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‘Providing a Vehicle’ The Next Move? Escheats Bill Fails Old Foes and New ‘Friends’ A brief flare-up on the House floor ending as suddenly as a summer rain, a round-the-table discussion in the liberal revenue and tax committee, an observation on recent history, an open letter to two fellow representatives these were the events Thursday that suggest the next moves in the Texas House. Gov. Daniel had issued an earlyterly critical of those who wrecked his deficit program. “I now challenge those who defeated the measure to come forward with their solution,” he said. Just before the early weekend adjournment, Rep. W. T. Oliver, conservative from Port Neches, rose on personal privilege. He proceeded to attack Daniel for interfering in the business of the House, for being unstatesmanlike, for playing politics, and .for deciding “what is good and bad for the people of Texas.” “It’s about time we had a little statesmanship up there,” Oliver said. “It’s about time some of us quit running for other office and got on with the business at hand . . : Anytime someone casts bad light on me because I voted the way I think my people wanted me to vote, or because I represent my people, I am going to use the floor of the House to answer them. I’m not afraid of the governor or anyone else.” There was strong applause. Rep. Franklin Spears, San Antonio, then leaped to the floor on personal privilege. “The previous speaker has cast aspersions on the House,” he charged. The governor “not only has the right but the responsibility to fight for his program”to criticize members if they don’t agree. “This House won’t gain anything by applauding a speaker who says we should be insulted from the other departments of government” when that department is carrying out its duty. Spears also was vigorously applauded. Minutes later, in an impromptu meeting of a revenue and tax committee which had seen the three tax measures it had overwhelmingly reported to the floor beaten down the night before, chairman Charles Ballman of Borger said the committee “should give the House a variety of tax measures. It’s our duty to throw some sort of vehicle out to the House, so they can put amendments on if they choose. “The deficit is a disgrace. We’ve got to take care of it,” the chairman said. Rep. George Hinson, liberal from Mineola, pointed out that Rep. John Allen of Longview had introduced a general sales tax, but he has asked for no committee hearings. Ballman injected: “I’ve talked with him four or five times, asking why he hasn’t asked for a hearing.” He gave no reason why, Ballman said. The score flashed 72-72, followed by a prolonged groan throughout the chamber. Counting the votes off the machine and on the floor, Speaker Turman announced after verification the motion to table had carried by 74-73. Wade Spilman, McAllen conservative, then moved to postpone consideration for a week. Rep. B. H. Dewey’s motion to table carried, 74-71. Rep. Tony Korioth, Sherman liberal, stopped by to tell reporters, “This is the slowest steamroller I ever saw.” It turned out to be anything but “Well, this committee worked hard putting those bills out that got beat last night,” Hinson said. “The hard-core opposition hasn’t offered any concrete plans. They haven’t submitted anything to this committee for anything. I’ll help get some different plans out to the floor, not that I’ll vote for them then.” “I’m in favor of having a floor vote on every philosophy of taxation,” Ted Springer, Amarillo liberal, said. “Would you vote for a sales tax?” Rep. Jim Cotten, Weatherford, asked. “I certainly would not,” Springer replied. Bob Eckhardt, Houston liberal, said: “This committee strikes me as being quite different from the tax committee last session.” \(“I hope so,” chairman Ballman again that old committee handling the opposition last night. “It seems to me,” Eckhardt continued, “that the feelings of this present committee aren’t to frame a mold for the House. It shouldn’t originate bills like the old committee did.” * * A couple of hours later, after lunch recess, the committee sent to the floor a “loophole-closing” bill on a series of taxes on igarettes, coin-operated machines, and air-conditioners. In an interesting move, the committee then approved a motion by Eckhardt “to notify Allen and Connell \(JackConnell of Wichita Falls, who has introduced a $50 bill is broad enough to take any amendment, that it is a vehicle that will carry any amendment, including a sales tax. Also we should notify them that the committee will entertain a request for a hearing on their own bills.” \(There is a rule that no amendment can be made that is not germane to a bill. A specific singleshot tax bill would prohibit an amendment tying on another tax. But a “series” tax bill, such as the one sent out, could take a sales tax amendment as another Dick Slack, conservative from Pecos, commented: “If the play is to get a sales tax offered by someone who doesn’t really want it, just to get it out and killed, it will be a play that could be regretted down the line.” Chairman Ballman dismissed the group with a closing remark: “My secretary has prepared a list of tax measures scheduled to come before this committee. I’ll say this about the men who voted against our tax measures last nightI don’t find their names on any bills referred to this committee that would raise any revenue for the state. If I find their names here at all, it’s on bills that would lower the revenue to the state. I’m not being critical; I’m just stating a fact.” a steamroller. Spears’ motion to engross the bill failed by nine votes, 79-70. After another lengthy verification, Wilson of Amarillo moved to table and reconsider. It failed by the 73-73 tie. Spears took the microphone again and pointed to the back gallery. “I want to thank you gentlemen for your support and to remind Santa Anna in the balcony,” he said, “that while we got beat today at the Alamo, San Jacinto is yet to come.” W.M. \(See separate story on AUSTIN Bankers in Austin for a convention watched from the galleries Wednesday as the escheats bill on which Gov. Daniel has warned he will stake a special session was defeated, 79-69. Crackling tempers, remarks directed to the gallery, and curiously shifting votes on a long series of complicated amendments marked the fourth unsuccessful attempt to put teeth into the existing escheats statute. The battle ‘began with a special message from the governor asking again for his emergency deficit program, was played behind locked doors with a “call on the House,” and ended with the sudden ten-vote margin after close victories for the governor’s forces on the later amendments. “In your oath of office, you pledged to preserve, protect, and defend the laws of this state, Rep. Charles Hughes, the sponsor, said. “This bill does just that. You’ll be enforcing the statutes and the constitution of Texas.” After seven years, the original depositors would be sought, and if not found the property would escheat to the state. It might be recovered later in the courts. “If you don’t pass it,” he said, “you’ll be making a $17 million gift out of the taxpayers’ pockets to the banks, pipeline companies, and insurance companies. I’ve been in this legislature six terms and I’ve never seen such a blackand-white measure. I see absolutely no justice in opposing it. “The point will be made,” he argued, “that this measure would shake confidence in the banks. Yet a majority of the states have had this for years and the banks haven’t lost confidence there. This will actually aid the banks in cutting down on embezzlement problemsmost embezzlement takes place in dormant funds,” he said. “As the governor said, even if we didn’t face a deficit, we should pass the measure to protect the depositor.” Rep. John Allen, Longview conservative, asked about old people who might leave money in banks for funerals. Wouldn’t the state get the money? “That’s an interesting question Mr. Allen asked,” Rep. Tony Korioth of Sherman said. “From what the bankers told us in committee, if you left $200 or $300 in the bank over a long period, you soon wouldn’t have anything. It’d be eaten up by service charges.” Rep. Bill Jones, Dallas conservative, began raising the first of several legal questions and charged that Hughes had no idea how much money the measure would raise. Then Rep. Wilson Foreman, Austin conservative, presented ‘the first of a series of successful amendments. A motion to table a Foreman amendment allowing banks to open to investigation only those accounts which they say are dormant failed, 78-61. The amendment itself passed, 82-61. Another amendment by Foreman to extend to 20 years the period in which accounts may be held was passed without dissent after Foreman was persuaded to exclude insurance and oil and gas companies from the extension. Other relatively minor amendments acceptable to Hughes were also passed. Then, in a well-timed move by proponents of the bill, Korioth offered an amendment “that will cure most of the objections” by giving banks a choice after seven years: either they could escheat a dormant account to the state at that point or keep the dormant account another 15 years and pay interest on it. “This will give the banks a clear and fair choice,” Korioth said. “If they choose to keep the account, there would be no service charges and the depositor’s money would be earning interest. This would protect the depositor even further.” A motion by Foreman on another amendment which would have killed the Korioth proposal failed on a close 74-72 vote. Then the Korioth provision was adopted, by a resounding 104-32. At this point the proponents seemed to be picking up strength. Crippling amendments by Terry Townsend, Ben Jarvis, and Leon Thurman, were tabled, 80-70, 74-71, and 77-69. Judy Horton Paul Haring of Goliad, speaking on the Jarvis amendment, said: “Jarvis has one of the most ‘asinine bills ever made in the legislature. I don’t think he can go home if it passes. We’ve seen all these jackass attempts today to kill this bill. If this passes, the state won’t get a single cent, and the banks will keep on robbing the state of Texas.” Hughes, somewhat flustered by Haring’s supporting speech, said, “With all due respect for Mr. Haring, sometimes the problem is not with your enemies but with your friends.” The amendment would gut the bill, however, he said. Jarvis later said he felt “deeply hurt by these things Haring has said.” A clear issue was posed when Reed Quilliam, Lubbock conservative, offered yet another amendment which would have killed the successful Korioth measure providing for interest payments on the extended 15-year period. This drew one of the most spirited exchanges of the evening. Malcolm McGregor, El Paso liberal, said, “A lot of us are duly concerned with depositors. Won’t the Korioth amendment be wonderful for the depositor who later shows up?” His dormant ‘account would not be eaten up by service charges, but would actually be larger with interest additions, McGregor said. “I’m not nearly as worried about the depositor” who has gone off and left his account “as you are,” Quilliam replied. The bankers would “be forced” to pay interest, he said. They should be able to keep the money without adding interest on it. It was at this point, with legislative stomachs growling, that Steve Burgess of Nacogdoches rose to offer the House buttermilk and a chicken dinner courtesy of the Dairy Farmers Association. Byron Tunnell of Tyler jumped to his feet. In a moment of comic relief from the growing tension, Tunnell pointed to the bankers in the gallery and said he didn’t want the chicken. “I’ve got some steak people up there,” he said. The debate continued when Korioth said his successful amendment had met the objections of the bankers, “who said they had been mainly worried about turning savings accounts over to the state. Those dormant accounts are just laying there,” he said. “It’s costing them absolutely nothing to keep it. The ultimate consideration here is the depositor. This is just simply fair.” Korioth’s motion to table the Quilliam amendment prevailed, 75-71. Just before the motion on engrossment, Tom James rose to the floor and angrily charged that the speaker had refused earlier to recognize him on a motion to postpone a showdown. “I can’t vote for this or any other bill being rammed down our throats by the people who control this House.” James said he had committed himself to vote for the bill, but under the circumstances he could not. Tensions were at their highest. but there was much laughter and horseplay as the measure finally came up for final vote. Hughes said “the amendments added tonight haven’t hurt the bill very muchit’s still a good The red and green lights flashed on the board. “It’s a red one,” a veteran reporter said. It was a ten-vote failure, 79-69. Speaker Turman swiftly laid out the utilities tax while Wesley Roberts, conservative from Lamesa. tried futilely to gain’ recognition for a motion to reconsider and table. All that remained in the demolition work was defeat of the gross receipts tax on utilities sponsored by Max Carriker, Roby, who offered it as an attempt “to establish the tax rate at a uniform level and eliminate the present exemption for utilities in rural areas.” The electric co-operatives would be paying taxes for the first time, Carriker said, but it would only be a small part of the $17 million total. Several conservatives rose to defend REA against taxation, prompting Bcb Eckhardt to ask Carriker, “Aren’t you impressed with the sudden new friends you see here for REA? It looks like almost a complete turnover in support to me.” Dick Cory, Victoria conservative, offered an amendment gutting the bill by exempting taxes on utility sales to industry in most rural areas, also changing the present law to exempt industries in small towns. Carriker’s motion to table the Cory amendment failed, 78-70. A liberal effort to adjourn and avoid a showdown vote on the Cory proposal was killed, 73-72. The Cory amendment was then approved, 74-63, and the day’s work was completed. One weary reporter observed: “Magna Charta couldn’t have passed today in this place.” W.M. * Governor Issues Critical Statement AUSTIN Gov. Daniel issued this statement after the defeat of his deficit-retiring measures: “It was a fine day for the banks and interstate corporations, but a bad day for the people of Texas.