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With the stroke of Abbott’s pen, TAB wins clean sweep on legislative front

 - Major victories on tax, newsroom issues

When Gov. Greg Abbott last week-end put away his veto stamp and bill-signing pen, Texas broadcasters concluded their most successful legislative session in TAB’s history.  Major victories ranged from fixes to state sales and franchise tax concerns, as well as key newsroom issues involving investigative reporting and public information laws.

TAB’s legislative initiatives started long before lawmakers convened in Austin Jan. 10, with local meetings with key lawmakers at stations in several markets across the state. The agenda officially kicked off with an impressive showing of station owners, managers and news directors at TAB’s 2015 Legislative Day conference in Austin which featured one-on-one lunch discussions with their local Representatives and Senators.

Tax Policy

Radio Transmission Equipment – Rep. Kyle Kacal, R-College Station, and Sen. Kel Seliger, R-Amarillo, responded enthusiastically to local radio broadcasters’ concerns about a disparity in state tax policy regarding digital transmission equipment.  Because of a ruling under former Comptroller Susan Combs, local radio stations lost their longstanding sales tax exemption for such equipment, despite a ruling from her predecessor, Carole Keeton Strayhorn, which dictated that the exemption provided in law should apply equally to TV and Radio broadcasters.

The passage of HB 2507 by Kacal and Seliger corrected that inequity and will save radio stations as much as $10,000 each depending on a station’s unique circumstances.  The measure takes effect Sept. 1 and is not retroactive.

Ben Downs of Bryan Broadcasting and Kevin Anderson of KKHA in Bay City testified before lawmakers as the bill progressed from the House to the Senate.  Downs was key to securing Kacal’s commitment, as was John Moesch of KQRX/KHKX/KMCM in Odessa-Midland in locking in Seliger’s support.

Franchise Tax – Rep. Tan Parker, R-Flower Mound, and Sen. Paul Bettencourt, R-Houston, took the lead in addressing a potentially costly gray area in the state’s franchise tax regarding revenue earned by content producers and broadcasters.  A lack of clarity in the franchise tax law had led to inconsistent audit findings on tax liability since then-Gov. Rick Perry pushed the much-maligned law through the Legislature in 2006.

HB 2896 by Parker and Bettencourt clarified that in transactions with Pay-TV companies in Texas, content producers such as ABC, CBS, FOX and NBC incur franchise tax liability for revenue from sales to the companies, not to Pay-TV companies’ subscribers.  The bill takes effect Jan. 1, 2018.

TAB partnered with the Motion Picture Association of America in advancing this measure which had passed the House in 2015, but failed in the Senate in the final throes of that legislative session.

Newsroom Policy

Reporting Third Party Allegations – Rep. Todd Hunter, R-Corpus Christi, once again reprised his role as a champion for Texas journalists by sponsoring a measure to reverse a Texas Supreme Court ruling that effectively would have otherwise stymied reporters’ ability to report third party allegations, the basis of most investigative reporting.

Hunter carried in previous sessions the landmark Citizen Participation Act, which is commonly referred to as the anti-SLAPP law, and the Defamation Mitigation Act, a uniform corrections and retractions statute.

Sen. Joan Huffman, R-Houston, sponsored the measure in the Senate and took the lead in the bill hearing early in the session which prompted, after contentious testimony, arduous negotiations with the trial lawyer lobby.  Reporters Jaie Avila of WOAI-TV San Antonio, Greg Groogan of KRIV-TV Houston, and Becky Oliver of KDFW-TV Dallas testified on broadcasters’ behalf.

The final language in SB 627 provides the protections journalists need while addressing trial lawyers’ initial concerns.  The bill took effect immediately when Abbott signed it May 18.                            

Texas Public Information Act – Sen. John Whitmire and Rep. Garnet Coleman, both Houston Democrats, joined forces to pass SB 308 which for the first time applies the Texas Public Information Act to private universities’ police departments.

Reporter Robert Arnold of KPRC-TV Houston was stunned to learn such police departments were exempt from the TPIA after being denied dash-cam video of a severe off-campus beating of a man alleged to have stolen a bicycle from the Rice University campus. 

Arnold testified on broadcasters’ behalf at the bill hearings.

TAB partnered on these measures with the Texas Press Association which represents the state’s daily and weekly newspapers.  Attorney Laura Prather of Haynes Boone drafted and negotiated SB 627, the third party allegations bill, for TAB and TPA.

Motor Vehicle Accident Reports – TAB secured a hard-fought win on a longstanding frustration – the process of securing complete motor vehicle accident reports – when the House sponsor, Rep. Ana Hernandez, D-Houston, agreed to reverse a provision in a bill she was carrying that would have made it nearly impossible for journalists to receive the complete reports.

Pat Stacey of KLTV-TV Tyler persuaded Rep. Travis Clardy, R-Tyler – a co-sponsor of the measure – to accept TAB’s amendment along with Hernandez, who also had been pressured by Hunter.

The effort was nearly lost after Sen. Charles Perry, R-Lubbock, succeeded in stripping TAB’s language in the Senate floor vote, aided by Huffman, despite an impassioned plea from Sen. Kirk Watson, D-Austin, who was acting in part on a late-night call from Eric Lassberg of KXAN-TV Austin.

When Watson questioned the constitutionality of Perry and Huffman’s effort, TAB’s Michael Schneider embarked on a midnight research effort and, with attorney Stacy Allen of Jackson Walker, confirmed that a court had found a similar measure unconstitutional nearly fifteen years ago.

That finding, along with swift maneuvering by TAB’s lobby team, clinched the win for journalists as Perry was forced to concede and accepted the version of HB 2633 that had been passed by the House.

Schneider reports on other significant newsroom legislation that TAB was able to improve or derail in a separate story in this issue of the TABulletin.

Broadcasters’ success this session resulted from a constant stream of individual broadcasters responding to very targeted calls to action from TAB at key points in the process, as well as their continued engagement in events such as TAB’s local legislative meetings, the biennial Legislative Day conference and financial support through membership dues.

Membership dues are used solely for TAB’s legislative effort and allowed TAB to supplement in-house talents with expertise from tax counsel Cindy Ohlenforst and legislative consultant Jack Erskine at K&L Gates, as well as media lawyers such as Stacy Allen and Paul Watler from Jackson Walker and Laura Prather and Alicia Calzada from Haynes Boone.

Questions?  Contact TAB's Oscar Rodriguez or call (512) 322-9944.

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