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.
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.
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.
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.
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.
An ugly scene erupted in the Texas Senate today, with Sen. John Carona (R-Dallas) suggesting that some of his Republican colleagues were “shills” for the payday loan industry and worrying that the GOP would be seen as “the party that is backed and bankrolled by payday lenders.”
After intense negotiations this week, Carona told lawmakers he had struck a deal to pass legislation to reform payday and auto-title lending in Texas. Most of the consumer groups, the cities, Senate Democrats and even the payday loan industry were on board with the “hard-fought compromise,” he said.
“There have been great concessions on both sides,” Carona said. “We can leave this chamber at the end of May and honestly say we made a significant incremental step forward on protecting consumers.”
However, as Carona moved toward a suspension of the rule to bring the bill up for debate, which requires two-thirds of the Senate, he complained that payday-loan lobbyists were calling senators on the Senate floor and asking them to change their votes. He even hinted that two GOP senators were acting as agents for the industry.
“If we don’t do it this time, you won’t be able to regulate this industry two years from now,” he said. “This industry will be so much wealthier, so much more politically powerful that you won’t be able to say no and you won’t be able to draw the line. I know the lobbyists are just in a frenzy right now to try to stir up some action on the floor and get one or two of my colleagues who seem to be working the floor to change their vote.”
Republican Sen. Troy Fraser ($42,000 in contributions from the payday industry between 2009-2012) complained that the legislation was being rushed and asked Carona ($140,000 in industry contributions) to wait till Monday to vote. “I know you’re not down here as a shill for the payday lenders,” Carona said. “This is a stall tactic, and I’m sorry you chose to be the messenger.”
Later, Carona got into it with Sen. John Whitmire, a Houston Democrat. “What’s the rush?” Whitmire asked. “We spent more time on this than water for Texas, highway funding, mental health, why is this bill getting such a high priority?”
Carona responded: “Because 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.”
Despite claiming to have 28 votes for his bill and earlier promising not to pull it down, Carona agreed to wait till Monday to bring it up for a vote. If, he said, he can’t get enough votes to pass the bill, “then we’re going to talk very publicly about what changed the minds.”
We’ll say this for Sen. Dan Patrick: He keeps it interesting.
In an unusual move, the Houston Republican pushed the Senate yesterday to take back a campaign finance bill by Sen. Kel Seliger (R-Amarillo) that the senators had already passed and sent to the House.
Seliger’s SB 346, which he said has “everything to do with transparency,” would require 501C(4) and 501C(6) organizations—IRS designations used for social welfare and lobbying groups—to disclose their donors. The Quorum Report mentions this would include groups like Texans for Fiscal Responsibility run by Michael Quinn Sullivan who’s been enforcing tea party orthodoxy the past few sessions, marshaling money to go after Republicans he deems insufficiently conservative.
Patrick actually voted for the bill when it passed the Senate but then tried to undo that, arguing he didn’t realize the bill’s impact. Some folks might say, well, that’s too damn bad—he should have read the bill more closely the first time around or found another way to kill it (there are, of course, many ways to derail legislation at the end of a session). But Patrick won the vote, and the Senate tried to bring the bill back.
But the House, which had already technically taken possession of it, denied the request. By the time the Senate vote was over, the House had already referred it to State Affairs for hearing next Wednesday.
Rep. Charlie Geren has picked up the bill in the House. “Sen. Patrick is welcome to come testify against the bill if he feels the need to,” Geren told Quorum Report.
1. Many jokes hit the Twittersphere yesterday warning Texans to text, Tweet and drive while they still can. The Observer’s Emily Mathis reports after 11 amendments and much discussion, Rep. Tom Craddick’s texting-while-driving ban passed through the House.
2. The Observer’s Olivia Messer reports that 10 years after the U.S. Supreme Court ruled Texas’ designation of “homosexual conduct” as a criminal offense was unconstitutional, the Senate Criminal Justice Committee took up SB 538, which would finally remove the language from the Texas Penal Code.
3. The Austin American Statesman reports Rep. Byron Cook laid out a bill in House State Affairs yesterday that would allow undocumented immigrants to get a driver’s licenses and car insurance.
Line of the Day:
“How can you be in one part of the Capitol advocating for best practices in cancer research … and then on the other end arguing on behalf of industry saying tobacco companies need regulating a certain way?… That seems to be the story of the CPRIT Foundation. It’s just one conflict of interest after another.” —Rep. Trey Martinez Fischer on the Cancer Prevention and Research Institute’s (CPRIT) choice to hire a tobacco company to lobby on its behalf, as reported by the Texas Tribune.
What We’re Watching Today:
1. The House is scheduled to debate seven bills today on the floor, including HB 788, which would direct the Texas Commission on Environmental Quality to regulate greenhouse gas permits and emissions. The Environmental Protection Agency does so currently.
2. The Senate State Affairs Committee has one bill on the menu for today: a redistricting bill that would would make the interim district maps used in the last election permanent.
3. The House Appropriations Committee started early this morning to discuss revenue bills, including HB 11 that would pull money from the rainy day fund to use for water projects, and a few other bills that discuss transportation and highway project financing.
House members considered a pair of bills Wednesday rooted in social conservative ideas about what’s wrong with universities, before briefly delving into a plan to let students access unspent state loan money. The first two got most of their attention.
We mentioned Fort Worth freshman Rep. Matt Krause’s House Bill 360 earlier this session, for its proposal to cut off state money to any school that requires its student groups to let any student join, regardless of their beliefs, status, race, gender and sexual orientation. Before the House Higher Education Committee, Krause’s defense of his bill was in line with what he told the Observer in February.
“We want a bill that allows all organizations to freely assemble and not be forced to accept members they don’t want to,” Krause said. “Even a momentary chill of free speech can do irreparable harm.”
He offered a committee substitute that, he said, removed “overly broad” language in the bill, and cut out “status, race, gender and sexual orientation”—leaving only “beliefs.”
Jason Hoyt, president of a national Christian fraternity, said the bill would help clarify organizations’ rights to pick and choose their members. His group, Beta Upsilon Chi, has taken fire before for only including Christian males, but Hoyt said they’ve resolved those issues at the university level.
Rep. Donna Howard (D- Austin) thought the entire conversation a waste of time. She said it “doesn’t sound like there’s some overwhelming discrimination” going on in student organizations that can’t be resolved on a case-by-case basis. She was concerned about formalizing the right to discriminate.
“I am proud to be part of the United States of America to have all these privileges,” she said. “I don’t know why we’re having all these discussions today, quite frankly. … This [issue] doesn’t seem to merit doing something here at the Legislature.”
Next up was another freshman Republican, Southlake’s Rep. Giovanni Capriglione, whose HB 1938, which would only allow courses offering a “comprehensive survey” of American history to count toward an undergraduate student’s six required history credits. Race, gender, and other special interest history courses wouldn’t count.
It’s the House version of a bill that Sen. Dan Patrick (R-Houston) has introduced, in response to a report from the conservative National Association of Scholars, which said courses at the University of Texas and Texas A&M spend too much time on Latino and African-American history.
Tony Diaz, the founder of Librotraficante who sounded the alarm about the Senate bill earlier this session, told lawmakers it “appears to be part of the GOP attack on ethnic studies. … To me, House Bill 1938 would take us back to 1938 in ethnic studies.”
Capriglione said that sort of criticism comes from a small group of activists whose complaints are misplaced. “This is not about race. This is not about ideology,” he said. “This is about academic quality.” Capriglione said he was not trying to exclude ideas, or remove any courses. He said his intent is to enhance civic engagement.
Rep. Roberto Alonzo (D-Dallas) wondered who had asked Capriglione to author this bill. Capriglione said no one in particular. Later in the hearing, the Texas Public Policy Foundation’s Thomas Lindsay admitted to having had something to do with it.
“The first duty of government is to defend the citizens,” Lindsay explained. “There’s a physical defense, but there’s also a metaphysical defense.” Lindsay said when we teach American history, that’s when we teach what it means to be American, and all students need a grounding in those same principles.
“It doesn’t matter what you look like, where you came from, or what religion you have,” he said. “America’s essence is an idea and you can’t defend what you can’t define.”
Having considered allowing more discrimination and discouraging ethnic studies, the committee turned to a more practical question: student loans.
Dan Weaver, assistant commissioner of the Higher Education Coordinating Board, told lawmakers that within a few months, $100 million will be sitting in a fund for the Texas B-On-Time loan program, which the board manages, but that there aren’t enough eligible students to spend it on. The program offers loan forgiveness to students who finish their degrees quickly.
Rep. Chris Turner’s (D-Arlington) House Bill 3265 would give the board the chance to spend that money on a financial aid program for veterans. Unused Texas B-On-Time money could be spent on the Hazelwood Act—a state benefit that provides qualified veterans and their family tuition for up to 150 hours of credit. Turner said Hazelwood has been so successful that demand has even outpaced what universities expected.
“This bill is about finding a two-fold solution. First, help schools collect more than what they’re using B-On-Time,” Turner said, “and second, try to find a solution to the funding gap we are facing.”
After the hours of testimony over the afternoon’s more controversial proposals, far less was said about Turner’s bill.
Weaver said since 2004 the coordinating board has been accumulating the extra B-on-time funds because the Legislature only appropriates so much for each year. For example, this next year the coordinating board is allowed to spend $40 million for B-on-Time loans, but will have collected $56 million in loan repayments. Weaver said that’s $16 million extra funding just sitting there, waiting to be spent.
After a long debate and a slew of amendments, the Texas Legislature is closer to banning texting while driving. The House passed Rep. Tom Craddick’s bill Wednesday with a vote of 98 to 47.
HB 63 imposes a $100 fine and misdemeanor traffic ticket for drivers caught texting and a $200 fine for repeat offenders. Much of the debate focused around proposed amendments by Rep. Harold Dutton Jr. (D-Houston) and Rep. Charles Perry (R-Lubbock).
Rep. Perry argued that texting shouldn’t be the sole reason for pulling over a driver, worrying that it gave too much power to law enforcement. But his amendment ultimately failed.
Dutton stepped up after Perry’s failed amendment with a similar amendment. Dutton argued that if a police officer pulls a driver over for texting while driving, it would ensure that the government is much too involved in the lives of its citizens. And he worried that it could lead to racial profiling.
After close votes and two recounts, Dutton’s amendment failed as well.
Bills have been proposed in past sessions to prohibit texting while driving with little success.In 2011, the legislature passed HB 242, which banned texting while driving. Governor Perry vetoed the bill on the grounds that it was “a government effort to micromanage the behavior of adults”.
But over the years, several cities have passed citywide ordinances to ban the use of cell phones. The patchwork of laws regarding cell phone use across the state can often lead to confusion for drivers, said Rep. John Smithee (R-Amarillo) during the debate. “Whatever we do, let’s make it uniform,” he said. “Part of making it understandable is making it consistent.”
It may appear that gay marriage is a long way off in Texas, but at least an unconstitutional “sodomy law” is finally being repealed. (Admittedly, this a low standard.) Ten years ago, the US Supreme Court ruled in Lawrence v. Texas that section 21.06 of the Texas Penal Code, which designates “homosexual conduct” a criminal offense, violated the privacy and liberty of adults.
Late Wednesday afternoon, the Senate Criminal Justice Committee took up Senate Bill 538, authored by Sen. Jose Rodriguez (D-El Paso), which would “repeal ‘homosexual conduct’ as a criminal offense.” The legislation would remove section 21.06 and any other references to the section in Texas law.
Rodriguez says that this law is unenforceable and needlessly costing the state money. The immediate impetus for repeal was an unconstitutional arrest in 2009. “This defunct law was grounds for the police to arrest patrons in a restaurant in my district, resulting in a suit against the city of El Paso,” Rodriguez said. “Not only is the continued existence of this law on the books a source of misinformation for law enforcement, but in my own district local governments have been forced to spend their limited resources due to this misuse.”
Charles Spain spoke on behalf of the State Bar of Texas. “The confusion in El Paso came from two people who were kissing,” he said. “The police officers thought that was ‘homosexual conduct.’”
Rodriguez explained that the legislative program of the State Bar of Texas requires, as of 1963, that the state change any “statutes that have been revised or declared invalid. Well, this is exactly what the state bar has recommended here with regard to this particular provision.”
Chuck Smith, Executive Director of Equality Texas, spoke in favor of the bill. “This week the Montana Legislature has passed a similar repeal legislation, and Montana Gov. Steve Bullock is expected to sign it into law. That would leave only the states of Texas, Oklahoma, and Kansas as the only three states in the country that still have the statute on the books,” he said.
Update: The bill was voted out of committee 5-0.
[This post was updated at 10:30p.m. on April 17, 2013.]
We’ve reached day 100 of the session. Just 40 days left to complete the state’s business for the next two years without a special session.
Two of the major issues coming into the session—Medicaid expansion and school testing reform—remain unresolved, though we saw progress on both fronts yesterday.
The Senate Education Committee passed House Bill 5, which would reduce the number of standardized tests high school kids must pass to graduate, yesterday morning. The measure was voted out with a few changes from the House version.
Meanwhile, Rep. John Zerwas (R-Richmond) continues to push Medicaid expansion—well, he’s not calling it that exactly. It’s more like expanding health insurance to Texans that don’t have it. In House Appropriations subcommittee yesterday, he laid out HB 3791, which would push a “Texas solution” so state officials could design a Medicaid expansion as Texas sees fit—a block grant approach, as John Reynolds writes for Quorum Report, that Zerwas hopes will satisfy the conservatives at the Texas Public Policy Foundation. We’ll see.
1. The Senate Natural Resources Committee voted out Senate Bill 957 by Sen. Troy Fraser (R-Horseshoe Bay). The measure would “streamline” the process that communities and environmental groups currently use to challenge permits to pollute. And by “streamline,” we mean make it easier for polluters to gain permits without nuisance from concerned citizens.
2. The Observer‘s Forrest Wilder examines how the payday loan industry is dividing and conquering consumer advocates this session. Advocates and Democrats are deeply divided over Sen. John Carona’s bill that would impose light regulations on payday loans, but would also hand the industry a major victory by preempting all city ordinances restricting their lending. At the Capitol, money still talks.
3. The troubles for CPRIT, the cancer-fighting agency, just keep coming. Jay Root reports in the Texas Tribune that CPRIT hired a tobacco lobbyist to help its cause at the Legislature. Irony alert.
Line of the Day:
“Maybe the Legislature should just go home and let The New York Times represent the House and the Washington Post represent the Senate.” —Dan Patrick (R-Houston) in the Senate Education Committee on the newspapers’ opposition to Texas reducing standardized testing.
2. Senate Criminal Justice will hear a bill to repeal “homosexual conduct” as a criminal offense.
3. Senate Criminal Justice will also debate SB 780 by Sen. Juan “Chuy” Hinojosa. The bill seeks to improve Texas’ indigent defense by ensuring that poor defendants eligible for counsel actually get a lawyer.
Opening this morning’s Senate Education Committee hearing on the bill, Sen. Dan Patrick (R-Houston) was ready with a wagging finger of his own for those East Coast elitists. “Since when does Texas worry about what the Washington Post editorial board and the New York Times editorial board have to say about our legislation in Texas?” he wondered.
“Maybe the Legislature should just go home and let The New York Times represent the House and the Washington Post represent the Senate,” he went on—a ridiculous idea because the Times would be a much better fit for the Senate.
For months, the big education policy action was all about scaling back the state exams; Texas’ 15 high school tests are far more than any other state requires. Trimming the number of tests has been an easy sell at the Capitol this session.
So Patrick came out swinging this morning to defend the bill—and to jab at the bill’s detractors. Patrick noted that companies with the Texas Association of Business, a group that’s been critical of HB 5, haven’t come to his office to explain their problems. Any claims that the new graduation requirements are less rigorous than the current ones, he said, are “just false.”
He said he recognizes there are some folks with whom he’ll simply disagree. “I realize some think that if you don’t have algebra II, chemistry and physics that somehow you’re not ready for life,” he said. “Well, not every student needs algebra II, chemistry and physics.”
“So in business, you have them coming and going,” Patrick said “If they fail in high schools and have to go to a GED, you sell a test there.”
Clark disagreed with Patrick’s premise. “The implication of that, Senator, is that somehow, Pearson would welcome the failing of students so they’d be forced to take one more test,” he said.
Patrick, though, shared an unsettling realization about the private sector. “I’m just respectfully saying that the objective of Pearson, which is their right, is to make a profit. And the objective of Pearson is not in the best interest of the students and teachers,” he said.
The committee room was full of support for HB 5, ready with laughter or applause for lines like that one. At one point, Sen. Kel Seliger warned the crowd that “this is a hearing and not American Idol.”
MALDEF lawyer Marisa Bono offered rare criticism of the bill in today’s hearing, saying they’re “concerned HB 5 still creates opportunities for tracking.” What should be most important to lawmakers, she said, is giving schools the resources they need to educate kids. “We know this because we’ve seen it happen. These students can meet any level of rigor that the Legislature puts in front of them, if they’re given the proper support.”
The committee voted out House Bill 5 this afternoon, with a few changes from the House version, replacing the graduation paths with similar plans Patrick proposed in other bills. Other changes would provide state funding for students to take SAT or ACT tests—offset by the savings from giving fewer STAAR tests and providing more money to support kids retaking the tests.
Democratic Senators Leticia Van de Putte and Royce West took symbolic present-not-voting votes, saying they hoped to work on the bill before it reaches the Senate floor. Van de Putte said she’s concerned students will be too likely, under HB 5, to choose a graduation path that disqualifies them from state-funded college grants or automatic admission to state universities.
It’s becoming a perennial pastime at the Texas Capitol. Former speaker of the House Rep. Tom Craddick (R-Midland) files a simple one-page bill that would close a loophole that allows payday and auto-title lenders in Texas to avoid the state’s anti-usury laws and charge unlimited rates; everyone listens politely; and then the bill gets leapfrogged by much more convoluted payday reform legislation.
Yesterday, Craddick plugged this session’s version, House Bill 2019, at the House Committee on Investments and Financial Services.
“What [the bill] does is level the playing field in the payday and auto title loan industry. It does not create any new regulation, it’s just making sure that all lenders … operate under the same standards. The bill would ensure all consumer lenders are subject to the same rates and fees,” Craddick explained. Right now, payday and title lenders operate as “credit service organizations,” a part of the Texas Finance Code originally intended for businesses that repair consumers’ credit. Craddick’s approach would make the payday lenders subject to the same regulations as other consumer lenders.
“The fees are the biggest problem,” said Craddick. Payday and auto title lenders often charge rates of more than 600 percent APR, plunging borrowers into a cycle of debt they are unable to climb out of.
The bill drew support from various members of faith organizations. Advocates for reforming payday loans clearly prefer closing the loophole over legislation moving in the Senate.
“Mr. Chairman and members, you face a choice in this committee to endorse predatory lending practices of payday and auto title lenders in Texas or to stand up for poor and vulnerable families in our state,” said Bishop Vasquez.
He was clear that, while the bill does not suggest doing away with fees associated with payday lending, setting a cap on these fees would be much better than the current unregulated system.
Ann Baddour, Senior Policy Analyst for Texas Appleseed, also testified on behalf of the bill.
“I think you have so many churches here and non-profits here concerned about this because people aren’t necessarily complaining to the state,” said Baddour. “Think of yourself, you’re a working family, you barely have enough money to make ends meet. What do you do with your time? Do you complain to someone who can’t help you or do you go to someone who can help you?”
Gail Rowland, a woman from Houston with a full time job, found herself in need of fast money to help pay for medical expenses. She turned to a local payday lender, and, since taking the loan, has paid more than twice her original loan back.
“Am I responsible for the decision I made? Absolutely. Do I owe the money? Yes, I do, and I want to repay that,” said Rowland. “We make bad decisions. The payday lenders help us make bad decisions. They make it extremely easy, they make it extremely fast … And I think when we have a financial need, we are looking for that. We’re desperate.”
She continued: “There’s been a lot of talk about people continuing on that path. I can assure you, this will be my last [loan] … I don’t plan to be in a situation, but these have been hard times for Texans.”
As Rowland quietly took her seat, committee members and those sitting in the room together applauded her.