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88th Texas Legislative Session: End of Session Report

During the 2023 Texas Legislative Session, the Greater Houston Partnership prioritized issues foundational to Houston’s strong, diverse economy. 

 

Leading up to this session, the Partnership’s Board of Directors and Public Policy Steering Committee worked to develop a legislative agenda that addresses the most pressing issues facing the business community and the greater Houston region. The agenda included four executive priorities – economic development, higher education funding, flood mitigation, and energy transition.  
  

This year, the Partnership successfully advanced legislation to strengthen the region’s economy and provide opportunity for all. The Legislature passed bills that will positively impact the region, including establishing a new economic development incentive program, increased investment in workforce development and higher-education funding, and prioritized flood mitigation dollars in the state’s budget. While not all priorities made it over the finish line, the Partnership made great strides in advancing these key policy items during the 88th Texas Legislative Session. 

 

Below are the Partnership’s Executive Priorities and listing of bills supported by the Partnership during the legislative session. 

Executive Priorities

Economic Development Incentives

House Bill 5

SIGNED BY THE GOVERNOR

House Author: Representative Todd Hunter (R-Corpus Christi) 
Senate Sponsor: Senator Charles Schwertner (R-Georgetown)

  • Ensures a competitive business climate and fosters growth by developing a new, transparent, and accountable economic development program for Texas.
  • Makes the state attractive to emerging industries and ensures long-term competitiveness.
  • A state-wide economic development incentive program is critical to attracting businesses that invest in local communities and provide high-quality jobs. After the expiration of the Chapter 313 economic development program last session, Texas was in need of a new school property tax abatement program as a competitive economic development tool.

Texas has long been a national leader in securing large capital-intensive investments and attractive to businesses looking to relocate on nearly all measures companies consider. However, Texas often falls short on property taxes, and the lack of a new school property tax abatement program could cause it to fall behind other states in landing new businesses.

After the last session, when the Texas Legislature allowed Chapter 313 to sunset, the Partnership and other business organizations began working on its replacement. Leading up to this session, a coalition of supporters conducted statewide polling, finding that Texans overwhelmingly support utilizing economic development tools to attract businesses.

The Partnership also partnered with statewide business organizations to mobilize regional partners to support House Bill 5, resulting in the collection of over 250 signatures from chambers of commerce and economic development organizations across the state on a letter of support for the creation of a new program.

Houston Skyline
University of Houston

Texas University Fund (TUF)

House Bill 1595/House Joint Resolution 3

SIGNED BY THE GOVERNOR

House Author: Representative Greg Bonnen (R-Friendswood)
Senate Sponsor: Senator Brandon Creighton (R-Conroe)

  • Establishes a $3.4 billion research endowment for the University of Houston, Texas Tech University, University of North Texas, and Texas State University.
  • Performance-based allocations of up to $100 million annually for each university.

House Bill 1595 establishes the Texas University Fund, a permanent endowment that will appropriate billions of dollars to four of the state’s public universities, including Houston’s flagship university, the University of Houston.

This transformational investment will strengthen Texas’ higher education institutions by providing the necessary funding to improve Texas universities’ national rankings, which will help the state attract top talent and reduce “brain drain.” The fund will also provide long-term financial certainty, allowing for forward-thinking projects and innovation. Finally, it will help Texas schools compete for federal research grants, secure private research funding, drive increased alumni support, and position Texas as a top destination for premier higher education.

The TUF will also bolster the state’s economy by making Texas more attractive to business. There will now be a true ecosystem of institutions engaged in high-level research and development, strengthening Texas’ talent pipelines.

Community College Finance Reform

House Bill 8

SIGNED BY THE GOVERNOR

House Author: Representative Gary VanDeaver (R-New Boston)
Senate Sponsor: Senator Brandon Creighton (R-Conroe)

  • Overhauls the state’s method of financing community colleges, shifting toward an outcomes-focused, industry-aligned
    model.
  • Increases college affordability by creating new scholarships to support high-demand industries.
  • Improves college capacity by providing funding for student support and inter-institutional shared services, to better serve
    the state as its population grows.

Currently, Texas’ community colleges are funded by combination of property taxes, tuition, and enrollment, meaning they remain fully funded regardless of student outcomes. A strong economy is supported by its workforce talent pipelines and strong community college graduates drive the talent pipeline. Therefore, student outcomes should be part of the equation on how community colleges are funded.

House Bill 8 provides for a transformational change by moving towards an industry-led, outcomes-based funding model, while also increasing college affordability and capacity. Community colleges will also work with employers to ensure they are producing the type and caliber of workers needed for the future economy.

The Partnership is proud to have supported the development of House Bill 8 by promoting industry voices at the Texas Commission on Community College Finance hearings, which was charged with studying how community colleges are funded and making recommendations to the legislature for improvement.

education
Green

Carbon Capture Use & Storage: Comprehensive Regulatory Framework

House Bill 4484/Senate Bill 2107  

FAILED TO PASS

House Author: Representative Greg Bonnen (R- Friendswood) 
Senate Author: Senator Robert Nichols (R-Jacksonville) 

  • Affirms surface owner owns pore space, recognizes the mineral estate, and establishes a process for pore space integration.
  • Creates an ongoing stewardship program and addresses transferability of long-term liability.

Leveraging Texas’ comparative advantage and remaining competitive in the multi-trillion-dollar carbon capture use and storage (CCUS) industry is a top Partnership priority. After successfully advocating for the state to seek primacy from the Environmental Protection Agency (EPA) over Class VI carbon injection storage wells last session, which is currently pending EPA approval, it was important to shift to addressing the regulatory and legal uncertainty hindering CCUS.

The Partnership joined a broad coalition to support a comprehensive CCUS framework to resolve significant legal complexities posing the biggest barrier to CCUS while offering explicit protections for the mineral estate, providing additional revenue opportunities for landowners, and going above and beyond every other state to ensure potential wins for all parties.

The base bill was effectively gutted after an unproductive committee hearing filled with mischaracterizations and misinformation by opposition groups over a fundamental aspect of the bill – integration – a process required to combat immense hurdles CCUS developers face trying to assemble the web of fragmented property rights needed for expansive deep underground pore space storage.

Work on this priority legislation began long before the legislature convened, with a series of policy summits in Austin to educate legislative staff. Ahead of the bill’s legislative hearing, the Partnership mobilized companies, spearheading a letter-writing campaign, and amplified the message in Austin.

Flood Infrastructure Fund

House Bill 1 

SIGNED BY THE GOVERNOR

House Sponsor: Representative Greg Bonnen (R-Friendswood) 
Senate Author: Senator Joan Huffman (R-Houston) 

  • Allocates more than $70 million in  general revenue  for the Texas Water Development Board (TWDB) to hire more staff for the implementation of the Flood Infrastructure Fund (FIF).  

Senate Bill 30 

SIGNED BY THE GOVERNOR

House Sponsor: Representative Greg Bonnen (R-Friendswood) 
Senate Author: Senator Joan Huffman (R-Houston) 

  • Allocates nearly $625 million in one-time general revenue funds to replenish the Flood Infrastructure Fund (FIF) prior to the state flood plan due September 2024. 

Following Hurricane Harvey, the Partnership advocated for the creation of the Flood Infrastructure Fund (FIF) during the 2019 legislative session to address the need for adequate relief from flooding and protection from future severe weather events across the state.

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 funding for flood mitigation projects.

In late 2022, the Texas Water Development Board (TWDB), the state agency charged with oversight of the FIF, signaled that the fund is oversubscribed and would soon be exhausted.

This session, the Partnership prioritized the effort to replenish the FIF. As a result, the Texas Legislature invested more than $1.3 billion in flood prevention and resiliency work. The FIF received nearly $625 million in one-time general revenue funds in Senate Bill 30—a first for the fund as it was originally funded by a one-time infusion from the Economic Stabilization Fund. Additionally, House Bill 1 provided more than $70 million in funding to the TWDB for more staff to implement the substantial investment in the FIF.

H_GHP_Downtown_Buffalo Bayou_Memorial Drive_2019
H_GHP_Buffalo Bayou_Double Rainbow_2019

Coastal Texas Program

House Bill 1 

SIGNED BY THE GOVERNOR

House Sponsor: Representative Greg Bonnen (R-Friendswood) 
Senate Author: State Senator Joan Huffman (R-Houston) 

  • Allocates nearly $600 million in general revenue to the Gulf Coast Protection District for the state’s contribution to begin construction on the coastal spine project. 

House Bill 2416 

VETOED BY THE GOVERNOR

House Sponsor: Representative Dennis Paul (R-Houston) 
Senate Author: Senator Carol Alvarado (D-Houston) 

  • Creates the Gulf Coast Protection Trust Fund.   

The Coastal Texas Program, also known as the Coastal Spine, will protect the Houston region from flooding and storm surges caused by catastrophic weather events like Hurricanes Ike and Harvey. The barrier floodgate and levee system’s development will require significant investment (65% Federal and 35% State/Local), making its funding a priority for the Partnership.

This session, the Legislature voted to establish the Gulf Coast Protection Trust Fund with the passage of House Bill 2416. On June 17th, House Bill 2416 was vetoed by Governor Greg Abbott for technical reasons.

Issues

Public Education
Energy & Environmental Regulation
Energy Transition
Transportation & Infrastructure
Workforce Development
Economic Development
Local Issues
Health Care & Life Sciences
Technology

View the Full 88th Texas Legislative Session Summary

See the Partnership's Full Legislative Agenda

Convening to Make an Impact

The Partnership's impact work happens through Committees, which convene business and community leaders to fuel the growth and vitality of the Houston region. 

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In the weeks before early voting, the Greater Houston Partnership will share essential information on key ballot initiatives impacting our region. This week, we focus on state propositions 5 and 6, which would allow Texas to invest in its higher education system and improve deteriorating water infrastructure. The 2023 Ballot On November 7, Texas will hold a statewide general election, allowing voters to decide on 14 to the state’s constitution. Since Houston will be the only major city in Texas conducting local elections, Houston voters will disproportionately impact the statewide results. In this general election, Texas could invest in its higher education system, improve deteriorating water infrastructure, expand equitable broadband access, and incentivize biomedical manufacturing and job creation. In addition, Harris County could receive much-needed funds to enhance and expand the Harris Health System. Proposition 5: Boosting Texas Universities with $3.4B Fund A strong college-educated talent pipeline is becoming increasingly important to attract the companies and investments that can power economies for decades. There are just two national top 50 public universities in Texas: The University of Texas at Austin (ranked 9th) and Texas A&M (ranked 20th). Consequently, Texas is ranked 23rd nationally in the number of students attending a top 50 public university.  With the goal of elevating other Texas universities to top-50 status and improving Texas’ competitiveness, the 2023 Legislature passed House Bill 1595 and House Joint Resolution 3, which will establish the Texas University Fund (TUF). The TUF is a permanent $3.4 billion research endowment that will appropriate up to $100 million dollars annually to four Texas public universities, including the University of Houston.  Why it matters: This historic investment will strengthen Texas’ higher education institutions by providing the necessary funding to improve Texas universities’ national rankings, which will help the state attract top talent and reduce “brain drain.” Additionally, it will allow Texas schools to compete for federal research grants, secure private research funding, drive increased alumni support, and position Texas as a top destination for premier higher education.   What’s next: Establishing the fund is contingent on voters passing Proposition 5. The Partnership urges support for the constitutional amendment creating the Texas University Fund, which will expand educational opportunities for all Texas students and strengthen the state’s economy. Proposition 6: One positive step toward addressing looming water challenges According to the most recent State Water Plan, the population in Texas is expected to grow by 73 percent from 2020 to 2070, while the water demands are projected to rise by nine percent. Meanwhile, the existing water supply is expected to decline by around 18 percent. The result would be a crisis-level water shortage of 6.9 million acre-feet per year by 2070. To address this need, the Texas Legislature passed a constitutional amendment to establish the New Water Supply Fund, the Texas Water Fund, and the Statewide Water Public Awareness Account and put dollars toward crumbling water infrastructure across the state. The measure will help address future shortfalls by enabling the state to take on new water infrastructure projects, thereby increasing access to water for residents.   What’s next: Establishing these funds and funding is contingent on voters passing Proposition 6. The Partnership urges support for the constitutional amendment creating the Texas Water Fund to assist in financing water projects in Texas. Important Election Information: Early Voting: Oct. 23 – Nov. 3 General Election Day: Nov. 7 Find more information on voting and polling locations. Find more information on each of these ballot measures supported by the Greater Houston Partnership at Houston.org/2023ballot.
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Taylor Landin
Executive Vice President and Chief Policy Officer
Public Policy
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713-844-3624
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