The uncertainty created by the coronavirus pandemic has permeated into all aspects of life. Personally and professionally, COVID-19 has changed the way we live and work in 2020.
Zoom wasn’t a word in most of our vocabularies until March, and now it’s a part of our daily lives. Bank lobbies opening by appointment only, real estate closings happening in bank parking lots and employees shifting to remote work environments are the new normal. A year ago, it would have been farfetched to think we would educate our children, worship and celebrate special events with extended family and friends via Zoom, but now this is our normal routine.
Despite all these changes, the vast majority of what we do is exactly the same. At home, our kids still fight with each other and forget to do their homework and chores. At the office, Texas bankers continue to meet the financial needs of their customers and serve their communities to the best of their abilities.
And in Austin, folks in and around the Capitol are gearing up for the next legislative session because Texas law requires the legislature to convene in regular session at noon on the second Tuesday in January of each odd-numbered year. Pandemic or not, the 87th Session of the Texas Legislature will officially convene at noon Jan. 12, 2021.
More questions than answers
Before turning to policy issues, it must be acknowledged that, operationally speaking, as of now, there are more questions than answers surrounding what the next session will look like next year.
On any given legislative day, there are thousands of people – legislators, staff, advocates and visitors – in the Texas Capitol. While the Capitol building itself boasts more than 360,000 square feet of floor space, maintaining social distancing protocols during the legislative session will be difficult.
Because there are only 31 members of the Texas Senate, senators should be able to maintain six feet between themselves while in the Senate Chamber. The same can’t be said for the House Chamber, though, where 150 members work closely alongside one another.
House members’ desks are very close to one another, with each member sharing a connected desk with another legislator. In order to maintain six feet between themselves, House members would need to take advantage of the gallery above the House Chamber. Even the simple process of voting will be exponentially more difficult.
Holding committee hearings is another challenge that must be addressed. Most committee hearings take place in the Capitol Extension, which is almost twice as large as the Capitol building itself.
However, even given this additional space, legislators sit elbow-to-elbow on committee hearing rooms’ daises, and advocates and visitors sit and stand cheek-to-jowl in the audience. A committee hearing is when public testimony is taken on legislation being considered; current social distancing protocols make the logistics of House and Senate committees holding in-person public hearings difficult, if not impossible.
Will it be a low bill year?
The operational challenges highlighted above have created the sense among Capitol onlookers that 2021 will be a low bill year. What does this mean? Over the past 10 years, an average of 6,500 bills have been filed each session and, of these, an average of 1,350 were finally passed (e.g., made their way to the governor’s desk).
Given the space limitations discussed above, many believe that legislators will be told (or already have been told) by their leadership to prioritize their legislative packages with the understanding that a limited number of their bills will be heard in committee.
Winnowing down the number of bills that receive public hearings would in turn reduce the number of bills that make their way to the House or Senate floor. Debating and voting on fewer bills would reduce the amount of time both bodies spend in their chambers.
Why is this important? In a typical session, TBA spends 80% of our time playing defense. In a low bill session, this could increase to 90-95% simply because the bills that are debated will be considered to be likelier to finally pass.
Leaders in the House and Senate are collaborating on ways to ensure the work of the Texas Legislature can be accomplished in 2021. Ideas being discussed include meeting at the Austin Convention Center or another large-scale space in town that would enable better social distancing, providing all committee hearing witnesses the ability to testify remotely, and requiring Capitol visitors to have appointments and take rapid-result COVID tests before entering the building.
TBA will share legislators’ solutions to these challenges as they are developed so our members can determine the best ways to weigh in on important legislation making its way through the process.
Legislative priorities
Undeniably, operational and logistical challenges will reshape the 87th Session. More importantly, though, the COVID-19 pandemic has reshaped legislators’ priorities for 2021.
As a reminder, the only bill the legislature must pass in any regular session is the budget. Budget discussions will be very difficult next session because of the economic downturn.
In fact, legislators are facing an estimated $4.6 billion shortfall for this biennium, which runs through Aug. 31, 2021. The Comptroller will submit his biennial revenue estimate (BRE) for the next two-year budget period at the beginning of the 87th session, and next biennium’s BRE is expected to be less than rosy.
In addition to the budget, what else are legislators expected to address? TBA has held dozens of candidate and officeholder Zooms over the course of the past several months, and there have definitely been recurring themes discussed by most legislators, regardless of political party or area of the state represented.
Broadband access is an issue that has come up in virtually every Zoom we’ve convened. The critical necessity of reliable internet access crystalized as millions of Texas employees and students pivoted overnight last spring to a remote environment. What has become widely accepted in the ensuing months is that many rural communities simply can’t get reliable internet.
Furthermore, there are families in cities across the state that are unable to provide the type of internet access needed to ensure their children can adequately participate in remote learning. Legislators seem committed to addressing broadband access issues like these in 2021.
Criminal justice reform is another recurring theme we’ve heard on our Monday Zooms. Given the civil and social unrest many of our communities saw over the summer, legislators in both parties have expressed a desire to take a hard look at our state’s Code of Criminal Procedure and Penal Code to ensure all Texans have equal access to justice.
Finally, 2021 is a redistricting session, and it’s at the top of every legislator’s mind. After the decennial Census, Texas legislators must draw the district boundary lines for the State Senate, State House, U.S. Congress, State Board of Education and State District Courts and Courts of Appeals. Federal law requires census population data to be delivered to the Legislature no later than April 1. The Census was delayed because of the pandemic, so it is unclear when the data will be delivered in 2021.
If state House and Senate lines are not drawn during the regular session that runs through May 31, 2021, the Legislative Redistricting Board (LRB) must meet and adopt a plan. The LRB is composed of the Lieutenant Governor, Speaker of the House, Attorney General, Comptroller and Commissioner of the General Land Office, positions which are currently all held by Republicans.
The redistricting process is always partisan in nature because not only do legislators want to protect their existing seats, they also want to increase their political parties’ power bases. Redistricting is a time-consuming issue in the best of times; redistricting during a pandemic has the potential to be extremely acrimonious.
Banking priorities
Despite the obvious challenges next session will present, TBA has a number of proactive legislative issues we’d like to see addressed. First, we are working with the Texas Civil Justice League and other industry groups on liability protection legislation to ensure businesses are protected from claims alleging exposure or potential exposure to COVID-19.
As part of a CISA-designated critical infrastructure sector, Texas banks have worked throughout the pandemic to ensure customers have continued access to financial services. This work should not make Texas banks the targets of unwarranted lawsuits, so TBA is working to make sure there are statutory COVID-19-related business liability limits in place.
Sen. John Cornyn has been a leader in this space at the federal level, and we want to make sure state legislators similarly act to protect businesses from frivolous COVID-19-related claims.
Second, we will work to address the growing ATM smash and grab problem. TBA’s Smash and Grab Task Force met in mid-November to discuss the breadth of the problem. Excluding the damages to the machines themselves, Texas banks have experienced $13 million in cash losses from ATM crimes in less than two years. This is a problem that must be addressed.
The FBI would like to pursue these crimes under 18 U.S.C. §2113, the federal criminal bank robbery statute. Ideally, this would be enough to stem the tide of crime. Unfortunately, the ground-truth reality is that §2113 crimes have to be pursued by federal prosecutors, many of whom have historically not viewed smash and grab crimes as worthy of prosecution.
TBA is working with legislators in Austin on enhanced criminal mischief legislation that is designed to become another arrow in the quiver of local law enforcement and prosecutors when ATM criminals are apprehended.
Finally, working in conjunction with our Wealth Management and Trust Division, we are actively pursuing legislation that would substantially extend Texas’ Rule Against Perpetuities (RAP) statute, an antiquated law that requires an interest in a trust to be finally settled within 21 years after some life in being at the time of the creation of the trust.
Not only does our state’s existing law limit Texans’ choices as they develop estate and gift plans, it also puts the state at an economic disadvantage because the estate plans of Texans are being developed in one of the numerous other states that have already extended their RAP statutes, creating jobs and revenue there, not here.
The post-COVID era will be one in which economic development is vital to our state’s recovery; making Texas’ estate planning laws more attractive is a seeming no-brainer because it will keep these assets in the state for generations to come.
Just as 2020 has been, 2021 looks to be year unlike any other. Undoubtedly, the 87th Session of the Texas Legislature will look and feel very different from every session in recent memory.
Even with all of the changes, though, most parts of the session will be very much the same. There will be good bills filed, but there will be more bad bills filed. Successfully passing a budget for the 10th largest economy in the world will be difficult, but this is true whether there is a budget shortfall or not.
And, not only will the limited 140-day calendar and statutory and constitutional deadlines be the greatest challenges legislators face, they’ll also be the most effective weapons at their disposal.
Thankfully, being in Texas, we can rest assured that come sine die on May 31, 2021, lawmakers will adjourn the 87th Session of the Texas Legislature knowing they have done everything in their power to make the state a better place to live, work and play.