSITION: Support
EFFECTIVE DATE: September 1, 2013
HB 1550 – Representative Bell (Magnolia)/SB 1628 Senator Van de Putte (San Antonio) – Employers can be charged back for an involuntary separation of an employee. This happens when an employee experiences an event in their life unrelated to their employment. For example, an employee loses their home, transportation and belongings because of a fire and cannot work temporarily. HB 1550 ensures employers are not charged back for any separation that occurs under these types of circumstances.
NFIB POSITION: Support
EFFECTIVE DATE: September 1, 2013
HB 2141/SB 658 – Representative Smith (Baytown)/Senator Deuell (Mesquite) – This legislation imposes a penalty on individuals who fraudulently collect unemployment insurance benefits. The penalty is equal to 15% of the amount fraudulently collected.
NFIB POSITION: Support
EFFECTIVE DATE: October 1, 2013
SB 21- Senator Williams (The Woodlands)/Representative Creighton (Conroe) – SB 21 implements drug testing for individuals receiving unemployment insurance benefits who are seeking work in specific occupations. An individual would need to complete a pre-screening survey. If an answer to the survey raises a question, the individual would need to take a drug test. Drug testing would only be permitted for those occupations drug tested under the U.S. Labor Code. Full implementation of this law will be contingent on regulations issued by U.S. Department Labor.
NFIB POSITION: Support
EFFECTIVE DATE: September 1, 2013
SB 920 – Senator Eltife (Tyler)/Representative Reynolds (Missouri City) – As a condition of eligibility for receiving unemployment benefits, an individual must be actively seeking work. Recent federal laws mandate states codify a work search requirement. SB 920 fulfills this mandate and ensures Texas continues to receive federal funding the unemployment compensation program.
NFIB POSITION: Support
EFFECTIVE DATE: Effectively Immediately
WATER INFRASTRUCTURE
LEGISLATION PASSED
HB 4 – Representative Ritter (Nederland)/Senator Fraser (Horseshoe Bay) – This legislation creates a “revolving fund” using $2 billion from the state’s Rainy Day Fund from which local governments can borrow from. Repayment includes interest.
NFIB POSITION: None
Effective Date: September 1, 2013 with the exception of certain sections, which is contingent upon voter approval in a November 2013 constitutional amendment ballot.
WORKERS COMPENSATION
LEGISLATION THAT PASSED
HB 1762 – Representative Price (Amarillo)/Senator Deuell (Mesquite) – This legislation clarified workers from a temporary employment agency are covered by the temporary agency’s workers compensation policy at a client’s place of business.
NFIB POSITION: Support
EFFECTIVE DATE: September 1, 2013
LEGISLATION THAT FAILED TO PASS
HB 475 – Representative Walle (Houston) This legislation would have mandated construction contractors and subcontractors carry workers compensation insurance.
NFIB POSITION: Opposed
HB 1155 – Representative Smithee (Amarillo) – HB 1155 allows insurance carriers to suspend benefits if an injured worker fails to submit to a designated doctor examination without good cause, leaving the employee with no opportunity for reinstatement.
NFIB POSITION: Support
HB 1468 – Representative Sheets (Dallas)/Senator Huffman (Houston) – Currently, communications between an employer and their workers compensation insurance carrier is not confidential and can be used in court proceedings. HB 1468 would have made these communications privileged.
NFIB POSITION: Support
HB 2726 – Representative Olivera (Brownsville) – An employee who is receiving workers compensation would have been allowed to contest the certification of a medical rating simply by filing a written contest, which does not serve as a request for a benefits review conference. HB 2726 provided no protections to employers and would have allowed the employee to enter into a benefits review conference when they were fully prepared to do so.
NFIB POSITION: Opposed
HB 2727 – Representative Olivera (Brownsville) – This legislation would have changed the venue for workers compensation benefits disputes. Currently, Travis County is the site for all workers compensation benefits disputes. This ensures consistency for rulings for all parties. HB 2727 would have moved the venue to county courts.
NFIB POSITION: Opposed
HB 3310 – Represenative Martinez (Weslaco) – HB 3310 would have mandated businesses that do not have workers compensation insurance, regardless of whether they are insured in some other manner, to provide $200,000 life insurance policies for each employee.
NFIB POSITION: Opposed
HB 3311 – Representative Martinez (Weslaco) – Under this proposed legislation, employers who do not provide workers compensation would be required to report to the Texas Department of Insurance, Workers Compensation Division, all injuries that occur on the job. Employers are already required to do this under OSHA regulations.
NFIB POSITION: Opposed
WORKFORCE DEVELOPMENT
LEGISLATION PASSED
HB 5 – Representative Aycock (Killeen)/Senator Patrick (Houston) – HB 5 changes the current curriculum in public high schools to allow students to pursue careers in technical and skilled trades careers. The bill also reduces the number of tests students are required to take.
NFIB POSITION: Support
EFFECTIVE DATE: The Act takes effect immediately with the exception of specific sections.
HB 834 – Representative J. Davis (Houston)/SB 441 – Senator Deuell (Mesquite) – Students attending community colleges or technical schools would be allowed to receive a degree through competency rather through a calendar. Students who can show mastery of a skill would be able to test out of classes and receive their degree earlier.
NFIB POSITION: Support
EFFECTIVE DATE: Effective Immediately
HB 842 – Representative Bell (Magnolia)/Senator Deuell (Mesquite) – Public high school students would be allowed to earn credits that count toward graduation as well as a secondary degree in an effort to expedite their entrance into the workforce.
NFIB POSITION: Support
EFFECTIVE DATE: Effective Immediately
HB 1296 – Representative Alvarado (Houston)/Senator Taylor (Friendswood) – The Texas Workforce Commission along with the Texas Higher Education Coordinating Board are required to provide an annual report to the legislature regarding workforce needs, education and training, the number of degrees and certifications awarded as well as other specialized training. Based on this data, the Workforce Commission and Higher Education Coordinating Board must identify where education and training programs must be increased or decreased to accommodate future workforce needs.
NFIB POSITION: Support
EFFECTIVE DATE: Effective Immediately
HB 1784 – Representative Farney (Georgetown)/Senator Lucio (Brownsville) – This legislation would allow a public junior college to partner financially with a public technical institute to provide (as part of the dropout recovery program curriculum) career and technology education courses that lead to certification.
NFIB POSITION: Support
EFFECTIVE DATE: Effective Immediately
HB 2478 – Representative Alvarado (Houston)/Senator Watson (Austin) – This legislation would require the Texas Workforce Commission to consolidate information about skills shortages in key industries. The Workforce Commission would be required to submit an annual report to legislators and the Governor regarding the shortages.
NFIB POSITION: Support
EFFECTIVE DATE: Effective Immediately
LEGISLATION FAILED TO PASS
HB 533 – Representative Lozano (Kingsville) – This legislation would have created a pilot program to expand access to career and technical education partnerships in rural areas.
NFIB POSITION: Support
HB 1423 – Representative Deshotel (Beaumont) – Not all high school students are interested in attending college after graduation but they have no alternative paths to follow. HB 1423 would have allowed high school students attending technical training courses to count this course work towards their high school diploma.
NFIB POSITION: Support
