Our office remains committed to advocating for our Hays County constituents as we move forward in trying to work with the EAA to resolve compliance matters.  Please contact my staff or me at your Capitol office at (512) 463-0647 if we may be of any assistance to you and your family.
 
Sincerely,
Patrick

Dear Friends and Neighbors:

Recent decisions by the Pedernales Electric Cooperative (PEC) board to elect a member of its old guard as president and maintain its directors’ salaries well above the national median are deeply troubling.  These disturbing decisions, coupled with the discovery of a $565,000 secret bank account,continue a pattern of mismanagement and abuse that falls far short of the standard deserved by PEC members and employees. 

As the State Representative for PEC’s Johnson City headquarters, and thousands of PEC members and employees, I am committed to ensuring our co-op’s long-term success by ending this pattern of abuse.  It has become clear that state government must act – the only way to ensure real change at PEC and to prevent similar events at other Texas electric cooperatives is to pass strong reforms next session. 

Legislation requiring all electric cooperatives in Texas to comply with Open Meetings and Open Records statutes is the only guarantee that business practices are transparent and accessible to co-op members. This is a critical component of reform because it creates the environment necessary for local control to truly exist.  Communities need the reality of Open Meetings and Open Records in order to ask questions and guarantee real answers that keep boards of directors and management accountable. 

Furthermore, the PEC experience has taught us that all Texas co-ops should submit annual audits to the state’s Public Utility Commission for review, limit investments outside their core business of providing electricity, and guarantee fair and democratic elections for the board.  Next session,the Texas Legislature must require all four of these critical reforms in statute so that reform is lasting. Strong local control for Texas’ 3 million co-op member-customers is the surest way to prevent fraud and abuse, while guaranteeing the lowest electric rates possible.

As I testified on this matter in Washington D.C. last month, members of Congress questioned our state’s ability to solve this problem. The federal government sees PEC’s questionable business practices as an indicator of similar problems at electric cooperatives nationwide.  We must show Congress that the Texas Legislature has the tools it needs to address these problems and that we are committed to necessary reform. 

Our message to Congress and to Texas families must be that the buck will stop with us.  It is important for co-op members and legislators alike that we fully understand what went wrong with PEC in order to prevent further mismanagement.  A financial and governance review by Navigant Consulting, Inc., ordered by State District Judge John Dietz, is ongoing.  That report, and any light that it sheds on the events that took place at PEC, must also shape our legislative agenda.   Our Texas Legislature is equipped to craft legislation that serves as the foundation for local control, while avoiding the unnecessary costs associated with over-regulation. 

On the whole, Texas co-ops are providing their member-customers with excellent electric service at a cost that is considerably lower than the average rate charged by investor-owned utilities in areas such as Dallas, Houston, and South Texas.  Publicly-owned utilities bring an important balance to our energy market – it is public power that keeps energy costs affordable for many middle-class families across Texas.  Particularly in today’s economy, this is an asset we must protect. 

Public power only works, however, when it is transparent. And without transparency, there is no meaningful local control.  We can achieve this balance with the right reforms at the state level – let us work together to make Texas an example for other states. 

Over the last several months, as property owners in Blanco, Caldwell and Hays Counties received preliminary appraised value notices, my office has heard from many concerned homeowners about the increase in their appraised values.  As allowed by Texas law, some of these property owners chose to file a protest with their local Appraisal Review Board (ARB). The deadline for these protests was June 9^th and now homeowners await review by the board.

Should the ARB rule against a property owner, in 2005 I sponsored legislation (Senate Bill 1351) that gives Texans an affordable option to appeal unreasonable tax appraisals.  The legislation gives property owners the option of requesting binding arbitration as an alternative to filing an appeal of an ARB’s decision; instead of hiring lawyers and filing costly lawsuits.   For more information about Property Tax Binding Arbitration for Property Owners, please visit the Texas Comptroller’s Web site at www.window.state.tx.us/taxinfo/proptax/arbitration05/.

It is clear from the preliminary appraised value notices that a lot of work remains to safeguard homeowners.  I strongly believe that property tax relief passed by the Legislature becomes meaningless without addressing appraisals.

In 2006, I supported the new business tax that dedicated revenue to lowering property taxes closed the franchise tax loopholes and lowered the maintenance and operation portion of property tax rates by approximately one-third.  The benefits of the property tax relief are not currently recognized because there are no appraisal caps.  The Legislature must do more to protect property owners from runaway appraisal districts that make any tax relief temporary and ineffective. 

For three legislative sessions, I have supported and voted for appraisal cap legislation to ensure that homeowners benefit from any property tax cuts passed by the Legislature.  During the 80^th Regular Session last spring, I voted for House Bill 438 and House Joint Resolution 40 by Rep. Scott Hochberg.  This legislation prohibits appraisal districts from increasing appraisals on homesteads more than 10% per year even if they didn’t increase by the full 10% in the prior year.  The legislation was approved by Texas voters as Proposition 3 last November.

In both the 79^th Regular Session in 2005 and in the 78^th Regular Session in 2003, I worked with my colleagues in the House in support of legislation to cap appraisal increases on homesteads at 5% per year.  I believe that this can be a starting point to give homeowners the relief that they need and deserve.  As the Texas Comptroller collects the new margins tax this month, the Legislature must ensure that all revenue generated continue to go towards funding further property tax cuts and appraisal caps. 

I hope you will join my efforts to pass strong appraisal caps.

Last November, Texans authorized $3 billion to fund cancer research, prevention, early detection and control programs at the new Cancer Prevention and Research Institute of Texas.  This funding is an historic investment towards easing the burden that cancer places on all taxpayers and particularly our health care system.  Each year, cancer costs Texans approximately $30 billion in direct and indirect costs.  

The Institute was created by House Bill 14, legislation that I joint-authored last spring.  This effort was possible because of a coalition that included the Lance Armstrong Foundation, Susan G. Komen for the Cure, the American Cancer Society and countless Texans who have been touched by this disease.

This week, the first 6 appointments to the Institute’s Oversight Committee were announced.  The 11-member committee provides accountability for the Institute’s expenditures and operations.  This Oversight Committee, once all appointments are made, will embark on a search for a new Executive Director for the Institute.  

A Scientific and Research and Prevention Programs Committee that will review grant applications and make funding recommendations will also govern the Institute.  This 18-member committee will include voting members representing health care professionals, health care facilities and voluntary health organizations and non-voting members representing Texas’ leading public and private research and health institutions, like M.D. Anderson in Houston.  

With its leadership teams in place, the Institute will be ready to begin the work that the Legislature outlined in HB 14.  The Institute has 3 clear statutory purposes:  1. Fund up to $300 million a year for 10 years in grants for scientific breakthroughs in the prevention of and cures for cancer; 2. Attract, create, or expand research capabilities in our institutions of higher education institutions and other public or private entities to promote an increase in cancer research and in the creation of high-quality new jobs in Texas; and 3. Develop and implement the Texas Cancer Plan.

According to the Texas Cancer Council, cancer is the number two killer of Texans.  Across our nation, nearly 1 in 2 men and 1 in 3 women will be diagnosed with cancer in their lifetime.  I am hopeful that the work of the Institute will lead to cures for this terrible disease.  

Sincerely,