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March 22nd, 2011:

Compromise on microbrew bills

As Brewed and Never Battered noted, HB660 and HB602 were scheduled for a public hearing in committee today. I’m delighted to say that it looks like there was progress achieved on them.

Rep. Mike Villarreal, D-San Antonio, laid out HB660 before the House Licensing and Administrative Procedures Committee today. The measure, in its original form, would’ve allowed brewpubs — restaurants that brew their own beer — to distribute directly to other bars, restaurants and stores. But after a compromise with the Beer Alliance of Texas, the bill would only allow brewpups to sell their bottled wares via a beer distributor.

Villarreal told the committee that brewpubs are already manufacturing beer, and that Texas’ regulatory system is stunting their growth. Brewpubs in other states are allowed to sell to distributors, meaning Texas is losing out on what could be a growing business, Villarreal said.

“If it is putting our playing field at a built-in disadvantage to our brewpubs, versus out-of-state brewpubs, then it needs to change,” said Villarreal.

But opponents of the bill, including the Wholesale Beer Distributors of Texas, say allowing brewpubs to sell to distributors would break down the three-tiered system that regulates the production, distribution and retail sales of beer separately — and which has been around since Prohibition. The system is meant to make it easier to regulate and tax beer sales and keep any one company from gaining a monopoly.

They suggest a round-about alternative: HB602, which would allow breweries to charge admission for tours and include up to two six-packs of beers to give to tourists at the end of the tour. Keith Strama, who represents the Beer Distributors, told the committee if HB602 passes, brewpubs could change their licenses to become manufactures of beer, so that they could sell to distributors, sell during tours, and open a restaurant on the premises.

Rick Donley, president of the Beer Alliance of Texas, told the committee that he is a staunch supporter of the three-tier system, but that after working with Villarreal and the brewpub owners, a compromise was reached. Originally, the bill would have allowed brewpubs to sell a limited amount of their product directly to stores and other restaurants and bars, bypassing the distributors. The amended bill makes the distributors the middle man.

Scott Metzger, a brewpub owner and executive director of Texas Beer Freedom, said he’s pleased with the compromise. Being able to sell his beer to a distributor will help him grow his business, Metzger told the committee, but would also help grow the state’s economy and its tax revenue. Metzger, who is also an economics professor at the University of Texas at San Antonio, told the committee the bill has the potential to create $680 million a year in economic activity, 6800 new jobs at brewpubs and $57 million in new tax revenue per year.

Personally, I’d prefer to see the three-tier system thrown onto the ash heap of history, but if Scott Metzger is happy with this compromise, then so am I. If what they say about HB602 is true and it gets passed, it’ll be a huge step forward. I’m genuinely optimistic about their chances now. Kudos to Metzger, Rep. Villarreal, Rep. Jessica Farrar (the author of HB602), and everyone else involved in brokering this deal. Now let’s get this bill passed so we can all enjoy the benefits of it.

Elsewhere in alcohol-related news, two other bills moved along, though neither are bills I’d been following.

The first will require liquor stores to begin reporting the final sales destination of booze they sell — and could boost state revenues as much as $25.8 million — was approved this morning by the Texas Senate.

State Sen. Kevin Eltife, R-Tyler, the author, said that under current law, the stores do not have to report the final destination of liquor sales like they do for beer, wine and malt liquor.

“This changes the reports filed with the Comptroller, and is expected to increase tax revenue to the state,” Eltife said, noting that the improved tracking of sales is expected to improve auditing and tax collection.

The second bill, by Sen. Craig Estes, R-Wichita Falls, will increase the limit for Texas winery off-premise tasting room sales from 35,000 gallons to 50,000 gallons. More wine sold will mean more revenues for the state, officials said.

Estes said that the increase is expected to allow the wine industry to continue growing at its current rate. Between 2007 and 2009, the economic impact of the Texas wine industry grew from $1.35 billion to $1.7 billion annually.

The bills in question are SB576 and SB411. With the news about HB602, I’d say it’s been a good day for Texas beer and wine lovers.

The last bill of alcohol-related interest is SB595, which is a bill to allow Sunday liquor sales, and on which there has been no further action. There’s still time in the session for it, but as Yogi Berra once said, it gets late early out there. I’m not nearly as optimistic about this bill’s chances.

The time to plan for the future was in the past

Here’s a piece in the Rio Grande Guardian by my one-time history professor Char Miller that’s worth your time to read:

Today is World Water Day, a U.N.-sponsored event that is an ideal time for communities to strategize about their future water needs.

For San Antonio (and South Texas), this year’s theme–Water for Cities: Responding to the Urban Challenge–could not be more appropriate. Globally and locally, rapid urbanization is intensifying pressure on the capacity of metropolitan regions to insure all people’s access to potable water.

Compared to mega-cities such as Lagos or Mumbai, San Antonio seems to be in ok shape. Few express disquiet that a city whose population has doubled since the 1980s, and is still absorbing more water-hungry souls, might be in jeopardy. As for its continued dependence on what is essentially a single source of water, the Edwards Aquifer, how bad can that be?

Click the link to find the answer. Water rights, and the fight for access to water between cities and rural areas in Texas, is already a big deal, and will continue to be so. Water conservation is a big part of the puzzle, but San Antonio already does pretty well on that point. There’s still more for it to do to keep up with its growing population and their need for the wet stuff.

The next step for voter ID

Very likely, the courthouse.

While the Democrats have little chance of stopping the bill from getting the votes to pass, this particular piece of legislation may very well be tied up in lawsuits for years. And today, Democrats can lay some of the groundwork for those future cases.

As I wrote when the Senate passed this piece of legislation, this particular voter ID bill would be the most stringent in the nation—more stringent, even, than the Indiana bill that it’s based on. Currently, it only allows five forms of photo identification and only exempts people over 70. The Indiana law allows student IDs from state universities to count—our version doesn’t. And while the Indiana version gives folks missing suitable ID ten days after they voted to bring it in, the Texas version only gives voters six days. Many worry the bill would suppress voter turnout, particularly among the poor and black and Latino voters. In fact, the legislation is so dramatic that after it passed the Senate, I called Wendy Weiser, the director of Brennan Center’s Democracy Program. In addition to having one of the better titles I’ve heard, Weiser is an expert on voting rights.

Weiser said Texas was going to have a tough time implementing the law—despite the widespread legislative support. That’s because our fine state is one of seven singled out in the Voting Rights Act Section 5. Thanks to our history of discriminatory election law—poll taxes, literacy tests, etc. the Voting Rights Act requires that we get the okay from the Department of Justice or the courts before implementing certain changes to our election law, a process known as “preclearance.”

Because of its stringency, this bill will undoubtedly get a close look—and Weiser said that the legislative debate around the bill can play a role in determining whether or not it violatese the Voting Rights Act. For instance, if the Legislature rejects amendments that would make it easier for certain groups to obtain IDs, that could send up red flags for the Department of Justice. The legislative debate, Weiser said, “is relevant the extent to which the state takes proactive efforts to make sure that law is not excluding groups.”

This would be why GOP Caucus Chair Larry Taylor wanted Democrats to keep quiet and allow the bill to pass as it inevitably would without any fuss. This would also be why it’s never a good idea to take advice from your political counterparts. Fortunately, the Democrats are smart enough to recognize this for what it is, and in the end they stalled the House vote for at least a day via a point of order. That sent the bill back to the Calendars committee, where this issue was fixed and the bill voted out again, so the process can repeat itself as early as Wednesday. This would also be why Governor Perry declared voter ID and all those other silly, pointless things “emergency” items: It put them at the front of the calendar, which leaves sufficient time to correct errors like this one, which was about “days” versus “business days”. Later on in the session, what kills these bills isn’t necessarily the point of order but the lack of time to go through committee again.

Anyway. Greg does his usual bang-up job of liveblogging, which you need to read to understand just how ridiculous this exercise is. Stace, Eileen, Texas Politics, TrailBlazers, and Postcards have more.

Adding charter schools

There are currently 210 active charter schools, and state law limits the total number to 215. (Note that this refers to charter school networks as well, so those 210 schools translates to about 520 campuses.) There are about 56,000 students on waiting lists for charter schools in Texas. The Lege is doing the math.

House Public Education Committee Chairman Rob Eissler, R-The Woodlands , said he believes some upward adjustment of the cap will pass this session.

“There’s a market for them,” Eissler said. “We’ve got charter schools that have long waiting lists, and it’s a very market-driven mode of education, which is promising.”


The TEA is charged with monitoring and intervention when any public school fails to meet expectations. But spokeswoman Debbie Ratcliffe has said more agency layoffs could come this summer, raising concerns about the agency’s ability to effectively monitor a new generation of charters.

“If a law passes to increase (the cap), then we do what we can to make it happen,” said Suzanne Marchman, another TEA representative.

Lindsay Gustafson, public affairs director for the Texas Classroom Teachers Association, said her organization is not unequivocally against lifting the cap but opposes the proposition at this time, given the state’s budget woes and TEA staff reductions.

“They’re already strapped, in looking at charters — oversight of charters and any time that they take to close charters is pretty significant,” Gustafson said. “It’s not an easy thing to do.”

I agree with that sentiment. Clearly, there’s a demand for more charter schools, and as I’ve said before, we should do what we can to encourage the best of them to proliferate. But there’s a lot of bad ones out there as well – the story notes that in 2010, 11.1 percent of charters received the “academically unacceptable” designation, compared with 1.4 percent of regular public school districts. The TEA has just finished laying off over 10% of its staff. How are they going to oversee these new charters, and the existing ones, under those conditions? As with everything else this session, the Lege’s reach far exceeds its grasp. If the Lege wants more charter schools, they should come up with a way to pay for proper oversight of them. I don’t think that’s asking too for too much.

UPDATE: Here’s an op-ed in today’s Chron by Chris Barbic and Joe Greenberg of YEP Prep advocating the use of Permanent School Fund monies for charter schools. I agree with giving charters access to state funds for facilities, but not the PSF. How they do that needs to be determined.

Meet the new historical districts

Not so different from the old historical districts.

After months of petition drives and acrimonious public testimony over the protection of old Houston neighborhoods, the only change to the six historic district maps headed to the City Council on Wednesday is the removal of a single address from a Montrose-area district.

The council could end a divisive civic discussion that dates to last summer by approving a planning department report that concludes there is not sufficient support in any of the neighborhoods to repeal the historic designation rules that govern what property owners may do to the exteriors of their homes.


Prior to the reforms, homeowners denied city permission to demolish or alter their homes could disregard the city’s disapproval after three months and proceed with their plans. The council adopted a “no-means-no” ordinance in October that makes decisions by the city’s Archaeological and Historic Commission permanently binding. The amended ordinance also gives homeowners greater flexibility on additions and the use of materials.

In updating the ordinance, the council granted an escape clause giving neighborhoods a one-time shot to opt out of historic status altogether. Residents of six neighborhoods took up the cause, but in none could they muster the 51 percent support for repeal needed to have historic designation lifted from their homes. All of the districts are inside Loop 610.

“It’s been a very divisive issue out in the community. I think we do need to bring some closure to this,” said Council Member Ed Gonzalez, whose District H encompasses three of the districts.

I’m not so sure this is a closed issue just yet. The people who were on the losing side of this were not happy with the way the opt-out vote was conducted, since a failure to participate was counted as a vote for maintaining historic status. Getting 50% plus one of all homeowners rather than of all voters is a much higher wall to climb. I could see this all being re-litigated in a Mayoral election this fall, if a credible opponent to Mayor Parker comes forward. If not, then I’d say historic preservation has probably been put to bed for awhile. But one way or another, perhaps when Weingarten makes its next move with the Alabama Theater, this will pop up again.

What the decision to use Rainy Day funds means for school districts

From School Zone:

As you might know by now — unless you’re tuning out the news over spring break — the House Appropriations Committee, with Gov. Rick Perry’s blessing, agreed to spend up to $3.2 billion from the rainy-day fund to balance the state budget this fiscal year.

What does this mean for public education?

The short answer, for HISD, is not much.

The initial House budget for the biennium proposes slashing $9.8 billion — or about $5 billion a year — from the main public education fund.

Rebecca Flores, Houston ISD’s director of governmental relations, gives us a math lesson. With the newfound $2 billion, the House’s cut to public education goes down to $7.8 billion. If lawmakers decide to delay payments to districts (an accounting trick of sorts), generating $2.5 billion (her best guess), that leaves a $5.3 billion hit to public ed statewide.

HISD’s chief financial officer, Melinda Garrett, has been basing her budget for the district on the state cutting public ed by $5 billion — a pretty good guess based on the current House numbers. With that estimate, Garrett has been predicting that HISD could be $171 million short next year, receiving $160 million less in state funding while having to cover $11 million in increased “fixed” expenses such as health insurance and utilities.

In other words, we’re about where HISD thought we’d be. There are still things that can happen to affect this – the Senate is actively looking for revenue in a variety of places, for instance. If they succeed, and if the House, whose budget is currently much more penurious, goes along, and if Governor Perry doesn’t veto anything, then HISD’s shortfall (and every other school district’s) might wind up smaller still. But that’s a lot of ifs.