2019 legislative session recap
The recent legislative session was a challenging but successful one for the Texas Apartment Association. TAA had one “must-pass” priority—clarifying the state’s late fees statute—and also had to weigh in on a higher-than-normal number of landlord/tenant bills filed on behalf of tenant advocates. In addition, the focus of legislative leaders was firmly fixed on making changes to the state’s property tax system and changing school finance to create additional property tax savings—high-stakes efforts that can make a big difference in the bottom lines of TAA member companies.
Thankfully, TAA’s government relations team was not alone in taking on these challenges. We were fortunate to have a group of dedicated volunteers and key legislators who helped us achieve our goals for the 2019 legislative session. Learn more in our Legislative Session Recap Report.
SB 1414 by Hancock; Effective September 1, 2019
- The Texas Apartment Association successfully advocated on behalf of members for changes in the late fees statute to bring more clarity to the late fees process.
- The new law, which takes effect September 1, creates a set of fees that constitute a “safe harbor,” as well as allowing flexibility for owners and managers who experience higher costs associated with collecting late rent.
- Adds an additional day to the grace period before late fees can be charged.
- Leaves in place current law requiring late fees to be reasonable and provides penalties against owners who violate the law.
- Creates a clear, easy to understand standard for tenants and landlords, which is lacking in current law
Learn more. (requires member login)
Passed Senate 26-5 and House Urban Affairs 8-0 but was not scheduled for House floor debate.
This legislation would have:
- Required the city budget cover page to list any new or increased fees and amount of revenue raised by each.
- Required separate vote to use revenue from new/increased fees.
- Created city email notification system/web page for fee changes.
From the start, the state’s top elected officials were insistent on offering some measure of property tax relief. Gov. Greg Abbott, Lt. Gov. Dan Patrick and Speaker of the House Dennis Bonnen presented a united, public front before and during the session when presenting plans to limit property tax increases and make changes to the school finance system.
These measures will of course impact all Texans, including Texas Apartment Association members. Highlights of the property tax and school finance laws are noted below; more detailed information. (member login required)
SB 2 by Bettencourt/Burrows Generally effective 1/1/20
- Limits year-over-year M&O property tax levy increases for cities, counties and special districts to 3.5 percent (currently 8 percent).*
- Automatic November election if entity wants to increase by more than 3.5 percent.
- Effective for 2020 tax year.
- Creates specialized ARBs in counties with 1 million -plus population for properties valued at $50 million or more (adjusted for inflation).
- Eliminates challenges by local governments to value of an entire category of properties before an ARB.
- Enhances the Comptroller’s role in standardizing tax rate calculations and data gathering.
- Increases electronic financial disclosures by taxing units.
More information on property tax reform legislation. (member login required)
HB 3 by Huberty/Taylor; Generally effective September 1, 2019
- Increases the state’s share of school funding.
- Reduces recapture rates for property-wealthy school districts.
- Lowers the school property tax rates by an average of 8 cents in 2020 and 13 cents in 2021.
More information on property tax reform and school finance legislation. (member login required)
An unusually high number of landlord/tenant bills were filed during the recent session—more than 40. TAA supported some, opposed some and worked with bill authors to craft compromises on others.
- Most landlord/tenant legislation introduced during the session did not pass.
- Legislators approved new lease termination rights following the death of a sole resident, and new documentation to support lease termination requests following family violence situations.
- Some changes related to parking, gun rights and justice of the peace court jurisdiction also passed.
- Measures requiring flood disclosure notices, rent increases and entry notices, and repealing the state’s preemption of source of income ordinances, among others, did not pass.
Learn more. (member login required)
- New legislation places limits on city building and permit fees, and allows any building materials authorized in a national code, with exceptions for historical properties.
- Affordable housing measures approved will change how points are given for low-income housing tax credits and remove prohibitions against awarding more than one tax-credit property in a community per year, under certain conditions.
- A number of other affordable housing measures did not pass, including some that would have mandated participation in Section 8. Bills to revise lien laws also were introduced but did not pass.
Learn more. (member login required)
Legislators attempted this session to override local ordinances mandating employer-paid sick leave and “banning the box” to limit criminal history inquiries early in the job application process. Both efforts failed.
Plumbing deregulation in the state has been avoided until after the next session, thanks to the governor’s executive order extending the State Board of Plumbing Examiners. The agency was under sunset review, and legislators failed to reauthorize it during the session.
Learn more about business-related legislation. (member login required)
Voters will go to the polls on November 5, 2019 to consider 10 constitutional amendments. Several are of interest to the rental housing industry, including:
- HJR 4 by Phelan/Creighton which would provide $1.7 billion in state funding for flood control and mitigation. (TAA supports)
- HJR 34 by Shine/Bettencourt to allow the legislature to enact a law providing for a temporary property tax exemption following a disaster. (TAA supports)
- HJR 151 by Huberty/Taylor provides funding to help provide increased school funding resulting in property tax relief. (TAA supports) Editorial note: Technically, TAA did not take a position on this amendment but it is very much in line with support for lower property taxes.
Many thanks to our TAA volunteer leaders and supporters.
TAA 2017-2019 Legislative Committee
Sandy Eckhardt, Chair
Cypress Real Estate Advisors, Georgetown
Mike Rust, Vice Chair
Highland Commercial Properties, San Antonio
Colleen Grahn, CAPS
Cypress Real Estate Advisors
Theresa Ebner, CAM, CAPS, CPM
Gary Mann, CAM, CAPS (Chair, Development Subcommittee)
W3 Luxury Living, Grand Prairie
Kyle Brown, CPM
Michelle Pawelek, CAPS, CPM
Greystar Real Estate Partners
Allyson McKay, CPM (Chair Landlord/Tenant Subcommittee)
Lincoln Property Company
SAN ANTONIO ALT.
Capstone Real Estate Services
Nicolle Block, CAMT, CAPS
AMLI Residential, Addison
TARRANT COUNTY ALT.
CENTRAL TEXAS REGION
Alpha Omega Properties, Bryan
CENTRAL TEXAS REGION ALT.
Greystar Real Estate Partners, Austin
Josh Allen, CAM, CAPS, CAMT II, NAHP-E
J Allen Management Company, Beaumont
COASTAL REGION ALT.
Dayrise Residential, Houston
EAST TEXAS REGION
My Blue Heaven, Nacogdoches
EAST TEXAS REGION ALT.
National Property Management Assoc., Tyler
Gary Mitchel (Chair, Legal Subcommittee)
PANHANDLE REGION ALT.
Howard Street Properties, Amarillo
WEST TEXAS REGION
Weidner Apartment Homes, Midland
WEST TEXAS REGION ALT.
Christine Galvez, CAM, CAMT, CAPS, CPO, NALP
Bohannon Development Corp., El Paso
MEMBERS AT LARGE
Mike Clark, HCCP
Alpha-Barnes Real Estate Services, Dallas
MEMBERS AT LARGE ALT
Ms. Celine Williams, CAPS, HCCP, ARM
Lincoln Property Company, San Antonio
Matt Jones, ARM
AMLI Residential, Addison
EXECUTIVE COMMITTEE ALT
Tropicana Properties, El Paso
PAST CHAIRMAN VOTING
Mark Hurley, CAPS
Highland Commercial Properties, San Antonio
San Antonio Apartment Association
Austin Apartment Association (served through December, 2018)
TAA Minuteman Committee
Sandy Eckhart (chair); Traci Hall, CPM; Clay Hicks, CPM; Mark Hurley, CAPS; Hugh Cobb, CPM; Mike Rust, Kyle Brown, CPM; and Gary Mann, CAM, CAPS.
Special thanks to Catherine Newell (Greystar), Rob DelPriore (Mid America Apartments), Clay Hicks, CPM (Dinerstein Companies), David Fritsche (Law Office of R. David Fristche), Jennifer Owen (Higier, Allen & Lautin) and Howard Bookstaff (Hoover Slovacek), for their extraordinary efforts in support of TAA’s legislative initiatives.
The following legislators and their staffs are TAA’s Legislative Champions for the 2019 legislative session. Through their efforts we were successful in achieving many of our top priorities for the session.
Sen. Paul Bettencourt (R-Houston), property tax reform author (SB 2)
Rep. Dustin Burrows (R-Lubbock), property tax reform sponsor (SB 2)
Sen. Pat Fallon (R-Frisco), author of TAA city fee transparency bill (SB 849)
Sen. Kelly Hancock (R-North Richland Hills), author of TAA late fee legislation (SB 1414)
Rep. Tan Parker (R-Flower Mound), sponsor of TAA city fee legislation (SB 849)
Rep. Dade Phelan (R-Beaumont), sponsor of TAA late fee legislation (SB 1414)
TAA also thanks the following legislators and their staffs who helped provide support for the late fee legislation:
Sen. Jose Menendez (D-San Antonio)
Rep. Barbara Gervin-Hawkins (D-San Antonio)
Rep. Jeff Leach (R-Plano)
Rep. Jim Murphy (R-Houston)
Rep. Tony Tinderholt (R-Arlington)
TAA is in the process of updating both lease forms and the REDBOOK. Unlike most years, the lease will be updated in two phases. Prior to September 1, there will be changes to comply with the new late fee law. A second round of changes, available in December, will reflect laws taking effect January 1, as well as other routine changes made in response to member suggestions, public policy issues and updated industry practices.
Likewise, the REDBOOK Online will be updated to reflect laws going into effect on September 1 and both the REDBOOK Online and printed copies of the book will be updated with other needed changes in early 2020.
In the meantime, keep an eye out for legal articles in TAA publications and at www.taa.org. TAA will also offer webinars on legal and regulatory topics as needed.
Dates for 2020 REDBOOK seminars will also be announced in the near future. Copies of all bills can also be accessed at www.capitol.texas.gov.