Saturday, August 13, 2016

NCSL Chicago: Highlights From A Wonk's Paradise

This past week Legislators from Utah's House and Senate made a trip to Chicago to share ideas and learn from other Legislators across the nation.  I was privileged to attend.  Here are some highlights from the trip.

Utah Stands Out

Senator Curt Bramble from Utah County is the President of the NCSL organization.  He opened our conference.

Utah was also showcased in our Budget and Revenue Breakout meetings as a great example of emergency fiscal preparedness.  Jonathan Ball, our chief Fiscal Analyst, told how Utah's origins created a culture of frugality that still carries with our budget making policies today.

In another session, I even had a chance to speak against some amendments proposed by other members of the conference.  One amendment to a resolution was proposed by a Representative from Massachusetts that would strip language asking the Federal Government to operate a sustainable budget.  The resolution was deferred to a later discussion after the amendment failed. I suggested that asking the Federal Government to operate a sustainable budget was not too onerous a request and that it was acceptable for our conference to push back against Federal mandates.

The Internet 3.0

We heard a session about a new technology based on the framework used to support Bitcoin call BlockChain.  The discussion confused a lot of folks in the room.  What I got out of the conversation was that a new network and method of transaction is being concocted to help reduce fraud and increase the speed of business transactions.  Look for more on this topic in the coming year.

The Creepy Dark Web

As a member of the Law Enforcement Committee, we heard about the "Dark Web".  It is a sordid place of anonymity where the underworld does its business.

Here we were shown a website on the dark web claiming to broadcast live torture.   It turned out to be a spoof site.

Here we were shown a web page similar to where you can purchase drugs, hitmen, guns, and any other nefarious item you can imagine.

Data breaches are happening at amazing volume. 

To combat fraud and fight the dark web, the technology advocates asked that policy makers focus on the behavior and not try to regulate the computer hardware.  For a moment, I thought we were talking about guns.


Not all breakout sessions are created equal.  In this case, I attended a session called "Tax Fraud Prevention".  Sounded exciting.  I imagined it would be a cops and robbers discussion on what kind of policy to implement to deter fraud in our state tax system.  Instead we were treated to a dry lecture on the IRS-State Industry Submit Process.  From a look at the number of warm bodies in the room, it appears that everyone got the memo about this session before I did.

The Future of Tax Policy

 We had a session where legislators were asked to offer one word that represented their state's tax system.  You can see the candid responses above.  

Fortunately, from the discussion we had, it appears that Utah has been very good about anticipating shifts in the economy and adapting its tax code as markets and consumer dynamics change.  Utah has a relatively balanced tax system compared to other states. Utah utilizes property, sales, and income taxes to generate its revenue.  Other states have very lop-sided policies.    

The key takeaway from the meeting was that when larger numbers of people pay taxes, the taxes can be lower for everyone.  When few people pay taxes, taxes are a lot higher for those few people paying them.  Utah does a pretty good job of "broadening the base and lowering the rate" but more work on this important topic can be done.   

It was great to be in Chicago with my wife and colleagues to absorb some great information.  Look for more bills and initiatives on the Hill from lessons gleaned from this conference.

Monday, July 25, 2016

ACYPL: Dining with Delegates from China

Last year I was privileged to be able to travel with a group of young political leaders via a State Department funded program called ACYPL (American Council of Young Political Leaders).  You can read about that fascinating trip here and here.

One of the great parts of the ACYPL program is that it creates a network of alumni that support the program moving forward.  I had an opportunity recently to provide that support by hosting a dinner for a delegation of Chineses officials coming to America.  I chose the Joseph Smith Memorial Building as our venue and invited Ryan Wilcox, a former Legislator who now works for Senator Mike Lee and Eric Hutchings who currently serves with me in the House of Representatives and who also happens to speak fluent Mandarin. Both also happen to be ACYPL alumni.

Here is a brief biography of our guests:

Our conversations mainly focused on political economy.  I sat next to Mr. Wan Sucheng who is in charge of the All-China Youth Federation.  It is an organization that oversees the civic education and molding of over 300 Million Chinese youth.  I joked with him that being in charge of that many people was pretty close to being President of the U.S.  But, since they are all kids, I am sure its much harder.  Interestingly, he is fourth in line to become President of China.

We did share some of Utah's history and explained the importance of the month of July in our state.  They listened intently as we rehearsed the pioneer story and how that heritage has affected our politics.  My wife Kim also attended the dinner with us and one of our guests asked us directly about our LDS faith and how we raised our children in the faith.  I am sure from their perspective where a one-child policy has been the norm for decades, it was alarming to hear that we had four daughters.

Our evening ended with an exchange of gifts.  I presented each member of the delegation with a proof-quality commemorative quarter celebrating the completion of the trans-continental railroad.  We also shared the story of how Chinese immigrants played a significant role in the building of that rail line and that many Chinese rest in our Ogden cemetery from that era.  

It was great to make new friends from a foreign land.  As we parted I told them that: "Peace comes from understanding, understanding comes from friendship, and friendship comes from eating dinner together."  We all got a good chuckle from my pseudo-Confucius-like aphorism.  I am glad we were able to give our guests a taste of Utah hospitality and good will.    

Thursday, July 14, 2016

Thank You Noall Knighton!

It was announced this week that Noall Knighton is resigning from his post as the Chairman of the Weber County GOP due to a job opportunity out of state.

I just wanted to take moment to thank Noall for all of his hard work on behalf of the Republican Party and elected officials in Weber County.  Being a county party chair is often a tough and thankless job as it requires balancing the needs and philosophies of so many voices within the party.

I wish Noall the best as he moves on to a new adventure.  Thanks again for your hard work and dedication Noall!

UPDATE: Special Session 2016 No. 3

We just completed our interim committee meetings and special session at the Capitol today.  Here are some highlights from the day's events:

Revenue and Taxation Interim Committee

We heard testimony today regarding internal governance of the Tax Commission and also a problem surrounding property tax exemptions related to agricultural land.  You can listen to our meeting HERE.

Government Operations Interim Committee

Our committee passed out two bills and some additional discussion.  One deals with minor changes to SB54 language and how petitions to get candidates on the ballot are handled moving forward.  The other bill dealt with parameters related to redistricting. The bill modifies the guiding principles so to place more emphasis on community cohesion rather than on exact equality in the population size of districts.  We had State Auditor John "Frugal" Dougall come and make some recommendations to the legislature regarding areas of improvement that were needed in various ways the State conducts its business. You can listen to our discussion HERE.

Special Session Bills

Tax Credit Review Amendments - This was a redraft of HB310 which passed the house with flying colors during the General Session.  Unfortunately, an egregious typo left the bill without an "Enacting Clause" and after the Governor signed it, staff realized it couldn't become law.  So, the bill was brought back to the Special Session to be voted on with its Enacting Clause intact.  The bill sailed through the House and Senate without a problem.

State Fair Park Amendments - There is a panicked effort to maintain the State Fair Park's viability in the community.  This bill made temporary emergency changes to procurement practices to facility a fast renovation of the site to be ready by next summer.  This bill passed.

Unmanned Aircraft Amendments - This bill increases penalties for individuals caught using drones in emergency areas like wildfires.  It also allows violators to be liable for damages caused by their drone intrusion.  This bill passed.

Criminal Justince Reinvestment Amendments - This bill tweaked the much needed yet sometimes much derided JRI legislation we passed two years ago.  It permitted law enforcement to include more common sense provisions in sentencing and probationary situations.  This bill passed.

Grandparent Rights Amendments - The original bill passed during the General Session (I voted against) and was ultimately vetoed by the Governor.  The bill sponsor made some adjustments to the bill and limited grand parent visitation rights to situations where adoptive parents were related to the grand parents.  This bill still seemed onerous to me since the only reason adoptive parents would not permit related grand parents to visit a child was if there was a serious strain within the family.  It seemed to me that permitting the courts to force visitation rights in such a situation would make for very painful experiences for those involved. I voted against. The bill failed 27-40.

Controlled Substance Database Modifications - This bill made a common sense change regarding access of law enforcement to databases related to controlled substances.  The bill passed unanimously.

Economic Development Revisions - This bill created sales tax exemptions for companies moving into Utah who would occupy large 150,000+ SQFT facilities and be using them for constructing data centers.  The logic behind this bill is that data centers are very expensive and add significantly to the property tax base while requiring little in the way of community resources.  Thus, such centers would help fund local education wherever they are built.  The bill also reflects a philosophical drift away from taxing inputs in the manufacturing process and only taxing final products.  This bill passed.

Judicial Nominating Commissions - This bill matched the number of judges nominated with the number of vacancies in the court.  This bill passed.

Continuing Care Retirement Community Amendments - This bill deals with a very strange business model of retirement homes being funded by future occupants of the facility.  Private equity donations would be collect to fund the construction of a facility that the "investors" had contributed to build.  The issues surrounding the bill dealt with how the "investor/occupants" funds would be treated in the event they left the facility and what kinds of guarantees and securities can be offered.  The bill creates some basic ground rules for the business model. The bill passed.

My Bill Files

I have many bill files open already and I am drafting bills on a variety of topics including property taxes, foster care, tax credits, teacher compensation, public notices, and more.  Look for more details as discussions with stakeholders continue.

Tuesday, July 12, 2016

VIDEO: Kaysville City Council Conflageration

KSL recently reported on fireworks at a Kaysville City Council meeting.  The drama surrounds a freshman city councilman's use of a city credit card to fix his personal firetruck for use in the city parade.

This situation is where of a rookie mistake has collided with a city that does not have proper controls in place over its finances.  I am sure our State Auditor John "Frugal" Dougall would be interested in this story.

What makes things even more interesting is the theatrics of the city council meeting which were conveniently caught on video.  Councilman Adams (the guy in yellow) gets into a personal tirade against another councilman, breaches decorum, and otherwise makes the meeting ungovernable.  

You can watch the city council meeting meltdown here (fast forward to 4h 28m):

In this instance, I think the councilman needs to reimburse the city for the expense.  The city also needs to change its credit card policy to avoid this problem in the future.  In the meantime, its going to be very difficult for Councilman Adams to walk back this performance.  I expect more fireworks in the future.  

Thursday, June 30, 2016

The Future of Solar Tax Credits in Utah: Part 1

I recently participated in a stakeholder meeting hosted by the Governor's Office of Energy Development.  The purpose of the meeting was to discuss Utah's policy of issuing $2,000 tax credits to consumers for rooftop solar systems and its impact on the industry and state budget.

The meeting was spurred by legislation I ran in the 2016 General Session to unwind the solar tax credits under the premise that the industry has matured to the point that tax payer subsidies are no longer required.  At that time, the industry disagreed with me.

At the root of the issue is the purpose of the tax credits.  Are they to help move forward in time the market adoption of this new technology?  Are they there to act as a form or corporate welfare to lift a struggling industry?  Is it a feelgood policy that exists because renewable energy is the "in" thing right now?  Defining the purpose of the credit is important to how me move forward.

 At our meeting, we discussed some serious challenges being faced by the State regarding the credit. To put some sunshine on the subject (pun!), lets take a look at this graph:

The solar tax credit right now is mushrooming in usage. The left hand axis shows the number of credits claimed by consumers for installing rooftop solar systems on their homes.  As you can see, there is a hyperbolic increase since 2012.  Interestingly, last year saw 3,174 credits issued. In 2016, at its current pace, it is projected that 12,500 credits will be issued!  That is a 400% increase in one year.

So why is this a problem?  There are several reasons.  First, every credit is a silent drain on the education budget.  The total credits issued have ballooned from less than $1 million 2012 to $6.3 million last year.  This year will cost the education budget $25 million in unrealized revenues.  With solar panels becoming ubiquitous, the credit threatens to put a major damper on funding Utah's education needs.

The second problem is administrative in nature.  Utah does not budget any money to administer this tax credit.  The funds used to pay for state employees to administer this credit come from Federal grants.  Historically, only one employee has been needed on a part time basis to handle the workload.  However, that has increased in recent years and with the surge in popularity, a staff of 6 to 8 full time people (paid $75,000 salary and benefits per year) will be required to continue administering the credits.  This poses a funding problem to the Legislature and raises red flags about the program.

The third issue facing the credit is the philosophical one.  What is its purpose?  In our stakeholder meeting, a lot of time was spent by stakeholders trying to solve the administrative funding problem.  As if to say that if the administrative funding issue could be resolved, the flow of credit money could continue unabated.  But, the sheer magnitude of the credits are now threatening our education programs.  So, something has to change.

At the conclusion of our meeting, we asked the stakeholders to come up with ideas to discuss in our next meeting in July.  Some ideas included a full repeal of the credit, a taper or wind down over time, shifting the credit to another budding technology (like batteries), or whatever idea they could come up with.  I look forward to the discussion.  It is hoped that the solutions we come up with will be forwarded to our Revenue and Taxation Interim Committee to draft a committee bill for the 2017 General Session.    

Monday, May 9, 2016

Candidate Surveys: NRA and Utah Sierra Club

One of the exciting and often tedious parts of being a candidate for office is the request to fill out dozen's of candidate questionnaires.  I find this often to be a great opportunity to quantify my views and demonstrate my political philosophy.

So, here are two surveys I received and my responses.  One is from the NRA and the other is from the Sierra Club:

I hope you enjoyed reading these.  If you have any other questions or concerns about my views on the issues, don't hesitate to CONTACT ME.