February 18, 2019

Join the Plano Chamber of Commerce on the first Wednesday of the month from 7:30-9am for our monthly Public Policy Committee meeting. This committee discusses legislation and issues that affect the business community. Committee meetings are open to all members in good standing. CLICK HERE for more details. 

We are in the final planning stages for Plano Legislative Days.. CLICK HERE for more information.The deadline to register has passed. 
Collin County Days will be held March 26-27, 2019 at the Intercontinental Stephen F. Austin Hotel in Austin, TX. CLICK HERE for more information and to reserve your hotel room. 

CLICK HERE to view the bills we are tracking this session. 

The Plano Chamber works tirelessly to identify the issues of highest priority to our business community and to act on their behalf.  View the Legislative Priorities  for the 86th Texas Legislative Session for more details.

Texas Small Business Day
On Tuesday, Governor Greg Abbott delivered remarks at the National Federation Of Independent Business' (NFIB) Texas Small Business Day Conference in Austin. The Governor discussed his priorities for the legislative session, including property tax and school finance reform, and expressed his commitment to creating an even stronger economic environment in the state of Texas. Governor Abbott said, "Small businesses in Texas continue to pave the way for our economic success. This session, we have a unique opportunity to make the Texas economy better than ever before. We will do this by reining in skyrocketing property taxes, reforming a broken school finance system, and cutting burdensome red tape that stifles Texas entrepreneurs. By tackling these challenges, we will create an even stronger economic environment for small businesses to succeed, and we will chart a course towards a brighter future for Texas."

The Senate was in session Monday, Tuesday and Wednesday of last week conducting routine business. On Wednesday, they recessed until Thursday for first reading and referral of bills to committees.
This Week: The Senate is observing the President's Day holiday on Monday. The Senate will reconvene at 11:00 a.m. on Tuesday, February 19, 2019.

The House was in session on Monday, Tuesday and Wednesday of last week conducting routine business.
This Week:   The House is also observing the President's Day holiday on Monday. The House will reconvene at 11:00 a.m. on Tuesday, February 19, 2019

Aerospace & Defense Manufacturing - On Monday, the Texas Association of Manufacturers (TAM) released an economic impact study that shows the State of Texas would realize more than $76 million in additional state revenue from the aerospace and defense (A&D) industry - and help recover 4,000 lost jobs - if Texas aligned state franchise tax policy with the Federal Acquisition Regulation (FAR). The FAR provides "uniform policy and procedures for acquisition" for companies doing business with the federal government. Tony Bennett, CEO of TAM said, "Defense-related aerospace activity is a cornerstone of the Texas economy, with 17 of the top 20 firms in the nation having a substantial presence here. More than 44,000 employees - many of them military veterans - earn more than $100,000 in these high-quality jobs. We owe it to the men and women who are contributing to the security of our nation and our economy to embrace tax policy that attracts and retains these good jobs in Texas." According to the study, Texas has lost market share and 4,000 net jobs in the A&D sector partially as a result of discrepancies between the current Texas franchise tax and the cost definitions contained in the FAR, which more accurately reflect manufacturing, compensation, training and technical services costs incurred by A&D contractors.
The study shows the direct benefits that would result from conforming the current franchise tax to the FAR:
  • Annual Additional Economic Activity: $4.1 billion
  • Total Permanent Jobs: 19,493
  • Annual State Tax Revenue: $76.1 million
  • Annual Additional Earnings:$1.4 billion
  • Annual Additional Value-Added: $2.3 billion
Jon Hockenyos, president of TXP, Inc. and lead author of the economic study added, "The prospect for aligning the franchise tax with the FAR could pay outsized dividends."
This Week: The House International Relations & Economic Development Committee will meet on Tuesday, February 19, 2019 at 8:00 a.m. in E2.010 of the capitol extension for an organizational meeting and to hear invited testimony.

Texas Oil & Gas Association - On Tuesday, the Texas Oil & Gas Association (TxOGA) released data indicating that the Texas oil and natural gas industry paid more than $14 billion in state and local taxes and state royalties in fiscal year 2018, up 27 percent from fiscal year 2017 and the second-highest total in Texas history. TxOGA President Todd Staples said, "Last year alone, the Texas oil and natural gas industry paid the equivalent of $38 million a day to fund our schools, roads, universities and first responders. More tax and royalty revenue from the oil and natural gas industry means our lawmakers have more to work with to meet the needs of our growing state. In fiscal year 2018, Texas school districts received $1.24 billion in property taxes from mineral properties producing oil and natural gas, pipelines, and gas utilities. Counties received $366.5 million in oil and natural gas mineral property taxes. In addition to taxes and royalties, Texas oil and natural gas companies are investing billions in advanced technologies that are protecting and improving our environment - proof that we can grow our economy, protect the environment and enhance our energy security at the same time. U.S. CO2 emissions are near 20-year lows and methane emissions from oil and natural gas systems are down 14 percent since 1990 - all while production has skyrocketed." Specific statistics provided in the report:
  • State royalties paid by the oil and natural gas industry in fiscal year 2018 increased 18 percent to a total of $2 billion. That money is used to capitalize the Permanent School Fund (PSF), which benefits the public schools of Texas, and the Permanent University Fund (PUF), which benefits public higher education in Texas.
  • Oil and natural gas royalties constitute the only substantive new money deposited annually to the PSF and PUF.
  • The Texas Permanent School Fund is the largest educational endowment in the country, with a balance of $44 billion at the end of fiscal year 2018 (bigger than Harvard University's endowment worth $39.2 billion).
TxOGA also released its policy priorities for the 86th Legislature, which include:
  • Support for adequate funding for the Railroad Commission of Texas and the Texas Commission on Environmental Quality to be properly staffed and equipped;
  • Funding for the Texas Department of Public Safety to enhance public safety on congested roadways in energy-producing areas;
  • Reauthorization of the Texas Emissions Reduction Plan (TERP);
  • Renewal of Chapter 312 of the Tax Code, which allows counties and cities to provide temporary property tax reductions for new projects; and
  • Additional funding to assist counties in energy sectors that are experiencing increased traffic and road deterioration.

Texas Association of Manufacturers - On Tuesday, the Texas Association of Manufacturers (TAM) and its members gathered at the State Capitol to celebrate Texas Manufacturers' Day, with the message that "manufacturing matters" to the state's economy and the roughly 870,000 Texans who work in the industry. Industry leaders urged elected officials to embrace legislation that would attract investment, grow jobs and strengthen the Texas workforce. TAM CEO Tony Bennett said, "The Legislature must maintain policies that keep Texas in the game to attract major investments and jobs here. We need smart economic development tools, policies that strengthen our competitive position and a ready workforce for today's manufacturing job opportunities." At the top of TAM's priority list is renewal of Chapter 312 of the Texas Tax Code, which allows counties and cities to offer temporary tax exemptions to attract new capital investment projects and the quality jobs that accompany them. Bennett continued, "Texas has the fourth highest industrial property taxes of any state - 65 percent higher than the national average. Every other state in the nation will cheer if Texas abandons economic development by allowing Chapter 312 to expire." He also noted that most states and countries offer similar economic development incentives. He concluded, "Global competition for major manufacturing investment is fierce. We cannot afford to take our competitive edge for granted. Texans will lose if Chapter 312 expires."
Texas Small Business Protection Act - Also on Tuesday, Senator Donna Campbell filed SB 762, which she said will "protect small businesses from overreaching ordinances that insert big government into the employment practices of private businesses." She named the bill the "Texas Small Business Protection Act." Senator Campbell said, "SB 762 will prohibit Austin, San Antonio, and other cities from enforcing involuntary paid sick leave policies on small businesses, burdening them with unnecessary costs and threatening their ability to stay open. Texas has the tenth largest economy in the world because we promote free enterprise and protect economic freedom. Unfunded mandates on small businesses are a regulatory nightmare that negatively impacts the economy and costs jobs. City officials need to get their nose out of the private sector and focus on the public service function of local government like delivering drivable roads and providing clean drinking water. The filing of SB 762 comes almost one year to the date since the Austin City Council passed a mandate last February requiring all businesses to pay and keep track of sick leave for their employees. That policy is expected to cost local businesses $150 million a year in overhead costs according to a study conducted by the Austin Chamber of Commerce. Currently, six in ten Texans receive paid sick leave benefits without any type of government mandate. However, that number increases to eight out of ten workers when you take smaller firms and family-owned businesses out of the equation. In other words, these ordinances present the greatest cost to those small businesses least likely to afford it. While Austin's ordinance was ruled unconstitutional by the Third Court of Appeals, the City of San Antonio has since passed a similar ordinance."
This Week: The House Business & Industry Committee will meet on Tuesday, February 19, 2019 at 11:00 a.m. or upon adjournment in E2.016 of the capitol extension to hear invited testimony.

House Human Services Committee - On Tuesday, the House Human Services Committee held an organizational meeting and heard invited testimony from the Legislative Budget Board, Texas Department of Family and Protective Services, Texas Health and Human Services Commission, and the Sunset Advisory Commission.
Senate Health & Human Services Committee - Also on Tuesday, the Senate Health & Human Services Committee took up:
SB 10 by Jane Nelson (R-Flower Mound), which would establish the Texas Mental Health Care Consortium and leverage the expertise of Texas' medical schools to bolster mental health resources for children and adolescents. Governor Abbott declared the bill an emergency item in his State of the State address. All 31 senators are signed on as co-authors of SB 10. Senator Nelson said, "Texas has been making strong progress on mental health with innovative programs that expand access to care. This bill will help better identify children and adolescents with mental health challenges and connect them with the treatment they need before they become a danger to themselves and others. Under this legislation we can also better address our workforce needs and support mental health research." Specifically, SB 10 would:
  • Create a consortium to help coordinate state mental health initiatives across Texas' health-related institutions of higher education;
  • Establish mental health "hubs" at the health-related institutions consisting of psychiatrists, social workers, referral specialists and other mental health professionals;
  • Establish the Child Psychiatry Access Network (CPAN), which will allow pediatricians and primary care providers to consult with mental health experts on treatment options for their patients;
  • Establish a program allowing youth to be screened for mental health conditions through telemedicine;
  • Increase residency opportunities for psychiatry students in community settings;
  • Expand and coordinate mental health research at health-related institutions; and
  • Require judges to be educated about mental health resources in their community.
The Senate budget allocates $100 million in new funding for SB 10. It was voted out favorably as substituted.

House Higher Education Committee - On Wednesday, the House Higher Education Committee held an organizational meeting and heard invited testimony from Lloyd Potter, the State Demographer who talked about the state's growing population and changing demographics, which put a strain on transportation and public education. The majority of growth in the school-age population is Latino, and the percentage of the Latino population that pursue post-secondary opportunities is only 36 percent. Higher Education Commissioner Raymund Paredes discussed the goals of the 60x30TX higher education plan that by 2030, 60 percent of the population ages 21 to 35 would have a postsecondary degree, credential, or certification. He talked about the need to keep higher education affordable and to expand opportunities for Latino students. The committee also had a discussion on Title IX and heard from representatives of East Texas Baptist University and Texas A&M University System.

House Public Education Committee - The House Public Education Committee held meetings on Tuesday and Wednesday last week.
On Tuesday , the House Public Education Committee heard invited testimony on public school finance and the final report of the Texas Commission on Public School Finance from representatives of the Buffalo, Coppell, Dallas, DeKalb, Elgin, Frisco, New Boston, San Antonio, Spring Branch, and Ysletta, ISD's; Texas School Alliance; Texas Association of School Administrators; Texas Urban Council of Superintendents; Uplift Education; Texas American Federation of Teachers; Texas Association of Rural Schools; Texas Taxpayers and Research Association; Texas Business Leadership Council; Texans Advocating for Meaningful Student Assessment; Texas State Teachers Association; South Texas Association of School Boards; Texas School Coalition; Disability Rights Texas; and Moak Casey & Associates.

On Wednesday , the House Public Education Committee heard testimony on the final report of the Texas Commission on Public School Finance from a panel of former chairs of the House Public Education Committee including Kent Grusenforf, Rob Eissler, and Jimmie Don Aycock. Other witnesses included former State Representative Paul Colbert (budget chair of the House Public Education Committee when HB 72 was passed); representatives of the Barbers Hill, Brownsville, Cypress-Fairbanks, Dallas, and Fort Bend ISD's; and representatives of the Dallas Federal Reserve Bank, Educate Texas, Austin Chamber of Commerce, IDEA Public Schools, Greater Houston Partnership, Charter School Association, Texas Education Grantmakers Advocacy Council, Texas Association of School Administrators, Equity Center, ARC of Texas, Intercultural Development Research Association, Texans Care for Children, Texas Public Policy Foundation, Texas Classroom Teachers Association, Raise Your Hand Texas, Texas Aspires, Center for Public Policy Priorities, and Association of Texas Professional Educators.
Senate Education Committee - On Thursday, the Senate Education Committee held an organizational meeting. The committee heard from Education Commissioner Mike Morath and Justin Porter of Texas Education Agency.
Student Mental Healthcare and Campus Policing - Last Friday, Representative James Talarico (D-Round Rock) filed HB 1467, his first bill. Representative Talarico said, "As a former middle school teacher, I have chosen to make school safety the focus of my first bill. HB 1467 would create a ratio of mental health professionals to law enforcement officials in Texas public schools. It will help school districts prioritize a cost-effective, research-based approach to school safety by balancing mental healthcare and campus policing. HB 1467 will require a 4:1 ratio of mental health professionals to law enforcement officials in school districts with more than 5,000 students. The bill also lowers the ratio for smaller districts. This bill will ensure that when our students walk through their campuses they see more counselors than cops. Every expert - from the Department of Education to the Secret Service - agrees that creating positive, healthy school climates is a far more effective campus safety strategy than militarizing our schools. Texas schools are long overdue for greater mental health resources. For example, the National Association of School Psychologists recommends a ratio of 1 school psychologist per 500-700 students. Texas, however, has a ratio of 1 to 2,792 students. Governor Greg Abbott has named mental health services and school safety as emergency items. My bill focuses on the important nexus between these two issues, encouraging school districts to seek out a balance between a law enforcement response and a research-based approach that focuses on student well-being."
This Week:
Tuesday, February 19, 2019 - The House Public Education Committee will meet at 11:30 a.m. or upon adjournment in E2.036 of the capitol extension to take up:
HB 55 by Mary Gonzalez (D-El Paso) would limit the pre-kindergarten instructor/student ratio to 11-1 for classes of 16 students or more or at least one certified teacher or teacher's aide per class for smaller classes.
HB 102 by Diego Bernal (D-San Antonio) would make several changes to teacher mentoring statutes including:
  • requiring mentor teachers to demonstrate interpersonal skills, instructional effectiveness, and leadership ability;
  • requiring school districts to provide training that includes content related to best mentorship practices to mentor teachers and other district and campus employees that work with classroom teachers;
  • requiring mentor teachers to meet with each classroom teacher assigned to the mentor at least once a week for at least 45 minutes;
  • requiring school districts to schedule release time or a reduced teaching load for mentor teachers to facilitate mentoring activities;
  • instituting a mentor program allotment for school districts that have implemented a mentoring program for classroom teachers who have less than two years of teaching experience to fund the mentoring program and provide stipends for mentor teachers with the amount of the formula determined by the commissioner; and
  • requiring teachers that are assigned as a mentor to agree to serve as a mentor teacher for at least two school years.
HB 108 by Mary Gonzalez (D-El Paso) would require the Commissioner of Education to establish a pilot program for participating school districts to implement a digital portfolio method to assess students in grades three through eight and use student performance under that method as a percentage (50 percent) of a student's overall performance on assessment instruments for accountability purposes. It would require the Texas Education Agency to contract with a single entity to facilitate the use of the digital portfolio method of assessment by school district participating in the pilot program.
HB 109 by Armando "Mando" Martinez (D-Weslaco) would apply the statute prohibiting classes on Memorial Day to open-enrollment charter schools.
HB 111 by Mary Gonzalez (D-El Paso) would require training for school employees to include prevention of sexual abuse, sex trafficking, and other maltreatment of children with significant cognitive disabilities in both educational and non-educational settings.
HB 116 by Mary Gonzalez (D-El Paso) would require the State Board of Educator Certification to adopt rules specifying what each educator is expected to know and be able to do, particularly regarding students with disabilities.
HB 120 by Mary Gonzalez (D-El Paso) would exempt students with limited English proficiency from state-administered assessment instruments for up to two years (instead of one year) after initial enrollment in a school in the United States.
HB 128 by Gina Hinojosa (D-Austin) would require school districts to provide parents with a copy of the results of the physical fitness assessment of the parent's child by the last day of the school year.
HB 134 by Valoree Swanson (R-Spring) would require ballot propositions authorizing the issuance of bonds to contain only one project or category of expenditure.
HB 165 by Diego Bernal (D-San Antonio) would allow special education students to earn an endorsement on the student's transcript by successfully completing curriculum and endorsement requirements identified by the State Board of Education, with or without modification by the student's admission, review, and dismissal committee.

Senate Property Tax Committee - On Monday, the Senate Property Tax Committee took up:
SB 2 by Paul Bettencourt (R-Houston), which would be the Property Tax Reform & Relief Act of 2019. The committee discussed the bill and adopted 12 amendments before voting the SB 2 out of committee. The amendments will be rolled into a committee substitute. The following summary of the amendment was provided by Texas Taxpayers and Research Association. The amendments would:
  1. allow "small taxing units" as defined in the bill to call local elections to reduce their rollback tax threshold from 8 percent to 2.5 percent;
  2. provide that tax rates must be approved by the governing bodies of taxing units other than school districts, 71 days before the November uniform election date, if the governing body adopts a tax rate that exceeds the rollback tax rate;
  3. change the term "rollback tax rate" to "voter-approved tax rate";
  4. permit chief appraisers to submit certified estimates of value to taxing units if appraisal review boards do not complete hearing protests by July 20;
  5. require one public hearing on proposed tax rates, rather than two, and clarify publication requirements;
  6. prohibit governing bodies of taxing units from reducing first responder compensation based on reductions in the rollback tax rate;
  7. delete proposed date changes to the property tax calendar so that the current schedule for providing notices of appraised value, protesting values, and completing appraisal rolls is retained;
  8. prohibit value increases as a result of binding arbitration and litigation, as well as appraisal review board protests;
  9. specify the appraisal manuals that appraisal districts must use to comply with generally accepted appraisal methods and techniques;
  10. provide that protests may not be heard by appraisal review board special panels unless requested or consented to by the property owner or agent;
  11. provide that appraisal review board orders determining protest must list land and improvements separately; and
  12. limit discovery that appraisal districts may request in litigation concerning value.
Senator Juan "Chuy" Hinojosa (D-McAllen), the only Democrat on the committee, voted "present-not-voting" on the motion to report SB 2 out of the committee favorably. Senator Hinojosa explained his vote saying, "While I support 97.5 percent of this bill, I cannot support the other 2.5 percent. Specifically, I cannot support the 2.5 percent 'voter-approved rate' currently in SB 2. While the existing 8 percent rate is too high, the 2.5 percent rate is too low and would jeopardize the ability of local governments to provide crucial services to their communities. There is no doubt that property tax appraisals are increasing faster than our paychecks. Property taxpayers need relief. However, we should find a balanced approach that does not tie the hands of our local elected officials and hinder their ability to provide basic services and public safety. The largest budget expenditure by local governments is public safety. On average, 60 percent of their budget supports our police officers and firefighters. With a 2.5 percent cap, SB 2 could hinder our local governments' ability to keep our communities safe and to fund other necessary services and infrastructure. Instead of applying a one-size-fits-all approach to our vast state, to provide true property tax relief we should focus more on school finance reform. School taxes are the largest portion of our property tax bill. We should also eliminate unfunded mandates by the state. I look forward to continuing to work with my colleagues to find consensus on a fair and equitable solution that improves the property tax and appraisal process without hindering our local communities' ability to fund public safety, education, indigent health care, and the infrastructure needed to continue Texas' prosperity."
House Ways & Means Committee - On Wednesday, the House Ways & Means Committee held an organizational meeting. Chairman Dustin Burrows (R-Lubbock) introduced Jimmy Skipton, the Committee Director and Paige Higerd, the Committee Clerk. Comptroller Glenn Hegar discussed his biennial revenue estimate that indicates that the state will have $119.2 billion in available revenue for the 2020-2021 biennium. He said the growth rate in the Texas economy has moderated but the economy is continuing to grow. He mentioned factors that could affect his final revenue estimate including the price of oil, higher interest rates, and uncertainty about global trade. Obligations that will have to be met through a supplemental bill will reduce the revenue estimate by approximately $2.5 billion. Other employees of the comptroller's office discussed the franchise tax, sales and use taxes, motor vehicle sales and rental taxes, severance taxes, insurance premium and maintenance taxes, mixed beverage taxes, tobacco taxes, hotel taxes, motor fuels taxes and the property tax. Representatives of the Legislative Budget Board gave an overview of state revenue by source, current biennium expenditures by state agency categories, the constitutional spending limit, the Economic Stabilization Fund, the Foundation School Program, Medicaid, child protective services, behavioral health, school safety, transportation, retirement and health benefits, the driver's license program, border security, higher education, adult criminal justice and judicial salaries.
Note: The committee had invited Dale Craymer of Texas Taxpayers and Research Association and Dick Lavine of the Center for Public Policy Priorities to testify, but Chairman Burrows announced that their testimony will be moved to next week.
Appraisal District Reform - Last Friday, Representative Matt Krause (R-Fort Worth) filed HB 1333, which would institute appraisal district reforms. Specifically, it would:
  • Improve notification of property value increases, changes to exemptions, and eligibility of exemptions. Representative Krause said, "It improves notification of valuation increases, changes to exemptions, and eligibility of exemptions by providing homeowners the option to receive notifications electronically via email. This would create a modern and more direct line of communication between appraisal districts and homeowners."
  • Create an honest appraisal process. Representative Krause added, "The bill creates a fairer appraisal process by prohibiting an officer or employee of a taxing unit that participates in the appraisal district from being employed by an appraisal district. Persons with a vested interest in increasing property valuations should not be employed by an appraisal district. Additionally, the bill requires that the cosmetic nature of the property to be included in the appraisal."
  • Provide resources and assistance to homeowners by requiring appraisal districts to maintain a list of licensed real estate agents, licensed appraisers, and licensed tax agents willing to provide free help to homeowners. The list of voluntary professionals would be made readily available to the public upon request.
Representative Krause concluded, "The Appraisal District Reform Act provides much needed improvement to the appraisal process. By granting Texans more resources and opening up a more transparent system, homeowners are given a more fair and convenient opportunity to challenge their appraisals."

This Week: The House Judiciary & Civil Jurisprudence Committee will meet on Wednesday, February 20, 2019 at 8:00 a.m. in E2.028 of the capitol extension for an organizational meeting and to hear invited testimony.

House Transportation Committee - On Wednesday, the House Transportation Committee held an organizational meeting and heard invited testimony from Bruce Bug, chair of the Texas Department of Transportation; James Bass, executive director, Mark Williams, deputy executive director, and Brian Raglan, chief financial officer of Texas Department of Transportation; Whitney Brewster, executive director of Texas Department of Motor Vehicles; Skyler Hearn, deputy director of Texas Department of Public Safety; and Greg Winfrey, director of Texas A&M's Transportation Institute.

The House Business & Industry Committee - On Tuesday, the House Business & Industry Committee held an organizational meeting and heard invited testimony from representatives of the Comptroller's office, the Attorney General's office, Texas Workforce Commission, the Legislative Budget Board, the Texas Department of Insurance's Division of Workers' Compensation, Office of Injured Employee Counsel, Texas Department of Banking, the State Office of Risk Management, and Texas Mutual Insurance Company.
First Responders Injured in the Line-of-Duty - Last Friday, Representative Dustin Burrows (R-Lubbock) and four joint authors filed HB 1521, which would penalize insurers that illegally deny Texas first responders access to medical treatment for line-of-duty injuries covered under state workers' compensation laws. HB 1521 would amend Section 415.021 of the Labor Code to add sanctions, administrative penalties, and other remedies, including attorney's fees, for administrative violations by self- or collectively-insured municipalities obligated to cover eligible workers' compensation claims. The amount of the administrative penalty could not be less than two times the total amount of benefits payable in connection with the first responder employee's claim. Representative Burrows said, "The current workers compensation system for firefighters and police officers in Texas is plagued by delays and abuse. Private insurers have largely been replaced by cities that are either self-insured or in a risk pool. This has resulted in widespread denials and delays by the cities when it comes to nearly any on-duty related injury or illness." Joint authors of HB 1521 are Representatives Joe Moody (D-El Paso), Jeff Leach (R-Plano), Oscar Longoria (D-La Joya), and Morgan Meyer (R-Dallas).
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