The Texas Report 5/22

The Texas Report 5/22

What’s Happening:

• Election Integrity Legislation

• Texas Economic Miracle (More here)

• Major business groups and environmental advocates team up on Legislative Grid Proposal

• Legislative Update

Time is running short on the Texas legislative process. The Texas legislature will officially adjourn next Monday, so this week is the last opportunity for legislators to pass bills impacting Texans. Governor Greg Abbott has already signaled that he will call extra "special" sessions if legislation to establish a school voucher system doesn't pass. Considering this is the last week of the 88th legislative session, we wanted to update you on some of the biggest bills still being considered.

We'll do a border update on Wednesday, but to give a taste, 24 states have responded to Abbott's call for help in securing the border. In addition to Florida and Iowa, states whose governors have pledged support include Alabama, Alaska, Arkansas, Georgia, Idaho, Indiana, Missouri, Mississippi, Montana, Nebraska, North Dakota, New Hampshire, Nevada, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Utah, Virginia, West Virginia, and Wyoming. Abbott recently posted a meeting with several Idaho State Police officers sent by Governor Little. (More here)

Election Integrity

The Texas House will consider a variety of “election integrity” bills today, including one that would essentially fire the elections administrator in Harris County by getting rid of the position and returning the authority for running elections to the County Clerk. S.B. 1750 by Senator Paul Bettencourt (R-Houston) was initially written to eliminate the role of elections administrator in counties with over 1 million population but was changed to just apply to Harris County.

Harris County elections have gotten a lot of attention in recent years dating back to November 2020 when then County Clerk Chris Hollins instituted a variety of new policies like opening some polling locations for 24 hours a day, sending mail-in ballot applications to each of the county’s registered voters, and more. Many of these policies were challenged by members of the Harris County Republican Party and the Texas attorney general. Republican legislators also responded in 2021 by banning many of these changes.

• Following the 2020 Election Harris County transitioned election’s responsibilities from the elected county clerk to an election administrator.

• Election administrators are nonpartisan county employees whose typically sole responsibility is running elections, and over 120 counties have transitioned to this system.

• Harris County is currently on its second election administrator in two years after the previous one resigned amid backlash over issues in the March 2022 primary.

• The new election administrator has faced his struggles after paper ballot shortages at several polling places in the November 2022 election prompted lawsuits by the Harris County Republican party and several Republican candidates who claim that the paper ballot shortages were intentional. This claim has been contested by the county and there are dozens of lawsuits on the issue.

Republicans in the Texas Legislature have introduced several bills related to election integrity. Some of the other major bills:

• S.B. 1933 would authorize the Texas Secretary of State to provide oversight and even fire election officials if their office has reason to believe a recurring pattern of problems exists within the county due to the election administrator. Election administrators are county employees, and this bill would allow the state to fire those employees without requiring input from the county.

• S.B. 1070 would force the state to leave the Electronic Registration Information Center (ERIC). ERIC is a multi-state partnership intended to improve the accuracy of America’s voter rolls. Some Republican states have recently begun pulling out of the partnership due to perceived data privacy issues and “partisan tendencies.” This bill would likely require the Secretary of State’s office to create its own system.

• S.B. 1661 is intended to clean up provisions passed in 2021 that, if not amended, would prevent the use of voting systems going forward. Texas voting equipment can’t currently comply with the provisions, and voters would return to using paper ballots.

The Texas Secretary of State’s office has also routinely testified that Texas not only has fair and safe elections, but also some of the most secure in the entire country.

Texas Economic Miracle

In April job data released by the Texas Workforce Commission and the Bureau of Labor Statistics Texas is once again setting new employment highs:

• Texas reaches a new high for total jobs at 13,871,1000 as employers added 33,300 non-farm jobs over the month.

• Texas has the largest labor force in state history at 14,960,300.

• Texas leads the nation for job creation across the last 12 months, adding 534,600 jobs and growing at an annual rate of 4.0%, compared to the average 2.6% for the nation as a whole.

The state was also named the “Best State for Business” by CEOs for the 19th year in a row.

In his statement on the news Governor Abbott said, “The strongest economy in the nation is built by Texans. With Texas employers growing jobs across every major industry over the year, and with our young and skilled workforce growing to nearly 15 million, we are building an even stronger Texas of tomorrow.” (More here)

Grid Proposal

There has been a significant amount of discussion over the past two years following the 2021 winter storm on strengthening the Texas grid against future natural weather disasters. This session the Lieutenant Governor of Texas has pushed S.B. 7 as one of his major priorities to “address market uncertainty and levels the playing field between renewables (windmills and solar) and dispatchable energy by targeting money at the dispatchable assets that we need.”

S.B. 7 is intended to provide guidance to the Public Utility Commission of Texas in regards to implementing a cap for the Performance Credit Mechanism (PCM) to improve reliability service. This is extremely complicated legislation involving billions of dollars for major Texas companies, impacting the rates paid on electricity bills, and potentially strengthening electric grid in times of crisis.

• As with any major policy proposals stakeholders have far ranging opinions on the likelihood of success for this new program.

• Major Texas business associations like the Texas Oil & Gas Association and Texas Association of Manufactures (TAM) have joined with environment advocacy organizations, the American Association of Retired Persons, and more to advocate for a cap on the PCM.

• These organizations are supportive of the S.B. 7 language which sets the cap at $1 billion, which many of the power generators are against.

In their joint statement the stakeholders specifically request “a meaningful cap on the proposed Performance Credit Mechanism scheme that will impose billions of dollars in increased costs for Texas consumers if left uncapped. The PCM offers no guarantee of increased capacity or improved reliability and lacks consumer protections and spending oversight.”

TAM, President & CEO Tony Bennett adds that the proposed PCM would be "a costly, unnecessary tool that will provide billions in profits to the very generators who failed Texans during Winter Storm Uri. This unproven model has the potential to add billions to the market, and without a firm cost cap, it threatens to significantly increase prices on all consumers without meaningfully improving reliability.” (Full letter)

Generators Response

On the other side, many of the generators say instituting a cap would do the opposite of reining in cost and would instead leave consumers with the risk of paying for another grid disaster. And renewable energy companies expressed concern that S.B. 7 will stifle renewable energy development and potentially force renewable energy producers out of the market.

Concerns from state agencies

This comes as the Electric Reliability Council of Texas (ERCOT) recently said there is legitimate concern that demand will outpace power supply this summer.

This legislation is set to be debated Monday, on the House floor and with little time left in the legislative process time is running out for meaningful grid reform.

In summary:

• Major Texas business v.s. major Texas business with the future of the Texas electric grid and the utility bills of millions of Texans at stake.

TEXAS LEGISLATIVE UPDATES

Public school funding and Vouchers

Time is running short on the Texas legislative process. The Texas legislature will officially adjourn next Monday, so this week is the last opportunity for legislators to pass bills impacting Texans. Governor Greg Abbott has already signaled that he will call extra "special" sessions if legislation to establish a school voucher system doesn't pass. Considering this is the last week of the 88th legislative session, we wanted to update you on some of the biggest bills still being considered.

Public School Funding

H.B. 100 by Representative Ken King (R-Canadian) is intended to increase public education funding, including through enrollment-based funding under the foundation school program. This legislation has been largely bi-partisan receiving 141 yeas to 3 nays on the House side. However, things got complicated last night when reports came out that the Senate sponsor Brandon Creighton was adding language for vouchers into the bill.

This effectively means that school funding increases and subsequent teacher salary pay raises are tied to school vouchers.

• This legislation would add $3.8 billion in new funds to public schools and an additional $300 million annually into special education. $500 million for vouchers.

• The new Senate version would provide $8,000 “education savings accounts” (vouchers) these funds could be used for Tuition and fees for private school, Textbooks, instructional materials, uniforms that are required for enrollment, including purchases made through a third-party vendor of educational products, academic assessment costs Fees for private tutors or teaching services, and more.

This huge change to the bill means that once/if it passes the House sponsor will be given the opportunity to “concur” with the changes, which is unlikely to happen considering Representative Ken King is a vocal anti-voucher legislator. Refusing to concur means the House and Senate will go to a “conference” committee to hash out their differences and the House will likely try to take out the language tying vouchers to teacher salary increases.

Other legislation of note

• S.B. 12 by Senator Bryan Hughes (R-Mineola), sponsored by Representative Matt Shaheen (R-Plano). This legislation is set to be passed out of the House today and would add new punishments and penalties for businesses exposing children to sexually oriented performances. When passed out of the Senate, it included any show involving a "drag" performer, but the House took out this language and narrowed it to just sexually explicit performances.

• S.B. 17 by Senator Brandon Creighton (R-Conroe) and sponsored by Representative John Kuempel (R-Seguin) would ban public institutions from establishing or maintaining offices of "diversity, equity, and inclusion." Along with preventing those factors from being considered in hiring or employment practices.

• H.B. 12 by Representative Toni Rose (D-Dallas) and sponsored by Senator Lois Kolkhorst (R-Brenham) would provide 12 months of postpartum Medicaid coverage for women in Texas. This bill passed out of the Senate yesterday, and they added language related to abortions.