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Eddie Rodriguez

Microbreweries organize again

About time.

Craft brewers are asking beer fans to put their money where their thirst is.

Six weeks before state primary elections, the Texas Craft Brewers Guild on Monday launched a political action committee to raise money and awareness to challenge “archaic, anti-competitive beer laws” it says are holding back an industry poised for dramatic growth.

The PAC already has raised more than $40,000 from among its approximately 250 brewery members, with the largest individual donations coming from the owners of Austin Beerworks and Saint Arnold, Live Oak and Deep Ellum Brewing Cos. Much of the money raised by the new CraftPAC will go to support state legislative candidates who support the brewers’ agenda, guild executive director Charles Vallhonrat said

CraftPAC so far has donated $1,000 each to two incumbent legislators – one Democrat and one Republican – in the Austin area.

“We intend to influence where we can,” Vallhonrat said.

Here’s the CraftPAC finance report for January. The legislators in question are Reps. Eddie Rodriguez and Tony Dale, though I’m sure there will be more. It’s one thing to give money to a friendly incumbent in a friendly district, but it’s something else altogether to contribute to someone who’s looking to take out an enemy. We’ll see how seriously they decide to play.

Brewbound has more details:

Initially, CraftPAC will focus on legalizing of to-go sales from production brewery taprooms, which Texas law currently outlaws. Although the state’s manufacturing breweries are not allowed to sell beer for off-premise consumption, the state’s brewpubs, wineries and distilleries are allowed to sell their products to-go.

Speaking to Brewbound, Texas Craft Brewers Guild Executive Director Charles Vallhonrat said Texas distributors have had a financial edge over brewers after giving more than $18 million in political contributions to lawmakers. CraftPAC, he added, is a way to level the playing field.

“We want to be on the same field,” he said. “We know that they have big bats, but we need to be on the same field to say we’re in the game.”

CraftPAC board chairman and Austin Beerworks co-founder Adam DeBower added that Texas’ brewers haven’t had a voice in the legislature since 2013, when several lawmakers who supported brewers retired or moved on.

“We don’t have any champions left,” he said.

[…]

Vallhonrat said last year’s passage of House Bill 3287 — which put tighter restrictions on how beer that is sold for on-premise consumption at brewery taprooms — was the catalyst to the formation of CraftPAC.

“The blow we received from 3287 showed the overwhelming power that the distributors wield,” he said. “That they could influence a bill that absolutely no brewery supported, and they could go around saying this was for the protection of breweries and convince the Legislature and get it passed, that really demonstrated what we’re fighting against.”

In 3287, Texas lawmakers changed the way the state’s barrel cap is calculated, adding production across multiple brewing operations rather than from individual facilities. Now, breweries making more than 225,000 combined barrels annually will be required to repurchase their own product from a wholesaler in order to continue selling beer for on-premise consumption in their taprooms.

In the announcement of CraftPAC, the Guild also cited the 2013 passage of Senate Bill 639, which prohibits breweries from selling their distribution rights to wholesalers, and led to a lawsuit that will be decided by the Texas Supreme Court.

Vallhonrat told Brewbound that CraftPAC will also work to make other “common sense updates” to Texas’ alcohol code such as eliminating the distinction between “ale” and “beer.” According to the Texas code, an ale is a beer above five percent ABV while a beer is under five percent ABV. Such distinctions are costly, and add market confusion and work for brewery owners, he argued.

DeBower added that CraftPAC would work to equalize licensing differences between breweries and brewpubs. Currently, brewers are required to have a manufacturer’s license while brewpubs receive retail license and are afforded different privileges, such as off-premise sales.

If you’ve read this blog for any length of time, you know what I think of this state’s ridiculous, anachronistic, and extremely consumer-unfriendly beer laws. (If you’re new here, you can now probably guess.) I support all of this, of course, but I’m shaking my head a little because this is at least the third separate effort to organize and whip up public opinion in favor of modernizing the beer codes. There was a bipartisan blog-based effort in 2007, of which I was a part, and the now-dormant Open The Taps group that helped spearhead the 2013 laws that represented the one step forward we have taken. The experience since then shows that a movement can never take anything for granted – what has been done can be undone, or at least undermined. I wish CraftPAC all the success – their Facebook page is here; give it a Like – and I especially wish that they stay around and keep at it well after they do have success.

Fifth Circuit partially unblocks SB4

Terrible.

A panel of three appellate judges ruled on Monday that parts of the state’s immigration enforcement legislation, Senate Bill 4, can go into effect while the case plays out on appeal.

Last month, U.S. District Judge Orlando Garcia halted the part of the bill that requires jail officials to honor all detainers. He also blocked other sections that prohibit local entities from pursuing “a pattern or practice that ‘materially limits’ the enforcement of immigration laws” and another that prohibits “assisting or cooperating” with federal immigration officers as reasonable or necessary.

While a hearing on the state’s appeal of that ruling is scheduled for Nov. 6, a panel of U.S. 5th Circuit Court of Appeals judges ruled Monday that the detainer provision can stand for now. The panel ruled, however, that based on its interpretation of the law, the part that requires local jails to “comply with, honor and fulfill” detainers does not require detention based on every detainer issued.

“The ‘comply with, honor, and fulfill’ requirement does not require detention pursuant to every ICE detainer request,” the panel wrote. “Rather, the ‘comply with, honor, and fulfill’ provision mandates that local agencies cooperate according to existing ICE detainer practice and law.” The court also ruled that jails do not need to comply if a person under a detainer request provides proof of lawful presence.

The appellate court also ruled that local and college police officers with “authority that may impact immigration” cannot be prevented from assisting federal immigration officers. It said the state was likely to win those arguments during a subsequent hearing and argued the issue has already been settled in an earlier U.S. Supreme Court decision, Arizona v. United States.

But the 5th Circuit also said that portions of the measure that prevent “materially limiting” cooperation with immigration officials were too vague. The court held that the word “limit” could be too broadly interpreted and left a decision on that up to the subsequent panel.

The court offered a mixed ruling on another controversial item in the bill, a section of the law that prevents local governments from “adopting, enforcing or endorsing” policies that specifically prohibit or limit enforcement of immigration laws. The judges kept that injunction in place, but said it only applies to the word “endorse.” The bill, as passed and signed, would have made elected and appointed officials subject to a fine, jail time and possible removal from office for violating all or parts of the legislation. Opponents keyed in on the “endorsement” provision as something that would open up most officials to possible fines and jail time.

See here, here, and here for the background. I hate to say this could have been worse, because I agree with State Rep. Eddie Rodriguez in his statement that “No part of SB 4 should be allowed to take effect”, but it could have been worse. Even this limited ruling cracks the door open for the whole thing to be let through. I presume the plaintiffs will ask the whole court to reconsider, and will appeal to SCOTUS if they don’t succeed; the state will of course appeal if they do. In the meantime, there’s a whole lot more fighting to come, and a much darker cloud of fear for the many people who will be directly affected by this ruling. I know I harp on this a lot, but nothing is going to change until we change who we elect. The Observer and Texas Monthly, which has a great profile of Domésticas Unidas, one of the groups leading the resistance to SB4, have more.

“Sanctuary cities” bill modified by House committee

It’s less bad than the Senate version, but it’s still not good.

A Texas House committee on Wednesday began debate on the lower chamber’s version of the controversial proposal to outlaw “sanctuary” jurisdictions, making few but significant changes to the bill the Senate passed out last month.

Outlawing “sanctuary” entities, the common term for state and local governments and college campuses that don’t enforce federal immigration laws, has been deemed must-pass legislation by Gov. Greg Abbott. It’s likely a bill will make it to his desk before lawmakers gavel out in late May.

But members of the House State Affairs Committee also told witnesses and other lawmakers that Senate Bill 4 by state Sen. Charles Perry, R-Lubbock, will likely be revised several more times before it’s presented to the full House for a vote.

“It’s not perfect, it’s not complete and we will continue to work on it,” Fort Worth Republican state Rep. Charlie Geren, the bill’s House sponsor, said during the hearing.

One major change to the proposal is that the House version makes inquiring into the status of an undocumented immigrant allowable only if that person is arrested. The Senate version is broader in that it applies to immigrants that are arrested or detained. Perry said during the Senate debate that meant a police officer could question a person’s status during even routine traffic stops.

Rep. René Oliveira, D-Brownsville, said he appreciated Geren listening to his concerns and working with the members, but added that a person could still be turned over to Immigration and Customs Enforcement agents for a class C misdemeanor, which normally would only require them to pay a fine.

[…]

After a suggestion by state Rep. Oscar Longoria, D-Mission, the House committee is also working on a change that would prevent bail bond agents from charging a large amount of cash up front to bond out an undocumented immigrant. Geren said that currently, bondsmen can take advantage of an arrested person by knowingly accepting their money up front even though that person will likely be transferred to ICE agents for subsequent deportation.

See here and here for the background. A lot of people showed up to testify against this bill.

As the lawmakers debated the language, hundreds pleaded with them to scrap the proposal altogether.

In all, 638 people registered to speak about the bill. Of those, 619 registered to voice opposition to the legislation, while just 11 registered in support. Eight were neutral.

The opponents included the Houston Police Department, which called the plan “short-sighted” and Harris County Sheriff Ed Gonzalez, who said it would strain relations with immigrant communities and make minorities less likely to report crimes. Despite the fierce opposition, neither Houston nor Harris County has adopted “sanctuary city” policies.

Others spoke of the impact on the lives of immigrants.

Sergio Govea, a 9-year-old, choked back tears as he told a reporter before the hearing about the constant fear that plagued him that his parents won’t return “every time they leave the house.”

“I haven’t lost my parents physically but they are not the same as they were before this,” he said. “They are scared to go to H-E-B to get food, a basic necessity. … I don’t even know if they will be there today when I get back home.”

The bill was left pending in committee, but it will come back (possibly with more changes) and when it gets voted on it will get sent to the full House. How long that will take is unclear at this time.

Rep. Byron Cook, R-Corsicana, the chairman of the House State Affairs committee, said he is in no hurry to rush through the process.

“We’ve got a long ways to go to get this right,” Cook said at the Capitol the morning after a marathon hearing on the current measure, Senate bill 4 by state Sen. Charles Perry, R-Lubbock. The legislative session ends on May 29.

[…]

Abbott called banning sanctuary jurisdictions a priority after Travis County Sheriff Sally Hernandez, a Democrat, announced following her 2016 election victory that she would only honor detainer requests on a very limited basis. As punishment, Abbott yanked state-grant funding for all county programs.

Cook said Thursday he thinks the bill could be consolidated to only include the detainer provision. Testimony from hundreds of witnesses at Wednesday’s hearing reflected a sentiment that allowing officers to question a person’s immigration status without arresting them would create a chilling effect that would erode the public’s confidence in law enforcement.

Cook took note of those concerns, he said.

“If you look at this on the big picture [level], all we’re really needing to do, all that’s really been said is that local jurisdictions need to honor federal detainer requests,” he said, noting Hernandez was the only outlier. “And what the testimony indicated once again last night is that though one sheriff deviated for a short period of time, all our law enforcement agencies across the state are in fact honoring detainer requests, as they’re supposed to.”

Rep. Cook also indicated that the state should pay for detainer costs, not the counties. I appreciate the effort that Cook has made to make the bill less bad, but it’s still a bad bill that serves no good purpose.

State Rep. Eddie Rodriguez, D-Austin, said he’s on board with Cook’s desire to limit the scope of the bill and said the issue has become a political football more than anything else.

“If it was just dealing with detainers in the jails, it addresses [the Republicans’] issue, which is really just to get a vote on an immigration issue,” he said. “Because this is all politics, as far as I’m concerned. We’ll still vote against it but at least it’s not as bad as it can be.”

Indeed. The danger here is that when the House version passes, the modifications made by the House could get gutted by the conference committee, with something close to the original Senate version passing. The only right answer is to keep opposing this bill.

Court rules several Congressional districts were illegally drawn

Bam!

Some of Texas’ 36 congressional districts violate either the U.S. Constitution or the federal Voting Rights Act, a panel of federal judges ruled Friday.

In a long-delayed ruling, the judges ruled 2-1 that the Texas Legislature must redraw the political maps it most recently used for the 2016 elections.

Specifically, they pointed to Congressional District 23, which stretches from San Antonio to El Paso, takes in most of the Texas-Mexico border and is represented by Republican Will Hurd of Helotes; Congressional District 27, represented by Blake Farenthold, R-Corpus Christi; and Congressional District 35, a Central Texas district represented by Lloyd Doggett, D-Austin.

The 166-page ruling by the San Antonio-based district was the latest in a complicated case that dates back to 2011, and comes just two election cycles away from the next U.S. Census — when the state would draw a new map under normal circumstances.

In 2013, the district court found evidence that lawmakers intentionally discriminated when redrawing the boundaries. But the U.S. Supreme Court soon complicated the case when it struck down a key section of the Voting Rights Act that had forced Texas to seek permission before making changes to election procedures.

But that didn’t end the legal battle. The U.S. Department of Justice and other plaintiffs pressed on in the case, and Texas held elections using interim maps drawn by judges.

In its decision Friday, the court still found that “mapdrawers acted with an impermissible intent to dilute minority voting strength or otherwise violated the Fourteenth Amendment” of the Constitution.

“The Court finds that this evidence persuasively demonstrates that mapdrawers intentionally packed [concentrated certain populations] and cracked [diluted certain populations] on the basis of race (using race as a proxy for voting behavior) with the intent to dilute minority voting strength,” U.S. District Judges Orlando Garcia and Xavier Rodriguez wrote in the majority opinion.

In his dissenting opinion, Judge Jerry Smith of the U.S. Fifth Circuit Court of Appeals called the case moot under previous rulings, and he  sharply criticized the Justice Department.

Tale about a Friday news dump – I literally saw this on Facebook just before going to bed Friday night. We have been waiting forever for a ruling in this case. Note that this is only half of what we have been waiting for – there is still a ruling to come on the State House map, too. But for now, the status of the 2018 elections has changed. The Lone Star Project adds on.

The court singled out violations in the Corpus Christi region involving District 27 (Farenthold – R), in the South Texas/Border region involving District 23 (Hurd – R) and in the Austin to San Antonio region involving District 35 (Doggett – D). The Court also ruled that minority voters in the Dallas/Fort Worth area were illegally cracked under the 2011 map.

While it is too early to know exactly what changes will be made, it is fair to read the opinion as requiring that Hispanic voters put into Anglo-controlled CD27 in the current map must be returned to an effective Hispanic district, that Hispanic voting strength weakened in District 23 must be restored, and that District 35 in the Austin to San Antonio corridor will have to be modified to reunite minority voters in a far less fragmented district centered in Austin.

In Dallas/Fort Worth, the creation of District 33 (Veasey – D) in the current map may have resolved some of the blatant violations under the 2011 map; however, arguments will be made to repair remaining cracked Hispanic and African American neighborhoods in Dallas and Tarrant counties.

The ruling is a major victory for minority citizens and their advocates before the court. Minority advocacy groups including LULAC, NAACP, the Mexican American Legislative Caucus and citizen plaintiff groups led by Congressman Marc Veasey and State Representative Eddie Rodriguez had the courage to challenge the GOP map and the tenacity to stay with a long and difficult court battle. Their efforts have defended and protected the voting rights of thousands of otherwise disenfranchised Texas citizens. The Lone Star Project has been engaged in the Texas redistricting battle from the onset and will continue to provide support to key plaintiffs in this important effort.

We should expect the San Antonio Court to schedule a hearing soon to discuss the additional deliberations needed to fully resolve the case and to reach a final remedy. It is also likely that Governor Greg Abbott will refuse give up Texas GOP efforts to protect a discriminatory redistricting process and will direct state attorneys to explore appeal options.

I’d say it’s not “likely” that Abbott appeals, it’s a 100% gold-plated certainty. Rick Hasen quotes from the majority decision to explain what that “minority voters in the Dallas/Fort Worth area were illegally cracked under the 2011 map” means:

Plaintiffs have established a § 2 violation, both in terms of intent and effect, in South/West Texas. Plaintiffs have shown that seven compact majority-HCVAP districts could and should be drawn there that would substantially address the § 2 rights of Hispanic voters in South/West Texas, including Nueces County. Defendants’ decision to place Nueces County Hispanic voters in an Anglo district had the effect and was intended to dilute their opportunity to elect their candidate of choice.

Meanwhile, race predominated in the drawing of CD35, and Defendants’ decision to place majority- in Travis County was not to comply with the VRA but to minimize the number of Democrat districts in the plan overall. Plaintiffs have established a Shaw-type equal protection violation with regard to CD35. Plaintiffs also establish a Shaw-type equal protection violation with regard to CD23. In addition, Defendants’ manipulation of Latino voter turnout and cohesion in CD23 denied Latino voters equal opportunity and had the intent and effect of diluting Latino voter opportunity. Nueces County Hispanics and Hispanic voters in CD23 have proved their § 2 results and intentional vote dilution claims. The configurations of CD23, CD27, and CD35 in Plan C185 are therefore invalid.

Plaintiffs fail to proffer a demonstration plan accompanied by sufficient evidence to demonstrate that additional compact minority districts could be drawn in DFW or Houston, taking into account traditional redistricting principles and communities of interest. However, they are not precluded from raising § 2 results claims with regard to Plan C235 during the trial on that plan. Plaintiffs have proved intentional vote dilution through packing and cracking in DFW and also establish a Shaw-type racial gerrymandering claim with regard to CD26, but not CD6. However, they fail to prove intentional vote dilution in the Houston area, and fail to prove that mapdrawers acted with racially discriminatory purpose when drawing the districts represented by the African-American Congresspersons.

Well, okay, we’ll need to see a proposed remedy to understand what that means, but the bottom line is that four districts could be directly affected – CDs 23, 26, 27, and 35 – with ancillary changes to some number of adjoining districts. In a subsequent post, Hasen provides some extra guidance to this decision.

2. Bail in. It probably is not obvious to those not steeped in this area, but the big fight here is not about these particular districts (although that is important) but whether Texas gets put back under Section 5 preclearance for up to 10 years. That is possible under Section 3, the “bail-in” provision of the VRA which gives a court the ability to impose preclearance after a finding of intentional race discrimination. That finding is here, and the case is still going to go forward on that issue (as well as some other issues). Further, the finding of intentional race discrimination will almost certainly be relied on if, as I expect, the trial court in the Texas voter id case, finds intentional racial discrimination and orders bail in. So this is huge. (The caveat is how a Trump DOJ would enforce such rights if Trump is still in office. I’m not optimistic, and there’s no appeal of a DOJ decision to grant preclearance. Preclearance of post-2020 redistricting will depend on who wins the 2020 presidential elections.)

3. Race or party. I have been writing a lot about the race or party question: what to do about claims of racial discrimination when, as in the American South, race and party are so closely correlated. The majority approach, is subtle and sophisticated on this question, and seems to fall mostly on the party as a proxy for race (“party as race”) approach to the question. When you make it harder for minority voters to exercise political power for your own political reasons (such as protecting incumbents or your party), this counts as intentional race discrimination. Judge Smith takes the “race or party” approach, and he believes he knows what’s “really” going on: this is all about party, rather than race. It is either blind to the realities or ignoring the fact that these two criteria are really inseparable in Texas.

4. The remedy and what comes next. The trial court does not order anything to happen right now. The parties will fight about the remedy. Likely Texas will get a chance to redraw districts with some deference to Texas as to that which is not a violation. The parties will fight over the plans. And this will get dragged out. But presumably there will be new maps in place for the 2018 congressional elections, unless the Supreme Court intervenes. I fully expect Texas to try to get the Supreme Court to intervene in the interim. At most these lines would last 2 elections, and then we are back to a new round of redistricting. And this shows what is lost by preclearance. We’ve now had three elections that arguably should never have taken place under these lines.

There’s more, so read the rest. If this case proceeds from here as the post-2003 redistricting litigation did, we will get a bunch of November of 2018 special elections in these Congressional districts, with the possibility of special elections in some number of redrawn State House districts as well. If that doesn’t sound like your idea of fun, then you’re reading the wrong blog. Daily Kos and the Chron have more.

Voter ID 2.0

Well, this is interesting.

Still the only voter ID anyone should need

Top Texas Republicans unveiled legislation Tuesday that would overhaul the state’s voter identification rules, an effort to comply with court rulings that have found that the current law discriminates against minority groups.

Filed by Sen. Joan Huffman, Senate Bill 5 would add options for Texans who say they cannot “reasonably” obtain one of seven forms of ID currently required at the polls. It would also create harsh criminal penalties for those who falsely claim they need to choose from the expanded list of options.

Lt. Gov. Dan Patrick has granted the bill “priority” status, carving it a faster route through the Legislature. Nineteen other senators have signed onto the bill, and Texas Attorney General Ken Paxton — who is still defending the current ID law in court — applauded the legislation Tuesday.

In a statement, Paxton said the proposal would both ensure the “the integrity of the voting process” and comply with court rulings that have found fault with the current law, considered the nation’s strictest.

Chad Dunn, a Houston-based attorney for groups suing the state over that law, called the legislation “a step in the right direction.”

“The state is acknowledging the federal court’s conclusion that the (current) law is discriminatory,” he said Tuesday.

I’ll reserve judgment for now, but this seems like a sign that the Republicans are not terribly optimistic about their chances with the ongoing lawsuit, with the question in district court about discriminatory intent. Actually, we don’t have to suppose, because we have this.

The U.S. Justice Department joined Texas’ attorney general Wednesday in asking a federal court to delay a hearing on the state’s voter ID law, the latest signal that the federal government might drop its opposition to the law now that Donald Trump is president.

In the joint filing, the Justice Department and Texas Attorney General Ken Paxton asked to delay next Tuesday’s hearing until summer because the Texas Legislature is considering changes to the existing law, which a federal court has found to be discriminatory. Barack Obama’s Justice Department had joined the lawsuit contesting it.

[…]

In the filing, the Justice Department and Texas asked for the hearing to be pushed back until after June 18, the last day Gov. Greg Abbott has to sign or veto legislation.

“If new Texas state voter identification legislation is enacted into law, it will significantly affect the remainder of this litigation,” Texas and the Justice Department argue.

Just hours after Trump was sworn in as president, the Justice Department asked for a January hearing to be delayed to February, saying they needed more time to brief new leadership. Lawyers in the case say it’s still too early to know for sure if Trump’s Justice Department change positions in the case.

In August, Ramos denied a request from Texas to delay hearings in the case until after the legislative session wraps up in June.

“The question to be determined at the hearing is whether there was intent to discriminate during the legislative session in 2011,” said Houston attorney Chad Dunn, who is part of a legal team representing Democrats and minority rights groups challenging the law. “Whatever happens with this bill doesn’t address that question.”

See here and here for the background. I will just point out that the GOP could have passed SB5 back in 2011 and saved themselves a lot of trouble. It would still be a bad idea and a non-solution in search of a non-existent problem, but it would have been harder to beat in court. But here we are, and in this environment that counts for progress. A statement from Rep. Eddie Rodriguez is beneath the fold, and the Star-Telegram has more.

(more…)

Alternate funding sources

That’s one way to do it.

State Rep. Eddie Rodriguez, D-Austin, announced plans Friday to raise public funds for Travis County, days after Gov. Greg Abbott canceled about $1.5 million in criminal justice grants over the county’s new “sanctuary” policy.

Rodriguez’s initiative is called Travis County #StrongerTogether and it will allow the community to donate tax-deductible funds to the county in order to help sustain community programs that “protect our women, children and veterans,” according to a news release. The initiative is partnering with the Austin Community Foundation (ACF).

“The people of Travis County are resilient and take care of each other. That’s what Travis County #StrongerTogether is all about,” Rodriguez said in an emailed statement. “If Governor Abbott is willing to sacrifice our veterans, women and children to score political points, then we will show him the power of love.”

[…]

Hernandez has shown no signs of backing down in the face of the funding cuts. In a Facebook post Friday, Hernandez endorsed Rodriguez’s initiative, and predicted the money will help “maintain the programs Governor Abbott has defunded.”

“Together, we can raise the funds necessary to ensure that our community’s values are represented and that the most vulnerable in our community are receiving the assistance they need,” Hernandez wrote.

See here for the background. This went live on Friday the 3rd, and according to the banner on the Travis County Stronger Together webpage, a bit more than $66K had been raised as of 10 PM on Saturday the 4th; it’s now over $89K as of Monday at 3 PM. Not a bad start, and as the Facebook page only has a couple hundred Likes, there’s plenty of room for growth.

On the one hand, this great. Resistance takes many forms, and it would be extremely satisfying to tell Greg Abbott where he can stick that grant money. On the other hand, this is terrible. It’s not any kind of model for a functioning government, and it’s in no way sustainable. Not to put too fine a point on it, but another term for what is going on here is that this particular grant for a specific public purpose is being privatized. In any other context, progressives would not like this. To some extent, this is going to be resolved in the courts one way or another. Different electoral outcomes would also be the end of stuff like this. In the meantime, this is what we have. The Statesman, which has video of Sheriff Hernandez talking about this saga, has more.

Abbott pulls state grant money to Travis County

As threatened.

Sheriff Sally Hernandez

Gov. Greg Abbott has followed through on his threat to cut off state funding for Travis County over its new “sanctuary” policy.

Abbott’s office said Wednesday it has canceled criminal justice grants it usually administers to the county, whose sheriff, Sally Hernandez, recently announced her department would reduce its cooperation with federal immigration authorities when they request an inmate be flagged for possible deportation. The policy was set to go into effect Wednesday.

The move appears to target about $1.5 million Travis County was due to receive this year from the criminal justice division of the governor’s office. The division doled out $1.8 million to the county last year and has already paid out roughly $300,000 in 2017.

[…]

Democrats had pushed back on Abbott’s threat to withhold the grant money by noting it funds programs that help children, women, families and veterans. But the Republican governor has held firm, saying his No. 1 concern is public safety.

“The Governor is willing to sacrifice veterans, women and children to garner political points,” state Rep. Eddie Rodriguez, D-Austin, said in a statement Wednesday. “Governor Abbott must be held accountable for playing politics with the lives of the most vulnerable in our communities.”

U.S. Rep. Lloyd Doggett, D-Austin, went even further in a statement, saying Abbott’s “vindictiveness is more like Russian President Putin’s authoritarian regime than our democracy.”

See here, here, and here for the background. As the Statesman notes, the grants “support projects such as family violence education and a special court for veterans”, so way to get tough there, Greg. One point five million isn’t nothing, and Abbott is looking for more leverage to use, but I feel reasonably certain Travis County could cover the difference if it wants to. Looking over their fiscal year 2017 budget, there’s $169 million allocated to the Sheriff’s office, with another $105 million in reserves. My guess is Abbott will need to find a considerably larger stick to get their attention. But we’ll see, and if the so-called “sanctuary cities” bill passes this year, plus whatever horrors Congress and Trump conjure up, things could change.

It’s a little easier to run for a statewide judicial office now

From the Quorum Report:

"Objection Overruled", by Charles Bragg

“Objection Overruled”, by Charles Bragg

In a change that flew under the radar for most and was signed by Gov. Abbott, candidates for statewide judicial offices will no longer be required to gather petition signatures from around the state before they can file. One of the changes quietly made by the Texas Legislature this year will make it significantly easier for candidates to qualify for the ballot in statewide judicial races, Quorum Report has learned.

Starting this fall, those wishing to run for the Texas Supreme Court or the Court of Criminal Appeals will no longer be required to travel around the state gathering signatures from each of the state’s 14 appellate court districts before they can file.

Slipped into the language of Senate Bill 1073 by Sen. Judith Zaffirini, D-Laredo, is a line that repeals the section of the Texas Election Code that forced the gathering of the signatures. The part of the bill that removed the petition requirement was at the very end of the legislation. The text simply states that several election code sections would be repealed without describing what those sections actually do.”

Here’s SB 1073 and here’s the bill text, with the un-annotated repeal bits at the end. I’m too lazy to look up which repealed section is the one dealing with petition signatures, but feel free to do it yourself if you want to.

I found this on Sondra Haltom’s Facebook page, where she half-jokingly asks Glen Maxey if he was responsible for this. Maxey went on to explain as best he could what happened in the comments:

I drafted SB 1073 and asked [Sen. Judith] Zaffirini to carry it. In the House, it was amended with two other bills that I drafted. One of those was a rewrite of the laws about canvasses. Rep. [Craig] Goldman had sponsored that bill. It got caught up in the Thursday night chub a thon on gay marriage. I asked Rep. [Eddie] Rodriguez to amend SB 1073 with HB 3118 by Goldman.

Somewhere in all that last minute shuffle, this repealer language got added. It was a drafting mistake somewhere along the line…. but in this case a good mistake. These petitions are a pain and don’t serve the ostensible reason they were done: to keep unqualified people from running for judge. We have learned that even idiots can get petition signatures. It did more to thwart good candidates than protect them. Good riddance to an anti-democratic piece of legislative crap.

Your government at work, y’all. This sort of confusion has been known to happen at the end of a legislative session when everything is in a rush to beat various deadlines. As Maxey says, at least this time it was a beneficial mistake. If more candidates sign up to run for statewide benches in 2016, now you’ll know why.

House passes stricter judicial bypass bill

Unfortunate but expected.

Never again

Never again

After about four hours of debate and a barrage of failed amendments by Democrats, the House passed House Bill 3994 by Republican state Rep. Geanie Morrison of Victoria on a 98-47 vote. The measure would enact several restrictions on “judicial bypass,” the legal process that allows some minors to obtain abortions without their parents’ permission. The measure now awaits final approval by the House before it can go to the Senate.

Texas law requires minors to obtain consent for an abortion from at least one parent. But if obtaining an abortion could endanger the minor, she can look to the courts for judicial bypass to obtain the abortion without parental consent.

“The intent of this bill is to improve the protection of the minor girl and ensure that parental rights are protected,” Morrison said.

But the measure was met with fierce opposition from Democrats who called several points of order — a method used to delay or kills bills on a technicality — and offered several amendments to weaken the bill. Their efforts were unsuccessful.

Among the restrictions in HB 3994 is a requirement that doctors presume a pregnant woman is a minor unless she presents a “valid government record of identification” — a measure opponents of the bill have dubbed as “abortion ID.”

Democrats unsuccessfully attempted to tack on several amendments to the bill to strike the ID provision altogether and broaden the types of IDs that would be acceptable under the law.

State Rep. Eddie Rodriguez, D-Austin who offered an ID-related amendment questioned whether HB 3994 is intended to create “a defacto ban on abortion for people who don’t have IDs.” Meanwhile, state Rep. Rafael Anchia, D-Dallas, grilled Morrison on why a student ID from a high school or college would not be acceptable or whether she expected victims of human trafficking to be able to comply with the provision.

“What kind of ID do you think a human trafficking would have?” Anchia asked Morrison.

“If they’re actually a victim of human trafficking they should be going to a police department,” Morrison responded.

It was one of few questions Morrison answered during the hours-long debate, declining multiple requests from Democrats to answer questions about the bill.

The legislation would also increase the burden of proof for minors who say that asking for parental consent could lead to physical, sexual or emotional abuse.

[…]

Additionally, the measure would restrict where minors can seek judicial bypass. Minors can currently file applications for judicial bypass in any county in the state. But HB 3994 would require minors to file applications in their home county, unless that county has a population under 10,000, or the county where she will obtain the procedure.

An amendment by state Rep. Mary González, D-Clint, to revise that population limit to 50,000 failed.

Another provision of Morrison’s bill would make public the names of judges who rule on judicial bypass cases. González also offered an amendment to strike this provision from the bill, arguing that it would “put a target on the backs of judges who rule on these cases.”

See here, here, and here for the background. Now read that last paragraph, and keep in mind this is happening at a time when unlimited “dark money” campaign contributions can be made in secret and the Lege is busy protecting the identities of those involved in making the lethal injection drugs, in each case because of fear or reprisal from some unknown foe. But the names of judges who grant judicial bypass requests? Sure, go ahead and publish them. What could they possibly have to fear? I mean, whoever heard of violence being committed against anyone associated with abortion?

There is one small glimmer of hope, as RG Ratcliffe notes.

Morrison’s bill has no Senate companion. Finding a Senate sponsor will not be difficult, but the bill comes up again today [Thursday] on third reading. That means even more time will be eaten up by debating it once more, further driving down the chances of [Rep. Cecil] Bell’s anti-same-sex marriage bill. Also, depending on how the House handles the paperwork, Morrison’s bill might not be delivered to the Senate until sometime next week. Then it would have to be read and referred to committee, where a public hearing would be required before it could be voted out. Senate rules also provide means of delaying the hearing on the bill. So the odds of the bill reaching the governor are not great.

By debating it in the House, however, the legislation gives the Republican allies of Speaker Joe Straus an anti-abortion vote they can carry into next year’s primaries.

[…]

Now, the lay of the land for Bell’s HB 4105. The legislation would bar county clerks from issuing same-sex marriage licenses if the U.S. Supreme Court declares state bans on such marriages to be unconstitutional. The clerks could be caught between following a Supreme Court opinion and state law.

“It would be chaos,” Chuck Smith of Equality Texas told me.

Smith also believes the bill would be part of a larger strategy to keep fighting against implementing same-sex marriage in Texas. He speculated that Attorney General Ken Paxton would first argue that the Texas case, pending before the 5th U.S. Circuit Court of Appeals, was not part of the national case and so the ruling does not apply. Failing that, Paxton could then litigate using Bell’s bill that the federal government cannot force the states to use state money to enforce a federal law or court ruling.

Failure tonight of Bell’s bill would make that litigation more difficult.

Ah, you say, Governor Greg Abbott could add Bell’s bill to the agenda of any special session. That is true, but the governor would be unlikely to call a session before his 20-day deadline to sign or veto bills has passed. That means the timing of a special session, particularly if the tax-cut negotiations break down, is most likely sometime in early July. By then, the Supreme Court will have ruled, and if it rules in favor of same-sex marriages, that will be the law of the land before the Legislature could resurrect Bell’s legislation.

It’s something, but remember Abbott could add the judicial bypass bill to a special session call, too. I drafted this last night so I didn’t know as I wrote if Bell’s bill would fall off the table or not. I’ll post something about it for tomorrow, but whatever does happen any opportunity to slow things down was welcome. In the meantime, as distasteful and damaging as those tax cut proposals are, it would be better if they pass now and not in the summer. Hair Balls, Newsdesk, and the Observer have more.

Tesla going nowhere

We have entered the period of the legislative calendar where bills that have not been voted out of committee or aren’t scheduled for a vote begin to get pronounced dead. Here’s the Tesla bill’s obituary.

A crusade waged by Tesla Motors CEO Elon Musk to change Texas law to allow his company to sell electric cars directly to customers is on life support at the Legislature.

After getting crushed by state auto dealers at the Capitol two years ago, Musk all but declared war in the name of Tesla, assembling a deep bench of powerful lobbyists and spreading out a total of $150,000 in political contributions to dozens of lawmakers in recent months.

However, bills backed by Musk and his money-losing electric-auto firm have not just stalled in the Senate and House – where unfriendly committees have suffocated the proposals – but appear to be heading in reverse as key legislative deadlines approach.

The latest blow: the senator authoring a bill to allow Tesla to sell directly in up to 12 locations across Texas said recently that he’s abandoned plans to push the measure forward.

“We’re not looking at pursuing the bill at this time,” state Sen. Kelly Hancock, R-North Richland Hills, said.

[…]

Hancock, the senator carrying the Tesla proposal, did not elaborate on why he was burying his proposal. But his sudden cold shoulder reflects the less than enthusiastic public response the bill received in the Senate, where it sits with no champion, no joint authors and no co-sponsors. Tesla never received a hearing, and won’t unless the House moves its version of the bill over, said Sen. Troy Fraser, who chairs the committee considering the legislation.

“Even the members in favor, which were not very many, do not want to have a hearing,” said Fraser, R-Horseshoe Bay, who polled the committee two weeks ago on whether to hold a Tesla hearing.

In the House, Tesla’s bill is actively being worked by an Austin Democrat, but also has been met with resistance. A panel of lawmakers gave the measure a lukewarm reception at a hearing last month in which a Tesla official said the company may have to resort to taking Texas to court to get what it wants.

The House Licensing and Administrative Procedures Committee left the bill pending, and the panel’s No. 2 says he doesn’t think it has enough support to move forward.

“It’s fair to say that Tesla is dead in committee for this session,” said state Rep. Roland Guitterez, a San Antonio Democrat who serves as the committee’s vice chair and opposes the bill. “If there was a willingness to move Tesla, I think we would have taken the vote already.”

See here, here, here, and here for the background. I’ve made the comparison to microbreweries often enough that even I’m tired of it, but keep two things in mind. One is that it took the craft brewers four sessions to get a bill passed; this is only the second session that Tesla has tried. And two, the brewers built a pretty good grassroots organization to bolster their cause. That’s easier for them to do since they have far more customers than Tesla does, but it worked where the spend-tons-of-money-on-lobbyists approach didn’t, or at least hasn’t so far. Draw your own conclusions. In the meantime, I’m sure Tesla will be back again in 2017.

Tesla makes its pitch

It’s a start.

At a packed committee hearing Monday evening, advocates for Tesla Motors told a panel of Texas House members that it was time to bring state car sales laws into the 21st century and allow the company to sell its luxury electric vehicles in Texas.

“The future is here,” said state Rep. Eddie Rodriguez, D-Austin, author of a bill that would allow Tesla to operate up to 12 stores in Texas. “The way in which we buy and sell goods is changing and we must adapt.”

The California-based company builds cars and sells them directly to consumers, bypassing car dealerships — a business model prohibited by Texas law. Tesla currently operates three “galleries” in Austin, Dallas and Houston, but employees there are barred from normal dealership activities like discussing prices or offering test-drives.

Rodriguez told the House Licensing and Administrative Procedures Committee that innovative technology companies like Tesla cannot succeed under the current system. His legislation, House Bill 1653, is similar to deals the company has struck in other states like New York, Ohio and Pennsylvania.

[…]

Opponents pushed back against Rodriguez’s bill on Monday, arguing that it creates two separate systems for car sales — one for Tesla and one for everyone else.

“Everyone should play by the same rules,” said Bill Hammond, CEO of the Texas Association of Business.

“It’s a solution looking for a problem. Tesla’s problems are self-imposed,” said Carroll Smith, who represents Texas on the National Automobile Dealers Association board in Washington, D.C.

See here for the background. I’ve said before that I support allowing Tesla into Texas, and that it wasn’t them that was asking for special treatment, but according to RG Ratcliffe, that’s not exactly true.

First, understand that this is not a fight over whether a car or truck can be sold over the Internet. That already happens through dealerships across the state. Go online, look at the dealer’s inventory and make a purchase.

Second, know this bill is not really about bringing free markets to Texas retail sales of new autos by busting the monopoly of licensed franchise dealers. House Bill 1653 would exempt manufacturers such as Tesla from having to sell through a state licensed franchise dealership, but the manufacturer would be limited to having a dozen or fewer sales locations in the state. Limiting the number of manufacturer dealerships just gives Tesla a competitive advantage over the giant motor companies of Detroit while trying to be unthreatening to the majority of Texas dealerships. Such a carve-out for Tesla is not exactly about bringing consumer choice to Texas, even if Tesla In Texas tries to claim otherwise.

[…]

Whether the Legislature carves out an exception for Tesal or not, this debate is no more about free markets than was the Candy Bin Bill that I once covered.

Once upon a time, bulk sales of beans and grains and candy were found just in health food stores for hippies, not the upscale groceries of today. Only two companies delivered food to the consumer in bulk. One used gravity shoots that dropped product directly into the consumer’s paper bag. The other used bins and scoops for the consumer to measure out how much product they wanted.

The gravity dealer pushed legislation that banned bins and scoops as health code violations. Imagine, their lobbyists said, a plumber coming from auguring out a toilet drain and sticking his unwashed hands into the bin to scoop up food. Ugh! Gross!

The bin dealer countered by claiming the gravity shoots should be outlawed because they were anti-consumer – get too much product and you have to buy it anyway because there is no way to return the excess to the bin. Let the consumer have freedom of choice!

In the end, a compromise piece of legislation passed giving the health department the power to regulate bulk food sales, no matter how it is delivered. Think of the auto dealers as the gravity shoot dealers and Tesla as the bin and scoop. They both want to be regulated, just to their own advantage.

Read the whole thing, it’s a great overview. I don’t get the licensed franchise dealership model, just as I don’t get the three-tier distribution system for beer. It’s great for those who get to participate in it, but it’s hardly a “free market” and it doesn’t do anything for the customers. I say we should let Tesla sell its cars the way it wants to, but that doesn’t mean they should be the only ones. If Ford or Toyota or whoever wants to set up their own shops to sell their cars directly to the public, I don’t see the problem with that. Last I checked, other manufacturers in other industries can do this (do the words “Apple Store” ring a bell?) and the republic remains on its feet. I understand why TADA wants to maintain the status quo, and I understand why Tesla is seeking this limited entrance, but that doesn’t mean it’s the way things ought to be.

Bill filing deadline has passed

Believe it or not, we are almost halfway through the legislative session, and we have now passed the point where new bills can be filed.

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Racing to beat a deadline for filing bills, state lawmakers on Friday submitted hundreds of measures on everything from abolishing the death penalty to the licensing of auctioneers.

By the time the dust settled, 928 bills had been filed in the state House and Senate on Friday, setting the chambers up for a busy second half of the legislative session.

“Now, it’s game on,” longtime lobbyist Bill Miller said.

In all, some 8,000 measures are now before the 84th Legislature, including 4,114 House bills, 1,993 Senate bills and 1,771 resolutions.

[…]

The most high-profile bill filed Friday was an ethics reform package supported by Gov. Greg Abbott that long had been expected to be submitted by Sen. Van Taylor, R-Plano. Abbott had declared ethics reform a legislative emergency item during his State of the State address last month.

Taylor’s proposal, known as Senate Bill 19 and also backed by Lt. Gov. Dan Patrick, would require state officials to disclose contracts with governmental entities, prohibit lawmakers from serving as bond counsel for local and state governments and make departing legislators and statewide elected officials wait one legislative session before becoming lobbyists.

“There is no more valuable bond in democracy than the trust the people have with their government,” Taylor said in a statement. “The common-sense ethics reform outlined in Senate Bill 19 will strengthen that bond and send a clear message to the people of Texas that there is no place in government for those who betray the trust given to them by the voters.”

Tax policy also was a common theme, with [Rep. Dennis] Bonnen submitting his hotly anticipated proposal to cut business and sales taxes.

The Senate, which in some ways has been moving faster than the House, already has debated several tax proposals, and the issue is expected to be a priority focus of the session.

The Trib highlights a few bills of interest.

— House Ways and Means Chairman Dennis Bonnen, R-Angleton, filed his long-awaited proposals to cut the rates for both the margins tax paid by businesses and the broader state sales tax. The margins tax bill, House Bill 32, is identical to one filed by Senate Finance Chairwoman Jane Nelson, R-Flower Mound. The measures should draw the House more into the tax cut debate this session, which until now has been focused more on the Senate, where Nelson has already held hearings on some high-profile measures.

— Several measures filed Friday aimed at allowing Texas to change its approach to immigration, even as broader proposals stall in Washington.

House Bill 3735 by state Rep. Byron Cook, R-Corsicana, seeks to establish a partnership with the federal government to establish a guest-worker program to bring skilled and unskilled labor to Texas.

House Bill 3301 by state Rep. Eddie Rodriguez, D-Austin, would recognize undocumented Texans as “citizens” of the state. It would allow them to apply for driver’s licenses, occupational licenses and state IDs if they meet certain residency criteria and are can verify their identity.

“It also opens the door for future conversations about the very real fact that these Texans without status are here, they are not leaving, and we should be doing everything we can to help them find employment, housing and opportunity,” said Laura Stromberg Hoke, Rodriguez’s chief of staff.

— House Bill 3401 by state Rep. Matt Schaefer, R-Tyler, seeks to establish an interstate compact between interested states for the detection, apprehension and prosecution of undocumented immigrants.

— Looking to add restrictions on abortion, state Rep. Jodie Laubenberg, R-Parker, filed House Bill 3765 to beef up the state’s informed consent laws when it comes to minors. Texas law already requires patients seeking an abortion to go through the informed consent process, but Laubenberg’s bill would require notarized consent from a minor and a minor’s parent before an abortion is performed.

— House Bill 3785 from Rep. Marisa Marquez, D-El Paso, would permit patients with cancer, seizure disorders, PTSD and other conditions to medical marijuana. The measure is broader than other bills filed this session that would only allow low-level THC oils to be used on intractable seizure patients.

— The National Security Agency might have some trouble in Texas if Rep. Jonathan Stickland, R-Bedford, gets his way. House Bill 3916 would make it illegal for any public entities to provide water or electric utility services to NSA data collection centers in the state.

— State Rep. Joe Deshotel, D-Port Arthur, filed a pair of measures, House Bill 3839 and House Joint Resolution 142, which would ask voters to approve the creation of as many as nine casinos. Under Deshotel’s plan, most of the casinos would be built near the Texas coast, and a large portion of the tax revenue would go toward shoring up the troubled Texas Windstorm Insurance Association, the insurer of last resort for coastal Texans.

— In an effort to pave the way for a Medicaid expansion solution that would get the support of conservatives, state Rep. Garnet Coleman, D-Houston, filed House Bill 3845 to request a block grant from the federal government to reform the program and expand health care coverage for low-income Texans. Though GOP leaders have said they won’t expand Medicaid under the federal Affordable Care Act, they’ve asked the feds for more flexibility to administer the program. Coleman’s proposal, titled the “The Texas Way,” intends to give the state more wiggle room while still drawing some Republican support.

Here’s a Statesman story about the casino bills. There’s been a distinct lack of noise around gambling expansion this session, which is change from other recent sessions. I suspect Rep. Deshotel’s proposals will go the way of those previous ones, but at least there’s a new angle this time.

Here’s a press release from Republicans Against Marijuana Prohibition (RAMP) in favor of the medical marijuana bill from Rep. Marquez; there is a not-yet-numbered companion bill to HB3785 in the Senate, filed by Sen. Jose Menendez, as well. Two other, more limited, medical marijuana bills, the so-called “Texas Compassionate Use Act”, were filed in February. I don’t know which, if any, will have a chance of passage. I will note that RAMP has been admirably bipartisan in its praise of bills that loosen marijuana laws. Kudos to them for that.

If you’re annoyed at Jodie Laubenberg going after reproductive choice again, it might help a little to know that Rep. Jessica Farrar filed HB 3966 to require some accountability for so-called “crisis pregnancy centers’. Her press release is here.

I am particularly interested in Rep. Coleman’s “Texas Way” Medicaid expansion bill. (A companion bill, SB 1039, was filed by Sen. Jose Rodriguez.) I have long considered “block grant” to be dirty words in connection with Medicaid, so to say the least I was a little surprised to receive Rep. Coleman’s press release. I have complete faith in Rep. Coleman, so I’m sure this bill will move things in the direction he’s been pushing all along, but at this point I don’t understand the details well enough to explain what makes this bill different from earlier block grant proposals. I’ve sent an email to his office asking for more information. In the meantime, you can read Sen. Rodriguez’s press release and this Legislative Study Group coverage expansion policy paper for more.

Finally, one more bill worth highlighting:

The proposal introduced by out lesbian Rep. Celia Israel (D-Austin) would prohibit mental health providers in Texas from attempting to change the sexual orientation or gender identity of people under 18. Those who violate the law would face disciplinary action from state licensing boards.

Israel acknowledged that House Bill 3495 has little chance of passing the Republican-dominated Legislature, and it wouldn’t apply to faith-based practitioners, but she said it’s an important response to the Texas GOP’s 2014 platform plank endorsing reparative therapy.

“I don’t think that they recognize how hurtful these kinds of things can be,” Israel told the Observer. “To suggest that some young kid that happens to be gay is less than normal is very hurtful and harmful and dangerous, and I think I put myself back in those years when I was first discovering who I was. … I felt strongly about introducing a bill that was a counter to that, to say, ‘We don’t need fixing. We just need your love.’”

Virtually all of the major medical and mental health organizations have come out against reparative therapy, from the American Psychological Association to the American Medical Association and the American Counseling Association.

I agree that this bill isn’t going anywhere, but as I’ve been saying, that doesn’t mean it shouldn’t have been filed. Good on Rep. Israel for doing what’s right. Equality Texas has more.

Tesla tries again

They’ve brought more firepower to the fight this time, by which I mean “more lobbyists”, but we’ll see if they can break through.

Let the car haggling resume at the Texas Capitol.

A group of state lawmakers on Thursday filed legislation that would allow Tesla Motors to sell its luxury electric cars at as many as 12 stores in Texas, renewing the California-based company’s challenge to a state law protecting auto dealers.

Tesla’s business model is to sell directly to consumers, bypassing the middleman dealers as it does in many states. But a longstanding law bars that practice in Texas.

New legislation — House Bill 1653 and its companion, Senate Bill 639 — would allow manufacturers that have never sold their cars through independent dealerships in Texas to operate the limited number of stores. It’s modeled on deals Tesla has forged in other states, including New York, Ohio and Pennsylvania.

“Free market principles are the foundation of our strong Texas economy,” said state Sen. Kelly Hancock, R-North Richland Hills, who filed the Senate bill. “SB 639 helps sustain a competitive marketplace and gives consumers more choices.”

State Rep. Eddie Rodriguez, D-Austin filed the House bill, along with with Reps. Charles “Doc” Anderson, R-Waco; Jodie Laubenberg, R-Parker; Tan Parker, R-Flower Mound; and Ron Simmons, R-Carrollton.

Tesla currently showcases vehicles at “galleries” in Austin, Dallas and Houston, but because the galleries are not franchised dealerships, state law prohibits employees from discussing the price or any logistical aspect of acquiring the car.

Tesla calls the traditional dealership model unworkable, because it doesn’t mass-produce its cars — at least not yet. The company allows customers to order customized cars that it later delivers, and it can’t depend on independent dealers to champion its new technology, it says.

“Fundamentally, this company was founded to produce a new technology,” Diarmuid O’Connell, vice president of business development, said in an interview. “No one is as unconflicted as we are in our desire to promote electric vehicles.”

Some Texas dealers have approached Tesla about selling its cars, O’Connell said, and the company has “respectfully declined.”

Tesla and others have also questioned whether a traditional dealer could succeed in selling its cars, because dealerships make much of their money on maintenance — something the company’s highly touted models require little of.

O’Connell said the legislation would let Tesla employees educate Texans about its cars in person, allowing the company to grow its footprint here. He envisions adding stores in Corpus Christi, San Antonio, El Paso, Fort Worth and San Antonio, if given permission.

See here for previous Tesla blogging. The Trib also had an interesting story about the auto dealers’ attempt to get Tesla to work with them; some of that is recapitulated in the story above, but it’s worth reading on its own. Tesla insists that their model doesn’t work with dealerships, though I get a whiff of “the lady doth protest too much” in their argument. I’ve compared Tesla’s efforts to the microbreweries more than once, and one of the things that characterized that saga was that in the end they didn’t get everything they wanted. They scaled their wish list back to the point where they were able to minimize opposition from the big brewers and the distributors, and from there the task became doable. It would not surprise me if in the end Tesla needs to find some form of accommodation with the auto dealers.

Tesla brings the lobbyists

Nothin’ but good times ahead if you’re a Republican-connected lobbyist, thanks to Tesla and the auto dealers.

Locked in a brawl with auto dealers, Tesla Motors CEO Elon Musk is unleashing some of the most powerful lobbyists and consultants in the state to persuade lawmakers to make it easier for his company to sell electric cars in Texas.

Ahead of the legislative session, Musk has assembled an all-star team of politically well connected forces at the Capitol – almost all entrenched with top Republican leaders – to lay the groundwork for a full Tesla blitz come January.

Musk, the California billionaire who also heads the rocket company SpaceX, is pressing the Legislature to allow Tesla to bypass traditional dealerships and sell cars in Texas through its stores.

An attempt failed last session, as Tesla was squashed by a network of state auto dealers and their own team of well-connected hired guns.

This time, according to lawmakers and lobbyists, Musk has revved up the Tesla influence machine to make sure he doesn’t lose again in Texas.

“Tesla is going to move in force to bring significant resources to this debate this session,” said state Rep. Jason Villalba, a Dallas Republican who last session supported the electric-auto maker’s push. “You’re going to see a lot of pressure on these young new members in the Legislature, a lot of movement on the floor and the backrooms to get people convinced this a good deal for Texas.”

Playing the influence game at the Texas Capitol is nothing new for Musk, who employed a team of lobbyists last session and parachuted into Austin on two occasions to personally push for legislation to help SpaceX and Tesla.

He is set to hit Texas again next month – two days after the legislative session starts – to headline a state transportation forum.

But this time, he’ll be coming back to Texas just months after disappointing state officials with a decision to pass up on the Lone Star State for Tesla’s $5 billion lithium-ion battery plant in favor of Nevada.

And the company’s opponents know it.

“They tried to use the giga­factory as leverage to get their foot in the door, but the gigafactory was never coming to Texas,” said Bill Wolters, president of the Texas Automobile Dealers Association. “I can’t imagine what kind of tale they can spin.”

See here for the background. I’ve compared Tesla’s efforts to those of the microbreweries, but this is where the analogy breaks down, since they never had a phalanx of gold-plated lobbyists at their disposal. Anyone in the vicinity of the Capitol next spring ought to keep an eye out on the sidewalk as you walk around – you may see stray $100 bills lying around. We’ll see whose lobbyists are mightier. PDiddie has more.

Legislative quick hits

This is the time of the session where there’s lots happening, and there isn’t always the time or space to stay on top of it all. So here are a few quick updates on things that are happening in an attempt to at least not be too far behind.

A bill to give Tesla Motors an opportunity to operate in Texas moves out of committee in the House.

The House Business and Industry Committee advanced a bill on Tuesday that would allow Tesla Motors to circumvent the state’s franchise dealer system and sell cars directly to Texans, giving a shot in the arm to the company’s efforts to operate in the state.

Tesla says an exemption from the franchise dealer system is the only way the company can operate successfully in Texas, but the owners of state auto dealer franchises have objected, saying the effort weakens a business model that has been key to their success.

House Bill 3351, by state Rep. Eddie Rodriguez, D-Austin, was replaced by a committee substitute that offered auto dealers another layer of protection: If Tesla ever sells more than 5,000 cars a year in the state, it will become subject to existing regulation and must start to franchise its operations.

With Tesla projecting sales of only a few hundred cars a year in the state, the bill’s supporters, including Diarmuid O’Connell, the vice president of business development for Tesla motors, called this a workable approach.

“This would give us the space we need to introduce our technology in the state,” he said.

See here for the background. I’m rooting for this one.

A bill to allow online voter registration has passed the Senate.

[Tuesday] afternoon, the Texas senate approved SB 315, a bill proposed by State Sen. Carlos Uresti (D-San Antonio) to allow holders of unexpired Texas driver’s licenses or state-issued IDs to register to vote online.

Currently, registered voters in Texas may change their addresses online if they move within the same county but must complete a paper application if they are registering to vote for the first time or have moved to a different county.

In testimony on the proposed bill, election administrators said the legislation would both save significant money by reducing the need to manually enter information and eliminate transcription mistakes that happen with the current process.

The version of the bill approved by the Texas senate differs slightly from the original filed version in that the passed bill no longer requires voters to use the address listed on their license or ID as their voter registration address.

A similar bill – HB 313 – by State Rep. Mark Strama (D-Austin) is currently pending in the state house.

See here for the background. Another bill I’m rooting for. BOR has more.

Sen. Dan Patrick’s charter school expansion bill had its hearing in the House

Lawmakers didn’t let on too much of their feelings about the bill—but Killeen Republican Jimmy Don Aycock, chair of the House Public Education Committee, said he didn’t consider the bill watered-down, because it allows the state’s charter network to grow. Charter school officials seemed to agree.

The bill still gives charter schools priority access to unused public school facilities, which Kathleen Zimmerman, executive director of NYOS Charter School, said is the bill’s most important improvement. Zimmerman said she has to give up her office for tutoring sessions because unlike public schools, charters don’t get facilities funding.

Under the Senate version, the education commissioner would revoke charters of schools that performed poorly in three out of five years.

Zimmerman said she didn’t focus on those higher standards because she wanted to highlight the positives. But, she said, “as a charter operator, I don’t want poor performing charters either.”

Rep. Alma Allen (D-Houston) said she’s concerned that charters may have a hard time getting loans because some banks want them to plan to be open for more than five years.

Charles Pulliam, chief development officer of Life School charter in Dallas, said that prospect would undermine the flexibility charters need to test out innovative education strategies.

“It scares me a little,” Pulliam said. “To have one blanket way of determining if they are successful is a mistake.”

The bill is SB 2, and it easily passed the Senate after adding a bunch of mostly Democratic amendments. It is pending in the House Public Ed committee.

Speaking of charter schools, a bill to limit the role ex-SBOE members can play at one has advanced.

A measure to bar former State Board of Education members from taking a job at a charter school or related foundation within two years of serving on the board is headed to the full Senate.

Senate Bill 1725 by state Sen. Bob Deuell, R-Greenville, is intended to close the revolving door between the SBOE and charter schools.

An amendment by Sen. Leticia Van De Putte, D-San Antonio, would allow former board members to take a job at a charter school within the two-year period so long as that member did not vote to create that particular school.

The Senate Education Committee passed the bill 6-3 late Tuesday.

The three nays all came from Republicans, which suggests this bill could have problems getting any farther.

The Lege has been trying to change the name of the Railroad Commission to something more reflective of reality for as long as I can remember. They’re still trying, and working on some other reforms as well.

The bill, SB 212 by State Sen. Robert Nichols, R-Jacksonville, embodies a previous Sunset review of the Railroad Commission that didn’t pass in the last legislative session that would forbid certain campaign contributions. For instance, commissioners could not accept donations from a party involved in a contested case hearing. It would also limit campaign contributions to the 17 months before an election and 30 days after. Commissioners are elected to six-year terms.

A contested case hearing is the way citizens protest against an oil and gas company permit or action.

Barry Smitherman, Chairman of the Railroad Commission, said during testimony that the campaign restrictions were “tricky” because the commissioner position is elected statewide, the state is big, travel is necessary and commissioners must raise money.

State Sen. Rodney Ellis, D-Houston, who sits on the committee, said the Sunset Commission had thought hard about how to put reasonable limits on the campaign financing.

“Sitting there for a six-year term, being able to raise unlimited amounts of money from the industry that they regulate, there clearly is a perception problem,” said Ellis.

The Railroad Commission should be subject to restrictions that differ from other statewide elected officials, like senators and representatives, because the nature of the commission is unique, Nichols said, because the commissioners have six-year terms, they regulate a specific industry and they set rates.

Similar Sunset legislation for the commission originating in the House, HB 2166 by State Rep. Dennis Bonnen, R-Angleton, recently passed out of committee, but largely stripped of the campaign and ethics reform, according to Texas Energy Report. That bill could end up competing with the Senate bill discussed Tuesday.

[…]

No one testified specifically against the name-change provision. [Commissioner Christi] Craddick suggested the more succinct Texas Energy Commission. State Sen. Glen Hegar, R-Katy, who worked on the Sunset review that failed to pass in the last legislative session, also suggested a new name.

“I’d like to change it to Texas Department on Oil and Gas because it sounds cool … TDOG,” Hegar said.

The official name in the bill is Texas Energy Resources Commission. But I like Sen. Hegar’s suggestion.

We close with two from the inbox. First, from Equality Texas:

Moments ago, the House Committee on Criminal Jurisprudence advanced House Bill 2403 by Rep. Mary González of El Paso on a committee vote of 5-3.

HB 2403 would remove existing inequity in Texas’ “Romeo & Juliet” Affirmative Defense law. The “Romeo & Juliet” Affirmative Defense is a logical approach to the reality that adolescents sometimes make sexual decisions that adults wish they had not made, but that adolescents have been making since the beginning of time.

Under current law, if teen sweethearts are of opposite sexes, consensual intimate contact remains a matter between parents and their children. However, the “Romeo & Juliet” Affirmative Defense is not currently available to dating teens of the same gender. The state should not intrude on the right of parents to instill their values about sex into their children. Nor should the state interfere if teenage sweethearts make decisions that their parents believe are not what is best for them.

This needs to be a conversation between parents and their children. Not between parents, their children, an arresting officer, a prosecuting attorney, and a trial judge. That is why the “Romeo & Juliet” Affirmative Defense exists.

HB 2301 will ensure that it applies equally to straight & gay teens.

Today’s House committee action follows advancement of identical legislation by the Senate Committee on Criminal Justice. On April 9th, Senate Bill 1316 by Senator John Whitmire of Houston was advanced by the committee on a 4-1 vote. SB 1316 is on the Senate Intent Calendar for Tuesday, April 23, 2013.

See here for more. As far as I can tell, the full Senate has not taken up SB1316 as yet.

Last but not least, a non-good bill from Empower the Vote Texas:

HB 148 by Rep. Burkett is scheduled to be voted on by the full House tomorrow, April 25th. Please contact your State Representative and tell them to vote NO on this bill. If you are not sure who is your State Rep, you can use the “Who Represents Me” lookup tool. Emails addresses for all House members are firstname.lastname @ house.state.tx.us, however phone calls are much more effective.

Attached are the letter ETVT sent to all Representatives opposing this bill along with supporting documents. The original text of the bill as introduced, the new text of the committee substitute, witness list, and bill analysis can be found here.

A copy of the letter is here. The hearing is today, so we’ll see how it goes.

What does Tesla Motors have in common with microbreweries?

Both are forbidden by archaic laws from selling their wares direct to the public.

Electric car maker Elon Musk wants to bet big on Texas – but he’s having trouble getting his chips on the table.

Musk, a South African-born entrepreneur and the CEO, chairman and co-founder of Tesla Motors, wants to sell Tesla’s electric cars directly to Texas consumers. But to do so, the company must win an exemption from state antitrust laws that regulate the relationship between car dealers and manufacturers.

State laws prevent car manufacturers from selling directly to Texas consumers and require that manufacturers operate through a tightly regulated franchise system. Texas’ protections for car dealers are among the strongest in the country. The Texas Automobile Dealers Association says the rules protect consumers, and ensure the livelihood of Texas auto dealerships. Tesla and its supporters say the laws are an antiquated legacy, and that the ability to sell directly to customers is crucial to the company’s livelihood.

“Everyone told us when we were getting into this that we’d get our ass kicked,” Musk told reporters at a press conference on Wednesday. “Well, I guess there’s a good chance that we will get our ass kicked. But we’ll try.”

Two bills — Senate Bill 1659, by state Sen. Craig Estes, R-Wichita Falls, and House Bill 3351, by state Rep. Eddie Rodriguez, D-Austin — would carve out narrowly tailored exemptions from state franchise law for Tesla. Under the measures, American manufacturers of electric cars that have never previously had franchised dealerships could sell cars directly to customers.

But the bills’ critics, including some legislators, ask why Tesla can’t conduct business like other, established car companies.

“There’s nothing prohibiting this company, in the future, from finding a dealership to represent them,” said state Sen. Dan Patrick, R-Houston. He argued that weakening the dealer model would hurt car owners.

“I would be wary, as a consumer, of buying a car from a manufacturer that may or may not be here in six months.”

I’m just curious – has anyone ever explained to Dan Patrick how capitalism works? What he said is true of any product or service on the market. Last I checked, auto dealerships can go belly-up, too.

Currently, Tesla has “galleries” in Austin and Houston. Employees there are legally prohibited from discussing the price or any logistical aspect of acquiring the car. Consumers who want to purchase the vehicle have to order the car from Tesla’s headquarters in Palo Alto.

The cars are then delivered in a truck with no company markings, per Texas law. Once delivered, Musk said, the customers even have to unwrap their new automobiles themselves, because under the law no representatives of Tesla’s in the state are allowed to do, say or touch anything related to selling or delivering cars.

To put it bluntly, this is nuts. Laws like these, in the automotive industry and the beer-making industry, do nothing for consumers, but do ensure a tidy piece of the action for a privileged set of middlemen. I can’t imagine too many people will want to buy a car direct from a manufacturer – most of us have at best a vague idea of what we want in a car, which is why we go to dealerships and take test drives and so on – but I can’t think of any reason why someone who does know what she wants should be prevented from doing business directly with the source. If Dan Patrick or anyone else is truly concerned about the risk such customers may be exposing themselves to, they can insist on including some strong consumer protections in the law that Tesla is seeking. Ideally, the exception Tesla is seeking to carve out really ought to be a general one for all automakers, but the bills are narrowly tailored to just them because everyone is already freaking out about it. The Lege can be a very weird place sometimes. As with the microbrewers, it will take Tesla more than one session to get enough buy-in on this to get a bill passed. I hope they’re in business long enough to see it happen, if only so Dan Patrick doesn’t get to say “I told you so”. See also this Trib interview with Elon Musk, and Texas Politics has more.

What will Doggett do?

Does Rep. Lloyd Doggett want his old district back or not?

Rep. Lloyd Doggett

The congressional and legislative districts used in this year’s elections were temporary maps drawn by panel of federal judges in San Antonio. The maps were designed to be used this year, while the courts continued to sort out various legal challenges to maps drawn by the Legislature.

Those challenges include efforts by a group of Travis County plaintiffs and a collection of civil rights groups who accused the Republican-controlled Legislature of creating racially and ethnically discriminatory maps. Republicans denied the allegations, and the case is ongoing.

The Travis County plaintiffs weren’t specific in court documents about creating a Travis County-centered district for Doggett, said Michael Li, a Democratic fundraiser and redistricting expert. “But that was the crux of their argument in the first round of redistricting, and it very well could be again,” Li said.

State Rep. Eddie Rodriguez, an Austin Democrat and one of the Travis County plaintiffs, said in an interview that he would like to see a Travis County district in which minorities would be able to elect the candidates of their choice, like they have with Doggett.

“I’d like to see as much of Travis County as possible in one congressional district,” Rodriguez said. “I would like to see us having one unified voice in D.C.”

Rodriguez said he believes Doggett feels the same way, but in a statement Doggett said: “I remain ready for whatever Republicans throw at me next. I am really not concerned with ‘what if,’ I am working on ‘what now’ is needed to serve our families.”

I don’t remember, and the story doesn’t say, if Doggett fought to have CD25 restored as a mostly-Travis County district after the 2003 re-redistricting. When it was redrawn for the 2006 election, it was a byproduct of CD23 being declared illegal. My guess is that Doggett will stay quiet, at least publicly, about this. He’s already proven he can win in a non-Travis-centric district, so it’s not clear what he’d gain from advocating for CD25 to be put back together. It won’t surprise me if he expresses an opinion behind the scenes, or if he ultimately has some influence over whatever the Travis County intervenors do, but I seriously doubt he’ll be caught talking about it out loud. On a related note, Texas Redistricting reviews the briefs submitted by the intervenors asking the Supreme Court to dismiss the State of Texas’ appeal or, alternatively, to summarily affirm the decision of the district denying preclearance of the redistricting maps drawn by the Texas Legislature. We’ll see how long it takes to get a ruling.

More on the foodie caucus

The Trib has an update.

Rep. Eddie Rodriguez

On a mission to advance the local food movement, a Democrat from Austin is finding common ground with Republicans and rural Texans.

When Republicans hear a Democrat saying there’s “too much regulation, their ears perk up,” state Rep. Eddie Rodriguez, that Democrat, said with a smile. He founded the Farm to Table Caucus, the nation’s first bipartisan legislative caucus focused on advancing the local production of healthy food. Ultimately, Rodriguez says, the caucus could help address health issues in Texas like obesity and the scarcity of healthy food options in poor urban neighborhoods.

While their large-scale counterparts receive agricultural tax relief, urban and small-scale family farms do not qualify under many county appraisal districts’ definitions of agricultural land use. And a lack of consistency in local health regulations makes it difficult for farmers and chefs to know what is permitted, what requires a permit and what is off-limits when selling or distributing locally produced foods.

[…]

“We have to look at the balance of the concern about food safety versus food freedom,” said state Rep. Lois Kolkhorst, R-Brenham, who co-chairs the Farm to Table Caucus. Although she usually favors local government control, Kolkhorst said the state should provide consistent definitions on what type of food production is allowable.

She authored the Cottage Food Law, which was passed in 2011 and allows Texans to sell baked and canned goods from home as long as they meet certain requirements.

Rodriguez has drafted a variety of ideas for the caucus to consider, such as reducing barriers to tax exemptions for urban farms, allowing onsite processing of feral hog and deer meat that could be prepared at soup kitchens, and expanding the Cottage Food Law.

See here for the background. While I generally agree with the goals here, I’d feel better about adding more exemptions to our tax code if we had a sunset-like process in place to review them periodically see which ones are still useful and desirable and which have morphed into money-sucking boondoggles and special-interest-protected sacred cows. But that’s a separate fight. In the meantime, as I said I generally support this effort and wish them well in the next session.

The foodie caucus

Sure, why not?

Rep. Eddie Rodriguez

State Rep. Eddie Rodriguez, an Austin Democrat and admitted foodie, is creating the Farm to Table Caucus of the Texas House. Rodriguez is expected to send letters to all of the House’s 150 members Monday and invite them into the bipartisan group.

As it seeks to ride the wave of popularity of buying local food, the caucus will be focused on making it easier for small producers of healthy food to expand their markets, while allowing for increased availability of their locally produced food.

“It’s the outcome of a movement that’s happening around the state,” Rodriguez said. “It’s about time for something like this to happen.”

The caucus will focus on educating policymakers and the public about the value of small food producers, making sure government agencies don’t get in the way of small operations’ progress and helping to remove obstacles to the development of the market.

The result could be a new form of local economic development, Rodriguez said.

He also said that the caucus will marry the interests of rural and urban Texas, two factions that regularly find themselves at odds in the Legislature over a variety of issues such as transportation, public education and access to health care.

Rep. Lois Kolkhorst of Brenham, who along with Rep. Rodriguez sponsored the Cottage Food bill that was passed last session, will be the caucus’ vice chair. The Lege recently had its first ever joint hearing between the House Agriculture and Livestock committee and the House Urban Affairs committee, so there’s clearly some momentum on this. I’ll be interested to see who joins up and what they do with it next session.

The Cottage Food Law was adopted

I received the following email from Kelley Masters of the Texas Cottage Food Law group late last week:

After a roller coaster of a session, the cottage food bill ended up getting attached as an amendment to SB 81 in the 11th hour, and is now sitting on the Governor’s desk awaiting signature. We were so lucky to have Representative Kolkhorst fighting for us. It has been quite the ride. Thank you for your support, we are just praying Perry agrees with it too.

See here for some background. Here’s SB81, and here’s where to see the relevant amendment. SB81 currently awaits action from Governor Perry, so if you want to see him sign it, now would be a good time to contact his office and say so. I just hope that next session the microbreweries and brewpubs have the same good legislative fortune. The Dallas Observer has more, and you can follow Texas Baker’s Bill on Facebook for further updates.

A win for the microbrewers

Woo hoo!

Craft beer brewers came to the Capitol this session with a number of bills giving them greater latitude in getting their beers to customers. [Thursday], the House gave an early OK to one of those bills, allowing breweries to charge admission for tours, and include up to two six-packs of beers to give to tourists at the end.

“Tours of our brewery are the single most important marketing item,” Brock Wagner, founder of Saint Arnold brewery in Houston, told the House committee that took up the bill last month. Other states have that ability, he said, and those breweries and their beers are out-competing Texas beers.

This is HB602 by Rep. Jessica Farrar we’re talking about. It passed the House unanimously and now needs to pass the Senate. Beer, TX has some information on that:

[Rep. Farrar’s] bill now awaits committee assignment in the Senate, where it is being sponsored by State Sen. Wendy Davis, D-Fort Worth.

[…]

Brock Wagner, the Saint Arnold Brewing Co. founder who has pushed for the change as a way to help small brewers market their products more effectively, said his focus now turns to the upper chamber. While pleased with Thursday’s vote, he was not ready to pop the top on a celebratory ale.

“I continue my state of cautious optimism,” he said. “We’re not there yet. It’s certainly a big step in the right direction.”

Sen. Davis’ bill is SB1863; it remains in the Business and Commerce Committee as of today. I should note that Saint Arnold’s already charges for a tour, and in return you get the lovely glass pictured on that page. That’s nice, but perhaps not so useful after a certain number of return trips. If this gets signed by the Governor, I presume Saint Arnold will institute a tiered pricing structure for its tours, thus allowing those who wish to take home a six pack or two to do so. After three sessions of trying to make something like this happen, this is substantial progress.

I wish I could report equally good news for the brewpub bill HB660, but it remains in committee and I daresay it is unlikely to see the light of day this session. Tellingly, the only update on the Brewed And Never Battered blog talks about a couple of other bills that had recent committee hearings, HB2436 by Rep. Eddie Rodriguez, and companion bill SB1575 by Sen. Kirk Watson, which would allow for some direct sales by microbrewers, but neither has received a committee vote yet. Frankly, no matter what happens with any of these bills, I think Scott Metzger did a great job getting the word out and building support for letting brewpubs expand their markets. If HB602 can pass, something like HB660 will eventually pass, too. It may take a few more sessions, but it will happen, and we’ll all be the better off for it.

It’s way past time to regulate payday lenders

From the Observer:

As an industry, when you’ve got Tom Craddick, consumer groups, the Midland County District Attorney and Bible-quoting Baptists arrayed against you, most likely you’re facing a serious come-to-Jesus moment. Today, a House committee heard hours of impassioned testimony in favor of legislation that would curb Texas’ Wild West payday and auto-title lending business. As Melissa del Bosque has documented, payday lenders in Texas are virtually unregulated and frequently lock consumers into a cycle of debt. Craddick’s bill, along with three other identical bills, would close a loopholethat allows payday lenders to register as consumer credit organizations (CSOs) and escape regulation.

It was rather incredible to watch former Speaker Tom Craddick, who doesn’t exactly have a reputation as an advocate for the working poor, take the payday lenders to the woodshed. “No longer do I think the Legislature can stand back and watch these businesses take advantage of people in need,” Craddick said today. The impact of rates that can amount to 500 percent APR is “overwhelming – actually it’s awful,” he said.

Under the proposed legislation, payday and auto-title lenders could no longer operate as consumer credit organizations, but instead would be subject to the same laws and regulations as other lenders. A cap of 135 percent – still far above the 36 percent limit imposed by many states – would be imposed on the short-term loans offered by payday lenders.

Craddick’s bill is HB410, and it has a bipartisan plethora of co-authors. Other bills on the subject are HB 656 (Farias), HB 661 (Rodriguez), HB 1323 (Johnson), HB 2594 (Truitt), and HB 2592 (Truitt).

Among the consumer advocates and faith leaders, consensus seemed to be that the best approach would be imposing rate caps, closing the CSO loophole and imposing existing law on the lenders. That’s Craddick’s approach. However, the payday lender industry is basically telling legislators that they will go out of business if that happens and desperate consumers will have nowhere to go for easy credit.

The Craddick approach would “dramatically change the business model as we know it in a detrimental way,” said Rob Norcross, a lobbyist for the Consumer Service Alliance of Texas, an industry group.

Asked today if they could survive with ‘just’ 135 percent APR, Norcross said, “The answer is no. … Those rates aren’t sustainable.”

Cry me a river, dude. If your business isn’t sustainable at that APR level, you don’t have a viable business model and deserve to be made extinct. If that’s what happens, it’s a feature, not a bug.

Basically, payday lenders need to be treated like any other loan-making financial institution. As the group Texas Faith for Fair Lending notes, the problem is that’s not how they operate now.

payday and auto title lenders do not operate as lenders governed by the Texas Finance code as one might expect. Instead, they have found a loophole in a law called the Credit Services Organizations (CSO) Act that sets no limits on rates and fees they charge borrowers.

The CSO statute was enacted in 1997 and is designed to govern how credit repair services can help those repair bad credit. In this statute CSOs are given is the authority to “obtain an extension of consumer credit for a consumer.” The intent is clearly to enable CSOs to help Texans with bad credit build up a positive lending history in order to increase credit scores. Instead, over 98% of registered CSOs in this state are payday and auto title lenders that do anything but help people repair credit.

So, in practice, payday and auto title lenders are merely brokers, or arrangers of credit. They partner with banks or other large lenders who charge an interest rate of below the 10% APR constitutional limit, while the payday lender, registered as a CSO, charges an exorbitant fee. This diagram better illustrates the relationship –

The true lender, the financial institution, charges a small interest rate and makes a little money from the short loan. The CSO charges a high fee to arrange, collect and guarantee the loan. This is typically around $20 per $100 borrowed but there is no legal limit on these fees. The borrower never interacts with the actual lender.

They add nothing of value to the equation but reap huge profits by virtue of the loophole they squeeze through. That loophole needs to be closed. You can see videos of the TFFL press conference here, and more about TFFL, which is a Texas Impact project, here. If you’re a churchgoer, the odds are good that your denomination is involved in this effort. Please check it out and make your voice heard as well.

Cottage foods trying again

During the 2009 legislative session, I wrote about a group called Texas Cottage Food Law that seeks to legalize selling food that was made in a residential kitchen. From their website:

In Texas it is currently illegal (click to see law) to run a food establishment from a residential kitchen, even if your product is low-risk baked foods like cakes and cookies.  You cannot be licensed for a home bakery.

A group of dedicated home bakers are trying to change that law.

State Representative Eddie Rodriguez has filed HB 1139, the Cottage Food Production Act!  Please get involved today and call or write your State Representative and State Senator and ask them to support this important bill!

See here and here for more about the current law and what it does not allow. In 2009, HB 3282 by Rep. Dan Gattis was voted unanimously out of committee in the House and picked up a couple of co-authors and a Senate sponsor along the way, but never made it onto the calendar. I believe that if HB 1139 can get to the floor of each chamber it will pass easily, but especially in a session like this overcoming inertia and winning the competition for attention against all the other bills is tough to do. When you get right down to it, this is a bill that would facilitate job creation, which ought to be a no-brainer for legislators to support. If you support it, let your Rep and Senator know. If enough of them know it’s worth their time, it’ll get a shot.

And in a stroke of good timing, here’s a Houston Press cover story about the cottage food movement, written by Robb Walsh. You can see video clips of a couple of people quoted in that story talking about their home-baed food businesses here. This kind of publicity, plus the reactions from legislators and Ag Commish Todd Staples in the story, all bode well for the cottage foodies’ chances.