CAPITOL UPDATE
December 7, 2011
CONSTITUTIONALITY OF MARGINS TAX UPHELD
The Texas Supreme Court in a recent decision last month upheld the constitutionality of the revised state franchise tax, but a battle to revisit the structure of the tax may still be possible next session. The "margins tax" was revised in 2006 as part of a reduction in local school property taxes.
The tax had been challenged on the basis that the application to limited partnerships amounts to a personal income tax, which is illegal under the Texas constitution. The court held that the partnership is a distinct entity from the partners and that the franchise tax is a tax on the business entity and not a tax on the net income of the entity's natural person limited partners.
The structure of the tax may still get hard scrutiny from the 2013 Legislature, however, for several reasons. Not only has the tax not generated the amount of revenue expected when it was passed but the school funding system in the state, to which the tax is inextricably tied, is under another legal challenge from school districts. Speaker Joe Straus has tasked a key House committee with evaluating the margins tax and whether it should be replaced with a different business tax.
TEXAS SENATE INTERIM STUDIES
The presiding officers of Texas House and Senate typically charge committees with conducting studies of various issues during the interim between sessions and these charges are often good indicators of upcoming legislative issues. Speaker Straus earlier released his charges to House committees and recently Lt. Governor Dewhurst released the Senate committee charges. These include:
- Natural Resources: compare the differences in cost between immediate and phased implementation of the State Water Plan.
- Flooding: study the benefit of legislation that would require coastal regions, when making improvements to drainage systems and other infrastructure, to take into account the probability of future flooding and upgrades necessary to prevent it.
- Intergovernmental Relations: Monitor the proliferation of MUDs and the need for increased oversight. Review state and local policies related to growth and development in unincorporated areas.
- Transportation: Examine funding options proposed in last session, options for local revenue, and strategies for prioritization. Examine public policy of CDAs. Review and make recommendations regarding DOT structure and relationships.
SUNSET COMMISSION APPOINTMENTS
Speaker Straus has appointed Rep. Harold Dutton of Houston and Rep. Walter "Four" Price of Amarillo to the Legislature's Sunset Advisory Commission. The Commission reviews state agencies and recommends their continuation, revision or abolition. Among the agencies up for review before the 2013 session is the Texas Board of Professional Engineers (TBPE), as well as other professional licensing agencies. Three other House members, five senators, and two public members also comprise the membership.
CANDIDATE FILINGS IN FULL SWING
At least as of today, candidate filings for the March party primaries are in full swing. "As of today" because legal challenges to redistricting could delay the filings and even the primary dates. A three-judge federal judicial panel has revised the district lines passed by the Legislature and substituted its own map. However, the state has appealed this decision to the U.S. Supreme Court and asked for a stay. The current deadline for candidates to file is December 15.
Two races involve ACEC TEXAS members. Bennett Ratliff of The Ratliff Group running for House District 115 in northwestern Dallas County and Roger Burns, CFO of Halff Associates, is running in House District 67 in Collin County.
ACEC TEXAS (CEPAC), TSPE (PACE), and other groups will hold a fundraising breakfast for Ratliff on Thursday, January 12 at 7:30 AM at Gleneagles Country Club.
IN THE NEWS
Go to Infrastructure News on www.acectx.org for news articles on engineering, infrastructure, construction, transportation, environmental issues and more, including:
- Governor Perry has appointed Linda Ryan Thomas of Longview presiding officer of the Northeast Texas RMA.
- A bipartisan push for a vast transportation bill is emerging.
- Experts struggle to address direness of infrastructure problems to public.
- Are America's subways and roads overpriced?
- Denton considers a new road impact fee?
- Interview with Ted Houghton
- Houston area adds most construction jobs in U.S.
- Construction spending rises for third straight month but stays depressed.
- Passenger rail from Fort Worth to Kansas.
- Holding TxDOT's feet to the fire on IH-35.
- And more . . .
1001 Congress Ave., Suite 200 - Austin, Texas 78701
512-474-1474 - fax 512-474-1490