May 13, 2003

Legislative Activity

Date: May 13, 2003

To: AAF Texas Members

From: Clark Rector, Jr., SVP-state government affairs
Jeff Perlman, EVP-government affairs

Re: Texas Legislative Update

Lt. Governor Dewhurst's school refinance bill, including the advertising/services tax, has been struck a major blow in the legislature. The House did not accept the plan when sent to them by the Senate, and Speaker Craddick has refused to appoint members to a House/Senate conference committee to discuss the issue.

As I am sure you are aware, a group of 50 or so House Democrats have left the state to prevent the House from considering a controversial redistricting plan. The absence of these members — and thereby a quorum in the House — means that that chamber cannot pass any legislation at all until their return.

While the advertising tax issue may be done for the session ending June 2, it is not gone for good. The legislature is expected to return later this year or early next year for a special session on the school refinance issue. We can anticipate that Lt. Governor Dewhurst will again offer his plan and expect it to be a starting point for discussions with the House.

Lawmakers still need to hear from the advertising industry to be educated on the importance of advertising to the Texas economy and the devastation an ad tax would cause to the economy and businesses in the state.

I urge the leadership of the Texas ad clubs to survey your members to determine who knows your representatives and senators. Once the session ends, these members should be encouraged to contact the lawmakers and explain to them the negative consequences of an advertising tax.

Now is the time to start working on the issue for the special session. The advertising industry, and AAF's advertising clubs, did an outstanding job of responding to the advertising tax threat on extremely short notice. We now have the advantage of time to get our message out. We cannot afford to waste that time.

I look forward to meeting with many of you in June at the AAF National Advertising Conference in Los Angeles where we can discuss our strategy for the upcoming months. Meanwhile, do not hesitate to contact me at 1-800-999-2231 if you have any comments or questions.