This week, the legislature moved several key bills, the Partnership opposed a bill that could have negative impact on the 2017 pension reform, and we preview an important committee hearing related to economic development incentives.

Bills on the Move: Courts, Coastal Resiliency and Data Privacy

New Harris County Criminal Courts
On April 5, House Bill 3747 by Representative Jeff Leach (R-Plano), the omnibus courts bill, was voted favorably out of the House Committee on Judiciary and Civil Jurisprudence. The bill includes provisions to create six new criminal courts in Harris County.

Gulf Coast Protection Trust Fund
On April 4, House Bill 2416 by Representative Dennis Paul (R-Houston) was voted favorably out of the House Committee on Natural Resources. The trust fund, administered by the General Land Office (GLO), will be used for infrastructure developments that protect the gulf coast within the Gulf Coast Protection District. The Coastal Barrier Project, better known as the Coastal Spine, is likely a primary beneficiary of the trust fund.

Data Privacy
On April 4, House Bill 4, the Texas Data Privacy and Security Act by Giovanni Capriglione (R-Southlake), was passed with no amendments off the House Floor in a vote with 146 Yeas to 0 Nays, with one member present and not voting. House Bill 4 would establish a comprehensive framework for how certain businesses can process the personal data of Texas residents. 

Partnership Opposes Pension Bill 
The Texas Legislature is again considering legislation that would impact the City of Houston’s pension systems. House Bill 3340 by Representative Will Metcalf (R-Conroe) attempts to add new benefits to the City’s fire and police pension systems, which would result in a negative fiscal impact on the City. The House Committee on Pensions, Investments, and Financial Services favorably passed House Bill 3340 out of committee.

Why it matters: In 2017, the Texas Legislature overwhelmingly passed a pension reform package led by Senator Joan Huffman (R-Houston), which improved Houston’s pension system. Prior to 2017, the City faced $8.2 billion in unfunded pension obligations. The reforms have lowered that liability to $2.2 billion in five years while providing certainty to pensioners and predictability to the City’s long-term liability.
The bottom line: The Partnership believes now is not the time to make changes to the pension system because the 2017 reforms are working. For this reason, the Partnership opposed HB 3340 in committee. 

Inventory Tax Exemption Bill Moves to Senate floor

Senate Bill 2289 by Senator Joan Huffman (R-Houston) would exempt the state’s pharmaceutical, medical device, and PPE manufacturers from inventory and equipment taxes.

Why it matters: Equipment and inventory taxes drive up the effective tax rate for Texas medical and biomedical manufacturers, negatively impacting manufacturers and making it more difficult to grow the industry. The state’s competitors - North Carolina, Massachusetts, Tennessee, Pennsylvania, and Illinois - all have an effective tax rate of less than 13.5%, compared to Texas’ rate of over 28%.

The bottom line: Reducing the tax burden on the medical and biomedical industries in Texas will help onshore manufacturing, create jobs, drive economic resiliency, and promote innovation in the state.

What's next: The bill was voted out of the Senate Finance Committee without objection or amendments on April 4. The legislation now awaits consideration on the Senate floor. 

Look Ahead: Economic Development & State’s Budget 

Economic Development: House Bill 5 by Representative Todd Hunter (R-Corpus Christi)
1. What’s next: On Monday, April 10, the House Ways & Means Committee is scheduled to consider HB 5, the creation of a new economic development tool. Partnership President & CEO Bob Harvey will testify in support of the legislation.
2. Why it matters: National and global competition to win projects is ramping up rapidly, as other states try to emulate Texas’ success in attracting new businesses. It is critical Texas has the economic development tools necessary to remain competitive.

State Appropriations Bill: House Bill 1 by Dr. Greg Bonnen (R-Friendswood)
1. The big picture: Late Thursday evening, the House passed House Bill 1, the House version of the state budget. House Bill 1 will now move to the Senate before differences - which will likely be significant - are worked out in a conference committee made up of members of the House and Senate. 
2. Houston in Focus: The bill provides $350 million of new funding in the base budget for the Flood Infrastructure Fund, which is the first time general revenue has been used to fund the program. Designating these funds as general revenue ensures flood mitigation funding will be included in the base budget in future sessions. The Greater Houston Partnership was instrumental in the original passage of the Flood Infrastructure Fund during the 2019 session. 

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.