During the 86th Legislative Session, the Partnership will provide a weekly update on our top executive priorities and other newsworthy items from Austin. 

There was a noticeable uptick in legislative activity in Austin this week. While we continue to wait for the House to file their public school finance bill, we are pleased to report that flood resilience remains on a positive trajectory. There were also significant developments on a number of issues impacting the business community. Here is this week’s recap of our top executive priorities and other key issues. 

PARTNERSHIP EXECUTIVE PRIORITIES
SCHOOL FINANCE REFORM
The Senate Finance Committee met on Monday and voted out of committee Senate Bill 3, which funds an across-the-board pay raise in the amount of $5,000 for all full-time classroom teachers. This would require an appropriation of $3.7 billion. Lieutenant Governor Dan Patrick identified teachers’ pay as a top priority during the last campaign cycle, and he has worked closely with members of the Senate to ensure this legislation moves swiftly through the chamber. Most legislators are supportive of increasing teachers’ pay, but there is not broad agreement on the across-the-board approach. In addition, we anticipate that Senate Education Chairman Larry Taylor (R-Friendswood) will file the chamber’s school finance reform bill soon.
  
In the House, we continue to await the filing of House Public Education Chairman Dan Huberty’s (R-Kingwood) school finance reform bill. During the House Public Education Committee meeting on Tuesday, Chairman Huberty, said “A plan for school finance will be revealed later this week.” As of this publication, a bill has not been filed.

FLOOD RESILIENCE
There were two important developments related to flood resilience this week. First, House Bill 478 was scheduled for a hearing next Tuesday in the House Natural Resources Committee. HB 478, authored by Representative Dade Phelan (R-Beaumont), would create a statewide flood infrastructure fund allowing local governments to receive funding to construct flood mitigation projects in their communities. Second, the Senate maintained its strong alignment with plans to address flooding through three distinct bills focused on disaster preparedness and response, funds for flood mitigation projects and the creation of a statewide flood plan. We anticipate an announcement on this alignment late next week with all three bills being heard in Senate Water Committee on March 11. Specifically related to funding for flood mitigation projects, we are pleased to report that both the House and Senate bills call for an investment of at least $3.0 billion. This amount won’t address all of the state’s flood mitigation needs, but it is a strong down payment toward a more resilient Texas. 

WEEK IN REVIEW

• Property Tax Reform
  The House Ways & Means Committee heard nearly 12 hours of testimony from over 130 registered witnesses on House Bill 2 introduced by Chairman Dustin Burrows (R-Lubbock). Like the Senate version, the House bill proposes a 2.5% property tax revenue cap for all taxing entities above $15 million in revenue. The bill also reforms appraisal boards and the appraisal review process. Most cities and counties expressed broad support for the appraisal reforms but stated concerns about the impact a 2.5% cap could have on government services. The House Ways & Means Committee is expected to vote the bill out of committee as early as next week.
   
• Mental Health
  The House Committee on Public Health considered legislation this week that would establish and fund the Texas Behavioral Health and Research Institute. House Bill 10 and House Joint Resolution 5, both authored by Chairwoman Senfronia Thompson (D-Houston), address mental health issues by investing in mental health research, workforce development, and health care capacity to support child and adolescent mental health needs. Votes on these measures could take place as early as next week. 
   
• Eminent Domain
  Next week, the Senate Committee on State Affairs will hear Senate Bill 421 authored by Senator Lois Kolkhorst (R-Brenham). SB 421 would make significant changes to the current eminent domain laws in Texas. The legislation would negatively impact large infrastructure projects such as pipelines, utility lines, and transportation networks by adding punitive requirements to the established eminent domain process such as covering attorney’s fees, increasing monetary compensation, and restricting public easements. The Partnership is working with a statewide industry coalition that is negotiating a legislative compromise compatible with landowners' concerns. 
   
• Municipal Issues
  In response to the paid sick leave ordinances passed in 2018 by the cities of Austin and San Antonio, the Senate State Affairs Committee passed Senate Bill 15 filed by Senator Brandon Creighton (R-Conroe). The bill reserves all employer-employee benefit regulation to the state and federal governments and overturns existing local ordinances. Many individual companies and business organizations, including the Partnership, share the concern that paid sick leave ordinances adopted on a city-by-city basis will harm businesses’ abilities to operate across the state. It is important to note that the committee struck a key provision that exempted local non-discrimination ordinances from state pre-emption. Several business groups testified that they supported the bill but urged legislators to protect local governments’ non-discrimination ordinances. The committee approved the amended version on a 5-1 vote. 
   
• Chapter 312 Reauthorization
  Late last week, Senator Brian Birdwell (R-Granbury), Chairman of the Senate Committee on Natural Resources and Economic Development, filed a bill to reauthorize Chapter 312. Chapter 312 of the state tax code allows cities, counties, and special districts to offer a temporary property tax exemption to a new investment project. Senate Bill 1046 extends the Chapter 312 program by 10 years and increases reporting and oversight requirements in unincorporated county territory. The bill requires 312 applicants to disclose certain details of property improvements, provide a five-day notification prior to any public hearing, and compels county commissioners to vote on any agreements made in unincorporated areas of a county. Senator Birdwell’s bill is expected to be the primary Chapter 312 bill in the Senate. House Bill 360 authored by Representative Jim Murphy (R-Houston) is the primary bill in the House. 
   

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