From the 87th A Strange New World and Gov. Abbott's State of the State

Strange times indeed.  Pointing out the obvious, the 87th Session is certainly, at this point, unlike any other prior session. 

By a long shot. 

Testing before you enter the Capitol, limiting the number of people in the building, offices closed or working remotely, new rules, ubiquitous masks, the cafeteria (the major hub of typical session activity) closed, and describing the hallways, chambers and offices are sparsely populated is an understatement, just to name a few.

And one more obvious point, we do not know how things will progress or what changes will occur in the coming months.  We all hope with vaccine rollouts that month-after-month we are all returning to lives with the semblance of normalcy, assuming we can remember at this point what that is. 

While we expect to find out from Speaker Phelan later this week the composition of the House committee assignments, there is still a great deal of uncertainty as to when committee work will begin, how it will work, and how many hearings are even going to be conducted.

We are nearly through our first month out of five and hearing that the next month could look and operate similarly to this start – slow, quiet, and distanced.  All that is known is that the longer and slower things take at the start, the more compressed, intense, risky, and difficult things will get towards the end. 

Passing any legislation, even the seemingly mundane, inconsequential, and universally supported, is going to be difficult simply from the perspective of process, but mostly because there will not be enough time.

At this stage we continue to read the bills that are filed daily.  We are nearly to 2,000 bills filed, which I’m sure we will surpass by the end of the week.  Until we see how the committee process is going to work under these new conditions, we won’t be able to see which bills are starting to gain traction.  At this point we operate with an abundance of caution and assume everything will move, and therefore work them all.  We are tracking and working on 85 bills so far and expect by the March bill-filing-deadline that number will approach 300.

Big Ticket

Big ticket items that we are focused on right now are COVID business liability protection, Paycheck Protection Program loan forgiveness impact on Texas franchise tax, and ensuring we are deemed essential businesses to remain operational. 

Bills are still in the drafting stage for liability protection and essential businesses, but at least two PPP bills are filed HB 1195 and SB 372.  Recent federal law changes made sure that when a business who obtained a PPP loan has that loan forgiven, the loan forgiveness will not count as income for federal income tax purposes.  However, we have learned from the Comptroller’s office that PPP loan forgiveness would be counted as revenue for Texas Franchise Tax purposes.  And the current legal opinions are that only a change in the state’s laws can avoid this undesired outcome for so many Texas businesses.

Gov. Abbott’s State of the State

In the broken record of more things that are different this session, rather than giving his state-of-the-state address in an afternoon session to a packed chamber with all members, staff, and the public there watching, Gov. Abbott gave his address alone, directly to camera Monday evening.

Always the most telling information coming out of the of the state-of-the-state are the governor’s declared “emergency items.”  Technically, theses are specific items that the governor has determined need more immediate attention and therefore allows lawmakers to take them up sooner in the process than the rules would otherwise allow.  But more importantly is that these are single calls to the legislature on what the governor wants to see occur during the session.  And while far from automatic that he will get all that he calls for done by the end of May, it clearly indicates his priorities moving forward.

For this session Gov. Abbott had five emergency items: 1) expanding broadband internet access, 2) laws that prevent cities from “defunding police,” 3) changing the bail system, 4) election integrity, and 5) providing civil liability protections for businesses that were open during the pandemic.

For our manufactured housing industry, the two most important declared emergency items by the governor were the expansion of broadband and civil liability protection.  The COVID pandemic has drawn yet another important light and focus on how critical access to effective, quality broadband is for the citizens of Texas.  Gov. Abbott cited education and medicine as drivers for the expansion, which clearly are the most critical, but in addition, the opportunity to work remotely, including the virtual meeting and communicating tools utilized by so many during the pandemic are needed throughout Texas.  Expansion of broadband opens more rural areas of Texas for some people to live and now work remotely, and in these markets our homes compete and thrive.  And a pandemic can certainly make clearer the advantages to having your own house, yard, land, space, more square footage, and whether it is millennial first time buyers or retirees, the idea now of moving “out to the country” and living in more rural Texas has taken on all new levels of appeal.

And finally, his focus on civil liability protections for, “individuals, businesses, and healthcare providers that operated safely during the pandemic,” is also critically important to our industry.  While exceedingly difficult at the start of COVID, the reality is that our industry remained open and operational throughout the past year.  Deemed “essential” we were able to continue to build, sell, install and provide much needed housing throughout Texas.  This ability must continue, but also knowing that in providing these essential services and products that our businesses have not inadvertently exposed their future viability to plaintiff civil lawsuits that can, even if ultimately successful in our defense in court, weigh down our businesses financially, and operationally in this current time when what we as a state really need are more houses.

TMHA is grateful for our relationship with Gov. Abbott, and we look forward to another productive session working together to achieve our common goal to, as Gov. Abbott said last night, “seize this opportunity to make our state healthier, safer, freer, and more prosperous for all who call Texas home.”

Bills of Interest- Some Good, Some Concerning, Some Bad

Here are a few bills from our tracking list to keep on your radar:

HB 279 - Relating to pet deposits or fees collected by landlords.

HB 314 - Relating to the provision of access to a dwelling by a landlord to a cotenant or occupant who commits certain offenses.

HB 528 - Relating to a limitation on increases in the appraised value of commercial real property for ad valorem tax purposes.

HB 531 - Relating to notice requirements for a leased dwelling located in a floodplain.

HB 610- Relating to judicial review of certain local laws applicable to state license holders.

HB 738 - Relating to the residential building codes of municipalities.

HB 801 - Relating to a certification program for assistance animals.

HB 871 - Relating to the municipal fees charged to certain air conditioning and refrigeration contractors.

HB 875 - Relating to the prohibition of housing discrimination on the basis of age or certain housing needs and to the enforcement of that prohibition.

HB 900- Relating to the liability of a landlord for damages resulting from the execution of a writ of possession in an eviction suit.

HB 987 - Relating to an exemption from ad valorem taxation of all or a portion of the value of a person's income-producing tangible personal property depending on the value of the property.

HB 1012 - Relating to access to a residence or former residence to retrieve certain personal property.

HB 1034 - Relating to the authority of a county to adopt a fire or wildland-urban interface code.

HB 1159 - Relating to the maximum judgment amount awarded by a justice court in certain civil cases regarding the repair of residential rental property

HB 1257 - Relating to the definition of personal property for purposes of removing personal property from a roadway or right-of-way.

HB 1347 - Relating to the authority of a political subdivision to impose certain fees on new construction.

HB 1418 & SB 219 - Relating to civil liability and responsibility for the consequences of defects in the plans, specifications, or related documents for the construction or repair of an improvement to real property.

HB 1478 - Relating to liability of a recreational vehicle park or campground entity for injuries arising from certain activities.

SB 63 - Relating to the system for appraising property for ad valorem tax purposes.

SB 314 - Relating to notice requirements for leased residential property, manufactured home lots, or commercial property located in a flood zone.

SB 360 - Relating to prohibiting daily simple interest home loans. 

Some that are fun with naming stuff…

HCR 12 - Designating Kyle as the official Pie Capital of Texas for a 10-year period beginning in 2021

HCR 13 - Designating San Marcos as the official Mermaid Capital of Texas for a 10-year period beginning in 2021.

HCR 15 - Recognizing the 1847 Colt Walker pistol as the official handgun of the State of Texas.

HCR 32 - Designating Missouri City as the official Hip-Hop Capital of Texas for a 10-year period beginning in 2021.

SCR 6 - Designating San Angelo as the official Visual Arts Capital of Texas for a 10-year period beginning in 2021.

SCR 7 - Designating the Bowie knife as the official state knife of Texas.