"You've got some significant problems," state Sen. Florence Shapiro, R-District 8 in Plano, told the North Texas NAIOP chapter at yesterday's breakfast meeting in the Dallas Country Club at 4100 Beverly Dr. "Your issue of classification is probably as significant as any. I do believe there will be changes." The specialty panel included Public Strategies Inc.'s managing director Russell T. Kelley and Jones Day Dallas attorney Labry Welty and was moderated by Glenn Callison, chairman and CEO of Munsch Hardt Kopf & Harr in Dallas.

NAIOP's local chapter is a power group of senior executives from all brokerage camps in the region. Kelley has been brought on board to lobby its HB3 case in Austin. "It is law," Kelley said, "but I don't think of it as final law."

The legislation eliminated a tax loophole for Texas limited partnerships, but HB3 "is causing havoc with a lot of real estate firms," Welty said. "It certainly needs some work from a real estate perspective. I would expect a huge number of technical corrections in the bill when the legislature returns in January."