April 19 , 2019

Inside this edition of Capitol Roundup:

Call to Action Two major AGC-TBB bills scheduled for House vote next week

All AGC-TBB bills advance from committees

2019 update on AGC-TBB supported bills

Senate passes property tax bill while House postpones debate until next week

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AGC Texas Chapters

Quote of the Week

"Whether it's income tax, property tax, sales tax, or whatever tax, I'm not voting for an increase ... tax swaps got us into trouble ten years ago when we swapped out property tax relief for the franchise tax".

-State Sen. Paul Bettencourt
Sen. Paul Bettencourt (R-Houston), who chairs the Senate Committee on Property Taxes, made the comment this week after the Senate passed a property tax bill that did not include a one-percent sales tax hike proposed by the state's top three elected leaders.
All AGC-TBB bills pass committee stage; Two major bills headed to House floor for vote next week

For the first time in at least six legislative sessions, all AGC Texas Building Branch bills have been voted out of their assigned committees. Having passed that primary hurdle, these bills become closer to passage by the full House and full Senate bodies. 

Right to Repair / School Construction Defect bills scheduled for vote by the full House next week

Two bills in particular - House Bill 1734 and House Bill 1999 - are close to reaching a second milestone in the legislative process. After advancing from the House Judiciary and Civil Jurisprudence Committee, these two key pieces of legislation have been scheduled for a vote on the House floor next week. 

We will be contacting everyone in the AGC family on Monday, April 22, with details on contacting your chapter's House members to relay the message that we need their votes to pass these two bills. 

Bills on the move: Statute of Repose / Uniform General Conditions / Breach of Contract Attorney's Fees 

Several other major AGC-TBB bills gained positive ground this week as well. Perhaps most significantly, one of our bills, HB 1737, which would reduce the time owners have to sue contractors (known as the "statute of repose" period) from 10 to 7 years, passed out of committee this week. This is the first time a bill lowering the statute of repose has advanced from the committee stage. 

Another major bill would  require the Texas Education Agency to create uniform general conditions (UGCs) for ISD building contracts (modeled on State's UGCs). That measure - HB 1416 - got the thumbs up from the House Public Education Committee yesterday. Also receiving approval this week was HB 1185, which provides for recovery of attorney's fees for state breach of contract when the amount in controversy exceeds $250,000. 

$3.8 Billion in Higher Ed Construction Contracts

Finally, another win for the contracting industry came in the form of $3.8 billion in new tuition revenue bond (TRB) spending for higher education construction contracts. The measure, HB 2000, gained approval from the full House this week and awaits referral to a Senate committee. 

2019 Legislative Update

Here's an update on the position of major AGC-TBB bills along with legislation strongly supported by AGC-TBB:

AGC-TBB Major Bills Scheduled for House Vote

School Construction Defects  
HB 1734 by Justin Holland / SB 1907 by Eddie Lucio, Jr.
*HB 1734 passed committee by 6-2 vote*
*Scheduled for House floor vote April 23*
Right to Repair 
HB 1999 by Jeff Leach (no Senate companion bill)
*HB 1999 passed committee by 7-2 vote*
*Scheduled for House floor vote April 24*

AGC-TBB Major Bills Passed House Committee(awaiting placement on House Calendar)

Statute of Repose 
HB 1737 by Justin Holland (no Senate companion bill)
*Passed committee by 5-4 vote*
Uniform General Conditions (K-12 Contracts)
HB 1416 by Eddie Lucio III / SB 1297 by BeverlyPowell 
*HB 1416 passed committee by 11-1 vote*
*SB 1297 last heard in committee April 16*
Attorney's Fees for State Breach of Contract 
HB 1185 by John Cyrier / SB 737 by Bryan Hughes
*HB 1185 passed committee by 8-0 vote*

AGC-TBB Supported Bills
Higher Education Tuition Revenue Bonds
HB 2000 by Chris Turner / SB 2247 by Royce West
*HB 2000 passed House committee by 9-1 vote*
*Passed full House by 132-9 vote*

Attorney's Fees for All Breaches of Contract (including governments and partnerships) 
HB 790 by Sarah Davis (no Senate companion bill)
*Passed House committee 9-0 by vote*
*Scheduled for House floor vote April 24*
Contractors Not Liable for Design Defects 
HB 2901 by Jeff Leach (no Senate companion bill)
*Passed House committee by 6-3 vote*
Contractors Not Liable for Road Project Defects 
HB 2899 by Jeff Leach / SB 1866 by Chuy Hinojosa
*HB 2899 passed House committee by 6-1 vote*
TLR Bill on Hiring Contingency Plaintiffs Lawyers for Defects Cases 
HB 2826 by Greg Bonnen / SB 28 by Joan Huffman 
*HB 2826 passed House committee by 5-4 vote*
Local Preemption Bills  (Paid sick leave
SB 2485 by Brandon Creighton (employee benefits)
*Passed committee 7-0; Passed Senate 18-12*

SB 2486 by Creighton (scheduling and overtime)
*Passed committee 7-0; Passed Senate 20-11*

SB 2487 by Creighton (paid leave) 
*Passed committee 7-0; Passed Senate 18-12*

SB 2488 by Creighton (criminal history) 
*Passed committee 7-0; Passed Senate 19-12*
Senate passes property tax bill while House is set to debate next week

The Texas Senate passed its version of property tax reform on Monday, as the House is expected to take on the issue next week.

After an expected vote last week was delayed, Republican members of the Texas Senate agreed to bring a property tax bill to the floor of the upper chamber Monday. After three hours of debate, the bill passed 18-12 along party lines, with just one Republican - Sen. Kel Seliger (R-Amarillo) - voting against the measure. 

Senate Bill 2, as passed on Monday, would require cities, counties, and other local taxing entities to have voters approve any budget that collects property tax revenue representing a 3.5 percent or more increase over the previous year. The Senate plan had originally set that "rollback" rate to trigger local elections at 2.5 percent. 

Gov. Greg Abbott (left)
"Today the Texas Senate took action to deliver on the promise of reining in skyrocketing property taxes," Gov. Greg Abbott said in a statement. The governor has said reforming property taxes is one of his priorities for this legislative session. 

Under SB 2, school districts would be subject to the 3.5 percent rollback trigger, which sets up a major difference between the Senate and House bills. The lower chamber's property tax reform vehicle - House Bill 2 - has specifically carved out school districts from the rollback election requirement.  The House bill also excludes community colleges, hospital districts and emergency service districts. 

Though school districts would be subject to the rollback elections under the Senate bill, revenue generated on new construction would not count toward the 3.5 percent threshold. Furthermore, small taxing entities, with sales and property tax levies under $15 million annually, would be allowed to opt into some of the bill's provisions through elections.
Lt. Gov. Dan Patrick

"We heard a lot of comments on the floor, well respected, from those in opposition who were concerned about cities and counties and their budgets," Lt. Gov. Dan Patrick told reporters after the bill passed. "We're concerned about the people's budget. That's what we're concerned about. People's ability to live in their homes and keep their businesses."

Senate Bill 2 has been sent to the House Ways & Means Committee. The House is expected to debate its own property tax reform bill on Wednesday, April 24. While neither measure is expected to be sent to the governor's desk in current form, the two chambers will likely work out the final details of a reform bill in a conference committee. 
April 2019
FRI 26th - TBB Board meeting
May 2019
MON 27th - Last Day of 86th Legislature
June 2019
WED 5th - SAT 8th - Convention @ Jackson Hole, WY
August 2019
THU 22nd - OCA awards @ Georgetown, TX
FRI 23rd - Board meeting
November 2019
FRI 15th - Board meeting