Korry Castillo From: Korry Castillo Sent: Wednesday, March 18, 2015 12:27 PM To: Robert Wood Subject: FW: Notes on the HB 1250 Fiscal Note Questions That Arose Yesterday FYI From: Dan Casey il Sent: Wednesday, March 18, 2015 12:17 PM To: Korry Castillo; Gary Price Cc: Bob Popinski; Chris Grammer Subject: Notes on the HB 1250 Fiscal Note Questions That Arose Yesterday I know it was a long day for you yesterday (and leading up to it) on the Chapter 313 bills. I finally had the chance to spend some time on the House Bill 1250 fiscal note estimates and made some notes to myself, which I have included below. As I understand HB 1250 (based on the Committee Substitute), it does the following: 1. Allows for job transfers 2. Pays 110 percent of the lesser of: a. State median annual wage for manufacturingjobs in the state (new), or b. County average annual wage for manufacturing jobs in the county where the jobs are located, or c. The regional manufacturing wage calculation. 3. Amended the wage requirements for non-qualifying jobs to the lesser of: a. the state median annual wage for all jobs (new), or b. County average annual wage for all jobs in the county where the jobs are located, or c. Regional average wage for all jobs. All of this would apply to new applications. Given the groups testifying for the bill yesterday, the proposed changes are obviously an attempt to drive down the wage requirements by a significant amount, but also to address what are viewed as signi?cant variations in the county data. The House doesn't prepare a bill analysis now until the bill comes out of committee, so there is no information available outside of the ?scal note. One thing that strikes me is that there is nothing in the documentation available that spells out what kind of annual wage we are talking about. One omnipotent association head referenced a $41,000 median manufacturing wage, but there is nothing in the fiscal note that references this ?gure and compares it with the range of current manufacturing wages by county. Comparability is probably the culprit, but I was simply looking for something that could serve as a benchmark for me. In looking at the methodology section, you do indicate that if the new wage standard for qualifying jobs in H3 1250 was applied to current projects, we would see wage requirements fall by about 27 percent. In the case of non-qualifying jobs, the fall off would even be greater, reflecting a 40 percent reduction. (Given that these amounts are measured against the wage requirements in agreements that are already in place, the scale of these reductions might suggest some overreach on the part of the proponents of these changes, although I am not sure what would be a reasonable alternative at this point.) As i understand the references to the Foundation School Program, you are assuming that more businesses will be filing for Chapter 313 agreements than would have been the case under current law, given that the qualifying and non- 1 qualifying job wage requirements are lower. Your notes indicate three projects a year that would not have quali?ed previously would now negotiate agreements with local school districts. As I mentioned in my testimony "on" the bill, the minimum number ofjobs required under HB 3390 are so law now that the wage requirements don't generate a lot of discussion at the school-board level, especially for projects where job waivers are requested. I did get an earful of complaints with regard to the Williamson County manufacturing wage and the Tesla discussions, but as I indicated yesterday, my recollection is that the wage structure Tesla used was also part of the problem, with their heavy reliance on incentives. Now that I have had time to digest the fiscal note, i have a better understanding on how you approached these issues. I personaily don?t like seeing us migrate toward a situation where you can qualify for a value limitation for minimum wage jobs?that will come next session?but I am sympathetic to the problem of what appears to be wide variation in the county manufacturing wage and making that work from the standpoint of attracting businesses. I'm not sure that I have said anything that is helpful, but I did want you to know that I have a much better sense of your approach than i did yesterday. Thanks for all of your hard work. Dan Daniel T. Casey. Monk. Cuscy Associates 400 w. 15'" Suiti: Mil) Austin. TX 7870l-l648 Ph. (512) 485-7878 Fax (512) 485-7888 Cell: (5 l2) 426-6662 Email! sgyicnm MOAK. CAS BY Assocuvrrs