State - 82^nd Legislative Session Priorities

The Austin Chamber recognizes the fiscal challenges facing the 82nd Legislature. The State of Texas has developed its position as the national leader in job creation and low unemployment through a sophisticated set of programs across the economic development spectrum. We support these programs including, but not limited to, the Tax Increment Financing Act, the Property Redevelopment and Tax Abatement Act, the Skills Development Fund, Enterprise Zones, moving image project incentives, and sales and use tax exemptions. To maintain its competitive position with a strong business climate, the Austin Chamber strongly supports the following positions:

Texas Economic Development Act: Chapter 313, Texas Tax Code

Created by the Texas Legislature in 2001, the Texas Economic Development Act enhances the state's economic development efforts especially with securing large-scale capital investment. Through June 2008, economic development agreements under Chapter 313 have resulted in nearly $41 billion in capital investment. The Austin Chamber supports maintaining and strengthening this program to promote continued investment in large-scale projects such as manufacturing, research & development, and energy.

Emerging Technology Fund

As of August 2010, the Emerging Technology Fund (ETF) has awarded more than $290 million to Texas companies and universities to develop the next generation of commercial technology. The Texas Legislature created the ETF in 2005 and appropriated funding in every subsequent session. The Austin Chamber supports continued appropriations to the ETF to continue investment in high-impact, high-growth economic development for the future.

Texas Enterprise Fund

As of August 2010, the Texas Enterprise Fund (TEF) has contributed $397 million that successfully secured economic development agreements resulting in more than 53,600 jobs statewide with $14.4 billion of new capital investment. The Texas Legislature created the TEF in 2003 and appropriated funding in every subsequent session. The Austin Chamber supports continued appropriations to the TEF to maintain this vitally important economic development tool. Together, the ETF and TEF maintain Texas as a national leader for business success especially in the following targeted industry clusters: Advanced Technologies and Manufacturing; Aerospace and Defense; Biotechnology and Life Sciences; Information and Computer Technology; Petroleum Refining and Chemical Products; and Energy.

Texas Franchise Tax

Small business success is important to the long-term economic health of the state. Maintaining a lower tax burden for these businesses is vital to their survival. The Austin Chamber supports maintaining the no tax due threshold amount of $1,000,000 for franchise tax reports due in all future years.

Transportation continues to be a significant issue for the Chamber. We believe that a successful transportation infrastructure is vital to ensuring a successful Texas economy. The Austin Chamber will continue to monitor the progress of TxDOT's Grant Thornton audit recommendations and support the ongoing efforts for additional transparency and accountability of the agency. We are sensitive to the projected budget deficit facing the State however; we remain steadfast in the need for a supplemental and secure revenue stream for maintenance and future capacity.

Texas earned the reputation as having the nation's best surface transportation system. We know that if we are to remain the best State to do business, we need to plan for growth and creatively think of ways to continue to invest in our infrastructure and support TxDOT's effort to prepare for economic growth while enhancing safety, improving air quality and increasing the value of the state's transportation assets.

New Revenue

The Austin Chamber urges the Legislature to optimize existing funding sources and identify new funding sources for transportation, including but not limited to:

• Eliminating diversions;
• Raising taxes on motor fuels;
• Indexing the motor fuels tax;
• Increasing vehicle registration fees; and
• A local option transportation tax.

Any increase to the motor fuels tax rate above the current 20¢ should be directed 100% to transportation to the extent consistent with the Texas State Constitution.

A Sustainable Funding Source for Road, Rail & Transit Infrastructure

We encourage the Legislature to determine which funding mechanisms will provide a sustainable funding source for road, rail and transit infrastructure to operate and maintain past investments and provide additional capacity for projected population and business growth. An implementation strategy should be identified.

Rail Relocation & Improvement Fund

The Legislature and TxDOT should work together to find an appropriate long-term revenue source to fund the Rail Relocation and Improvement Fund. Rail infrastructure is a key component of the State's transportation system and voters approved the creation of the Rail Relocation and Improvement Fund in November 2005. The 81st Legislature appropriated the funds in 2009, but the conditions required by the contingent appropriations rider have not been met to be certified or released for expenditure.

Streamline the Environmental Process at State Agencies

The Austin Chamber supports improvements to the state environmental process that timely and efficiently implements those provisions of the National Environmental Policy Act and other relevant federal and state statues. A long, lengthy environmental process can result in increased right-of-way costs and drawn-out project timelines for desperately needed infrastructure improvements.

Texas Mobility Fund

The Texas Mobility Fund (TMF) provides the state with a creative mechanism to substantially leverage transportation dollars. It is estimated that for every $100 million allocated annually for the TMF, about $1 billion in bonding authority is created. The Austin Chamber urges the Legislature to identify additional and new revenue sources during the 82nd Texas Legislature for the Texas Mobility Fund.

Transportation Reinvestment Zones

Transportation Reinvestment Zones (TRZs) offer an important tool for generating local funding. The Austin Chamber supports uncoupling TRZs from the "pass-through" program.

Metro Austin has a lot of talent. We need many more entrepreneurs, managers and innovators with a technical edge. Between 2010 and 2015, Central Texas needs to increase higher education enrollment from 87,000 to 100,000. We need to orient K12 system toward readiness for college and the high performance workplace; update the state K12 funding formula system; unify K12/higher education transitions; focus less on state operational micromanagement and focus more on higher education outcomes. Adoption of the Competitiveness Agenda below makes that more likely:

Protect college/career readiness standard in state K12 accountability.

• Texas Education Agency (TEA) should eliminate use of the Texas Projection Measurement or similar projection measures. Students who fail state assessments should not be counted as passing. Instead, TEA should create and report a separate student growth measure, but restrict its use to delay of school sanctions for academically underperforming schools.
• The Legislature should commission an independent, external audit of current and future methodologies used by the Texas Education Agency to determine whether the standard for "passing" and "college/career readiness" on the state assessment are equivalent year to year.
• For new high school exit assessments, TEA should phase-in by 2015 a college/career readiness standard which reflects minimum knowledge necessary for college/career readiness. Assessments should be offered electronically, with appropriate accommodations for learning abilities.
• In a new accountability system, TEA should recognize and have consequences which ensure minimum levels of student performance against the college/career readiness standard. Cross-disciplinary standards should be measured electronically, using a portfolio assessment.
• In the new accountability system, since students do not receive a "year off" from accountability, campuses should not receive a year off during implementation of the new accountability system.

Strengthen K12 education; help Austin taxpayers through funding formula changes

• Central Texas is particularly disadvantaged by a K12 funding formula system last updated in the mid-1980s and which "captures" nearly all appraised value growth from local taxpayers.
• Maintain current per pupil expenditure guarantees while returning to formula funding by 2014. The state should update the Cost of Education Index, incorporate school district Social Security payments, and provide adequate funding for secondary students learning English and pre-K enrollment; school district fund balances should not be subject to state capture.
• Utilize K12 funding formulas to allow taxpayers to retain appraisal growth in their school district.
• Protect electronic instructional content to be purchased with state textbook funds.
• Phase in pre-kindergarten student enrollment as part of school finance formula.
• Allow school districts to bypass the $1.17 tax cap by up to four cents if funding is dedicated to educator incentive pay. Allow local school districts flexibility in using all state incentive pay funds for state-approved school district designed plans.

Unify critical public and higher education components

The Austin Chamber commends lawmakers and educators for making Texas the first U.S. state to include college/career readiness in its accountability system. To build upon this progress, Texas should:

• Continue to support increased rigor in the Recommended High School Program, with an expectation of math beyond Algebra II and ensure standards meet or exceed those of the federal Common Core.
• Initiate statewide review of Advanced Technical Credit (ATC) standards for technical courses and phase-out in four years weighted funding for career & technical courses at high school and post-secondary which do not earn statewide ATC quality and reciprocity seals.
• Ensure all currently available K12, higher education, SBEC and workforce data are included in the Education Research Centers. Fund capability of ERC to ensure data accessible closer to real-time. Digitize state financial aid forms. Standardize their collection, dissemination and acceptance.

Deregulate Higher Education Governance Constraints

The Legislature should return autonomy to appropriate college Boards of Trustees to set course-by-course tuition, Trustee terms of office, faculty leave policy.

Restore Funding for Higher Education Institutions

The Legislature should establish a clear target amount for formula funding and community college base funding levels and adequately fund for enrollment growth. The state should maintain funding for current Tier One institutions, the Research Development Fund, the Competitive Knowledge Fund and the Texas Research Incentive Program for emerging research universities, and preserve options for universities to adjust tuition as necessary in light of level or reduced funding from the state general fund. The Legislature should authorize Tuition Revenue Bonds for capital improvements to address public higher education institutions capacity needs.

Focus on Higher Education Outcomes

• For enrollment in college-level coursework, Texas should ensure all assessments used to determine whether students are academically prepared for higher education should have a comparable level of difficulty at the college-readiness level.
• To protect college access and increase graduation rates for academically prepared, financially needy students, the Legislature must protect and prioritize existing TEXAS Grant appropriation.
• Texas should improve the preparation and quantity of higher education graduates through outcomes-based funding. Texas should create a state graduation assessment from higher education and at the transition point between college entry level and college advanced level coursework.
• Add math and science or modern language requirements and reduce social studies requirements in the higher education core curriculum, to include focus on strong student writing skills.
• To ensure sufficient capacity, Texas should work with institutions of higher education to catalog and prioritize new academic and research facility needs and renovation of existing facilities to meet the State "Closing the Gaps" enrollment goals.

"Do No Harm" While Leveraging Federal Funds

CHIP and Medicaid Cuts: The Austin Chamber opposes any cuts to CHIP and Medicaid. The State of Texas should not cut state expenditures for these programs which, in reality, shift the burden of those costs to local businesses, taxpayers, and providers. Furthermore, because both CHIP and Medicaid are in-part funded with matching federal funds, a reduction of State funds would also mean a reduction in these matching funds, effectively guaranteeing that fewer of Texas's federal taxpayer dollars will come back to the State (for every $1 Texas cuts in State funding for Medicaid, the State loses approximately $1.42 in federal monies).

To "Do No Harm", the Texas Legislature should also consider the following:

Physician and Provider Reimbursements: The Austin Chamber opposes reducing the already low rate of provider reimbursements. Such a reduction will have its greatest impact on urban areas and will not only affect the availability of care for our patients now; it will also reduce the number of providers that will be available to Texas residents in the future.

Multi-Share Programs: Multi-share, or 3-Share Programs, are important healthcare funding mechanisms for Texas because they create opportunities to enhance benefits and/or reduce employer and employee health care costs by splitting the financial responsibility for providing health care with a third payer – public or philanthropic funding sources. These programs first begun in Texas in July of 2008, show great potential and should be allowed to mature to ensure they fully evolve into vital healthcare funding alternatives for the State.

Funding Mechanisms that Address the Uninsured: The Austin Chamber encourages maintaining the integrity of current funding mechanisms for healthcare that address the uninsured such as disproportionate share dollars (DSH) and upper payment limit (UPL) funding, particularly throughout the process of structuring and implementing health care reform as some individuals will not be eligible to participate in the state exchange program.

Prevention Mechanisms

The Austin Chamber believes the health of Texans would improve with the Legislature's support of incentive-based strategies and programs to promote wellness and prevention with an emphasis on tobacco cessation, obesity, diabetes, immunizations, and mental health.

Medical Home Development

The Austin Chamber supports the implementation of the "medical home" concept, also known as "integrated care", to improve the quality of healthcare, increase efficiency, and reduce costs. Successful administration will require support for an educational component designed to redefine conceptions of care for both physicians and patients. Additionally, integration of healthcare should be incentivized for both physical and mental health services.

Tort Reform

The Austin Chamber will oppose any legislative efforts to make substantive changes to the advances Texas has made in civil justice reform, which have led to vast improvement in the overall economic climate, particularly the healthcare industry. Specifically pertaining to healthcare, we urge the legislature to maintain current cap levels.

Trauma Care

The Austin Chamber urges the distribution of all the uncompensated trauma and emergency health care designated account funds to designated trauma centers in a timely and appropriate manner.

Healthcare Professional Shortages

The Austin Chamber supports maintaining, restoring, and diversifying the funding sources and strategies employed by the State for addressing the shortage of healthcare professionals, particularly through the support for a variety of training opportunities at all levels of provider care and the authorization of financing solutions for healthcare education cost management.

• Educational Opportunities: We support a manifold package of funding mechanisms and opportunities for provider training at all levels including the continued funding of academic medicine, the restoration of Medicaid Graduate Medical Education payments for hospitals, the recruitment and retention of additional qualified faculty, and the creation of new faculty positions.
• Education Costs: The Austin Chamber supports financial strategies that incentivize educational attainment including educational loan repayment programs, deferment of educational loans during medical residency and internships, and grants for scholarships.

Mental Health

The devastating impact of mental illness on Texas employers, their employees, and the economic health of our State threatens to impede our very basic ability to be competitive nationally and on a global scale. Indirect costs of mental illness alone are astounding: in Texas, the figure is estimated at $16.6 billion with a 'real' fiscal impact on state and local governments of $1.5 billion, without accounting for incarceration, homelessness, and early mortality.

Despite very real negative fiscal implications and the demonstrated hindrance to our intellectual output and individual life achievement, mental health services have always been and continue to be deeply underfunded, particularly in comparison to other health services. The grave disparity of investment is acutely evident in our struggling mental health infrastructure which is unable to meet the considerable need and is already hemorrhaging human capital.

The Austin Chamber strongly opposes cutting funding for mental health centers. The State of Texas must carefully protect existing mental healthcare resources and not handicap a system that is already desperately burdened.

Cancer Prevention and Research Institute of Texas (CPRIT)

The Austin Chamber continues to support funding for the Cancer Prevention and Research Institute of Texas (CPRIT), which is vital to keeping Texas at the forefront of innovation and developing a robust and cutting-edge research community in the State.

Health Information Exchanges (HIE) and Health Information Technology (HIT)

The Austin Chamber fully supports the engagement of the business community in the consensus-based stakeholder decision-making inherent in the design of Texas' governance structure for coordinating the implementation of Health Information Exchanges (HIE) and Health Information Technology (HIT) in the State. However, success of this model and the Texas Health Services Authority (THSA), the public-private collaborative created by HB1600 in 2007, is highly depending on this HIE governance entity achieving a level of operational maturity that takes advantage of this mechanism for negotiating health IT and HIE solutions among diverse interests to drive HIE developments.

The Austin Chamber supports THSA significantly prioritizing the robust multi-sector, multi-stakeholder participation required for effective statewide HIE governance, the optimization of resources allocation, and the creation of the accountability, policy and technical frameworks vital to the sustainability of HIE deployment.

The Austin Chamber advocates for the Texas Health Services Authority and appropriate state agencies to develop a statewide health information exchange strategy that integrates with existing electronic health record and health information exchange infrastructure developed by local communities.

Expedite Medicare EMR Incentive Programs to Secure the Greatest Amount of Decreasingly Available Federal Resources

While ARRA stimulus grant funding under the HITECH Act has largely been awarded to other states, Texas still has an opportunity to maximize federal resources authorized by the Act which provides 100% federal funding for Medicaid meaningful use incentive programs and 90% for reasonable state administrative expenses. The Austin Chamber strongly encourages the THSA to follow the recommendations of the Centers for Medicare and Medicaid Services by implementing Texas Medicaid EHR inventive programs as soon as possible in 2011 to maximize the State's access to available federal resources include time-limited funding and technical assistance.

Federal Healthcare Reform

The Austin Chamber strongly supports a deliberate process for State implementation of Federal Health Care Reform. It is imperative that the State prepare for the implementation of health reform and begin to take steps in that direction. We will monitor and evaluate the recommendations that come from the House Select Committee on Federal Legislation and consider possible support regarding their suggestions.

The Austin Chamber recognizes cleaner air is a statewide challenge and accordingly, supports the adoption of TCEQ's Legislative Appropriations Request for the next biennium for air quality planning activities.

The Austin Chamber also supports programmatic adjustments to the Low Income Vehicle Repair Assistance, Retrofit, and Accelerated Vehicle Retirement Program (LIRAP). LIRAP reduces emissions from older, high-emitting vehicles by allowing assistance to qualified owners of vehicles who fail the emissions test.

Additionally, we recognize the Texas Emissions Reduction Plan (TERP) has proven to be a successful incentive program aimed at improving air quality, enhancing public health, and promoting economic prosperity. The Austin Chamber supports programmatic adjustments to this program as necessary.

The Austin Chamber recognizes that Texas must invest in clean and cost-effective energy technologies and practices to lower costs, minimize air pollution, reduce water consumption, enhance the health and comfort of its citizens, and maintain a vibrant industrial economy.

The Chamber supports initiatives that provide for improved information dissemination on energy efficiency opportunities, and the alignment of policies to incentivize implementation of energy efficiency projects and innovative energy technologies. The Austin Chamber also supports programs that encourage the creation and expansion of markets for renewable energy technologies with significant job creation potential.

The Chamber recognizes the promotion and expansion of the oil and natural gas industry is critical for statewide economic and employment growth as well as national security.

Specifically, The Chamber:

• Support reasonable approaches to measures that address the traditional permitting process for oil or natural gas drilling that will not affect economic development in the State.
• Support for policies regarding the exploration, production, and transportation of oil or natural gas in Texas that make Texas gas resource development more competitive with other states.
• Strongly supports measures that promote the expanded use of natural gas in Texas, especially for transportation, recognizing that this will lead to lower costs, new investments and the stimulation of new employment opportunities.

The Austin Chamber supports Texas's statewide water plan, adopted by the Texas Water Development Board in 2006. This plan was prepared by Texas' 16 regional planning groups and represents the state's plan to provide water to all Texans through 2060. We supported SB3 from the 80th Legislative Session and the strategies and elements of the statewide water plan. Therefore, we will oppose any legislation that removes any water management strategies currently contained in the plan.

Immigration issues continue to be a concern for Texas businesses, foreign governments and academic institutions as they engage talent from around the world to remain competitive in an increasingly global economy. The Austin Chamber recognizes the problems that exist and agree that comprehensive action should be taken at the federal level. We have historically supported national employer-based immigration policies and we support federal immigration reform which will give employers access to a legal workforce to meet legitimate business needs in all sectors of the economy.

Given that businesses need to have nationally consistent, comprehensive immigration standards, the Austin Chamber encourages the Texas state legislators to defer from policymaking at the state level and promote continued debate and national policy development at the federal level. We are hopeful that this debate will result in comprehensive immigration reform that will address both securing the international borders and the clear economic benefit of foreign workers to the Texas economy. In the interim, the Legislature should encourage adequate enforcement of existing federal immigration laws.