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Legislative Update: Final 86th Session recap

It’s Sine Die which means there are no more days left in the 86th Legislative Session. Since the highest priority bills passed both chambers, including the Biennial Budget (HB1), the School Finance bill (HB3), and Property Tax Reform (SB2), there should be no need for Governor Abbott to call a special session, and he has made clear he has no interest in doing so.

The biennial budget is set at $250.7 billion for a six percent increase over the last budget. HB1 was passed unanimously in the Senate and 148-1 in the House, and it has been sent to Comptroller Glenn Hegar for certification and then onto the Governor’s desk.

SB 500, the Emergency Appropriations Bill, also passed both chambers and costs $9.9 billion with $4.967 billion allotted from the state’s Rainy Day Fund (Economic Stabilization Fund), but at the last hour $100 million in border surge security was removed from the bill since $800 million is already included in HB1.

The legislators tackled and successfully completed one of the most difficult tasks in restructuring our public school finance system and for the first time in more than 30 years will infuse significant resources at the classroom level. HB3 costs $11.3 billion with $5.1 billion going to property tax relief and includes some pay raises for teachers, school nurses, counselors, librarians, and total staff increases left to the discretion of each individual school district. The sweeping measure pays for full day Pre-K for those students who qualify, provides funding for those districts developing merit pay programs, provides incentive funds for dual language programs and dyslexia programs, and increases resources to educate low-income students. HB3 automatically lowers property tax rates at 2.5 percent. Most homeowners would see property tax relief of $200 in 2020 for a home appraised at $250,000 and $325 in 2021. These are only estimates and will increase in future years prompting the legislators to seek a study on potential sources of money for future sustainability. Gov. Abbott, Lt. Gov. Patrick, and Speaker Bonnen all supported a one-cent sales tax increase to fund the future costs of the education bill, but the legislature did not support a “tax swap” and instead chose to punt this challenge to a future date.

SB2, relating to ad valorem taxation, restricts local governments to property tax increases to 3.5 percent yearly before facing a rollback vote. The more than 100-page bill also includes many process and appeals changes within the property tax and appraisal system.

Other major successes include SB11, the school safety measure which was amended to include the language from SB10, the mental health research and consortium bill. These measures were a result of the tragedy of school violence and the Santa Fe High School shooting. A separate bill passed increasing the use of school marshals.

Retired teachers fared well and will be receiving a 13th check up to $2,000 but not a cost of living adjustment. State employees did not receive any pay raises.

Many Hurricane Harvey related bills related to flooding, infrastructure mitigation, disaster planning and management, and funding are headed to the Governor’s desk for signature. One of the bills, SB7 takes $1.7 billion from the Rainy Day Fund and allows local communities to draw down billions in federal funding for housing and past mitigation, economic recovery, and flood control.

Several bills to support the military successfully passed both Chambers and are heading to the Governor’s desk, including SB 1200 which supports certification of military spouses. This legislation, which the Chamber provided testimony in support, is a broad-spectrum approach to affording military spouses who currently have certificates and licenses in good standing from other states a streamlined and expedited process to working in their profession in the State of Texas. This is good news for military spouses, but also good news for our state economy and industries, where we can put qualified professionals into open positions more quickly – satisfying our need for nursing and teaching, for instance.

Already signed by the governor are a handful more military bills for which the Chamber provided support. SB 1819 officially designates May 8 as Military Spouse Appreciation Day. The day will commemorate the sacrifices made by military spouses while their loved ones are away, as well as the support spouses provide military service members throughout the span of the service members’ military career. The day is to be observed by programs coordinated by the Texas Veterans Commission. SB 1557, which helps schools highlight the programs they provide for military-connected students by establishing the Purple Star Campus program, which recognizes campuses that develop practices and programs that cater to this student group. HB 1597 will help to alleviate concerns about residency and the urgency to get military families with school children enrolled in school early. Without a permanent address, many families had to wait to begin the registration process which impacted getting their children settled quickly into their new home communities. This legislation will permit military parents to submit permanent change of station orders as proof of residency in a public school district or charter school service area. The biggest win for Military City USA was the allocation of $30 million in Defense Economic Adjustment Assistance Grant Program (DEAAG) and $50 million for the Military Revolving Loan Program.

Laws passed increasing the age to purchase all tobacco products to 21, expanding the diagnostic uses for medical marijuana, banning the use of red light cameras by municipalities, increasing pipeline safety, legalizing the farming of hemp, reforming child care center licensing and regulation, combating human trafficking, continuing our emissions reduction program, strengthening college campus sexual assault reporting and penalties, allowing beer-to-go sales at craft brew locations, allowing 19 cities to subsidize major hotel and convention center projects with state and local revenues and removing expiration dates for statewide transportation proposition funds.

Bills that did not make it through the entire legislative process include university tuition revenue bonds (TRBs), election security, banning local units of governments from hiring lobbyists, eminent domain, ethics reform, daylight savings time, and prohibiting local governments from mandating Paid Sick Leave for private employers.  A Paid Sick Leave preemption bill was most disappointing, as it was one of  the Chamber’s top legislative priorities.

June 16 is the last day the governor can sign or veto bills passed during the regular session, 20 days following final adjournment. While the Governor does have the ability to line item certain appropriations in HB1, the complex legislative system is designed to kill bills not pass them. Count on your Chamber to continue monitoring during the veto period.

The members and their staffs have worked diligently and deserve much credit for accomplishing their tasks during the 86th Legislative Session. A luscious Rainy Day Fund and healthy revenue climate allowed record spending on HB3 and an easy allocation on the Emergency Appropriations bill. That may not be the case in two years when the structural financial responsibilities are again before the 87th Legislature.

We will remain vigilant during the interim while the various state agencies and commissions are implementing legislation, from the task force stage to rule making, comment period, and final conclusion. Many believe that once a bill is passed, the work is done. Nothing could be further from the truth. Now the real work begins, and we will be watching.

For more information, please contact Stephanie Reyes, Vice President of Public Policy at sreyes@sachamber.org.

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