Click here to view photos and a recap of the first-annual Legislative Champion Awards Dinner, held in Austin on Thursday, January 10.

Lobbying
For more than 15 years, the AeA Texas Council has been a state legislative and regulatory advocate for Texas' high tech industry. AeA's advocacy activities are managed by a team of policy professionals with local, state and federal policy experience.  In the Texas capitol, AeA is the voice of the high-technology industries and is looked to by policy makers for guidance as they craft legislation to help advance the Texas economy.

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Leadership
AeA Texas' Public Policy Committee is co-chaired by member companies who set AeA's annual policy agenda and action plans.

The Policy Subcommittee is the AeA Texas Council’s most active subcommittee and plays a key role in determining the Council’s legislative agenda and in guiding that agenda to successful implementation.  During legislative sessions, the

AeA Texas public policy efforts are administered through policy subcommittees comprised of member company representatives, AeA Texas Council staff, and our contract lobbyists. AeA Texas Council subcommittees help ensure that the interests of Texas' technology industry are served in a number of subject areas.

During the 80th Texas Legislative Session this year, AeA Texas Council contract lobbyist Dana Chiodo and AeA Director of Public and Legislative Affairs, Jeff Clark, produce reports on legislative issues of importance to the technology industry and Texas business community. This report series provides an overview of the legislative and regulatory issues currently being considered in the Texas Capitol.

AeA Legislative Update – May 2007

Public Policy
The AeA Texas Council’s public policy program has been actively working during the 80^th Texas Legislature to fend off legislation harmful to high-technology businesses and to promote initiatives designed to improve the business environment, improve state education systems, and enhance the profitability of Texas’ high-tech companies.

Our programs are guided by member needs and are overseen by our lobby staff in Austin.  The AeA Texas Council’s Public Policy Committee provides additional guidance and meets weekly during the legislative session to review pending legislation, to discuss and develop initiatives, and to formulate strategies for implementation.  If you have an interest in serving as a member of the Public Policy Committee, please contact Jeff Clark (jeff.clark@aeanet.org) in the AeA Texas Council’s Austin office.

Taxes and Spending
Determined to shift some of the state’s tax burden away from the property tax, during the summer of 2006, the Texas Legislature reformed the state’s business tax doing away with the Franchise Tax and replacing it with a new tax on gross margins.  The tax has not been in place long enough for clear predictive data to be available.  This has created some uncertainty as to the overall impact of the tax and what the fiscal implications of the tax might be for future state budgets.  Some experts have estimated that the tax may generate as much as $1 Billion less than anticipated when the tax was created. 

Because of this uncertainty, legislators have been hesitant to enact any substantial tax decreases during the 2007 session.  AeA, however, is strongly making the case for reductions in the taxes on high-tech businesses.  AeA is also working to defend the current tax code’s provisions from unnecessary changes. 

One such change, which was presented as a technical change in the House Ways and Means Committee, would have changed the way in which R&D expenses are accounted for.  As proposed, R&D expenses would have had to be tied to a finished product and deducted as a cost of goods sold.  This is one example of an occasion in which the legislature lacked an understanding of the nature of science-based industries.  AeA opposed the change arguing that R&D many times does not lead to an immediately marketable product.  The legislature responded affirmatively, rejecting the change and leaving the current system intact.

Research and Development
One of the AeA Texas Council’s primary areas of focus is on improving the Research and Development climate in Texas.  To that end, the Council has proposed and our supporters have filed legislation to create a state sales tax exemption on all materials and equipment used in the course of Research and Development.  This would help to cut the cost of conducting research in Texas and would encourage more companies to bring research to our state.

While the aggregate amount of R&D conducted in Texas is quite large, Texas ranks 26^th in R&D spending on a per capita basis.  Other states are increasingly enacting provisions exempting research and development equipment from sales taxation and, according to a survey conducted by Site Selection Magazine in November 2006, a majority of states now provide a tax exemption to encourage and attract research and development activities to their states.  Texas had previously offered an R&D credit which was applied to the franchise tax but this credit was eliminated when the Franchise Tax was replaced with the Margins Tax in 2006.

Presently, Texas offers a sales tax exemption for equipment used in manufacturing and specifically excludes R&D equipment.  For many companies, this exclusion creates ambiguity and confusion with regard to whether a piece of equipment is R&D equipment or manufacturing equipment.  In many cases, the line is unclear.  Extending the sales tax exemption to R&D equipment – and continuing to include manufacturing equipment – would resolve this issue and would more realistically reflect the trend in the high-technology industry toward a convergence of the R&D and manufacturing processes and the accelerated progression of product lifecycles.  Extending the exemption also recognizes emerging technologies as holding the greatest promise for future prosperity and promotes their development.  Finally, this incentive would create jobs in our state by attracting R&D activities to Texas.  And, for every R&D related job directly created, two more jobs are created in trade, services, and other industries. 

Education
Education remains a perennial issue on the AeA legislative agenda.  We are working to expand science, mathematics, and technology courses in the public schools and to improve the performance of our state’s higher education.  We recognize that Texas is competing both nationally and internationally and we’re helping to build a K-16 education system that prepares students for success in the high-technology information-based environment of tomorrow. 

To that end, we continue to support the state’s Master Teacher Certification program to keep highly qualified teachers in the classroom.  We are also working to drive more technology into the classroom where students can benefit from immersive instruction and real time diagnostics, while developing a familiarity and comfort level with technology.  Working with the Office of the Governor, AeA has supported a package of legislation to create incentives for universities that are focused on our future workforce needs.  These incentives, along with additional scholarship funding, will help Texas universities to graduate more students in the high-technology fields, like electrical engineering, so critical to our future economic development.

Environmental Issues
Companies that manufacture in Texas face unique environmental issues and the Texas Council’s Environmental Committee is reviewing pending legislation to make certain that new legislation is based on science and does not place unreasonable or unnecessary regulations on business.

In the area of e-Waste/Recycling, AeA has played an educational role helping Texas legislators as they attempt to craft a system that protects the environment, meets the needs of consumers, and does not place an undue burden on industry.  AeA’s voice in the debate helps ensure that the concerns of electronics manufacturers are heard and our commitment to the environment is reaffirmed.  AeA represents electronics manufacturers of all types and is working to see that eWaste/Recycling legislation reflects their products’ and their markets’ unique characteristics.

Other Issues
Many other issues are being considered in the 80^th legislature and AeA is playing a role in the debate.  We’re pushing legislation to expand state economic development incentives to include data centers in the list of eligible facilities.  We’re battling trial lawyers who want to expand their ability to bring suit against businesses for data breaches.  We’re defending private property rights at high-tech facilities.  We’re helping lead the fights to continue and expand the Texas Emerging Technology Fund and the Texas Enterprise Fund. 

In short, if it affects the high-tech industry in Texas, we’re working on it.

There is a great deal going on in your state capitol and the AeA Texas Council is in the middle of the fight.  We’re working to make Texas a premiere location in which to operate a high-technology business and we welcome your participation in our work.  Please on us whenever you have questions or concerns.  For more information on the AeA Texas Council legislative program, please contact Jeff Clark in the Austin office at 512-474-4403 or by email at jeff_clark@aeanet.org.

Other Recent AeA Public Policy Updates

AeA Texas Testimony in Support of R&D Sales Tax Exemption – May 2007

AeA Texas Joins Business Leaders in Opposing New Sales Taxes – May 2007

AeA One Pager on R&D Sales Tax Exemption

AeA produces reports and updates to keep our members up to date on pertinent issues that may affect their businesses.  Some of these reports are listed in this archive.

• Texas 78th Legislative Wrap Up Session  
  
• AeA Texas Final Legislative Report by Dana Chiodo, AeA Contract Lobbyist
• Legislative Wrap-Up for the 77th Texas Legislature

Links to Texas State Government:

Texas Online – The State of Texas Web Portal

Legislative Branch

• Office of the Governor
• Office of the Lieutenant Governor
• Texas Legislature Online
• Texas State Senate
• Texas House of Representatives
• Capitol Information

Texas Legislative Reference Materials

• Legislative Bill Search
• Legislative Budget Board
• Legislative Reference Library
• Texas Register
• Texas State Statutes
• Texas Administrative Code
• Texas Constitution

Executive Branch

• Office of the Governor
• Office of the Secretary of State
• Office of the Comptroller of Public Accounts
• Office of the Attorney General
• Comptroller's Window on State Government
• Texas Commission on Environmental Quality
• Texas Workforce Commission
• Texas State Auditors Office
• Texas Public Utility Commission

• Jeff Clark, Director of Public & Legislative Affairs

• Dana Chiodo, Contract Lobbyist - 512.472.5110

Using AeA's online advocacy software you can make your voice heard and learn more about your Texas federal, state and local elected officials by the click of a button.  Find voting history, contact information, and more.

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For more information on the many benefits, programs and services of the AeA Texas Council, contact Clare Freeman at 972.386.6540.

This page was last updated on 01/25/08.  
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