The 84th Legislative Session Cumulative Report The Texas A&M University System August 2015 Table of Contents Overview of the 84th Legislative Session…………………………………………………………………………………………1 Appropriations / Riders………………………………………………………………………………………………………………….21 Bill Facts…………………………………………………………………………………………………………………………………………53 TAMUS Institution-Specific Legislation…………………………………………………………………………………………..55 Overview of Key Higher Education Legislation……………………………………………………………………………….61 Other Bills of Interest…………………………………………………………………………………………………………………….87 Bill Analysis Task Force…………………………………………………………………………………………………………………..95 State Relations……………………………………………………………………………………………………………………………….97 Overview of the 84th Legislative Regular Session The 2014 election marked significant changes in statewide leadership positions. With a new Governor and Lieutenant Governor at the helm for the first time in more than a decade, combined with the addition of several newly elected Members, the priorities and process for the 84th Texas Legislature were somewhat unclear at the outset. Governor Greg Abbott and Lieutenant Governor Dan Patrick assumed their new roles and claimed a strong conservative mandate as a result of their electoral victories. In his first State of the State address, Governor Abbott outlined an agenda built on his campaign proposals, and set forth five “emergency items” – border security, transportation, pre-kindergarten, ethics reform, and higher education research funding. As the Governor’s designated emergency items, they were eligible for consideration earlier in the session. Newly elected Lieutenant Governor Patrick took the reins of the Republican-led Senate, and with the strong backing of the State’s most conservative voters, put forth his major priorities for the 84th Legislative Session. In his inauguration speech, the Lieutenant Governor cited border security, expanded Second Amendment rights, lower property and business taxes, expanded school choice, and reduced costs for higher education among his chief agenda items. He also created several “advisory boards” on issues such as the economy, tax policy, energy issues, and transportation in an effort to involve the private sector in the policy making process. One of the more significant advisory committees was the “Grassroots Advisory Board” which comprises prominent conservative activists from around the state. The group showed its independence when it published a letter openly opposing Governor Abbott’s pre- kindergarten proposal. The Texas House saw its first openly contested vote for House Speaker in 40 years. Several Tea Party affiliated legislators and interest groups argued that Speaker Straus was too moderate, prompting Representative Scott Turner (R – Frisco) to begin a campaign to unseat the Speaker. Representative Joe Straus (R – San Antonio) easily withstood a Tea Party challenge and was reelected to his fourth term as Speaker of the House of Representatives. Ultimately, when the votes were tallied, Representative Turner garnered 19 votes. In addressing the House Chamber after his reelection, Speaker Straus remarked that the Texas House would not be beholden to “special interests” or “scorecards.” In addition to the changes in leadership, turnover in both chambers led to a shake-up in committee assignments and the appointment of new committee chairs. Representative John Otto (R – Dayton) took over as Chair of the House Appropriations Committee and Senator Jane Nelson (R – Flower Mound) was appointed Chair of the Senate Finance Committee. While Senator Kel Seliger (R-Amarillo) retained his position as Chair of the Senate Higher Education Committee, Representative John Zerwas (R-Katy) assumed a new role as House Higher Education Chair. In one its first acts, the Senate changed the “two-thirds rule.” The tradition, which dated back nearly 70 years, required the approval of two-thirds of senators present to suspend the Senate rule dictating the regular order of business in order to bring a bill to the Senate floor for consideration. Supporters of the Page 1 TAMUS Office of State Relations rule argued that it promoted compromise, gave the minority a voice, and created a more congenial legislative body. Others, including the Lieutenant Governor who had long opposed the rule, argued it led to abuse of legislative procedure and put too much power into the hands of a minority of members. With significant turnover in the chamber’s membership, the Senate had the votes to replace the two- thirds rule with one requiring three-fifths support. Under the new rule, only 19 votes were required to bring up a bill for debate rather than the previous 21 votes. This change gave the Republican-led Senate the ability to bring up legislation without the support of a single Democrat. Lawmakers began the 84th Legislative Session with a budget surplus, but falling oil prices raised some uncertainty regarding the budget projections. However, newly elected Comptroller Glenn Hegar remained cautiously optimistic about the Texas economy in the State’s biennial revenue estimate. He estimated legislators would have a total of $220.9 billion General Revenue related funds to craft the State budget. In addition, Comptroller Hegar projected the Economic Stabilization Fund, also known as the Rainy Day Fund, would grow to more than $11 billion. As the session progressed, legislators and leadership struggled to find a balance between the budget priorities of the more mainstream Republicans and the more conservative Tea Party members. One of the most contentious battles of the session centered on providing tax relief, a major priority for Republicans. Though the House and Senate proposed relatively similar budgets for the upcoming biennium, the two chambers’ tax relief plans were drastically different. Early in the session, the Senate outlined a proposal to reduce the business franchise tax and provide an increased homestead exemption as a means of reducing property taxes. Meanwhile, the House plan called for a reduction in the business franchise tax rate and in the sales tax rate. Lieutenant Governor Patrick and House Ways and Means Chairman Dennis Bonnen (R – Angleton) were openly critical of the opposite chamber’s plans, and it appeared a deal might not be reached. Without an agreement on tax relief, budget writers could not complete the 2016-17 state budget, threatening to force a special session. In the end, the impasse was resolved, and the Governor, Lieutenant Governor, and Speaker announced an agreement for a $3.8 billion tax relief package that would significantly reduce the business franchise tax rate and increase the homestead exemption. Despite some differences in how to accomplish their respective priorities, legislators were able to avoid the most partisan battles that colored recent legislative sessions. Ultimately, Governor Abbott and leadership from both chambers all claimed legislative victories on key priorities. Lawmakers passed a $209 billion General Revenue budget, leaving $6.4 billion General Revenue unspent. It includes tax relief, an additional $1.5 billion for public education, funding for increased border security, increased funding for higher education, and expanded funding for the state’s pre-kindergarten program. Open carry and campus carry legislation also passed. Though some leadership priorities were unsuccessful – including a ban on sanctuary cities, major ethics reforms, and a ban on issuing same-sex marriage licenses – the legislature adjourned Sine Die, and Governor Abbott indicated he would not call members back for a special session. Page 2 TAMUS Office of State Relations Overview of Issues Higher Education Issues The following sections summarize major higher education-related issues from the 84th Legislature, with particular emphasis placed on issues impacting the Texas A&M University System institutions. Many of these issues are covered in greater detail within the “Appropriations” and “Overview of Key Higher Education Legislation” sections of this report. Nominations Governor Abbott made three appointments to expired positions on the Texas A&M University System Board of Regents. The Governor reappointed outgoing Board Chairman Phil Adams and appointed Mr. Robert L. Albritton and Mr. Williams “Bill” Mahomes each to six year terms. The Senate Nominations Committee chaired by Senator Brian Birdwell considered the Texas A&M University System nominees in their third hearing on February 19. The committee voted unanimously to approve all three nominees in their next hearing February 26. The Senate unanimously confirmed the appointments on March 3. Tuition Revenue Bonds/Facilities Funding The Texas legislature invests in higher education capital projects through the use of Tuition Revenue Bonds (TRBs), which are styled as legislatively approved tuition-backed bonds for which the legislature has historically appropriated General Revenue to reimburse institutions for debt service. The bonds are called Tuition Revenue Bonds (TRBs); however, this session the name was the subject of much discussion. Some members opposed the idea that the legislature authorized debt without seeking constitutionally required voter approval for general obligation debt of the state. Other members mistakenly thought the name meant tuition was actually used – and therefore increased – to pay the debt service. Finally, some members distrusted the process for selecting TRB projects as arbitrary and unfair. Many university systems changed the nomenclature to request “capital construction” in an attempt