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Tuesday, Dec. 29, 1998

Retailers watch for electric deregulation

Legislature also to consider sales tax exemptions, raising minimum wage

   With the start of the 76th Texas Legislature just two weeks away, state retail and restaurant associations are taking a close look at electric deregulation.
   "It's such an important issue for all retailers, in particular supermarket, discount and department store members," said Chuck Courtney, vice president of the Austin-based Texas Retailers Association.
   Already, Rep. Steve Wolens, D-Dallas, has pre-filed a bill that the Texas Restaurant Association likes. The groups estimates a deregulated retail electricity market could save $2,000 to $6,000 per restaurant each year.
   Retailers and restaurateurs will look for two key items from any bill that emerges.
   First, they want to make sure they as commercial customers aren't saddled with a disproportionate share of investments power companies have made in generating and transmission facilities.
   Second, retail businesses want to make sure legislation allows companies that operate multiple stores to aggregate, or purchase electricity for all their locations from a single company, giving them greater bargaining power when it comes to rates.
   The restaurant association wants a law that also would allow the state's single-store operators to buy electricity as a group.
   "Aggregation doesn't cause anybody a problem as far as I can see, unless of course you're a monopoly utility that we're not going to be buying from," said Glen Garey, general counsel for the association.
   

Guaranteeing service

   For Corpus Christi-based Whataburger, which operates about 280 company-owned restaurants in Texas, the issue isn't as simple as lower rates, senior vice president Tim Taft said.
   While it's predicted that deregulation eventually will bring electric rates down, Taft said the issue of service remains an unknown and especially important issue, especially for the fast-food chain with locations across the state.
   "With (Central Power and Light Co.), you at least know who you're dealing with. They've been around for a long time, and there's something to be said for reliability," he said.
   Taft said Whataburger isn't ready to endorse deregulation yet, but would favor a bill if it could lower costs without compromising service.
   "We're kind of in a wait-and-see mode," he said. "There's going to have to be a lot of evaluation done just because of the dynamics of where our locations are."
   

Sales tax exemptions

   Though deregulation is a key issue, retailers and restaurant operators are keeping their collective eyes on other issues as well.
   The retail association is keeping a watchful eye on legislation pertaining to sales tax exemptions.
   A few bills relating to exemptions have been pre-filed:

House Bill 66, filed by Rep. Roberto Gutierrez, D-McAllen, would exempt sales tax on certain health care products, school supplies and school clothing.

House Bill 111, Rep. Glen Maxey, D-Austin, would exempt Internet access from sales tax.

Senate Bill 66, Sen. Chris Harris, R-Arlington, would exempt sales tax on gun safes.
   Texas Retailers Association's Courtney thinks there's a good chance a law will emerge that exempts sales tax on certain goods, but says it is uncertain to what degree it will help retailers.
   "We want to keep it simple," he said. "You can propose the bill and make it kind of broad, but when you try to implement it, that's when the comptroller's office needs some direction."
   Other states have implemented sales tax exemptions similar to those proposed with differing degrees of success.
   "Retailers in New York saw a surge in sales," Courtney said. "Florida had problems because they kind of got lost in the semantics of what is taxable and what is not."
   

Other legislation

   Retailers and restaurant operators also will keep their eyes on efforts to raise the minimum wage, tighten food safety regulations, expand the Americans with Disabilities Act requirements and lower the legal blood-alcohol limit from 0.10 percent to 0.08 percent.
   The restaurant association traditionally has opposed lowering the blood-alcohol limit, and similar measures have been defeated in past legislative sessions.
   This year, however, the restaurant association appears ready to concede before the session begins.
   Garey said millions of dollars in federal highway funds are tied to lowering the blood-alcohol limit. "I don't think my members aren't willing to pay a tax to go out and protect social drinkers," Garey said.
   
On Retailing is published each Tuesday in the Staff Writer business section and includes items on new, relocated and expanded businesses. Items for consideration should be submitted to: On Retailing, Corpus Christi Staff Writer, P.O. Box 9136, Corpus Christi, Texas 78469; e-mail Jeffrey Tomich at tomichj@scripps.com; fax items to (512) 886-3732; or call (512) 886-4316.

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  © 1998 Corpus Christi Caller Times, a Scripps Howard newspaper. All rights reserved.