The 86th Session of the Texas Legislature officially concluded and was gaveled Sine Die, on Monday, May 27th. This was a different session than in the recent past because Representative Dennis Bonnen (R-Angleton) was the new Speaker of the Texas House. Additionally, the relationships between the big three, Governor Abbott, Lieutenant Governor Dan Patrick and Speaker Bonnen seemed to be in sync on key legislative issues from the beginning of session, which was a bit different than recent legislative sessions. As always, Texas Retailers Association (TRA) went to work on your behalf in the halls of the Capitol building playing both offense and defense on a variety of issues.
TRA fought very hard to pass good legislation and to kill bad bills that would have been detrimental to our members and industry. On balance, TRA had a good legislative session, getting key TRA priorities passed into law, playing effective defense on potentially harmful bills, and leaving a few key issues to continue to be worked on during the interim. Overall, 7,324 bills were filed during the 86th Texas Legislature and 1,429 of them were passed. TRA actively tracked over 550 bills and hundreds more amendments directly impacting the retail industry.
Session highlights include successfully having bills filed on all our priority issues and defending our industry against bad legislation.
- SNAP Distribution Schedule: During the 86th Texas Legislative Session TRA partnered with its grocery industry members to support and pass House Bill 1218 (Effective immediately) by Representative Stephanie Klick and Senator Charles Perry. HB 1218 was signed into law by Texas Governor Greg Abbott on May 24th, as the Texas Legislature concluded its 86th session. This represents a significant legislative victory on a top priority for TRA and its members, which was several years in the making. HB 1218 directs the Commissioner of the Texas Health and Human Services Commission (HHSC) to transition the monthly SNAP distribution schedule to a more evenly distributed 28-day period, from the current 15-day schedule. While the excellent work throughout session resulted in an immediate effective date for the bill, the legislation provides the HHSC Commissioner until September 1, 2020 for implementation. This means that throughout the next year, TRA will work closely with the agency to ensure a smooth and efficient transition to the new distribution schedule. It is important to note that the new schedule will only apply to SNAP benefits that are approved after September 1, 2020. Those who have benefits approved before that date will continue under the current SNAP distribution schedule.
- South Dakota v. Wayfair: Since the South Dakota v. Wayfair decision last summer, TRA has been working with Texas Comptroller Glenn Hegar, key members of the Texas Legislature, and other statewide elected officials to implement legislation, rules, and regulations in a way that reflects the spirit of the level playing field for all retailers envisioned by the U.S. Supreme Court’s ruling. House Bill 1525 (Effective October 1, 2019) was part of the implementation process in Texas, ensuring that all marketplaces and out of state retailers selling into Texas collect sales tax.
- Protecting the Retail Industry: TRA took a leading role and successfully negotiated or defeated many issues impacting retailers that were proposed and discussed at length during the 86th Legislative Session. Many of these issues would have been very problematic for our members and industry. They include:
- Reducing the Sales Tax Prepayment Allowance
- Sales Tax Increases and Expansion
- Burdensome Data Privacy Requirements
- New Food Labeling Requirements
- Billboard Regulation
- Prescription Drug Issues
- ID Verification
- Property Tax Reform: Property taxes were one of the most talked about issues of the session and was a priority issue for the Governor, Speaker and Lt. Governor and ultimately passed in the form of SB 2 (Sent to the Governor). Many methods and approaches were on the table as the legislature tried to address the increasing burden placed on homeowners and businesses every year through the property tax system. SB 2 looked for long-term restrictions on the growth of local tax burdens, most notably through placing caps on revenue growth. SB 2 limits local government property tax revenues from increasing more than 3.5% without voter approval, and school property taxes can’t rise more than 2.5% without voter approval.
- Legalizing Hemp Production in Texas: More than 40 other states have legalized production, but bills to do so in Texas have failed in the past. Currently, hemp-based products that contain no THC – like clothing and twine, protein powder, moisturizers, and essential oils – are legal, but hemp cannot be grown here. This forces retailers to source these products from other states. House Bill 1325 (Sent to the Governor) legalizes the production of hemp in Texas and provides the Texas Department of Agriculture the regulatory authority of the State Hemp Production Plan.
- Reusable Plastic Container Theft: House Bill 4584 (Sent to the Governor) builds upon the Texas Retailers Association’s Stop Theft of Plastics Products (STOPP) Initiative, an initiative that has had success in combating tray theft. The passage of HB 4584 will help regulate the sale of reusable containers.
- TABC Sunset Legislation: The Texas Alcoholic Beverage Commission underwent the review and scrutiny provided by the state’s Sunset Advisory Commission, which resulted in the passage of HB 1545 (Sent to the Governor). This continues the functions of the agency and most notably increases the long-standing limit on package store permits held by a person from 5 to 250 with a limit of 15 new permits per year. Overall the TRA was pleased with the outcome of this must pass legislation and looks forward to continuing our positive working relationship with the agency.
- Age 21 for Tobacco Purchases: SB 21 (Sent to the Governor) raises the legal age to purchase cigarettes, e-cigarettes or tobacco products from 18 to 21. This law does not apply to a person who was born on or before August 31, 2001 and includes an exemption for those who are 18 and present a valid military ID for purchase. There are new signage requirements, coupon restrictions, preemption language that prevents local governments from adopting more restrictive tobacco ordinances. The new law takes effect September 1, 2019.
- Inventory Property Tax: TRA made significant progress again this session on the issue of Inventory Property Tax. For the first time in many sessions multiple elected officials filed legislation to provide inventory tax relief and this is a direct result of TRA’s continued efforts to bring this issue to the forefront and demonstrate its burden on our industry to the legislature. Although these bills were not ultimately passed, we took a major step in raising its visibility by educating members of the Legislature when testifying before the Senate Finance Committee during our first public hearing on an inventory tax bill. This is an issue which we know will require a multi-session effort and we plan to continue to move the needle on this issue during the interim between now and next session.
- Wage and Labor Issues: State preemption of wage and labor ordinances at the local level, similar to Austin’s paid sick leave ordinance, was one of TRA’s priorities this session. Unfortunately, the well thought out legislation we had drafted with our coalition partners, could not clear the final legislative hurdle due to political differences on the issue among the State’s top leadership. Despite our best efforts, no wage and labor legislation was sent to the Governor’s desk this session. As a result, our backstop continues to be the Texas State Supreme Court, which will ultimately hear the Austin paid sick leave case and hopefully (given the conservative make up of the court) rule that wage and labor issues are the purview of the state and not local jurisdictions. TRA is in contact with the Texas Attorney General’s office to offer our assistance in any way we can help in his effort to prevail on these issues.
Special thanks go to the TRA members whose help proved invaluable throughout the session. Whether it was members who have government affairs staff in Austin, lent their resources to work in collaboration with our team, those who testified, wrote letters and emails or made calls to their Legislators, or those who attended our Texas Retail Industry Lobby Day, we could not have done it without you. Thanks for all your help and engagement in our legislative efforts this session.