By all accounts, the 87th Regular Session of the Texas Legislature was a singular experience that no one wants to see repeated – ever. The session opened in the middle of a once-a-century pandemic and resulting lockdown that, coupled with falling oil prices, left the Texas revenue forecast looking very bleak. The Legislature convened on time, with strict COVID protocols that included most staff working from home, and remote committee registration and testimony for the first time. The Capitol was virtually empty as lobbyists learned to navigate remote meetings and presentations.

Then, a month into the session, Winter Storm Uri hit – estimated to be the most expensive Texas natural disaster. Instantly the Legislature’s focus shifted from coping with and paying for the pandemic to ensuring that ERCOT and the Public Utility Commission had the tools to prevent any future statewide grid failure, and that electric generation facilities and the gas facilities that fuel some of them were required to weatherize to protect the grid against future demand driven by both winter and summer extreme conditions.

In the midst of this pandemic/budget/electricity chaos, the regular work of the Legislature continued. Of 137 bills on TACCA’s tracking list, 27 are on the final list and have been signed by the Governor or are on his desk. He has until June 20 to veto, sign, or let bills become effective without his signature. Here are a few of the bills that are of particular interest to TACCA, in rough order of importance.

HB 871 – Morrison/Kolkhorst – TACCA’s municipal fee bill was signed by the Governor on June 4 and takes effect September 1! As of that date, municipalities will no longer be allowed to charge HVAC contractors a fee to do business.

HB 1560 – Goldman/Buckingham – The Texas Department of Licensing and Regulation (TDLR) is reauthorized. The bill provides for: the commission, in consultation with the respective advisory boards, to establish a minimum number of hours of continuing education; the executive director or the presiding officer of the commission to appoint interdisciplinary advisory boards across license types; and the department to conduct risk-based inspections that prioritize inspections based on key risk factors identified by the department. The bill also requires TDLR to prioritize and expedite the complaint resolution process.

HB 636 – Thompson/Whitmire – The Texas State Board of Plumbing Examiners is reauthorized.

HB 19 – Leach/Taylor – Relating to procedure, evidence, and remedies in civil actions relating to commercial vehicle accidents. Provides a framework for trial procedures, the use of evidence, and the determination of liability in certain civil actions involving commercial motor vehicles.

HB 738 – Paul/Nichols – Updates both the International Residential Code, and the International Building Code for commercial properties to their May 1, 2012 versions. A municipality may not adopt a local amendment to either Code unless the municipality holds a public hearing on the local amendment and adopts it by ordinance.

HB 2110 – Morales/Whitmire – When residential real property that includes an air conditioning system as a fixture to the property is conveyed to a new owner, a manufacturer’s warranty in effect on that system or a component of that system on the date of the conveyance is automatically transferred to the new owner and continues in effect as if the new owner was the original purchaser of the system or component.

HB 3215 – Geren/Hughes – Relating to energy efficiency building standards. In addition to the Energy Star Program, HB 3215 recognizes as also being in compliance with Texas energy efficiency standards a home energy rating system index utilizing Standard 301 of the American National Standard for the Calculation and Labeling of the Energy Performance of Dwelling and Sleeping Units using an Energy Rating Index, commonly cited as ANSI/RESNET/ICC 301. The bill also updates the energy rating indexes required for the various climate zones for single family residential construction.

SB 1210 – Johnson/Oliverson – Beginning January 1, 2023, a building code or other requirement applicable to commercial or residential buildings or construction may not prohibit the use of a substitute refrigerant authorized pursuant to 42 U.S.C. Section 7671k, the U.S. Stratospheric Ozone Protection Safe Alternatives Policy.

The full final tracking list is posted here.

As of May 12, 2021, TACCA has monitored or actively supported or opposed approximately 136 bills in the Texas House and Senate that have the potential to impact HVAC/R contractors, the HVAC/R industry, or small businesses. Of those, 30 of TACCA’s tracked bills have passed their house of origin. Last session, 1,427 bills were passed, and as of today, only 61 bills have been sent to the Governor. Passing a bill this session is a major accomplishment.

HB 871 by Chair Geanie Morrison – TACCA’s bill, eliminating the municipal fees charged to certain air conditioning and refrigeration contractors. This is essentially the same as HB 4249, our bill from last session by Rep. Kuempel. This bill passed out of the Texas House of Representatives on April 13, passed out of the Senate Local Government Committee on May 10, and is currently recommended for Senate local and uncontested calendar with a high probability of passing and being sent to the Governor.

HB 19 by Rep. Leach relating to civil liability of a commercial motor vehicle owner or operator. Passed out of the House on April 30, and testimony was heard in the Senate Transportation Committee on May 12.

HB 334 by Rep. Gary Gates, amends Education Code Section 48.106:

(c) At least 90 [55] percent of the funds allocated under this section must be used in providing career and technology education programs in grades 7 through 12.

HB 636 by Rep. Senfronia Thompson, relating to the continuation and functions of the Texas State Board of Plumbing Examiners. Passed out of the Texas House of Representatives and sent to the Texas Senate (April 14). Passed out of the Senate Natural Resources & Economic Development Committee on May 11, and was placed on the Senate intent calendar for May 12.

HB 738 by Rep. Dennis Paul, relating to the residential building codes of municipalities.

(c) Subject to Subsection (e), a [A] municipality may establish procedures:

(1) to adopt local amendments to the International Residential Code that may add, modify, or remove requirements set by the code; and

(2) for the administration and enforcement of the International Residential Code.

(d) A municipality may review and consider amendments made by the International Code Council to the International Residential Code after May 1, 2012 [2001].

The bill adds that the municipality may only adopt changes under subsection (c) after a public hearing and by adopting the changes in an ordinance. The bill passed out of the House (April 8) passed out of the Senate Business & Commerce Committee (May 10), and was recommended to Senate local and uncontested calendar.

HB 1146 by Rep. Gary Gates amends Section 21.403(b), Education Code:

(b) For each year of work experience required for certification in a career or technological field, up to a maximum of 10 [two] years, [a] certified career or technology education teachers and persons issued a school district teaching permit under Section 21.055(d-1) are [teacher is] entitled to salary step credit as if the work experience were teaching experience.

HB 1146 is exciting because TACCA met with with Rep. Gates’ legislative director over the summer to discuss the difficulty of attracting new CTE teachers because of the pay cut most of them take when they leave their industry. This bill has been referred to the House Public Education Committee.

HB 1650 by Rep. Matt Schaefer amends “Tradesman plumber-limited license holder” to mean a person who has completed at least 4,000 hours working under the direct supervision of a journeyman or master plumber as a plumber’s apprentice; or has successfully completed a coherent sequence of courses in the plumbing trade that are offered through a career and technology education program, as described by Section 1301.3542; has passed the required examinations; and constructs and installs plumbing for one-family or two-family dwellings under the supervision of a responsible master plumber.

HB 2110 by Rep.Christina Morales related to the automatic transfer of manufacturer’s warranties on air conditioning systems conveyed with residential real property. TACCA was consulted prior to this bill being drafted and we have committed to staying neutral on it.

HB 3032 by Rep. Oliverson relating to substitutes for hydrofluorocarbon refrigerants applicable to commercial or residential buildings or construction. Identical bill SB 1210.

HB 3803 by Reps. Geren, Darby, Kuempel, Minjarez, Goldman, relating to the adoption of a certain plumbing code by the Texas State Board of Plumbing Examiners. This bill would eliminate the Uniform Plumbing Code from state plumbing code.

SB 125 by Sen. Nathan Johnson, relating to the regulation of hydrofluorocarbons under the Texas Clean Air Act. Phases in a prohibition on the use of certain propellants including refrigerants.

SB 207 by Sens. Schwertner, Buckingham, Campbell, relating to recovery of medical or health care expenses in civil actions.

SB 871 by Sen. Robert Nichols relating to the continuation and functions of the Texas State Board of Plumbing Examiners. This is not identical to the bill filed in the House to continue the Plumbing Board. This one repeals the designation of “responsible master plumber” and includes the Tradesman plumber-limited license holder provisions in HB 1650. Both this bill and the House bill require the Plumbing Board to go through Sunset review again in 2027.

Other bills TACCA is tracking include the usual noise regulations, cell phone prohibitions, franchise tax changes, and minimum wage requirements.

On January 12, 2021, the 87th Texas Legislative Session began with a low-key, socially distanced swearing-in ceremony in both chambers. In the House, Representative Dade Phelan was elected as Speaker. Both chambers adopted their rules for the session, which include wearing masks, how hearings and voting will occur, and allowing each member to set the policies for his or her office space. There will be no lobby days this year.

Perhaps the most significant rule: The Senate became one seat less Republican in the November election, so they changed the number of votes needed to bring legislation to the Senate floor from 19 to 18 votes, or a five-ninths supermajority of the Senate. Traditionally, the rule was 21 votes.

Lieutenant Governor Dan Patrick released committee assignments, with few changes. The Senate Business and Commerce Committee is where most bills of interest to TACCA are heard:

Kelly Hancock, Chair
Robert Nichols, Vice Chair
Donna Campbell
Brandon Creighton
Nathan Johnson – new
José Menéndez
Angela Paxton
Charles Schwertner
John Whitmire

The new Speaker of the House has not made committee appointments; Friday, January 22 was the deadline for House members to send in their committee preferences. Assignments could be announced as early as January 29, but could be as late as the end of February.

The House and Senate are adjourned until the afternoon of Tuesday, January 26th. The latest word is that they will reconvene Tuesday-Wednesday and then adjourn until the following Tuesday.

Budget Update:

As of January 15, when the fourth quarter 2020 tax receipts were due, Texas is facing a $1 Billion revenue shortfall compared to the current budget. Given the pandemic surge, it is likely that first quarter 2021 tax numbers will be lower than anticipated, so the $1 Billion may go up when the Comptroller revises his estimate in mid-April.

Even though we are in a pandemic, people are still moving to Texas, and more people are probably moving onto the Medicaid rolls through employment loss, so education and state-paid healthcare costs, the two biggest pieces of the budget pie, are getting bigger. Without raising more revenue, they will have to make cuts.

In an interview with the Texas Tribune the day before the session opened, new Speaker Dade Phelan would not commit to maintaining the increases to public education passed last session. However, in House and Senate base budget bills released mid-January, Public Education is the only category not cut.

Remember that the Rainy Day Fund probably has over $12 Billion, and even though it will grow more slowly now, they could easily take the $1+Billion shortfall out and still have a robust account.

Uncertainty is the byword of the political landscape heading into the 87th Legislature. Due to COVID-19 concerns, the interim House committees are conducting studies via written submissions instead of holding hearings, and only one Senate interim hearing is currently scheduled. Adding to those changes, a new House speaker will be elected when the Legislature convenes in January, and virus protocols for conducting the legislative session are being discussed.

TACCA is closely following the Sunset Commission (“Sunset”), as the Texas Department of Licensing and Regulation (TDLR) is under Sunset review. It was one of the agencies which was scheduled to be heard by Sunset in August before those hearings were canceled. Sunset and TDLR staff advise that the hearings will be rescheduled.

In anticipation of the upcoming legislative session, the biggest issue TACCA is currently following is what will happen to the regulation of the plumbing industry. Because the Governor’s extension of the Plumbing Board was temporary, a decision must be made by the Legislature whether to re-create the Plumbing Board, or move regulation of the industry to TDLR.

Another issue which may be raised again is TACCA’s bill from last session to eliminate the municipal registration fees that HVAC contractors are required to pay in many jurisdictions.

TACCA’s Legislative Committee is considering these and other issues as the date for early bill filing to begin approaches on November 9.

Of the 100 bills on TACCA’s tracking list for this session, only five passed that are of note for TACCA. There were also two notable failures:

1. Unfortunately, TACCA’s own bill, HB 4249, which provided that municipalities could not continue to charge registration fees to HVAC contractors, did not pass. Although it was sent to the drafters in October, 2018, it was not back from them and ready to file until March 8, 2019, which was the filing deadline. There is no explanation for the delay, and it did put the bill in an uphill battle for time. Then, instead of being referred to the House Licensing and Administrative Procedures Committee, where TACCA’s bills have always gone, it was referred to Urban Affairs, where the bill’s author, Rep. John Kuempel (R-Seguin), had never appeared. Even so, it was voted out of committee with only one no vote, from freshman Rep. Jessica Gonzalez (D-Dallas). That one no vote made it ineligible for the Local and Consent Calendar, which is much faster than the regular House calendar. So it was sent to the House Calendars Committee, where it died.

The Texas Department of Licensing and Regulation (TDLR) is up for Sunset review in 2021, and that process will begin this fall. The next goal is to include the language of HB 4249 in the TDLR Sunset bill in 2021.

2. The Plumbing Board Sunset bill, SB 621 by Sen. Nichols (R-Jacksonville), had its own series of unfortunate events, and ultimately it also failed. That bill would have abolished the Plumbing Board and moved the regulation of plumbers to TDLR. PHCC opposed SB 621, and had Rep. Nevarez (D-Eagle Pass) file another bill, HB 4226, which created a new agency – a trades board governing plumbers, electricians, and HVAC contractors. That bill did not even get a hearing.

TACCA pitched to TDLR, and to Sen. Nichols and Rep. Nevarez, a compromise proposal of creating a trades board under the TDLR umbrella, for the same three license groups. The Governor would appoint members of the three trades to serve on the independent trades board, its rules would be reviewed by the TDLR commission, and TDLR would perform all administrative duties required for issuing and investigating those licenses. This was not adopted but was not negatively received, and will be pitched again to the Sunset Commission and its staff during TDLR’s Sunset review.

Ultimately, the Governor resuscitated the Plumbing Board by executive order and extended it for two more years, which means it will be the subject of Sunset legislation again in 2021. His rationale for the executive order was the ongoing need for licensed plumbers in the aftermath and rebuilding from Hurricane Harvey, and the need to stay prepared for the next hurricane or other disaster.

Bills that passed:

1. HB 1342 by Rep. Jeff Leach (R-Plano) provides that a conviction within the past five years for an offense that does not directly relate to the duties and responsibilities of a licensed occupation is no longer grounds for disqualification for the occupational license. The bill also expands the list of factors a licensing authority has to consider in determining whether a criminal conviction directly relates to the duties and responsibilities of a licensed occupation to include whether there was correlation between the elements of a crime and the duties and responsibilities of the occupation.

2. HB 2452 by Rep. Craig Goldman (R-Fort Worth) allows the TDLR to contract with a qualified individual to assist with reviewing and investigating complaints. Except for an act involving fraud, conspiracy, or malice, the contractor would be immune from liability and could not be subject to a suit for damages for acting in the contracted capacity. This should speed up the complaint review process.

3. SB 237 by Sen. Jane Nelson (R-Flower Mound) provides that each agency that licenses an occupation or profession shall determine the type of license holders’ personal information that the agency should make available on its website, based on the following factors: the type of information the public needs to verify a license, locate a service provider, and file a complaint with the agency; and whether making the information available on the website could subject a licensee to harassment, solicitation, or other nuisance.

4. SB 1217 by Sen. Carol Alvarado (D-Houston) provides that, for purposes of determining a person’s fitness to perform the duties and discharge the responsibilities of a licensed occupation, a licensing authority may not consider an arrest that did not result in the person’s conviction or placement on deferred adjudication community supervision.

5. SB 1531 by Sen. Kelly Hancock (R-North Richland Hills) removes the requirement that applicants for electrician licenses demonstrate their honesty, trustworthiness, and integrity. These types of bills seek to make it easier for Texans to obtain and retain their licenses.