84th Legislative Session Impact on Small Business

Bills Introduced                                           6,061                                                             6,474

Bills Passed                                                 1,447                                                              1,329

Bills NFIB/Texas Tracked                           1,367                                                               899

Bills NFIB/Texas Registered a                       142                                                                 95

       Position/Testified

**Of the 899 bills that NFIB/Texas tracked during the course of the 84th legislative session, 774 ‘died’, meaning they did not pass, and 125 passed. Fewer bills were passed into law this session than last, which is always a good thing since businesses are already overregulated at the local, state and federal levels. 

NFIB/Texas once again worked the legislature for full repeal of the business margin’s tax (or franchise tax), which is based on gross receipts and paid regardless of if the business experiences a loss for the year. The legislature as a whole agreed that the tax needs to be repealed at some point, but because of little wiggle room in the budget they passed, they couldn’t fit in a full repeal this session. They did however manage to pass a franchise tax rate reduction of 25% across the board for all businesses in Texas in the form of House Bill 32. The $1 million small business tax exemption and deduction is still in place. Included in the legislation is an EZ computation option for businesses whose total revenue is not more than $20 million. If the qualifying business so chooses, they can use the EZ computation method by multiplying their total revenue (after apportioned out to the state) by .331% to figure out how much tax they owe for the year. 

In conjunction with HB 32, to account for a total of $3.8 billion in total tax relief, was the approval of SB 1, which will increase homestead exemptions on school property taxes from $15,000 to $25,000. SB 1760, which prohibits a governing body from raising property taxes without a majority of the voters signing on, was also an important piece of the property tax puzzle. NFIB/Texas supported all of the successfully passed measures.

12 minimum wage increase mandates were filed this session and none of them passed thanks to our strong opposition in committee when the bills were heard. NFIB/Texas made it clear that a mandated minimum wage hike would hurt small business owners and their employees in Texas, and ultimately the state’s economy. The minimum wage is meant to be a starting wage and increasing it will hurt the very people it aims to help — young, entry-level workers who will no longer have the skills to qualify for higher paying jobs. 

12 bills were filed this session that would have added to the definition of what an ‘unlawful employment practice’ is under Texas law, which opens an employer up to more liability and litigation. Many of the bills had to do with employer discrimination against an employee. There are already clear laws in place regarding workplace and wage discrimination, but every session legislators want to add to what would be considered ‘discrimination’ against an employee, like adding sexual orientation and gender identity to the list things that an employer cannot discriminate against. Currently employers cannot discriminate on race, ethnicity, and religion. Adding more and more to the list just adds more opportunity for an employee to file a claim and a lawyer to file a civil suit against an employer. 

Only one of those 12 bills filed passed, but it was also a bill that NFIB/Texas did not oppose. 

Eight bills were filed dealing specifically with wage claims against an employer. They either would have extended the period of time for an employee to file a wage claim against an employer (from 180 days to up to 2 to 5 years), or they would have changed current law regarding the terms under which an employee can bring a claim against an employer (another that opens up the definition of discrimination or retaliation). Once again, lawyers would have had a hay day with these new laws, if passed, but NFIB/Texas opposed and lobbied against all eight bills and all eight died. 

NFIB/Texas members were balloted prior to the legislation session and asked what issues are most important to them. All of the usual issues were noted as the most important: taxes, mandates, licensing, health insurance, etc. but among those issues this time were local ballot propositions to issue bonds or create a new local ordinance. Six bills were filed that would require a city or county, before issuing bonds, to state clearly on their ballot proposition to the voters what their current debt obligations are and what the estimated time to pay that off is. 

Another bill was filed to require the city or county, before they bring forward a measure to enact a new ordinance, to send the proposal to the Attorney General to make sure it doesn’t violate the Texas or Federal constitution or an existing state statute and determine whether the passage of the measure would cause a government taking of private property. If the Attorney General were to determine it does any of that, the city or county wouldn’t be allowed to bring the measure up for a vote. All the bills described to improve upon government transparency to the voters failed to pass. Local and County government have a very strong lobby, and they succeeded in making sure these bills didn’t pass. Government transparency will be a major issue next session indeed and NFIB/Texas will have a seat at the table. 

Only a few bills were filed this session that would require an employer to offer an employee paid leave for one reason or another (for domestic violence, for a sick sibling, for extracurricular activities of a child or foster child), but those all failed to pass. NFIB/Texas is opposed to mandating paid leave on an employer and government getting involved in the employee/employer relationship. It should be left up to the employer as to what leave time they can and will prescribe for their employees. It’s more important that an employer is provided that flexibility to work with their staff on a case by case basis. Because of NFIB/Texas’ on the record opposition to paid leave both nationally and in Texas over the years, we’ve seen a decrease in the bills filed that would create the additional mandates. 

As you know, HB 5 passed last session (and NFIB/Texas supported) which created new opportunities for children in schools to choose which path they’d like to take — the traditional route leading them toward college readiness or the non-traditional route leading toward entering the workforce immediately upon high school graduation by making new workforce development and career training courses available to them. This session there were several bills that built on what was passed last session, all of which NFIB/Texas supported. The major education bill of the session, HB 18, establishes college and career readiness training academies for counselors in public schools: middle, junior high and high schools. 

The Center for Teaching and Learning at the University of Texas at Austin will develop the academies and solicit input from the Texas Education Agency, school counselors, the Texas Workforce Commission, institutions of higher education, business, community, and school leaders. This bill includes a measure that adds a 7th or 8th grade semester course on career and college readiness to explore graduation plans and college and career choices (all students must pick an endorsement upon entering 9th grade). In another bill, the continuation of the Jobs and Education for Texans (JET) Grant Program was supported by legislators again this session. It fills a need in workforce education at the state’s two-year institutions. The program enables educators to create courses that meet the needs of employers in their region, quickly and efficiently. Another bill supported by NFIB/Texas that passed was one that allows military personnel to obtain certification to teach career and technology education (CTE) classes in public schools, even if they have no specific occupational licensure. Now, more classes in this field will be available to students interested in following the career and technology path. 

Conclusion 

It was a successful session because all of our major issues were addressed in the manner we wished: franchise and property tax relief passed; no new major regulatory or licensing requirements were enacted; no new major employer mandates were enacted like new costly health insurance mandates, minimum wage increase mandates, or paid leave mandates; and more strides were made toward workforce development in the state. Small business owners can breathe a sigh of relief knowing that they avoided bad legislation for yet another session due to the lobbying efforts of NFIB/Texas.