i Associa’ March 2, 2017 ‘The Honorable Dan Patrick Lt. Governor State of Texas P.O. Box 12068 Austin, Texas 78711-2068 ‘The Honorable Joe Straus Speaker of the House State of Texas P.O. Box 2910 Austin, Texas 78768-2910 Re: Senate Bill 10 and House Bill 1774 Dear Governor Patrick and Speaker Straus: As the Chairman and C.E.0. of one of the nation’s largest property management companies, Associa is responsible for commercial and residential properties throughout Texas. I have recently become aware of Senate Bill 10 and its companion, House Bill 1774, and I write to express my strong opposition to this legislation. Associa addresses its exposure to risk through the use of insurance, as do most Texas businesses, particularly those that operate or manage buildings. The current Texas Insurance Code provides procedures and protections for property owners and managers, so that when fires, storms or other events cause damages, we can be sure that those to whom we pay premiums will promptly pay legitimate claims. S.B. 10/H.B. 1774 would seriously diminish those protections, thereby shifting risks to building owners and managers that they do not currently face. Although there has been much talk about litigation that followed massive hailstorms involving many thousands of people, as we read them, the bills would negatively affect property and casualty insurance involving any peril affecting even a single property. The bills would also drive Texas businesses into the federal court system if they incur damages of more than $75,000, which is very likely for those who operate or manage large properties. It would truly be unusual for the Texas Legislature to pass a bill that favors getting Texans involved in the federal system with a claim involving property in Texas. I cannot imagine the justification for doing that. My legislative experience exposed me to the temptation to react to perceived abuses by some by withdrawing the rights of everyone else, but the Legislature should avoid that temptation. I understand that devastating hailstorms in many parts of Texas were followed by an increase in claims, lawyer and public adjuster 5401 N. Central Expressway, Suite 300 | Dallas, TX 75205 Delivering ursurpessed management and lifestyle serces to communities worldwide. wwwassociaonline.com (800) 808-4882The Honorable Dan Patrick The Honorable Joe Straus March 2, 2017 Page 2 involvement and lawsuits. | am not in a position to gauge the merits of those claims or the actions of those involved. Ihave not attempted to enumerate all of our concerns with these bills. My point is that we should not sacrifice protections that have served everyone else well because of the actions of a few. Associa responsibly cares for its customers. I respectfully request that the Legislature assist us in doing so by defeating the efforts represented by S.B. 10 and H.B. 1774. Sincerely, Unime john Carona Chairman and Chief Executive Officer Ce: The Honorable Kelly Hanock, Chair, Senate Business and Commerce Committee ‘The Honorable Greg Bonnen, Member, Texas House of Representatives Members, 85t% Texas Legislature