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

NAIOP's local chapter is a power group of senior executives fromall brokerage camps in the region. Kelley has been brought on boardto lobby its HB3case in Austin. "It is law," Kelley said, "but I don't think ofit as final law."

The legislation eliminated a tax loophole for Texas limitedpartnerships, but HB3 "is causing havoc with a lot of real estatefirms," Welty said. "It certainly needs some work from a realestate perspective. I would expect a huge number of technicalcorrections in the bill when the legislature returns inJanuary."