There is one week remaining in the 88th Regular Session of the Texas Legislature. Some issues have been settled, but there remains more than a few still up in the air before the bodies adjourn sine die on Memorial Day.
Here’s a rundown of where the top issues stand.
Budget
Settled, mostly.
The one constitutional requirement of the Legislature is to pass a budget for the next biennium. The two chambers each passed a 2024-2025 budget exceeding $300 billion, with about a $6 billion difference between the two.
A conference committee between the two chambers announced their final settlement on most of the differences between their respective versions, though there still are some questions contingent on the final passage of pending legislation such as property taxes — on which both chambers have different target dollar figures for different purposes — and the state’s potential subsidization of dispatchable generation development for the Electric Reliability Council of Texas (ERCOT) power grid.
Once the dust settles on the rest of the legislation, much of which has attached fiscal notes for constitutional funds that exist outside the state’s general revenue fund, a final dollar amount for the next-biennium budget will be realized.
School Choice
Dead, mostly.
The Texas Senate passed an $8,000-per-student Education Savings Account (ESA) program in Senate Bill (SB) 8 at the beginning of April, but it languished in the House for a month until the Public Education Committee Chairman Brad Buckley (R-Kileen) introduced a substitute. That substitute made substantial changes to the Senate engrossed version, which was summarily watered down even more to only apply to special education students and those at “F”-rated schools.
Gov. Greg Abbott announced his disapproval of this new version, saying that he would veto it. He then threatened to call special sessions to get the item across the finish line, and Buckley waved the temporary white flag — all but putting to bed the idea of school choice reform passing in what’s left of the session.
However, Sen. Brandon Creighton (R-Conroe) resurrected a glimmer of hope on Monday morning when he amended House Bill (HB) 100, a teacher pay raise and school finance bill, to include his “Teacher Bill of Rights” and other provisions from SB 9 along with the ESA language in SB 8. The committee then voted it out.
If passed in the upper chamber, that amendment bill will move back to the House for possible concurrence — requiring an up or down vote on school choice in the lower chamber that’s only had two symbolic test votes on the issue — lest a conference committee be triggered, at which point all bets are off.
The path to passing school choice took another twist on Monday morning, but whether it changes anything substantially remains to be seen.
If not, at least one special session awaits.
Border Security
Battered.
The most consistent top-polling issue in Texas for a few years has been border security — now more timely than ever with the expiration of the federal government’s Title 42 provision that allows expedited deportations of illegal immigrants.
The State of Texas has long maintained operations on the southern border to try and stem the tide of illegal immigration, and its Legislature made buttressing those state actions a priority this session. The Texas House had three border-related priority bills this session, including HB 7’s $95 million in funding for court administration, prosecution, and other legal-related actions on the border; HB 20’s creation of the Border Protection Unit (BPU) and invocation of the constitution’s “invasion” clause; and HB 800’s increase to a third degree penalty for human smuggling.
HB 7 and 800 both await a vote in the Texas Senate, but HB 20 died by point of order before a key House deadline earlier this month. House Republicans tacked HB 20’s BPU language onto HB 7 in an amendment to salvage that portion of the bill, but the rest of it is in the graveyard.
The state’s budget has a $4.6 billion appropriation for the continuance of Abbott’s border security program Operation Lone Star, but these other bills are intended to supplement the operation already in place. Meanwhile, the state and federal forces on the border continue to encounter thousands of illegal border crossers daily.
Property Taxes
Stalemate.
The Texas House and Senate are embroiled in a bitter standoff on one aspect of their efforts to tweak the property tax system. On this issue more than any other, the leaders of the two chambers — Lt. Gov. Dan Patrick and Speaker Dade Phelan (R-Beaumont) — have clashed frequently and publicly.
The Senate wants school district tax rate compression paired with an increase in homestead exemptions and business credits, while the House prefers rate compression paired with a reduction and expansion of the appraisal cap. The respective plans have stalled out in their opposite chambers.
Last week, the Texas House made one last attempt to find a compromise and upped the ante by pairing their $12 billion in 15-cent rate compression with $4.3 billion to raise the homestead exemption to $100,000 — double the increase outlined by the Senate — along with the 5 percent appraisal cap for all real property, not just homesteads.
The Senate hasn’t even publicly commented on the plan, let alone touched it in committee. But the new fiscal year begins in September and local governments will begin setting their rates this summer.
On this issue more than almost any other, the need for a compromise seems urgent due to the timelines associated with it. But the most urgent deadline in the immediate future is Wednesday, when the Senate must pass all bills.
School Safety
Imminent.
Every issue has some sort of disagreement in the Legislature, but due especially to the Robb Elementary School massacre in Uvalde last year, there is less rigid obstruction on passing school safety measures.
There are two main bills for the purpose of hardening schools this session: HB 3 and SB 11.
On Sunday evening, the Senate passed HB 3 with the House set to consider SB 11 on Monday. As passed in the lower chamber, HB 3 requires every school to have armed security and allows trained school employees to meet the requirements laid out by the bill; it also provides $100 per student for schools to fund a variety of security measures.
The House also passed HB 13 which provides for emergency preparedness training, but it has not even been considered in the Senate Education Committee.
Meanwhile, SB 11 will be considered on Monday on the House floor. It also provides security funding and outlines appropriate purposes, but it lacks the House’s mandate for armed security at every school campus.
Unlike with property taxes or school choice, there is a nearly 100 percent chance that something is settled between the two chambers on this issue given its sensitivity.
Power Grid
Close.
A hot summer tinged with a warning lies ahead for the state’s largest power grid. ERCOT grid regulators announced this month that for the first time ever, they expect electricity demand to exceed the dispatchable generation capacity’s ability to match it.
That makes the state’s insistence that more dispatchable generation be built in Texas all the more pressing. There are three main bills pending in the Texas House on Monday on that issue. SB 7 would create a “firming requirement” — a mandate that namely renewable generators supplement their main units with backup power during their intermittency. It’d also establish a new ancillary service product called a “Dispatchable Reliability Reserve Service,” another fleet of break-in-case-of-emergency generators for when the grid gets tight; an analysis from the Consumer Fund of Texas released on Sunday estimates it to cost $4 billion per year.
Finally, it would set guidelines for the Performance Credit Mechanism (PCM), the preferred ERCOT market reform of the Public Utility Commission, that would divvy out financial rewards for generators who produce in stressful periods. It’s intended to drive investment by generators toward building more power plants.
That PCM language was added as a backup provision in case another PCM-focused bill, SB 2012, cannot get across the finish line. The main difference between the two is that SB 7’s PCM language contains a $1 billion annual and netted cap while SB 2012’s is a $500 million net-per-year cap.
The third item to watch in the House on Monday is SB 2627, which is a second go at a subsidization program for the development of new, mainly natural gas power plants. The previous attempt was SB 6, a more direct subsidization, which was pocketed by the lower chamber.
SB 2627 would create a loan program plus bonuses for the construction of the power plants, with a goal of building 10,000 megawatts more of capacity in ERCOT. The House’s and Senate’s plans differ in the interest percentage of the loans and structure of the bonus allotment, but both would require the generators to pay rather than SB 6’s grant money.
There is a lot of trepidation about this coming summer among state officials, even among those who’ve been previously bullish about outlasting the summer heat. But as Texas’ population continues to expand and businesses flock to the tax-friendly state, the demand for electricity just grows.
Social Issues
Sprinting.
The session after Republicans notched two massive social issue wins — abortion bans and constitutional carry — they’ve followed it up with a ban on child gender modification, restrictions on drag performances in front of children, and an extension to colleges of the mandate that athletes compete within categories based on biological sex.
It was a bumpy road through the Texas House — two temporary deaths by points of order — but SB 14’s ban on child gender modification finally made it through and now awaits a signature from Abbott.
SB 15’s collegiate extension of the transgender sports restriction has passed both chambers, but the Senate must concur on the House’s amendments or else trigger a conference committee. SB 12, the restriction against children being present at sexually oriented performances by making the business owner civilly liable, has passed the lower chamber on an initial vote. But it must again pass on third reading before moving back for the Senate to weigh in on the House’s changes, which includes removing specific mention of drag performances.
Across the rotunda, HB 900 and its ban on sexually explicit materials in school libraries has passed the House and is expected to be voted on in the next couple of days — despite some trepidation among some of the Senate committee over potential amendments.
Each of these bills appears primed to reach Abbott’s desk.
State Versus Local
Contentious.
One of the highest-profile bills this session that wasn’t on either chamber’s priority list — and one that received a massive amount of outside laud and ire — was HB 2127, a preemption bill that flipped the unceasing state-versus-local fight at the Legislature on its head.
Typically, when the GOP-controlled state pushes back against localities it deems to have overreached, the Legislature passes a form of “conflict preemption”; it did that last session with its statewide homeless camping ban and restriction on municipalities cutting police department funds.
But this session, rather than continue to play legislative “Whac-A-Mole,” state Republicans opted for a “field preemption” approach by which the state precludes local governments from regulating beyond what’s laid out in nine specific sections of code. The bill passed the House with eight votes from Democrats in April and was given approval by the Senate last week.
The bill then moved back to the House, which voted to concur with the Senate’s amendments, sending the bill to Abbott’s desk — who has previously endorsed the bill.
Other notable bills include HB 3899, aimed at Austin’s Project Connect and the permanent tax rate increase passed in 2020 to finance part of the light rail project; HB 4082 which would curtail local governments’ use of certain non-voter-approved spending for capital projects, a direct response to Amarillo’s $260 million end-around voters to expand its convention center; and HB 3053 to allow certain areas annexed by 500,000-people-plus cities without voter approval before the 2017 reform became effective to disannex.
The disannexation bill passed both chambers and the other two await approval from the Senate.
Another bill awaiting Senate approval is HB 14 which would expedite the building permitting process, which can be very onerous at the local government level.
There are always many bills filed and advanced pushing back on things local governments have done during the interim and this session is no different.
Emergency Powers Reform
Pending.
Last session, reform to the state’s emergency powers was top of mind after an interim full of state and local government shutdowns and mandates. This session, COVID-19 is firmly in the rearview mirror, but still visible.
With a less contemporaneous feel to the pandemic, a door has opened to push through that which couldn’t get across the finish line last session in reforming emergency powers. SB 29, a Senate priority bill, would ban mandates of masks and vaccines along with prohibiting business closures only in terms of COVID-19. It awaits a vote on Monday alongside the power grid bills.
Its broader sibling bill, SB 1104, is on the House’s Tuesday floor calendar. It would strip the governor of the ability to curtail business operations during a state of disaster and requires him to convene a special session of the Legislature to make those decisions if the need arises. It also prohibits local governments from issuing disaster declarations that conflict with the state’s orders.
Another bill on Tuesday’s calendar is SB 177 that’d prohibit public and private entities from mandating COVID-19 vaccination as a condition of employment.
Gov. Greg Abbott said in January that he would continue renewing the state’s COVID-19 disaster declaration — and thus his related executive orders — until the Legislature passes reforms banning mask and vaccine mandates.
The Horse-Traders
Moving.
Each session, there are priority bills in one chamber that are relative non-starters in the other except in the context of legislative “horse-trading” — items used as political chips to ensure other priorities are ushered through.
The most prominent example is the House’s proposed replacement of the Chapter 313 tax abatement program, intended as a carrot to attract businesses to Texas. After lingering in the Senate for a couple of weeks following House passage, the Texas Senate Business & Commerce Committee advanced on Sunday a substitute to the lower chamber’s version.
Both the House’s version and the subsequent Senate version differ substantially from the no-longer-operational Chapter 313 program, including in that it excludes renewable generators from the abatements. Because the House wants it so badly, it is a massive bargaining chip for the Senate to use. But its movement signals the chamber that tanked Chapter 313 renewal last session will pass some form of replacement.
Meanwhile, two top Senate higher education priorities await approval in the House. SB 17, a prohibition against university diversity, equity, and inclusion (DEI) offices, passed on second reading last Friday after 10 hours of debate with a pair of amendments. It must pass again on Monday to move back to the Senate.
The other university-aimed bill is SB 18, passed by the Senate as a total ban on tenure at institutions of higher education. The House’s version altered that ban to a version that allows tenure to be given only with the approval of the university’s governing body. It was on the Texas House floor for a vote on Thursday, but Democrats successfully point-of-ordered the bill, kicking it off that day’s calendar and requiring its recommitment to committee to fix the problem.
It’s back on Monday’s calendar for a vote, but the deadline to fix further issues in committee has passed, and thus there’s no room for a do-over.
Late on Sunday evening, the Senate approved something the House has pined for since last session — extension to one year of the state’s postpartum coverage under Medicaid. Last session, the House passed a one-year extension but the Senate only approved a six-month extension — so the two chambers compromised and went with the six-month option.
But the House is back with the one-year bill again, and passed HB 12 back in April. Yesterday, a few days following Phelan’s appearance in the Senate chamber and Patrick’s announcement that the two had a “good meeting,” the Senate acted on it — though it amended the bill to prohibit that coverage from paying for abortions.
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