Floor Pass

The Lead:

There aren’t many consumer victories at the Texas Capitol, but Monday’s debate on payday loan reform was certainly one of them. After hours of debate, the Texas Senate passed surprisingly tough payday loan reform, as the Observer‘s Forrest Wilder writes.

After a false start last Thursday—in which senators accused each other of being “shills” for industry—Sen. John Carona (R-Dallas) brought his SB 1247 back to the Senate floor, and it eventually passed 24 to 6. But not before the Senate added a series of amendments that transformed a watered-down compromise bill into a serious reform of the payday and auto title lending industry. The bill now prohibits lenders from offering more than one payday loan to a person at a time and caps interest rates at 36 percent APR, in addition to more restrictions that protect the loan recipient from drowning  debt. In other words, the bill would end the predatory payday loan practices in Texas, as we know them.

It may be a pyrrhic victory, however. The strong reforms may doom the bill in the House. The wealthy and powerful payday industry will do whatever it can to kill the bill.

Yesterday’s Headlines:

1. According to the Quorum Report, the House budget conferees (who will now negotiate the final budget with the Senate) were named yesterday. They are Jim Pitts (R-Waxahachie), Sylvester Turner (D-Houston), John Otto (R-Dayton), Myra Crownover (R-Denton) and John Zerwas (R-Richmond). After these negotiators were named, the House voted 77 to 68 to instruct the five not to vote for any provision that might even mention expanding Medicaid eligibility under Obamacare, reports the Dallas Morning News.

2. Sen. Tommy Williams (R-The Woodlands) brought forth a resolution on Monday that would give the go ahead to electric rebates. The measure passed the Senate despite significant opposition from Democrats, reports the Texas Tribune’s Morgan Smith. Under this measure, 90 percent of the almost $1 billion System Benefit Fund, originally intended to assist impoverished families with utility payments, would end up in the hands of the electric customers. Returning the money would be a huge boon to commercial users, not necessarily Texas families. Retail electric customers in competitive areas like Houston and Dallas-Fort Worth would get refunds of approximately $119 per electric meter.

Line of the Day:

“I just want to go home and feed my cat.” —Sen. John Carona near the end of the debate that turned his compromise payday loan bill into a serious reform bill.

What We’re Watching Today:

1. Today, the House floor will hear HB 166, which would set up an innocence commission to investigate potential cases of wrongful conviction.

3. Sen. Dan Patrick’s (R-Houston) big charter school expansion bill, SB 2, is scheduled to be discussed in the House Public Education Committee. The bill’s already passed the Senate.

2. The House will also hear Sunset legislation that proposes continuing the Texas Lottery Commission for another 12 years.

The Lead:

Senators struggled last week with Sen. John Carona’s (R-Dallas) legislation that would impose some watered-down regulations on the payday and auto-title lending industry. Carona’s bill, Senate Bill 1247, wouldn’t limit interest rates but would simply limit the number and size of loans that a person could take out, as the Observer’s Forrest Wilder explains.

Meanwhile the legislation would hand industry a major victory by preempting any city ordinance restricting payday loans, which have been known to charge 600 percent interest rates. Opponents of the bill say that it doesn’t do enough to regulate a predatory industry and could lead to new unhealthy lending practices.

When the bill first came to the Senate floor last Thursday, the debate wasn’t exactly smooth. Carona complained that two of his colleagues were working as “shills” for the industry, trying to turn votes against a relatively benign compromise bill. Carona eventually agreed to pull the bill down and wait over the weekend. There might have been a little lobbying going on this weekend. We’ll be watching for round two on payday loans in the Senate this afternoon to see if legislators are willing to make any changes to the lending practices in this state.

Weekend Headlines:

1. The fertilizer plant explosion in West, Texas, has environmentalists questioning whether regulations to monitor such chemical plants are too lax, The Texas Tribune reports.

2. Patti Kilday Hart reports in the Houston Chronicle that federal officials didn’t know that the fertilizer plant in West had so much ammonium nitrate on site. The plant had 270 tons of ammonium nitrate—1,300 times higher than the threshold that should have triggered federal oversight.

3. Lawmakers are considering two bills that would alter the retirement plans for teachers and state workers, including raising the retirement age. The Austin American-Statesman has the details.

4. Last week, lawmakers heard Rep. Matt Krause’s HB 360, which proposes to allow university student organizations to potentially restrict members based on, well, who they are. Kraus strenuously denied this was discrimination.

Line of the Day:

“The interests behind this bill have hired darn near every lobbyist in this town that needed employment. They are around every corner in this Capitol.” —Sen. John Carona (R-Dallas) during last week’s debate on his payday loan bill, SB 1247.

What We’re Watching Today:

1. The Senate Finance Subcommittee on Fiscal Matters will be hearing a proposal for a constitutional amendment that would require a 2/3 majority vote for the Legislature to raise taxes.

2. We’ll be watching the Senate to see if Sen. Carona’s payday loan bill reappears. 

The Lead:

It appeared yesterday that Sen. John Carona (R-Dallas) had become fed up with the power and influence of the payday loan industry, as the Texas Observer’s Forrest Wilder reports.

Carona stood on the Senate floor trying to pass an extremely watered down version of his reform bill while several senators were doing the industry’s bidding by working the floor and trying to flip votes against the measure. Carona had had enough. He called out some of his colleagues for working as “shills” for the payday loan industry. You just don’t hear that kind of language on the Senate floor very often.

Carona himself said the legislation is already a compromise with the industry, because it doesn’t cap interest rates, as the Observer’s Forrest Wilder wrote in this piece. However, it would limit the number and size of loans for some consumers. Democrats and consumer advocates are divided over whether to support the bill, which does impose minor restrictions but also hands the industry a major victory by doing away with city ordinances on payday loans.

In the end, Carona agreed to postpone a vote on the bill till Monday. That gives both sides the weekend to swing votes.

Yesterday’s Headlines:

1. Apparently Gov. Rick Perry wasn’t too fond of Rep. Lyle Larson’s term-limits bill. The governor hauled the fellow Republican in for a “spirited” hour-long meeting, the Dallas Morning News reports. Perry, of course, is the longest-serving governor in Texas history. He’s occupied the office going on 13 years and hasn’t ruled out a run for….um, what number term would this be? We’ve lost count.

2. The House Appropriations Committee voted unanimously to send a supplemental spending bill, with $500 million more for education, to the full House, as the Texas Tribune reports. The legislation also tosses in $170 million for several agencies to cover costs of last year’s wildfires.

Line of the Day:

“To me, House Bill 1938 would take us back to 1938 in ethnic studies.” —Librotraficante founder Tony Diaz told the House Higher Education Committee about a bill that would end race, gender and other specialized history courses from counting toward students’ required history credits.

What We’re Watching Today:

1. It’s a slow Friday. The House is in session, but not much on the calendar looks controversial, except possibly HB 1325, which would limit some asbestos litigation.

2. House Criminal Jurisprudence is the only committee in either chamber scheduled to meet.