LEGISLATIVE UPDATE: FEBRUARY 20, 2015

DRC ACTIVITIES

Jay Barksdale, Senior Vice President of Public Policy, and Virginia Schaefer, Director of Public

Policy, along with Metro 8 Chamber of Commerce colleagues, attended meetings with legislators and

staff discussing economic development incentives. Next week, Jay Barksdale and Erica Mulder,

Director of Public Policy, will attend the Move Texas Forward Rally to show the DRC’s support for

current efforts to increase transportation funding in Texas.

GOVERNOR

State of the State

On Tuesday, Governor Greg Abbott delivered his 2015 State of the State address to a joint session of

the Texas House and Senate. In his remarks, Governor Abbott laid out his legislative priorities and

detailed a roadmap to achieve his agenda. The Governor also announced five emergency items: early

education, higher education research initiatives, transportation funding, border security funding, and

ethics reform. Governor Abbott said, “As your governor, I’m proud to report that as the sun rises on

2015, the state of Texas is strong and together we’re about to make it stronger. The reason Texas

leads the nation is because of our greatest natural resource – the people of Texas – who’ve built a

strong and diversified economy. Texas leads the nation as a beacon of individual liberty and

economic opportunity. Our job is to make sure we keep it that way. Our fellow Texans face so many

challenges: the need for better schools, more roads, border security, better healthcare, more jobs.

They want more liberty and less government, and they deserve ethics reform. We can’t let their future

be defined by these challenges. Instead it is our responsibility to work together and respond to these

challenges. Texas needs us to succeed. Working together, we will keep Texas the leading state in this

nation.”

Governor Abbott on Veterans

In his State of the State address, Governor Abbott discussed his initiatives to assist veterans. He said,

“My budget exempts new businesses – formed by veterans – from having to pay state registration fees

to open their businesses. My budget also exempts new businesses formed by veterans from paying

state franchise taxes for the first 5 years, and I’m calling for legislation to waive licensing exams and

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fees for veterans with the required education, training and practical experience gained in the military.

If the training you received as an electrician, a technician or some other job meets the standard of the

United State’s military, it should be good enough for the State of Texas. We must also do more for our

veterans who return broken from battle. Not all wounds are seen. My budget includes funding to

provide mental health screenings to veterans and service members to help them deal with some if

their deepest wounds.”

Governor Abbott on Ethics Reform

Governor Abbott also discussed his ethics reform agenda saying, “Let’s dedicate this session to ethics.

I want to work with you to strengthen the faith and the trust Texans deserve from us. It’s a reminder of

who we work for – the citizens of Texas. In my Blueprint for the future of Texas, I outlined multiple

ethics reforms. Things like requiring elected officials to disclose contracts they have with public

entities, prohibiting lawmakers from voting on legislation from which they could profit and more

disclosure of campaign finance information. The most important commodity we have as elected

officials is the bond we share with our constituents. Transparency – and rising above even the

appearance of impropriety – will strengthen that bond. Rejection of ethics reform will weaken that

bond and rightfully raise suspicions about who we truly serve – ourselves, or the people of Texas.

Because these ethics reforms are so important, I’m adding this to my list of emergency items.”

Additional specifics from Governor Abbott’s speech and his budget proposal, which was released on

Tuesday, are included in the issue categories below.

STATEWIDE

State of the Judiciary

On Wednesday, Chief Justice of the Texas Supreme Court Nathan Hecht delivered the State of the

Judiciary message to a joint session of the Texas Senate and House. Justice Hecht said, “Over the

third of a century I have served as a judge, including 26 years as a Member of the Texas Supreme

Court, I have witnessed relations between the Legislature and the Judiciary grow stronger. This has

benefitted the people of Texas. The Texas Judiciary is committed to upholding the rule of law. It is

committed to a court system that is fair, efficient, and just, interpreting and applying the law guided

by fixed principles. And it is committed to a justice system that is accessible to all, regardless of

means. My message is that the Third Branch will pursue these commitments, working together with

the Legislative and Executive Branches, in every way it can for the good of the people of Texas. Given

the likelihood that Texas courts will be called upon to interpret the laws passed by this body with

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even more frequency, I propose that the Legislature and the Judiciary explore mechanisms for

improving their understanding of the writing and interpretation of statutes. Neither Branch can

relinquish its constitutional independence or responsibility, but both should work toward a better

understanding of the role of each.” He called for:

• Decriminalizing the failure to attend school and providing prevention and intervention

services for at-risk children to achieve the goal of getting them back in school.

• Improving the handling of cases involving Child Protective Services including allowing

judges to appoint one attorney for both parents, not an attorney for each, thereby reducing

costs and improving efficiency; and creating county or regional programs to help provide

attorneys for indigent parents; and improving procedures for transferring a case from one

county to another so that placement of children in a stable environment is not delayed.

• Providing $4 million for the next biennium to help provide legal aid to veterans for basic

legal services to supplement the Texas Veterans Commission’s pledge of $1.5 million for legal

aid and for veterans criminal courts.

• Encouraging interested law students after their second year of law school to devote their

practice to providing legal services at more affordable rates and help close the justice gap.

• Continuing to make all reasonable efforts to assure that any innocent person who has been

convicted is exonerated, and that only the guilty are convicted by providing an additional

investment by the State in indigent criminal defense and support for expanding public

defenders’ offices and assigned counsel systems and assuring that court-appointed lawyers

are qualified, experienced, and not too busy to give attention to each case.

• Providing full funding for the courts of appeals budget request to treat similar court

positions similarly and equal to other positions in the government.

• Providing additional state funding for the E-filing system to provide equipment and software

in the less populous counties.

• Monitoring guardianships to protect against exploitation and abuse of the elderly and to

ensure that they exist only when necessary by implementing a pilot program by the Office of

Court Administration in several areas of the State to explore best methods and practices for

monitoring guardianships.

• Considering the Judicial Compensation Commission’s 2014 recommendation on judicial compensation to attract and keep the qualified judges Texans want and need.

• Continuing to consider paths to reform the judicial selection system.

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SENATE

This week, the Senate was in session on Tuesday in the joint session for the State of the State address

and on Wednesday in the joint session for the State of the Judiciary speech.

New Senate Member Elected

On Tuesday, special election run-off voters selected a new member of the Texas Senate: Senate District 26 replacing Senator Leticia Van de Putte (D-San Antonio) will be State Representative Jose Menendez (D-San Antonio), who got 59.04% of the vote over his House colleague Representative Trey

Martinez Fischer (D-San Antonio) who took 40.95%.

Senate Nominations Committee

The Senate Nominations Committee met on Thursday and took up Governor Greg Abbott’s nominees

for Commissioner of Insurance (David Calvin Mattax of Austin); Office of State-Federal Relations

(Jerry D. Strickland of Austin); and Texas A&M University System Board of Regents (Phillip David

Adams of College Station, Robert Leak Albritton of Fort Worth, and William Mahomes of Dallas). The

committee unanimously approved the appointments of Mattax and Strickland. A vote on the regents

was postponed until next week.

Next Week: The Senate adjourned until Monday, February 23, 2015 at 2:00 p.m. The Senate’s first

Intent Calendar for this session was posted for Monday. It includes:

• SB 11 by Brian Birdwell (R-Granbury) would allow Texas concealed handgun license holders

to carry handguns on campuses of institutions of higher education.

• SB 17 by Craig Estes (R-Wichita Falls) would allow concealed handgun license holders to

openly carry a holstered handgun.

HOUSE

This week, the House was in session Monday through Thursday conducting routine business and

hosting the Senate for joint sessions for Tuesday’s State of the State speech and for Wednesday’s

State of the Judiciary speech. On Thursday, the House passed their first Congratulatory and Memorial

Resolutions calendar.

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Three New House Members Elected

On Tuesday, special election run-off voters selected new members of the Texas House from the

following districts:

• House District 13 replacing Representative Lois Kolkhorst (R-Brenham) will be Caldwell

attorney Leighton Schubert (R-Caldwell), who received 57.14% of the vote to defeat Austin

County Judge Carolyn Cerny Bilski (R-Sealy), who got 42.85%.

• House District 17 replacing Representative Tim Kleinschmidt (R-Lexington) will be John Cyrier (R-Caldwell), former Caldwell County Commissioner, who got 52.06% of the vote to win

over Bastrop businessman Brent Golemon (R-Bastrop), who received 47.93%.

• House District 123 replacing Representative Mike Villarreal (R-San Antonio) will be former

San Antonio City Council member Diego Bernal (D-San Antonio), who defeated Nunzio

Previtera (R-San Antonio) 63.66% to Previtera’s 36.33%.

House Republican Caucus Leadership

House Republican Caucus Chairman Tan Parker announced the appointment of two new caucus

positions - Representative Ron Simmons of Carrollton was named the Chairman of the Caucus Policy

Committee and Representative Jim Murphy of Houston was named the Caucus Floor Leader. In

announcing the appointments, Chairman Parker stated, “Putting together a top quality leadership

team to help take the Caucus operation to new heights is my top priority, and these members have

proven themselves to be invaluable assets who will deliver the high quality services that the Caucus

deserves. The Policy Committee undertakes the important function of analyzing all legislation before

the Texas House of Representatives and adopting recommendations for the full Caucus membership

to consider when voting on legislative measures. Likewise, the Floor Leader is tasked with ensuring

that the Republican majority is organized on the House floor and that information can quickly be

disseminated throughout the Caucus membership in real-time when critical issues are being

addressed.”

Next Week: The House adjourned until 2:00 p.m. on Monday, February 23, 2015.

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BUDGET

Governor Abbott’s Budget Proposal

The Governor calls his budget – “Jobs. Opportunities. Prosperity.” It includes five goals:

1. Strategically invest in education, transportation, border security, and healthcare.

2. Constrain the size and growth of government

3. Reduce agency spending

4. Suspend, reduce, and eliminate unnecessary taxes and fees

5. Ensure government supports job creation and is accountable and transparent.

Principles

In addition to strategically improving transportation, education, and border security, the 2016-17

budget recommendations are built on the following core principles:

• Passing a constitutional amendment to limit the growth in state spending to the historic

growth in the state’s population plus inflation.

• Limiting the size of government by reducing most state agency general revenue expenditures

by three percent.

• Securing additional funding for transportation infrastructure by passing a constitutional

amendment to dedicate one-half of the motor vehicle sales tax to transportation needs and

ending many transportation funding diversions.

• Stimulating private sector job growth by permanently decreasing the business franchise tax

by $2 billion, combined with comprehensive reforms, including tax reductions for veteran-

owned businesses.

• Providing property owners with $2.2 billion in property tax relief.

• Using any revenue that exceeds initial estimates or a portion of any surplus cash to reduce

state non-self-supporting debt.

• Preventing future overspending by passing a constitutional amendment ending the use of

funds in statutorily dedicated accounts for budget certification; suspending, reducing or

eliminating the collection of at least $268 million in dedicated taxes and fees.

• Providing the Governor with expanded line-item veto authority to ensure prudent and

sensible spending reductions.

• Expanding the Texas economic model, which is proof that limited government encourages

unlimited opportunity for all.

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Governor Abbott on Budget Reform

In his State of the State address, Governor Greg Abbott announced his plan to reduce the state’s debt,

control the state’s spending, and reduce state agency budgets. He said, “To keep Texas fiscally strong,

the time has come to begin reducing the state’s debt. Debt today becomes taxes tomorrow. Debt

service unnecessarily burdens the state’s budget and limits the economic freedom of future

generations. We must begin the process now to create a structure to pay down our state’s debt. To

keep Texas the premiere model for opportunity, we must constrain the size of government and

maximize the liberty of individuals. To protect taxpayers from government growing too big, we need a

constitutional amendment that limits the growth of the state budget to population growth plus

inflation. Many of us have ridiculed states like California and Illinois as bastions of failed big

government. You’ll be surprised to learn that Texas has more full-time state employees per capita

than California and Illinois. That’s shocking – it must be changed. That’s why my budget requires most

state agencies to reduce their general revenue spending by three percent. Some of those cuts can

come from hiring freezes and reductions in fuel and travel costs. Excepted from these budget cuts are

public and higher education formula spending, pension obligations and amounts required by the

federal entitlement programs. To lead by example, I’m cutting the Governor’s office budget by more

than ten percent. I can do it. I know every other agency can do it, too. The more we restrain the

growth of government, the more we will empower hardworking Texans. These budget cuts will make

our budget even leaner while helping us prioritize spending that will make our state even stronger.”

BRAC

The governor’s budget proposal includes $30 million for the Texas Military Preparedness Commission

(TMPC) within the Office of the Governor to administer Defense Economic Adjustment Assistance

Grants to assist communities with infrastructure and construction projects that meet grant

specifications. Within that funding, the TMPC will appoint a full-time, knowledgeable military advisor

and ensure follow-through on strategic planning initiatives.

Budget Diversions

On Tuesday, Senator Kirk Watson (D-Austin) filed SJR 33, which would propose a constitutional

amendment ending budget diversions by 2023. Senator Watson said, "Texans expect us to be honest

about how we spend the taxes and fees they pay. Instead, lawmakers have been misleading folks for

more than 20 years by hoarding billions of dollars and avoiding the difficult discussions about how to

pay for needs of a growing state. This amendment will end the deceptive budget practice of using

hoarded taxes and fees to certify the budget as balanced and it will give lawmakers ample time to

wean the state budget off the billions of dollars that have been collected for a dedicated purpose but

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never spent. The current two-year budget relies on more than $4 billion in dedicated funds, including

those intended to reduce emissions and support trauma care facilities. This amendment is a critical

reform that will restore truth in budgeting and ensure dedicated accounts are used only for their

intended purpose."

Senate Finance Committee

The Senate Finance Committee met Tuesday through Friday this week.

• On Tuesday, the committee took up Article III agencies including Texas State Technical

College’s component institutions, the health science centers, Texas A&M System agencies,

public community colleges, and the University of Houston System.

• On Wednesday, the committee took up Article II, Health and Human Services agencies.

• On Thursday, the committee took up additional agencies from Article II (Health and Human

Services).

• On Friday, the committee took up Article VI (Natural Resources) agencies including the

General Land Office, Department of Agriculture, Railroad Commission, Parks and Wildlife

Department, Animal Health Commission, Texas Commission on Environmental Quality, Soil

and Water Conservation Board, Water Development Board, and the Low-level Radioactive

Waste Disposal Compact Commission.

House Appropriations Committee’s Subcommittees

• Subcommittee on Articles I (General Government), IV (Judiciary), and V (Public Safety and

Criminal Justice) met Monday through Thursday this week.

• Subcommittee on Article II (Health and Human Services) met Monday through Thursday this

week.

• Subcommittee on Article III (Education) met Monday through Friday this week.

• Subcommittee on Articles VI (Natural Resources), VII (Business and Economic Development),

and VIII (Regulatory) met Monday through Friday this week.

Next Week:

Senate Finance Committee The Senate Finance Committee has posted hearings for Monday through Thursday next week:

• Monday, February 23, 2015 – The Senate Finance Committee will meet at 9:00 a.m. in E1.036 of

the capitol extension to take up Article V (Public Safety and Criminal Justice) agencies.

• Tuesday, February 24, 2015 – The Senate Finance Committee will meet at 9:00 a.m. in E1.036

of the capitol extension to take up Article VII (Business and Economic Development) agencies

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including Department of Housing and Community Affairs, Department of Motor Vehicles,

Workforce Commission, and Lottery Commission.

• Wednesday, February 25, 2015 – The Senate Finance Committee will meet at 9:00 a.m. in

E1.036 of the capitol extension to take up Article VII (Regulatory) agencies.

• Thursday, February 26, 2015 – The Senate Finance Committee will meet at 9:00 a.m. in E1.036

of the capitol extension to take up the Secretary of State, Department of Transportation, and

Article IX (Special Provisions) pending items.

House Appropriations Committee’s Subcommittees:

• Monday, February 23, 2015: Subcommittee on Article III (Education) at 7:30 a.m. in E2.010 of

the capitol extension to take up health science centers and components of Texas State

Technical College System.

• Tuesday, February 17, 2015: Subcommittee on Article III (Education) at 7:30 a.m. in E1.030 of

the capitol extension to take up graduate medical education and related institutions

including Higher Education Financial Aid and TRS-Care

Note: Other meetings may be contemplated but not yet officially posted.

ECONOMIC DEVELOPMENT

Governor Abbott on Economic Development

In his State of the State speech, Governor Abbott said, “We are at the pinnacle of America’s economy.

Texas has been number one in the nation for creating jobs for so many years, it’s hard to keep count.

But in 2014 we literally outdid ourselves. We created more jobs than any year in the history of Texas.

And already this year reports show that our economic engine continues to gain steam. Last week,

Comptroller Hegar reported that sales tax revenue in January increased by 11 percent, surging to an

all-time record. It’s the 58th consecutive month of year-over-year sales tax growth. . . While our job

creation is legendary, many states are overhauling their economic development programs to compete

with Texas. We will rise to the challenge by making the Texas Enterprise Fund more efficient, more

effective and more transparent to help grow even more jobs in Texas.”

House Economic and Small Business Development Committee

On Thursday, the House Economic and Small Business Development Committee held an

organizational meeting. They received invited testimony from Bryan Daniel, Director of Economic

Development and Tourism in the Governor’s Office. He outlined programs administered by his office

including the Texas Enterprise Fund, the Texas Emerging Technology Fund, the Space Fund, the

Enterprise Zone Program, and the Moving Image Fund. The committee also heard from

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representatives from the Texas Department of Agriculture who discussed the economic development

efforts of the department including the Community Development Block Grant Program, the Texas

Capital Fund, the Texas Agriculture Finance Authority, Jobs for Texans, and the Young Farmer Grant

Program.

Subcommittee on Small Business Development

Chairman Angie Chen Button (R-Garland) appointed the permanent Subcommittee on Small Business

Development to be chaired by Representative Jason Isaac (R-Dripping Springs) and members

Representatives Hubert Vo (D-Houston), Eric Johnson (D-Dallas), Will Metcalf (R-Conroe), and Wayne

Faircloth (R-Dickinson).

Representative Eric Johnson’s “Opportunity Agenda”

On Thursday, State Representative Eric Johnson (D-Dallas) filed three more bills as part of his

"Opportunity Agenda."

• HB 1626 - Banking Development Districts – would guarantee the deposit of state and local

funds into bank branches that open in under-banked areas. Representative Johnson said,

“Mainstream banks allow individuals to rely less on payday lenders and check-cashing outlets

that charge high fees.”

• HB 1628 - Prize-Linked Savings Accounts – would allow banks and credit unions to operate

"no-lose" raffles with cash prizes in which the entry ticket is a savings account deposit receipt.

Representative Johnson added, “This alternative to playing the lottery encourages people to

save their money rather than gamble.”

• HB 1629 - Crowdfunding for Communities – would override conflict-of-interest rules

preventing operators of crowdfunding websites from offering investments in businesses in

which they have a financial stake, but only for non-profits and government agencies engaged

in small business/economic development lending. Representative Johnson concluded, “This

will allow public small business/economic development loan funds to be leveraged with

private investment. It's hard to expand a business without capital and it's hard to open a

personal bank account if there's no bank in your community. All Texans want are the tools to

build their own success, and if the Legislature can facilitate that at no cost to taxpayers, we

are duty-bound to do so. This is a hand-up, not a hand-out.”

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Next Week:

• The House International Trade and Intergovernmental Affairs Committee will meet on

Monday, February 23, 2015 in E1.014 of the Capitol Extension for an organizational meeting

and to take invited testimony.

• The Senate Agriculture, Water, and Rural Affairs Committee will meet on Monday,

February 23, 2015 at 1:00 p.m. in E1.012 of the capitol extension to receive an overview from

the Texas Department of Agriculture.

• The House Culture, Recreation and Tourism Committee will meet on Tuesday, February 24,

2015 at 2:00 p.m. in E1.010 of the capitol extension to hear invited testimony from the Texas

Commission on the Arts and the Texas Parks and Wildlife Department.

• The House Business and Industry Committee will meet on Tuesday, February 24, 2015 at

11:00 a.m. in E2.016 of the capitol extension for an organizational meeting and to take

testimony on the general state of the Texas Economy, and the entities under the committee’s

purview.

ENERGY

Next Week: The House Energy Resources Committee and the House Natural Resources Committee will

have a joint meeting on Monday, February 23, 2015 at 2:00 p.m. in E1.030 of the capitol extension to

take invited testimony on water use and various technologies associated with the recycle and reuse of

water in oil and gas production.

ENVIRONMENT

Natural Resources Governor’s Budget Recommendations

• Texas Parks and Wildlife - $13.4 million in funding and resources to continue to fully fund the

state’s border security efforts at the Texas Parks and Wildlife.

• Carrizo Cane - $9.8 million for Carrizo cane removal within the Texas State Soil and Water

conservation Board that impedes and conceals the detection of criminal actors and restricts

enforcement officers’ access to riverbanks.

• Water Projects - $3 million in grants for water reuse, aquifer storage, and recovery projects.

• Total Natural Resources - $26.2 million

Next Week: The House Environmental Regulation Committee will meet on Tuesday, February 24,

2015 at 8:00 a.m. in E1.026 of the capitol extension for an organizational meeting and to hear invited

testimony.

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HEALTH

Health and Human Services Governor’s Budget Recommendations

• Medical Residency Positions - $15 million to add approximately 250 new first-year residency

positions in Texas for medical school graduates.

• Veterans’ Mental Health - $1 million to provide designated mental health screening days for

veterans and service members through partnerships with qualified mental health providers

near major military installations and $20 million for effective veterans community mental

health grants.

• Postpartum Depression - $1.3 million to add optional screening and treatment for

postpartum depression to women’s health services for low-income pregnant women.

• Loan Repayment for Mental Health Professionals - $1.2 million to extend loan repayment

programs to mental health professionals (licensed professional counselors, clinical social

workers and credentialed psychologists) who practice in underserved areas of the state.

• Women’s Health Programs - $50 million to increase services available to women including

improving health outcomes, decreasing treatment costs including preventive services, well-

woman care, cancer screening and postpartum care.

• Home and Community Care - $105.3 million to recruit and retain personal attendants and

provide increased opportunities for independent home- and community-based living options.

• Children and Families At Risk - $40 million for children and families at risk and foster

children by increasing access to outcome-based prevention, child safety placement oversight,

and community-based family safety services.

• Total Article II (Health and Human Services) Requests - $233.8 million

House Human Services Committee

On Monday, the House Human Services Committee heard agency overview presentations from

representatives of the Department of Aging and Disability Services and the Department of Assistive

and Rehabilitative Services.

House Public Health Committee

On Tuesday, the House Public Health Committee held an organizational meeting and heard invited

testimony from the Sunset Advisory Commission, Texas Department of Health and Human Services,

and the Department of State Health Services.

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Surprise Emergency Medical Bills

On Thursday, a partnership of statewide consumer and healthcare advocacy groups applauded the

filing of legislation in the Texas House of Representatives to protect patients from getting surprise

medical bills after health emergencies. Surprise medical bills are unexpected billings to a patient for

medical care not covered by their insurance. Often, surprise bills occur after patients are treated in

the emergency room of an “in-network” facility by physicians or other medical specialists not in the

patients’ insurance network. Representative John Smithee (R-Amarillo) filed HB 1638 to take

consumers out of the middle of billing disputes between out-of-network health providers and

insurers. The legislation seeks to hold consumers harmless from all out-of-network emergency bills

for services at emergency rooms, whether the care is provided at an in-network hospital or a free-

standing emergency room. Under HB 1638, consumers would only be responsible for their usual in-

network cost sharing. It would allow providers and insurers to access a dispute resolution process to

find a fair price for emergency medical services. The legislation requires that consumers be sent a

notice about the dispute resolution process and informed of their right to participate in the

procedures. The legislation is supported by a partnership of consumer groups, including AARP,

Consumers Union, National Multiple Sclerosis Society, Center for Public Policy Priorities, and the

American Cancer Society Cancer Action Network.

Next Week: The House Human Services Committee will meet on Monday, February 23, 2015 at 2:00

p.m. in E2.030 of the capitol extension to hear invited testimony from the Health and Human Services

Commission, Department of Family and Protective Services, and the Sunset Advisory Commission.

HIGHER EDUCATION

Governor Abbott on Higher Education

In the State of the State speech, Governor Abbott said, “We must make college more affordable and

accessible. We must restrain the spiraling cost of higher education so more Texans can reap the

rewards that come from college. Just like with primary and secondary education, higher education

doesn’t work in a one-size-fits all approach. Different students have different needs, and our

employers are demanding that we better prepare our students for workforce needs. For many, a two-

year degree is far more than a piece of paper. It’s a key that opens the door to economic freedom. We

need to expand and support our community colleges that serve as the gateway to better jobs and as a

step toward further education opportunities. We also need to elevate the national research standing

of our universities. Because of the vital role higher education plays in transforming our state, I’m

declaring higher education research initiatives my second emergency item.”

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Higher Education Governor’s Budget Recommendations

• Tuition Exemptions for Military Families - $531.8 million to reimburse the state’s colleges

and universities for the cost of tuition exemptions provided to military families.

• Governor’s University Research Initiative – Repurposes $56.1 million currently in the

Emerging Technology Fund, to the Higher Education Coordinating Board to establish a

program to help universities recruit intellectual talent, including Nobel Laureates.

• Emerging Research Universities - $40 million in new funding to support research and

emerging research universities.

• Total Higher Education - $627.9 million

Texas Higher Education Coordinating Board Appointment

Last Friday, Governor Greg Abbott appointed Dr. Fred Farias, III to the Texas Higher Education

Coordinating Board for a term to expire August 31, 2019. Dr. Farias is a Rio Grande Valley native who

graduated from the University of Texas at Austin in 1980 before receiving his Doctor of Optometry

from Southern College of Optometry in 1987 and opening his first practice, 20/20 Vision Care, Inc., in

McAllen, Texas in 1988. Dr. Farias currently serves as President of the Texas Optometric Association. In

2001, Governor Rick Perry appointed him to the Texas Optometry Board where he served for seven

years, in part as Chair of the Licensing and Administration Committee.

Tuition Cap

On Wednesday, Senator Charles Schwertner (R-Georgetown) launched a petition website -

www.texastuitionfreeze.com- in support of SB 233, which would cap Texas tuition at current levels

and limit any future increases in tuition and fees to no more than the rate of inflation. Senator

Schwertner said, “I’m launching texastuitionfreeze.com to put a face on this effort and give a voice to

the thousands of parents and students who continue to struggle with the skyrocketing cost of college

tuition and fees. I know this will be an uphill battle, but I'm confident we can be successful if Texans

from across the state join together and make their voices heard. Since the legislature's decision to

deregulate tuition in 2003, tuition and fees at Texas public universities have more than doubled

(104%). The dramatic increase has far outpaced the rate of inflation and has placed increased

pressure on students to assume greater and greater amounts of student loan debt. Student loans now

represent the nation's second largest source of debt - surpassing credit card debt and second only to

mortgages. The average student borrower in Texas now graduates with over $24,000 in student loan

debt, and as students struggle to repay the exorbitant cost of higher education, they have less money

to purchase a home, start a small business, or otherwise contribute to the Texas economy.”

Representative Four Price (R-Amarillo) has filed the companion bill, HB 921.

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House Higher Education Committee

On Wednesday, the House Higher Education Committee held an organizational meeting and heard

invited testimony on issues related to higher education. Raymund Paredes, Commissioner of Higher

Education gave an update on the Texas Higher Education Coordinating Board’s efforts on “Closing the

Gaps” and he outlined new goals concerning completion, student debt, and outcomes-based funding.

He also expressed support for tuition revenue bond authorization for higher education facilities. The

committee heard from Rey Garcia, Executive Director of Texas Association of Community Colleges,

who discussed workforce alignment, performance-based funding, college readiness, developmental

education, transferability, and the common course numbering system. Ray Martinez, President of

Independent Colleges and Universities of Texas gave an overview of independent colleges. He

encouraged the committee to continue funding for Tuition Equalization Grants and for private

university participation in the B-On-time Loan Program.

Subcommittee on Post-Secondary Education and Workforce Readiness

Chairman John Zerwas (R-Fulshear) appointed the permanent Subcommittee on Post-Secondary

Education and Workforce Readiness to be chaired by Representative Travis Clardy (R-Nacogdoches)

and include Representatives Armando “Mando” Martinez (D-Weslaco), Geanie Morrison (R-Victoria),

John Raney (R-College Station), and Chris Turner (D-Arlington).

HUMAN RESOURCES/EMPLOYMENT

Minimum Wage

On Wednesday, State Representative Senfronia Thompson (D- Houston) filed HB 1590, to raise Texas'

minimum wage to $8.25/hour. Representative Thompson said, “In 2001, I authored Texas' last

minimum wage bill and now with HB 1590, I am continuing my fight to help working Texans. With the

high price of food, clothing and rent always on the rise, we must keep up with the fast changes our

economy faces. This pay raise is way overdue. It is ridiculous that a single parent with two to three

children working anywhere from 53-70 hours a week on minimum wage can still be living in poverty

with the necessity to depend on governmental assistance. According to the U.S. Department of Labor,

3 out of 5 small business owners surveyed in 2014 supported a minimum wage increase stating it will

help boost the economy by putting more money in families' pocketbooks, which will be spent on

goods and services. In addition, economists have shown through various studies that raising the

minimum wage has not had a negative effect on employment but instead increased business'

productivity in low-skilled workers and reduced employee turnover and training cost."

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PROCUREMENT

House Government Transparency and Operation Committee

On Tuesday, the House Government Transparency and Operation Committee discussed state

contracting and procurement and heard invited testimony from Ursula Parks, Director, and Julie Ivie,

Assistant Director, of the Legislative Budget Board, who gave an overview of state procurement and

contract management including a discussion of the Contract Advisory Team and Projects Advisory

Team. The committee also heard from representatives from the Comptroller of Public Accounts,

Department of Information Resources, Sunset Advisory Commission, State Auditor’s Office and Health

and Human Services Commission.

PUBLIC EDUCATION

Governor Abbott on Public Education

In his State of the State address, Governor Abbott announced education as his highest priority saying,

“Our journey begins with striving to create the best education system in America. We’ve seen that we

can do it. In Dallas, African-American and Hispanic students pass AP exams at a higher rate than

anywhere in America. In the Rio Grande Valley, I visited the IDEA Weslaco charter school, where about

99 percent of the high school seniors go on to college. And I’m very proud to say that Irving ISD has

been recognized as the 2015 Advanced Placement District of the Year. Irving is the best in the entire

nation. We must not rest – we must not relent – until we replicate success like this across the state. We

can be number one in education if we apply the same tenacity and commitment to education as we

do to job creation. I think we can all agree it’s time to put school finance litigation behind us. It’s time

to stop fighting about school finance and start fixing our schools. To improve our schools we must

begin by building a strong foundation at the very beginning. Our goal should be to ensure all Texas

students are performing at grade level in reading and math by the time they finish the 3rd grade. I’m

declaring early education as my first emergency item as governor. Another essential ingredient to

better schools is ensuring we have the best teachers in our classrooms. In part, that means saying no

to common core. We can bring out the best in all of our teachers by getting rid of the one-size-fits-all

mandates and trusting our teachers to truly educate our students. We must also return genuine local

control to our schools. Let’s allow school districts to opt out of parts of the Education Code so they

can design an education plan that best fits their community needs. Local control, however, doesn’t

end at the school district level. Real local control rests with parents. Parental involvement is critical to

student advancement. The ultimate parental involvement is giving parents more choices in their

child’s education.”

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Specific Public Education Governor’s Budget Recommendations

Pre-Kindergarten Programs: • High Quality Pre-K - $118 million to provide an additional $1,500 in flexible funding per

eligible 4-year-old student to schools willing to adopt a rigorous, high quality pre-k program.

• Training for Pre-K Teachers - $2 million to develop and deliver three-day-long training

seminars for pre-k teachers so that they may effectively use the Texas Prekindergarten

Guidelines.

• Reading Excellence Teams - $2 million to establish a pilot program for Reading Excellence

Teams – groups of well-trained, specialist literacy professions to be available on an optional

basis to schools with low reading scores.

• Literacy Achievement Academies - $30 million for highly professional, research-based, four-

day Literacy Achievement Academies for kindergarten through third grade teachers with a

curriculum focused on how to teach core reading and writing skills.

• Math Achievement Academies - $30 million to create highly professional, research-based,

four-day Math Achievement Academies for teachers of kindergarten through third grade,

utilizing a curriculum focused on how to teach core numeracy skills.

• Total Pre-K through Third Grade - $182 million

School Governance:

• Reading-to-Learn Academies - $30 million in Reading-to-Learn Academies to deliver Texas

curriculum-focused teaching strategies to improve student comprehension across all

subjects, to fourth and fifth grade teachers.

• Advanced Placement and International Baccalaureate Courses - $14.6 million to

incentivize better performance on AP and IB exams by providing bonuses directly to teachers

for each student who scores a three or higher on an AP exam or four or higher on an IB exam.

• STEM Teachers - $4 million for recruiting and preparing STEM majors for the teaching

profession.

• Teach for America - $3 million to support Teach for America in recruiting high-achieving

college graduates to teach at underserved schools.

• Principal Preparation - $5 million to create a principal leadership program.

• Total School Governance - $56.6 million

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Digital Learning:

• Technology Grant Program - $100 million for a technology grant program that will help with

telecommunications infrastructure at low-performing “D” or “F” rated campuses to be used to

enter into public-private partnerships to improve access to high-quality digital learning

options through necessary upgrades to content, devices, and access.

• Texas Virtual School Network (TxVSN) - $25.8 million to better access high-quality digital

courses through the Texas Virtual School Network.

• Tutoring - $7.6 million to give teachers and students access to free voluntary tutoring

courses, materials, and online tools through the TxVSN for each course that requires an end-

of-course exam for high school graduation.

• Innovation Grants for Blended On-line Education - $16 million to create an “innovation

grant” program to encourage school districts to develop or implement blended online

education models that have proven effective in the classroom.

• Professional Development for Blended Learning Classes - $15 million to provide

professional development for teachers at schools wanting to implement blended learning

classes to effectively engage students in a digital learning environment.

• Total Digital Learning - $164.4 million

House Public Education Committee

On Tuesday, the House Public Education Committee held an organizational meeting and heard

invited testimony from representatives of Texas Education Agency who discussed STAAR test passing

rates, the school finance court case, and the Texas Virtual School Network.

Senate Education Committee

On Thursday, the Senate Public Education Committee took up:

SB 149 by Kel Seliger (R-Amarillo) would establish an individual graduation committee for each

student who fails to pass an end-of-course assessment after two attempts. In support were

representatives of Texas School Alliance, Texans Advocating for Meaningful Student Assessment, Elgin

ISD, Texas NAACP, and Mexican American Legal Defense and Education Fund (MALDEF). Nelson

Salinas with Texas Association of Business raised concerns about the bill’s effect on college readiness.

Drew Scheberle of Austin Chamber of Commerce also raised concerns about the effectiveness of

placement committees. It was left pending.

Next Week: The House Public Education Committee will meet on Tuesday, February 24, 2015 at 2:00

p.m. in E2.036 of the capitol extension to take up:

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• HB 66 by Mary Gonzalez (D-El Paso) would prohibit the Commissioner of Education from

including the performance of students with Limited English Proficiency that have been

enrolled in a school in the United States for less than three years in a school’s performance

rating.

• HB 181 by Cecil Bell, Jr. (R-Magnolia) would eliminate the inclusion of endorsements,

performance acknowledgements and distinguished level of achievement on high school

diplomas.

• HB 256 by Donna Howard (D-Austin) would authorize the use of compensatory education

funds to provide assistance with childcare for students at risk of dropping out of school.

• HB 370 by Jason Villalba (R-Dallas) would require school districts to notify a parent or

guardian upon request if an employee has been appointed a school marshal.

• HB 440 by Larry Gonzalez (R-Round Rock) would add students with a mental disability to the

type of students for whom the physical education curriculum must be developmentally

appropriate.

• HB 456 by Roland Gutierrez (D-San Antonio) would prohibit the use or possession of vapor

products at school-related or sanctioned activities on or off school property.

• HB 505 by Eddie Rodriguez (D-Austin) would prohibit the Texas Higher Education

Coordinating Board from adopting a rule that limits the number of dual credit courses or

hours in which a high school student may enroll.

TAX

Governor Abbott on Tax

The governor expressed his commitment to tax reduction in his State of the State speech saying, “The

best way to create more jobs is to permanently reduce the business franchise tax. I will reject any

budget that does not include genuine tax relief to Texas employers and job creators. I will also insist

on property tax reduction. My plan calls for a $2 billion reduction in the business franchise tax and a

$2.2 billion reduction in the property tax burden. My budget includes an appropriation that makes

school districts whole for any tax revenue they might lose. But the property tax reduction must be

lasting – it can’t be allowed to evaporate by rising property valuations.”

Specifics of Governor’s Recommended Tax and Fee Reductions:

• Business Franchise Tax Relief - $1.985 billion

• Business Franchise Tax Relief for Veterans - $14.5 million

• Total Business Franchise Tax Relief - $2 billion

• Property Tax Relief - $2.216 Billion

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• Suspend, Reduce or Eliminate the Collection of Dedicated Taxes and Fees - $268 million

• Total Tax Relief for the 2016-17 Biennium - $4.484.2 billion

House Ways and Means Committee

On Tuesday, the House Ways and Means Committee held an organizational meeting and heard invited

testimony from Ursula Parks, Executive Director of the Legislative Budget Board, who discussed the

state budget, the Property Tax Relief Fund, the Medicaid program, transportation funding, state

pension plans, and the Constitutional Spending Cap. Also testifying were Talmadge Heflin, Director of

Fiscal Policy for Texas Public Policy Foundation; representatives of the Comptroller’s Office; and Dick

Lavine, Senior Fiscal Analyst for the Center for Public Policy Priorities.

Next Week: The House Ways and Means Committee will meet on Tuesday, February 24, 2015 at 8:30

a.m. in E2.010 of the capitol extension to hear invited testimony from the Governor’s Office of

Economic Development and Tourism, Comptroller of Public Accounts, Legislative Budget Board, and

Texas Taxpayers and Research Association.

TRANSPORTATION

Governor Abbott on Transportation

In his State of the State address, the governor said, “Another fundamental responsibility of

government is to build the roads Texans need. With the passage of Proposition 1 this past November,

Texans sent a loud and clear message that they are tired of being stuck in traffic. My budget adds

more than $4 billion a year to build more roads in Texas without raising taxes, fees, tolls or debt.

Regardless of the priorities that may exist in this Capitol, the voters made unequivocally clear their

priority – they want roads funded. Because this funding is so essential to the people of Texas, I am

declaring transportation as my third emergency item.”

Governor’s Transportation Funding Plan: • Motor Vehicle Sales Tax Revenue - Constitutional amendment dedicating ½ of the Motor

Vehicle Sales Tax to the State Highway Fund starting in 2017 - $2.359 billion

• Proposition 1 - Provide the oil and gas severance tax transfers approved in Prop 1 to TxDOT -

$1.308 billion in 2016 and $1.267 billion in 2017.

• Eliminate Fund Diversions - Provide additional funding to TxDOT by reducing State Highway

Fund diversions to other agencies - $400 million in 2016 and $400 million in 2017

• Total Transportation Funding Request - $1.708 billion in 2016 and $4.026 billion in 2017 for

a biennium total of $5.734 billion

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Texas Transportation Commission

Last Friday, Governor Greg Abbott announced the appointments of J. Bruce Bugg Jr. of San Antonio

and Tryon Lewis of Odessa to the Texas Transportation Commission, which governs the Texas

Department of Transportation (TxDOT) for terms to expire February 1, 2021.

J. Bruce Bugg, Jr. is the Chairman and Chief Executive Officer of Argyle Investment Co., LLC, a

private investment firm and serves as Chairman of the Board, President and Chief Executive

Officer of Southwest Bancshares, Inc., President and CEO of Texas Hill Country Bancshares,

Inc. and as Chairman of the Board of The Bank of San Antonio. In 1984, Bugg founded

Southwest Bankers, Inc., a bank holding company formed to acquire and own the original

Bank of San Antonio, where he served as Director, President and Chief Executive Officer.

Tryon Lewis of Odessa is a former State Representative from Texas’ 81st District, serving from

2008-2015. Prior to serving in the Texas Legislature, Representative Lewis practiced law in

Odessa from 1973-1984 with a primary emphasis on civil litigation. In 1985, Representative

Lewis took office as a State District Judge and served in that capacity until February of 2006,

after which he returned to practicing law. Lewis is currently a partner at Atkins, Hollman

Jones, Peacock, Lewis & Lyon Law Firm.

Senate Transportation Committee

On Wednesday, The Senate Transportation Committee received an overview and update from the

Texas Department of Transportation, the Texas Department of Motor Vehicles, and the Texas

Department of Public Safety.

House Transportation Committee

On Thursday, the House Transportation Committee held an organizational meeting and had invited

testimony from representatives of Texas Department of Transportation, Texas Department of Motor

Vehicles, Texas Department of Public Safety, Texas Transportation Institute, and Texas Association of

Metropolitan Planning Organizations.

Vehicle Registration Fees in Travis County

On Wednesday, Senator Kirk Watson (D-Austin) and Representative Donna Howard (D-Austin) filed SB 579 and HB 1432, companion bills that would allow the Travis County Commissioners Court to levy an

additional, vehicle registration fee (VRF) to fund local transportation projects. Senator Watson said,

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“Texans have made it clear that they want to close the funding gap that TxDOT says will be needed to

maintain current congestion levels. Despite passage of Proposition 1 in November, there still exists a

shortfall of $4 billion. The Travis County region faces particularly tough challenges. For example,

twelve of the 100 most congested roadways in the state for 2014 are located in Travis County. Given

the scope of our state and regional transportation problems, local leaders need local tools to address

our needs.” Under the bills, the Travis County Commissioners Court would have to vote to levy the

VRF, which would be capped at $10 unless a majority of county voters approve an increased fee of

$20, indexed to the construction cost index.

Direct Purchase of Motor Vehicles

On Thursday, Representatives Eddie Rodriguez (D-Austin), Charles “Doc” Anderson (R-Waco), Jodie

Laubenberg (R-Wylie), Tan Parker (R-Flower Mound) and Ron Simmons (R-Carrollton) and Senator

Kelly Hancock (R-North Richland Hills) filed HB 1653 and SB 639 to allow Texans to purchase certain

new vehicles directly from the manufacturer.

Under the state’s current law, new vehicles can only be sold through a franchised dealership. Senator

Hancock said, "Free market principles are the foundation of our strong Texas economy. SB 639 helps

sustain a competitive marketplace and gives consumers more choices." The Department of Justice

found in a 2009 study that direct distribution of new vehicles could save consumers on average more

than $2,200 per vehicle. Representative Rodriguez added, “Our current franchise dealership laws were

created to prevent vehicle manufacturers from unfairly competing with their existing franchised

dealerships, not to restrict competition. HB 1653 ensures Texans have access to breakthrough

automotive technology. Most states already allow some form of direct sales of new vehicles. HB 1653/SB 639 will bring Texas in line with best industry practices across the country.” Representative

Laubenberg also commented saying, "Our hard-earned reputation as a state with low taxes and

limited regulations should be an encouragement to all who wish to bring new investment and good

jobs to Texas. Let's not be a protectionist state and kill innovation in the automotive industry, but

instead allow the free market to decide the fate of new ideas. HB 1653/SB 639 is carefully limited in

scope: it applies only to manufacturers that have not engaged previously in the dealer/franchise

system, and it caps the number of permissible sales licenses at 12 within the state.” A recently-

released poll conducted by Baselice & Associates indicates, “HB 1653/SB 639 enjoys overwhelming

support from Texans. According to a recent statewide survey of 1,201 adults (conducted 1/26/15-

1/31/15) 84 percent of Texans favor allowing consumers to be able to purchase certain new cars

directly from the manufacturer.”

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Next Week: The Senate Transportation Committee will meet on Wednesday, February 25, 2015 at

8:00 a.m. in E1.016 of the capitol extension to take up:

• SB 5 by Robert Nichols (R-Jacksonville) would dedicate annual motor vehicle sales tax

revenue above $1.5 billion to the highway fund to be used for road construction,

maintenance, acquisition of right-of-way, and repayment of road bonds. (This is the enabling

bill for SJR 5.)

• SJR 5 by Robert Nichols (R-Jacksonville) would propose a constitutional amendment

dedicating annual motor vehicle sales tax revenue above $1.5 billion to the highway fund to

be used for road construction, maintenance, acquisition of right-of-way, and repayment of

road bonds.

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