IT’S NOT OVER UNTIL IT’S OVER

Texas Legislative Session adjourns Sine Die.

By GINA ERWIN, HAA Legislative Chair, with BRADLEY PEPPER, Vice President of Government Affairs

ON MONDAY, MAY 29, the Texas Legislature adjourned Sine Die (last day of session). After 140 days and nights of work, the members of the House and Senate returned home to live under the laws that they passed. Any piece of legislation that was not passed (or vetoed) must wait until January 2025 to be considered when the Legislature returns to Austin for the 89th Legislative Session.

That is unless Governor Greg Abbott calls a Special Session. At the time of writing, the legislature was still in regular session. Only the Governor has the authority to go to overtime and he alone has the authority to decide what will be addressed during that session.

Unlike a regular session where lawmakers can pursue legislation on any topic, during a Special Session the Governor determines the agenda by placing issues “on the call.” Any measures outside the scope of those issues will not be taken up. There were still several major legislative priorities that both the Senate and the House had not resolved, not the least of which was the budget. The budget is only one item that the Texas legislature must pass and the Texas Constitution requires that it be a balanced budget.

With a record $33 billion surplus and an alltime high of $188.2 billion in state general funds available to spend, there were disagreements between the chambers on how to use those dollars.

Property tax relief has been priority number one of the Governor, the Senate and the House, with all three announcing intentions to use at least $15 billion of the surplus to reduce property taxes. That said, there have been competing strategies to deploy those resources.

The Senate has focused on increasing the homestead exemption for homeowners from $40,000 to $70,000 and reducing school taxes by 25%. The House has proposed instituting appraisal caps for all properties at 5%.

Another priority issue for Governor Abbott has been school choice, also known as school vouchers. There has historically been little to no interest in spending taxpayer public education dollars on private school tuition from Texas Democrats and the Texas House.

With a renewed effort by the Governor, the Senate passed a bill creating education savings accounts, which would work like vouchers and allow families to use tax dollars for private schools. It would be open to most K-12 students in Texas and would give parents who opt out of the public school system up to $8,000 in taxpayer money per student each year. Those funds could be used to pay for a child’s private schooling and other educational expenses, such as textbooks or tutoring.

In the Texas House, school choice vouchers have been a non-starter for decades. In many of the House members’ districts, the public-school districts are the largest employer and educate almost all school aged children, so members take special interest in protecting their funding.

The House Public Education Committee Chair, Rep. Brad Buckley (R-Killeen), proposed a far more narrowed voucher program that would limit eligibility to only students with disabilities or those who attended an F-rated campus. This would mean that fewer than a million students would be eligible to enter the program.

Even after watering down the Senate’s voucher bill, it would still be a very heavy lift to pass that narrowed proposal out of the House. The Governor indicated that if the legislature did not pass something resembling the Senate version, it would result in a Special Session being called.

What passes or does not pass while this magazine is being printed will determine if and when there will be a Special Session and what will be considered. We will have a comprehensive session recap in next month’s magazine.

TAA/HAA Supported Legislation

While property taxes have a dramatic impact on the industry and continue to be a top priority in both TAA and HAA’s advocacy efforts, there are a few pieces of legislation that we are actively pushing.

• House Bill 2035 by Rep. Shelby Slawson/Senate Bill 986 by Senator Brandon Creighton: The eviction process should be uniform across Texas. A patchwork of local requirements creates confusion and unintended consequences. Justices of the Peace follow state law and court rules in eviction proceedings and cities have no defined role. However, some cities have recently tried to intervene by passing ordinances that prolong the process.

For example, the City of San Marcos currently has a 90-day notice before you can file an eviction. HB 2035 and SB 986 would prohibit cities from imposing their own notice requirements outside of state law.

At the time of printing, SB 986 had been voted out of the Senate and was awaiting a hearing in the House. HB 2035 had received a hearing in the House Business and Industry Committee.

• House Bill 2457 by Rep. J.M. Lozano/Senate Bill 767 by Senator Tan Parker: City fees fund essential services but stakeholders – and sometimes even council members – are often not aware of new or increased fees until after they have been adopted. These bills would increase transparency when cities are considering increasing fees in city budgets.

They will require a fee schedule of new/increased fees to be included on the city budget’s cover page – similar to requirements cities already meet when proposing new property tax rates. They will also require a separate vote by the city council to approve the use of the revenue raised by the new or increased fees and allow interested parties to register for email notification about proposed new/increased fees.

At the time of printing, SB 767 had passed the Senate and been picked up by Rep. Lozano in the House. It had been voted out of the House committee and was waiting to be heard on the House floor.

• House Bill 4057 by Rep. Mano DeAyala/Senate Bill 2147 by Senator Joan Huffman: The City of Houston recently created conservation districts in six pilot Houston neighborhoods. These districts will regulate many of the same items found in deed restrictions and potentially circumvent existing state law on the creation of deed restrictions by allowing 51 percent of property owners to implement newly created regulations without a property owner opt-out provision. These bills would afford property owners in a City of Houston conservation district the same right found in state law for newly created deed restrictions by providing for a one-year time period to opt out of the conservation district.

At the time of printing, HB 4057 had passed the House and was scheduled to be heard in the Senate Local Government Committee and SB 2147 had passed the Senate and was waiting to be heard in the House Land and Resource Management Committee.

NAA Continues to work on Biden Plan for Renters Bill of Rights

The National Apartment Association (NAA) has been working diligently in its response to the White House’s Blueprint for a Renters Bill of Rights by asserting industry perspective. Here are a few updates on our recent activities:

• Resident Screening: NAA issued a call to action for screening stories that will be reviewed and compiled as a supplement to NAA’s formal comment to the CFPB and FTC’s request for information (RFI).

• NSPIRE (National Standards for the Physical Inspection of Real Estate): NAA co-signed a coalition submission to HUD's request for comments on the NSPIRE scoring and methodology. The letter expressed our appreciation with the overall changes but made clear the industry’s concerns relating to how certain policy decisions will impact our members. NAA continues to engage with HUD officials to keep our members informed of potential operational changes.

• Multifamily Tenant Protections: The Federal Housing Finance Agency (FHFA) is expected to issue a Request for Input (RFI) on multifamily tenant protections in late May with a 45-day window for comments. On April 21, NAA members and staff met with FHFA officials to provide industry perspective on tenant protections being considered. When the comment period opens, NAA will need the support of its membership to communicate the rental industry’s operational needs to the FHFA.

• Potential Changes to Section 504 Rules: On April 25, HUD published an Advanced Notice of Proposed Rulemaking seeking public comment to influence whether the agency changes Section 504 requirements related to accessibility and prohibiting disability-related discrimination in assisted rental housing. HUD is interested in what it should consider relating to HUD funding recipients' obligations, including how to account for advances in accessible design, the use of websites and assistive technology, and whether to adopt an updated federal accessibility standard for compliance purposes.

To be clear, these principles and actions are nonbinding and are not federal policy. This is not an executive order from President Biden. There are no new requirements or policy changes that have been made. At this point, several federal agencies have only been tasked with exploring new housing policies and gathering information to help develop those policies. In addition, the administration calls on state and local governments to strengthen renter protections to align with these principles.