State of the State Address – On Tuesday, Governor Greg Abbott delivered his State of the State address to a joint session of the Texas Legislature. He started out by saying, “I am honored to work with Lt. Governor Dan Patrick and Speaker Dennis Bonnen as we embark on this new session. On this very day, about 1,000 new residents will call Texas home. That happens almost every day. Whether you like that or not, we can never lose sight of the reason so many people make life altering decisions to uproot their families and businesses and chart new paths – paths that guided them to Texas.

They were fed up with big government policies increasingly running their lives and imposing burdensome regulations. They were taxed out of their states that some of their families had lived in for generations. The cost of doing business imposed by heavy-handed special interest groups simply became too oppressive. They needed an escape. They longed for freedom. They wanted hope. They found it in Texas. We may not be perfect, but to all the newcomers I talk to, they think Texas is a governmental Holy Grail. The newcomers have joined with long-time Texans, and together we have forged what has become the most powerful state in America.

We have achieved so much thanks to the tireless efforts of our elected officials, and more importantly, because of the hard work of everyday Texans eager to secure a brighter future. We will continue to build on our state’s successes. But we must also address the serious challenges that require nothing short of our complete attention for the people that expect our complete devotion.”

Emergency Items – The governor identified five emergency items that the legislature can now take up immediately including:

 In addition to the emergency issues, he discussed other key problems that he would like to see addressed this session. Among these are, taking care of the mental and physical health of veterans, fighting gangs and human trafficking networks in Texas, and fully securing the border.

Conclusion – The governor concluded, “No doubt, what I have outlined today is a transformative agenda. We have an opportunity to make Texas a far better state. We have the power to ensure Texas is a state where our citizens can realize their dream of owning a home or starting a business – where we prioritize student achievement and create safer schools. A state that puts public safety first, whether it’s in the face of natural disasters or dangerous gangs. A Texas where we expand economic opportunity and freedom to every corner of our state and where we provide our veterans with the support they deserve. What we must accomplish will require all of us working together on bold ideas. But Texas was built on bold ideas. It was built by the men and women who came before us who worked together to make Texas the most exceptional state in the nation. Now, it is our time to chart a course that will make Texas even better – not just for the next four years, but for the next forty years. We have an opportunity to turn bold ideas into reality. We have the opportunity to grasp the brass ring that belongs to Texas. When we do that, we will keep Texas the greatest state in America.”

Emergency Proclamation on Hurricane Harvey Recovery – Specific wording of Governor Abbott’s proclamation designating disaster preparedness as an emergency item for early consideration by the legislature is, “Legislation relating to emergency preparedness, response, and recovery.”

Border Security – On the issue of border security, the governor said, “I know we’ve long waited for the day when Texas would not have to provide funding to secure our border. And yet, the federal government still has not fulfilled its responsibility. As a result, I am once again asking that Texas step up and fully fund our border security program.”

Human Trafficking – Governor Abbott also talked about the problem of human trafficking, “We must also work together to crack down on human trafficking and to protect the victims of this heinous crime. I ask the legislature to increase funding to create six regional human trafficking squads. These squads will investigate and shut down human trafficking operations across Texas. And, absolutely every trafficker should get mandatory jail time. These predators should be locked up, not freely roaming our streets looking for victims.”

Veterans – The governor prioritized veterans’ issues saying, “We must not turn our backs on the service and sacrifice of the men and women who have worn the uniform of the mightiest military in the history of the world. As we know some return broken from battle with injuries both seen and unseen. Some cannot find a job. Others don’t know how to find a job. Still others are homeless, possessing only a glimmer of the glory they once fought for. They fought for our freedom.

Now we must fight for their future. Texas is home to more than 1.6 million veterans. This session we have an opportunity to do even more. That includes fully funding the mental health program for veterans at the Health and Human Services Commission. We must also fund the Texas Veterans Commission to help veterans receive the VA healthcare benefits they have earned. This session we will ensure that veterans get the best services Texas can provide so that the men and women who fought on the front lines go to the front of the line.”

ECONOMIC DEVELOPMENT:

Governor Abbott on Economic Development – In his State of the State speech, the governor said, “Texas leads the nation in new job creation. And we have the fastest growing economy in America. A by-product of this success is a prosperity that touches all corners of our state. Texas recorded its lowest unemployment rate ever. And wages are rising. Digging deeper, you’ll see that we lead the nation in jobs created by African-American business owners and Hispanic women business owners.

And get this – Texas is now number one for Women Entrepreneurs. The Texas economy is more diversified today than ever before. From aerospace to cybersecurity, financial services to manufacturing, from Fortune 500 companies to small businesses and startups. Texas is the premier economic destination in the United States. And Texas has led the nation in exports for 16 years straight. And for the past 5 years we’ve led the nation in tech exports. Now more than ever, the most powerful label is: ‘Made in Texas.’ Business expansions all across the state are the result of the Texas Enterprise Fund, which promotes economic diversification.

Texas remains America’s prime destination for businesses and job-seekers – in part because of actions of Senators and Representatives in this Capitol that helped foster opportunities for Texas’ economic prowess. You spurred more investment and business start-ups by slashing regulations and by cutting the business margins tax. You funded a road building strategy that provides than more than $7.5 billion for road construction each year.”

Governor Abbott on Energy – In his State of the State speech, the governor said, “We all know about another number one ranking – Texas is number one in oil and gas production. In fact, America will be energy independent by next year. Texas is helping emerging economies across the globe wean themselves off of coal and instead use clean burning natural gas produced right here in Texas.”

Texas Oil and Gas Association president Todd Staples responded, “As the Governor pointed out, Texas is number one in the nation for oil and natural gas production, and the Texas oil and natural gas industry is responsible for helping the United States achieve something that for decades has seemed unattainable – energy independence. Families, schools and businesses here in Texas, across the United States, and around the globe are better off because of the Texas oil and natural gas industry.

Our economy, our environment and our lives are improved because of innovative technologies that make energy exploration and production safer, critical infrastructure like pipelines that represent the safest and most reliable method of transportation for fuel, refineries that convert oil and natural gas into 96 percent of the everyday essentials that Texans use on a daily basis, and the ports that are exporting clean natural gas produced right here in Texas to communities across the globe. And even as production has increased, technological advancements have helped the United States lead the world in emission reductions, with CO2 emissions at their lowest levels in 20 years.”

Grocery Access Investment Fund Program – Last Friday, Representative Eddie Rodriguez (D-Austin) filed legislation that would establish a Grocery Access Investment Fund program to fund projects that seek to increase food access in low to moderate income communities located in under served areas. Representative Rodriguez serves as chair of the Texas House Farm to Table Caucus, the first bipartisan legislative caucus of its kind in the nation. The Caucus works to promote the production and consumption of local foods while addressing issues related to food access and food insecurity.

Representative Rodriguez said, “HB 1252 is about creating opportunities for food access projects to get off the ground when they might not be viable without additional funding from outside conventional channels. In both urban and rural areas across Texas, people have grown increasingly reliant on retail food stores to feed their families. Many communities, however, do not have a grocery store, are not considered by grocery chains to be potentially profitable markets and lack other food access points. In these places, the food ecosystem often revolves around the local corner store and its stock of highly processed foods.

The lack of access to choice contributes to negative health outcomes including poor nutrition and obesity. HB 1252 would create a ‘grocery access investment fund’ program to facilitate the raising of public and private funds for financing projects including grocery stores, mobile markets and farm stands that would increase access to healthy, local foods in low to moderate income communities located in under served areas. The program would be flexible enough to fund a variety of projects, including mobile markets and farm stands, as grocery stores are not appropriate for some communities. It would also promote the creation of local wealth, hiring of local residents and consumption of healthy food grown and made by local producers.”

Package Theft – On Monday, Representative Gene Wu (D-Houston) announced the filing HB 760 to defend consumers against the increasing problem of package thieves – commonly known as “porch pirates.” HB 760 would increase the criminal penalty for stealing packages addressed to a victim from the steps of a victim’s home. Currently, package theft is only prosecuted as a Class C Misdemeanor ticket or as a Class B Misdemeanor, like shoplifting.

Representative Wu said, “Package theft has been on the rise in recent years due to the increased market share of online shopping and home delivery services. Despite frequently having clear videos documenting the theft, these acts often go uninvestigated, and the offenders go unpunished. I hope that this legislation can encourage prosecutions and deter would be thieves who don’t think the police would ever bother. As a lawmaker, I am always hesitant to increase criminal penalties, but this is a different situation.

The current law is based on the value of the property stolen and not the nature of the theft. The value of most day-to-day deliveries would garner no more than a simple Class C ticket for the theft, and as such, law enforcement may be reluctant to spend scarce resources to track down a thief, and to issue a ticket. Additionally, stealing packages from a victim’s own home is much more of a personal violation of a victim than compared to stealing a six-pack of beer from the gas station.

More and more Texans are having their groceries, prescriptions, and daily items delivered straight to their door. Many of these thefts are taking place during work hours, when upstanding citizens are working hard to provide these delivered goods for their families. I want to ensure hardworking Texans are protected from these porch pirates.”

Package Store Ownership – On Wednesday, Senator Brian Birdwell (R-Granbury filed SB 645, which would remove the limit on package store ownership and the so-called “consanguinity loophole.” Current Texas law limits the number of package store permits a person can own to five with two exceptions or loopholes:

Senator Birdwell said, “This bill will remove a decades-old anticompetitive and unconstitutional limit on package store ownership and promote a free and fair market in Texas.” The provision was ruled unconstitutional by U.S. District Judge Robert Pitman in a March 2018 decision. Judge Pitman’s decision concluded that the consanguinity exception, is inconsistent with the Equal Protection Clause of the U.S. Constitution. The opinion stated, “The consanguinity exception is unconstitutional because it extends a benefit (the right to have more than five package stores permits) to some persons while withholding it from others without a rational basis.”

Distilled Spirits Council vice president Dale Szyndrowski said, “For generations, Texas law has unfairly granted some families the ability to own an unlimited number of package stores while restricting others to a maximum of five. This protectionist arrangement has enabled a handful of entrenched package store owners to dominate the market while restricting competition and, ultimately, choices for consumers. Texas laws should apply equally to all individuals, regardless of family lineage. Removing this protectionist clause would go a long way to modernizing the Texas Alcoholic Beverage Code, which is littered with outdated provisions serving no purpose than to restrict competition and protect special interests. It’s time to establish a modern framework to promote a free and fair market in Texas to promote competition, innovation and economic growth.”

Mental Health Care Consortium – On Tuesday, Senator Jane Nelson (R-Flower Mound) filed SB 10, which would establish the Mental Health Care Consortium to foster collaboration among health-related institutions with the goal of improving early identification and access to mental health services, addressing psychiatry workforce issues, promoting and coordinating mental health research, and strengthening judicial training on juvenile mental health.

SB 10 is nearly identical to her SB 63, which was filed in November and has since been designated as a Senate priority. Senator Nelson said, “I appreciate my colleagues for signing on as joint authors and the lieutenant governor for designating this as a priority issue. This initiative focuses heavily on identifying at-risk youth, getting them screened and into treatment so that they don’t present a danger to themselves or others.” All 31 members of the Senate have signed on as co-sponsors. Specifically, SB 10 would:

Health and Human Services Commission – On Wednesday, Governor Greg Abbott reappointed Courtney Phillips, Ph.D. to be the Executive Commissioner of the Health and Human Services Commission (HHSC) for a term set to expire on February 1, 2021. Commissioner Phillips is the first woman to be appointed as the Commissioner of HHSC in Texas.

Courtney Phillips, Ph.D. of Austin has served as the Executive Commissioner of HHSC since October 2018. She previously served as the Chief Executive Officer for the Department of Health and Human Services in Nebraska. Phillips received a Bachelor of Science in kinesiology and a Master of Public Administration from Louisiana State University and a Doctor of Philosophy in public policy from Southern University.

Governor Abbott on Public Education – In his State of the State speech, the governor said, “Our mission begins with our students. We are graduating more students from high school than ever before. But we have more students graduating who are not ready for college or a career. Only about 40 percent of 3rd graders are reading at grade level by the time they finish the 3rd grade.

Not surprisingly, less than 40 percent of students who took the SAT or ACT were prepared for college. To improve this, we must target education funding to help our students achieve in school. That starts with teachers in the classroom. Texas must recruit and retain the best and brightest teachers to educate our students. This session, we must pay our teachers more. We must provide incentives to put effective teachers in the schools and classrooms where they are needed the most. And we must create a pathway for the best teachers to earn a six-figure salary. The teacher pay system used by Dallas ISD shows this strategy works. Working together, we will create a Texas where every student is reading at grade level by the time they finish the 3rd grade. Where every child, regardless of their zip code, receives a quality education. And where every student graduates with more than just a diploma. They will graduate with the tools they need to excel in college or a career.”

Governor Abbott on School Safety – The governor also discussed school safety saying, “As we improve our schools, it’s not enough to give our students a quality education. We must create a learning environment that is safe. No student should be afraid to go to school. No parent should be fearful when dropping their child off at school. Texas must act now to make our schools safer, so I am making school safety an emergency item.

After the horrific shooting at Santa Fe High School, I held round tables with parents, students, educators, law enforcement, and mental health experts. We developed innovative solutions to better protect our children and teachers. It’s time to turn ideas into action.We must do all we can to make our schools safer. Working together, we will deliver on this promise to our parents, to our students, and to our teachers. When it comes to improving school safety, one solution everyone agreed on was the need to address mental health in our schools. I commend Senator Nelson, who wasted no time crafting a strategy that does exactly that.

As she has pointed out, many of our universities already have innovative mental health programs. Programs like the telemedicine wellness project at Texas Tech. It partners with school districts in West Texas to identify and remove students who pose a potential threat. And it provides students the help they need. School districts across Texas deserve access to these services. And as we all know, mental health issues are not confined to our schools. They touch our entire society.

To better address these needs, Senator Nelson provided a broad-based plan.

A plan that creates the Texas Mental Health Care Consortium to collaborate on statewide mental health needs. In typical Texas fashion, her idea is big and bold. To ensure it has enough time to become law this session, I’m declaring it an emergency item.”

Governor Abbott on Property Tax Reform – On the issue of property tax reform, the governor said, “I think we can all agree another emergency is property tax reform. If we are going to keep Texas the economic engine of America, we must rein in a property tax system that punishes families and businesses and prevents younger Texans from achieving their dream of home ownership.

We can no longer sit idly by while property owners are reduced to tenants of their own property with taxing authorities playing the role of landlord. Our constituents are counting on us. I applaud leaders of the Senate and House for working together in historic fashion on identical bills that limit the ability of taxing authorities to raise your taxes. At the same time, the state will be making new investments in education and reducing Robin Hood.

This isn’t just about restraining the growth of property taxes, it’s about restoring power to the people of Texas. That’s why I propose giving taxpayers the ability to fire their property tax appraiser and elect a better one. By taking these actions, we’ll do more than just reform our property tax system. We will ensure seniors who have worked their entire lives can afford to retire in a home they’ve already paid off. We will give hope to the next generation of Texans, that they too can realize their dream of owning a home. And we will ensure that middle and low-income Texans can remain in the neighborhoods they cherish. It is for those Texans that I am making property tax reform an emergency item this session.”

Emergency Proclamation on Property Tax Reform – Specific wording of Governor Abbott’s proclamation designating property tax reform as an emergency item for early consideration by the legislature is, “Legislation relating to reform of the property tax system by requiring voter approval to exceed a 2.5 percent rollback rate, by improving accountability in the selection of a chief appraiser, and by increasing transparency.”

Senate Property Tax Committee – The Senate Property Tax Committee met last Wednesday to take testimony on SB 2 by Senator Paul Bettencourt (R-Houston), the committee chair, which is the omnibus property tax reform bill. The committee heard from several witnesses.

Texas Taxpayers and Research Association president Dale Craymer testified saying, “SB 2 has three basic pillars:

Tax Visibility – We hear the word ‘transparency’ used in talking about this bill, but I quibble with that word. SB 2 does not make your property tax bill more transparent; it does just the opposite. It makes your bill more visible, and consequently, more understandable. That is exactly what the system needs. We strongly support the provisions of SB 2 that provide taxpayers a real time website on which they can see how proposed tax rates are going to affect their tax bill, who the decision makers are, and how they can make their opinion known before those rates are adopted. This process is standardized with uniform worksheets promulgated by the Comptroller that will be publicly available to taxpayers.

ARB Reforms – SB 2 provides improved training for Appraisal Review Board members and special panels with specific expertise to hear disputes over complex properties, along with a number of other reforms we view very positively including: time and dates of hearings, access to evidence from the CAD, protections against abusive determinations (ARB can’t raise your value), and protections against political influence over the appraisal process (taxing unit can’t

challenge).

Tax Rate Adoption Provisions – We have two areas of the bill that lead us to be neutral over-all on the bill, at this time. First, the bill strikes the current requirement by which voters may determine if their local schools may impose a tax rate for maintenance and operations (M&O) above $1.04. We would ask that the provision in current law be retained, regardless of what is done with school tax relief. Otherwise, within 5 years, property owners could see their school M&O tax rate climb to $1.17 without ever having an opportunity to vote on the increase. This would negate any benefits we might otherwise see with city, county, and special districts’ tax rates.

We would note that even at the $1.04 tax rate, under our school finance system school districts are guaranteed that they receive full funding for enrollment growth as well as additional equity funding based rising values. Second, in 2017 we supported the senate property tax bills in both the regular and special sessions. We believe that the 8 percent rollback threshold in current law does not reflect the realities of today’s inflation and economic environment.

Nor do we find the current petition requirement for an election to be workable in larger jurisdictions. We believe an election to exceed the rollback threshold should be mandatory, as SB 2 provides; however, we are unable, at this time, to say that a 2.5 percent rollback threshold is the appropriate level.”

Texas Association of Manufacturers president Tony Bennett registered a position of “neutral” on SB 2. He said, “Today, TAM is testifying “neutral” on SB 2, knowing there will be additional debate in the coming weeks to ensure a final rollback rate that is fair to both taxpayers and local governments. Many of our member companies operate major facilities within dozens of cities across Texas. TAM members want to ensure that our local communities have the resources they need for public safety, infrastructure and a high quality of life for our employees and their families. However, our member companies do agree with the general direction of this bill.

We certainly believe that the current 8 percent rollback rate is far too high. TAM is on record in previous legislative sessions favoring between a 4 percent to 6 percent rollback rate. Our members believe that the legislature will eventually reach an appropriate rollback rate that fits today’s more stable economic climate. TAM also agrees with the bill’s changes regarding appraisal review boards, transparency for tax rate notices, and taxpayer website information.

TAM members also applaud the fact that SB 2 is a solution that treats all taxpayers equally. Businesses and homeowners alike would benefit in the same way.”

Other Witnesses – The committee also heard from representatives of Galveston and Collin Counties, Center for Public Policy Priorities, Rice University’s Baker Institute for Public Policy, Texas Public Policy Foundation, Travis County Appraisal District, Texas Association of Appraisal Districts, Texas Building Owners and Managers Association, Center for Public Policy, Texas Oil and Gas Association, and several other individuals