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Legislative update: Week of May 29, 2015 »
Wednesday was the last day for the House to decide on all Senate bills and for the Senate to vote on all bills. The official end to this legislative session on Monday, June 1, is the last day for both chambers to approve, reject or correct revised bills that leave conference committees. Many bills died this week before the Tuesday and Wednesday midnight deadlines, but the progress of legislation important to Texas businesses and residents from this week can be found below.
Check out the Chamber's Legislative Wrap-up, a summary of all legislation relevant to our Legislative Agenda. Our wrap-up includes a legislative scorecard that shows how Richardson-area legislators voted on important bills.
HB 26, the economic development reform bill authored by Rep. Angie Chen Button (R-Richardson), was passed by the Senate on Tuesday and assigned a conference committee by the House on Thursday. Both chamber have until Monday to approve HB 26 and send it to the Governor.
HB 32, which provides a 25 percent franchise tax cut to all businesses in Texas, was approved by both Chambers on Thursday and will now head to Gov. Abbott's desk. The bill is estimated to cost $2.6 billion over the next biennium and satisfies Gov. Abbott, who said he would veto any appropriations bill that did not include a margins tax cut.
SB 632, which abolishes the Texas Emerging Technology Fund and redistributes its account to other state programs, was passed by the House on Monday. The Senate refused to concur with House amendments to the bill on Thursday and assigned a conference committee to negotiate a new version.
HB 2712, which creates a 20-year sales tax exemption for certain large data center projects, was passed by the Senate on Monday and approved by the House on Thursday. Tax incentives for data centers would encourage these often multibillion-dollar projects to settle in our state, creating high-tech jobs and attracting more capital investment. HB 2712 will now go to the Governor's desk.
SB 1457, which curbs the behavior of patent trolls in harmful patent infringement claims, was passed by the House on Friday and sent to the Governor on Tuesday. Patent trolls target small businesses and individuals by submitting baseless or tenuous claims that require years of complex and costly litigation to resolve. SB 1457 introduces basic requirements for these claims, such as the number of the patent in question and the identity of the plaintiff, and a civil penalty for their abuse.
SB 9, which limits the growth rate of the budget, was passed by the House on Tuesday and assigned a conference committee by the Senate on Thursday. The Texas Constitution limits state spending to the growth of the state economy for certain categories in the budget. The revised version of SB 9 would expand these restrictions to the entire budget and require only a simple majority vote to override the state spending cap. The cap on each category, such as education or transportation, would be based on inflation and population rates relevant to that area and determined by the Legislative Budget Board for each session.
HB 2, the supplemental budget bill that fills gaps in the 2014-2015 state budget, was passed unanimously by the Senate on Tuesday with amendments, which the House approved on Thursday. HB 2 will also go to Gov. Abbott's desk.
HB 4, which allocates $130 million in state funds to pre-K programs that meet certain high quality benchmarks, was signed by Governor Abbott on Thursday. Improving Texas pre-K programs was a top priority for Gov. Abbott this session.
HB 100, which would allocate millions of dollars for much-needed construction and maintenance funds for Texas colleges and universities, was sent to conference committee by the Senate on Monday. Both chambers must approve the revised version of the bill, distributed on Thursday, by midnight next Monday.
HB 1000, which creates three new university research funds over the next biennium, was passed by the Senate on Wednesday. The new funds are intended to support quality faculty and research capacity at higher ed institutions (HRO report). Another bill that promotes higher ed research, SB 44, was sent to the Governor on Tuesday. SB 44 specifies that private gifts made to colleges and universities to support undergraduate research are eligible for matching state grants under the Texas Research incentive Program (TRIP).
Representatives plan to meet over the weekend in anticipation of the Wednesday, May 27 deadline for passing House bills in the Senate and Senate bills in both chambers. Make sure you check out our Updates section below to see the status of legislation that could impact the business community.
Negotiations over appropriations bill finally come to end
On Thursday night House and Senate negotiators reached an agreement regarding the controversial appropriations bill, the budget legislators must pass before the end of the session. House and Senate members must approve the $210 billion budget before it goes to the governor's desk. Below are some highlights of the final version:
House and Senate approve bills that support telecommunications providers
On Wednesday the Senate passed Senate Bill 1009, which would increase the cap on sales tax refunds for telecom network equipment from $50 million to $75 million. The analysis for HB 2199, its identical companion, says the bill would spur economic activity, create new jobs, improve broadband services and restore Texas' competitive edge over other states in the telecom arena. SB 1009 was sent to the House Ways and Means Committee on Thursday.
House representatives approved Senate Bill 755 on Thursday, another bill authored by Sen. Van Taylor and sponsored by Rep. Angie Button (R-Richardson) intended to help the tech industry. SB 755 would remove a glitch in Texas law that allows the same computer program to be taxed twice.
HB 32, which would reduce the franchise tax over the next biennium as proposed by the budget, was passed by the Senate Finance Committee on Wednesday.
House members approved Senate amendments to HB 4 on Thursday, which supports pre-K programs that meet certain performance-based requirements. The bill will now head to Gov. Abbott for passage or veto.
SB 1457, which would curb the widespread practice of abusive patent litigation, passed out of the House Judiciary and Civil Jurisprudence Committee on Wednesday and was sent to Calendars on Thursday.
HB 100, which distributes tuition revenue bonds (TRBs) to Texas colleges and universities for facility maintenance and construction, was passed by the Senate on Tuesday. On Thursday, however, the House did not concur with the Senate's amendments and appointed a conference committee.
SB 632, which eliminates the Texas Emerging Technology Fund and establishes governor's university research initiative to recruit distinguished researchers, was passed unanimously by the House Economic and Small Business Development Committee on Thursday.
SB 44, another bill aimed at improving Texas' position as an innovator in research, is scheduled for a House vote today. SB 44 would clarify that private gifts made to colleges and universities are eligible for matching funds under the Texas Research Incentive Program.
Legislative update: Week of May 15, 2015 »
Representatives rushed against the midnight deadline on Thursday to vote on bills that originated in the House. Meanwhile, significant progress in the appropriations bill conference committee has been reported. Today is the last day to pass House bills on third reading in the lower chamber, and the next major deadline is Wednesday, May 27th, the last day for the House to pass Senate bills and for the Senate to vote on all proposed legislation.
Public Policy hosts transportation lobbyist for straightforward update on legislature
Last Friday, the Chamber's Public Policy Committee welcomed Drew Campbell of the Dallas Regional Mobility Coalition to discuss important transportation bills and their advancement in the legislature. "What we are going to get this year is new funding," Campbell predicted, referring to the promising feedback from both chambers and Gov. Abbott's prioritization of TxDOT funding. He also provided valuable insights into the more subtle ways events in Austin may impact a bill's progress. Read more about this event and Campbell's thoughts in the Chamber's article covering the meeting.
Prudent investment of excess Rainy Day funds approved, sent to governor
The Senate passed House Bill 903 on Thursday, which authorizes the investment of excess funds in the state Rainy Day Fund. HB 903 will now head to Gov. Abbott to be signed into law or vetoed. A sufficient balance for the Rainy Day Fund, also known as the economic stabilization fund (ESF), is considered to be $7 billion; however, the balance is expected to reach $11.1 billion by the end of 2017. HB 903 proposes that the Comptroller invest a percentage of the excess funds ($4.1 billion), which are currently "highly liquid, low yield assets", according to the well-established prudent investor standard. Over time, these small, relatively safe investments would build the Texas emergency fund and provide more support for programs when general revenue falls short. See the Finance committee's bill analysis and the HRO report for more a more detailed account of the bill's fiscal strategy.
Letter grade school rating system passed, new formula funding withdrawn
On Thursday the House approved House Bill 2804, authored by House Public Education Chairman Jimmie Don Aycock, which replaces the former school performance ratings with A through F letter grades. State public school evaluations would also be based on new criteria, such as advanced placement enrollment and locally selected programs related to community and student engagement. Students' performance on STAAR standardized tests would still be considered the primary criterion for school performance evaluations, but nearly half of the letter grade would be determined by unrelated factors (HRO report). If any school received a failing grade of D or F, school districts could not achieve an "A" or exemplary grade. HB 2804 will now be assigned a Senate committee for consideration.
Another education bill authored by Rep. Aycock, House Bill 1759, was withdrawn on Thursday due to the approaching midnight deadline and discouraging feedback from the Senate. HB 1759 would have added $800 million to the $2.2 billion allocated to Texas public schools and removed outdated calculation methods for funding. Regarding his decision to withdraw HB 1759, Rep. Aycock said, "I don't think it's fair to leave this bill pending and kill everything that's up when we know the Senate will almost certainly not consider the measure if it passes."
House committee hears Senate bill that could weaken local control
The House Ways & Means Committee heard testimony on Tuesday for Senate Bill 1760, which would require city councils to secure a super majority to increase local taxes for revenue. If passed out of committee and calendared before May 27th, SB 1760 would go to the House floor for a vote. The restrictions proposed by SB 1760 could impede growth and development in thriving communities and reduce what local governments can do for their residents. Richardson's local legislator, Rep. Angie Chen Button, has reported that as a member of Ways & Means she will oppose this legislation. Let the members of Ways & Means and your representatives know that their constituents and Texas residents do not approve of SB 1760.
SB 1457, which creates measures intended to restrict the destructive effects of patent trolls, has been scheduled for a hearing on Tuesday, May 19th.
Legislative update: Week of May 8, 2015 »
Legislators hurried this week to push several bills because of deadlines approaching next week, despite the stalemate between House and Senate members over sales and property tax cuts in the budget. Monday, May 11 is the last day for House bills to leave committee and Friday, May 15 is the last day for representatives to vote on House bills. The last day for the Senate to consider all legislation is Wednesday, May 27.
Pre-K, higher ed funding bills head to governor's desk
House Bill 4, an early education bill and one of Gov. Abbott's top priorities, was passed by the Senate on Thursday. HB 4 dedicates $130 million to encourage existing pre-K programs to implement certain high quality curricula and teaching measures, such as smaller class sizes and training. Early education grant programs are currently available for qualifying children, such as low-income, military and foster children. If the House approves changes and the 11 amendments adopted by the Senate, the bill will head to the governor's desk for his signature.
On Monday the House approved Senate Bill 1191, which would increase funding for state colleges and universities by $130 million annually to accommodate growth. SB 1191 will now head to Gov. Abbott for his approval.
Ways & Means approves bill promoting telecom investment and development
House Bill 2199, filed by Rep. Tan Parker (R-Flower Mound) and identical to Senate Bill 1009, would increase the annual cap on the sales tax refund for communications network equipment from $50 million to $150 million. Texas imposes the eighth highest sales tax rate on telecommunications equipment, making our state less competitive than other states when attracting telecommunications companies and providers. A sales tax rebate could promote investment in communications networks and have an impact across the economy, including the generation of more jobs and local tax revenue. HB 2199 passed out of the House Ways and Means Committee last Friday. The Senate Finance Committee hear testimony on its sister bill, Senate Bill 1009, on Wednesday.
SB 1457, which establishes requirements relating to bad faith patent infringement claims to discourage patent trolls from targeting Texas businesses, was referred to the House Judiciary & Civil Jurisprudence Committee on Tuesday.
SB 778, which limits rises in college and university tuition to inflation plus 3 percent of inflation, was passed by the Senate on Thursday with five amendments.
HB 26, part one of three state economic development reform bills filed by Rep. Button, was referred to the Senate Natural Resources &Economic Development Committee on Tuesday.
Legislative update: Week of May 1, 2015 »
With only a month left in the legislative session, legislators hurried this week to pass several landmark bills that covered priority issues including economic development, transportation, higher education and tax reform.
House passes economic development measures
On Friday the House is expected to pass House Bill 26, House Bill 27 and House Bill 28, the state economic development reform package authored by Rep. Angie Chen Button (R-Richardson). HB 26, which was given preliminary approval on Thursday, abolishes the Texas Emerging Technology Fund (TETF), creates a university research initiative to match funds for the recruitment of renowned faculty at state colleges and universities, shortens the state's approval period for grants, and authorizes the Texas Enterprise Fund (TEF) to fund higher ed research commercialization requests. HB 27 also eliminates TETF and supports higher ed research commercialization grants, but redistributes remaining TETF funds to only the Texas Research Incentive Program or the Texas Research University Fund. HB 28, in an effort to increase transparency in state economic development programs, establishes regular audits of Texas economic incentive programs.
Several other economic development measures were passed in an effort to increase Texas' competitive advantage when recruiting new businesses. HB 1701, passed on Wednesday, shortens the approval period for TEF proposals from 91 days to 31 days. HB 590, approved by House legislators on Tuesday, attracts start-ups and promotes growth by creating a tax exemption for property used for the commercialization of technologies developed by universities and eligible medical centers. SB 632, approved by the Senate, also redirects funds from TETF toward the creation of Gov. Abbott's proposed university initiative for the recruitment of Nobel Laureates and National Academy members to Texas colleges and universities.
Sales tax and franchise tax reductions passed in House
On Tuesday, the House unanimously approved the first sales tax cut in Texas history. House Bill 31 decreases the state sales and use tax from 6.25% to 5.95%, a reduction of nearly 5 percent. The House also passed House Bill 32, which decreases the franchise tax for all business owners by 25 percent, without an amendment that mirrored the Senate's plan by increasing the franchise tax exemption from $1 million to $4 million. HB 32 would provide an estimated $4.9 billion in tax relief to Texas business owners. Both bills were amended so that the Comptroller could further reduce tax rates if more state revenue comes in than expected.
HB 31 and HB 32 support the budget proposed by the House, but are still at odds with the Senate's plan to cut property taxes and leave the sales tax untouched. Opponents of the Senate's tax cut plan cite concerns over rising appraisal values of property and marginal savings for homeowners. Speaker Joe Straus said in a statement that the House "looks forward to a productive conversation with the Senate about how best to deliver results on [tax reform] and the many others that matter to our economy and to Texas families."
Transportation bills provide significant boost in funding
Several bills have been considered this week to address the alarming shortfalls in funding for the Texas Department of Transportation (TxDOT). Two bills were approved on Tuesday that concern diversions from the State Highway Fund (SHF), Senate Joint Resolution 12 and Senate Bill 139. SB 139 ends the diversion of funds from SHF to the Texas Department of Public Safety, which amounted to more than $810 million in 2014-2015, and restricts federal funds for state highway construction and acquiring rights-of-way. It relies on the passage of SJR 12, an identical constitutional amendment, by voters in November 2015.
On Thursday the House gave preliminary approval to House Bill 13 by Transportation Chairman Joe Pickett (D-El Paso), which establishes certain requirements for TxDOT projects and authorizes the Texas Transportation Commission to determine how to use funding collected from HJR 13. HB 13 is contingent on the passage of House Joint Resolution 13 by voters this November, which would dedicate $3 billion in net sales tax revenue, along with an additional 2 percent of remaining revenue, each fiscal year to SHF. SJR 13 would result in an estimated loss of $11.7 billion to state general revenue funds by 2020. HB 13 and HJR 13 dedicate significantly more funding to TxDOT than SB 5, sent to the House Transportation committee two weeks ago, which would transfer the first $2.5 billion in annual vehicle sales and use tax revenue to SHF.
HB 6, which would assign letter grades for school performance evaluations, was approved unanimously by the House Education committee on Wednesday and sent to Calendars.
SB 778, which limits rises in college and university tuition to inflation plus 3 percent of inflation, was passed by the Senate on Thursday with five amendments.
SB 149, which establishes individual public school graduation committees of parents, teachers and principals for students who fail to pass one or two STAAR tests but are otherwise eligible to graduate, was sent to the governor on Wednesday.
Legislative update: Week of April 24, 2015 »
This week, the Senate passed landmark legislation to address the growing, widespread problem of patent trolls and made progress in providing steady, reliable revenue to the State Highway Fund.
Reining in the growth of patent trolls
On Wednesday the Senate passed Senate Bill 1457, written by Sen. Robert Nichols (R-Jacksonville) and co-authored by Don Huffines (R-Dallas). The bill addresses the negative impact of "patent trolls," patent assertion entities (PAEs) that use abusive patent litigation to target businesses and innovators for financial gain. In lieu of federal action, states have begun establishing their own laws that prohibit PAEs from making bad faith claims of patent infringement, or claims that are false, baseless or misleading. SB 1457 allows the Texas Attorney General to investigate bad faith claims and bring suit against patent trolls, and protects patent holders by notifying them of possible infringements and pursuing compensation.
Reliable funding for road construction, maintenance and long-term projects
Senate Joint Resolution 5, the companion bill to SB 5, was unanimously passed out of the House Transportation committee on Tuesday. SJR 5 would dedicate the first $2.5 billion in vehicle sales tax revenue to the general revenue fund, and the following $2.5 billion to the State Highway Fund (SHF). Any remaining funds would be split evenly between the general revenue fund and SHF each year. Constitutionally dedicated funds could provide a predictable revenue stream for the Texas Department of Transportation, which needs to know how much funding will be available years in advance for long-term projects. Revenue from the state's 6.25% tax on vehicle sales and rentals currently goes toward the state's general revenue. If voters approve the measure in November 2016, the bill will go into effect in 2018.
Another transportation bill, SB 1512, was passed by the Senate on Monday. SB 1512 would correct diversions created by the separation of the Texas Department of Motor Vehicles (TxDMV) fund and SHF. HB 6 from the 2013 legislative session resulted in the diversion of revenue streams from TxDMV to the state general revenue fund, effectively "abolishing" the TxDMV fund. SB 1512 ends this diversion and reestablishes this funding for TxDMV. The bill will now be sent to House Calendars for scheduling.
HB 4, which would address one of Gov. Abbott's emergency items by providing universal pre-K to qualifying Texas children, was referred to the Senate Education committee on Thursday.
HB 100, which would provide millions of dollars in much needed revenue bonds to higher ed institutions for facility construction and maintenance, was referred to the Senate Higher Education committee on Thursday.
HB 1603, by Rep. Jason Villalba (R-Dallas), creates a separate state chancery court for complex civil litigation, was passed our of the House Business & Industry committee on Tuesday. The bill will now be sent to Calendars to be heard by the House.
Source: Texas Legislature Online
Legislative update: Week of April 17, 2015 »
This week's headliners were the House and Senate budgets, the approval of expanded economic incentives for data centers and debate over school financing reform. Several bills relevant to Richardson businesses and residents were alsoapproved by committees and sent to Calendars, where they will be scheduled for discussion and a vote.
Chamber holds engaging City Council Candidate Forum
Last Friday, candidates for Richardson City Council Places 1 and 4 visited the Chamber to discuss their policy ideas and answer questions about their experience and priorities for Richardson. Ronda Moreland, Chair of the Public Policy Committee, moderated the discussion. For more information about the Chamber's public policy meetings and events, please contact Molly Ulmer at email@example.com.
Side-by-side budget comparison: Senate vs. House
Now that both legislatures have approved budgets for 2016-17, five representatives and five senators will be appointed to a conference committee to unite the proposals. Below is a summary of some of the differences between each version.
The $1.6 billion difference in the House and Senate versions represents less than 1% of the total amount allocated for the next biennium. Part of the included tax relief that depends on legislation has seen some promising developments. House Bill 31, which reduces the sales tax from 6.25 to 6.24 percent, and House Bill 32, which deceases the margins tax by 5 percent, were passed out of the Ways & Means committee and are headed for the House floor.
Reforming how Texas supports its schools
House Bill 1759, the controversial public education funding bill filed by Rep. Jimmy Van Aycock, was discussed in committee on Tuesday. A district court ruled in favor Texas public schools last August, stating that tax cuts from previous sessions imposed a statewide property tax in violation of the Texas Constitution. Legislators have until July 1st to remedy the school financing system, unless the Texas Supreme Court answers the state's appeal. Rep. Aycock said in committee that legislators shouldn't wait to hear back before restoring formula funding allotments. HB 1759 would provide $3 billion to public schools over the next biennium and include eighth grade students in career & technology funds, but would also make larger increases in funding for wealthier schools than urban districts.
House committee approves economic incentives for large data center projects
On Tuesday, the House Ways & Means committee approved several bills aimed at improving economic incentives for large data center projects. Legislators hope that passage of the bills below will make Texas a leader in this segment of the tech industry by extending current exemptions. Each of the bills below has a counterpart in the Senate and will be scheduled for a discussion and vote by the House.
House Bill 2096 by Rep. Angie Chen Button (R-Richardson) would extend the incentives to data centers of any size and reduce the required capital investment from $200 million to $100 million, among other changes. House Bill 2712 by Rep. Charlie Geren (R-Fort Worth) would also broaden the definition of data centers and exempt tangible personal property required for its operation. House Bill 2709, also by Rep. Geren, would allow more data centers to apply for benefits on property used for their facilities under the Texas Economic Development Act.
HB 26, HB 27 and HB 28 by Rep. Button have passed out of the Economic & Small Business Development committee and are headed to the House floor. The bills include a number of key economic development reforms that could produce an estimated $19 million in net state revenue.
SB 1601, which disqualifies high-speed rails from eminent domain, passed out of the Transportation committee with a 5-4 vote. The bill could jeopardize plans to construct a privately-funded high-speed rail between Dallas and Houston.
HB 1603 by Rep. Villalba, which would create a chancery court for complex business litigation, was approved by the Business & Industry committee and sent to Calendars.
SB 1457, relating to bad faith patent infringement claims, was approved by the State Affairs committee and scheduled to be heard by the Senate.
Legislative update: Week of April 10, 2015 »
The budget is the only bill that must be approved during the legislative session. Both of the Senate and House proposals for 2016-17, SB 2 and HB 1, introduce tax cuts designed to benefit Texas businesses and residents. The table below, compiled the Texas Taxpayers and Research Association, highlights key changes suggested by each legislature's tax relief plan.
President & CEO Bill Sproull testifies before House Economic and Small Business Development Committee
On Thursday, Richardson Chamber President & CEO Bill Sproull traveled to Austin to testify in support of House Bill 3160 by Rep. Angie Chen Button (R-Richardson), Chair of the House Economic and Small Business Development Committee. HB 3160 would allow the Texas Enterprise Fund (TEF) to be used for commercialization of intellectual property obtained through university research backed by private-sector investments. The bill was left pending in committee, as is practice for a first time hearing.
Senate approves computer science courses as high school credits
On Thursday, the full Senate passed House Bill 728 for the establishment of advanced computer science programs for high school students. The programs would allow computer science courses to count toward a student’s advanced mathematics or advanced science credits. Currently, a student must complete three math and three science credits to graduate. By 2018, 51 percent of all STEM jobs are predicted to be computer science related.
House Ways & Means Committee approves new calculation for school rollback tax rate
The “rollback” tax rate is the tax rate that a school district may not exceed without holding an election. Districts can raise their maintenance and operations (M&O) taxes by 4 cents per $100 of taxable property value, up to the maximum allowable tax rate of $1.17 for most districts before an election is required. Some have argued that the requirement of special elections for rate increases may deter schools from temporarily lowering their tax rate during times of surplus.
The House Ways & Means Committee approved House Bill 486 on Thursday, which would allow schools more flexibility in determining their tax rates by providing a new method of calculating the rollback tax rate. The rollback tax rate would be the higher of (1) the tax rate under current law, or (2) the sum of the highest tax rate adopted by the district’s voters and the district’s current debt rate. The new calculation would apply only to districts that adopted a tax rate equal to or higher than the rollback rate for any tax year in the preceding ten years. The Legislative Budget Board has not produced a fiscal note, as it is unknown how many school boards would lower their tax rates.
HB 486 is the companion bill to Senate Bill 1267, which would also allow a school district to raise tax rates to a rate approved by voters within the past ten years without holding another election SB 126 was approved by the Senate Education Committee on Tuesday.
Committee approves establishment of Texas Higher Ed Innovation Accelerator
On Wednesday, the House Higher Education Committee unanimously approved House Bill 17 for the establishment of a Texas Higher Education Innovation Accelerator for public colleges and universities. Higher ed institutions that are invited to participate would develop and submit an innovation plan including research and courses offered, with an eye toward improving job attainment post graduation. HB 17 will now be sent to the full House for a vote.
Committee moves to continue graduation committees
The Senate Education Committee unanimously approved Senate Bill 463, which continues the use of high school graduation committees. The committees, established during the previous legislative session provide students who fail one or two end-of-course exams an alternative to graduating that does not include passing the exams. SB 463 removes the sunset date of 2017 and makes the new provisions permanent.
Conferees appointed for budget conference committee
Both chambers this week appointed conferees for the conference committee on the only bill legislators must past this session, the appropriations bill. Senate conferees will include Chair Jane Nelson (R-Flower Mound), also Senate Finance Committee Chair and chief budget writer; as well as Sen. Juan "Chuy" Hinojosa (D-McAllen), Sen. Joan Huffman (R-Houston), Sen. Lois Kolkhorst (R-Brenham) and Sen. Charles Schwertner (R-Georgetown). House conferees include Chair John Zerwas (R-Richmond), also chief budget writer in the House; as well as Trent Ashby (R-Lufkin), Sarah Davis (R-West University Place), Larry Gonzales (R-Round Rock) and Oscar Longoria (D-Mission) the Vice Chair of the Appropriations Committee.
Friday, April 14 marks the passage of the 100th day of the 140-day legislative session. The 85th legislative session ends on Memorial Day, May 29. Deadlines
Ways and Means Committee sends franchise tax reform to full House
The House Ways and Means committee unanimously approved House Bill 28, authored by the committee’s chair, Rep. Dennis Bonnen (R-Angleton). HB 28 would use a portion of surplus general revenue (GR), up to $3.5 billion each biennium, to phase out the franchise or margins tax until its eventual expiration. A similar bill by Sen. Jane Nelson, Senate Bill 17, has been approved by the full Senate and received by the House. SB 17 would dedicate half of GR funds above five percent growth to franchise tax relief, with an estimated cost of $541 million beginning in 2020.
During the last session, lawmakers compromised to pass a 25 percent reduction in the franchise tax. Rep. Bonnen was more optimistic after the vote on Wednesday, saying, “I think the Senate has finally agreed that they want to eliminate the franchise tax.” Opponents argue that cutting the franchise tax will put further stress on an already tight budget. Franchise tax is the state’s third largest source of revenue, behind sales tax and motor vehicle sales and fuel taxes. HB 28 will now go to the full House for a vote and amendments.
Bill allows public schools to introduce cybersecurity and computer coding courses, promote workforce development
On Wednesday, the House Public Education Committee unanimously approved House Bill 3593 to allow school districts to make cybersecurity courses eligible for local credits. The approval of the State Board of Education would not be required if the districts partner with colleges and universities that offer similar courses. HB 3593 further adds cybersecurity and computer coding to the list of courses that qualify for STEM credits. House Bill 639, also approved during by the Public Education Committee, would allow public school districts to purchase insurance coverage for businesses that partner to provide students with career and technical training programs, and for the participating high school students.
Supporters believe increasing computer science education access in schools will address the widening workforce skills gap, particularly in the IT and STEM industries. Several other ideas have been proposed during the 85th legislature, including the 60x30 plan, creating targeted baccalaureate and technical degree programs at community colleges, and encouraging private businesses to offer apprenticeships with valuable on-site training.
Senator Jane Nelson asks Attorney General Ken Paxton to decide on proposed budget maneuver
Two weeks ago, the Senate proposed a budget balanced by a widely questioned accounting maneuver, delaying the transfer of $2.5 billion from general revenue into the state highway fund by one day into the next fiscal cycle. Sen. Jane Nelson (R-Flower Mound), Chair of the Senate Finance Committee, has asked the attorney general to decide if delaying payments into the state highway fund to balance the upcoming budget is constitutional. Texas State Comptroller Glenn Hegar, who manages the state’s finances, believes the move violates the Texas Constitution. Article 8, Section 7-b states the state comptroller must move money from general revenue to the state highway fund during the same fiscal year when that revenue is collected. Attorney General Ken Paxton’s decision will likely impact budget negotiations during the final weeks of the legislative session. The Speaker of the House has called the maneuver an Enron style method of accounting, and the House approved its version of the budget by appropriating $2.5 billion from the state’s rainy day fund.
Richardson Chamber visits Washington, D.C. for first federal policy conference
From Sunday through Wednesday this week, delegates of the Richardson Chamber and Tech Titans visited our nation’s capital to meet legislators, tour the Capitol, and learn about important issues facing our nation.
After a cherry blossom river cruise on Sunday night, the group was briefed at the U.S. Chamber of Commerce on federal policy issues on Monday morning. They then visited the Russell and Hart Senate Office Buildings for briefings by the staffs of both Texas U.S. Senators, John Cornyn and Ted Cruz. That evening, the delegation hosted a reception at the Capitol Hill Club and honored U.S. Congressman Sam Johnson, who has announced he will not seek another term after serving in the House since 1991. The evening was capped by a private tour of the U.S. Capitol guided by Congressman Pete Sessions, including the stunning view of Washington at night from the Speaker’s Balcony.
On Tuesday, delegates were briefed at the Cannon House Office Building by Congressman Sessions and his staff, representatives of CompTIA, and the Congressional Management Foundation. After lunch, the group enjoyed a private, guided tour of the Supreme Court and a visit to the Library of Congress, as well as time observing the House in action from the Gallery. After dinner at Washington’s oldest continuously operating restaurant, the Old Ebbitt Grill, the group took a nighttime tour of famous D.C. Monuments. The final morning of the trip the group went to the Newseum, a museum dedicated to the free press and the First Amendment.
House approves their version of the Texas budget after marathon debate
After more than 15 hours of debate, the House gave final passage to a supplemental funding bill for the current fiscal period, as well as a revised version of Senate Bill 1, the 2018-19 budget, around 1:30 a.m. House members voted to block school vouchers by a vote of 103 to 44, withdraw $2.5 billion from the Rainy Day Fund, and decrease funding for the Texas Enterprise Fund by $43 million. The funds taken from the Texas Enterprise Fund would be split between Child Protective Services (CPS) and a program that pays for children’s physical, occupational and speech therapy.
Both chambers will now work to reconcile the differences between the House’s $218.2 billion biennium budget and the Senate version, before sending a final budget to the governor for approval.
Senate passes new requirements for municipal fees “to limit the ability of cities”
Senate Bill 737, authored by Sen. Kelly Hancock (R-North Richland Hills), passed in the Senate by a vote of 28 to 2. Under current law, clear descriptions of proposed property tax increases must be included in the proposed and adopted budgets of cities in Texas. SB 737 proposes similar requirements for increases in all municipal fees, along with an option for residents to receive email notices of changes in the city’s budget. Sen. Huffines added one amendment that would require a hearing for each increased fee. This is one of Governor Abbott’s major priorities.
Governor Greg Abbott has spoken out many times about reining in cities that establish local regulations and raise fees. “One strategy would be for the state of Texas to take a ‘rifle shot after rifle shot after rifle shot’ approach to try to override all these local regulations,” Abbott explained to the Texas Conservative Coalition Research at an event last month. “I think it would be far simpler, and frankly easier for those of you who have to run your lives and your businesses on a daily basis, if the state of Texas adopted an overriding policy to create certain standards that must be met.” Opponents such as the Texas Municipal League counter that having home-rule cities, which can enact regulations that do not expressly conflict with state law, prevents the biennial legislature from becoming bogged down with local issues. Local control allows states and their cities to operate more efficiently and better serve diverse communities with various needs. SB 737 will now be received by the House for consideration.
Higher Ed committee approves funding for workforce continuing education
The House Higher Education Committee unanimously passed House Bill 2994 for workforce continuing education, or programs that prepare adults for employment opportunities and to take on higher-paying, more skilled jobs within their particular field. The funds could also be used to educate employees on updates and developments in their industry. HB 2994 would allow community colleges to request state funding for workforce programs, including tuition waivers for high school students and courses funded by public or private entities such as local businesses.
Bill overhauls A-F ratings of public schools
House Bill 22, authored by House Public Education Committee Chairman Dan Huberty (R-Houston), was approved unanimously in committee. HB 22 would overhaul the performance criteria for A-F ratings of public schools, which replaced the pass/fail accountability system in 2015. The bill would not eliminate the A-F system as requested by Texas schools, but instead focuses on only three categories: student achievement, student progress, and student climate.
Student achievement and progress have been expanded beyond STAAR tests to include students completing locally selected exams, Advanced Placement (AP) exams or college readiness assessment tests such as the SAT and ACT, dual credit courses, industry certifications and associate level degrees. Student climate factors include postsecondary course completion for economically disadvantaged students, health and wellness rates, and participation in extracurriculars like UIL and clubs.
Senate passes greater tax exemption for Texas businesses
Currently, business owners can claim tax exemptions on income-producing personal property valued at less than $500. Senate Bill 730, unanimously passed by the Senate, would increase that exemption to $2,500. The bill’s author, Sen. Paul Bettencourt (R-Houston), believes the bill will support small businesses. The Legislative Budget Board estimated a loss of nearly $2.5 million by 2020 to public school funding if the exemption is adopted.
Budget bill moves to House, huge differences in chambers’ proposals
The Senate voted unanimously to send Senate Bill 1, the upper chamber’s appropriations bill, to the House Appropriations Committee, who sent their substituted version for deliberation and amendments by the lower chamber next week. The House budget proposes using $2.5 billion from the Economic Stabilization Fund (ESF), more widely known as the state’s Rainy Day Fund, to balance their version. Senate budgets writers have proposed delaying the transfer of $2.5 billion until fiscal year 2020 from General Revenue, so that the transfer is not part of the 2018-19 budget. House Speaker Joe Straus is in favor of using the ESF, while Lieutenant Governor Dan Patrick has spoken against it. To tap into Texas’ savings, two-thirds of both chambers must approve the withdrawal.
The Senate and House budgets, faced with less money at their discretion than previous years, contain significant differences according to their priorities. In the substituted version, the House committee cuts $1 billion in state funding for Medicaid, the federal-state insurance program that serves children, pregnant women and people with disabilities. With the cut, Texas would lose another $1.4 billion in federal funding. HB 1 would also add $1.5 billion to public schools if House Bill 21, the school finance bill, passes. The Senate’s version would cut $1.8 billion from state education funding, making up the difference with local property taxes and additional revenue. In total, Senate Finance Chair Jane Nelson (R-Flower Mound) stated the budget would increase public school funding by $4.6 billion. The Senate is also pursuing cuts to franchise and property taxes.
Performance-based metrics and tuition freeze bills passed by committee
On Tuesday, the Senate Higher Education Committee approved Senate Bill 543 and Senate Bill 19, limiting tuition increases. SB 19 would freeze tuition rates and student fees for public colleges and universities at 2016-17 levels for four years. Since tuition deregulation in 2003, tuition costs in Texas have soared 147 percent, while the amount spent on instruction has increased only 65 percent. Such costs become prohibitive for young Texans and families at a time when most businesses complain of gaps in the available skilled workforce. SB 543 would require that higher ed institutions meet at least six out of eleven metrics before raising tuition beyond the rate of inflation. The eleven targets include the total number of undergraduate degrees awarded, degrees awarded to at-risk students, the average length of a student’s enrollment and the four-year graduation rate of first-time, full-time undergraduates. If they meet performance standards, the bill would further limit the increase to 3 percent above rate of inflation. Halting tuition growth was one of Lieutenant Governor Dan Patrick’s top priorities this session. Both SB 19 and SB 543 will now be sent to the full Senate for consideration.
Senators pass bills making some government contractors subject to Public Information laws
Senators approved Senate Bills 407 and 408 by Sen. Kirk Watson (D-Austin) on Monday. SB 407 would overturn the Texas Supreme Court case of Boeing v. Paxton, removing an exception to the Public Information Act (PIA) that allows businesses who contract with the state to withhold information that would provide an advantage to a competitor after the governmental body has awarded the contract. SB 408 would overturn Greater Houston Partnership v. Paxton by expending the definition of “governmental body” to include entities that receive funds to perform services traditionally provided by the government. SB 408 would subject businesses and chambers of commerce to the Public Information Act.
Transportation bill targeting high-speed rail, Cotton Belt, leaves committee
Texas metropolitan areas have become the destination for multiple high-speed rail projects in the past decade. The Texas Cotton Belt Corridor, scheduled to begin implementation in 2022, would extend from CityLine through Addison and Carrollton to DFW. Another project, driven by private investor Texas Central Partners, would connect Dallas and Houston by same high-speed bullet train used successfully in Tokyo and Osaka, Japan. Representatives of rural districts have filed numerous bills to derail these plans, particularly the ambitious Dallas-Houston project.
Senate Bill 385 by Sen. Konni Burton (R-Colleyville) would negatively impact these projects by requiring cities who would host the rail to approve the use of federal funds for rail construction by a public vote. At the Transportation Committee meeting, Former Richardson Mayor and current DART board member Gary Slagel testified against SB 385, as well as Mayor of Addison Todd Meier, as causing harm to North Texas cities and economic development by threatening the construction of the Cotton Belt Corridor.
School voucher legislation leaves Senate committee
On Thursday, the Senate Education Committee approved Senate Bill 3 for the establishment of school voucher programs. SB 3 would create two programs: the Education Savings Account (ESA), a bank account for parents that contains taxpayer money for private school tuition and homeschooling supplies; and the Tax Credit Scholarship (TCS), providing tax credits to businesses that donate for private school tuition. Families earning above 200 percent of the guideline for reduced-price lunches would receive 60 percent of the state’s average expense per student; lower income families would receive 75 percent. The Legislative Budget Board estimated a loss of $90 million to $330 million to Texas in 2019 based on the current proposal.
Supporters, including Rep. Van Taylor (R-Plano) and Sen. Don Huffines (R-Dallas), argued that the ESA would allow parents to personalize their children’s education by providing funds for private education and home-schooling. They also claimed vouchers would hold public schools accountable by allowing parents to transfer out of schools they dislike.
Opponents contend that school voucher programs defund public schools. If five students leave a class for example, the teacher’s salary and maintenance costs would not change, but the school’s funding would decrease significantly. Advocates also warn that voucher programs have not been proven effective, citing studies and pilot programs that have not shown evidence of significantly changing student outcomes. Witnesses said legislators should strive instead to increase funding to public schools for improved quality.
SB 3 will now head to the full Senate, where it is expected to pass. With support from Texas Lieutenant Governor Dan Patrick and others, 31 states are considering related legislation. However, House Public Education Chairman Dan Huberty said last February that school choice legislation has “no path forward” in the House of Representatives.
Workforce development legislation heard in committees
House Bill 108 by Rep. Carol Alvarado (D-Houston), also known as the “Recruit Texas Act,” would establish the Recruit Texas Program to support employers expanding or relating operations in Texas. Businesses would coordinate with junior and technical colleges to train hires. The program would focus on businesses that recruit high-skilled employees. The bill is co-authored by House Economic and Small Business Development Committee Chair Angie Chen Button. HB 108 was left pending in Rep. Button’s committee on Thursday.
House Bill 595 by Rep. Paul Workman (R-Austin), which would provide a franchise tax credit of $1,000 per intern for businesses with an internship program, was also left pending in the House Ways & Means Committee on Wednesday.