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2022-066 2023-2024 Draft Legislative ProgramOctober 14, 2022 Report No. 2022-066 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: 2023-2024 Draft Legislative Program EXECUTIVE SUMMARY: The draft 2023-2024 Legislative Program summarizes the City’s federal and state legislative policy priorities, specifically defining the City’s position on potential legislative issues approaching the 88th Session of the Texas Legislature. As a policy document, the Program provides direction to staff in how to respectfully advocate for the City in response to proposed legislation and in working with state and federal agencies. This Program, along with a coordinated review of federal and state advocacy efforts and funding opportunities, will be presented in a Council Work Session on October 25, 2022, and for adoption by resolution for implementation on November 1, 2022. DISCUSSION: On January 10, 2023, the State of Texas 88th Legislative Session will convene in Austin, with early bill filing beginning November 14, 2022. As such, City staff developed the City’s 2023-2024 Legislative Program as the City’s primary state legislative policy document and, beginning this year, the updated policy document also includes federal policy direction. As has been noted in previous legislative sessions, issues relating to local control will likely continue to be a focal point in the upcoming state legislative session. As a full-service city, numerous issues and bills may impact City operations, positively and negatively. As a response to the wide array of issues and bills potentially affecting cities and local governments this upcoming session, individual position statements covering each issue are not included, but instead summarized in statements under each key issue area. The City’s state legislative consultant, Jackson Walker, provided the attached memorandum summarizing general and city-specific issues expected to be a focus in the upcoming state legislative session. In developing the 2023-2024 Legislative Program, City staff, along with Jackson Walker and Capital Edge, the City’s federal legislative consultant, completed a review and recommended updates based on the previous Legislative Program. To gain a better understanding of potential issues, concerns, or legislative needs, staff met with City departments to review drafts of the Legislative Program and discuss concerns from policy enacted last session. Along with internal reviews, staff reviewed priorities and the Program with, neighboring cities, peer jurisdictions, local organizations, and the Texas Municipal League. The attached Program is divided into several key issue areas: General Government, Funding, Economic Development, Land Use and Resources, Environment and Sustainability, Mobility and Transportation, Utilities, Community Development and Human Services, Public Safety, and Partnerships and Coalitions. Within each issue area, the Program includes the position the City will take on priority issues that are likely to be considered during the 88th Legislative Session. As October 14, 2022 Report No. 2022-066 it is difficult to anticipate every issue that will come before the Legislature, summarized statements for each issue area allow for a nimble, flexible, and timely response. CONCLUSION: The attached draft 2023-2024 Legislative Program provides staff with clear direction and the ability to act swiftly and advocate appropriately as state and federal legislation is considered. At the October 25 Council Meeting, staff will present the 2023-2024 Legislative Program and both staff and consultants will review federal advocacy efforts, state advocacy efforts, and strategic grant and funding processes. On November 1, staff will seek adoption of a resolution enacting the Legislative Program in advance of the November 14 early filing start date. ATTACHMENTS: 2023-2024 Draft Legislative Program Jackson Walker Memorandum STAFF CONTACT: Jennifer Rainey, Assistant to the City Manager Jennifer.Rainey@cityofdenton.com REQUESTOR: Staff Initiated PARTICIPATING DEPARTMENTS: City Manager’s Office City Attorney’s Office 2023-2024 Legislative Program TEXAS CITY OFDenton DRAFT 2 City of Denton City Council Gerard HudspethMayor Gerard.Hudspeth@cityofdenton.com Brian BeckMayor Pro Tem | District 2 Brian.Beck@cityofdenton.com Vicki ByrdDistrict 1 Vicki.Byrd@cityofdenton.com Jesse DavisDistrict 3 Jesse.Davis@cityofdenton.com Alison MaguireDistrict 4 Alison.Maguire@cityofdenton.com Brandon Chase McGeeAt-Large Place 5 Brandon.McGee@cityofdenton.com Chris WattsAt-Large Place 6 Chris.Watts@cityofdenton.com General Legislative Policy Statement of Purpose The fundamental objective of the City’s legislative activities is to produce positive outcomes for the City of Denton and its residents. Frequently, legislative proposals have the potential to significantly impact the ability of the City to carry out its overall mission. By taking a proactive role in monitoring and engaging both state and Federal Legislatures on proposed legislation, interim charges, and funding opportunities, the City will work to ensure the Denton community will continue to enjoy the quality of life they have come to expect and deserve. Federal and state advocacy efforts of the City ensure the City’s priorities are promoted, defended, and understood as municipalities and local control are discussed. General Policies As a general policy, the City opposes any legislation: • Detrimental to the City of Denton’s strategic goals or limiting its home rule authority; • Contrary to the health, safety, and welfare of its residents; • Mandating increased costs or results in loss of revenues; • Adversely impacting municipal operations; or • Diminishing the fundamental authority of the City. As a general policy, the City supports any legislation: • Advancing the City’s strategic goals and interests;• Improving the health, safety, and welfare of its residents; or• Allowing the City to sufficiently fund its services and operations.• Tools and resources to enhance the quality of life of the Denton community.DRAFT 3 General Government The City of Denton will work to protect Denton residents’ right to govern themselves and work with their local government and local elected officials to make decisions regarding their community at the local level. The City supports legislation protecting or advancing the principle of local control to allow for locally elected officials to make decisions beneficial to the interests of City residents or are otherwise beneficial to the City’s interest. The City of Denton opposes the pre-emption of municipal authority and the imposition of unfunded mandates. The City of Denton supports legislation improving government transparency, so long as such legislation does not create unwarranted confusion, unnecessarily duplicate existing disclosure requirements, or cause an undue burden as an unfunded mandate to the City. FundingThe City of Denton will work to protect the ability of the City’s elected governing body to set its own budget, raise the funding necessary to provide services to city residents and businesses, and effectively respond to the needs of the Denton community. The City of Denton further supports flexibility in the sources and generation of revenues and opposes the imposition of unfunded mandates or any action that substantially erodes Denton’s tax base. The City of Denton supports maintaining tax exemption for municipal bonds and reinstating advance refunding for municipal bonds. Economic DevelopmentThe City of Denton will continue to support access to economic development tools with the potential to expand our tax base, bring jobs to our community, and support businesses and industries that have chosen to locate themselves in Denton. The City of Denton further supports efforts increasing economic and workforce development for local jurisdictions via applicable tax credit opportunities, block and formula grant programs, and federal job training programs. Land Use and ResourcesThe City of Denton will protect the City’s ability to regulate its growth and land development, promote sound land use, and manage development within the city limits and our extraterritorial jurisdiction. The City of Denton further supports tools and authority to promote and regulate the health, safety, and welfare of the city, and flexibility in land development regulations and processes. Environment and SustainabilityThe City of Denton will support the enhancement and protection of the environment, including advocating for increased funding, supporting new and creative initiatives, and pursuing effective programs that preserve and promote sustainability. Mobility and TransportationThe City of Denton will work to protect the City’s ability to manage our utilities, rights-of-way, and publicly owned land, and maintain our authority to make decisions about how our utilities are governed, funded, and operated. The City of Denton further supports the preservation of authority and structure of municipally owned utilities and opposes legislation diminishing the ability of the City to provide needed utility services at rates set by residents through the Denton City Council. The City of Denton will support electric market reforms that do not discriminate or penalize communities with policy choices protecting the environment and that increase ERCOT grid reliability and resiliency. UtilitiesThe City of Denton will work to protect the City’s ability to manage our utilities, rights-of-way, and publicly owned land, and maintain our authority to make decisions about how our utilities are governed, funded, and operated. The City of Denton further supports the preservation of authority and structure of municipally owned utilities and opposes legislation diminishing the ability of the City to provide needed utility services at rates set by residents through the Denton City Council. The City of Denton will support electric market reforms that do not discriminate or penalize communities with policy choices protecting the environment and that increase ERCOT grid reliability and resiliency. DRAFT 4 Community Development and Human ServicesThe City of Denton will work to encourage the expansion of human services to the Denton community, including access to affordable housing, social support for addressing homelessness, behavioral/mental health services, and access to high-quality and affordable childcare, education, and physical and mental health care. Public SafetyThe City of Denton will continue efforts to ensure the safety of our residents and administer efficient and effective public safety services and municipal court operations. The City of Denton further supports flexibility and resources for disaster response, increased availability of training and technology resources for public safety, statewide standards that uniformly enhance public safety, and the preservation of judicial discretion within the municipal court. Partnerships and Coalitions The City will partner with other cities, political subdivisions, private sector and non-profit entities, and other appropriate stakeholders sharing common goals with the City of Denton to advocate for or against proposed legislation. Additionally, the City will work in coordination with coalition organizations such as the Texas Municipal League, when their adopted positions are in line with the legislative objectives and goals of the City. These partnerships and coordinated efforts are intended to provide the City with a stronger presence in the legislative process. The City of Denton will continue to support local, regional, and state partners in meaningful ways benefitting the Denton community. To accomplish this goal, the City will support legislation directly benefiting the following partners, if such proposals do not adversely affect the City’s interests:• Denton County • Denton County Transportation Authority • North Central Texas College, the University of North Texas, Texas Woman’s University, and Denton Independent School District• Non-profit partners serving the Denton community and their ability to provide critical services to vulnerable Denton residents • Texas Municipal League Produced by the City of Denton • ADA/EOE/ADEA TDD (800) 735-2989 • www.cityofdenton.comDRAFT M E M O R A N D U M FROM: Denise Rose and Kate Goodrich DATE: October 13, 2022 RE: 88th Legislative Session Update for City of Denton General Overview The 87th Regular Session was one of the most unique and challenging sessions in Texas’ legislative history. The regular session required navigating the COVID-19 pandemic before the rollout of the vaccine, an electric grid failure during Winter Storm Uri, and the initial failure of a highly political election bill that resulted in three subsequent special sessions (and the bill’s ultimate passage). About 15 percent of the almost 7,000 bills that were filed ultimately passed, including attempts at reforming the electric grid and the agencies that regulate it. When the third special session concluded late last fall, many members had to begin gearing up for tough primary races almost immediately. Although many seasoned incumbents were challenged by well-funded opponents, all but one returning member were able to escape their primary challengers unscathed. As we begin to prepare for this upcoming session, many members and their staff are reporting to us that they are experiencing both fatigue and uncertainty of what new policies the next session will bring. The 88th Regular Session will officially begin on January 10, 2023, but it will unofficially begin on November 14, 2022, when members may begin to pre-file legislation. This will present us an opportunity to be able to survey which legislative priorities members are choosing to prioritize. So far this interim, there are a handful of issues that are percolating to the surface and we can make an intelligent guess will be on the docket to explore next session. These issues include: school safety in regards to mitigating the damage of future shootings, reducing property taxes, and increasing “parental choice” when it comes to children’s education, which ranges from regulating the content of the curriculum and library books that children may access to the possibility of exploring the use of school vouchers (which are government funds that would allow families to send their kids to public or private schools, including religious institutions and homeschooling arrangements). Many of these issues have been included on several legislative priority lists. Even amongst the uncertainty, there are a few items that we do know for certain. For example, we know that this session, there are several large, complicated, and important agencies up for Sunset review—including Texas Council on Environmental Quality, the Public Utility Commission, and ERCOT. The Legislature must pass each Sunset bill or the agency in question will cease operations after a one-year wind-down period. These bills will likely take a lot of air out of the room this session. We also know that the legislature will have quite a bit of turnover, as is common after a redistricting session, with a minimum of six new faces in the Senate and 26 new Page 2 members in the House. The general election on November 8th has the possibility to change the trajectory of next session as all statewide elected officials are on the ballot; however, many are predicting that it will not significantly alter the characters at the statewide level. One other certainty that we have going into this session is that, as of this fall, Texas is experiencing an unprecedented budget surplus. In a statement that Texas comptroller Glenn Hegar released on July 14, 2022, Hegar shared that he was increasing his projected Certified Revenue Estimate for the state by almost $15 billion—to an unprecedented $26.95 billion. This is in addition to the $13.6 billion that the state already has in the Economic Stabilization Fund (ESF) (otherwise known as “the rainy day fund”). This number increased by $3.5 billion this biennium, which is more than double the amount the ESF normally grows heading into a legislative year. This is largely due to the tax collected off of increased oil prices and sales tax collected from goods that cost more because of inflation. This additional revenue will give Texas legislators a variety of options of how to spend that money. We are hearing predictions that a large amount will be allocated towards reducing property taxes, although the Comptroller recommended the Legislature spend that money towards funding water infrastructure, road infrastructure and broadband internet connectivity. City-Specific Overview Last session there was an onslaught of bills that could be considered antagonistic to cities. For example, after activists made calls to “defund the police” over the summer in the wake of George Floyd’s death, Texas went the other direction, passing legislation that would punish cities if police funding was slashed. House Bill 1900 froze property tax revenue for any city with a population of 250,000 or more that defunds police. It also allows the state to withhold sales taxes from a city that defunded police, giving that money to the Texas Department of Public Safety instead. A similar bill, Senate Bill 23, required voter approval to cut law enforcement budgets in counties with a population larger than one million people. If voter approval isn’t received and police funding is still cut, then the county’s property tax revenue will be frozen. Another issue that significantly affected cities in the 87th Session was policy surrounding persons experiencing homelessness. After the City of Austin’s decision to lift the city’s homeless encampment ban two years ago, Texas lawmakers passed a law that outlawed the encampments statewide. House Bill 1925 made camping in prohibited public spaces a crime. The Class C misdemeanor is now punishable by a fine of up to $500. In this upcoming session, we predict the ongoing power dynamics between states and local governments will continue. Last week in a two-day Senate Local Government committee hearing chaired by Sen. Paul Bettencourt (R-Houston), he expressed complaints about cities and municipalities regarding several subjects, including how they are handling, creating and maintaining affordable housing, how they are appraising property values, and how to appropriately legislate extraterritorial jurisdictions (ETJs). The affordable housing issue will be examined in an interim study that will be completed by the House Land and Resource Management Committee about the impact of zoning regulations on housing supply. The charge calls the committee to “[s]tudy the effect of governmental land-use regulations and controls on the availability and affordability of residential housing in Texas, including land use and zoning restrictions and related factors that slow or hinder housing development and improvement. Identify viable, free market solutions in lieu of governmental regulation to help Texas meet the current and future housing demands of a growing statewide Page 3 population.” In the Senate Local Government committee hearing on August 13, 2022, there were over 20 witnesses from the public who primarily testified about the lack of available affordable housing in Texas and the impact that has on staffing, schools, and quality of life. Property tax appraisal has been brought up in both chambers this interim, and both hearings received a considerable amount of attention from the public. It was explored in both a Senate Local Government committee hearing on August 14, 2022, devoted almost entirely to this subject, and also in a House Ways and Means committee hearing on September 8, 2022. It will almost definitely be an issue that will arise in the 88th session. In the Senate Local Government committee hearing, Chairman Bettencourt chastised “about a half a dozen ISDs” because he alleged that in these school districts, tax payers will not see property tax relief even if they vote for it. He argued that it is bad public policy to put an issue before voters without informing them of the tax implications, and Senator Springer, among others, heartily agreed with him. This hearing lasted approximately eight hours and public witnesses testified continuously for hours—most of them reiterating their frustration with the property tax appraisal process—specifically that it needs to be more understandable to taxpayers. Senator Bettencourt strongly implied there would be legislation this upcoming session to address transparency concerns. As it relates to the ETJ issue, an attorney with the Texas Legislative Counsel explained to the Senate Local Government committee that the laws related to annexation of an ETJ fall primarily under Chapter 42/43 of the Local Government Code, and that there are really two main questions that are asked in reference to a city’s ability to annex an ETJ: (1) does the city have the authority?; and (2) what is the process by which they can go about the annexation? Although most of the public testimony related to a specific ETJ issue that came to a head last session (Lost Creek, Texas, on the west side of Austin), Senator Bettencourt implied there will likely be legislation surrounding this issue again this session. Finally, one last issue that we continue to see arise again and again is that of “tax-payer funded lobbying.” This issue made it out of the Senate last session but died on the House floor. This is particularly one to watch, as the House member who carried it last session (Rep. Mayes Middleton, R-Galveston) will presumably be a Senator next session.