1209 Nueces • Austin, Texas 78701

512.477.6721 • 512.477.0836 fax • www.txbiz.org

February 27, 2013

The Honorable Juan “Chuy” Hinojosa, Chairman

Senate Committee on Intergovernmental Relations

P.O. Box 12068

Capitol Station

Austin, Texas 78711

RE: Senate Bill 385, relating to authorizing assessments for water and energy improvements

in districts designated by municipalities and counties.

Chairman Hinojosa:

The Texas Association of Business (TAB) would like to take this opportunity to communicate to

you and the members of the Senate Intergovernmental Relations Committee our support for

Senate Bill 385 by Senator Carona which is before your committee. TAB is a broad-based,

bipartisan organization representing more than 3,500 Texas employers and over 200 local

chambers of commerce. As Texas’ leading employer organization for more than 85 years, TAB

represents some of the largest multi-national corporations as well as small businesses in almost

every community in the state.

Our state faces significant challenges in ensuring that we have the infrastructure to meet the

needs of a growing economy. This challenge is particularly well illustrated by the situation we

face with the reliability of both our electrical power and water supplies. It does not overstate the

case to suggest that both are essential if Texas is to remain a place to attract capital investment

and job opportunities. Meeting these challenges will require significant financial investments and

this Legislature is to be congratulated for its serious consideration of solutions to these financial

demands. By far, however, the cheapest and most affordable supply of energy or water we find

will be the existing supply that we can reallocate because we saved and conserved these

resources.

The traditional approach to energy or water conservation has been to create financial incentives

through tax credits or exemptions, or worse, discriminatory tax or regulatory policies that distort

free markets, mandate investments with uncertain positive returns and reduce revenues to state

and local governments. SB 385 represents an innovative and creative alternative that is

particularly appealing to TAB – an option that is consistent with free market principles, is

completely voluntary and puts no public funds at risk. The key to the program authorized by SB

385 is a cooperative arrangement between private property owners, lenders and local

governments that enables property owners to make valuable improvements to property that

reduce demands for energy and water in a way that benefits all parties to the arrangement.

Chairman Juan “Chuy” Hinojosa

Re: SB 385

February 27, 2013

Page 2

Under the agreements authorized by SB 385 lending institutions will see increased business

activity and loans that are more secure. Property owners will be able to undertake capital projects

under more favorable financial terms, maintain healthier balance sheets and enhance the value of

their property – all while reduce long-term operating costs. Local governments will realize an

increase in taxable value of improved properties, realize reduced demand for often-strained

public utilities and benefit from the increased economic activity derived from the flow of goods

and services to the additional construction and capital investment this program will attract.

It has always been a fundamental policy principle of TAB that, whatever actions governments

undertake, they should act efficiently and add value to the communities they govern. SB 385

represents an unusual opportunity for local governments to work with private property owners in

a way that is mutually beneficial to both parties – an opportunity to do something for businesses

rather than to businesses. As the state looks, often desperately, for innovative solutions to

address our critical infrastructure problems, we cannot afford to ignore options that offer what

may be valuable solutions. When those options represent the functions of free markets, voluntary

business decisions and risks to private rather than public capital, TAB believes those options

merit the most serious consideration.

For these reasons, we offer our support for SB 385 and our commitment to work with the author,

the members of the committee and all stakeholders with an interest in the bill to ensure an

understanding of the bill’s intent and benefits and address any concerns about its effects.

Thank you for your consideration. As always, I am available at 512.637.7707 or

sminick@txbiz.org if you or your staff have any questions or require additional information.

Respectfully,

Stephen Minick

Vice President for Government Affairs

Chairman Juan “Chuy” Hinojosa

Re: SB 385

February 27, 2013

Page 3

cc: Members, Senate Committee on Intergovernmental Relations

The Honorable Robert Nichols

The Honorable Ken Paxton

The Honorable Larry Taylor

The Honorable John Carona

The Honorable Jim Keffer