Last Week in the Legislature
The Session Ends … Then Begins Again …
Then Ends (Maybe?)
By Kenneth Besserman
Director of Government Affairs and Special Counsel
June 2, 2023 | Issue 16
AUSTIN - The 88th Session of the Texas Legislature ended on May 29, with serious disagreements on significant issues, in-fighting between the Big Three (Governor Greg Abbott, Lt. Governor Dan Patrick and Speaker Dade Phelan) and an impeachment of Attorney General Ken Paxton with a summer Senate trial on the horizon. The end of session dynamics were unprecedented and should make for an interesting summer and fall – the Senate impeachment trial and multiple special sessions.
Success for TXCPA
First, let us get to the very good news for the CPA and accounting profession and TXCPA. This session, the legislature and TXCPA took some very big steps in addressing the CPA pipeline. There are strong headwinds facing many professions from demographic changes, higher education challenges and affordability, job expectations and requirements, and salaries. This session, TXCPA, along with our partners in the legislature, advocated for two bills to begin to address the pipeline by allowing students who are ready to begin the CPA Exam process a bit earlier in their education journey and to provide some additional accounting scholarship opportunities to more students.
SB 159 – allowing students to begin to take the CPA Exam after completion of 120 hours of education and 21 hours of upper-level accounting – was signed by the Governor and is now the law. The change in law becomes effective on September 1. This was a big change for Texas, and TXCPA is working hard on making sure the rules work for students, educators and the Texas State Board of Public Accountancy.
The second bill, HB 2217, includes an expansion of the State Board’s Fifth-Year Scholarship Program. The legislation will expand the number of students who would be eligible to receive a scholarship to include accounting students who have completed at least 15 hours of upper-level accounting. Governor Abbott has until June 18 to sign the bill.
Both of these bills are important steps in addressing the pipeline and it was a heavy lift to get these bills moving early on in the legislative process to avoid the inevitable end-of-session meltdown. We will be back with more information on both of these bills in the coming months about how students can take advantage of the legislation in their path to CPA licensure.
The legislature is constitutionally required to only pass one bill every session – the state budget. The legislature did pass a $300+ billion budget – spending some of the $32+ billion budget surplus but leaving a significant portion unspent – addressing some important issues, such as water infrastructure projects, expanded broadband, expanded Medicaid eligibility up to 12 months for post-partum mothers, and a 13th check for retired teachers. There were a number of appropriations placeholders left in the budget, including billions for property tax reform, school vouchers (Educational Savings Accounts) and a teacher pay raise. The state budget passed with about four or five days left in the session.
All eyes turned to property tax reform – would the conference committee agree to the Senate version of an increased homestead exemption or the House version of a lowering of property tax appraisal increases? At one point, it appeared that a deal had been struck, but on the last day of the session, the House and Senate could not agree on a compromise. This left the Big Three bickering, pointing fingers and accusing each other of not living up to campaign promises of significant property tax reform.
So, echoing back to the blog’s title, the Governor immediately called the legislature back into a special session to address property tax reform through “compression” (enable lower, or compressed, local property taxes by providing more state funding for public schools) and increasing penalties for human smuggling.
In a move not seen ever or in recent memory, the House met, passed its version of property tax reform – putting over $12 billion into the public school system in order to compress property tax rates imposed by school districts thereby lowering property tax rates – and then immediately adjourned. This left the Senate in the very awkward position of having to accept the House’s version of property tax reform or itself adjourning and, once again, the legislature not addressing property tax reform.
At the time of this writing, the Senate is to meet on Friday, June 2 and we will see what transpires. In the meantime, the Governor has come out in support of the House plan, further damaging the fragile relationships between the Big Three. This means legislators are likely to be hanging around Austin for a while this summer as they tackle property tax reform and whatever else the Governor decides to add to future special session calls.
The end of the session also witnessed only the third impeachment of a state official in the state’s history. Attorney General Ken Paxton, who has been under legal and ethical scrutiny for a number of years, was impeached by the Texas House by a vote of 121-23 – an overwhelming majority of both parties. It was a whirlwind last week of the session as the House took up the 20 impeachment articles on the penultimate day of session. After impeachment, the House delivered the articles to the Senate, which is scheduled to adopt impeachment rules in the coming weeks and then conduct a Senate trial before the end of August. Only two House members, Reps. Senfronia Thompson and Tom Craddick, were present at the last House impeachment in 1975 of a state district judge.
This is the final regular session Last Week in the Legislature. We will have more updates during the special session and be back with more information about the bills passed addressing the CPA profession. The advocacy efforts of TXCPA leaders, volunteers, advocates and members made our success possible.
A special thank you to Denise Davis and Lisa Kaufmann of Davis Kaufman, our contract lobbyists, for helping us push through this important legislation. They have provided us with a review of the session that contains a lot of insight on the big issues of the session and the upcoming impeachment trial.