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86th Legislative Session Summary

Published Jun 20, 2019 by Taylor Landin

The 86th Texas Legislative Session was a success for the Partnership, the Houston business community and the broader Greater Houston region. This session was characterized by strong leadership from Governor Greg Abbott, Lt. Governor Dan Patrick and first-term House Speaker Dennis Bonnen. Their leadership focused the Legislature on addressing the most pressing needs facing Texas, which closely aligned with the Partnership’s priorities.

Through the efforts of the Partnership’s Board of Directors and our Public Policy Advisory Committees, we identified our top executive priorities based on the issues’ importance to Houston and the Partnership’s ability to make meaningful impact.

The Partnership focused on two initiatives critical to the advancement of the region’s economic competitiveness: improving the state’s flood resilience and supporting comprehensive public school finance reform. Thanks to consistent engagement from the Partnership, strong leadership from our statewide leaders and commitment from our regional delegation, we are proud to report success in each of our top priority areas.

FLOOD RESILIENCE - Senate Bill 7 Signed by Governor Abbott 

The passage of flood resilience legislation was a major accomplishment. The Partnership built a data-driven case for the state to fund Hurricane Harvey recovery and establish a role in future flood mitigation resulting in $2 billion in funding for both of these areas. Importantly, this legislation marks the first time the state will have a significant role in funding flood mitigation infrastructure.

In total, the Legislature appropriated $2 billion towards Hurricane Harvey recovery and future flood mitigation. The Texas Infrastructure Resiliency Fund received an appropriation of $638 million to cover unanticipated FEMA local matching requirements. $172 million will remain in the fund to make future appropriations or to implement an initial state flood plan. An appropriation of $47 million was made primarily to update flood risk maps throughout the state. 

In addition, the Texas Water Development Board received an appropriation of $793 million for future flood infrastructure projects. These funds will most likely flow through the Flood Infrastructure Fund following passage by voters of a constitutional amendment this November. The General Land Office was also appropriated $200 million for costs associated with infrastructure projects being conducted by the U.S. Army Corps of Engineers, and the Soil and Water Conservation Board was appropriated $150 million for dam infrastructure projects throughout the state. 

This commitment of significant state funding will help local communities and make Texas more resilient.

PUBLIC SCHOOL FINANCE REFORM – House Bill 3 Signed by Governor Abbott

The Legislature passed the most consequential public school finance reform since 1993. House Bill 3, authored by House Public Education Committee Chairman Dan Huberty (R-Kingwood) and sponsored by Senate Education Committee Chairman Larry Taylor (R-Friendswood), delivers transformational solutions, passed without a court order, and reflects the Partnership's principles for school finance reform:

  1. Prioritizing formula funding weights for economically-disadvantaged and English Language Learner students.
  2. Funding early education with an emphasis on programs that increase the reading proficiency of students by third grade.
  3. Increasing pay for the best teachers and incentivizing the best teachers to teach in the lowest performing schools.
  4. Equitably reducing the burden of recapture.
  5. Increasing the state’s share of education funding.

House Bill 3 dramatically reduces statewide recapture payments over the next biennium. Statewide recapture is reduced by $3.6 billion, a 47 percent reduction. Two school districts in our region, Houston ISD and Spring Branch ISD pay recapture. HB 3 is projected to reduce Spring Branch ISD’s recapture payment in 2020 from $96.9 million to $26.9 million. Houston ISD’s recapture payment in 2020 is projected to be reduced from $308.6 million to $0.

It is important to note that school district property tax reform is directly connected to the school finance reform efforts in House Bill 3. The legislation compresses local school district property taxes over a two-year period and establishes a school district revenue cap of 2.5 percent. These provisions help to reduce the challenge of funding public schools with local revenue, while increasing the state’s share of funding public education. 

This historic reform legislation increases the state’s share of funding public education from 38 percent to 45 percent and reduces the burdensome cost of recapture. Houston-area students will directly benefit from the funding allocated to proven programs directed at the highest need student populations so that students have an opportunity to graduate fully prepared to enter a twenty-first century workforce. 

The Partnership also engaged in workforce development policy at the state legislature for the first time, and this work will continue into the interim. Other issues important to the Houston business community – the preservation of state economic development programs, enhancement of higher education and creation of new mental health programs – were also approved with leadership from Houston-area legislators 

This was a tremendous session, and we thank the Board of Directors, Public Policy Advisory Committees, members, staff and stakeholders for your engagement prior-to and during session. For further details on outcomes of the 86th Legislative Session, click here. For more information on the Partnership’s public policy efforts, click here.  

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Legislature Adjourns: Update on Key Business and Education Policies

PUBLICATION NOTE: The Partnership will publish a comprehensive report on the 87th Legislative Session by June 15. In the meantime, please enjoy the final installment of our weekly update. Final Week In Review: End of the 87th Session In the final days of the 87th Legislative Session, an important school accountability bill gained agreement from both chambers, while a key economic development program did not pass. Just before midnight on Sunday, most Democratic Representatives departed from the floor and broke the House's quorum. Their absence prevented a final vote on Senate Bill 7. Governor Greg Abbott responded with a call for a special session. The Governor has the exclusive power to call the Legislature into special session and to determine what issues will be on the agenda. The Governor has not announced the timing of a special session or what issues the Legislature may consider. A special session was planned for this fall to consider redistricting, when data would be available from the U.S. Census Bureau. It is unclear if Governor Abbott will add issues to a special session that includes redistricting or if he will call a separate special session. Budget Sent to Governor Abbott The House and Senate approved the 2022-2023 biennial state budget for Governor Abbott's signature. The bill spends $116 billion in General Revenue and $248 billion over the two-year period. Public education reforms under House Bill 3 remain fully funded. Higher education funding also received an increase for enrollment growth. Funding for transportation and other budget areas remains largely flat from the current year. The Economic Stabilization Fund, also known as the Rainy Day Fund, is estimated to reach $11 billion, and it was not utilized to fund the new budget. As a result of actions taken by the House in the final hours of session, Governor Abbott threatened to line-item veto the budget article that funds the legislative branch. School Accountability Reforms Pass On the final day of the legislative session, the House and Senate approved Senate Bill 1365 by Senator Paul Bettencourt (R-Houston). The bill ensures the continuation of the state's accountability system and enhances intervention and sanction measures for perennially failing campuses and public school districts. Key provisions of the legislation include the clarification of the investigative authority of the Commissioner of Education and the Commissioner's ability to issue sanctions, appoint a board of managers, and provide intervention support services. The bill clarifies the definition of a D-rated campus as it relates to potential sanctions or intervention measures. A rating of D is now considered unacceptable performance under the accountability system. Finally, the legislation allows for all public school districts and charter schools not to be held accountable for campus and district ratings during the 2021-22 school year due to the pandemic's extreme impact on students' learning loss. Campuses and school districts will still be rated on the A-F accountability scale, but sanctions and interventions required under this law for multiple years of failure will not go into effect until the 2022-23 school year. The bill is now on Governor Abbott's desk, and we anticipate his final approval soon. Chapter 313 Fails to Pass After failing to meet a parliamentary deadline, House Bill 4242 by Representative Morgan Meyer (R-Dallas) which would have provided a two-year extension for the Chapter 313 economic development incentive program stalled in the Senate. The Chapter 313 program will expire on December 31, 2022. The short-term extension was the final effort to keep the program intact after a failed attempt earlier in the session to pass legislation that would have made broad reforms to the program.  COVID Business Liability Protections Pass Senate Bill 6, by Senator Kelly Hancock (R-North Richland Hills), heads to the Governor for his signature. The bill enacts a Partnership legislative priority, and one of Governor Abbott's emergency items, of providing legal liability protections related to the pandemic. The bill provides full defense against lawsuits for businesses, health care institutions, governmental entities, schools and higher education facilities acting in good faith and within posted government safety protocols from those who contract a disease during a pandemic. We expect Governor Abbott to sign this measure into law. Sign-up to receive Legislative and other Public Policy updates directly to your inbox.
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