The Senate Finance Subcommittee on Criminal Justice and Public Safety (Article V) met on March 28 to review agency appropriations and requests. The subcommittee, chaired by Sen. John Whitmire (D-Houston), is continuing with its “kinder-gentler” version of the budget and is giving thoughtful consideration to restoring funds that will directly impact programs at the local level.
The committee increased the criminal justice budget by about $450 million, thus restoring programs that were not included in SB 1. Some of the criminal justice recommendations adopted by the full Senate Finance Committee on March 31 are:
By Paul Emerson
TAC State Financial Analyst
Pursuant to the Texas Constitution, the Comptroller’s Office must certify that there are sufficient funds available in the General Appropriations Act (GAA) to cover approved spending by the Legislature before the bill is sent to the governor for approval. Various techniques, such as sweeping accounts at the end of the session and reclassifying dedicated revenue funds to general revenue, are being used to achieve this goal.
In 1991, the Legislature began phasing out restrictions on many of the dedicated revenue funds and changing the methods of fund accounting. Most dedicated revenue was held in special funds outside of general revenue, which would limit the availability of general revenue for certification purposes. Since then, the Legislature switched many of the dedicated funds into general revenue.
With the huge shortfall that is anticipated over the next several years, several key appropriations members, including Sen. Steve Ogden (R-Bryan) and Robert Duncan (R-Lubbock), have filed similar companion bills that would reclassify many of the dedicated funds to be used for general revenue. Some of these re-classification bills include funding that is used to support county programs and projects. For example, HB 3790 would reclassify the judicial training and court personnel training fund by moving it from the state treasury to general revenue. This would essentially allow the Legislature to use these funds for other purposes.
At this time, it is uncertain as to whether these bills will change at a later date — due to the relating clause on each of the bills. The topic matter is fairly broad, which suggests there will be a substitute eventually.
TAC is currently working on identifying these bills and will provide a further detailed analysis in an upcoming electronic newsletter.
For more information, contact Paul Emerson, TAC state financial analyst, at (800) 456-5974 or via email at Paule@county.org.
By Aurora Flores
Legislative Liaison
and Tim Brown
Senior County Analyst
Senate Finance is expected to hear SB 1505, the bill written to address the oil and gas undervaluation problem, on Monday, April 4.
The County Judges and Commissioners Association of Texas and Texas Association of Counties met with stakeholders to work out the best possible language in the proposed legislation, which was authored by Sen. Carlos Uresti (D-San Antonio). Rep Tryon Lewis (R-Odessa) has authored similar legislation in the House. While this version does not meet all of the counties’ concerns, it is a definite improvement over the present statute.
Bill Background
In 1993, the Tax Code (Sec 23.175), was amended to require that the formula for the valuation of oil and gas properties include the average price of oil and gas for the past year, causing appraisal values to lag behind recent market results and allowing for severe changes in annual appraisals.
In 2007, HB 2982, (80R), altered section 23.175 of the Tax Code to add a forward looking component, the CPA’s estimate of the price of oil and gas for the upcoming year. The change requires appraisers to use forecasted and average historical prices published by the Comptroller of Public Accounts (CPA) for determining future product values when appraising oil and gas properties — whether prices are going up or down.
At that time, the explanation given was that the bill’s changes would level the wide variations caused by the use of the past year’s prices with no significant effect on local or state revenues. After the bill became law, the CPA determined that HB 2982 (80R) required the use of the state severance tax revenue estimate methodology. In 2008 and 2009, the CPA’s conservative estimates severely underestimated the actual price of crude oil resulting in a shift of the tax burden to other property owners and a loss of revenue to the state and local governments. The CPA determined that legislative changes would be necessary to change the formula enacted from the 80th session.
During the interim, both the Senate Committee on Finance and the House Committee on Ways & Means studied the undervaluation issue and heard from all interested parties. In the interim report, Senate Finance recommended that the Legislature eliminate the requirement that the forecasts be based on revenue estimating methodology to enable the CPA’s office to better focus on incorporating market value methodology to its estimates.
Proposed Bill Language
Uresti and Lewis have introduced legislation to correct the inherent undervaluation and utilize market-based methodology. These legislators have conducted workgroup meetings for several weeks with industry, appraisal and county representation. It appears that a consensus is near on an agreed bill.
The CPA office and the revenue estimating methodology have been removed from the proposed bill language. The proposed legislation would use the price estimated for the coming year in the EIA (US Energy Information Administration) Annual Energy Outlook at the full value to determine the price adjustment for the first year.
This “price adjustment” will be calculated by the chief appraiser, using the forecasted price for current calendar year and dividing by the estimated price for oil for the previous calendar year. The escalation rate for future years is based on the Producer Price Index (PPI) rate and would be capped at an additional five years.
For more information, please contact Aurora Flores at aurorafo@county.org or (800) 456-5974.
By Laura Nicholes
TAC Legislative Staff
SB 1014 by Sen. Wendy Davis (D-Fort Worth) (identical to HB 3305) is scheduled to be heard on Tuesday, April 5 in the Senate Criminal Justice Committee. The bill, supported by an inmates’ advocacy group, seeks to establish in law times for inmates to be released from jails. The idea has been discussed at recent workshops held by the Texas Commission on Jail Standards (TCJS) where sheriffs, judges, commissioners and jail administrators in attendance expressed concerns with the proposal.
The bill would amend Chapter 511, Government Code, to require the TCJS to adopt rules establishing the time of day in which inmates, other than those being released on bond, may be discharged or released from county jails and would require detailed records be kept on any inmate released between the hours of 7 p.m. and 7 a.m., excluding certain circumstances.
who are familiar with the proposal have stated that adding this item as a minimum jail standard exceeds the scope and authority of the Commission by overreaching into the independently elected sheriff's operational policies and procedures. This is one more standard, they say, for which a jail could be found in non-compliance and reaches beyond the reasons the jail commission was established — to ensure constitutional conditions for confinement and to ensure county jails conform to minimum standards of construction, maintenance and operation.
The meeting has been set for 1:30 p.m., Tuesday, April 5 in the Capitol Extension, Room E1.016. Written testimony may also be submitted. For additional information, please contact TAC Legislative Staffer Laura Nicholes at (800) 456-5974 or lauran@county.org.