While legislators do the heavy lifting during the biannual legislative session, they also are active in the interim between sessions. The Speaker of the House and the Lt. Gov. issue specific charges to each standing committee of the legislature. Speaker Joe Straus issued the House committee charges this week.
Straus issued two blanket charges to all committees:
- Study and make recommendations for significantly improving the state’s manufacturing capability.
- Find ways to increase transparency, accountability and efficiency in state government.
Of the 38 pages of committee charges, there are at least two charges of interest to CPAs. The first charge to the Ways and Means committee, emphasis added:
Evaluate the state's tax structure and determine its impact on the competitiveness of the Texas business climate. Specifically, determine the impact of the state's major taxes, including the sales tax and franchise tax, as well as tax exemptions, exclusions, and credits on economic growth, capital investment, and job creation in Texas. As part of this review, evaluate the franchise (margins) tax and determine whether the tax structure should continue to exist in its current form or in a revised form, or whether the existing tax structure should be repealed and replaced with a different business tax.
During the last legislative session there was much discussion about the franchise tax and a number of legislators expressed publicly their view that the tax needed revision or replacing. The budget crises in the state essentially prevented the legislature from devoting time to the issue. There was discussion during and after the session of a joint select committee to be appointed by the Speaker and the Lt. Gov. but that idea was dismissed and the task has fallen to the Ways and Means committee. With two lawsuits challenging the constitutionality of the tax and the school district lawsuit challenging the constitutionality of school funding, substantive changes to the franchise tax could be in our future.
One of the charges to the Licensing and Administrative Procedures committee might also be of concern to CPAs:
Study the feasibility of streamlining the process to obtain an occupational license. Consider consolidating all occupational licenses under one state agency and whether such a move would increase efficiency and effectiveness. Analyze the process being used in other states.
Every few years the suggestion to consolidate occupational licensing is studied. In fact the Texas Department of Licensing and Regulation is already a consolidated licensing agency that administers 28 occupational and business licenses ranging from Auctioneers to Polygraph Examiners to Water Well Drillers. Each time this issue has been studied in the past, it has been determined that professional licenses (CPAs, Attorneys, Architects, Engineers, etc.) should not be consolidated into one agency. Hopefully, once again, legislators will differentiate between “occupational” and “professional” licensing.
There are many other interim charges that could result in proposed legislative changes that affect CPAs and taxpayers. The Appropriations and Ways and Means committees share one charge:
Analyze increases in Texas's overall state debt burden and the role debt plays in the state's fiscal management. Recommend strategies to reduce the state's debt, as well as the calculation of the constitutional debt limit.
Despite the fact that the Texas Constitution requires a balance budget each biennium, there are numerous exceptions and Texas goes deeper into debt each year. Four of the ten constitutional amendments on the November ballot are to authorize more debt for Texas.