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Legislative UpdateThe Texas Legislature has wrapped up the 81st regular session without passing “must-have” legislation. Some Texas state agencies—including the Texas Department of Transportation and the Texas Department of Insurance—face an uncertain future because lawmakers failed to pass legislation that would extend their existence. This oversight will result in a special session at some future date. As always, legislators began the session by spending a day piously debating and adopting rules of procedure, and then spent the next 139 days violating, ignoring, or suspending those rules. But there the similarities to all other sessions ended. 1 The 2009 session was characterized, first and foremost, by the volume of work. Lawmakers filed 7,609 bills and proposed Constitutional amendments. That’s an increase of 19 percent over the 2007 figure and 29 percent more than 10 years ago. It’s likely that no other American legislative body has ever filed that many bills in a biennium. The volume of bills was made even harder to handle by a five-day, late-session talk-a-thon in the House that prevented a voter identification bill from being considered for passage but held up dozens of other measures, as well. As a result, the number of bills passed dropped slightly (please see the accompanying chart). In 2007, lawmakers passed 23.5 percent of bills filed; this year, only 19.3 percent made the cut. For city-related bills, the success rate was even lower: roughly eight percent. That’s good news for cities, since the lion’s share of the city-related bills would have harmed municipal authority in some way. In the final days of the session, it required procedural sleight-of-hand to pass even the most non-controversial of bills. On the last day, almost nothing happened. House members, for example, spent most of their time passing resolutions recognizing staffers, friends, or family members. The highlight was a high resolution that recognized a lawmaker’s grandson for graduating from school . Then, the House suddenly adjourned without enacting important legislation. Not long after, the Senate, in a fit of pique aimed at the House, also called it quits. 2 Opposelegislation that would unduly restrict the ability of the City to set its own budget or raise the necessary revenue to provide services to City residents and businesses. There were over 25 different proposed bills that had to do with increases in appraised value. Most of these had more of an impact on the way appraisal districts operated, but there were a few that would have also negatively impacted our ability to raise revenue. There was one bill that we strongly disagreed with. SB 700 sought to limit the authority of a city council to generate property tax revenue and was voted from the Senate Finance Committee on Monday, April 20. However the bill died in the calendaring stage. As voted from the committee, the bill would have required a city to automatically conduct a property tax rate ratification election any time the city wishes to adopt a tax rate that exceeds the rollback rate(current law requires a petition from citizens to trigger a rollback election). 3 Supportlegislation that preserves local land use authority. Opposelegislation that would erode local land use authority by restricting the ability of cities to zone or rezone properties. As is the case during each legislative session there are many attempts to restrict cities ability to adopt or amend zoning regulations. This was also a high legislative priority for TML. We are not aware of any bills that were successful in this regard, but we will be updated on this matter by TML next week. 4 Supportlegislation that would permit greater local regulatory oversight of intra-state pipelines. Opposelegislation that would continue to preempt municipal regulation of intra-state pipelines. There were many bills introduced regarding mineral rights, gas drilling, and pipeline regulations. A couple of bills that the City was opposed to, HB 4441 and HB 2110 sought to take away local control and input over pipelines and drilling. These proposed bills didn’t make it out of committee or the calendars. On the other hand Senator Davis, proposed quite a few bills relating to gas drilling and pipelines that were favorable to cities. Only one of those was successful and is waiting for the governors signature and that is SB 686 -Allowing Natural Gas Gathering Lines in TxDOT Rights-of-Way –this legilslation is a hard-won compromise between pipeline operators, local governments, and TxDOT, that would allow gas lines to be placed in highway rights-of-way, helping reduce the need for condemnation of private property. 5 Support passageof an amendment to Texas Tax Code chapter 321 clarifying the “place of business” definition. S.B. 636 -Sales Taxes: does the following in relation to sourcing of city sales taxes: (1) provides that when goods are shipped within Texas by a retailer with more than one legal "place of business" for sales tax purposes, sales taxes shall be generally sourced at the location where the retailer first received the order for the goods, provided the order was placed in person; and (2) provides an exception to number 1 above for cities with certain economic development agreements in place prior to January 1, 2009, provided such cities provide notice to the comptroller regarding those agreements. This bill was sent to the governor on June 3 rd and awaits his signature. 6 Seek passageof an amendment to Texas Tax Code 11.13 allowing taxing entities to offer homestead exemptions as a hard dollar number under 20% cap. Last year as we developed our budget we gave the residents of Southlake a $5000 homestead exemption. After we approved this we were questioned as to whether cities had the authority to actually set a hard dollar number as an exemption rather than a percentage of valuation. While our city attorney disagrees with this point of view, we attempted to get this clarified during the legislative session. HB 637 –Rep Guillen authored a bill relating to the authority of a governing body of a taxing unit to adopt a local option residence homestead exemption from ad valorem taxation as a hard number of not less than $5,000 or more than $30,000. The House committee sent this bill to calendars in April where it never received any more attention. While this legislation did not pass, it is the City’s opinion that we have the authority to continue issuing homestead exemptions in this manner. 7 Here is a quick glance at some of the next legislative milestones. June 21 is the deadline for the governor to sign or veto bills. The city manager’s office on June 26 will be attending a legislative seminar sponsored by TML to be informed about the impact of the 81 st legislature on municipalities. And of course there is the potential of a special called session sometime in the future, which the governor indicated he would call for. 8 In the mean time if you have any legislative questions please give me a call. 9