The Mignon Memo

Only one more week of political ads.  Early voting ends this Friday and the 2012 General Election date is next Tuesday, November 6.  Look for next week’s memo where we will include election results from Texas.  Looks like it will be an interesting ride until then.

According to a recently released report by the State Auditor’s Office, state agencies in Texas reduced their total number of employees by about 3,200 workers in the fiscal year that ended Aug. 31^st.  This was a reduction of about 2.1 percent.  The report showed the state employed 147,325 full-time equivalents as of August 31^st.

The University of Texas at Austin announced that beginning with the 2014 entering freshman class, UT Austin will automatically admit all eligible applications who rank within the top 7 percent of their high school class, with the remaining spaces to be filled through holistic review.  Even though Texas law guarantees automatic admission to the state’s public universities to students who graduate in the top 10 percent of their high school senior class, legislators modified the law in 2009 to allow UT Austin to limit such automatic admissions to 75 percent of its freshman slots for Texas residents.

The 83^rd Legislative Session begins January 8, 2013.  Legislators may begin filing bills on Monday, November 12, 2012.  If you are interested in following the bills as they are filed, go to the Texas Legislature Online at http://www.capitol.state.tx.us  and click on Today’s Filed Bills under Legislative Activity.  The bill filing deadline is March 8, 2013.

Here is some sweet Halloween trivia for you. The National Confectioners Association estimates that consumers will spend $2.4 billion on candy for Halloween, the top holiday for candy sales.

Texas House Speaker Joe Straus has created the Texas House Interim Committee on Manufacturing.  Last year, Speaker Straus directed every House committee to make recommendations for significantly improving the state’s manufacturing capability. The Committee on Manufacturing will compile and summarize those findings and make its own recommendations about how to encourage manufacturing in the state. The Committee will also determine how those recommendations interplay with other committees’ work on business growth and retention in Texas.  Rep. Jim Murphy (R-Houston) will serve as Chairman of the Committee on Manufacturing, and Rep. Eddie Rodriguez (D-Austin) will be Vice Chairman.  Other members include Rep. Carol Alvarado (D-Houston); Rep. Angie Chen Button (R-Richardson); Rep. John Frullo (R-Lubbock); Rep. Jason Isaac (R-Dripping Springs); Rep. Eric Johnson (D-Dallas); Rep. Tracy King (D-Eagle Pass); Rep. John Kuempel (R-Seguin); Rep. Lyle Larson (R-San Antonio); Rep. George Lavender (R-Texarkana); Rep. Marisa Marquez (D-El Paso); Rep. Sergio Muñoz Jr. (D-Mission); Rep. Tan Parker (R-Flower Mound); and Rep. Kenneth Sheets (R-Dallas).

The Texas Supreme Court has upheld the constitutionality of the state’s franchise tax once again.  Nestlé USA challenged the constitutionality of the franchise tax by alleging that it violates the Texas Constitution’s equal and uniform taxation requirement as well as the U.S. Constitution’s equal protection, due process guarantees and its commerce clause.  In a 7-2 opinion by Justice Nathan Hecht, the Texas Supreme Court ruled against Nestlé’s contentions on all counts.  Justice Willett and Justice Lehrman dissented on a procedural basis by asserting again that the Court lacks exclusive original mandamus jurisdiction in taxpayers’ constitutional challenges.

Lt. Governor David Dewhurst shuffled the Texas Senate Committee chairs last week.  The end result is 12 Republicans and six Democrats chairing committees. Sen. Eddie Lucio Jr.(D-Brownsville) saw his committee and his chairmanship abolished.  Senators chairing different committees or taking on the chair position for the first time include Sen. Dan Patrick (R-Houston) at Education; Sen. Kel Seliger (R-Amarillo) at Higher Education; Sen. Judith Zaffirini (D-Laredo) at Government Organization; Sen. Robert Nichols (R-Jacksonville) at Transportation; Sen. Rodney Ellis (D-Houston) at Open Government; Sen. Juan “Chuy” Hinojosa (D-McAllen) at Intergovernmental Relations; Sen. Glenn Hegar (R-Katy) at Nominations; Sen. Royce West (D-Dallas) at Jurisprudence; and Sen. Bob Deuell (R-Greenville) at Economic Development. Two additional committees were disbanded – a subcommittee chaired by Sen. Mario Gallegos (D-Houston) and the redistricting panel chaired last session by Sen. Kel Seliger (R-Amarillo).

Speaker Joe Straus has appointed an Interim Committee on General Revenue Dedicated Accounts. Reps. Drew Darby (R-San Angelo) and John Otto (R-Dayton) will co-chair the Committee, which will study ways that the Legislature can use general revenue-dedicated funds more appropriately and transparently.  The members of the Committee include Rep. Rafael Anchia (D-Dallas); Rep. Larry Gonzales (R-Round Rock); Rep. Patricia Harless (R-Spring); Rep. Donna Howard (D-Austin); Rep. Jose Menendez (D-San Antonio); Rep. Jim Pitts (R-Waxahachie); and Rep. Sylvester Turner (D-Houston).

HHSC Commissioner Kyle Janek has named Kay Ghahremani as the new Director of Medicaid and CHIP.  Ghahremani has been with the agency for 17 years and has served as deputy director of the Medicaid and CHIP programs for the past five years.

The Texas Lyceum, a non-partisan, nonprofit statewide leadership group focused on public policy, has released the results of a poll conducted September 10-26, 2012. The poll examined attitudes about issues such as the state and national economies, public education, Medicaid expansion, college tuition deregulation and the water needs of the state. In addition, the non-partisan poll provides a look at who Texas voters will support in the upcoming presidential and U.S. Senate races and reveals the job approval numbers of our state and federal elected leaders.  The executive summary and the complete poll results can be viewed through this link: http://www.texaslyceum.org/PollPage2012.aspx.

The Texas Permanent School Fund finished the 2011-12 Fiscal Year strong with a year-end value of $25.5 billion and a return of 9.44 percent on its investments.  The Permanent School Fund was established in 1854 with a $2 million state investment. The fund helps to pay for textbooks and other educational expenses. It is the second largest education endowment in the country, only behind Harvard’s.

Gov. Rick Perry has reappointed Cydney C. Donnell of Fredericksburg to the Employees Retirement System of Texas Board of Trustees for a term to expire Aug. 31, 2018.  Donnell is an executive professor, associate department head of finance and director of real estate programs at Texas A&M University (TAMU) Mays Business School.

Gov. Rick Perry also announced that Suzy Whittenton of Austin has been named the director of administration for the Governor’s Office. The director oversees financial services, human resources, information technology, support services and the compliance and oversight division.

Texas Supreme Court Justice Dale Wainwright will resign at the end of the month to join law firm Bracewell & Giuliani’s Austin office. Wainwright joined the Court in January of 2003.  Gov. Rick Perry will appoint a replacement for Wainwright.  Since it is too close to the November election to name a replacement in time to get on this year’s ballot, the new justice will serve until the 2014 election.

The U.S. Supreme Court rejected a request to have Texas’ current maps for congressional districts thrown out for the November election.  The League for United Latin American Citizens (LULAC) had appealed to the Court in an effort to block Texas from using the interim redistricting map that was drawn so the state could hold congressional elections this November.

The U.S. Supreme Court also denied an emergency request by Project Vote, a voter registration group, to block Texas from enforcing new election laws governing voter registration drives.  The current law will apply to the November election.

The Legislative Budget Board (LBB) is working on various initiatives to make the state budget process more transparent.  LBB Acting Director Ursula Parks told the Senate Finance Committee that the agency intends to launch a revamped website on November 1^st.  The website will be designed to make a better use of current web technologies and will incorporate a notification feature.  Additionally, the LBB will roll out a series of one page issue briefs intended to give background information on common topics before the Legislature. The goal is to publish close to 100 briefs on a variety of issues.

This week, the Texas Supreme Court heard arguments in a case challenging the constitutionality of the state’s franchise or margins tax. In the lawsuit, Nestle USA and two Texas-based companies claim that the tax violates their equal protection rights by levying different rates for different businesses.  This will be the third time the margins tax has been challenged in the Texas Supreme Court and Nestle’s second challenge of the tax. Nestle’s first challenge was dismissed because the court ruled it didn’t have standing to sue because Nestle had not yet paid the tax.  The Court has until November 9th to issue its decision.

KERA will host a debate in Dallas between U.S. Senate candidates Ted Cruz and Paul Sadler on October 19^th beginning at 7:00pm.  The debate will be made available to all television and radio stations across the state and will be available via the Internet.

The Texas Secretary of State’s Office canceled November’s special election to replace former Rep. Veronica Gonzales (D-McAllen) after only one candidate filed paperwork to fill her unexpired term.  Attorney Bobby Guerra, a former chairman of the Hidalgo County Democratic Party, will represent Texas House District 41 for the remainder of Gonzales’ term, which expires in January 2013. The Republican candidate in the November election, Miriam Martinez, missed the special election filing deadline.

The Texas Education Agency announced plans to submit a request to the U.S. Department of Education, asking it to waive certain provisions of the Elementary and Secondary Education Act, also known as the No Child Left Behind law.  This will provide TEA and local school districts with more flexibility in complying with the law.

Texas finished the 2012 fiscal year with sales tax revenue up 12.6 percent from the previous year, according to Texas Comptroller Susan Combs.  The oil and gas industry and retail operations continue to be the major drivers of the increased tax collections.

Milton Rister, a member of Gov. Rick Perry’s senior staff, will become the new executive director of the Texas Railroad Commission.  Rister replaces John Tintera who retired in March.

More action in the court system.  Last week, a three-judge federal panel rejected the Texas voter identification law, saying it would improperly suppress the voting rights of minorities.  Texas Attorney General Greg Abbott said that, like the redistricting ruling, Texas will appeal the Voter ID decision to the U.S. Supreme Court.  In the meantime, Texans will not be required to present a photo ID to vote in person for the November 6^th General Election.

Speaking of the November 6^th General Election, you can find a list of candidates on the Texas Secretary of State’s website. The last day to register to vote in this election is October 9, 2012.  Early voting begins October 22, 2012 and runs through November 2, 2012.

Gov. Rick Perry and First Lady Anita Perry are in Italy this week on an economic development mission. Governor Perry is set to meet with business and government leaders, and participate in the 38th Annual Ambrosetti Intelligence on the World, Europe and Italy Forum. The Perrys will also attend the 2012 Formula 1 Italian Grand Prix at the Monza Circuit.

Gov. Rick Perry has named former Texas Railroad Commissioner Michael Williams as Texas Education Commissioner.  Last year, Williams resigned from the Railroad Commission to seek the Republican U.S. Senate nomination but later opted to run for Congressional District 25. He lost in the May primary. Williams previously served in the U.S. Department of Education under President George H.W. Bush.  Perry also announced that Lizzette Gonzalez Reynolds will serve as chief deputy commissioner, Williams’ number two. Reynolds has been a deputy commissioner at TEA since 2007.

Lt. Governor David Dewhurst appointed Sen. Tommy Williams (R-The Woodlands) as chair of the Senate Finance Committee. Williams will replace Sen. Steve Ogden (R-Bryan) who didn’t seek re-election.  In addition to the Senate Finance Committee, the Senate Education, Economic Development and Jurisprudence Committees will all get new chairs. Their chairs — Sen. Florence Shapiro (R-Plano), Sen. Mike Jackson (R-La Porte) and Sen. Chris Harris (R-Arlington) — each decided not to seek another term. Dewhurst has said that he will complete the reorganization of the Senate committees in the near future.

The U.S. Court of Appeals in Washington has ruled that Texas’ congressional, Texas Senate and Texas House redistricting maps do not comply with the Voting Rights Act.  The court denied granting the maps preclearance.  Attorney General Greg Abbott reported that he will file an immediate appeal to the U.S. Supreme Court.  The upcoming November election is not affected by this decision but this case could have an effect on the 2014 elections.

The Texas Supreme Court has accepted a case that will decide whether the state improperly administers its business tax.  Nestle USA, the plaintiff in the lawsuit, argues that the state’s business tax violates the Texas Constitution’s requirement that taxes be levied in an “equal and uniform” manner, as well as the U.S. Constitution’s equal protection and due process protections. The Texas Supreme Court dismissed a similar claim earlier this year, ruling that Nestle lacked standing because it had not yet paid its taxes. Nestle recently renewed its challenge after paying its taxes under protest.  The Court set an accelerated schedule for the
case, with oral arguments to be heard on September 18^th.

Another incumbent Texas State Senator finds himself without a general election opponent.  Democrat Lyndon Laird of Grandview, a candidate for Senate District 22, has withdrawn from the November election.  His withdrawal leaves incumbent Sen. Brian Birdwell (R-Granbury) without a Democratic opponent since the deadline has passed for other candidates to enter the race.

Speaker Joe Straus announced some staffing changes in the Texas House. Shalla Santos has been named as Assistant Parliamentarian and Special Counsel for the Texas House. Santos will work alongside Chris Griesel, who has served as Parliamentarian since 2011. Santos previously served as a staff attorney at the Third Court of Appeals in Austin. Frank Battle, a longtime top aide to Lt. Gov. David Dewhurst, is returning to the Texas House as Speaker Straus’ general counsel and ethics advisor to the House. Battle served as Dewhurst’s general counsel and policy advisor since 2003. Before that, he served as a special assistant and legal counsel to former Texas House Speaker Pete Laney and as the ethics advisor to the House.

Lt. Governor David Dewhurst also announced some new staff.  Constance Allison, former Chief of Staff for retiring Sen. Steve Ogden (R-Bryan) will be Dewhurst’s senior policy adviser. Bryan Hebert, who has worked as an attorney at the Texas Legislative Council as well as deputy general counsel for Dewhurst, will replace Frank Battle as Dewhurst’s general counsel. In addition, Lauren Hensarling, who previously served as the director of constituent services for House Speaker Joe Straus, will be Dewhurst’s scheduler, and Matt Hirsch, who directed communications for Dewhurst’s U.S. Senate campaign, will serve as press secretary.

Lots of activity in the courts this week impacting Texas.  The Fifth Circuit Court of Appeals ruled that Texas did not act unconstitutionally when it moved to expel Planned Parenthood from a health and contraceptive care program for low-income
women.  This overturns a ruling by a federal district court in Austin that found the state rules expelling Planned Parenthood from the Women’s Health Program to have violated the organization’s rights of free speech and association.  The US Court of Appeals for the District of Columbia threw out the controversial Cross State Air Pollution Rule by ruling that the U.S. Environmental Protection Agency had overstepped the bounds of federal clean air statutes and wrongly shut out state regulators from implementing the law. Texas had opposed its inclusion in the rule.