Last Week in the Legislature

By Kenneth Besserman
Director of Government Affairs and Special Counsel

May 28, 2021 | Issue No. 18

We Have Been Here Before

With three days to go in the 87th regular session, the Texas Legislature is reverting back to form. We have seen the Senate and the House blame each other for killing bills or failing to adequately debate high profile bills, state leadership arguing with the governor about priorities and possible special session topics, the budget about to pass with near unanimity, and many important pieces of legislation have been hammered out behind closed doors with little or no public debate. All in all, the ending of the session is no different than previous sessions.

Good Signs

TXCPA priorities have not been imperiled this week by the squabbling and retributions happening between the two chambers.

  • SB 297 – legislation to extend the CPA fingerprinting deadline by one year to August 2022 – is now sitting on Governor Greg Abbott’s desk awaiting his signature.
  • HB 1195 – loans forgiven under the Paycheck Protection Program are excluded from Texas franchise taxes – has been signed and is now the law. (Related article: Texas Franchise Tax Update)
  • Finally, SB 6 – the Pandemic Liability Acthas been passed by the House and the Senate and is now awaiting Senate approval of the House changes to the bill before it is sent to the governor.

All signs and information from our Government Affairs team and our lobbyists team indicate that SB 297 and SB 6 are in good shape and should be signed by the governor. Typically, the governor has to sign or veto a bill within 10 days of receipt, but any bill that arrives on the governor’s desk in the last 10 days of the legislative session allows the governor to sign or veto a bill up until the end of the veto period (20 days after the session ends – June 20 this year).

A Special Session

Some headline news this week is that Lt. Governor Dan Patrick has increased the calls for a special session after the Texas House did not pass a few of his legislative priorities – the ban on transgender students playing high school sports on a team of their identified gender; barring local governments from hiring lobbyists; and regulating social media’s ability to silence users.

All three of these items were on the lieutenant governor’s legislative priorities list since the beginning of the session. Patrick has asked the Abbott to call an immediate special session in June to address these issues. The governor has said that he will be calling a special session in the fall to address redistricting and the appropriation and authority of additional federal stimulus funding that is available to the state and local jurisdictions.

Other Legislation

The controversial constitutional/permitless gun carry legislation – allowing individuals to carry a gun without a license or training – has now passed both houses and is headed to the governor’s desk. The legislation engendered a lot of debate in the House and Senate and even saw many law enforcement agencies and associations voice serious concerns about the legislation. Many businesses and business groups also voiced significant concerns. Nonetheless, both houses passed the bill with significant majorities.

Other controversial social issues being debated and passed include a prohibition on the teaching of critical race theory in public schools and a bill to require sports teams that receive state funding or tax breaks to play the national anthem at events.

The background on much of the controversial legislation that is passing this session is that Texas is still a very conservative state – at least the House and Senate makeup trends more conservative. Much of this legislation is being advanced because Texas still is a primary state – meaning that most elections in Texas are decided in the primaries and not the general election.

The Grid

The Electric Reliability Council of Texas (ERCOT) and power grid reform still remains one of the biggest issues left unresolved at this late date. The legislation that is currently moving, and which has the highest probability of passing, is legislation that would require natural gas facilities to prepare (weatherize) for extreme weather. Penalties could be imposed on those facilities that do not take the necessary weatherization steps. The legislation would also reform ERCOT management and give the PUC some additional oversight authority.

The big unanswered questions are who will pay for the large weatherization costs and who will pay for the power generator overcharge and price spikes that the generators faced in the February winter storm. Will the legislature appropriate funds to cover those costs or will the generators be allowed to pass along those costs to ratepayers? The House and Senate are working to negotiate language to address these issues and we will see how it turns out and whether Texas will be adequately prepared for another extreme weather event.

Save the Date: June 4

Stay tuned for our TXCPA Facebook Live event on June 4 with our lobbyist Denise Davis as we discuss the legislative session and look forward to what a special session will look like.

Only threee days to go.

 

 

 

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