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While many thought the 87th Texas Legislature would be limited in scope to COVID-related needs, the end results were much more expansive. Government Relations & Public Policy attorneys Denise Rose and Kate Goodrich cover some of the key bills that passed and failed, the state budget, and the role Jackson Walker’s Legislative team played during the recent legislative session.

Greg Lambert: Hi, everyone. I’m Greg Lambert, and this is Jackson Walker Fast Takes. While it only happens every other year, the Texas legislative session always brings some very interesting topics to discuss. I asked Jackson Walker attorneys and government affairs consultants Denise Rose and Kate Goodrich to come on the show and go over some of the important legislation that passed or didn’t pass this session.

Denise and Kate, thanks for joining me.

Kate Goodrich: Thank you for having us.

Denise Rose: Thanks for having us, Greg.

Greg Lambert: All right, well, we went on a wild ride this year. So, I’m going to just kind of sit back and let you talk a little bit about this session, where it started and where it ended up.

Kate Goodrich: Oh man, Greg, a lot, a lot happened. It sort of became—Denise and I joked that it felt like every month of this session sort of contained its own trauma and its own adventure, kind of, all encapsulated, and then we had them altogether at once. So, it was really a crazy time.

Denise Rose: Yeah, you know, we started the session in the middle of a peak in COVID infections and hospitalizations, and really unsure of what the session was going to be like logistically for us, you know, going into the building and meeting with people. Then, the next month, we were all of a sudden in the middle of Winter Storm Uri, when most of Texas was without power and others without water during that week. We had a pretty slow pace of bill filing leading up to that point, and then all of a sudden in March, it was as if the floodgates opened. We saw a day during the winter storm where no bills in either chamber were filed. On the last two days of the time in which legislators can file bills, which is in mid-March, there were 1,500 of the almost 7,000 bills that were filed. So, you can see that it got kind of back-loaded—the process did—and it just was a really strange pace for everything.

From there, it seemed like we were going to spend, and in fact did spend, a lot of time talking about the issues that are of importance to the conservative base. You see that in the results of this session in where things landed and the ultimate result, which culminated in the Democrats walking out of the House Chamber and breaking quorum on the last day the House could pass Senate bills, killing the Election Integrity Bill, which was an emergency item for Governor Abbott and Lieutenant Governor Dan Patrick. So, it was a lot to process.

Greg Lambert: Yes, sounds like it. I know that the session started when the pandemic was raging, as you said, and we kind of went from COVID to “Snowvid”—it was the phrase that was being used at the time. But a lot of people thought that there weren’t going to be very many bills that were passed this session beyond what was necessary in support of the COVID-19 legislation. It doesn’t sound like that’s what ended up happening. What are some of the high-profile bills that ended up passing or not passing the session?

Denise Rose: We started this session in early February. The governor declared his emergency items, and those are the things that the legislature can pass outside the bounds of their sort of normal legislative timelines. He had five at the outset of session that were bail reform, election integrity, COVID liability protections, broadband, and local defunding of the police. After the storm, he added ERCOT and PUC reform. So, he had seven emergency items. The lieutenant governor set out a list of 31 priorities. There are 31 senators. Each of them essentially got to pick a bill to carry or pass, and 20 of 31 ended up passing. Then the speaker had his own set of priorities that were related to criminal justice reform, healthcare, and the electric grid.

The legislature is only constitutionally required to pass a budget. So certainly in January, there were a lot of us speculating that maybe that’s all they would do and then adjourn. You know, you can see a lot of those priority bills, and then about 1,000 more ended up passing. Now, I will say there were fewer bills that passed this session than last, but comparatively speaking, they filed the second-most amount of bills ever in legislative sessions. This is our 87th. So it’s only second to, I believe, the 86th session, when they filed over 10,000 bills. It was very busy once all of it got moving.

Some of the other bills that were not either emergency or priority items, but that got a lot of attention were the permitless carry bill, that was House Bill 1927; the critical race theory bill—

Kate Goodrich: There was a statewide camping ban. There was House Bill 4, which was the omnibus telemedicine and telehealth bill which basically made permanent some of the waivers that were implemented during the pandemic. It was pretty minimal, but we did through House Bill 1535 minimally expand the Texas Compassionate Use Program for medicinal marijuana. There was House Bill 1525, which was a public school finance reform cleanup bill of House Bill 3 from the 86th session. And finally, everybody’s favorite bill, this session was House Bill 1024, which did make permanent the COVID-19 policy of statewide alcohol to-go. So, if nothing else came out of the session, you can now take your margarita with you when you leave a restaurant.

Greg Lambert: Yes, I think that’s a bipartisan bill that most people in Texas were happy to see pass.

Denise Rose: Everyone supports that bill.

Kate Goodrich: It was a priority to many people, not necessarily any leadership, but to many Texans it was a priority.

Greg Lambert: So, those were some of the bills that passed. Were there any significant bills that failed?

Kate Goodrich: Yeah, Greg, there were some bills that I think that almost any of us would have predicted would have passed when we were starting this session. Two of the governor’s priorities, including election integrity—which Denise mentioned earlier—that was Senate Bill 7 and prompted a walkout of the Democrats, which garnered national attention and has led to results of them meeting in the White House and having meetings with Kamala Harris. We do not know what’s going to happen at the federal level with that, but we do anticipate we’ll see that in a special session along with House Bill 20, which was another one of the governor’s priority items that did not pass that was bail reform.

Likewise, there was some criminal justice reform – the George Floyd Act, which was carried primarily by Representative Senfronia Thompson out of Houston. I think a lot of people expected that there would be some momentum on that discussion. Some individual snapshot bills related to criminal justice reform did pass, like the Botham Jean Act, but in general, the George Floyd Act did not get as much traction as everyone thought it would. Finally, two other conservative priorities that we don’t know if we’re going to see a back on a special session call, but that we’re prepared to, is Senate Bill 10, which would ban the practice of taxpayer-funded lobbying, and Senate Bill 29 and 1646, which are both related to transgender children – one in reference to UIL sports and one in reference to hormone therapy. So, those were some of the highest ticket items that did not make it across the finish line this session.

Denise Rose: I was just going to add that, suddenly, we are also talking about the failure of SB 12, which was the Social Media Censorship Bill, as being added to the special session call. That was a priority of the lieutenant governor’s.

Kate Goodrich: That’s a good point.

Greg Lambert: Let’s switch back to the constitutional requirement of passing a budget. I know that coming into the session, the comptroller for the state forecasted a doom-and-gloom forecast for the Texas budget. How did the Texas budget fare in the session, and what do we know about the federal funds so far?

Denise Rose: Well, I think, you know, he came in the day before session started to provide his biennial revenue estimate. His projection was actually one that was not as bad as everyone was thinking it would be. We were sort of anticipating potentially somewhere between a $10 t0 $20 billion shortfall based on the economic downturn from the pandemic in 2020, the impact of oil and gas prices – which is a very big driver for the state’s revenue – and it just turns out that it wasn’t as bad as everyone thought it was going to be. We had about a $900 million shortfall “only.” There was really a sense of relief, to be honest, about that amount of money because that seems overcomeable in a session.

Then in March, Congress passed the American Rescue Plan Act (ARPA) and allocated additional funding to all of the states. Texas is going to or has received a total of $38 billion from the ARPA. Some of that has already been released, mostly in the education space. About $11 billion was released towards the end of session. We’re still waiting on receipt of that money. That was a big discussion point during session. So, the Texas budget that passed does not contain any funding from the ARPA. It was really too late in session for them to make decisions around that, and so that is going to be discussed in one of our special sessions, which we’ll talk about in a little bit. But that was a really big sticking point for people, because over 2020, with the receipt of the CARES Act and other relief dollars, the governor’s office had sole discretion on how to decide when and how that was spent, and the legislature would like to be part of those decisions. So, the night that the House passed their version of the budget, they included unanimously a writer that would have required the governor to call them back to special session to make decisions around the federal funding. When they went into conference committee – which is where 10 members, five from the House and five from the Senate, work out the differences between the Chambers – that writer got taken out and some were not happy about that, I’ll say. So, there was a commitment from the governor to include that on a special session call. Some of that funding will flow directly to cities and counties, but there is in total between $16 and $17 billion that the state will be deciding how it’s spent.

Other than that, in the state budget was a sort of not as bad budget session. In May, the comptroller came back to revise his revenue estimate. We saw essentially almost a $1.7 billion positive swing, and so where we ended up was around $725 million surplus. Some of the highlights from what’s in the state budget are about a 6% increase to the state’s Foundation School Program that funds public schools that’s over the last biennium. They appropriated this time almost $8.4 billion for behavioral health services across 25 different state agencies, and that’s an increase of about $300 million from last biennium. They included almost $124 million for rural hospitals who we know are really struggling in these times. There is additional funding to the tune of over $30 billion to the Texas Department of Transportation that includes money for highway planning, right-of-way acquisition, construction, and things like that. There’s money for the PUC – not a lot, about $4 million there. There’s money for the General Land Office and some additional disaster recovery related to Hurricane Harvey. So, while the budget was about 5% smaller than the last session’s budget, generally it was not as bad as people expected it to be.

We’ll see an additional round of decisions made in the fall with respect to those federal relief dollars.

Greg Lambert: Kate, I know this was your first session outside of the building, and Denise, I think if I’m counting right, this was your ninth. What did you both learn from this session?

Kate Goodrich: Oh man, Greg, what did I not learn? I feel like I made it a practice throughout the session of keeping copious notes of just the sheer amount of policy, procedures, and people that I was meeting at any given time.

But I think that if I had to say one thing that I learned—and I learned this a lot from working alongside Denise—is the importance of being physically present, being intellectually engaged literally at all moments. I think that’s a value that we really bring to our clients is having boots on the ground there. We were able to catch stuff that a lot of people might have missed just by the fact that we were milling around, that we were in the right place at the right time, and we were able to catch things that would have really been detrimental or beneficial to our clients because of our presence, and then kind of provide a constant line of communications to our clients. So, especially in a session as unpredictable as this one, I think that was a lesson I learned is just be everywhere at once all the time.

Greg Lambert: Which was no easy task this year.

Kate Goodrich: Yeah. I mean, you know, it’s fine. There’s two of us, we can be everywhere in the Capitol for 103 days.

Denise Rose: As long as you have your COVID wristband on.

Kate Goodrich: Yeah, and comfortable shoes, I learned.

Greg Lambert: Denise, how about you?

Denise Rose: Well, I would say that I always learn something – some things – every session that I work. None of them are the same. They all have a different theme and tone. What ends up taking up most of the oxygen always varies, but there’s always some new nuance to the procedures and the rules or the way that it’s being interpreted in that particular session that is valuable, that’s a lesson. There’s always something to be learned from this process, if you let it teach you and are open to that.

I also learned that it is possible to do a session without wearing heels, because I had a broken toe for the last six weeks of it. Which was a, you know, just another fun aspect of this weird session. But yeah, you know…

Kate Goodrich: She rocked it. She rocked the look.

Denise Rose: I think that, you know, reiterating what Kate said about just being present. That was really hard at the beginning of session, when we weren’t allowed in the building and there were essentially 181 different policies around access and wearing masks, making an appointment versus dropping in, and lunches or not. So, every session can teach you something and those are my takeaways from this one – just being flexible, being present, being open, and being ready for anything, because this session threw everything at us.

Greg Lambert: Yeah, sounds like it. So, besides pushing through a broken toe and COVID procedures, was there anything, Denise, that you accomplished this year that you’re especially proud of?

Denise Rose: I’m proud of surviving it, for one thing. But I think we had some really good successes for clients, moving the needle on new issues and having discussions about new topics in a time that we didn’t think that would be possible.

We were successful in working with a client to get the largest funding increase for family violence services in history. I’m really proud of that, because that was just such a huge need during—I mean, it’s been a huge need, but it was really exacerbated last year. We worked with the Texas Council on Family Violence and a number of legislative leaders and champions on that issue. I mean, just a number of people that are really invested in making sure that survivors are taken care of. I’m just really proud of the work that we were able to do on that front, and then just getting through it with a smile still on our face.

Greg Lambert: Again, no easy task this year. Kate, how about you? Anything you’re particularly proud of this year?

Kate Goodrich: Yeah, you know, I joined the team in February 2020. I came in, I had about – I joke that I had about three weeks of a really social lobbyist’s life before we all kind of retreated to our houses for over a year.

I’m really proud that Denise and I were able to expand our repertoire, even from within our homes, within the uncertainty of COVID. We added clients—we have city clients, we have animal shelter clients, we have family violence, we have telemedicine clients, healthcare clients, and we recently added a marijuana client. I mean, this is something really impressive to me is just being able to take the procedures, the people, and the relationships and expound on that and figure out the policy and become experts on what you can as you work through the system. I was really proud of our ability to be versatile and, really, be resilient in getting results for our clients.

Greg Lambert: Well, I save this part to the last. So, you get to take a little bit of a breather and enjoy the Fourth of July holiday. But it’s back to work right after that because there’s going to be a special session. What should we expect from this special session?

Kate Goodrich: Yeah, we just found out yesterday. It’s sort of like a kid finding out that they’ve just been summoned back to summer school right after summer vacation started. Governor Abbott announced that we will officially be going back in for our first of maybe several special sessions on July 8.

Denise, do you do you have any speculations about what we might be talking about?

Denise Rose: Yeah, he hasn’t announced yet what will be on the “call,” and the call determines what legislation can pass during a special session. They can’t file any bill. Well, I take it back, they can file any bill, but if it’s not germane to the particular items on the call, then it can’t pass.

The governor vetoed Article 10 of the budget. Article 10 is what funds the legislature and legislative agencies, such as the Legislative Budget Board, Legislative Council, the Sunset Advisory Commission, the Reference Library, and if that funding isn’t or that article is not restored, then those employees will not have paychecks or jobs starting September 1 when the new state fiscal year starts. So, they’re going to have to repass Article 10 of the budget. He vetoed that as a response to the number of Democrats who left on the night that Senate Bill 7, which is the election bill that was on the floor. So, we believe that that bill, Election Integrity, will be part of a call.

He recently signed a bill relating to Critical Race Theory and, in his statement, said the legislature needed to do more around that issue. We believe that will be added. And the other issue is the Social Media Censorship bill that didn’t pass the House. There’s speculation about a number of other issues – bail reform was his other emergency item that didn’t pass. I think that will be on the call at some point. He’ll have to add Article 10.

The question is the timing of all of this. So, does he add certain subject matter first with an expectation that it passed before additional things are added, does he put it all on there at once? We just don’t know that yet. I expect it to be kind of a long last half of the summer. They can meet for 30 days in a special session, and they don’t have to take up all 30 days, but they can’t go longer than 30 days. So, if they don’t finish their business in those 30 days, they have to start back over. Let’s say they start a special session July 8, and they get some of these bills three-quarters of the way through the process and then all of a sudden we are at August 8—well, they don’t just pick back up where they left off on August 9, they have to start all over and do it again and have hearings, send it back to the floor, etc.

So, I have a lot of unknowns about what this special session is going to look like. I think he’ll announce the topics pretty soon, we think, and then we’ll have a little more clarity around that. The known about special sessions is that we were always going to have to have one to do redistricting. We’re in a census year, or just past one, which is when they redraw the lines for all these members, districts, Congressional, Senate, and House. Because of the pandemic, the census was delayed and we now believe the state will have the results of that sometime in mid-September.

They will have to come back, redraw the maps in at some point after that. The commitment he had made during session was that he would add the federal funding issue to that particular special session. But that was before everything that happened in May transpired. So, we’ll see, but we could possibly have up to three special sessions in 2021, I think.

Greg Lambert: It sounds like we’re in for a little bit of a roller coaster ride in these special sessions. So, I invite you both to come back and fill us in on those.

Kate Goodrich: We’ll be back, Greg.

Greg Lambert: Denise Rose and Kate Goodrich, I appreciate you taking the time to give us an expanded view of what happened this year. Again, we’ll bring you back to find out more about those special sessions that are coming up. Thanks again for joining me.

Denise Rose: Thanks, Greg.

Kate Goodrich: Thank you.

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