Pub. 58 2017-2018 Issue 1

20 85 th TexasLegislatureGoes Into Overtime, SomeMajor IssuesRemainUnresolved Though the 85th Texas Legislature met for its 140 official Regular Session days and another 29 days in the First Called Special Session by Governor Abbott, a number of priority items including property tax reform and public school finance reform were left unresolved as the Legislature left Austin on August 15, 2017. It remains to be seen if the Governor intends to call legislators back again for another effort. The following is a summary review of some important pieces of legislation that TADA followed in the Regular and Special Sessions. Budget and Sunset Bills The only required items the Legisla- ture needed to clear by the end of the Regular Session were the budget and the Sunset Review bills that are needed to keep certain agencies operating in the next biennium. The Legislaturewas successful in passing a budget in SB 1 of the Regular Session. SB 1 provides for $217 billion in spend- ing over the 2018-2019 biennium, with balanced budgeting made possible by taking $1 billion from the Rainy Day Fund and delaying a $2 billion payment for transportation projects until the start of the following biennium. The Legislature also cleared most of the Sunset bills in the Regular Session, but it took the Special Session’s SB 20 to continue the Texas Medical Board and other health-related state agencies for another two years. Tax Issues Much of the energy in both sessions was dedicated to mandated property tax rollback elections when a city or county increases taxes on existing properties by over a specified percentage. The House and Senate got close on this issue, with the voter’s election triggered at 4% in the Senate passed version of SB 1 of the Spe- cial Session, and theHouse requiring the election at 6%. Small taxing jurisdictions were excluded from both versions, but the House and Senate would not resolve their differences before the Sine Die of the Special Session. During the Regular Session, HB 1449 was approved and signed by the Governor. It prohibits a local govern- ment from imposing linkage fees on all forms of new construction for the stated purpose of providing funds for low income housing. That law became effective on May 29, 2017. Bills (HB 28 and SB 17) to gradually reduce and ultimately eliminate the fran- chise tax based on satisfactory budget conditions were approved in the House and Senate during the Regular Session, but neither Chamber took action on the other’s version of the bill. The Governor did not add this agenda item to the First Called Session. With regard to the franchise tax, the Comptroller, House Ways andMeans Chairman, and Senate FinanceChair pushed throughHB4002 in the Regular Session. It eliminates the inclusion of labor on the installation of parts as a cost of goods sold under the tax. That result is consistent with a Texas Court of Appeals decision on the issue under the previously existing language of the statute. Insurance Issues The Texans for Lawsuit Reform and cer- tain business groups supported insurance reforms to combat claims of hailstorm lawsuit abuse during the Regular Ses- sion. HB 1774 provides for new notice requirements prior to filing suit, penalty adjustments governing the prompt pay- ment of claims, and potential limits on attorney’s fees in insurance claims over real property and structural improvement damage caused by forces of nature. HB 1774 is effective September 1, 2017.