Last Week in the Legislature

Hurry Up and Wait

By Kenneth Besserman
Director of Government Affairs and Special Counsel

March 31, 2023 | Issue 8

AUSTIN - This week, the Texas Legislature was in full committee hearing mode. In addition, both the House and Senate began to spend more time on the floor debating and passing bills. Committee agendas are getting longer, hearings are going later into the afternoons and early evenings, and every day that passes it becomes increasingly difficult to get bills heard in committees, passed and on to the floor for full debate and passage. The condensed nature of the Texas legislative session – only 140 days every two years – makes passing any bill very difficult, and March and April are times when many bills die or are put on the shelf for another day or another legislative session.

So Far, So Good

TXCPA has been working very hard this session to get ahead of the inevitable legislative slowdown. We have known for several months that the legislature will slow down significantly after the Easter break as negotiations begin over the state budget, property tax reform, power grid/ERCOT reforms and other hot button issues.

TXCPA has successfully moved our 120 hours to test legislation (SB 159/HB 797) through the Senate and the House committee and look forward to moving the bill to the House floor in the coming weeks. The legislation has received full support on its legislative journey.

In addition, legislation expanding the Fifth Year Accounting Scholarship Program to more accounting students – SB 951/HB 2504 – is still in good shape even though the bills have not yet had a committee hearing. TXCPA is in discussions with the bills’ authors (Sen. Charles Perry and Rep. Angie Button) and the respective Senate and House committees, and we are receiving good indications that the legislation will be set for a hearing soon.

Keeping Watch

This session, TXCPA has been working closely with our colleague trade associations, professional societies, business groups and others to monitor legislation that has a significant impact on business operations. While no particular bill specifically targets a CPA’s business operations, there are many bills this session that generally affect business liability, create private causes of action against businesses, and limit the ability of businesses to provide full and independent advice to their clients. Significantly, this session has seen a large increase in the number of bills creating causes of action, bills to allow the recovery of attorney’s fees/costs from business, and an increase in new criminal penalties against businesses and employers.

The Texas Civil Justice League (TCJL) – which has long monitored the civil justice system and represented businesses’ interests at the legislature – has put together an informative analysis of all the civil justice bills that affect the business community. TXCPA will continue to engage with TCJL and the general business community to monitor all of these bills, and support or oppose legislation where there is an interest to do so. We would like to hear from you if there is any bill(s) that interest you or your business.

Property Taxes

We have spoken in depth about property tax reform and the issue continues to be debated vociferously in the Capitol. The Senate and House are digging in their heels on their proposed solutions – increased homestead exemption vs. lowering appraisal increases. Both Lt. Governor Dan Patrick and Speaker Dade Phelan are standing firm on their proposals.

While both the Senate and House budgets contain significant funding for school districts in an effort to pressure local jurisdictions from the need to increase property taxes, the ultimate structure of property tax reform, and how much it will save homeowners, is still very much in question. Like many large tax proposals of past sessions, the solution will probably not be known until May as the session ends. Being such a high priority for the Big 3 (Gov. Greg Abbott, Patrick and Phelan) and many legislators, it is likely that a property tax solution will be found.

It’s Debatable

The other major issues debated this week in the legislature include bills addressing education savings accounts (vouchers), teacher pay raises, gender affirming care and transgender college athletes.

On a straight party line vote, the Senate Education Committee passed SB 8, which will allow families to use taxpayer money to send their children to private schools. SB 8 would allow parents who opt out of the public school system to access up to $8,000 per student to pay for a private school. The bill would also hold harmless small school districts so that they do not lose money if students leave their public schools. Smaller school districts would receive $10,000 every two years per student who leaves the school district. The legislation has been sent to the Senate floor for full debate where it will likely pass. House passage is less certain where many rural legislators and those who strongly support public education may seek changes to the bill.

SB 9 – the teacher pay raise bill – also passed the Senate Education Committee. While the exact amount of the pay raise is still to be worked out with the state budget writers, the passage is almost certain with the significant budget surplus that the state has.

Finally, the Senate passed legislation this week that will place restrictions on puberty blockers and hormone therapy for transgender kids. Prior to Senate passage, the Senate State Affairs Committee held a marathon hearing on the bill, spending hours and hours hearing from families, doctors and transgender individuals who were passionate on both sides of the issue. The debate over transition-related treatments has pitted many in the medical community against each other and against many legislators. SB 14 and its companion bill, HB 1686, are a priority of many in the legislature and, at this stage of the session, it seems likely that SB 14 will pass and be signed by the Governor.

Next week, the House of Representatives will begin debate on the House budget. House budget debate is always an interesting watch. House members routinely file well over 200 amendments seeking changes in the budget – everything from increasing or decreasing funding for particular programs to directing how state agencies can spend appropriated funds to legislators attempting to add policies to the budget. House debate on the budget typically goes late into the night and makes for entertaining watching. We will report back soon on what is in and out of the House budget as it makes its way to a conference committee.

See you next week. Less than two months left in the session.