This week, the Senate Committee on Business & Commerce hears economic development incentive legislation, the state allocates dollars for flood mitigation, a bill to help renovate Houston’s George R. Brown Convention Center inches closer to the finish line, and health care and energy bills move through the process. 

LATE BREAKING NEWS: Moments ago, House Bill 8, legislation to shift the state’s community college financing system toward an outcomes-based and industry-aligned model, passed the Senate 31-0. The House will need to concur with Senate amendments before it heads to the Governor’s desk. 

Economic Development Incentives Bill Heard in Senate Committee

On Thursday, the Senate Committee on Business & Commerce heard the Committee Substitute for House Bill 5, which would establish a new economic development incentive program for Texas. 

The Senate sponsor and Chairman of the Committee, Senator Charles Schwertner (R-Georgetown), made significant changes to the bill’s eligible projects and job requirement numbers, among other provisions, in his substitute. Over 90 witnesses signed up to testify on the bill, and the hearing went late into Thursday evening. 

• Why it matters: Establishing a new economic development incentive program is critical for ensuring Texas can keep competing globally for large-scale, capital-intensive projects. 
• What’s next: House Bill 5 was left pending in committee Thursday night. The bill could be voted out of committee at the next called committee meeting. If the bill clears the Senate floor, a conference committee will be necessary to work out differences between the House and Senate versions. 

Flood Mitigation Funding in Budget
 
This week, the legislature’s Senate and House budget conferees released their funding decisions for House Bill 1. The line items include a $350 million Flood Infrastructure Fund (FIF) allocation and a nearly $600 million appropriation to the Gulf Coast Protection District (GCPD).

The FIF is a statewide grant and loan program for flood mitigation projects. The Partnership advocated for establishing the FIF in 2019, and its replenishment has been an executive priority for the Partnership this legislative session.

• By the numbers: As of February 2023, the greater Houston region received more than $159 million of the initial $793 million FIF appropriation, meaning Houston received 20% of the original fund dollars for flood mitigation projects.
• What’s next: Senate Bill 30, the supplemental funding bill, which has yet to reach conference committee, includes additional funding for FIF through federal ARPA dollars. If FIF can capture its full funding potential, its replenishment amount could reach $1 billion or more.

The GCPD was created in 2021 by the Texas Legislature to become the non-federal sponsor of the Coastal Texas Program, a barrier flood gate and levee system along the Texas coastline. 

• What’s next: the Texas Legislature’s investment in the GCPD will fund the state’s portion of the 35% state-local match requirement to begin constructing the Coastal Barrier project.

Houston in Focus: GRB Bill on the House Floor

This week, a parliamentary maneuver on the House floor forced Senate Bill 1057 by Senator John Whitmire (D-Houston) to be sent back to committee. The bill would allow the City of Houston and Houston First to receive funds for much-needed improvements to the George R. Brown Convention Center. 

The additional revenue would be received by the entities through access to portions of certain downtown hotel taxes. Other large cities in Texas, like Dallas and Fort Worth, have enjoyed the same opportunity through similar legislative action. 

The bottom line: The Convention Center first opened its doors in the fall of 1987, and despite some notable renovations over the years, it has become clear that the convention center needs a significant modernization effort to remain competitive to attract large conventions. 

Next steps: Senate Bill 1057 is quickly making its way back through the process in hopes of being back on the House floor prior to Tuesday’s deadline for the House to pass all Senate bills.

Broadband Bills Gain Momentum
 
On Thursday, the Senate passed House Joint Resolution 125 and its enabling legislation, House Bill 9, by Representative Trent Ashby (R-Lufkin). The bills provide transformational funding Texas needs to expand access to broadband services statewide. 

The committee substitutes adopted by the Senate Finance Committee made significant changes from the House version in removing the funding amounts and providing funding that will be decided through the appropriations process. In the House version of the bills, the legislation allocated $5 billion to the Texas Broadband Infrastructure Fund, which would be administered through the Texas Comptroller’s Broadband Development Office. 

What’s next: The bills will be sent back to the House to approve the Senate’s amendments. If the House does not concur with the changes, the differences will be addressed in conference committee. Finally, the issue will go to the voters for approval this November if signed into law. 

Houston in Focus: The Texas Broadband Infrastructure Fund, accompanied by federal IIJA dollars, will provide an unprecedented amount of broadband infrastructure dollars that the Houston region could compete for to bring funding to our communities.

Health Care and Life Sciences Bills Advance
 
Postpartum Medicaid Expansion: 

• This week, the Senate Committee on Health and Human Services heard House Bill 12 by Representative Toni Rose (D-Dallas), which would extend Medicaid coverage for postpartum mothers for a full 12 months after birth. The bill passed the House in late April and has received substantial support from Houston’s regional stakeholders and state partners. The bill was successfully voted out of the committee and now heads to the Senate floor.
• By the numbers: In December 2022, the Maternal Mortality and Morbidity Review Committee and the Department of State Health Services submitted a joint report that found 44% of maternal death cases in Texas occur within one year of pregnancy. Additionally, the report found 90% of those deaths could have been prevented.

Health Care Workplace Violence: 

• Earlier this week, Senate Bill 240 by Senator Donna Campbell (D-Austin), which addresses rising workplace violence in health facilities, was signed into law by Governor Abbott. 
• Why it matters: The bill provides tightening of preventative safety measures for health care facilities to combat the rising number of violent incidents in recent years. Additionally, health workers will have access to the services and care they need following potential violent incidents. 

Life Sciences Tax Exemptions: 

• This week, Senate Bill 2289 was reported out of the House and the Senate, clearing the way for it to be sent to the Governor. If signed, it will be up to the voters in November for final approval.
• Senate Bill 2289 / Senate Joint Resolution 89 by Senator Joan Huffman (R-Houston) will exempt the pharmaceutical, medical device, and PPE manufacturing industries from paying taxes on their inventory, machines, and equipment. By prioritizing medical and biomedical R&D and manufacturing, state leaders seek to enable health entrepreneurs to continue to flock to Texas – cementing the state’s role as the epicenter of health care and research.
• The big picture: Texas’ medical, biomedical, and pharmaceutical companies are currently at a disadvantage compared to their counterparts in other states due to the state’s combination of real property, equipment, and inventory taxes. Texas's effective tax rate for this industry is 28.3% – more than double the next highest competitor state, North Carolina. In fact, Texas’ largest competitors in this sector, North Carolina, Massachusetts, Tennessee, Illinois, and Pennsylvania, all have an effective tax rate below 13.5% for this industry.

Workforce and Energy Bills Move 
 
Texas Technology and Innovation Program:

• What’s Happening: House Bill 2466 by Representative Angie Chen Button (R-Richardson), a bill establishing the Texas Technology and Innovation Program, was heard in the Senate Natural Resources and Economic Development Committee on Wednesday. The bill was left pending by the committee.
• Why it Matters: This program would provide eligible businesses which have received grants or contracts from the federal Small Business Innovation Research (SBIR) or Small Business Technology Transfer (STTR) programs with an additional state matching grant.

Energy Transition:

• What’s Happening: On Wednesday, a series of bills that would help Texas’ competitiveness in the energy transition were heard and left pending in the Senate Natural Resources and Economic Development Committee with no testimony in opposition. 
  • House Bill 2847 by Representative Drew Darby (R-San Angelo) relating to the jurisdiction of the Railroad Commission of Texas and hydrogen.
  • House Bill 4885 by Representative Brooks Landgraf (R-Odessa) relating to programs established and funded under the Texas Emissions Reduction plan.
  • House Bill 3837 by Representative Charlie Geren (R-Fort Worth) relating to the designation of advanced clean energy projects.
• Why it Matters: Collectively, these bills would help advance hydrogen infrastructure in Texas and boost Texas’ three regional hydrogen hub applications vying for $7 billion from the U.S. Department of Energy – two pending applications are from the Houston region.

During the 88th Legislative Session, the Greater Houston Partnership will provide a weekly update on newsworthy items from Austin. You can view more policy news and archives of our weekly updates here. Subscribe here to get our weekly legislative updates.