Fair Legal System
Texas' fair legal system limits unnecessary regulation to allow business to prosper. It's that simple.
Room to Prosper: Texas offers companies and entrepreneurs room to grow, as well as the freedom to go big and to be rewarded for their ambitions. Less government, lower taxes, smarter regulations and right-to-work laws are the economic policies attracting employers to Texas from states that overtax and over-regulate.
A Decade of Tort Reform: Employers need to invest their money in job growth, not high insurance premiums. Former Texas Governor Rick Perry led the effort to pass sweeping reforms through three key legislatures. The U.S. Tort Liability Index 2010 ranked Texas second overall in tort inputs to the U.S. tort liability system which "include the rules on the books in each state that shape its tort-system outputs—its monetary tort losses and tort litigation risks."
Supporting Healthcare: Since key tort reform (HB4) was passed in 2003, putting a cap on non-economic damages for medical practice, the number of licensed physicians in Texas has almost doubled.
Gov. Perry signed several laws to limit frivolous lawsuits in 2005. The reforms include:
- Cracking down on junk asbestos claims that were forcing innocent employers into bankruptcy and putting thousands of people out of work
- Preventing trial lawyers from suing restaurants on the charge of obesity-related health problems
- Stopping venue-shopping which had allowed lawyers to sue dredging companies in hostile forums hundreds of miles away from the site of their operations
House Bill 274 implemented a loser pays component for frivolous lawsuits in the state. The governor designated this issue as an emergency item for the legislative session. The law employs several measures to streamline and lower the cost of litigation in Texas courts, allowing parties to resolve disputes more quickly, more fairly, and less expensively. This includes:
- Allowing a trial court to dismiss a frivolous lawsuit immediately if there is no basis in law or fact for the lawsuit
- Allowing a trial judge to send a question of law directly to the appellate court without requiring all parties to agree if a ruling by a court of appeals could decide the case
- Allowing plaintiffs seeking less than $100,000 to request an expedited civil action
- Encouraging the timely settlement of disputes and helping prevent a party from extending litigation by seeking a "home run" if they have already been offered a fair settlement
R&D Tax Credit
HB 800 R&D tax credit: Prior to the passage of this legislation, Texas was one of only seven states without an R&D tax credit. The bill allows business to deduct certain qualified R&D expenditures from either their sales or franchise tax. The tax credit is worth 5 percent and increases to 6.25 percent for companies that partner with a college or university. The bill limits the total amount of the credit for any one company to 50 percent of the amount of franchise tax due before any other applicable tax credits and authorizes a carry forward of unused credits for up to 20 years.
Data Center Tax Incentives
HB 1223 – Data Center Tax Incentives: Creates a new state sales tax exemption for certain property used in qualified data centers (defined as at least 100,000 sq. ft. of space in a single building or a portion of a single building that has been specifically constructed or refurbished and actually used to house servers and related equipment and support staff for the processing, storage, and distribution of data). The bill authorizes the tax exemptions for 10 years if the capital investment is at least $200 million but less than $250 million and 15 years for investments over $250 million. The bill also prohibits companies from taking advantage of both these new data center incentives and Chapter 313 property tax limitations.
- HB 4 authorizes a $130 million grant program aimed at improving the quality and accountability of the state’s pre-kindergarten programs
- SB 925 establishes literacy achievement academies to provide professional development to public school teachers of students in kindergarten through third grade
- SB 934 provides training academies for public school teachers who provide mathematics instruction of students in kindergarten through third grade
- SB 935 establishes reading excellence team pilot program
- SB 972 provides training academies for public school teachers who provide reading comprehension instruction for students in grades four and five
- SB 632 and HB 26 authorize the Governors University Research Initiative, an emergency item declared by Gov. Greg Abbott to attract nationally-recognized researchers and Nobel Laureates to Texas institutions of higher education. The Initiative was provided $40 million in funding.
- SB 18 increases medical residency positions in Texas
- SB 100 authorizes $3 billion in bonds for higher education construction projects across the state
State Energy Regulation
- HB 40 - preempts regulation of oil and gas activity at the city level and resides that duty with the state, and ensures that any local regulation of surface activity is commercially reasonable and does not effectively prohibit an oil and gas operation.
- A $3.8 billion tax relief package for Texas businesses and homeowners which includes:
- A 25 percent permanent reduction in the business Margin Tax;
- SB 1, a $10,000 increase in the Homestead Exemption (from $15,000 to $25,000) beginning in 2015,
- SB 1760, requiring a 60 percent vote of the governing body of any taxing unit wishing to adopt an increase in property taxes that exceeds the effective tax rate.