Get your popcorn ready

Texas legislators are back in Austin for the 88th Session of the Texas Legislature beginning Tuesday, January 10. Legislating for a state of nearly 30 million people in a 140-day timeframe is serious business and has very real implications for each and every Texan in both the short- and long-term. Because those 140 days are further compressed by constitutional provisions limiting the first 60 days for the introduction and hearing of bills (except for emergency items designated by the Governor), legislators really only have 80 days to debate and pass bills for the world’s ninth largest economy. A seemingly insurmountable task that (almost) always comes together in the waning days of each regular session. Because life imitates art (and themes always make the legislative previews more fun), this article’s approach to the 88th Session of the Texas Legislature will be through an entertainment lens. Let’s get started.

What to expect when you’re expecting …

The Legislature only must pass one bill in a legislative session – the budget. Appropriators work throughout the 18-month interim between legislative sessions to hone the budget because it is simply not possible to craft the entire $250+ billion biennial budget in 140 days. Their work this biennium has been made easier by the fact that Comptroller Glenn Hegar has estimated the state will have at least $27 billion in surplus funds. All of this money cannot be spent, though, because of Texas’ constitutional spending cap, which provides the rate of growth of appropriations can’t exceed the estimated rate of growth of the state’s economy. The economic growth rate has been estimated at 12.3%, generally meaning lawmakers can only spend about $12.5 billion more state tax dollars next biennium than they did last budget cycle. There will certainly be differences of opinion between the House, the Senate and the Office of the Governor on how these additional dollars will be spent. Get Your Popcorn Ready.

Gambling proponents are intensifying their efforts to bring legalized gambling to Texas. In December, over 300 lobbyists were registered with the Texas Ethics Commission to lobby on the “Gambling” subject matter. News reports indicate even former Governor Rick Perry is in on this deal – he has joined the Sports Betting Alliance, which aims to bring regulated sports wagering to the state. In order to legalize gambling in the state, both the House and Senate must pass the proposed joint resolution by a two-thirds vote, and then a majority of Texans must vote to ratify the constitutional amendment in the next election. Opponents of legalized gambling have successfully killed pro-gambling measures session after session. Will they succeed again in 2023? Get Your Popcorn Ready.

Because of the continued onslaught of onerous federal “guidance” and regulations, TBA’s legislative stance in Austin in 2023 will largely be defensive as we work to make sure Texas remains a competitive marketplace for bankers to serve their customers and communities. However, we know that blockchain, cryptocurrency and digital assets will be hot topics for legislators in 2023, and we anticipate spending considerable time on these issues. TBA supports innovation and believes a robust debate on distributed ledger technology and digital assets is good for the State of Texas. We continue to work with leadership, legislators and staff to make sure that any discussion of digital assets begins with a discussion of consumer protections so Texans investing in these new commodities (admittedly, not all digital assets are commodities) have recourse if something goes as wrong as it did with FTX. We also want to ensure there is transparency in legislative and regulatory expectations for digital assets so banks understand the rules of the blockchain and digital assets road. Finally, any legislative discussion around digital assets must ensure there is a level playing field between banks and non-banks offering digital assets. Competition in the digital asset space is welcomed. However, for it to truly be competitive, banks must not be limited by burdensome regulations non-bank entities can simply ignore. Will legislators acknowledge that Texans’ investments should be protected or be wooed by crypto bros? Get Your Popcorn Ready.

TBA will also continue to proactively work to ensure every Texas student takes a financial literacy course before graduating from high school. Each of us must do our part to ensure Texas students have access to this essential life skill. Rather than advocating for new legislation, though, we will be working with stakeholders to encourage Texas students to enroll in the financial literacy classes that are being offered, either the hybrid Economics / Personal Financial Literacy course TBA worked to help pass in 2021 or the variety of CTE courses currently offered that include financial literacy components.

As we head full-bore into the 88th Session, it is important for bankers to make sure the lines of communication are open with their Representatives and Senators so they can easily be contacted when issues arise. Bankers should also recognize that legislative staff should never be overlooked — more times than not, they are the issue experts advising their bosses on how to vote. The 140-day session moves at a fast and furious pace, so accessibility, brevity, flexibility, honesty and a thorough knowledge of the subject matter are all key components for success. A sense of humor is clearly helpful as well. Got Your Popcorn Ready? If so, as the late, great Siskel and Ebert used to say, “See you at the movies!”

Celeste Embrey is the General Counsel for the Texas Bankers Association. She joined TBA in November 2005. Her work focuses mainly on legislative advocacy for TBA’s member banks and trust companies.