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2017-066 State Legislative SummaryDate: September 15, 2017 Report No. 2017-066 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: Summary of the 85th Texas Legislative Sessions BACKGROUND: The City compiles its key legislative issues into a State Legislative Program that is adopted by the City Council in advance of the regular Texas Legislature session every two years. The City’s 2017 State Legislative Program for the 85th session was adopted by the City Council on December 13, 2016. The Program included a general policy that the City will oppose any legislation viewed as detrimental to the City’s strategic goals or would limit home rule authority; is contrary to the health, safety, and welfare of its citizens; mandates increased costs or loss of revenues; or would diminish the fundamental authority of the City. DISCUSSION: Please find attached an End of Session Report from the City’s legislative consultant, Focused Advocacy, presenting a recap of the outcomes for the regular and special sessions of the 85th Texas Legislative, both in terms of cities affected statewide and Denton specifically. Below are a couple noteworthy items from the special session:  SB 6 passed requiring cities in large counties to receive voter approval before annexing new areas. This is harmful to cities that use annexation as a means to ensure that residents and businesses outside a city’s corporate limits, who benefit from access to the city’s facilities and services, share the tax burden associated with constructing and maintaining those facilities and services. Texas Municipal League (TML) is working to update an annexation paper and provide guidance based upon the requirements of the legislation. Staff plans to present an overview on annexation changes to the City Council at a work session in October.  HB 7 passed pre-empting some aspects of local tree ordinances. HB 7 does not allow cities to charge homeowners fees for removing trees that are under 10 inches in diameter. There is additional regulations regarding offset fees – homeowners can entirely eliminate fees by planting new trees, residential developers can offset 50% of fees, and commercial property owners can offset fees by at least 40%. This bill goes into effect December 1, 2017. Staff is working together to compare this legislation with the City’s tree ordinance and will report back to Council in October on this legislation and any associated impacts. Please do not hesitate to contact staff with any questions on the legislative session or the attached report from Focused Advocacy. ATTACHMENTS: 1. End of Session Report STAFF CONTACT: Date: September 15, 2017 Report No. 2017-066 Sarah Kuechler Assistant to the City Manager (940) 349-8356 Sarah.Kuechler@cityofdenton.com 9/13/2017 1 85TH SESSION END OF SESSION REPORT CITY OF DENTON Brandon Aghamalian Snapper Carr Curt Seidlits Andrew Keefer DENTON HOUSE DELEGATION 2 Tan Parker Investments & Financial Services (Chair) International Trade & Intergovernmental Affairs Redistricting Lynn Stucky Agriculture & Livestock Land & Resource Management Pat Fallon Culture, Recreation & Tourism Elections 9/13/2017 2 3 Jane Nelson Finance (Chair) State Affairs Health and Human Services Transition Legislative Oversight Committee (Co‐chair) Craig Estes Natural Resources & Economic Development (Chair) Business & Commerce Nominations State Affairs State Water Implementation Fund for Texas Advisory Committee DENTON SENATE DELEGATION WHERE WE STARTED LEADERSHIP AGENDAS •Solid GOP majorities in both chambers –House 95 R / 55 D Senate 20 R / 11 D •Abbott –Four Emergency Items: CPS, Sanctuary Cities, Ethics, and a Convention of the States; added a fifth: Voter ID •Patrick –SB 1‐30: Property Tax Caps, School Choice, “Bathroom Bill,” Sanctuary Cities, Voter ID, State Spending Caps, Hailstorm •Straus –School Funding, CPS, Mental Health, Infrastructure, Higher Education 4 9/13/2017 3 85TH LEGISLATURE BY THE NUMBERS •6,568 # of bills filed (i.e. –proposed ideas) •169 # of constitutional amendments filed •80 # of bills filed per day •3,089 # of bills filed last 10 days before deadline (47%) •2,508 # of “city bills” tracked and monitored by Focused Advocacy •1,211 # of bills passed (18% passage rate) •9 # of constitutional Amendments passed •1,007 # of bills signed into law •153 # of bills filed without signature •50 # of bills vetoed 5 DENTON LEGISLATIVE AGENDA As adopted by Council (Resolution #043 2016) 1. Protect Revenue Sources & Budget Setting Authority 2. Protect Land Use Regulations & Authority 3. Preserve DME as Community Owned & Operated 4. Seek introduction and passage of legislation to authorize City to utilize local Hotel Occupancy Tax (HOT) funds for enhancement of city‐owned recreation fields (as adopted by Council Resolution #11 2017) 6 9/13/2017 4 RESULTS 1. Protect Revenue Sources & Budget Setting Authority ✔ Defeated SB 1 / SB 2 2. Protect Land Use Regulations & Authority Authority ✔‐ Defeated all bad land use bills but “Vote to be Annexed” passed in special –however Denton SPA protected by Focused Advocacy efforts 3. Preserve DME ✔ No bad MOU bills passed 7 RESULTS •HB 2445 by Rep. Stucky & Estes –PASSED •Rep. Stucky filed it •Delicate bill that required a lot of negotiating with Texas Hotel Association •Mayor & lobby team invested a lot of time/effort •The bill became subject to a lot of other (unrelated) amendments •It was one of the very last bills passed on the last day •Hard fought victory with all credit to Stucky & Estes 8 9/13/2017 5 TREES •SB 744 by Sen. Kolkhorst (author) & Rep. Phelan (sponsor) –PASSED –Passed during regular session but vetoed by the Governor –Governor veto statement: “…compromise bill that imposes a very minor restriction on some municipal tree ordinances…I believe we can do better for private property owners” •HB 7 by Rep. Phelan (author) & Sen. Kolkhorst (sponsor) –PASSED –Passed during special session –HB 7, unlike SB 744, doesn’t allow cities to charge homeowners fees for removing trees that are under 10” in diameter –More specific about offset fees: homeowners can entirely eliminate fees by planting new trees, residential developers can offset 50% of fees, and commercial property owners can offset fees by at least 40% –Goes into effect Dec. 1 9 ANNEXATION •SB 715 by Sen. Campbell (author) & Rep. Huberty (sponsor) –DEFEATED –Defeated with a filibuster during regular session •SB 6 by Sen. Campbell (author) & Rep. Huberty (sponsor) –PASSED –Passed during special session –Rewrites Municipal Annexation Act to severely curtail the ability of cities to annex property –“Bracketed” to apply only to certain cities –Goes into effect on Dec. 1 10 9/13/2017 6 WHAT PASSED MUNICIPAL BILLS 11 Bill #Author Sponsor Description Status SB 4 Perry Geren Sanctuary Cities PASSED HB 100 Paddie Schwertner TNC’s (Transportation Network Companies) ‐Uber PASSED SB 1004 Hancock Geren Small Cell Deployment (right of way fees) ‐AT&T PASSED SB 1004 •SB 1004 by Sen. Hancock (author) & Rep. Geren (sponsor) –PASSED •Taxpayer subsidy for use of public property •Mandates the use of street signs, traffic structures, and street lights for antennas for cell phone companies •Subsidizes the cell phone industry with below market rental rates and capped application fees •Under the Texas Constitution, cities are mandated to receive fair market rental value for use of public rights‐of‐way. •City coalition led by McAllen and Dallas have filed a state suit challenging constitutionality of the statute. More cities are expected to join coalition as the suit moves forward 12 9/13/2017 7 WHAT DID NOT PASS REGULAR SESSION 13 Bill #Author Sponsor Description Status SB 2 Bettencourt 4% Property tax rate caps & budget referendums DEFEATED SB 715 HB 424 Campbell Huberty Vote ‐to‐be‐annexed in certain counties DEFEATED SB 241 SB 445 Burton Burton Prohibiting Cities From Advocating / Lobbying DEFEATED SB 451 HB 2551 Hancock Parker Preempting short term property rental ordinances (i.e. – Home Away / Air B‐n‐B)DEFEATED SB 488 Bettencourt Requiring cities to get Secretary of State approval for all ballot propositions DEFEATED HB 1658 SB 461 Phelan Lucio Requiring voluminous financial information to appear on bond proposition ballots DEFEATED SB 737 HB 1577 Hancock Parker Requiring cities to send email notification and hold hearings before adopting/raising “fees”DEFEATED WHAT DID NOT PASS REGULAR SESSION 14 Bill #Author Sponsor Description Status HB 1572 Workman Preempting tree ordinances if owner believes removing tree necessary for safety DEFEATED HB 744 Farrar Making cities broadly liable for attorney’s fees in civil litigation DEFEATED HB 3801 SB 1530 Capriglione Estes Prohibiting municipal regulation of payday lenders DEFEATED HB 2076 SB 628 Schubert Schwertner Allowing former owners to repurchase condemned property for lack of progress DEFEATED HB 1271 Lang Elimination of May city election date DEFEATED SB 88 HB 808 Hall Fallon Banning city red light cameras DEFEATED 9/13/2017 8 UTILITY BILLS WHAT PASSED 16 Bill #Author Sponsor Description Status SB 758 Menendez Rodriguez, J. Bill payment assistance program for CPS PASSED SB 735 Hancock Extends ERCOT IOUs to file at the PUC to make rate changes between base rate cases PASSED 9/13/2017 9 EMINENT DOMAIN 17 Bill #Author Sponsor Description Status SB 740 Kolkhorst Acquisition of property by an entity with eminent domain authority DEFEATED HB 2684 DeWayne Burns acquisition of property by an entity with eminent domain authority; waiving certain sovereign and governmental immunity DEFEATED WHAT DID NOT PASS 18 Bill #Author Sponsor Description Status HB 1460 Workman AE customers to petition the PUC to review rates DEFEATED HB 1458 Workman Allow Austin City Council to transfer management of AE to an appointed Board of Trustees DEFEATED HB 1459 Workman Cap AE general fund transfer and limit use of revenue DEFEATED HB 1461 Workman Require AE to transfer outside of city limits customers to neighboring electric cooperatives DEFEATED 9/13/2017 10 ELECTRIC MARKET STRUCTURE 19 Bill #Author Sponsor Description Status SB 736 Hancock Clardy General Land Office Power Program PASSED SB 758 Menendez Rodriguez, J.Bill payment assistance programs PASSED SB 1976 Whitmire Eligibility process for customer service benefits PASSED BILLS AFFECTING CITIES LAND USE REGULATIONS 20 Bill # Author Sponsor Description Status SB 744 Kolkhorst Phelan Tree planting credit to offset tree mitigation fees VETOED SB 1248 Buckingham Lucio IIII Limits municipal regulation of manufactured home communities PASSED HB 1449 Simmons Nelson Prohibits cities from imposing affordable housing fees on new construction PASSED HB 1704 Kuempel Huffman Loser pays court costs and attorney's fees in “permit vesting” lawsuits (chapter 245)PASSED 9/13/2017 11 21 Bill # Author Sponsor Description Status HB 501 Capriglione Taylor, V. Personal financial statements filed by public officers and candidates, disclosure of certain contracts PASSED SB 255 Zaffirini Simmons Contracts with and training for governmental entities and vendors, including purchasing and contract management training PASSED SB 1289 Creighton Paddie Purchase of iron and steel made in the United States for certain governmental entity projects PASSED SB 1221 Watson Hinojosa Annual report submitted to comptroller for hotel occupancy taxes PASSED BILLS AFFECTING CITIES CONTRACTING & REPORTING ECONOMIC DEVELOPMENT •No “bad” economic development bills passed this session. •However, dozens were filed and considered. •“Economic Development” has become a bad word. It’s now thought of by most as cronyism, picking winner and losers, corporate welfare and/or violating property rights. •Texas Enterprise Fund reduced to $86M (down from $90M). •FYI ‐Chapter 312 (tax abatements) expires next session. 22 9/13/2017 12 LOCAL CONTROL VS. LIBERTY •“If 2015 was the year local control began to lose its luster as a governing principle…, the 2017 Session saw the culmination of this unfortunate trend. •The new, improved mantra at the Capitol is “liberty,” which translates to liberty to do anything you want in a city without consideration for the liberty or property values of your neighbors. •How did we arrive at this state of affairs? •There are three principle reasons.” ‐‐TML 23 LOCAL CONTROL VS. LIBERTY •‘First, national “think tanks” are pushing the idea that state legislatures know better than local governments…that preemption …is the way forward... These groups are well funded by the national business lobby. •It’s a simple concept: why deal with multiple cities’ regulations when you can have one‐ stop shopping at the statehouse? •Second, years of litigation against the federal government have convinced some that state government is the pinnacle... That state government is supreme, and higher and lower levels of government need to get on board with that concept. •Finally, (there is) a new effort to politicize the non‐partisan nature of city government... Supporters of the two major parties are active in local city elections. This trend toward politicizing local government may be one of the biggest challenges the League faces in the coming years.” ‐‐TML 24 9/13/2017 13 SPECIAL SESSION 25 •During regular session, Lt. Gov. Dan Patrick held key “sunset” legislation hostage •It was an effort to force a special session on other issues •Namely bathrooms and property tax reform and some other “red‐meat” issues MAKE IT COUNT 20 ISSUES 26 •“Because of their inability or refusal to pass a simple law that would prevent the medical profession from shutting down, I’m announcing a special session to complete that unfinished business. But if I’m going to ask taxpayers to foot the bill for a special session, I intend to make it count.” –Greg Abbott •Promised to add 19 more issues but only after the Senate passed sunset •20 for 20 became the mantra – especially in the Senate and with the Governor •“As your governor, I will not allow Austin, Texas, to California‐ize the Lone Star State” –Greg Abbott 9/13/2017 14 PATRICK COMMENT ABOUT CITIES 27 •Dan Patrick: “People are happy with their governments at the state level. •They’re not with their cities… •Our cities are still controlled by Democrats.” –Dan Patrick PATRICK COMMENT ABOUT CITIES 28 •“Where do we have all our problems in America? Not at the state level, run by Republicans, but in our cities mostly controlled by Democrat mayors and city councilmen. •That’s where you see liberal policies, that’s where you see high taxes, where you see high street crimes. Look at New York, look at Chicago, look at…go around the country. •So the only place Democrats have control of is our cities and they’re doing a terrible job.”‐‐Dan Patrick 9/13/2017 15 THE SCORE CARD WHAT PASSED 1. Medical Board Reauthorization (sunset) ✔ 2. Annexation by Referendum ✔ 3. Preemption of Tree Ordinances ✔ 4. Reforming Health Insurance funded Abortions ✔ 5. Abortion Complication Reporting ✔ 6. Commission for School Finance ✔ 7. Teacher Pay & Benefits (Band Aid School Finance) ✖✔ 8. Mail‐in Ballot Fraud ✔ 9. Do‐Not‐Resuscitate Orders ✔ 10. Maternal Mortality Task Force ✔ 29 THE SCORE CARD WHAT FAILED 1. Property Tax Rate Caps / Budget Referendums (3%) ✖ 2. Spending Caps on Local Governments ✖ 3. Preemption of Ordinance on Private Property ✖ 4. Preemption of Hands Free Ordinances ✖ 5. Expedited Permitting ✖ 6. Bathrooms / Privacy ✖ 7. Prohibiting Taxpayer Funded Abortions ✖ 8. School Choice (Special Needs Student) ✖ 9. Union Dues ✖ 10. Spending Caps on State ✖ 30 9/13/2017 16 THE BLAME GAME 31 •"We missed some major opportunities, but what I'm most upset about is the House quit tonight," Patrick said at a press conference Tuesday evening.” With 27 hours to go, they walked off the job," he added. •Gov. Greg Abbott put blame on the House —particularly Speaker Joe Straus —for the shortcomings of the special session and left the door open to calling another one. •Asked if he assigned blame to Straus, a San Antonio Republican, Abbott replied, "Well, of course." THE BLAME GAME 32 •"There is a deep divide between the House and Senate on these important issues," Abbott said. •"So I’m going to be making decisions later on about whether we call another special session, but in the meantime, what we must do is we need to all work to get more support for these priorities and to eliminate or try to dissolve the difference between the House and the Senate on these issues so we can get at a minimum an up‐or‐down vote on these issues or to pass it.” 9/13/2017 17 LOOKING AHEAD JUDICIARY •Sanctuary Cities (SB 4) –TRO issued Aug. 30, 2017 •Voter ID –permanent injunction issued Aug. 23, 2017 •Small Cell Deployment (HB 1004) – lawsuit filed 33 LOOKING AHEAD ELECTIONS •Statewide Officers on the ballot in 2018 (US Senate top of ticket along with Governor, Lt. Gov, etc.) •Primary races essentially start now (March 6, 2018) •General Election (Nov. 6, 2018) •Retirements / Seeking other offices will continue to drive turnover in Legislature 34 9/13/2017 18 MEMBERS NOT RETURNING 35 SENATORS REPRESENTATIVES 1. Taylor, Van (R) – Plano 1. Keough, Mark (R) –The Woodlands 2. Gonzales, Larry (R) – Round Rock 3. Laubenberg, Jodie (R) – Parker 4. Cindy Burkett – running for Senate 5. Pat Fallon – running for Senate LOOKING AHEAD NEXT SESSION •Anti‐First Amendment Movement (limiting cities voice in legislature) •Property Tax Rate Caps & Budget Referendums •Local Control v. Liberty (i.e.‐municipal preemption) –Land use –STR •Right of Way Revenues •Debt Issuance •Re‐Addressing Unconstitutional Bills 36 9/13/2017 19 THANK YOU Brandon Aghamalian Snapper Carr Curt Seidlits Andrew Keefer 37