As you approach the challenges and opportunities that await you during the 2014 legislative session, Americans for Tax Reform (ATR) has put together a guide to showcase excellent pieces of legislation that were introduced in recent years and, in most cases, signed into law in states across the country. ATR holds up these bills as models for legislators in states where these reforms have not yet been implemented to follow.
The enclosed legislation covers a host of policy issues, such as school choice, tort reform, tax reform, and regulatory reform. ATR has included contact information for the lead sponsors of some these exemplary bills, should you wish to reach out to them and learn more about how a given issued played out in another state. Also included where available is a link to the bill language, which you can use and tailor to your state as you see fit.
ATR would be happy to put legislators in touch with policy experts and others who worked on these reforms from introduction to implementation. Please contact Patrick Gleason, ATR’s director of state affairs, for further assistance on passing these reforms in your state.
Section I: School Choice
Arizona – SB 1553 (Arizona Empowerment Accounts)
Arizona – HB2622 Increased AEA Eligibility/Provides for Universal AEA Eligibility (Model Bill from Goldwater Institute)
Indiana – HEA 1003 (Expands Tax Credit Eligibility and Voucher Program)
Louisiana – HB 976 (Expands School Choice Eligibility in Louisiana)
Section II: Taxes
Kansas – HB 2156 (Income Tax Phase Out)
Oklahoma – SB 1587 (Income Tax Phase Out)
New Hampshire – HB 156 (Tobacco Tax Cut)
Arkansas – Tax Me More Fund Executive Order
Section III: Labor
Michigan – HB 4003 (Right to Work)
Utah – SB 63 (State Pension Reform)
Wisconsin – Act 10 (Pension Reform and Collective Bargaining Rights Reform)
Section IV: Regulation
California – SB 1161 (Internet De-regulation)
Connecticut – HB 5021 (Sunday Sales and Competitive Alcoholic Liquor Pricing)
Section V: Transparency
Missouri – SB 757 (Establishes an Oversight Committee to Prevent Fraud, Waste, and Abuse of Public Funds)
Section VI: Tort Reform
Texas – HB 274 (Enacts a Loser Pays System)
Section VII: Telecommunications Issues
California – SB 1161 (Limiting government regulation of VoIP)
Section VIII: Transportation & Infrastructure
Puerto Rico – (Maximizing utilization of public-private partnerships)
Section I: School Choice
Bill number: SB 1553
Prime Sponsor: Sen. Rick Murphy (R): (602) 926-4444, [email protected]
Bill author: Senators Murphy, Bundgaard, Crandall, Gould, Klein, Pearce R, Yarbrough; Representatives Lesko, Mesnard, Montenegro, Smith D, Yee: Senators Allen, Barto, Biggs, Driggs, Griffin, McComish, Melvin, Nelson; Representatives Crandell, Forese, Harper, Pratt
Date introduced: 2/2/2011
Date signed into law: 4/12/2011
Summary of legislation: Created Arizona Empowerment Accounts for children with disabilities. The legislation grants parents the option of opting out of Arizona district and charter school systems and instead receives the equivalent of 90-percent of state aid to enroll their children in private schools, online programs, or homeschooling. The program is administered through the State Treasurer and the actual dollar amount per child is decided by the State Department of Education.
Link to Bill: http://www.azleg.gov/legtext/50leg/1r/laws/0075.pdf
Bill number: HB 2622
Prime Sponsors: Rep. Debbie Lesko (R): (602) 926-5413, [email protected]
Bill author: Representative Lesko, Senator Murphy: Representatives Carter, Crandell, Dial, Fann, Fillmore, Goodale, Gowan, Kavanagh, Mesnard, Miranda R, Pancrazi, Pierce, Proud, Robson, Tovar, Urie, Yee
Date introduced: 1/17/2012
Date signed into law: 5/14/2012
Summary of legislation: This legislation expanded the eligibility for Arizona Empowerment Accounts to 100,000 additional children. Eligibility for the program now includes children currently enrolled in “D” and “F” rated schools, children of active-duty military parents, and children who have been adopted out of Arizona’s foster-care system or those in the process of being adopted.
Link to Bill: http://www.azleg.gov/legtext/50leg/2r/bills/hb2622c.pdf
Bill number: HEA 1003
Sponsor: Rep. Robert Behning (R): 1-800-382-9841, [email protected]
Bill author: Rep. Robert Behning and Speaker Brian Bosma
Date introduced: 1/20/2011
Date signed into law: 5/5/2011
Summary of legislation: Creates a $1,000 tax deduction for parents whose children currently are in private school or homeschool; expands the cap on available tax credits to $5 million from $2.5 million for taxpayers who donate to scholarship-giving nonprofits; creates the nation's largest school voucher program in which more than half of all students, low-income and some middle-income, qualify statewide. In the first two years alone, voucher enrollees grew to 9,324 from 3,919.
Link to Bill: http://www.in.gov/legislative/bills/2011/PDF/HE/HE1003.1.pdf
Bill number: HB 976
Sponsor: Rep. Stephen F. Carter (R): (225)362-5305, [email protected]
Bill author: Reps Carter, Broadwater, others
Date introduced: 3/12/2012
Date signed into law: 4/18/2012
Summary of legislation: Expands eligibility for school choice in Louisiana
This year Gov. Bobby Jindal championed and signed into law one of the most significant school choice bills in U.S. history. According to The Friedman Foundation for Educational Choice, the expansion of the Student Scholarships for Educational Excellence Program will allow low- and middle-income students in Louisiana public schools graded “C,” “D,” or “F” by the state accountability system to receive government-funded vouchers to attend private schools. Currently, that option is available only to children in New Orleans and students with special needs in eligible parishes. About 380,000 children, or over half the state’s school age enrollment, will be eligible to receive scholarships.
Link to Bill: http://legis.la.gov/billdata/streamdocument.asp?did=793655
Section II: Taxes
Bill number: HB 2156
Bill author: Rep Anthony Brown, 785-296-7679, [email protected]
Rep. Gene Sullentrop, 785-296-7680, [email protected]
Date introduced: 2/4/2011
Date signed into law: N/A, died in Committee on June 1, 2012
Summary of legislation: HB 2156 would have phased out the Kansas corporate income tax over a five year period. Under current law, the corporate income tax is calculated by combining the normal tax rate of 4.0 percent of Kansas taxable income and the surtax rate of 3.05 percent of Kansas taxable income for income above $50,000. The bill would have reduced these tax rates by 20.0 percent for each tax year beginning in tax year 2011 until the tax would be eliminated in tax year 2015.
Phasing out the state corporate income tax eliminates a tax whose burden is borne not by companies, but by workers via lower wages and by consumers via higher cost of goods and services. Additionally, state corporate taxes generate very little revenue for states and could be easily offset through spending cuts or tax base broadening elsewhere. Phasing out this onerous tax would have a minimal impact on the budget, while making a state more economically competitive and attractive to employers.
Link to Bill: http://www.kslegislature.org/li/b2011_12/measures/documents/hb2156_00_0000.pdf
Bill number: SB 1587
Bill author: Senator David Holt, 405-521-5636, [email protected]
Date introduced: 2/6/2012
Date signed into law: N/A, referred to Finance Committee on 2/7/12 for 2nd reading
Summary of legislation: This legislation would have phased out the state income tax by lowering the income tax rate from 5.25-percent to 2.25-percent in 2013 and then gradually lowering the rate until full phase out in 2022. The initial income tax reduction would have been paid for via cuts in nonessential spending coupled with the elimination of most personal tax credits, exemptions, deductions, and exclusions. The legislation avoided cuts to core services or increasing any other tax rate.
Link to Bill: http://s3.amazonaws.com/assets.ocpa.com/assets/images/334/original/OCPA_ALME_Income_Tax_FINAL.pdf
Bill number: HB 156
Bill author: Rep. Kenneth Welyer, 603-642-3518, [email protected]
Rep. Frank Sapareto, 603-894-7083, [email protected]
Date introduced: 1/1/2011
Date signed into law: Rolled into state budget, became law 7/1/2011 without governor signature
Summary of legislation: Reduces taxes on cigarettes and other tobacco products. Targeted excise taxes on politically unpopular products such as tobacco and alcohol are bad public policy for a number of reasons. They push commerce across state lines, hurt small business, and provide an unstable source of revenue for state governments. As tax-paid sales decline, most states end up collecting less revenue than expected, blowing a hole in the state budget and putting upward pressure on other taxes.
A tobacco tax cut is a boon for retailers, especially along the border. And it shifts government away from over-reliance on an unreliable and declining revenue source.
Link to Bill: http://www.nhliberty.org/bills/view/2011/HB156
Bill number: “Tax Me More Fund” Executive Order
Bill author: Gov. Mike Huckabee
Date introduced: N/A
Date signed into law: 12/2001 via executive order
Summary of legislation: Allows individuals to pay "extra" taxes to the state by simply writing a check to the state Department of Revenue. Tax Me More Funds expose the hypocrisy often espoused by wealthy individuals who call for higher taxes on income that often impact small businesses and middle class families. If a wealthy individual wants to pay more in taxes and increase the state’s overall revenue, Tax Me More Funds allow for them to do that without increasing the tax burden on fellow taxpayers.
Section III: Labor
Bill number: HB 4003
Sponsor: Paul Opsommer, 517-373-1778, [email protected]
Date introduced: 1/13/2011
Date signed into law: 12/12/2012
Summary of legislation: Prohibits private and public sector unions from requiring all employees to join a union and pay dues as a condition of employment. Exempts police and firefighters.
ATR is very supportive of right-to-work laws, which are now on the books in 24 states. When it comes to the economic benefit of right-to-work laws, the facts speak for themselves. Roughly 4.7 million Americans moved from forced-union states to right-to-work states between 2000 and 2008, according to a Cato Journal study by economist Richard Vedder, and per capita income rose 23 percent faster in right-to-work states between 1977 and 2007. In fact, right-to-work states outperform forced-union states in virtually every metric of economic growth and prosperity, according to National Institute for Labor Relations Research data.
Not only is the unemployment rate lower on average in right-to-work states, members of the workforce fare better than those in non-right-to-work states. The University of Colorado’s Barry Poulson found in a 2005 study that residents of metropolitan areas in right-to-work states have an average after-tax purchasing power nearly $4,300 greater than their counterparts in non-right-to-work states.
Link to Bill: http://www.legislature.mi.gov/documents/2011-2012/publicact/pdf/2012-PA-0349.pdf
Bill number: SB 63
Bill author: Senator Dan Liljenquist (no longer in office)
Date introduced: 2/5/2010
Date signed into law: N/A, substituted
Summary of legislation: Preserved Utah's state pension system by capping state expenditures to defined benefit plans and gave state employees the option of enrolling in 401k style defined contribution plans. By shifting to defined contribution pensions, states can add certainty and predictability to their long-term budgeting, while eliminating massive unfunded liabilities. With some states calling for a federal bailout of their massive pension debt, others like Utah are taking proactive steps to get their pension liabilities under control by switching to a defined contribution system.
Link to Bill: http://le.utah.gov/~2010/bills/sbillint/sb0063.pdf
Bill number: Act 10
Bill author: Scott Walker, 608-266-1212, [email protected]
Date introduced: 2/14/11
Date signed into law: 3/11/11
Summary of legislation: Limits government employees' (excluding police and fire) collectively bargained wage increases to CPI, requires annual vote to recertify union, ends the government’s automatic collection of dues on behalf of unions, increases required employee pension payment, and increases employee share of health premium
These sweeping changes have in many ways saved Wisconsin’s local governments. In some cases personnel costs approach 90 percent of local budgets, and those costs were spiraling out of control due to government employee union largesse. The Walker reforms allowed localities to balance their budgets without tax increases or massive layoffs, and the governor comfortably won a union-backed recall election.
Link to Bill: https://docs.legis.wisconsin.gov/2011/related/acts/10.pdf
Section IV: Regulation
Bill number: SB 1161
Bill author: Senator Padilla, 916-651-4020, [email protected]
Date introduced: 2/22/2012
Date signed into law: September 28, 2012
Summary of legislation: Internet De-Regulation
Link to Bill: http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=20 1120120SB1161
This legislation limits the ability of the Public Utilities Commission (PUC) to regulate advanced voice services like Voice over Internet Protocol (VoIP)
ATR is supportive of state legislatures protecting new and advanced internet services from unelected officials with little expertise in handling internet protocol based services. So far, 23 other states and the District of Columbia have enacted similar laws that promote the availability of competitive and advanced voice services by preventing burdensome overregulation by the state and its subdivisions. Under these types of regulations, the state PUC would not have the authority to regulate the rates, terms, or conditions on which any entity offers VoIP service to customers in the state. The PUC would also have no authority to regulate an entity’s entry into or exit from the business of providing VoIP service to customers in that state.
This type of legislation, which in some cases is deregulatory and in other case prophylactic, encourages the development of internet protocol based services, like VoIP, by creating certainty and preventing barriers to market entry.
Bill number: HB 5021
Bill author: Rep. Christopher G. Donovan, 860-240-8500, [email protected]
Sen. Martin M. Looney, 860-240-0375, [email protected]
Date introduced: 2/9/2012
Date signed into law: 5/14/2012
Summary of legislation: Sunday Sales and Competitive Alcoholic Liquor Pricing. ATR is very supportive of efforts to repeal laws prohibiting the sale of alcohol on Sundays in states and localities where such laws exist. Permitting the sale of alcohol on Sundays in Connecticut, not a state that typically passes exemplary policy, was perhaps the only good thing to come out of the Connecticut legislature this year. Repealing the prohibition of Sunday sales is one of the easiest ways for lawmakers to raise revenue and work toward closing deficits without raising taxes.
Link to Bill: http://www.cga.ct.gov/2012/ACT/PA/2012PA-00017-R00HB-05021-PA.htm
Section V: Transparency
Bill number: SB 757
Bill author: Senator Rupp, 573- 751-1282, [email protected]
Date introduced: 1/13/2010
Date signed into law: N/A, Died in House budget committee, April 20 2010
Summary of legislation: This act establishes the Joint Committee on Recovery Accountability and Transparency to prevent fraud, waste, and abuse of the funds received by the state or any political subdivision from the federal American Recovery and Reinvestment Act of 2009. The committee will consist of four members of the senate and four members of the house.
Link to Bill: http://www.senate.mo.gov/10info/pdf-bill/perf/SB757.pdf
Section VI: Tort Reform
Bill number: HB 274
Bill author: Reps Creighton, 512-463-0726, [email protected]
Kenneth Sheets, 512 463-0244, [email protected]
Jim Jackson, 512-463-0468, [email protected]
Date introduced: 3/14/2011
Date signed into law: 5/30/2011
Summary of legislation: Tort Reform: Loser Pays
Under the current American legal system, each side in litigation typically retains financial responsibility for its own legal fees absent a prearranged agreement stating otherwise. However, under the English rule, adopted by virtually every other legal system in the West, the responsibility for attorneys’ fees can be summed up in two words: Loser pays. When two sides enter into litigation, the losing side must pay the winning side any damages awarded, as well as compensation for legal fees incurred by the victor.
During the 2011 biennial session of the Texas legislature, Lone Star State lawmakers passed a modified version of the English loser-pays rule. Gov. Rick Perry signed the new Loser Pays law, HB 274, in May of 2011. As Gov. Perry remarked in his signing statement, Loser Pays “provides defendants and judges with a variety of tools that will cut down on frivolous and costly claims in Texas.”
While more constrained than English-style Loser Pays, the Texas version allows an impartial judge to determine when a lawsuit has, according to the language of the law, “no basis in law or fact on motion and without evidence,” giving the judge the authority to declare an early dismissal when appropriate.
The appeal of loser pays is that it mitigates unjustified lawsuits against individuals and businesses. Empirically, it has been shown that the loser-pays system incentivizes two conflicting parties to settle outside of court, meaning savings on attorneys’ fees for both sides as well as reduced costs for taxpayers caused by a less congested court system for the state and plaintiffs who have warranted cases.
According to Ryan Brannan, policy analyst for the Texas Public Policy Foundation, loser pays makes the legal system more objective and legitimate. “The procedural protections … go a long way toward ensuring that our judicial system dispenses justice according to the merits of the case rather than the size of the wallet,” Mr. Brannan said. Jeff Moseley, president and chief executive officer of the Greater Houston Partnership, notes that “loser pays legislation protects businesses and helps us grow jobs and paychecks.”
Link to Bill: http://www.capitol.state.tx.us/tlodocs/82R/billtext/pdf/HB00274F.pdf#n avpanes=0
Section VII: Telecommunications Issues
Bill number: SB 1161
Bill author: Senator Padilla, 916-651-4020, [email protected]
Date introduced: 2/22/2012
Date signed into law: September 28, 2012
Summary of legislation: This legislation limits the ability of the Public Utilities Commission (PUC) to regulate advanced voice services like Voice over Internet Protocol (VoIP). ATR is supportive of state legislatures protecting new and advanced internet services from unelected officials with little expertise in handling internet protocol based services. So far, 23 other states and the District of Columbia have enacted similar laws that promote the availability of competitive and advanced voice services by preventing burdensome overregulation by the state and its subdivisions. Under these types of regulations, the state PUC would not have the authority to regulate the rates, terms, or conditions on which any entity offers VoIP service to customers in the state. The PUC would also have no authority to regulate an entity’s entry into or exit from the business of providing VoIP service to customers in that state. This type of legislation, which in some cases is deregulatory and in other case prophylactic, encourages the development of internet protocol based services, like VoIP, by creating certainty and preventing barriers to market entry.
Link to Bill: http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=20 1120120SB1161
Section VIII: Transportation & Infrastructure
Date introduced: June 2009
Date signed into law: August 29th, 2009
Puerto Rico has had immense success in utilizing public-private partnerships (P3). When former Governor Luis Fortuno assumed office in 2009, he found much of Puerto Rico’s infrastructure in a dire state. Improvements and rehabilitation efforts for the commonwealth’s highway network, electricity grid, water systems, and schools were desperately needed. To meet these challenges, Gov. Fortuno approved groundbreaking legislation, the Puerto Rico Public-Private Partnerships Act, in June of 2009, enabling state-owned corporations to pursue public-private partnership opportunities. This legislation established the Puerto Rico Public-Private Partnerships Authority (PRPPPA), an entity tasked with identifying P3 opportunities across all government assets and functions. Thanks to this act, Puerto Rico is utilizing private capital and expertise to improve, manage, and construct three toll roads, power plants, schools, and a major airport.
The PRPPPA facilitated the concession of two of the Island’s major toll roads in 2011, PR-22 & PR-5, to a private consortium that will fund, maintain, and operate the roads for the next 40 years. The result is a $1.436 billion privately financed investment that will allow the Puerto Rico Highway & Transportation Authority to retire a substantial portion of its debt and improve its ability to fund other transportation projects, all without taking a single extra dollar from taxpayers. In addition to the more than billion dollar up front fee, private sector partners have committed to invest $56.1 million in immediate improvements and an additional $600 million over the life of the project.
This year the PRPPPA selected Aerostar Airport Holdings LLC to run Luis Munoz Marin airport, the largest airport in the Caribbean. The Puerto Rican government will get $2.57 billion in exchange for letting Aerostar run the airport for the next 40 years. As David Alvarez, executive director of the PR PPPA, told Reuters in July of 2012 that the deal “includes a $615 million up front payment to the U.S. commonwealth’s Ports Authority, as well as annual payments to the public corporation over the life of the contract that add up to $550 million.”
The PRPPPA has also contracted with private companies to design, build, and modernize 49 schools throughout the commonwealth, all at no additional cost to taxpayers.
Every state in the union would be well-served to have an entity equivalent to the PRPPPA that is tasked with seeking out opportunities to utilize P3 to construct, manage and improve all manner of infrastructure, both core and non-core, in a way that is superior to traditional state financing and comes at no additional cost to taxpayers.