485 488 487 507 484 

Legislative update: Week of April 21, 2017 »


President & CEO Bill Sproull testifies before House Economic and Small Business Development Committee

 

On Thursday, Tech Titans 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.

 

Updates

 

  • House leaders urged Attorney General Ken Paxton to argue that the Senate’s strategic delay of $2.5 billion in funding until the next fiscal biennium is unconstitutional.
  • House Bill 21, the major school finance reform bill of this session with bipartisan support, was approved by the full House on Thursday by a vote of 132 to 15. Most notably, HB 21 increases the per-student allotment from $5,140 to $5,350. Among other changes, HB 21 would further expand the allotment for career and technology programs at high schools and include technology applications courses approved for high school credit. The bill would also increase the state’s share of school funding and reduce the amount recaptured from certain property-wealthy districts by $173.6 million in 2018, as well as include a $200 million hardship grant program to offset funding reductions to some districts.
  • On Tuesday, the full Senate passed two transportation bills that were introduced as a reaction to Texas Central’s high-speed rail project between Dallas and Houston. Senate Bill 977 prohibits the legislature from making appropriations to private or state entities related to the planning, construction, and operation of a high-speed rail project. Senate Bill 979 specifies that private entities do not have the power of eminent domain for the purpose of developing or operating high-speed rail projects specifically.

Sources: Texas Legislature Online, Legislative Budget Board


Legislative update: Week of April 14, 2017 »


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.

 

Updates

 

  • House Bill 21, the school finance reform bill, will go to the full House for debate and amendments next Wednesday, April 19.
  • Two bills on the Texas Enterprise Fund (TEF) authored by Rep. Angie Chen Button (R-Richardson), chair of the House Economic and Small Business Development Committee, will be heard in her committee next Thursday, April 20. House Bill 3160 would allow use of TEF funds for commercialization of university research, and House Bill 3364 would allow TEF funds to reimburse grant recipients for certain expenses.

Sources: Texas Legislature Online, Legislative Budget Board


Legislative update: Week of April 7, 2017 »

 

Tech Titans visits Washington, D.C. for first federal policy conference

 

Tech Titans Delegation Washington DCFrom Sunday through Wednesday this week, delegates of Tech Titans and the Richardson Chamber of Commerce 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.

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.

 

Updates

  • On Tuesday, the Senate approved Senate Bill 19 by a vote of 29 to 2, SB 19 would (i) freeze tuition and fees for Texas colleges and universities for two years (through Spring 2020), and (ii) establish performance-based criteria that must be met to raise tuition beyond inflation. Tuition increases would further be capped at 1 percent.
  • The Senate also passed Senate Bill 18 this week, eliminating the requirement for colleges and universities to set aside 15 percent of tuition for financial aid. These funds (“set-asides”) were established in 2003, the same year tuition was deregulated, as a mandatory financial aid program for middle class and low-income students. Votes were along party lines.
  • The Senate Transportation Committee approved multiple bills aimed at impeding the construction of a high-speed rail in Texas, including Senate Bills 977 and 980 prohibiting state funding of the planning, construction or operation of a privately-operated high-speed rail project. The bills are echoes of certain provisions in the Senate’s budget for rail projects. They will now be received by the full Senate for a vote.

Sources: Texas Legislature Online, Legislative Budget Board


Legislative update: Week of March 31, 2017 »

 

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.

 

Updates

  • Senate Bill 3, which establishes a school voucher program for parents from public education funds, was passed by the full Senate on Thursday.
  • A substituted version of House Bill 21, the public school finance bill, was approved by a vote of 10-1 in committee and sent to the House. HB 21 would reduce recapture by $400 million over the next biennium.

Sources: Texas Legislature Online, Legislative Budget Board


Legislative update: Week of March 24, 2017 »

 

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.

 

Updates

  • The Senate Finance Committee unanimously voted out Senate appropriation bill Senate Bill 1. The appropriations bill is the only bill that Texas legislators must pass before the end of the session. The revised bill provides $106.3 billion in general revenue, an increase of $2.7 billion from the original proposal. Instead of dipping into the Rainy Day Fund as has been proposed by House budget writers and the Speaker, SB 1 delays transfer of $2.5 billion in transportation funding until the next fiscal biennium in September 2019, but includes the funds in the 2017-18 budget. While some have questioned this budgeting maneuver, the full Senate is expected to vote on SB 1 next week.
  • On Tuesday, the full Senate passed Senate Bill 2 for property tax rate reduction on third reading with a vote of 18-12. The bill, which would trigger automatic tax ratification elections if local property tax revenue grows by at least five percent, has been sent to the House for review.
  • Senate Bill 17 also passed by 23-7 vote and was sent to the House on Tuesday. The proposed version would permanently dedicate half of general revenue funds above five percent growth to franchise tax relief. SB 17 allows for the franchise tax rate to become zero percent, or to be eliminated, if state revenue is sufficient.
  • Senate Bill 22 for the establishment of Pathways in Technology Early College High School (P-TECH) was approved by the Senate Education committee unanimously on Monday. SB 1 includes $5 million for P-TECH programs.
  • Dozens of businesses and trade and sports organizations have reached out to Texas legislators opposing Senate Bill 6, also known as the Bathroom Bill. Tourism officials have estimated a minimum loss of $407 million in Austin, Dallas, Houston and San Antonio if the bill passes.

Sources: Texas Legislature Online, Legislative Budget Board


Legislative update: Week of March 17, 2017 »

 

legupdatebillsproullTech Titans President Bill Sproull discusses March 2017 legislative update

 

President Bill Sproull talks about movement in the Texas Legislative session. Topics include: budget, the Bathroom Bill, property taxes, franchise fees, and school financing. Click image to view video online.

 

 

Senate Finance Committee approves local property tax rate bill after heated hearing

 

On Tuesday the Senate Finance Committee heard more than six hours of testimony on Senate Bill 2, the property tax reform bill filed by Sen. Paul Bettencourt (R-Houston). Senator Jane Nelson (R-Flower Mound), chair of the Senate Finance Committee, remarked at the meeting, “This is a tough crowd.” Opponents, including Sen. Royce West (D-Dallas), criticized the bill for failing to address significant changes in how the state pays for education. Local governments also condemned the bill as undermining local control and hindering cities’ ability to budget and fund city services such as police and fire departments.

Currently, if property taxes rise more than 8 percent, citizens can petition the city government for an election contesting the increase. As proposed, SB 2 would trigger an automatic election whenever the revenue a city receives from property taxes rises more than 4 percent. The increase does not depend on the set property tax rate; instead, the election could be triggered solely by increased property appraisal values.

At the hearing 34 witnesses registered as supporting SB 2, while nearly 100 individuals and organizations, including Mayor Paul Voelker of Richardson, testified in opposition. The Finance Committee eventually passed an amended version of SB 2 with a 9-to-5 vote. SB 2 will now go to the Senate to be heard.

 

Senate Finance Committee recommends cuts to university funding in state budget

On Wednesday the Senate Finance Committee voted to redesign university funding so that losses are distributed more evenly among state higher ed institutions. The original budget recommended reductions of more than half among some small Texas colleges and increased funding for larger universities such as Texas A&M. In the adopted version, universities would lose 6 to 10 percent of state funding overall compared to last session.

Part of the decrease results from removing funding for special projects at universities, which accounted for $1.1 billion of higher ed funding in 2015. A portion of those funds, $700 million, would be added back into the schools' formula funding to account for enrollment growth. The House budget includes approximately $1 billion in special items for universities.

The changes were approved unanimously, albeit reluctantly by some senators. "A lot of people are going to be unhappy," said Sen. Larry Taylor (R-Friendswood), chair of the Education Committee and a member of the Higher Education Committee. "No one is going to be ecstatic. But given the numbers we are dealing with, I think we turned out pretty well."

 

Rep. Angie Chen Button files bills supporting emerging researchers, research commercialization

Rep. Angie Chen Button (R-Richardson) has filed several bills that expand current state economic development incentives to including support for commercialization of intellectual property, leverage private donors for university research, and establish a broader definition of researchers who qualify for matching funds under the Governor's University Research Initiative (GURI).

House Bill 3245 broadens the definition of "distinguished researchers" who qualify for GURI awards, which match funds offered by universities to attract talent. In its current form, GURI narrowly defines distinguished researchers as Nobel Laureates or members of the National Academy of Science, National Academy of Engineering, or National Academy of Medicine. HB 3245 would include recipients with ‘equivalent’ honors, members of ‘equivalent’ honorific organizations or other national societies, and principal investigators (PIs, heads of laboratories) who oversee substantially funding, long-term research projects (i.e., $1 million in annual expenditures for at least three years).

House Bill 3260 would also expand GURI to fund university research with financial support from the private sector. Specifically, HB 3260 would allow GURI to supplement funding for projects aimed at commercialization of intellectual property discovered at that institution. The grant must equal less than half of the total investment in the project, which must be contributed by one or more private entities and the university.

 

House Bill 3160 would enable the Texas Enterprise Fund (TEF) to support commercialization of property developed by university researchers as well. To qualify, the project must also receive funding from the private sector in addition to their public or private higher ed institution. The award must be less than half of total investment. House Bill 3364, would further allow TEF to reimburse up to 15 percent of expenses related to the grant.

The Texas Economic Development Act (TEDA) allows school districts to offer temporary limitations on property taxes to encourage new investments locally. House Bill 3176 would require members of a school's board of trustees to disclose any conflict of interest with a TEDA applicant, and would prohibit those members from participating in the board's deliberations.

 

Updates

  • Senators passed Senate Bill 6, the controversial Bathroom Bill, with a majority of vote of 21-10. Two amendments were adopted with the following provisions: private companies that lease public school buildings are not subject to the law; state agencies may not consider a private company's bathroom designations when adopting a contract; and citizens must file an affidavit to complain about violations. The bill will now be referred to a House committee.
  • Next Tuesday, the Senate Education Committee will consider Senate Bill 3, which creates a scholarship fund for private school vouchers.

Sources: Texas Legislature Online, Legislative Budget Board


Legislative update: Week of March 10, 2017 »


By 6 p.m. tonight (Friday), all House and Senate bills must be filed. A suspension of the rules to obtain permission to introduce the new bill will be required for any future emergency items. While preparing for this deadline, a Senate committee took up the controversial Bathroom Bill, while House Committees heard testimony on a major school finance reform bill and legislation on career & technology courses.


Committee hears testimony on major school finance reform bill

 

On Monday, House Public Education Committee Chairman Dan Huberty (R-Houston) filed House Bill 21 to introduce major changes to school finance. If no changes are made, the state’s share of public school funding will decrease to 39% in 2019, compared to 49% ten years ago. With top-down reforms requested in the Supreme Court ruling a remote possibility, an increase to the basic allotment has been pursued.

HB 21 would add $1.6 billion during the next biennium; increase the basic allotment by $210 per student from $5,140 to $5,350; roll both high school allotment and additional state aid for non-professional staff into the basic allotment; create new transportation funding for recapture districts; lower recapture by approximately $163 million in 2018 and $192 million in 2019; create a hardship grant capped at $100 million per year to assist districts that will lose funds once the Additional State Aid for Tax Reduction (ASATR) expires; add 0.1 weight for students with dyslexia; and repeal Hold Harmless funding for certain districts, which supplements revenue that is lost when property tax revenue decreases.

Funding for HB 21 is included as a budget rider in the current version of House Bill 1, the House appropriations bill. In its proposed form, HB 21 provides additional funding for 95% of school districts compared to current law. At the committee hearing, the Legislative Budget Board estimated that the bill would increase funding for Richardson ISD maintenance and operations (M&O) by $8 million and for Dallas ISD by $34 mill

Legislative Alert: 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 the Texas high tech industry from this week can be found below.

 

Updates

 

Economic development

 

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 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.

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.

 

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.

 

Budget

 

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.

 

Education

 

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).

 


Legislative Alert: May 22, 2015 »

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. Last Friday was the final day for representatives in the lower chamber to pass House bills. Make sure you check out our Updates section below to see the status of legislation that could impact the tech industry.

 

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:

  • Public and higher education funding match the lower figures proposed by the Senate: $1.5 billion instead of $2.2 billion for public schools, and an unfortunate $500 million shortfall for the Texas Tomorrow Fund, which supplements year-to-year tuition rates for students who pay up front.
  • A rider that would have effectively killed plans to build a high-speed rail between Dallas and Houston was removed from the bill at the last minute. The passage of two bills that could threaten the bullet train's construction - SB 1601 and SB 1837 - is unlikely before the Wednesday deadline for Senate bills.
  • The franchise tax rate was reduced by 25 percent and the homestead exemption for property owners was increased by $10,000. No sales tax reduction was included in the budget. Governor Abbott told legislators he would veto any appropriations bill without a meaningful reduction in the margins tax, his only sine qua non for the budget.

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.

 

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 a more detailed account of the bill's fiscal strategy.

 

Updates

 

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 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.

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 Alert: 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.

 

Addressing the growth of patent trolls

 

The Senate passed SB 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. The bill was passed by the House Judiciary & Civil Jurisprudence Committee on Tuesday.

 

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 & Means Committee last Friday. The Senate Finance Committee hear testimony on its sister bill, Senate Bill 1009, on Wednesday.

 

Prekindergarten, 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.

 

House passes several economic development measures

 

The House passed House Bill 26, and is expected to pass House Bill 27 and House Bill 28 next week, the state economic development reform package authored by Rep. Angie Button (R-Richardson). HB 26, which was referred to the Senate Natural Resources &Economic Development Committee on Tuesday, 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. 

 

The House also 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. 

 

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.

 

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 last Tuesday. SJR 5 would dedicate the first $2.5 billion in vehicle sales tax revenue to the general revenue fund, and the second $2.5 billion to the State Highway Fund (SHF). Any remaining funds would be split evenly between the General Revenue Fund and SHF each fiscal year. Constitutionally dedicated funds could provide a predictable revenue stream for the Texas Department of Transportation, which needs to know how much funding it will receive years in advance for negotiating on long-term projects. Revenue from the state's 6.25% tax on vehicle sales currently goes into the state's general revenue fund. If voters approved the measure in November 2016, the bill would go into effect in 2018. 

 

The House also gave preliminary approval to <astyle="color: blue; text-decoration: underline;" track="on" shape="rect"href="http://www.capitol.state.tx.us/BillLookup/History.aspx?LegSess=84R&Bill=HB13"linktype="1" target="_blank">House Bill 13 by Transportation Chairman Rep. 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. 


Legislative Alert: 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 the North Texas technology industry were also approved by committees and sent to Calendars, where they will be scheduled for discussion and a vote.

 

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.

 

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.

 

Updates

 

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 Alert: April 3, 2015 »

House budget proposals were debated at length and overwhelmingly passed on Wednesday. Education reform also had the spotlight this week as the House Higher Education Committee approved a bill to provide critical funds to state universities and the Senate passed a new A though F rating system for school performance evaluations.

 

Budget proposals approved after marathon debate

 

The House deliberated on Tuesday for 18 hours before passing the budget, House Bill 1, at 5:39 am. Their proposal accounts for $209.8 billion in spending - $7.7 billion more than the current budget, but $2 billion less than the state spending cap. HB 1 contains 257 adopted amendments, including an appropriation of $1.6 billion to fund statewide pre-K programs submitted by Rep. Yvonne Davis (D-Dallas). Texas law prevents legislators from making law in the budget, but adjustments in funding and amendments for certain programs can effectively determine state policy on certain issues. The budget proposal will now be heard and discussed in the Senate so that both legislatures can agree on one budget for the next biennium. The House also unanimously passed the supplemental budget, House Bill 2, which would provide an additional $503 million for fiscal year 2015. Visit our legislative alerts page for a summary of how the appropriations bills impact issues that affect the technology industry.

 

Bills for expansion/maintenance of tuition revenue bond funds leave committee

 

House Bill 100 by Rep. John Zerwas (R-Richmond), Chair of the House Higher Education Committee, was passed unanimously out of committee on Monday. HB 100 allocates more than $2.6 billion to Texas universities during the next biennium, including $70 million for a new engineering building at UT Dallas and $80 million for a vivarium and lab facilities at UT Southwestern Medical Center. Tuition revenue bonds (TRBs) are important for expansion, facility maintenance and renovation projects at higher ed institutions. HB 100 is now headed to the House floor, where it will be discussed and held to a vote.

 

Senate passes new letter grade system for schools performance ratings 

 

The Senate passed Senate Bill 6 this week, which would establish a letter grading system for school performance evaluation. Grades of A through F would replace the current classifications of "exemplary," "recognized," "acceptable" and "unacceptable." Those four designations, author Sen. Larry Taylor (R-Friendswood) said, "lack the clarity of an A through F rating system." Supporters say clear ratings will increase transparency in school rating systems and allow parents to make more informed decisions about where their children attend school, but opponents argue a simplified system would stigmatize struggling schools. SB 6 is considered part of Lt. Gov. Dan Patrick's education reform agenda.

 

House and Senate budgets leave committees

 

House Bill 1 and Senate Bill 2, the general appropriations bills for each house, were passed out of committee this week. Both of these conservative proposals will be highly amended as legislators work together to pass only one state budget. Below is a review of each budget's recommendations for state programs that impact businesses and communities.

 

Texas Research Incentive Program (TRIP)

The Texas Research Incentive Program matches and leverages private donations for research at colleges and universities. HB 1 provides nearly $179 million for the next biennium that includes $67.5 million from the Emerging Technology Fund, a large increase from the previous year. SB 2 provides only $30 million from general revenue and additional funds from the Emerging Technology Fund. Part of the House's allocation would reduce the current backlog of TRIP funding requests.

 

Tuition revenue bonds (TRBs)

Tuition revenue bonds are authorized during the legislative session and provide higher education institutions with funding for construction and expansion of facilities, equipment and other infrastructure needs. In their interim report, the House Higher Education Committee criticized this method of providing supplemental financing to schools because most approved TRB requests favor construction over maintenance, rely on incomplete data from universities, and are uncertain. During the 83rd Legislature, $3.8 billion in TRBs were requested but none passed before the end of the session. The committee recommended funding schools from general revenue instead; however, HB 1 and SB 2 only provide for 24% and 64% of estimated total available funds, respectively, and SB 2 recommends the passage of $250 million in TRBs. Ensuring campuses receive the funding they need to maintain quality will likely be a top priority this session.

 

Transportation

Both budget proposals provide $24 billion to Texas Department of Transportation, an estimated 97% of total available funds that includes $2.5 billion provided by Proposition 1 passed last November. The amount allocated by SB 2 is contingent on the passage of a legislation that authorizes a one-time transfer from motor vehicle sales tax revenues to the State Highway Fund, and the discontinuance of transfers from the SHF to other agencies.

 

Texas Enterprise Fund (TEF) and Emerging Technology Fund (ETF)

 HB 1 provides $57 million to the Texas Enterprise Fund, which uses financial incentives to attract businesses to Texas, and splits the remaining Emerging Technology Fund balance of $101 million between TRIP and research programs, including Gov. Abbott's University Research Initiative. The Senate's budget does not provide any new funding to TEF or TETF for the next biennium. Instead, SB 2 proposes that legislators transfer half of the TETF balance to the Texas Enterprise Fund, and use the remaining funds for the University Research Initiative and TRIP.

 

Skills Development Fund

The Skills Development Fund, a workforce development initiative that provides grants to public colleges to develop career and technical education program development, would receive about $50 million over the next biennium under either budget, based on an estimated cost of $1,800 per trainee.

 

Tax Relief Package

 

This week, the Senate passed the following bills targeted at tax relief for homeowners and small businesses:

  • Senate Bill 1 by Sen. Jane Nelson (R-Flower Mound), which would decrease property taxes by increasing homestead exemption for school district taxes. School districts would be held harmless, that is, the state would offset any school property tax revenue losses that result from SB 1. This bill is contingent on passage of SJR 1.
  • Senate Bill 7 by Sen. Nelson, which would provide about $4 billion in tax relief to Texas homeowners and businesses by permanently reducing the franchise tax by 10%.
  • Senate Bill 8 (Small Business Tax Relief Act) by Sen. Charles Schwertner, MD (R-Georgetown), which would exempt businesses with less than $4 million in total annual revenue from the franchise tax, providing more than $380 million in tax relief for 52% of Texas businesses currently subject to the margins tax.
  • Senate Joint Resolution 1 by Sen. Nelson, would also reduce property taxes for homeowners by increasing the homestead exemption while holding schools harmless for tax revenue losses. If passed by the House, SJR 1 will be decided by voters during the next general election.

Legislative Alert: March 20, 2015 »

Several key bills with the potential to reshape Texas' business climate have been filed and passed on to committees in the legislature. Keep up with a legislation that impacts the North Texas technology community with Tech Titan's biweekly legislative alerts.

 

Bill Sproull's legislative alert

 

Click on the photo above to hear Bill Sproull, President of Tech Titans, speak briefly about exciting news and recent developments in the Texas legislature.

 

Reform package for state economic development programs

 

Rep. Angie Chen Button (R-Richardson) filed three bills last week proposing major changes to state economic development programs. House Bill 26 creates an Economic Incentive Oversight Board and amends the Texas Enterprise Fund guidelines to prioritize small businesses and support projects at higher ed institutions. HB 27 and  HB 28 eliminates the Texas Emerging Technology Fund, redistribute remaining ETF funds, establish recurring independent audits of economic development programs, and remove underutilized programs. In a released statement, she said the legislation "lays the groundwork for Economic Development reform in Texas." The bills follow recent criticisms of Texas incentives programs, including unfair distribution of funds and lack of transparency. All bills have been referred to the Economic & Small Business Committee, where Rep. Button is committee Chair.

 

High-speed electric railway between Dallas and Houston

 

Rebecca Cowle from Texas Central Railway (TCR) spoke to the Chamber's Public Policy Committee last Friday about the plans for construction of a high-speed electric railway between Dallas and Houston. The privately-funded project is modeled on the successful, exceptionally safe Shinkansen railway in Japan. The proposed route maximizes existing right-of-ways and has an estimate transit time as low as 77 minutes one-way. If approved, TCR expects to be operational by 2020. Two bills, if passed, threaten its construction. House Bill 1889 by Rep. Will Metcalf (R-Conroe), an outspoken critic of the plan, would require TCR to acquire approval from every individual city and county that hosts the route. Senate Bill 1601 by Sen. Lois Kolkhorst (R-Brenham) would disqualify companies that operate high-speed rails from exercising the power of eminent domain. For more information and updates, check out the Commission for High-Speed Rail in DFW's newsletters, the  TxDOT Rail Division and the Federal Railroad Administration.

 

Specialized chancery court for complex business suits

 

Rep. Jason Villalba (R-Dallas) spoke to the Advocacy Team last Wednesday about House Bill 1603, which would create a new specialized court for complex, lengthy corporate litigation. The chancery court and court of chancery appeals would remove cumbersome business disputes, such as mergers and acquisitions, security law and shareholder derivative actions. These cases crowd court dockets and prevent legitimate suits from being heard in a timely fashion. Because complex corporate litigation often requires specialized knowledge, HB 1603 proposes appointing individuals with the appropriate expertise and background for judgeships. Villalba modeled the bill after the Delaware Court of Chancery. Creating a chancery court may also attract more businesses who wish to incorporate in Texas. "By creating this business-focused, specialized chancery court," Villalba said, "we are telling the world that Texas is open for business and that there is no greater state in the United States to incorporate and begin operations." HB 1603 has been referred to the Business & Industry committee.


Source: Texas Legislature Online 


Legislative Alert: March 13, 2015 »

In anticipation of today's deadline for filing bills, legislators have flooded the Capitol with new proposals totaling more than 3,000 in the House of Representatives and 1,200 in the Senate. Committees have already begun to hear testimony and a few key bills have passed the House and Senate. Keep up with a legislation that impacts the North Texas technology community with Tech Titans's biweekly legislative alerts.

 

State of the State

Governor Abbott outlined his top priorities for this session in his State of the State last week. His agenda includes five emergency items for this Legislature to address immediately: strengthening border security, transportation funding, expansion of early education, higher education research initiatives and ethics reform. Abbott proposed $2 billion in tax reductions for employers by reducing or eliminating the franchise tax, $2.2 billion in property tax relief, increasing funding for road construction and maintenance by $4 billion and allocating $500 million for higher education research programs and faculty incentives. He further stated his support for adopting open carry laws and extensive ethics reform, led by Sen. Van Taylor (R-Plano) and Rep. Charlie Geren (R-Fort Worth).

Senate and House committees assigned

Lt. Gov. Dan Patrick announced his committee assignments on Jan. 23rd. Below are the committees for key North Texas legislators:

Rep. Angie Chen Button: Economic & Small Business Development (Chair), Rules & Resolutions, Ways & Means

Rep. Jeff Leach: Criminal Jurisprudence, Government Transparency & Operation

Rep. Linda Koop: Appropriations, Emerging Issues in Texas Law Enforcement (Select), International Trade & Intergovernmental Affairs

Sen. Van Taylor: Nominations (Vice Chair), Education, Health & Human Services, Transportation

Sen. Don Huffines: Transportation (Vice Chair), Administration, Business & Commerce, Education

 

Transportation funding

Among the many bills filed this session that address the current shortfall in the State Highway Fund, Senate Bill 5 has received some of the greatest support so far with 20 co-authors and Lt. Gov. Dan Patrick’s vocal support. Sen. Robert Nichols (R-Jacksonville) and Sen. Jane Nelson (R-Flower Mound) authored the bill, which proposes to dedicate the first $2.5 billion in revenue from the existing sales taxes on new and used vehicles to the general revenue fund, and the following $2.5 billion to the State Highway Fund to pay for construction, maintenance and transportation debt. Any remaining tax would be split evenly between the two funds. The Transportation committee’s analysis estimated that $2.8 billion would be added to the State Highway Fund during its first year in 2018, and more than $3 billion by 2020. The bill was passed by the Senate and will now be scheduled for a vote in the House.

Repealing the Franchise Tax

Testimony on several bills related to repealing the franchise tax was heard by the Finance committee this week. The margin tax was intended to provide stable, long-term funding for public schools after a Texas Supreme Court case deemed the state’s method of financing public schools violated the Constitutional provision against a statewide property tax (similar to the recent August 2014 ruling in favor of Texas public schools). The franchise or margin tax has been criticized for being overly complex, failing to meet revenue expectations by several billion dollars, charging businesses whether or not they earn profit, and disproportionately harming small businesses. In the bill analysis for Senate Bill 105 filed by Sen. Craig Estes, R-Wichita Falls, the Finance Committee accuses the franchise tax of "inflat[ing] consumer prices while deflating employee wages" and being "one of the most destructive taxes on corporate and small businesses in the country." Despite this strong opposition, replacing the estimated $2.7 billion loss in revenue from its repeal has been a growing concern and threatens the tax cuts to citizens promised by Texas lawmakers. An identical bill, HB 850, and other similar bills have been referred to the House Ways & Means committee for review.

Repealing the Texas Emerging Technology Fund

Rep. Jason Villalba, R-Dallas, filed House Bill 1389 to phase out and repeal Section D of the Texas Emerging Technology Fund (ETF), which deals with commercialization grants to private high-tech companies. Villalba has also filed House Bill 1506, which transfers a portion of TETF funds to the Texas Enterprise Fund. ETF was established in 2005 to match research grants at Texas universities and to seed and retain early stage high-tech companies. Its mission is to attracted talented researchers and innovators to Texas; however, the bill has come under fire recently for transparency issues. Gov. Abbott has proposed eliminating TETF and splitting those funds between a modified Texas Enterprise Fund and a new program designed to recruit top scientists and engineers from other states and private institutions. Two bills that also abolish the TEFT and request an evaluation of the program’s efficacy have been referred to the Economic & Small Business Development committee: HB 1037 by Rep. David Simpson (R-Longview) and HB 523 by Rep. Phil King (R-Weatherford).

Patent Reform Bill

Sen. Van Taylor filed Senate Bill 1187 on Wednesday to protect Texas businesses from abusive patent litigation. Several states have adopted legislation to address "patent trolls," non-practicing entities (NPEs) that threaten businesses or file lawsuits on unmerited patent infringement assertions. Currently, Texas has no laws that protect residents from these burdensome claims. Some have raised concerns that patent legislation could limit the ability of patent owners to protect their individual property, while supporters emphasize that frivolous lawsuits stifle innovation, divert resources and limit business growth. SB 1187 prohibits patent trolls from sending demand letters that contain bad faith assertions and imposes hefty fines for each violation.

Tuition Revenue Bonds Request at State Higher Education Institutions

Sen. Judith Zaffirini, D-Laredo, has filed Senate Bill 21 to request tuition revenue bonds for construction projects at state public universities and colleges. Tuition revenue bonds are used to fund capital construction projects at public higher education institutions. Among the several projects listed for each university, the bill also requests $99 million for an engineering building and $95 million for a science building at the University of Texas at Dallas. SB 21 was referred to the Senate Higher Education committee last month.

Texas Tuition Freeze Bill

Sen. Charles Schwertner, R-Georgetown, has filed SB 233 as a response to the alarming rise of tuition rates and student debt in the past decade. Tuition at state universities and colleges has more than doubled since 2003, when Texas lawmakers passed a bill that transferred the authority to set tuition from the Legislature to the Boards of Regents at public universities. This growth far outpaces inflation during the same period, an especially concerning trend when the average graduate’s debt in Texas has reached $25,000. The bill was recently referred to the Senate committee of Higher Education. Schwertner has also set up a petition website for students to post their experience with student loan debt. The proposed bill prohibits schools from increasing tuition beyond the rate of inflation, but allows fees to increase with a majority vote of the student body. SB 233 also caps tuition for one year. Rep. Four Price, R-Amarillo, filed an identical bill that has been referred to the House Higher Education committee.

Expanding Accountability Measures for Public Schools

Senate Bill 176 by Kel Seliger, R-Amarillo, proposes adding certain new criteria correlated with academic success to the existing Texas School Accountability Dashboard, including participation in the University Interscholastic League (UIL), the number of college credits earned, and the percentage of students who have either satisfied the Texas Success Initiative benchmarks or scored at a certain level on the ACT or SAT. The Commissioner of Education would be required to update these data by September 1st annually. The current public school accountability system’s indices laid out in HB 5 (2013R) include - Student Achievement, Student Progress, Closing the Performance Gaps and Postsecondary Readiness. SB 176 was referred to the Senate Education Committee last month.

Environmental Regulations

Rep. Mary Gonzalez, D-El Paso, filed House Bill 87 in an effort to curb harmful waste generated by improperly disposed electronic equipment. HB 87 would require large retailers that sell electronics to accept computer and television equipment for recycling and ensure that all equipment collected is legally disposed of, recycled or reused, free of charge. Currently, only manufacturers are required to collect and recycle their own products at no cost to consumers. The Texas Retailers Association opposes the bill, contending that it will be burdensome to retailers. A similar bill was halted in the House Calendars committee last session, but legislators are hoping for a different outcome this time. HB 87 has been referred to the House Environmental Regulation committee.

Sources: Governor’s Budget 2016-2017

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Sources: Texas Legislature OnlineLegislative Budget Board