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Legislative update: Week of May 29, 2015 »

Wednesday was the last day for the House to decide on all Senate bills and for the Senate to vote on all bills. The official end to this legislative session on Monday, June 1, is the last day for both chambers to approve, reject or correct revised bills that leave conference committees. Many bills died this week before the Tuesday and Wednesday midnight deadlines, but the progress of legislation important to Texas businesses and residents from this week can be found below.


Check out the Chamber's Legislative Wrap-up, a summary of all legislation relevant to our Legislative Agenda. Our wrap-up includes a legislative scorecard that shows how Richardson-area legislators voted on important bills.

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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 32, which provides a 25 percent franchise tax cut to all businesses in Texas, was approved by both Chambers on Thursday and will now head to Gov. Abbott's desk. The bill is estimated to cost $2.6 billion over the next biennium and satisfies Gov. Abbott, who said he would veto any appropriations bill that did not include a margins tax cut.

SB 632, which abolishes the Texas Emerging Technology Fund and redistributes its account to other state programs, was passed by the House on Monday. The Senate refused to concur with House amendments to the bill on Thursday and assigned a conference committee to negotiate a new version.

HB 2712, which creates a 20-year sales tax exemption for certain large data center projects, was passed by the Senate on Monday and approved by the House on Thursday. Tax incentives for data centers would encourage these often multibillion-dollar projects to settle in our state, creating high-tech jobs and attracting more capital investment. HB 2712 will now go to the Governor's desk.

SB 1457, which curbs the behavior of patent trolls in harmful patent infringement claims, was passed by the House on Friday and sent to the Governor on Tuesday. Patent trolls target small businesses and individuals by submitting baseless or tenuous claims that require years of complex and costly litigation to resolve. SB 1457 introduces basic requirements for these claims, such as the number of the patent in question and the identity of the plaintiff, and a civil penalty for their abuse.




SB 9, which limits the growth rate of the budget, was passed by the House on Tuesday and assigned a conference committee by the Senate on Thursday. The Texas Constitution limits state spending to the growth of the state economy for certain categories in the budget. The revised version of SB 9 would expand these restrictions to the entire budget and require only a simple majority vote to override the state spending cap. The cap on each category, such as education or transportation, would be based on inflation and population rates relevant to that area and determined by the Legislative Budget Board for each session.

HB 2, the supplemental budget bill that fills gaps in the 2014-2015 state budget, was passed unanimously by the Senate on Tuesday with amendments, which the House approved on Thursday. HB 2 will also go to Gov. Abbott's desk.




HB 4, which allocates $130 million in state funds to pre-K programs that meet certain high quality benchmarks, was signed by Governor Abbott on Thursday. Improving Texas pre-K programs was a top priority for Gov. Abbott this session.

HB 100, which would allocate millions of dollars for much-needed construction and maintenance funds for Texas colleges and universities, was sent to conference committee by the Senate on Monday. Both chambers must approve the revised version of the bill, distributed on Thursday, by midnight next Monday.

HB 1000, which creates three new university research funds over the next biennium, was passed by the Senate on Wednesday. The new funds are intended to support quality faculty and research capacity at higher ed institutions (HRO report). Another bill that promotes higher ed research, SB 44, was sent to the Governor on Tuesday. SB 44 specifies that private gifts made to colleges and universities to support undergraduate research are eligible for matching state grants under the Texas Research incentive Program (TRIP).


Legislative update: Week of 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. Make sure you check out our Updates section below to see the status of legislation that could impact the business community.


Negotiations over appropriations bill finally come to end


On Thursday night House and Senate negotiators reached an agreement regarding the controversial appropriations bill, the budget legislators must pass before the end of the session. House and Senate members must approve the $210 billion budget before it goes to the governor's desk. Below are some highlights of the final version:

  • 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.




HB 32, which would reduce the franchise tax over the next biennium as proposed by the budget, was passed by the Senate Finance Committee on Wednesday.

House members approved Senate amendments to HB 4 on Thursday, which supports pre-K programs that meet certain performance-based requirements. The bill will now head to Gov. Abbott for passage or veto. 

SB 1457, which would curb the widespread practice of abusive patent litigation, passed out of the House Judiciary and Civil Jurisprudence Committee on Wednesday and was sent to Calendars on Thursday. 

HB 100, which distributes tuition revenue bonds (TRBs) to Texas colleges and universities for facility maintenance and construction, was passed by the Senate on Tuesday. On Thursday, however, the House did not concur with the Senate's amendments and appointed a conference committee. 

SB 632, which eliminates the Texas Emerging Technology Fund and establishes governor's university research initiative to recruit distinguished researchers, was passed unanimously by the House Economic and Small Business Development Committee on Thursday. 

SB 44, another bill aimed at improving Texas' position as an innovator in research, is scheduled for a House vote today. SB 44 would clarify that private gifts made to colleges and universities are eligible for matching funds under the Texas Research Incentive Program.


Legislative update: Week of May 15, 2015 »

Representatives rushed against the midnight deadline on Thursday to vote on bills that originated in the House. Meanwhile, significant progress in the appropriations bill conference committee has been reported. Today is the last day to pass House bills on third reading in the lower chamber, and the next major deadline is Wednesday, May 27th, the last day for the House to pass Senate bills and for the Senate to vote on all proposed legislation.


Public Policy hosts transportation lobbyist for straightforward update on legislature


Last Friday, the Chamber's Public Policy Committee welcomed Drew Campbell of the Dallas Regional Mobility Coalition to discuss important transportation bills and their advancement in the legislature. "What we are going to get this year is new funding," Campbell predicted, referring to the promising feedback from both chambers and Gov. Abbott's prioritization of TxDOT funding. He also provided valuable insights into the more subtle ways events in Austin may impact a bill's progress. Read more about this event and Campbell's thoughts in the Chamber's article covering the meeting.


Prudent investment of excess Rainy Day funds approved, sent to governor


The Senate passed House Bill 903 on Thursday, which authorizes the investment of excess funds in the state Rainy Day Fund. HB 903 will now head to Gov. Abbott to be signed into law or vetoed. A sufficient balance for the Rainy Day Fund, also known as the economic stabilization fund (ESF), is considered to be $7 billion; however, the balance is expected to reach $11.1 billion by the end of 2017. HB 903 proposes that the Comptroller invest a percentage of the excess funds ($4.1 billion), which are currently "highly liquid, low yield assets", according to the well-established prudent investor standard. Over time, these small, relatively safe investments would build the Texas emergency fund and provide more support for programs when general revenue falls short. See the Finance committee's bill analysis and the HRO report for more a more detailed account of the bill's fiscal strategy.


Letter grade school rating system passed, new formula funding withdrawn 


On Thursday the House approved House Bill 2804, authored by House Public Education Chairman Jimmie Don Aycock, which replaces the former school performance ratings with A through F letter grades. State public school evaluations would also be based on new criteria, such as advanced placement enrollment and locally selected programs related to community and student engagement. Students' performance on STAAR standardized tests would still be considered the primary criterion for school performance evaluations, but nearly half of the letter grade would be determined by unrelated factors (HRO report). If any school received a failing grade of D or F, school districts could not achieve an "A" or exemplary grade. HB 2804 will now be assigned a Senate committee for consideration.


Another education bill authored by Rep. Aycock, House Bill 1759, was withdrawn on Thursday due to the approaching midnight deadline and discouraging feedback from the Senate. HB 1759 would have added $800 million to the $2.2 billion allocated to Texas public schools and removed outdated calculation methods for funding. Regarding his decision to withdraw HB 1759, Rep. Aycock said, "I don't think it's fair to leave this bill pending and kill everything that's up when we know the Senate will almost certainly not consider the measure if it passes."


House committee hears Senate bill that could weaken local control 


The House Ways & Means Committee heard testimony on Tuesday for Senate Bill 1760, which would require city councils to secure a super majority to increase local taxes for revenue. If passed out of committee and calendared before May 27th, SB 1760 would go to the House floor for a vote. The restrictions proposed by SB 1760 could impede growth and development in thriving communities and reduce what local governments can do for their residents. Richardson's local legislator, Rep. Angie Chen Button, has reported that as a member of Ways & Means she will oppose this legislation. Let the members of Ways & Means and your representatives know that their constituents and Texas residents do not approve of SB 1760.




SB 1457, which creates measures intended to restrict the destructive effects of patent trolls, has been scheduled for a hearing on Tuesday, May 19th.


Legislative update: Week of May 8, 2015 »

Legislators hurried this week to push several bills because of deadlines approaching next week, despite the stalemate between House and Senate members over sales and property tax cuts in the budget. Monday, May 11 is the last day for House bills to leave committee and Friday, May 15 is the last day for representatives to vote on House bills. The last day for the Senate to consider all legislation is Wednesday, May 27.


Pre-K, higher ed funding bills head to governor's desk


House Bill 4, an early education bill and one of Gov. Abbott's top priorities, was passed by the Senate on Thursday. HB 4 dedicates $130 million to encourage existing pre-K programs to implement certain high quality curricula and teaching measures, such as smaller class sizes and training. Early education grant programs are currently available for qualifying children, such as low-income, military and foster children. If the House approves changes and the 11 amendments adopted by the Senate, the bill will head to the governor's desk for his signature.


On Monday the House approved Senate Bill 1191, which would increase funding for state colleges and universities by $130 million annually to accommodate growth. SB 1191 will now head to Gov. Abbott for his approval.


Ways & Means approves bill promoting telecom investment and development


House Bill 2199, filed by Rep. Tan Parker (R-Flower Mound) and identical to Senate Bill 1009, would increase the annual cap on the sales tax refund for communications network equipment from $50 million to $150 million. Texas imposes the eighth highest sales tax rate on telecommunications equipment, making our state less competitive than other states when attracting telecommunications companies and providers. A sales tax rebate could promote investment in communications networks and have an impact across the economy, including the generation of more jobs and local tax revenue. HB 2199 passed out of the House Ways and Means Committee last Friday. The Senate Finance Committee hear testimony on its sister bill, Senate Bill 1009, on Wednesday.




SB 1457, which establishes requirements relating to bad faith patent infringement claims to discourage patent trolls from targeting Texas businesses, was referred to the House Judiciary & Civil Jurisprudence Committee on Tuesday.

SB 778, which limits rises in college and university tuition to inflation plus 3 percent of inflation, was passed by the Senate on Thursday with five amendments. 

HB 26, part one of three state economic development reform bills filed by Rep. Button, was referred to the Senate Natural Resources &Economic Development Committee on Tuesday.


Legislative update: Week of May 1, 2015 »

With only a month left in the legislative session, legislators hurried this week to pass several landmark bills that covered priority issues including economic development, transportation, higher education and tax reform.


House passes economic development measures


On Friday the House is expected to pass House Bill 26, House Bill 27 and House Bill 28, the state economic development reform package authored by Rep. Angie Chen Button (R-Richardson). HB 26, which was given preliminary approval on Thursday, abolishes the Texas Emerging Technology Fund (TETF), creates a university research initiative to match funds for the recruitment of renowned faculty at state colleges and universities, shortens the state's approval period for grants, and authorizes the Texas Enterprise Fund (TEF) to fund higher ed research commercialization requests. HB 27 also eliminates TETF and supports higher ed research commercialization grants, but redistributes remaining TETF funds to only the Texas Research Incentive Program or the Texas Research University Fund. HB 28, in an effort to increase transparency in state economic development programs, establishes regular audits of Texas economic incentive programs. 


Several other economic development measures were passed in an effort to increase Texas' competitive advantage when recruiting new businesses. HB 1701, passed on Wednesday, shortens the approval period for TEF proposals from 91 days to 31 days. HB 590, approved by House legislators on Tuesday, attracts start-ups and promotes growth by creating a tax exemption for property used for the commercialization of technologies developed by universities and eligible medical centers. SB 632, approved by the Senate, also redirects funds from TETF toward the creation of Gov. Abbott's proposed university initiative for the recruitment of Nobel Laureates and National Academy members to Texas colleges and universities.


Sales tax and franchise tax reductions passed in House


On Tuesday, the House unanimously approved the first sales tax cut in Texas history. House Bill 31 decreases the state sales and use tax from 6.25% to 5.95%, a reduction of nearly 5 percent. The House also passed House Bill 32, which decreases the franchise tax for all business owners by 25 percent, without an amendment that mirrored the Senate's plan by increasing the franchise tax exemption from $1 million to $4 million. HB 32 would provide an estimated $4.9 billion in tax relief to Texas business owners. Both bills were amended so that the Comptroller could further reduce tax rates if more state revenue comes in than expected. 


HB 31 and HB 32 support the budget proposed by the House, but are still at odds with the Senate's plan to cut property taxes and leave the sales tax untouched. Opponents of the Senate's tax cut plan cite concerns over rising appraisal values of property and marginal savings for homeowners. Speaker Joe Straus said in a statement that the House "looks forward to a productive conversation with the Senate about how best to deliver results on [tax reform] and the many others that matter to our economy and to Texas families."


Transportation bills provide significant boost in funding 


Several bills have been considered this week to address the alarming shortfalls in funding for the Texas Department of Transportation (TxDOT). Two bills were approved on Tuesday that concern diversions from the State Highway Fund (SHF), Senate Joint Resolution 12 and Senate Bill 139. SB 139 ends the diversion of funds from SHF to the Texas Department of Public Safety, which amounted to more than $810 million in 2014-2015, and restricts federal funds for state highway construction and acquiring rights-of-way. It relies on the passage of SJR 12, an identical constitutional amendment, by voters in November 2015. 


On Thursday the House gave preliminary approval to House Bill 13 by Transportation Chairman Joe Pickett (D-El Paso), which establishes certain requirements for TxDOT projects and authorizes the Texas Transportation Commission to determine how to use funding collected from HJR 13. HB 13 is contingent on the passage of House Joint Resolution 13 by voters this November, which would dedicate $3 billion in net sales tax revenue, along with an additional 2 percent of remaining revenue, each fiscal year to SHF. SJR 13 would result in an estimated loss of $11.7 billion to state general revenue funds by 2020. HB 13 and HJR 13 dedicate significantly more funding to TxDOT than SB 5, sent to the House Transportation committee two weeks ago, which would transfer the first $2.5 billion in annual vehicle sales and use tax revenue to SHF.




HB 6, which would assign letter grades for school performance evaluations, was approved unanimously by the House Education committee on Wednesday and sent to Calendars. 

SB 778, which limits rises in college and university tuition to inflation plus 3 percent of inflation, was passed by the Senate on Thursday with five amendments. 

SB 149, which establishes individual public school graduation committees of parents, teachers and principals for students who fail to pass one or two STAAR tests but are otherwise eligible to graduate, was sent to the governor on Wednesday.


Legislative update: Week of April 24, 2015 »

This week, the Senate passed landmark legislation to address the growing, widespread problem of patent trolls and made progress in providing steady, reliable revenue to the State Highway Fund.


Reining in the growth of patent trolls

On Wednesday the Senate passed Senate Bill 1457, written by Sen. Robert Nichols (R-Jacksonville) and co-authored by Don Huffines (R-Dallas). The bill addresses the negative impact of "patent trolls," patent assertion entities (PAEs) that use abusive patent litigation to target businesses and innovators for financial gain. In lieu of federal action, states have begun establishing their own laws that prohibit PAEs from making bad faith claims of patent infringement, or claims that are false, baseless or misleading. SB 1457 allows the Texas Attorney General to investigate bad faith claims and bring suit against patent trolls, and protects patent holders by notifying them of possible infringements and pursuing compensation.


Reliable funding for road construction, maintenance and long-term projects


Senate Joint Resolution 5, the companion bill to SB 5, was unanimously passed out of the House Transportation committee on Tuesday. SJR 5 would dedicate the first $2.5 billion in vehicle sales tax revenue to the general revenue fund, and the following $2.5 billion to the State Highway Fund (SHF). Any remaining funds would be split evenly between the general revenue fund and SHF each year. Constitutionally dedicated funds could provide a predictable revenue stream for the Texas Department of Transportation, which needs to know how much funding will be available years in advance for long-term projects. Revenue from the state's 6.25% tax on vehicle sales and rentals currently goes toward the state's general revenue. If voters approve the measure in November 2016, the bill will go into effect in 2018.


Another transportation bill, SB 1512, was passed by the Senate on Monday. SB 1512 would correct diversions created by the separation of the Texas Department of Motor Vehicles (TxDMV) fund and SHF. HB 6 from the 2013 legislative session resulted in the diversion of revenue streams from TxDMV to the state general revenue fund, effectively "abolishing" the TxDMV fund. SB 1512 ends this diversion and reestablishes this funding for TxDMV. The bill will now be sent to House Calendars for scheduling.




HB 4, which would address one of Gov. Abbott's emergency items by providing universal pre-K to qualifying Texas children, was referred to the Senate Education committee on Thursday. 

HB 100, which would provide millions of dollars in much needed revenue bonds to higher ed institutions for facility construction and maintenance, was referred to the Senate Higher Education committee on Thursday. 

HB 1603, by Rep. Jason Villalba (R-Dallas), creates a separate state chancery court for complex civil litigation, was passed our of the House Business & Industry committee on Tuesday. The bill will now be sent to Calendars to be heard by the House.


Source: Texas Legislature Online

Legislative update: Week of April 17, 2015 »

City Council Candidate Forum 4-10-15
This week's headliners were the House and Senate budgets, the approval of expanded economic incentives for data centers and debate over school financing reform. Several bills relevant to Richardson businesses and residents were alsoapproved by committees and sent to Calendars, where they will be scheduled for discussion and a vote.


Chamber holds engaging City Council Candidate Forum

Last Friday, candidates for Richardson City Council Places 1 and 4 visited the Chamber to discuss their policy ideas and answer questions about their experience and priorities for Richardson. Ronda Moreland, Chair of the Public Policy Committee, moderated the discussion. For more information about the Chamber's public policy meetings and events, please contact Molly Ulmer at molly@richardsonchamber.com.


Side-by-side budget comparison: Senate vs. House


Now that both legislatures have approved budgets for 2016-17, five representatives and five senators will be appointed to a conference committee to unite the proposals. Below is a summary of some of the differences between each version.

The $1.6 billion difference in the House and Senate versions represents less than 1% of the total amount allocated for the next biennium. Part of the included tax relief that depends on legislation has seen some promising developments. House Bill 31, which reduces the sales tax from 6.25 to 6.24 percent, and House Bill 32, which deceases the margins tax by 5 percent, were passed out of the Ways & Means committee and are headed for the House floor.


Reforming how Texas supports its schools


House Bill 1759, the controversial public education funding bill filed by Rep. Jimmy Van Aycock, was discussed in committee on Tuesday. A district court ruled in favor Texas public schools last August, stating that tax cuts from previous sessions imposed a statewide property tax in violation of the Texas Constitution. Legislators have until July 1st to remedy the school financing system, unless the Texas Supreme Court answers the state's appeal. Rep. Aycock said in committee that legislators shouldn't wait to hear back before restoring formula funding allotments. HB 1759 would provide $3 billion to public schools over the next biennium and include eighth grade students in career & technology funds, but would also make larger increases in funding for wealthier schools than urban districts.


House committee approves economic incentives for large data center projects


On Tuesday, the House Ways & Means committee approved several bills aimed at improving economic incentives for large data center projects. Legislators hope that passage of the bills below will make Texas a leader in this segment of the tech industry by extending current exemptions. Each of the bills below has a counterpart in the Senate and will be scheduled for a discussion and vote by the House.

House Bill 2096 by Rep. Angie Chen Button (R-Richardson) would extend the incentives to data centers of any size and reduce the required capital investment from $200 million to $100 million, among other changes. House Bill 2712 by Rep. Charlie Geren (R-Fort Worth) would also broaden the definition of data centers and exempt tangible personal property required for its operation. House Bill 2709, also by Rep. Geren, would allow more data centers to apply for benefits on property used for their facilities under the Texas Economic Development Act.




HB 26, HB 27 and HB 28 by Rep. Button have passed out of the Economic & Small Business Development committee and are headed to the House floor. The bills include a number of key economic development reforms that could produce an estimated $19 million in net state revenue.

SB 1601, which disqualifies high-speed rails from eminent domain, passed out of the Transportation committee with a 5-4 vote. The bill could jeopardize plans to construct a privately-funded high-speed rail between Dallas and Houston.

HB 1603 by Rep. Villalba, which would create a chancery court for complex business litigation, was approved by the Business & Industry committee and sent to Calendars.

SB 1457, relating to bad faith patent infringement claims, was approved by the State Affairs committee and scheduled to be heard by the Senate.


Sources: Texas Legislature Online,  Legislative Budget Board, House and Senate budget summaries


Legislative update: Week of April 10, 2015 »

The budget is the only bill that must be approved during the legislative session. Both of the Senate and House proposals for 2016-17, SB 2 and HB 1, introduce tax cuts designed to benefit Texas businesses and residents. The table below, compiled the Texas Taxpayers and Research Association, highlights key changes suggested by each legislature's tax relief plan. 


Senate House tax relief plans


SB 9, which would restrict constitutional state spending cap increases to the rate of inflation, was passed on Thursday. The bill will now be heard by the House.
SB 778, which would limit tuition increases at state universities unless a majority of 11 performance measures are met, passed on Wednesday.
HB 4, which would award additional funding to school districts for improving the quality of pre-K programs, was passed by the House on Thursday. The bill will now be heard by Senate committee.
HB 100, granting tuition revenue bonds to state colleges and universities, was passed on Thursday with a vote of 131-13.


Sources: Texas Legislature Online, Texas Taxpayers and Research Association

Legislative update: Week of 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.


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.


Sources: Texas Legislature Online

Legislative Alert: Week of March 27, 2015 »

This week featured several bills that could impact crucial programs and economic development across the state, including a large tax relief package and the passage of budget proposals from both the House and Senate out of committee.


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.



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.


House Bill 4, which provides high quality pre-K for qualifying children, was passed out of committee on Tuesday. The bill will now move to the House floor.

Sources: Texas Legislature Online, Legislative Budget Board

Legislative update: Week of 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 legislation that impacts the Richardson business community with the Chamber's weekly legislative alerts.


Bill Sproull's legislative alert

Click on the photo above to hear Bill Sproull, President & CEO of the Chamber, 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

House Bill 1603, filed by Rep. Jason Villalba (R-Dallas), 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.

Sources: Texas Legislature Online 

Legislative update: Week of 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 Richardson business community with the Chamber's weekly legislative alerts.


Richardson/Telecom Corridor Legislative Day


A delegation of leaders from the Chamber, City of Richardson and the community visited the state Capitol March 3-4 , meeting lawmakers and learning about important legislative issues during Richardson Legislative Day last week. The two-day event kicked off with a Delegation Reception and dinner, including our local legislative delegation members Sen. Van Taylor, Rep. Angie Button, Rep. Jeff Leach and Rep. Linda Koop . Dinner participants heard an entertaining and engaging account of current events from Scott Braddock of the Quorum Report. The following morning featured a Breakfast Reception hosted by Sen. Taylor, Rep. Button , Rep. Leach and Rep. Koop , who briefed the group on their top legislative priorities. Delegates also received briefings from Chairman Joe Pickett and Chairman Jimmie Don Aycock, of the House Transportation and Public Education committees, respectively, before they went to hear the Chamber's Resolution read on the House floor. The Delegation Lunch featured speakers Texas Comptroller Glenn Hegar and Rep. Dennis Bonnen, Chairman of the House Ways & Means Committee.

Richardson Legislative Day 2015  

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.


Open Access to Water Act


Sen. Van Taylor, R-Plano, filed Senate Bill 109 last year to address the lengthy, burdensome permitting process required for water rights permits. The bill creates deadlines for the Texas Commission on Environmental Quality (TCEQ) to respond to applications regarding the creation of new reservoirs. "With no time limit to issue permits, projects have been stalled over a decade waiting on bureaucratic approval. This lengthy process adds significant expense and uncertainty in our efforts to provide long-term water solutions," said Taylor. The proposed bill would require the executive director of TCEQ to grant or deny a permit for a reservoir within 300 days of receiving the application, with few exceptions. SB 109 has been referred to Agriculture, Water & Rural Affairs, and the identical bill filed by Rep. Jeff Leach, R-Plano, has been referred to Natural Resources.


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).


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.


Universal Access to Early Education


Another education bill filed by Sen. Zaffirini last November, Senate Bill 23, would establish free, full-day pre-kindergarten for all four-year-olds. Certain younger children will also qualify, including homeless children and those with a parent who is an active duty member of the armed forces. Other bills have been filed to address the quality of early education, such as a class size limit or required small teacher-to-student ratio. SB 23 was referred to the Senate Education committee last month.


Texas Tuition Freeze Bill


Sen. Charles Schwertner, R-Georgetown, has filed Senate Bill 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 Sen. 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.


Sources: Governor's Budget 2016-2017, Texas Legislature Online