During the 86th Legislative Session, the Partnership will provide a weekly update on our top executive priorities and other newsworthy items from Austin. 

With key legislative deadlines now in sight, state lawmakers are pressed to move their bills through committee in the next two weeks to be eligible for floor consideration. On Monday, Senator Paul Bettencourt (R-Houston) garnered the nineteen votes needed to bypass the regular calendar of business and debate Senate Bill 2, the upper chamber’s major property tax reform package. The Senate passed SB 2, which caps property tax revenue growth for cities, counties, school districts and special districts, and the vote avoided any break with tradition in Senate procedures. The bill now heads to the House Ways & Means committee. A potential sales tax increase continues to attract attention in property tax and school finance reform negotiations. 
  
PARTNERSHIP EXECUTIVE PRIORITIES
Public Education – Sales Tax 
As discussed last week, Governor Greg Abbott, Lt. Governor Dan Patrick and House Speaker Dennis Bonnen have voiced their support for increasing the state sales tax in exchange for reducing local school district property taxes. On Wednesday, House Public Education Committee Chairman Dan Huberty (R-Kingwood) laid out House Joint Resolution 3, which would raise the state sales tax by one percent from 6.25 percent to 7.25 percent. He framed the bill as a balanced approach to fulfilling Texans’ desire for ongoing, lasting property tax reductions and decreasing the state’s reliance on local property tax revenue. Eighty percent of the revenue raised would go towards lowering local school district property taxes, and 20 percent would provide additional funding for public education. In Houston, the sales tax rate would increase to a total of 9.25 percent. The House proposal to direct a portion of the new revenue to public education is at odds with the Senate’s version, which is entirely dedicated to lowering property taxes. The Senate’s approach is also favored by Governor Abbott. 
  
WEEK IN REVIEW
Property Tax Reform 
There was high drama in the Senate this week with Lt. Governor Patrick threatening to dispense with decades of tradition to bypass the regular calendar of business in order to take up and pass property tax legislation with a simple majority. Ultimately, Senator Kel Seliger (R-Amarillo) voted to advance Senate Bill 2, the property tax bill, he then voted against final passage. 

The hallmark of SB 2 is a 2.5 percent property tax revenue rollback rate for all school districts and a 3.5 percent rate for all other taxing entities, including cities, counties and special districts. In the other chamber, the House property tax bill exempts school districts, community colleges, hospital districts and emergency service districts and contains a 2.5 percent revenue rollback rate for all other entities. House leaders have stated their intention to address school property taxes within the school finance legislation. Both bills overhaul the property appraisal system, with changes to the operation of appraisal boards and increased guidelines for standardizing the rate setting and rate appeal processes. State leaders continue to reaffirm their commitment to meaningful property tax reforms with the final language inextricably tied to school finance negotiations. 
  
Municipal Issues 
Four bills authored by Senator Brandon Creighton (R-Conroe) designed to override a patchwork of local ordinances governing paid sick leave and other employer-employee benefits have now passed the Senate. Senate Bill 2485, Senate Bill 2486, Senate Bill 2487 and Senate Bill 2488 have been referred to the House Committee on State Affairs. Each bill curtails local municipalities’ involvement in employer-employee agreements and according to independent legal analysis, do not conflict with existing non-discrimination ordinances. 
  
Ports 
The House Transportation Committee, chaired by Representative Terry Canales (D-Edinburg), voted out two bills impacting the Port of Houston. House House Bill 4445 enshrines the recent Port Commission resolution on two-way ship traffic into law for two years and requires that any new rules governing two-way ship traffic must be supported by at least 80% of ship pilots. Bill 4436 creates a new Pilot Commissioners Board and moves jurisdiction of ship navigation and safety rules from the current Port Commission to the new stand-alone board. Both bills are authored by Chairman Terry Canales and mirror legislation, authored by Senator Brandon Creighton (R-Conroe), which passed the Senate several weeks ago. 

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