HOUSE RESEARCH ORGANIZATION • TEXAS HOUSE OF REPRESENTATIVES P.O. Box 2910, Austin, Texas 78768-2910 (512) 463-0752 • https://hro.house.texas.gov

Steering Committee: Alma Allen, Chairman Gary VanDeaver, Vice Chairman

Dustin Burrows John Frullo J. M. Lozano Jim Murphy Angie Chen Button Mary González Eddie Lucio III Andrew Murr Joe Deshotel Donna Howard Ken King Ina Minjarez Toni Rose

HOUSE RESEARCH ORGANIZATION

daily floor report

Friday, May 07, 2021 87th Legislature, Number 51 The House convenes at 10 a.m. Part One

Forty bills are on the General State Calendar for second reading consideration today. The bills analyzed or digested in Part One of today's Daily Floor Report are listed on the following page.

Analyses of postponed bills and all bills on second reading can be found online on TLIS and at https://hro.house.texas.gov/BillAnalysis.aspx.

The following House committees were scheduled to meet today: Public Education; Land and Resource Management; Corrections; Human Services; Pensions, Investments and Financial Services; Higher Education; and State Affairs.

Alma Allen Chairman 87(R) - 51

HOUSE RESEARCH ORGANIZATION Daily Floor Report Friday, May 07, 2021 87th Legislature, Number 51 Part 1

HB 4465 by Dutton, Jr. Creating a federal disaster relief funds school grant program 1 HB 3833 by King Limiting rollback taxes and interest imposed after change in land use 6 HB 2237 by Burrows Revising statutes on mechanic's, contractor's, or materialman's liens 8 HB 4426 by King Extending the authority of certain counties to cancel some subdivisions 14 HB 1556 by Murphy Extending, revising the Texas Economic Development Act (Ch. 313) 16 HB 4242 by Meyer Extending the Texas Economic Development Act (Ch. 313) for two years 25 HB 1207 by Guillen Creating a school turnaround endorsement certificate for principals 28 HB 1632 by Morrison Establishing the Texas music incubator rebate program 32 HB 3731 by Dutton, Jr. Considering a D rating as unacceptable for public school accountability 36 HB 3261 by Huberty Modifying the transition plan for electronic administration of assessments 40 HB 1231 by Moody Designating Eid al-Fitr and Eid al-Adha as optional holidays 44 HB 1396 by White Creating model peace officer training, revising misconduct processes 45 HB 4387 by González Requiring THECB to establish the Texas Transfer Grant Pilot Program 53 HB 1683 by Landgraf Barring state agencies from assisting federal oil, gas operation regulation 57 HB 2656 by Moody Modifying yearly offerings of court interpreter licensing examinations 59 HB 1810 by Capriglione Producing copies of electronic information under public information laws 61 HB 4146 by King Restricting permits for discharging waste or pollutants into certain streams 64 HB 2926 by Parker Reinstating parental rights after involuntary termination 66

HOUSE HB 4465 (2nd reading) RESEARCH Dutton ORGANIZATION bill analysis 5/7/2021 (CSHB 4465 by Dutton)

SUBJECT: Creating a federal disaster relief funds school grant program

COMMITTEE: Public Education — committee substitute recommended

VOTE: 12 ayes — Dutton, Allen, Allison, K. Bell, Bernal, Buckley, M. González, Huberty, K. King, Meza, Talarico, VanDeaver

0 nays

1 absent — Lozano

WITNESSES: For — Kenneth Flippin, US Green Building Council; (Registered, but did not testify: Madison Yandell, Texas 2036; Starlee Coleman, Texas Public Charter School Association; Carrie Griffith, Texas State Teachers Association)

Against — Karen Smith, Cypress-Fairbanks ISD, TASBO, and TSA; David Anderson, Raise Your Hand Texas; (Registered, but did not testify: HD Chambers, Alief ISD and Texas School Alliance; Andrea Chevalier, Association of Texas Professional Educators; Julia Grizzard, Bexar County Education Coalition; Chandra Villanueva, Every Texan; Colby Nichols, Leander Independent School District; Naomi Miller, Northside ISD; Charles Luke, Pastors for Texas Children; Dena Donaldson, Texas AFT; Barry Haenisch, Texas Association of Community Schools; Casey McCreary, Texas Association of School Administrators; Paige Williams, Texas Classroom Teachers Association; Mark Terry, Texas Elementary Principals and Supervisors Association; Laura Atlas Kravitz, Texas State Teachers Association; Louann Martinez, Texas Urban Council of Superintendents; Heather Sheffield)

On — Christy Rome, Texas School Coalition; (Registered, but did not testify: Eric Marin, Von Byer, Leonardo Lopez, and Monica Martinez, Texas Education Agency)

DIGEST: CSHB 4465 would establish a grant program to assist school districts, open-enrollment charter schools, and regional education centers in overcoming the educational impact resulting from the declared disaster

- 1 - HB 4465 House Research Organization page 2 related to the COVID-19 pandemic. The bill also would require the state to provide certain disaster relief funds to school districts and charter schools and require schools to adopt plans for the use of those funds.

Grant program. The bill would require the commissioner of the Texas Education Agency (TEA) to establish a grant program using funds available for that purpose and reserved for the state under the federal Coronavirus Response and Relief Supplemental Appropriations Act or the American Rescue Plan Act of 2021.

The grant program would assist school districts, charter schools, and regional education service centers in overcoming the educational impact resulting from the COVID-19 pandemic and could include:

 extending instructional time;  broadband grants to ensure that students had access to remote instruction;  innovation in curriculum and instruction;  improvements in quality of air and water at school facilities; and  accelerated learning.

A broadband grant made under the program could include a payment made by TEA, a TEA contractor or subgrantee, a school district, or a charter school to a provider of services or equipment for a student or to a student's parent to pay for such services or equipment.

The commissioner could determine the terms of a grant awarded under the program, including limits on the grant amount awarded to a school district, charter school, or regional education service center and the approved use of grant funds. Funds not used in accordance with the terms of a grant could be recovered by withholding any state funds otherwise due to a district, charter school, or regional education service center that was not complying with the grant terms.

TEA could administer the grant program or contract with a regional education service center to administer the grant program. Under the bill,

- 2 - HB 4465 House Research Organization page 3 the commissioner could seek gifts, grants, and donations from any public or private sources for providing the grants.

The commissioner could adopt rules to implement the program, and a decision by the commissioner would be final and could not be appealed.

Disaster relief funds, plans. CSHB 4465 would require the state to provide disaster relief funds made available to the state under the federal Coronavirus Response and Relief Supplemental Appropriations Act or American Rescue Place Act of 2021 to school districts and charter schools in accordance with the federal grant program under which the funds were received. A waiver of a maintenance of effort requirements or other federal grant requirement would not apply. The bill's provisions related to relief funds provided under this section would expire September 1, 2025.

The board of trustees of a school district or the governing body of an open-enrollment charter school that received disaster relief funds under the bill would be required to adopt a local plan regarding the use of the funds for each school year during which the funds were permitted to be used. The local plan would have to be adopted at a public meeting at which the district or school considered any recommendations of the commissioner regarding the use of the funds, and the school or district would have to submit the plan to TEA and consider the agency's comments in adopting the plan for the following school year.

A local plan would have to address:

 local needs for extending instructional time;  measures to ensure access to remote instruction;  innovation in curriculum and instruction;  improvements in quality of air and water at school facilities; and  accelerated learning.

Districts and schools that received funding also would be required to ensure that students in need of remediation were identified and receiving appropriate services by the beginning of the 2023-2024 school year.

- 3 - HB 4465 House Research Organization page 4

Funds received under the bill would have to be used in accordance with all requirements established by the federal grant program under which the funds were received or by the U.S. Department of Education or other appropriate federal authority.

Districts and charter schools could not use the funds to provide a general increase in their local salary schedule, but the funds could be used to provide additional compensation for staff providing, supporting, or supervising extended instructional time.

TEA would have to make each local plan adopted under the bill publicly available on the agency's website.

The bill would specify that none of its provisions could be construed to limit the authority of TEA or the commissioner to audit or recover funds in accordance with federal law.

The bill would take effect September 1, 2021.

SUPPORTERS CSHB 4465 would ensure that schools across the state were able to use SAY: federal coronavirus relief funds to plan and implement an effective, multiyear response to mitigate the pandemic's impact on public education. The bill would establish a major grant program that focused schools on appropriate uses for the federal funds, including extended instructional times, broadband access, accelerated learning, and improved air and water quality in school buildings. The bill would include important safeguards to ensure that local districts and charter schools spent federal funds in accordance with the terms of the grant.

The bill would provide a framework for schools to use federal money to replace older plumbing containing lead. Improving water and air quality will lead to healthier, safer school facilities.

Concerns expressed about an earlier version of CSHB 4465 have been addressed in the committee substitute, including specifying that the portion of federal funds to be used for the grant program comes from those reserved for the Texas Education Agency (TEA) for administrative purposes. The committee substitute also removed provisions that some - 4 - HB 4465 House Research Organization page 5

had interpreted as allowing the commissioner to use federal funds to supplant, instead of supplement, state funds.

The bill gives TEA authority to adopt rules for the grant program, which could address concerns about how any grant money directed for individual services to students could be used.

CRITICS CSHB 4465 could lead to delays in getting some federal coronavirus relief SAY: funds to local schools by requiring districts and charter schools to go through the process of seeking grant funding. The bill is not needed because Congress, in providing the funding, adopted sensible limitations on how local schools can spend the dollars.

Also, the bill would allow grant funding to a student's parent to pay a provider of broadband services or equipment, but it is unclear how those funds would be spent.

- 5 - HOUSE (2nd reading) RESEARCH HB 3833 ORGANIZATION bill analysis 5/7/2021 P. King, et al.

SUBJECT: Limiting rollback taxes and interest imposed after change in land use

COMMITTEE: Ways and Means — favorable, without amendment

VOTE: 11 ayes — Meyer, Thierry, Button, Cole, Guerra, Martinez Fischer, Murphy, Noble, Rodriguez, Sanford, Shine

0 nays

WITNESSES: For — Scott Norman, Texas Association of Builders; (Registered, but did not testify: James LeBas, AECT, TXOGA, and IBAT; David Mintz, Texas Apartment Association; Rick Dennis, Texas Association of Property Tax Professionals)

Against — (Registered, but did not testify: Julie Wheeler, Travis County Commissioners Court; Susana Carranza; Linda Guy; Courtney Perry)

On — (Registered, but did not testify: Korry Castillo, Comptroller of Public Accounts)

BACKGROUND: Under Tax Code sec. 23.86, if land that was appraised as recreational, park, or scenic land is no longer subject to a deed restriction or is diverted to another use, an additional tax is imposed on the land for the preceding five years, plus interest at an annual rate of 7 percent.

Secs. 23.96 and 23.9807 establish a similar rollback period for additional taxes and interest imposed on land appraised as public access airport property or restricted-use timber, respectively, if the land was no longer subject to a deed restriction or if there was a change in land use.

DIGEST: HB 3833 would limit additional taxes imposed on land appraised as recreational, park, or scenic land; public access airport property; or restricted-use timber for which the use of land changed or that was no longer subject to a deed restriction. Additional taxes could be imposed only on the preceding three tax years, plus interest at an annual rate of 5 percent.

- 6 - HB 3833 House Research Organization page 2

The bill would take effect September 1, 2021, and would apply only to a change of use of land that occurred on or after that date.

SUPPORTERS HB 3833 would reduce the tax burden for certain property owners and SAY: standardize tax laws. Under current law, certain types of land are appraised using methods other than market value, but if the use of that land changes, there is a rollback period of five years during which the land faces penalties. The bill would limit the rollback period such that additional taxes would be imposed only for the preceding three years, rather than five years, and at an interest rate of 5 percent, rather than 7 percent. In 2019, the Legislature made this limitation for agricultural use and timber use land, and this bill would be a logical extension of that policy by providing the same for park lands, airport property, and restricted-use timber land.

While local governments may have concerns about not being able to generate these revenues, property owners have the right to choose how to use their land and should not face such high penalties. Such punitive measures discourage property owners from finding the best use for their land and may make selling the land more difficult.

CRITICS By limiting rollback taxes and interest imposed on certain properties that SAY: had a change in use, HB 3833 would negatively impact local government revenues and could affect their ability to provide public services.

NOTES: According to the Legislative Budget Board, the bill could reduce property tax revenue for school districts, and related costs to the Foundation School Fund would increase through the operation of the school finance formulas. However, because no rollback information for the types of land under the bill is available, the cost is unknown.

- 7 - HOUSE HB 2237 (2nd reading) RESEARCH Burrows, Deshotel ORGANIZATION bill analysis 5/7/2021 (CSHB 2237 by C. Turner)

SUBJECT: Revising statutes on mechanic's, contractor's, or materialman's liens

COMMITTEE: Business and Industry — committee substitute recommended

VOTE: 6 ayes — C. Turner, Cain, Crockett, Lambert, Ordaz Perez, Shine

0 nays

3 absent — Hefner, Patterson, S. Thompson

WITNESSES: For — Greg Harwell, Dallas Builders Association; Sean Rooney, NACM SW; Fred Wilshusen, Texas Construction Association; (Registered, but did not testify: Corbin Van Arsdale, AGC Texas Building Branch; Melodie Durst, Credit Union Coalition of Texas; Jim Short, Houston Real Estate Council; Stephen Scurlock, Independent Bankers Association of Texas; Shawn Kirkpatrick, KB Home; Chris Lambert, L&O Electric, Inc. and Central Texas Subcontractors Association; David Mintz, Texas Apartment Association; Ned Muñoz, Texas Association of Builders; John Heasley, Texas Bankers Association; Crystal Brown, Texas Building Owners and Managers Association; Aaron Day, Texas Land Title Association; John Fleming, Texas Mortgage Bankers Association)

Against — Shelley Sampson, Airtron Inc., NRG / Direct Energy Company; Tami Behner, Barnsco and NACM; Anne Scarcella, Crawford Electric Supply and NACM SW; Teresa Waldron, Hajoca Corp; Jim Davis, Lehigh Hanson; Jason Burghart, NACM; Stephen Wilson, NACM and Foxworth Galbraith Lumber Co; Perrin Fourmy and Randall Lindley, NACM Southwest; Wendy Mode, NACM Southwest and ROMCO Equipment Co.; Kimberly Hanlin, NACM Southwest and Kloeckner Metals Corporation; Kim Larison Lancaster, NACM, Standard Supply, Bartos Industries, and Bradford Supply of Oklahoma; Heather Kimmel, WESCO Distribution Anixter Inc, Hill Country Electric Supply, Accutech Distributing, and Communications Supply Corporation; Stephanie Gharakhanian, Workers Defense Action Fund; (Registered, but did not testify: Caitlin Boehne, Equal Justice Center; Leonard Aguilar, Texas AFL-CIO; Denise Cawthon; Stephanie Hoffman)

- 8 - HB 2237 House Research Organization page 2

On — (Registered, but did not testify: CJ Tredway, Independent Electrical Contractors of Texas)

DIGEST: CSHB 2237 would revise several statutes relating to a mechanic's, contractor's, or materialman's lien, including statutes regarding the deadlines to file affidavits to claim a lien, the limitation period for bringing suit to foreclose a lien, and deadlines for notices of certain claims.

Definitions. CSHB 2237 would revise various definitions related to mechanic's, contractor's, or materialman's liens.

The bill would establish a definition for "purported original contractor," which would mean an original contractor who could effectively control the owner or was effectively controlled by the owner or who was engaged by the owner for the construction or repair of improvements without a good faith intention of the parties that the purported original contractor was to perform under the contract. For purposes of this definition, "owner" would not include a person who had or claimed a security interest only.

The bill would expand the definition of "improvement" to include additional fixtures or modifications to real property, machinery or apparatuses, work, or designs provided by a licensed architect, engineer, or surveyor. "Labor" would include a professional service used in the direct preparation for the work of a design, drawing, plan, plat, survey, or specification.

The bill would make revisions to certain other definitions as well, including definitions of "material," "residence," "retainage," "subcontractor," and "work."

Persons entitled to liens. The bill would specify the persons entitled to a lien for certain work performed under a contract with the owner or the owner's agent, trustee, receiver, contractor, or subcontractor. The bill also would specify that a lien would not extend to a house or building.

- 9 - HB 2237 House Research Organization page 3

Sham contract. The bill would amend provisions governing a sham contract. A person who furnished labor or materials under a direct contractual relationship with a purported original contractor would be considered an original contractor for purposes of perfecting a mechanic's lien. The bill would repeal a provision providing that a person would not be considered an owner in a sham contract if they had or claimed a security interest only.

Deadlines to file affidavits. CSHB 2237 would revise deadlines to file affidavits to claim a lien and make certain conforming changes to statutes.

The bill would require an original contractor claiming a lien to file an affidavit with the county clerk for:

 projects other than residential construction projects, no later than the 15th day of the fourth month after the original contractor's work was completed, terminated, or abandoned; or  for residential construction projects, no later than the 15th day of the third month after the original contractor's work was completed, terminated, or abandoned.

A subcontractor claiming a lien would have to file an affidavit no later than the 15th day of the fourth month after the subcontractor last provided labor or materials or after the subcontractor would normally have been required to deliver materials that had not been actually delivered, whichever date was later.

A subcontractor claiming a lien arising from a residential construction project would have to file an affidavit no later than the 15th day of the third month after the subcontractor last provided labor or materials or after the subcontractor would normally have been required to deliver materials that had not been actually delivered, whichever date was later.

The bill would require a subcontractor claiming a lien for retainage to file an affidavit no later than the 15th day of the third month after the original contract under which the subcontractor performed was completed, terminated, or abandoned.

- 10 - HB 2237 House Research Organization page 4

The bill would provide an additional three days after an affidavit of completion was filed for a copy of the affidavit to be sent to the original contractor and each claimant who sent a notice.

Limitation on bringing suit. CSHB 2237 would require a suit to be brought to foreclose a lien no later than the first anniversary of the last day a claimant could file a lien affidavit. The limitations period could be extended up to the second anniversary of that date if, before the period expired, the claimant entered into a written agreement with the then- current record owner of the property to extend the limitations period.

Notwithstanding other law, if suit was pursued solely to discharge a lien because the limitations had expired, the lien claimant's rights to pursue a suit would not be revived.

Notices. CSHB 2237 would revise certain requirements and deadlines for notices of certain claims regarding a mechanic's, contractor's, or materialman's lien.

Notice of claim for unpaid labor, materials. The bill would require a subcontractor claimant to send a notice of claim for unpaid labor or materials to the owner or reputed owner and original contractor. The notice would have to be sent by:

 the 15th day of the third month after the labor or materials were provided or the undelivered specially fabricated materials normally would have been delivered; or  for residential construction projects, the 15th day of the second month after the labor or materials were provided or the undelivered specially fabricated materials normally would have been delivered.

The bill would specify the contents of the notification.

Notice of claim for contractual retainage. The bill would require a subcontractor claimant whose contract provided for retainage to give notice for a lien for unpaid retainage, to the extent that the claim was not included in another notice, for the lien to be valid. - 11 - HB 2237 House Research Organization page 5

The subcontractor claimant would have to send the notice to the owner or reputed owner and the original contractor by 30 days after either the date the subcontractor claimant's contract was completed, terminated, or abandoned or the date the original contract was terminated or abandoned, whichever was earlier.

The bill would specify the contents of the notification.

Repealed notice requirements. CSHB 2237 would repeal provisions requiring a subcontractor claimant to give notice to the original contractor by the 15th day of the second month after each month in which all or part of the claimant's labor was performed or material delivered, and the same notice to the owner and original contractor by the 15th day of the third month after each month in which labor was performed or material delivered.

Other provisions. The bill would allow any required notice or written communication to be delivered by certified mail and would provide a method to compute the period of days in which to provide a notice if the last day of the period was on a weekend or holiday.

Withheld funds. The bill would specify that upon receiving a notice of a claim, an owner could immediately withhold from payments to the original contractor an amount necessary to pay the claim, and the withheld funds could be in addition to any reserve funds.

The bill would repeal a statute authorizing a claimant to make a written demand for payment of the claim to an owner authorized to withhold funds.

Summary motion to remove lien. The bill would provide that, after a suit was brought to foreclose a lien or declare a claim or lien invalid or unenforceable, the claimant and any other party that appeared in the proceeding would have to be notified at least 30 days, instead of 21 days, before the date of the hearing on the motion. A motion could not be heard before the 30th day after the claimant answered or appeared in the proceeding. - 12 - HB 2237 House Research Organization page 6

Other previsions. The bill would replace "retainage'" with "reservation" as it appeared in statute and make other conforming changes.

The bill would take effect September 1, 2021, and apply only to an original contract entered into on or after that date.

SUPPORTERS CSHB 2237 would clean up Texas lien laws to allow general contractors SAY: and subcontractors to more easily comply with the law. The bill would not make substantial alterations to the current process but would simplify statutes to create less confusing deadlines for affidavits and notices related to mechanic's, contractor's, or materialman's liens. The bill also would provide for a one-year statute of limitations for bringing a suit to foreclose a lien, provide specific forms for notices of claims, update definitions, and make several other conforming changes to the law. Regarding concerns about subcontractors being unable to give a second month notice, nothing in the bill would preclude them from sending an earlier notice.

CRITICS CSHB 2237 should expressly authorize subcontractors and suppliers to SAY: give notice of a lien claim on an unpaid balance in the second month after the labor was performed or material delivered. This notice is often an important tool to collect needed funds.

- 13 - HOUSE (2nd reading) RESEARCH HB 4426 ORGANIZATION bill digest 5/7/2021 T. King

SUBJECT: Extending the authority of certain counties to cancel some subdivisions

COMMITTEE: Land and Resource Management — favorable, without amendment

VOTE: 8 ayes — Deshotel, Leman, Biedermann, Craddick, Romero, Rosenthal, Spiller, Thierry

0 nays

1 absent — Burrows

WITNESSES: None

BACKGROUND: Local Government Code sec. 232.0085 allows the commissioners court of a county to cancel certain subdivisions for which the plat was filed and approved before September 1, 1989, and which had remained undeveloped if the development or making of improvements in the subdivision was not begun by a certain date and the court found that the land was likely to be developed as a colonia.

This authorization applies only to subdivisions located outside municipalities and their extraterritorial jurisdiction (ETJ) in an affected county, as defined by the Water Code, that has adopted certain statutory model rules related to safe and sanitary water supply and sewer services.

It has been suggested that including undeveloped subdivisions in the ETJ of a municipality among those that can be canceled by counties would help prevent the proliferation of colonias in those areas.

DIGEST: HB 4426 would amend Local Government Code sec. 232.0085 to allow a county commissioners court to cancel a subdivision for which the plat was filed and approved before September 1, 1989, and which had remained undeveloped and that was located in a municipality's extraterritorial jurisdiction if the area was not subject to a written agreement under specified statute that authorized the municipality to regulate subdivision plats and approve related permits in the ETJ.

- 14 - HB 4426 House Research Organization page 2

The bill would take effect September 1, 2021.

- 15 - HOUSE HB 1556 (2nd reading) RESEARCH Murphy, et al. ORGANIZATION bill analysis 5/7/2021 (CSHB 1556 by Shine)

SUBJECT: Extending, revising the Texas Economic Development Act (Ch. 313)

COMMITTEE: Ways and Means — committee substitute recommended

VOTE: 9 ayes — Meyer, Thierry, Button, Cole, Guerra, Murphy, Noble, Sanford, Shine

1 nay — Rodriguez

1 absent — Martinez Fischer

WITNESSES: For — Jeffrey Clark, Advanced Power Alliance; Rich Wells, Dow, Inc.; Megan Herring, Texas Association of Business; Tony Bennett, Texas Association of Manufacturers; Hector Rivero, Texas Chemical Council; Dale Craymer, Texas Taxpayers and Research Association; James LeBas, TXOGA; (Registered, but did not testify: Chad Wilbanks, 8minute Solar; Adam Burklund, Amshore US Wind; Lauren Spreen, Apache Corporation; David Parker, Arlington Chamber of Commerce; Dana Harris, Austin Chamber of Commerce; Metro 8 Chambers of Commerce, Texas 2050; Ed Latson, Austin Regional Manufacturing Association; Mike Meroney, BASF Corporation; Taylor Sims, Broad Reach Power, Texas Solar Branch Association; Price Ashley, Cheniere Energy; Steve Williams, City of Conroe; Guadalupe Cuellar, City of El Paso; TJ Patterson, City of Fort Worth; Angela Hale, City of McKinney, LGBTQ Chambers of Commerce, McKinney Chamber; Carrie Simmons, Conservative Texans for Energy Innovation; Logan Spence, Corteva and Engie N. A.; Micah Rodriguez, Cypress Creek Renewables and Texas Instruments; Ben Stratmann, Dallas Regional Chamber; Greg Macksood, Devon Energy; Royce Poinsett, Duke Energy Renewables; David Mindham, EDP Renewables; Michael Jewell and Shannon Meroney, Enel North America; Jay Brown, Enterprise Products and Valero Energy Corporation; Samantha Omey, ExxonMobil; Fred Shannon, Gerdau Ameristeel, Hewlett Packard Enterprise. Intel Corporation, and Applied Materials; Lindsay Munoz, Greater Houston Partnership; Shannon Ratliff, Invenergy; Jennifer Rodriguez, Lockheed Martin Aeronautics Company and North Texas Commission; Randy Cubriel, Nucor; Julie Moore, Occidental Petroleum; Jim Grace, Onward Energy, Scout Clean Energy,

- 16 - HB 1556 House Research Organization page 2 and Copenhagen Infrastructure Services Co.; Michael Jewell, Pattern Energy, Able Grid Energy Solutions, Solar Energy Industries Association; Michael Lozano, Permian Basin Petroleum Association; Bruce Scott, Pfizer; Bob Adair, Phillips 66; Lucas Meyers, Recurrent Energy, LLC; Larry Gonzales, Round Rock Chamber of Commerce; Ron Lewis, RWE Renewables; Matt Grabner, Ryan, LLC; Leticia Van de Putte, San Antonio Chamber Of Commerce; Lara Keel, Savion, LLC; Carl Richie, Texas Advanced Energy Business Alliance; Justin Yancy, Texas Business Leadership Council; Carlton Schwab, Texas Economic Development Council; Patricia Shipton, Texas Healthcare & Biosciences Institute; Ricardo Lopez-Guerra, The Boeing Company; Duane Galligher, Toyota; Thomas Ratliff, Tri-Global Energy; Shayne Woodard, Tyson, Graphics Packaging)

Against — Eric Pustejovsky, Abbott ISD; JR Proctor, Axtell ISD; Abe Gott, Blackwell Cisc; Dick Lavine, Every Texan; Wade Callaway, Gruver ISD; Cory Wood, Harrison Walker Harper; Ana Cortez, Manor ISD; Betsy Burnett, Mart ISD; Mark Porterie, Port Arthur Independent School District; Shelly Leung, Powell Law Group; Adrianne Burden, Priddy ISD; Samuel Wyatt, Rankin ISD; Sheryl Moore, Sara Leon and Associates; Vance Ginn, Texas Public Policy Foundation; Blake Powell, Texas Rural Education Association; Christy Rome, Texas School Coalition; Sara Leon and Pete Pape, Texas Schools for Economic Development; Michelle Cline, Throckmorton ISD; Rickie Harris, West Orange-Cove CISD; Mark Edward Goloby; (Registered, but did not testify: Billy Harlan, Academy ISD; Chloe Latham Sikes, Intercultural Development Research Association; Doug Greco, Network Of Texas Industrial Areas Foundation Organizations; Steve Koebele, Sara Leon & Associates; Rene Lara, Texas AFL-CIO; Dena Donaldson, Texas AFT; Craig Eiland, Texas Schools For Economic Development; Jim Sewell)

On — Daniel Casey, Moak, Casey and Associates; (Registered, but did not testify: Robert Wood, Comptroller of Public Accounts; Barry Haenisch, Texas Association of Community Schools; Colby Nichols, Texas Association of School Administrators; Will Holleman, Texas Association of School Boards)

- 17 - HB 1556 House Research Organization page 3

BACKGROUND: Tax Code ch. 313, the Texas Economic Development Act, authorizes school districts to agree to temporary abatements, or limitations, of property tax in exchange for businesses using property in the district for certain projects, including manufacturing, research and development, energy projects, computer centers, and projects on which the business has committed to expend or allocate a qualified investment of more than $1 billion, known as a "Texas priority project."

The chapter expires December 31, 2022.

DIGEST: CSHB 1556 would extend the Texas Economic Development Act through December 31, 2032, and revise certain provisions of Tax Code ch. 313.

Qualified investments and property. The bill would expand qualified investments and property that could be eligible for a limitation on appraised value to include certain renovation or improvement projects.

A "qualified investment" would include a building or permanent, nonremovable component of a building that was renovated, expanded, modernized, or improved on or after January 1, 2023, as part of a discrete project that increased the value of the building or component that housed tangible property that also was considered a qualified investment.

A building or component described above could not be considered a qualified investment unless:

 the building or component would qualify as a qualified investment if it were built during the applicable qualifying time period; and  the agreement described with specificity how the building or component would be improved.

"Qualified property" would include land on which a person proposed to renovate, expand, modernize, or otherwise improve an existing building or improvement. The land on which a building or component that was a qualified investment as described above was located could not be considered a qualified investment.

- 18 - HB 1556 House Research Organization page 4

Applications. CSHB 1556 would amend application fees and required materials for applications for a limitation.

Application fee. The bill would repeal a provision requiring a school district to establish an application fee for a limitation and instead would require applicants to pay districts a $60,000 application fee.

If the school district elected not to consider the application, the governing body would have to refund $10,000 of the application fee to the applicant. If the district elected to consider the application, $10,000 would be sent to the comptroller for an economic impact evaluation.

Application contents. The bill would repeal a provision requiring applications to include information sufficient to show that the real and personal property identified in the application as qualified property met the applicable criteria.

The application form could require the applicant to provide only the following information:

 the name and taxpayer identification number of the applicant and each parent, subsidiary, or affiliate;  contact information;  the name of the school district;  a description and the location of the project;  an estimate of the amount of the qualified investment;  the number of qualifying jobs the applicant committed to create and the total wages that would be paid;  an estimate of the appraised value of the project if it were not subject to the agreement;  an estimate of the property taxes for maintenance and operations and for debt that would have been imposed on the project if it were not subject to the agreement;  an estimate of the appraised value of the project for school district maintenance and operations property tax purposes in accordance with the agreement;

- 19 - HB 1556 House Research Organization page 5

 an estimate of the amount of property taxes for maintenance and operations that would be imposed by the school district on the project in accordance with the agreement; and  any information the comptroller required or otherwise determined was necessary to determine eligibility.

Agreements. CSHB 1556 would remove requirements for agreements, including certain supplemental and revenue protection payments, and instead would require stabilization payments. The bill also would provide for the start date of a limitation for a project involving renovations of an existing building.

Payment requirements removed. The bill would remove requirements for an agreement to include provisions for the protection of future school district revenues through the adjustment of the minimum valuations, the payment of revenue offsets, and other mechanisms agreed to.

The bill also would remove a provision authorizing an agreement to provide that the property owner would protect the school district in the event the district incurred extraordinary education-related expenses related to the project that were not directly funded in state aid formulas.

The bill would remove provisions allowing a person under an agreement to provide up to $100 per student per year in average daily attendance, or $50,000 per year, in supplemental payments to a school district. A person and school district could not enter into an agreement under which the person agreed to provide supplemental payments pursuant to an application filed on or after January 1, 2023.

Stabilization payments required. The bill would require an agreement to require the property owner to provide a stabilization payment to the school district in each tax year the limitation applied. The payment would be up to 38 percent of an amount calculated by applying the maintenance and operations tax rate of the school district to the difference between the market value of the qualified property and the value of the property under the limitation.

- 20 - HB 1556 House Research Organization page 6

A stabilization payment would not be considered to be a supplemental payment under current law.

Limitation start date for renovation projects. In the case of a project involving the improvement of an existing building, the agreement could provide that the beginning date of the limitation was the date the improvement was completed.

Reporting. CSHB 1556 would revise various reports required under the Texas Economic Development Act.

Reporting form. The bill would require the comptroller to adopt a single annual reporting form to be used by a recipient or former recipient of a limitation on appraised value. A recipient or former recipient would have to submit the form to the applicable school district and the comptroller at the same time. This provision would not apply to the form required for the report on compliance with job creation requirements.

Report to Legislature. The bill would remove the following contents of a report the comptroller is required to send to the Legislature:

 the total effect of the agreements on personal income, direct and otherwise, in the state;  the total fiscal effect of the agreements on the state and local governments; and  the median wage of new qualifying jobs under each agreement.

The bill would include in the report the amount of stabilization payments made to districts.

Report on compliance with agreements. The bill would repeal a provision allowing the comptroller to use standard economic estimation techniques, including economic multipliers, when preparing the report on compliance with agreements.

Provisions of the bill making changes to Education Code would apply beginning with the 2023-2024 school year.

- 21 - HB 1556 House Research Organization page 7

The bill would take effect January 1, 2023, and apply only to ch. 313 agreements entered into pursuant to an application filed on or after that date.

SUPPORTERS CSHB 1556 would allow school districts across the state to continue using SAY: a tool that has proved successful in attracting large-scale capital investment to Texas. The bill also would provide vital reforms to the program. Under Chapter 313, in exchange for a temporary abatement of school property taxes, companies agree to build facilities within school districts for qualifying projects. These investments result in more jobs and benefits to the economy. When the abatement ends, the developed facilities are taxed at full value, meaning that states pay less aid to these districts and the tax base of the districts grows. Chapter 313 agreements both expand and promote the long-term stability of school districts by attracting investments that otherwise would not have come to the state. Projects also attract additional ancillary businesses and services, indirectly generating more jobs.

Chapter 313 agreements provide a counterweight to the relatively high property taxes that businesses face when considering investment in Texas. Also, other states offer incentives to recruit businesses, and discontinuing the program would leave Texas at a competitive disadvantage.

By renewing Chapter 313 for another 10 years, CSHB 1556 would provide businesses currently considering an investment in a project in Texas with needed certainty. CSHB 1556 also would include essential reforms, such as eliminating outdated revenue protection payments that businesses pay districts under some current agreements. This would ensure the program incentivized investments that brought tax revenue to all schools and did not function as a special funding mechanism for a few. CSHB 1556 also would expand qualifying projects under the program to include certain renovations of facilities that already qualified under chapter 313, allowing Texas to better compete for not just new headquarters but also ongoing company capital investments in qualifying projects. The bill also would streamline the application process.

Properties considered by businesses for siting often are undeveloped before an agreement is made. Chapter 313 agreements develop facilities - 22 - HB 1556 House Research Organization page 8

on that land, allowing school districts to benefit at the end of the temporary abatement. Chapter 313 agreements require approval of both the school district and the comptroller, helping to ensure an investment would not have located in Texas but for the abatement.

CRITICS CSHB 1556 would extend and expand an unnecessary program that places SAY: a strain on the state budget. The state pays school districts for any school taxes relinquished due to these abatements, leading to less money going toward other state budgetary needs. The program also can increase inequality among school districts. While supporters claim the state will receive benefits of additional property tax revenues after the 10-year abatement ends, the taxable value remaining afterwards is only a fraction of the state's investment. In the aftermath of the COVID-19 pandemic, the state should not forfeit funds to out-of-state shareholders that could be better spent for recovery efforts in Texas.

The program struggles to achieve its mission of economic development and job creation. The gross benefits received through abatements often outweigh the number of jobs created, and the program does not go far enough in requiring more job creation or higher wages. The program even allows certain waivers on job requirements. The state should focus on other less costly economic development policies.

The abatement is largely unnecessary, as many of the businesses that have entered into chapter 313 agreements would have located to Texas even without the abatement. Many of the projects are dependent on the geography and resources of Texas. Businesses also do not need these abatements because the property tax burden has fallen significantly in the past 20 years.

CSHB 1556 would expand chapter 313 further, including renovations, expansions, and improvements on existing projects. This could increase projects, driving up costs to the state. If the Legislature were to continue chapter 313, it should review the program, expand oversight, and establish a "but for" requirement such that a project would not locate in Texas but for an abatement.

- 23 - HB 1556 House Research Organization page 9

OTHER By eliminating revenue protection payments, CSHB 1556 would remove CRITICS school districts' ability to negotiate for these benefits in chapter 313 SAY: agreements. Districts should have the discretion to develop a partnership with a business so that additional funds could be shared with the local community. This could have a chilling effect on the adoption of this important economic development tool in many school districts.

NOTES: According to the Legislative Budget Board, the bill would have a negative impact of $756,000 to general revenue through fiscal 2023, gradually increasing to $460.7 million by fiscal 2031.

The cost to the Foundation School Program would be about $1.3 million in fiscal 2025, $17 million in fiscal 2026, and $461.7 million in fiscal 2031.

- 24 - HOUSE HB 4242 (2nd reading) RESEARCH Meyer ORGANIZATION bill analysis 5/7/2021 (CSHB 4242 by Button)

SUBJECT: Extending the Texas Economic Development Act (Ch. 313) for two years

COMMITTEE: Ways and Means — committee substitute recommended

VOTE: 10 ayes — Meyer, Thierry, Button, Cole, Guerra, Martinez Fischer, Murphy, Rodriguez, Sanford, Shine

1 nay — Noble

WITNESSES: For — Shelly Leung, Powell Law Group; Hector Rivero, Texas Chemical Council; (Registered, but did not testify: Jeffrey Clark, Advanced Power Alliance; James LeBas, AECT and TXOGA; Kara Mayfield, Association of Rural Communities in Texas; Dana Harris, Austin Chamber of Commerce, Texas 2050 Coalition, and Metro 8 Chambers of Commerce; Martha Landwehr, BASF Corporation; Price Ashley, Cheniere Energy, Inc.; Guadalupe Cuellar, City of El Paso; David Parker, Coalition of East Tarrant Chambers; Charles Reed, Dallas County Commissioners Court; Matt Garcia, Dallas Regional Chamber; Eric Wright, EDPR Renewables and Orsted; Mike Meroney, Enel North America; Logan Spence, Engie N.A.; Lauren Spreen, Enterprise Products Partners LP; Daniel Casey, Moak, Casey, and Associates; Jennifer Rodriguez, North Texas Commission; Eric Blackwell, NRG; Julie Moore, Occidential Petroleum; Matt Grabner, Ryan, LLC; Grover Campbell, TASB; Carrie Simmons, Texas Advanced Energy Business Alliance; Megan Herring, Texas Association of Business; Wroe Jackson, Texas Association of Manufacturers; Colby Nichols, Texas Association of School Administrators; Carlton Schwab, Texas Economic Development Council; Ryan Paylor, Texas Independent Producers and Royalty Owners Association; Julia Parenteau, Texas Realtors; Christy Rome, Texas School Coalition; Craig Eiland, Texas Schools for Economic Development; Taylor Sims, Texas Solar Power Association; Dale Craymer, Texas Taxpayers and Research Association; Tyler Schroeder, The Boeing Company; Julie Campbell)

Against — Dick Lavine, Every Texan; Carine Martinez, Texas Public Policy Foundation; (Registered, but did not testify: Minerva Camarena Skeith, Central Texas Interfaith; Rene Lara, Texas AFL-CIO; Laura Atlas

- 25 - HB 4242 House Research Organization page 2

Kravitz, Texas State Teachers Association; Patty Quinzi, TX American Federation of Teachers)

On — (Registered, but did not testify: Robert Wood, Comptroller of Public Accounts)

BACKGROUND: Tax Code ch. 313, the Texas Economic Development Act, authorizes school districts to agree to temporary abatements, or limitations, of property tax in exchange for businesses using property in the district for certain projects, including manufacturing, research and development, energy projects, computer centers, and projects on which the business has committed to expend or allocate a qualified investment of more than $1 billion, known as a "Texas priority project."

The chapter expires December 31, 2022.

DIGEST: HB 4242 would extend the Texas Economic Development Act through December 31, 2024.

The bill would take immediate effect if finally passed by a two-thirds record vote of the membership of each house. Otherwise, it would take effect September 1, 2021.

SUPPORTERS HB 4242 would allow school districts across the state to continue to use a SAY: tool that has proved successful in attracting large-scale capital investment to Texas. In exchange for a temporary abatement of school property taxes, companies agree to build new facilities in the school district. These investments result in more jobs in the state and benefits to the economy. During the term of the abatement, any pre-existing property and inventory would still be subject to property tax. When the abatement ends, new facilities would be taxed at full value, meaning that states would have to pay less aid to these districts. Chapter 313 agreements both expand and promote the long-term stability of school districts' tax base by attracting investments that otherwise would not have come to the state.

They provide a counterweight to the relatively high property taxes that businesses face when considering making an investment in Texas. Other - 26 - HB 4242 House Research Organization page 3

states offer tax abatements to recruit businesses, and discontinuing the program would leave Texas at a competitive disadvantage. In many cases, businesses would not have invested in projects in Texas without these abatements. Chapter 313 agreements allow projects in Texas to get closer to the national average for property taxes. By renewing chapter 313 for two years this session, CSHB 4242 would provide businesses currently considering an investment in a project in Texas with more certainty and would give the Legislature the opportunity to continue the conversation on potential reforms to the program.

CRITICS CSHB 4242 would extend an unnecessary program that places a strain on SAY: the state budget. The state pays school districts for any school taxes relinquished due to these abatements, leading to less money going toward other budgetary needs and increased inequality among school districts. Abatement is largely unnecessary, as many of the businesses that have entered into chapter 313 agreements would have located to Texas even without the abatement. Many of the projects that have applied for chapter 313 agreements are dependent on the geography and resources of Texas. The Legislature should end the program rather than extending it for another two years.

OTHER The Legislature should provide vital reforms to chapter 313 this session, CRITICS while extending the program. Chapter 313 is an important economic SAY: development program but should be amended to streamline the process and remove certain outdated payment practices in current agreements that allow school districts to receive funds that are not counted towards school finance formulas, leading to unbalanced education funding.

NOTES: According to the Legislative Budget Board, the bill would have no impact through fiscal 2023 but would have a negative impact to the Foundation School Program of about $857,000 starting in fiscal 2025, gradually increasing to $98.5 million in fiscal 2031.

- 27 - HOUSE (2nd reading) RESEARCH HB 1207 ORGANIZATION bill digest 5/7/2021 Guillen

SUBJECT: Creating a school turnaround endorsement certificate for principals

COMMITTEE: Public Education — favorable, without amendment

VOTE: 12 ayes — Dutton, Allen, Allison, K. Bell, Bernal, Buckley, González, Huberty, K. King, Meza, Talarico, VanDeaver

0 nays

1 absent — Lozano

WITNESSES: For — Mark Terry, Texas Elementary Principals and Supervisors Association; (Registered, but did not testify: Andrea Chevalier, Association of Texas Professional Educators; Grover Campbell, TASB; Kristin McGuire, TCASE; Barry Haenisch, Texas Association of Community Schools; Casey McCreary, Texas Association of School Administrators)

Against — None

On — (Registered, but did not testify: Eric Marin and Jessica McLoughlin, Texas Education Agency; Annemarie Donnelly)

BACKGROUND: Education Code sec. 21.046 establishes qualifications for certification as a school superintendent or principal. Qualifications for certification as a principal must be sufficiently flexible so that an outstanding teacher may qualify by substituting approved experience and professional training for part of the educational requirements.

Interested parties have noted that many school district campuses across Texas have received an F rating under the state's accountability system and that the state would benefit from the establishment of a school turnaround endorsement certificate program for principals that could help these educators receive the training to assist struggling school districts and campuses.

- 28 - HB 1207 House Research Organization page 2

DIGEST: HB 1207 would require the State Board for Educator Certification (SBEC) to propose rules establishing training requirements and coursework for a principal to successfully complete to receive a school turnaround specialist endorsement as an addendum to a principal certificate.

In proposing the rules, SBEC would have to ensure that each person who received the endorsement demonstrated the knowledge and skills necessary to significantly improve teacher and student performance at a campus assigned an overall performance rating of F under the Education Code.

Program. SBEC would have to solicit proposals by March 1, 2022, for a school turnaround specialist endorsement program from appropriate educator preparation programs. From among the school turnaround specialist endorsement programs proposed to SBEC capable of satisfying the applicable requirements, the board may select no more than three of the programs that may be offered to principals.

A school turnaround specialist endorsement program would have to partner with one or more school districts that need principals with the training and education necessary to significantly improve teacher and student performance at one or more campuses assigned an overall performance rating of F.

The program must have appropriately qualified faculty to:

 conduct a campus leadership-needs analysis;  develop and provide the training and course work required by rules proposed under this section; and  provide necessary support to program candidates;

The program would have to establish a selective admissions process to ensure that each principal admitted to the program:

 possessed a significant knowledge of educational organizations, educational instruction, and teacher professional development;

- 29 - HB 1207 House Research Organization page 3

 demonstrated the ability to develop and implement campus-based systems that improve student learning; and  demonstrated the attributes of principals who had significantly improved teacher and student performance at underperforming campuses.

The program must offer a full-time internship that continued for at least one semester and provided meaningful interaction with the central administrative office of a school district. It also would have to collaborate with school districts to provide program participants who completed the program with continued support for at least two years after the participants’ initial assignment to a campus.

Principal requirements. To be eligible for admission to a school turnaround specialist endorsement program under this section, a principal must:

 hold a principal certificate;  have served as a principal or assistant principal for at least three school years before applying to the program;  demonstrate significant knowledge of educational organizations, educational instruction, and teacher professional development;  demonstrate the attributes of principals who have significantly improved teacher and student performance at underperforming campuses; and  provide evidence of the ability to develop and implement campus- based systems that improve student learning.

SBEC would have to periodically evaluate school turnaround specialist endorsement programs selected under the bill. For the purposes of evaluating the programs, SBEC would have to require each program to submit data, as determined appropriate by the board, for each year and at each five-year interval.

SBEC would have to propose rules relating to the school turnaround specialist endorsement to the school principal certificate no later than January 1, 2022.

- 30 - HB 1207 House Research Organization page 4

The bill would take immediate effect if finally passed by a two-thirds record vote of the membership of each house. Otherwise, it would take effect September 1, 2021.

- 31 - HOUSE (2nd reading) RESEARCH HB 1632 ORGANIZATION bill digest 5/7/2021 Morrison

SUBJECT: Establishing the Texas music incubator rebate program

COMMITTEE: Culture, Recreation and Tourism — favorable, without amendment

VOTE: 7 ayes — K. King, Gervin-Hawkins, Burns, Clardy, Israel, Krause, Martinez

0 nays

2 absent — Frullo, C. Morales

WITNESSES: For — Joe Ables, Saxon Pub; (Registered, but did not testify: Nicole Kralj and Claudia Russell, Music Venue Alliance of Austin; Aaron Lack, The Austin Federation of Musicians Local 433)

Against — (Registered, but did not testify: Anna Alkire; Beth Maynard; Ruth York)

BACKGROUND: Government Code ch. 485, subch. F establishes the Music, Film, Television, and Multimedia Office in the Office of the Governor to promote the development of the music industry in the state by informing members of that industry and the public about the resources available in the state for music production.

Interested parties have noted that many music venues, dance halls, and festivals have shut down or left Texas as a result of increasing costs and the consequences of the COVID-19 pandemic. Some have called for the state to establish a mixed beverage tax rebate program to provide financial relief that could help preserve these important cultural institutions for present and future generations of Texans.

DIGEST: HB 1632 would establish the Texas Music Incubator Rebate Program, create a dedicated account for the program in the state general revenue fund, and establish eligibility requirements for participation.

- 32 - HB 1632 House Research Organization page 2

Program administration and purpose. The bill would require the Music, Film, Television, and Multimedia Office to establish the program by September 1, 2022, administer the program, and adopt necessary rules.

The program would provide eligible music venues and eligible music festival promoters a full or partial rebate of the mixed beverage gross receipts taxes and sales tax receipts from the sale of beer and wine remitted to the comptroller annually by those venues and promoters. The money would be appropriated from a dedicated account created for the program called the Texas music incubator account. The account would be funded by mixed beverage gross receipts and sales tax receipts. Rebates would be used to assist eligible music venues and music festival promotors to support and continue to bring to local communities in the state live musical performances, including the recruitment of musical performance artists.

Under the program, the office could not provide a rebate to a music venue or music festival promoter in an amount that exceeded the lesser of $100,000 or the amount of mixed beverage gross receipts taxes and sales taxes from the sale of beer and wine remitted in the preceding year to the comptroller by the music venue or music festival promoter as a permittee or permit holder.

Eligibility for rebate. To qualify for a rebate, a music venue or music festival promoter, for at least the two years preceding the date on which the music venue or promoter submitted a rebate application, must have:

 been a permittee subject to the mixed beverage gross receipts tax or a permit holder subject to the sales tax on the sale of beer or wine;  been a retail establishment with a dedicated audience capacity of not more than 3,000 persons if the applicant was a music venue;  held a music festival in a county with a population of less than 100,000 if the applicant was a music festival promoter;  entered into a written contract with a musical performance artist to conduct a live performance at the venue or festival, as applicable, under which the artist received as compensation a specified percentage of ticket sales for or other sales during the performance, or a guaranteed amount in advance of the performance; and - 33 - HB 1632 House Research Organization page 3

 met certain criteria specified in the bill, including the marketing of live music performances through listings in printed and electronic publications and providing live music performances five or more nights per week.

The office could, at its discretion, provide a rebate under the program to a music venue or music festival promotor that failed to meet the eligibility requirements defined by the bill solely because the venue was located, or the music festival held, as applicable, in a county located wholly or partially in an area that at any time during the preceding two-year period was declared to be a disaster area by the governor or by the president of the United States.

Applications. The office would be required to prescribe the application form for obtaining a rebate under the program and establish an online portal on the office's public website for a music venue or music festival promoter to submit the application. The application would have to:

 state the amount of mixed beverage gross receipts tax and sales tax receipts attributable to the sale of beer and wine the venue or festival had remitted to the comptroller in the preceding fiscal year;  include sufficient evidence for the office to determine that the music venue or promotor qualified for the rebate; and  include any other information the office determined necessary to administer the rebate program.

Rebate applications would have to be accepted by the office beginning September 1 of each year and the office could provide rebates until the money in the Texas music incubator account was exhausted. Applications submitted by music venues or festivals located or held in a county that in the preceding two-year period had been declared a disaster area could be given expedited review by the office.

Rebates. After reviewing applications for the program, the office would be required to grant rebates to eligible music venues and festival promoters the office determined provided the most economic benefit to their communities, and to the Texas music industry, including live music performers. The comptroller, as directed by the office, would be required - 34 - HB 1632 House Research Organization page 4

to issue a warrant for a rebate drawn on the Texas music incubator account.

Account and source of funds. The Texas music incubator account would be a dedicated account in the general revenue fund. The account would be composed of:

 money deposited to the credit of the account from the state sales and use tax and mixed beverage tax;  gifts, grants, and other money received by the office for the program; and  other amounts deposited to the credit of the account.

Money in the account could be used by the office only to pay rebates to music venues and certain festival promoters participating in the program. Interest and other earnings from money in the account would have to be credited to the account. Any money that remained unobligated or unspent on the last day of each state fiscal biennium would have to be transferred by the comptroller to the general revenue fund to be used in accordance with legislative appropriation.

Among other provisions, the bill would amend the Tax Code to require the comptroller to deposit to the credit of the Texas music incubator account each fiscal year $100,000 of the revenue received from the state sales and use tax and $10 million of the revenue received from the mixed beverage gross receipts tax.

The Music, Film, Television, and Multimedia Office would be required to begin accepting rebate applications beginning September 1, 2022.

The bill would take effect September 1, 2021.

NOTES: According to the Legislative Budget Board, the bill would have an estimated negative impact of $20.2 million to general revenue through fiscal 2023. A contingency rider for $20 million for the Texas Music Incubator Program was included for consideration in Art. 11 of SB 1 by Nelson (Bonnen), the general appropriations act for fiscal 2022-23.

- 35 - HOUSE HB 3731 (2nd reading) RESEARCH Dutton ORGANIZATION bill analysis 5/7/2021 (CSHB 3731 by Dutton)

SUBJECT: Considering a D rating as unacceptable for public school accountability

COMMITTEE: Public Education — committee substitute recommended

VOTE: 8 ayes — Dutton, Allison, K. Bell, Bernal, Buckley, Huberty, K. King, VanDeaver

4 nays — Allen, M. González, Meza, Talarico

1 absent — Lozano

WITNESSES: For — Ruth Torres; (Registered, but did not testify: Veronica Garcia, Good Reason Houston; Starlee Coleman, Texas Public Charter Schools Association, Thomas Parkinson)

Against — Brian Woods, Texas Association of School Administrators and Northside ISD; Dee Carney, Texas School Alliance; (Registered, but did not testify: Andrea Chevalier, Association of Texas Professional Educators; Julia Grizzard, Bexar County Education Coalition; Jodi Duron, Elgin ISD; Charles Gaines, Raise Your Hand Texas; Hillary Lilly, San Antonio ISD; Grover Campbell, TASB; Dena Donaldson, Texas AFT; Barry Haenisch, Texas Association of Community Schools; Ann Williams, Texas Caucus of Black School Board Members; Mark Terry, Texas Elementary Principals and Supervisors Association; Laura Atlas Kravitz, Texas State Teachers Association)

On — (Registered, but did not testify: Jeff Cottrill, Eric Marin, and Von Byer, Texas Education Agency)

BACKGROUND: Education Code sec. 39.054 establishes that an overall or domain performance rating of D reflects performance that needs improvement and an overall or domain performance of F reflects unacceptable performance.

DIGEST: CSHB 3731 would revise provisions in public school accountability performance ratings and specify certain effects of a performance rating of D. The bill would require a school district, charter school, or campus assigned a D rating to develop and implement a local improvement plan.

- 36 - HB 3731 House Research Organization page 2

District and campus ratings. CSHB 3731 would treat a district or campus overall performance rating of D as follows:

 a reference in law to an acceptable performance or acceptable performance rating of a district, open-enrollment charter school, or district or charter school campus would include an overall performance rating of D if, since previously receiving an overall performance rating of C or higher, the district, charter school, or campus had not received either an overall performance rating of F or two or more overall performance ratings of D;  a performance rating of D that satisfied those requirements would be considered performance that needed improvement; and  a reference in law to an unacceptable performance or unacceptable performance rating would include a performance rating of D that did not satisfy those requirements.

Transition period. The bill would add a transition period set to expire September 1, 2027, for purposes of determining the performance rating history of an applicable district, campus, or charter school.

For an overall performance rating issued in 2017-2018 or a prior school year, the following equivalencies would apply:

 an overall rating of met standard, academically acceptable, recognized, exemplary, A, B, or C would be considered as a performance rating of C or higher, and  an overall rating of improvement required, academically unacceptable, or F would be considered as a rating of F.

Ratings pause. The bill would provide for a pause in applicable accountability interventions or sanctions if those interventions or sanctions were based on the first or second overall performance rating of D by a district, campus, or charter school since previously receiving a rating of C or higher. Under those circumstances, the Texas Education Agency (TEA) would be prohibited from implementing certain interventions or sanctions until another performance rating was issued.

- 37 - HB 3731 House Research Organization page 3

Such a pause also would be applied to revocation of a charter, annexation of an academically unacceptable school district, and a change in district accreditation.

The bill would establish that a first or second overall performance rating of D that triggered an interventions pause could not be included in calculating consecutive years of an unacceptable performance rating and would not be considered a break in consecutive school years of an unacceptable performance rating. Interventions or sanctions implemented prior to the pause would continue during the school year for which D ratings were paused.

Local improvement plan. CSHB 3731 would require a district, charter school, or campus assigned a rating of D that qualified as a rating of needs improvement under the bill criteria to develop and implement a local improvement plan. The plan would have to be presented to the district board of trustees or charter school governing board, as applicable.

The education commissioner would have to adopt rules to establish requirements for plan components and training. The commissioner would be prohibited from requiring a district or charter school to submit the plan to TEA.

Other provisions. The bill would repeal statutory provisions that require a district or campus assigned an overall or domain performance rating of D to develop and implement a targeted improvement plan. Also repealed would be provisions requiring the commissioner to take certain actions for each consecutive school year thereafter in which the district or campus was assigned an overall performance rating of D.

The bill would take immediate effect if finally passed by a two-thirds record vote of the membership of each house. Otherwise, it would take effect September 1, 2021.

SUPPORTERS CSHB 3731 would clarify how schools that receive a D rating are SAY: addressed under the public school accountability system. By treating a D rating the same as an F rating, the bill would alert school officials and the public to schools that need improvement to better serve their students, - 38 - HB 3731 House Research Organization page 4

many of whom are from low-income, minority neighborhoods that have long been poorly served by underperforming schools. The bill would create a two-year pause in interventions for D-rated schools to allow them time to make adjustments in their teaching and curriculum to close achievement gaps and improve student performance. Those that made such strides could avoid closure or takeover by the state.

The bill would ensure that plans to improve a campus were developed locally, rather than by the state, and adopted by a district's board of trustees or a charter school's governing board.

CRITICS CSHB 3731 would cause instability in the school accountability system by SAY: increasing the number of unacceptable campuses, including retroactively classifying many campuses from D to F. This could make these schools and districts susceptible to a state takeover based on a flawed system of assigning letter grades based largely on student test scores. The bill would compound the emphasis by penalizing D campuses as though they received an F.

- 39 - HOUSE HB 3261 (2nd reading) RESEARCH Huberty ORGANIZATION bill analysis 5/7/2021 (CSHB 3261 by Dutton)

SUBJECT: Modifying the transition plan for electronic administration of assessments

COMMITTEE: Public Education — committee substitute recommended

VOTE: 12 ayes — Dutton, Allen, Allison, K. Bell, Bernal, Buckley, M. González, Huberty, K. King, Meza, Talarico, VanDeaver

0 nays

1 absent — Lozano

WITNESSES: For — (Registered, but did not testify: Naomi Miller, Northside ISD; Taylor Sims, Project Lead the Way; Madison Yandell, Texas 2036; Jennifer Bergland, Texas Computer Education Association; Mia McCord, Texas Conservative Coalition; Suzi Kennon, Texas PTA; Starlee Coleman, Texas Public Charter School Association; Gilbert Zavala, The Greater Austin Chamber of Commerce; Knox Kimberly, Upbring; Thomas Parkinson)

Against — Greg Wright, Instructional Materials Coordinators’ Association of Texas; (Registered, but did not testify: Carrie Griffith, Texas State Teachers Association)

On — (Registered, but did not testify: Chloe Latham Sikes, Intercultural Development Research Association; Eric Marin and Monica Martinez, Texas Education Agency; Dee Carney, Texas School Alliance)

BACKGROUND: Education Code sec. 39.02341 requires the Texas Education Agency in consultation with the State Board of Education to develop a transition plan to administer all required assessment instruments electronically.

DIGEST: CSHB 3261 would authorize a matching grant program, allow funds from the instructional materials and technology allotment to be used for certain purposes, and modify the transition plan to electronically administer required assessment instruments, among other provisions.

- 40 - HB 3261 House Research Organization page 2

Matching grant program. The commissioner of education could establish a matching grant program to ensure that all school districts and open-enrollment charter schools had the necessary infrastructure to administer assessment instruments electronically in accordance with the transition plan. In establishing the grant program, the commissioner could:

 set eligibility criteria to receive a matching grant under the program; and  contract with developers of technology as necessary to ensure the most efficient and cost-effective implementation of internet connectivity infrastructure for electronic administration of assessment instruments.

The provisions permitting the establishment of a grant program would expire September 1, 2025.

Instructional materials and technology allotment. The bill would specify that funds under the instructional materials and technology allotment could be used to purchase services, equipment, and technology infrastructure necessary to ensure internet connectivity and adequate bandwidth and pay for training personnel in the electronic administration of assessment instruments.

Transition plan. The bill would modify the transition plan to administer all assessment instruments electronically by limiting its applicability to:

 assessment instruments designed to assess essential knowledge and skills in reading, mathematics, social studies, and science;  end-of-course assessment instruments for secondary-level courses in Algebra I, biology, English I, English II, and U.S. history; and  assessment instruments in Spanish to students in grade three through five who were of limited English proficiency.

Unless otherwise provided by commissioner rule, each of these required assessment instruments would have to be administered electronically. This provision would apply beginning with the 2023-2024 school year.

- 41 - HB 3261 House Research Organization page 3

The bill would remove the expiration date of the transition plan implementation deadline in statute.

Assessment instruments. On request by a school district or open- enrollment charter school, the commissioner could allow the district or school to administer certain required assessment instruments on the first instructional day of a week if administering the assessment instrument on another instructional day would result in a significant administrative burden due to specific local conditions.

The bill would specify that an open-enrollment charter school could not be required to administer interim assessment instruments, and that an interim assessment instrument would have to be predictive of the assessment instrument for the applicable subject or course for that grade level when possible.

Beginning with the 2022-2023 school year, no more than 75 percent of the available points on an assessment instrument could be attributable to multiple-choice questions.

The bill would apply beginning with the 2021-2022 school year, unless otherwise specified.

The bill would take immediate effect if finally passed by a two-thirds record vote of the membership of each house. Otherwise, it would take effect September 1, 2021.

SUPPORTERS CSHB 3261 would allow the Texas Education Agency (TEA) sufficient SAY: time to implement the required transition plan to administer assessments electronically by removing the statutory expiration date of the plan. COVID-19 disrupted the original intended timeline of the transition plan, and this bill would give TEA the necessary time to implement it. Further, the bill would aid school districts in adapting to the transition to electronic assessments by authorizing the education commissioner to create a matching grant program.

The instructional materials and technology allotment provides school districts with the ability to adapt to the increasingly electronic nature of - 42 - HB 3261 House Research Organization page 4

instruction and assessment. Therefore, the bill appropriately would expand use of the allotment to cover technology and training costs.

CRITICS CSHB 3261 inappropriately would authorize the use of funds from the SAY: instructional materials and technology allotment to pay for equipment and training for the electronic administration of assessments. These funds are intended to supply students with textbooks and other instructional materials, not to be used for providing assessments electronically.

NOTES: According to the Legislative Budget Board, the bill would have a negative impact of about $30.2 million to general revenue through fiscal 2023.

- 43 - HOUSE (2nd reading) RESEARCH HB 1231 ORGANIZATION bill digest 5/7/2021 Moody, et al.

SUBJECT: Designating Eid al-Fitr and Eid al-Adha as optional holidays

COMMITTEE: State Affairs — favorable, without amendment

VOTE: 9 ayes — Paddie, Deshotel, Harless, Howard, Hunter, Lucio, Metcalf, Raymond, Shaheen

2 nays — P. King, Slawson

2 absent — Hernandez, Smithee

WITNESSES: For — Insiya Aziz, Emgage Action; (Registered, but did not testify: Saatvik Ahluwalia, Austin Asian Civic Communities Coalition; Chloe Goodman, Workers Defense Action Fund; Ash Hall)

Against — None

BACKGROUND: Government Code ch. 662, subch. A governs holidays for state employees. Under sec. 662.006, state employees are entitled to a paid day off from working for a state agency on an optional holiday if the holiday does not fall on a Saturday or a Sunday and the employee agrees to give up, during the same fiscal year, a state holiday that does not fall on a Saturday or Sunday and that state agencies are not prohibited from observing.

Sec. 662.003 lists the national, state, and optional holidays for state employees. Optional holidays include the days on which Rosh Hashanah, Yom Kippur, and Good Friday fall.

DIGEST: HB 1231 would include Eid al-Fitr and Eid al-Adha among the optional holidays for which state employees would be entitled to a paid day off from working under Government Code ch. 662.

The bill would take effect September 1, 2021.

- 44 - HOUSE HB 1396 (2nd reading) RESEARCH White, et al. ORGANIZATION bill analysis 5/7/2021 (CSHB 1396 by White)

SUBJECT: Creating model peace officer training, revising misconduct processes

COMMITTEE: Homeland Security and Public Safety — committee substitute recommended

VOTE: 5 ayes — White, Bowers, Goodwin, E. Morales, Patterson

4 nays — Harless, Hefner, Schaefer, Tinderholt

WITNESSES: For — Linda Nuno; Eric Schafer; (Registered, but did not testify: David Sinclair, Game Warden Peace Officers Association; Susana Carranza, League of Women Voters of Texas; Louis Wichers, Texas Gun Sense; Joshua Houston, Texas Impact; Derek Cohen, Texas Public Policy Foundation; Jason Vaughn, Texas Young Republicans; and 10 individuals)

Against — (Registered, but did not testify: Chris Jones, Combined Law Enforcement Associations of Texas; Michael Fossum; Zoila Vega- Marchena)

On — (Registered, but did not testify: Michael Antu, Texas Commission on Law Enforcement)

BACKGROUND: Occupations Code sec. 1701.452 requires the head of a law enforcement agency to report to the Texas Commission on Law Enforcement (TCOLE) regarding a licensed peace officer who resigns or retires from the agency, whose appointment is terminated, or who separates from the agency for any other reason. Included in the report must be a statement on whether the license holder was honorably discharged, generally discharged, or dishonorably discharged, and an explanation of the circumstances under which the person resigned, retired, or was terminated.

Sec. 1701.501 requires TCOLE to revoke or suspend a license, place on probation a person whose license has been suspended, or reprimand a license holder for a violation of laws governing law enforcement officers, certain reporting requirements, or a TCOLE rule.

- 45 - HB 1396 House Research Organization page 2

DIGEST: CSHB 1396 would revise laws governing policies and procedures that affecting peace officers, including related to certain model policies, duties of law enforcement agencies for officer misconduct, employment records and termination reports, and disciplinary action by the Texas Commission on Law Enforcement (TCOLE). The bill also would create an advisory committee on entities that credentialed law enforcement agencies and would limit the grant eligibility of agencies under certain circumstances.

Certain model policies. TCOLE, in consultation with the Bill Blackwood Law Enforcement Management Institute of Texas, would have to develop and make available to all law enforcement agencies model policies and associated training materials on:

 the issuance of citations for fine-only misdemeanor offenses;  the use of a no-knock entry by a peace officer;  the duty of a peace officer to intervene;  the prohibition on the use of a choke hold, carotid artery hold, or similar neck restraint by a peace officer, except in certain circumstances; and  the duty of a peace officer to render aid.

Within 180 days of TCOLE making the model policies available, each law enforcement agency would have to adopt written policies on the issuance of citations for fine-only misdemeanor offenses, the use of a no-knock entry by a peace officer, and the duty of a peace officer to intervene. An agency would adopt the policies in consultation with judges, prosecutors, commissioners courts, governing bodies of municipalities, and local residents.

A policy would have to be approved by a district judge or the county judge in the agency's jurisdiction and ensure judicial efficiency, law enforcement efficiency and effectiveness, and community safety.

The policy related to fine-only misdemeanors would have to provide a procedure for a peace officer to verify a person's identity and issue a citation and comply with certain requirements under the bill.

- 46 - HB 1396 House Research Organization page 3

Coordinated response program model policy. TCOLE, in consultation with the Health and Human Service Commission and law enforcement agencies, would have to make available to all law enforcement agencies a model policy and associated training materials on the operation of a coordinated response program.

A "coordinated response program" would mean a program operated by a law enforcement agency in which a peace officer and a mental health professional jointly responded to a report of an alleged offense or other incident involving a person with a mental impairment, suffering from homelessness, or experiencing similar circumstances.

Duties of law enforcement agency for officer misconduct. Each law enforcement agency would have to report to TCOLE each substantiated incident of misconduct by a peace officer, including:

 a conviction for a criminal offense committed in the course of performing the officer's duties;  the use of excessive force against a person suspected of committing an offense;  conduct that constituted a felony or a class A or B misdemeanor, regardless of whether the criminal offense was prosecuted;  sexual harassment involving physical contact or misuse of official capacity;  the misuse of official capacity or misappropriation of property, including the misuse of a law enforcement database or criminal records;  an unprofessional relationship with a person arrested, detained, or otherwise in the custody of the officer or the agency;  any false statements made by the officer in obtaining employment with the agency;  tampering with or fabricating physical evidence of a crime; or  tampering with a governmental record, including making false statements in the record or altering, destroying, or concealing the record.

- 47 - HB 1396 House Research Organization page 4

The agency also would have to report for each substantiated incident whether the agency terminated or took disciplinary action against the officer or permitted the officer to retire or resign in lieu of termination.

A report submitted to TCOLE would be confidential and not subject to disclosure under public information laws.

TCOLE would have to make all reported information accessible by all law enforcement agencies in the state and could make the information available to a federal law enforcement agency that was investigating an incident. TCOLE would have to make available on its website a report on reported incidents of misconduct that included the total number of incidents and information on:

 the most common types of misconduct reported;  disciplinary action taken by the law enforcement agency, including termination or permitting the peace officer to retire or resign in lieu of termination; and  any disciplinary action taken by TCOLE.

Employment termination report. The bill would remove the requirement that an employment termination report include a statement on whether the licensed peace officer was honorably discharged, generally discharged, or dishonorably discharged and an explanation of the circumstances under which the person resigned, retired, or was terminated. Instead, the employment termination report would have to indicate whether the peace officer was eligible for an honorable discharge or suspected of misconduct, regardless of whether the officer was terminated for misconduct.

The bill would redefine "honorable discharge" to mean the discharge of a license holder who, while in good standing and not under suspicion of committing misconduct, was separated from employment with or died while employed by a law enforcement agency.

"Misconduct" would include conduct by a license holder that was criminal conduct, regardless of whether the license holder was arrested for, charged with, or convicted of an offense. - 48 - HB 1396 House Research Organization page 5

A person who was subject to an employment termination report could contest an indication that the person was suspected of misconduct under the current process governing a petition for correction of such a report.

Employment records. A peace officer would be prohibited from entering into an agreement under which the officer's employing law enforcement agency was prohibited from making the officer's employment records available to another law enforcement agency.

A law enforcement agency, agency head, or other law enforcement official would not be liable for civil damages for making a person's employment records available to a hiring law enforcement agency.

Disciplinary action. The bill would expand the circumstances under which TCOLE would be required to revoke or suspend a license, place on probation a person whose license had been suspended, or reprimand a license holder to include if the license holder had engaged in conduct constituting a felony or a class A or B misdemeanor.

The bill would repeal provisions governing license suspension for an officer who had been dishonorably discharged if the officer had previously been dishonorably discharged from another agency.

Advisory committee on credentialing entities. TCOLE would have to establish an advisory committee to review entities that provided credentialing to law enforcement agencies. The advisory committee also would have to identify credentialing entities that, at a minimum, established standards and processes for reviewing adherence to the standards in certain aspects of a law enforcement agency's operations, including policies and training regarding use of force and de-escalation techniques, best practices regarding community engagement, and other items listed in the bill.

TCOLE would have to designate one or more of the credentialing entities identified by the advisory committee for purposes of certifying that the policies of a law enforcement agency complied with grant eligibility requirements under the bill. - 49 - HB 1396 House Research Organization page 6

Limitation on grant eligibility. To be eligible to receive a grant or other discretionary funding by the governor, a law enforcement agency would have to consistently report incidents of misconduct as required by the bill and maintain current certification that the agency's use of force policies complied with all applicable laws and prohibited the use of choke holds or other physical maneuvers for purpose of incapacitation, unless the officer was justified in using deadly force. The bill would apply only to a grant awarded by the Office of the Governor on or after September 1, 2022.

Other provisions. The bill would repeal a provision that establishes that all information submitted to TCOLE is confidential and not subject to disclosure under public information laws, unless the person resigned or was terminated due to substantiated incidents of excessive force or violations of the law other than traffic offenses.

TCOLE would have to implement its requirements under the bill by June 1, 2022. By December 1, 2021, TCOLE would have to amend the employment termination report to comply with the bill.

Any changes the bill would make to laws governing employment records of law enforcement officers would apply only to a separation of a license holder that occurred on or after December 1, 2021.

The bill would take effect September 1, 2021.

SUPPORTERS CSHB 1396 would address concerns that current law lacks adequate SAY: procedures and accountability tools to ensure that safety and trust are maintained between law enforcement officers and the general public. In the aftermath of recent tragic deaths involving law enforcement officers, some have called for taking steps to rebuild the relationship between law enforcement and communities to avoid future tragedies.

Modeled after the federal "Safe Policing for Safe Communities" executive action, the bill would take steps to ensure that conduct, training, transparency, and accountability of law enforcement was updated and would apply to all law enforcement agencies across the state. The bill would create model policies on a range of practices, including issuing - 50 - HB 1396 House Research Organization page 7

citations for fine-only misdemeanors, using no-knock warrants, intervening to prevent another officer from using excessive force, and banning chokeholds and similar methods except under certain circumstances.

The bill would provide TCOLE with needed and additional authority to enforce standards of professional conduct by allowing the commission to take disciplinary action on a peace officer who engaged in conduct constituting a felony or a class A or B misdemeanor. This step would allow TCOLE to hold peace officers accountable as a professional licensing and regulatory agency.

The bill would improve transparency in the hiring process by ensuring law enforcement agencies had access to information on an officer's separation from a previous agency and on instances of misconduct, if any. The bill would prohibit an officer from preventing employment records being made available and would change the employment termination form, known as the F5 form, to include an indicator of misconduct rather than a category of separation to promote communication between law enforcement agencies in the hiring process.

CRITICS CSHB 1396 would provide TCOLE too much authority in personnel SAY: matters that should be handled on the local level. Allowing TCOLE to suspend or revoke licenses for conduct constituting a felony or a class A or B misdemeanor without a defined threshold for the conduct also could impact due process. This authority mimics that of licensing agencies of other occupations, but TCOLE is a licensing and training body, so the bill should only address those functions. Decisions and investigations relating to disciplinary action for police officer misconduct should be left to local law enforcement agencies and developed through the current negotiation processes that give cities the discretion to adopt a framework that best fits their local departments and communities.With a suspended or revoked license, an agency would be forced to fire the officer, regardless of the result of the investigation, impacting the officer's career and the agency's force.

- 51 - HB 1396 House Research Organization page 8

OTHER CSHB 1396 would overly burden TCOLE, and without substantially more CRITICS resources provided to the commission, the bill would only take an SAY: incremental step and not go far enough toward addressing the issue of trust and accountability of law enforcement to the community.

NOTES: According to the Legislative Budget Board, the bill would have a negative impact of about $281,000 to general revenue through fiscal 2023.

- 52 - HOUSE HB 4387 (2nd reading) RESEARCH M. González, et al. ORGANIZATION bill digest 5/7/2021 (CSHB 4387 by Raney)

SUBJECT: Requiring THECB to establish the Texas Transfer Grant Pilot Program

COMMITTEE: Higher Education — committee substitute recommended

VOTE: 9 ayes — Murphy, Pacheco, Cortez, Frullo, Muñoz, Ortega, Parker, Raney, J. Turner

1 nay — P. King

1 absent — C. Turner

WITNESSES: For — (Registered, but did not testify: Chris Walters, Texas 2036; Gilbert Zavala, The Greater Austin Chamber of Commerce; Molly Weiner, United Ways of Texas)

Against — None

On — Harrison Keller, Texas Higher Education Coordinating Board; (Registered, but did not testify: Priscilla Camacho, Alamo Colleges District)

BACKGROUND: Education Code ch. 56, subch. M governs the Toward Excellence, Access, and Success (TEXAS) Grant Program.

Concerns have been raised that the majority of transfer students are unable to participate in the TEXAS Grant program because this program gives priority to high achieving, recent high school graduates and requires students to enroll in a four-year institution within certain timeframes. Due to the priority and time constraints of the TEXAS Grant program, thousands of transfer students do not qualify for grant funding. Suggestions have been made to create a pilot program to help eliminate barriers to grant funding for transfer students.

DIGEST: CSHB 4387 would require the Texas Higher Education Coordinating Board (THECB) to establish the Texas Transfer Grant Pilot Program under which the coordinating board could provide a grant to enable transfer students to attend eligible institutions of higher education. The

- 53 - HB 4387 House Research Organization page 2 bill would establish eligibility criteria for students and specify the amount and authorized uses of the grants.

"Eligible institution" would mean a general academic teaching institution or a medical and dental unit that offered one or more baccalaureate degree programs. The term would not include a public state college.

The Texas Transfer Grant Pilot Program would expire September 1, 2025.

Administration of pilot program. THECB would be required to administer the pilot program and consult with the student financial aid officers of eligible institutions in developing necessary rules. The board would have to allocate to an institution for each academic year the amount necessary to award grants to eligible students. The total amount of grants awarded could not exceed the amount available for the program from appropriations, gifts, grants, or other funds.

The bill would require the coordinating board and the eligible institutions to give priority to awarding grants to students who demonstrated the greatest financial need.

The coordinating board and eligible institutions would be required to award initial grants beginning with the 2022 spring semester.

Eligibility. In order to qualify for a grant under the pilot program, a student would have to:

 be a resident of the state;  meet certain financial need requirements;  be enrolled in a baccalaureate degree program at an eligible institution;  be enrolled as a transfer student for at least three-fourths of a full course load for a student in a baccalaureate program;  have applied for any available financial aid or assistance;  not be a recipient of a TEXAS Grant under current law for the same semester or term;

- 54 - HB 4387 House Research Organization page 3

 make satisfactory academic progress toward a baccalaureate degree; and  comply with any additional nonacademic requirement adopted by the coordinating board.

THECB by rule would have to establish the maximum semester credit hours or equivalent for which an eligible student could receive a grant.

A student who failed to make satisfactory academic progress toward a degree after the completion of a semester or term could not receive a grant during the next semester or term in which the student enrolled, but the student could become eligible to receive a grant in a subsequent semester or term if certain conditions were met.

The bill would require THECB to adopt rules that, in the event of a hardship or for other good cause, allowed an otherwise eligible student to receive a grant while the student did not meet certain eligibility criteria.

A person who held a baccalaureate degree would not be eligible to receive a grant under the pilot program.

Grant use. A student receiving a grant under the bill could use the money to pay any usual and customary cost of attendance incurred by the student at an eligible institution. The institution could disburse all or part of the proceeds of a grant directly to an eligible student only if the student's incurred tuition and fees at the institution had been paid.

Grant amount. Under the bill, the maximum amount of a grant for an eligible student would be determined by THECB as the average statewide amount of tuition and required fees that a resident student enrolled full- time in a baccalaureate degree program would be charged for that semester or term at eligible institutions.

The grant amount could not be reduced by any gift aid for which the person receiving the grant was eligible, unless the total amount of a person's grant plus any gift aid received exceeded the student's total financial need at an eligible institution.

- 55 - HB 4387 House Research Organization page 4

Institution, legislative requirements. An eligible institution would be required to use other available sources of financial aid, other than a loan, to cover any difference in the awarded grant amount to the student and the institution's required tuition and fees if certain criteria were met.

Among other provisions, the bill would prohibit an eligible institution from denying admission to or enrollment in the institution based on a person's eligibility to receive a grant or a person's receipt of a grant.

The bill would require the Legislature in an appropriations act to account for tuition and required fees received under the bill in a way that did not increase the general revenue appropriations to that eligible institution.

Report. By December 1 of each even-numbered year, THECB would have to submit to the Legislature a report on the effectiveness of the pilot program and a recommendation on whether the program should be continued, expanded, or terminated.

Other provisions. CSHB 4387 would require THECB to implement the bill's provisions only if the Legislature appropriated money specifically for that purpose. If the Legislature did not appropriate money, the coordinating board could, but would not be required to, implement the bill using other appropriations available for that purpose.

As soon as practicable after the bill's effective date, THECB would have to adopt certain rules to administer the pilot program.

The bill would take immediate effect if finally passed by a two-thirds record vote of the membership of each house. Otherwise, it would take effect September 1, 2021.

NOTES: According to the Legislative Budget Board, the fiscal implications of the bill cannot be determined at this time due to lack of data regarding the number of students who would participate in the grant pilot program and the grant amount that would be awarded through the program.

- 56 - HOUSE HB 1683 (2nd reading) RESEARCH Landgraf, et al. ORGANIZATION bill analysis 5/7/2021 (CSHB 1683 by Leman)

SUBJECT: Barring state agencies from assisting federal oil, gas operation regulation

COMMITTEE: Energy Resources — committee substitute recommended

VOTE: 6 ayes — Goldman, Craddick, Ellzey, Geren, Leman, Longoria

1 nay — Reynolds

4 absent — Herrero, Anchia, Darby, T. King

WITNESSES: For — Jason Modglin, Texas Alliance of Energy Producers; Tom Glass, Texas Constitutional Enforcement; (Registered, but did not testify: Bill Stevens, Panhandle Producers and Royalty Owners Association; Ben Shepperd, Permian Basin Petroleum Association; Ryan Paylor, Texas Independent Producers & Royalty Owners Association; Tulsi Oberbeck, Texas Oil and Gas Association)

Against — (Registered, but did not testify: Cyrus Reed, Lone Star Chapter Sierra Club)

On — Chris Herrington, City of Austin

BACKGROUND: Natural Resources Code sec. 81.0523 defines an "oil and gas operation" as an activity associated with the exploration, development, production, processing, and transportation of oil and gas, including drilling, hydraulic fracture stimulation, completion, maintenance, reworking, recompletion, disposal, plugging and abandonment, secondary and tertiary recovery, and remediation activities.

DIGEST: CSHB 1683 would prohibit a state agency or person employed by a state agency from contracting with or in any other manner providing assistance to a federal agency or official regarding the enforcement of a federal statute, order, rule, or regulation purporting to regulate oil and gas operations if the statute, order, rule, or regulation imposed a prohibition, restriction, or other regulation that did not exist under state law.

- 57 - HB 1683 House Research Organization page 2

The attorney general would have to defend any agency of this state that the federal government attempted to sue for an action or omission consistent with the requirements of the bill.

The bill would take immediate effect if finally passed by a two-thirds record vote of the membership of each house. Otherwise, it would take effect September 1, 2021.

SUPPORTERS CSHB 1683 would protect the state’s energy fields and jobs by preventing SAY: implementation of any new overreaching federal regulations on oil and gas production in Texas. The oil and gas industry in Texas provides billions of dollars in state revenue and represents a large percentage of the nation’s total oil production. Texas regulators, notably the Railroad Commission and Texas Commission on Environmental Quality, do an outstanding job holding the industry accountable for preventing the waste of natural resources and protecting the environment, and the bill would defend that responsibility and delegation authority.

CRITICS Under federal law, many Texas state programs are delegated by the SAY: federal government and are under agreements to collaborate with federal enforcement regulations. CSHB 1683 could create a delegation issue for these state programs and would undermine delegation authority. The bill could significantly limit cooperation between the state and federal government which would impact the efficiency of state programs.

- 58 - HOUSE (2nd reading) RESEARCH HB 2656 ORGANIZATION bill digest 5/7/2021 Moody

SUBJECT: Modifying yearly offerings of court interpreter licensing examinations

COMMITTEE: Judiciary and Civil Jurisprudence — favorable, without amendment

VOTE: 8 ayes — Leach, Davis, Julie Johnson, Krause, Middleton, Moody, Schofield, Smith

0 nays

1 absent — Dutton

WITNESSES: For — Daniel Collins, El Paso County; (Registered, but did not testify: Adam Haynes, Conference of Urban Counties; Charles Reed, Dallas County Commissioners Court)

Against — None

BACKGROUND: Government Code sec. 157.103 requires that examinations for court interpreter licensing must be offered in Texas at least twice a year at times and places designated by the director of the Office of Court Administration.

Interested parties have noted that court interpreter licensing examinations are currently offered only in person in Austin, which creates a barrier of entry to the profession for individuals in Texas who do not live near Austin.

DIGEST: HB 2656 would modify the circumstances under which examinations for court interpreter licensing had to be offered to require that exams be offered:

 in person in each county with a population of 800,000 or more at least once a year at times and places designated by the director of the Office of Court Administration; or  in person at times and places designated by the director, if any, and online at least twice a year at times designated by the director.

- 59 - HB 2656 House Research Organization page 2

The bill would take effect January 1, 2022.

- 60 - HOUSE HB 1810 (2nd reading) RESEARCH Capriglione ORGANIZATION bill digest 5/7/2021 (CSHB 1810 by Paddie)

SUBJECT: Producing copies of electronic information under public information laws

COMMITTEE: State Affairs — committee substitute recommended

VOTE: 12 ayes — Paddie, Hernandez, Deshotel, Harless, Howard, Hunter, P. King, Metcalf, Raymond, Shaheen, Slawson, Smithee

0 nays

1 absent — Lucio

WITNESSES: For — Joe Ellis, Freedom of Information Foundation of Texas; Eva Ruth Moravec, Texas Justice Initiative; (Registered, but did not testify: Kelley Shannon, Freedom of Information Foundation of Texas; Joseph Coleman, Hill Country News; Adrian Shelley, Public Citizen; Hope Osborn, Texas 2036; Michael Schneider, Texas Association of Broadcasters; Joshua Houston, Texas Impact; Donnis Baggett and Mike Hodges, Texas Press Association; Shelby Sterling, Texas Public Policy Foundation; Ron Hinkle, Texas Tax Group, LLC; Laura Prather, Transparent and Accountable Government Coalition; Don Dixon; Tom Glass; Terri Hall; Gary Zimmerman)

Against — None

On — (Registered, but did not testify: Chase Howell, Texas Secretary of State)

BACKGROUND: Some have suggested that clearer statutory guidance for the maintenance and production of electronic public information under the Public Information Act would help both governmental bodies and requestors.

DIGEST: CSHB 1810 would specify that a governmental body's use of an electronic recordkeeping system could not erode the public's right of access to public information. The contents of electronic public information would be significant and not used merely as a tool for the maintenance, manipulation, or protection of property.

- 61 - HB 1810 House Research Organization page 2

"Electronic public information" would mean public information that was produced and maintained in an electronic spreadsheet or database that was searchable or sortable.

The bill would expand the definition of public information to apply to and include a data dictionary or other indicia of the type or category of information held in the applicable field of a database, other than metadata that directly implicated database security.

If a request for information applied to electronic public information and was requested to be in a searchable or sortable format, a governmental body would have to provide an electronic copy in the requested searchable or sortable format using computer software the body used to access, support, program, manipulate, or otherwise manage the information. The governmental body would have to provide a paper copy if the requestor preferred.

A governmental body could not refuse to provide a copy of electronic public information on the grounds that exporting it or redacting excepted information would require inputting range, search, filter, report parameters, or similar commands into the computer system if the commands could be executed with software used by the governmental body in the ordinary course of managing the information.

A requestor could request that a copy of electronic public information be provided in the format in which it was maintained or in a standard export format, if supported by the governmental body's computer programs. The governmental body would be required to provide the copy on suitable electronic media.

If requested electronic public information was maintained in a format that was:

 searchable but not sortable, the electronic copy would have to be in a searchable format; or  sortable, the electronic copy would have to be in a sortable format.

- 62 - HB 1810 House Research Organization page 3

A governmental body would have to ensure that a contract for the creation and maintenance of electronic public information did not impair the public's ability to inspect or copy it or make the information more difficult to inspect or copy than records maintained by the governmental body.

The bill would apply to public information for which a third party was the custodian for the governmental body.

CSHB 1810 would not affect the applicability to electronic public information of a confidentiality provision or other exception from required disclosure. Current law governing the charges for providing copies of public information would apply to an electronic copy or paper printout of electronic public information.

The bill would repeal current provisions governing the process for responding to requests for information that required programming or manipulation of data.

The bill would take effect September 1, 2021, and would apply only to a request for public information received on or after that date.

- 63 - HOUSE HB 4146 (2nd reading) RESEARCH T. King and Cole ORGANIZATION bill digest 5/7/2021 (CSHB 4146 by Reynolds)

SUBJECT: Restricting permits for discharging waste or pollutants into certain streams

COMMITTEE: Environmental Regulation — committee substitute recommended

VOTE: 7 ayes — Landgraf, Dominguez, Dean, Goodwin, Morales Shaw, Morrison, Reynolds

0 nays

2 absent — Kacal, Kuempel

WITNESSES: For — Ruth Russell, Devils River Conservancy, Llano River Watershed Alliance; Margo Denke Griffin, Friends of Hondo Canyon; John Byrum and Sky Lewey, Nueces River Authority; Annabell McNew, Texas Hill Country River Region; (Registered, but did not testify: Kinnan Golemon, Bandera Canyonlands Alliance; Gregory Ellis, Bandera County River Authority and Groundwater District; TJ Patterson, City of Fort Worth; David Foster, Clean Water Action; Julie Lewey, Devils River Conservancy; Kirby Brown, Ducks Unlimited; Jason Sabo, Environment Texas; Judith McGeary, Farm and Ranch Freedom Alliance; Ender Reed, Harris County Commissioners Court; Cyrus Reed, Lone Star Chapter Sierra Club; Adrian Shelley, Public Citizen; Robin Schneider, Texas Campaign for the Environment; John Shepperd, Texas Foundation for Conservation; David Yeates, Texas Wildlife Association; Kenneth Flippin, U.S. Green Building Council Texas Chapter; Julie Nahrgang, Water Environment Association of Texas; Rita Beving; Linda Guy; Gregg Vunderink)

Against — (Registered, but did not testify: Courtney Hoffman, Camping Association for Mutual Progress)

On — Gregg Easley, Texas Commission on Environmental Quality

BACKGROUND: Interested parties have suggested that the best way to protect the state's remaining pristine waterways would be to prohibit the direct discharge of wastewater and other pollutants into such waterways.

- 64 - HB 4146 House Research Organization page 2

DIGEST: CSHB 4146 would prohibit the Texas Commission on Environmental Quality (TCEQ) from issuing a new permit authorizing the direct discharge of any waste, effluent, or pollutants into a classified stream segment or stream assessment unit that by September 1, 2021 had:

 at least 10 water quality samples taken from the stream segment or stream assessment unit over the 10 calendar years preceding January 1, 2020; and  according to data in TCEQ's Surface Water Quality Monitoring Information System, a total phosphorus level below .06 milligrams per liter in 90 percent or more of all water quality samples taken from the stream segment or stream assessment unit taken over the 10 calendar years preceding January 1, 2020.

The prohibition also would apply to the drainage areas of such stream segments and assessment units. TCEQ also would be prohibited from amending a permit issued before September 1, 2021, to authorize an increase in the permissible amount of discharge into such stream segments, assessment units, and their drainage areas.

The bill would not affect the authority of TCEQ to issue:

 a new or amended permit to a municipality or a river authority that authorized a direct discharge of waste, effluent, or pollutants into a stream segment, stream assessment unit, or drainage area to which the bill applied;  an individual permit for a municipal separate storm sewer system; or  a general permit for stormwater and associated non-stormwater discharges.

CSHB 4146 would apply only to an application for a permit or permit amendment submitted to TCEQ on or after the effective date of the bill.

The bill would take immediate effect if finally passed by a two-thirds record vote of the membership of each house. Otherwise, it would take effect September 1, 2021.

- 65 - HOUSE (2nd reading) RESEARCH HB 2926 ORGANIZATION bill digest 5/7/2021 Parker, et al.

SUBJECT: Reinstating parental rights after involuntary termination

COMMITTEE: Juvenile Justice and Family Issues — favorable, without amendment

VOTE: 9 ayes — Neave, Swanson, Cook, Frank, Leach, Ramos, Talarico, Vasut, Wu

0 nays

WITNESSES: For — Lori Mellinger, Empowered Women of Purpose; Judy Powell, Parent Guidance Center; Julia Hatcher, Texas Association of Family Defense Attorneys; Sarah Crockett, Texas CASA; Meagan Corser, Texas Home School Coalition; Andrew Brown, Texas Public Policy Foundation; Melissa Baker and Cynthia Simons, Texas Women's Justice Coalition; Maggie Luna; Michele Nigliazzo; (Registered, but did not testify: Terra Tucker, Alliance for Safety and Justice; Alison Mohr Boleware, National Association of Social Workers - Texas Chapter; Lindy Borchardt, for Tarrant County Criminal District Attorney Sharen Wilson; Gabriella McDonald, Texas Appleseed; Brittney Taylor, TexProtects; Anais Biera Miracle, The Children’s Shelter and Family Tapestry; Knox Kimberly, Upbring; Taran Champagne; Jimmy Vaughn; Cecilia Wood)

Against — None

On — (Registered, but did not testify: Carol Self, Department of Family and Protective Services)

BACKGROUND: Family Code sec. 161.003 authorizes the court to order termination of the parent-child relationship in a suit filed by the Department of Family and Protective Services if the court finds that:

 the parent has a mental or emotional illness or a mental deficiency that renders the parent unable to provide for the physical, emotional, and mental needs of the child;  the illness of deficiency, in all reasonable probability, proved by clear and convincing evidence, will continue to render the parent

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unable to provide for the child's needs until the 18th birthday of the child;  the department has been the temporary or sole managing conservator of the child of the parent for at least six months preceding the date of the hearing on the termination;  the department has made reasonable efforts to return the child to the parent; and  the termination is in the best interest of the child.

It has been suggested that the reinstatement of parental rights, when appropriate, provides greater safety and stability to children and their families. There are concerns that Texas law does not sufficiently address the issue of reinstatement of parental rights to a former parent whose rights to a child have been involuntarily terminated.

DIGEST: HB 2926 would establish conditions under which a petition for the reinstatement of parental rights could be filed following the involuntary termination of the parent-child relationship.

Petition for reinstatement. The bill would allow the following persons to file a petition requesting the court to reinstate the parental rights of a former parent whose parental rights were involuntarily terminated:

 the Department of Family and Protective Services (DFPS);  the single source continuum contractor with responsibility for the child who was the subject of the petition;  the attorney ad litem for the child; or  the former parent whose parental rights had been involuntarily terminated.

A petition for the reinstatement of parental rights could be filed only if at least two years had passed since the issuance of the order terminating the former parent's parental rights and the child had not been adopted and was not the subject of a written adoption placement agreement. The petitioner would be required to provide notice, as defined by the bill, if the petitioner was the former parent who was seeking to have their parental rights reinstated.

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The contents of the petition for reinstatement of parental rights would have to be sworn by the petitioner and include:

 the petitioner's name;  the name and current residence address of the former parent whose parental rights were sought to be reinstated, if that former parent was not the petitioner;  the child's name, current residence address, and date and place of birth, if known;  the name, residence address, and contact information, if known, of any party that participated in the original termination hearing and had information relevant to the determination of conservatorship of or possession of or access to the child;  a summary of the grounds for termination of the former parent's parental rights;  a summary statement of the facts and evidence that the petitioner believed demonstrated that the former parent had the capacity and willingness to perform parental duties;  a statement by the former parent requesting the reinstatement of parental rights;  a statement of the intent or willingness of the child to consent to the reinstatement of parental rights, if the child was 12 years of age or older; and  a summary of all prior requests or motions for reinstatement by the former parent and by the petitioner, if the former parent was not the petitioner, with respect to the child.

Notification. Before a former parent whose parental rights had been involuntarily terminated could file a petition for reinstatement, the former parent would have to notify DFPS of their intent to file the petition at least 45 days before the petition was filed. The commissioner of DFPS would be required to create a form to be used by a former parent for that notice that included the information in the sworn petition for reinstatement. A copy of the notice would have to be filed with the petition.

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The petition for reinstatement and notice of a hearing on the petition would have to be served on persons specified in the bill, including the child or the child's representative, the county attorney, the child's attorney ad litem, DFPS or a single source continuum contractor, and the former parent whose parent rights were sought to be reinstated, if that former parent was not the petitioner.

Reinstatement hearing. A reinstatement hearing would have to be held not later than the 60th day after the date the petition was filed. In the hearing the burden of proof would be on the petitioner, and each party could call witnesses.

The court could grant the petition and order reinstatement of the former parent's parental rights only if the court found by a preponderance of the evidence that:

 reinstatement of parental rights was in the child's best interests;  at least two years had passed since issuance of the order terminating parental rights;  the child had not been adopted and was not the subject of a written adoption placement agreement;  if the child was 12 years of age or older, the child consented to the reinstatement and desired to reside with the parent;  the former parent had remedied the conditions that were grounds for rendering the order terminating parental rights; and  the former parent was willing and had the capability to perform parental duties, including maintaining the health, safety, and welfare of the child.

In determining whether to grant a petition for reinstatement of parental rights in regard to a child who was 11 years of age or younger on the date the petition was filed, the court would be required to consider the child's age, maturity and ability to express a preference. The court could consider the child's preference regarding the reinstatement as one factor, considered along with all other relevant factors, in making the determination.

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Orders. Following a reinstatement hearing, the court could render an order granting the petition, denying the petition, or deferring the decision on the petition.

If the decision on reinstatement was deferred, the court would render a temporary order that expired after a period of six months, during which DFPS would remain the managing conservator of the child and the former parent was the possessory conservator. DFPS would be required to monitor the possessory conservatorship of the former parent during the period of the temporary order, and when the temporary order expired the court would be required to hold a hearing to determine whether to grant or deny the petition for reinstatement.

If the court rendered an order for reinstatement of parental rights, the court would be required to enter its findings in a written order stating that all legal rights, powers, privileges, immunities, duties, and obligations of the former parent regarding the child, including with respect to custody, care, control, and support, were reinstated.

If the former parent's petition for reinstatement was denied, the court would be required to render a written order that included the court's findings and detailed the reasons for the denial of the petition and a statement prohibiting the filing of a subsequent petition in regard to the former parent's parental rights before the first anniversary of the date the order of denial was issued.

The bill would take effect September 1, 2021.

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