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The Senate Committee on Business and Commerce met on March 16 to discuss a number of items. This report covers SB 196 (Zaffirini), SB 298 (Hancock et al.), SB 415 (Hancock), SB 566 (Buckingham), SB 760 (Springer), SB 872 (Hancock), SB 876 (Hancock et al.), and SB 911 (Hancock). The video archive can be found here.

This report is intended to give you an overview and highlight of the discussions on the various topics the committee took up. It is not a verbatim transcript of the hearing but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

 

SB 196 (Zaffirini)  Committee Substitute – Relating to prohibited relationships between holders of certain alcoholic beverage licenses and permits.

  • Refile of HB 3791 from 2019, passed unanimously in House was but received too late in Senate to be heard
  • Alcoholic Beverage Code prohibits excessive discounts for sales of alcoholic beverages to on or off premise permit holders
  • Term “excessive discount” is undefined in statute
  • Bill provides regulatory clarity by removing “excessive discount” language and will clarifies the law regarding the practice of paying for transportation to educational events at manufacturing facilities
  • A manufacturer may provide transportation to an educational program at the manufacturer’s facility for retailers without it being considered an inducement, provided no quid pro quo exists
  • Committee Substitute is based on recommendations from out of state wine producers, further clarifying that manufacturers may provide transportation to only in state facilities

 

Lance Lively, Texas Package Stores Association – for

  • No comment

SB 196 left pending

 

SB 298 (Hancock | et al.)  Committee Substitute – Relating to the pickup and delivery of alcoholic beverages for off-premises consumption.

  • Amends alcoholic beverage code to safely sell alcoholic beverages to-go
  • Restaurants with a mixed beverage permit and food-beverage certificate from TABC will be able to sell beer, wine and cocktails with food orders that are purchased for pick-up or delivery, including through third party companies
  • Contains safety provisions: beverage must be sealed in original, manufactured container or tamper proof container with business label
  • If beverage is not in the required container, cannot be carried in passenger area of motor vehicle
  • Committee substitute will allow a private club to participate in to-go
  • Effective immediately

 

Nicole Holt, Texans for Safe and Drug Free Youth – on

  • Alcohol is the most widely used drug by youth, which leads to crimes and youth deaths and is reported by youth as the easiest substance to get
  • SB provides challenges to ensuring youth safety
  • We understand intention, but want to take action against the “easy route” for underage drinkers
  • Want task force of public health experts to research and determine the public health impact of bill and provide recommendations
  • Pass this thoughtfully and responsibly
  • Hancock – We did provide safeguards in bill. Personal story: Delivery service could not deliver beverage to home as the order name did not match the recipient name
  • Paxton – What other measures or protocols would you suggest?
    • Personal story: received bottle while family was not home
    • Reports of beverage delivery without ID checking or not having the right customer at the door
    • Problem with third party: if the person has no ID, then what? Where does the delivery person take it?
    • Not interested in making it to-go beverages impossible, but we are changing business around alcohol and full scope should be considered
    • Need to look at what apps work best, which might need refinement
    • Research how law enforcement can do compliance checks
    • Texas can be a model to other states
  • Paxton – Must enforce or law is moot
  • Hancock – Committed to working with you, appreciate your testimony.

SB 298 left pending

 

SB 415 (Hancock) – Relating to use of electric energy storage facilities in the ERCOT power region.

  • Utility scale battery storage devices have been integrated in the market and provide promise as tools of reliability and affordability in Texas
  • Bill is in response to a request from PUC: how to integrate into ERCOT market structure
  • Bill would maintain storage in competitive generation market while providing transition and distribution utilities with new, reliable standards that are cost effective
  • Allow electric generation company to own battery storage and maintain lease relationship with fully regulated transmission and distribution utility
  • Option of using storage is cheaper than building traditional infrastructure

 

Katie Coleman, Texas Association of Manufacturers – for

  • Our members are large consumers, concerned with reasonable utility rates while preserving the integrity of wholesale market; make sure that there are no resources that are subsidized through regulated rates competing with market generators
  • In last ten years, utilities have made proposals to apply batteries to transmission and distribution services
  • Our concern with those proposals: making sure battery application is a cost effective alternative while preserving the competitive market
  • SB give utilities an option to contract with competitive provider without putting battery ownership under utilities services
  • Do think that batteries offer a lot of potential but should be in competitive wholesale market
  • There were not a lot of batteries in market last session, but since they compete in wholesale more successfully, we have 26 gigawatts as of January
  • Task force at ERCOT in last year for battery integration
  • Menendez – I have talked to a company that felt they were paying too much, how would you tell an industrial unit to create power and store it?
    • That would be a significant opportunity, looking at that type of storage
    • Collocating storage with renewables, should be looking into it.
    • The bill furthers that application, making sure they are in resale market
    • Voltage support or distribution
  • Menendez – Would the bill allow for an industrial user to generate power and store it? Limitation not to exceed 40 megawatts?
    • Would be a significant opportunity, my members are looking at that type of application and collocating storage with renewables
    • Bill furthers applications, making sure batteries stays in retail market
    • A threshold had to be drawn, 40 might change over the years
  • Hancock – Trying to avoid fully regulated entity. Do not want companies to buy at negative number, store it, and sell it in times of scarcity; could increase chance of market manipulation
  • Johnson – Bill gives utility ability to contract with power generation company for supply of electricity from storage facility, presumably from a battery. Does that address something that is not already possible?
    • Yes, there is a special process to store power
    • Statute prohibits utilities from transacting in the market, unable to buy and sell unless acting as a consumer, for powering their office for example
    • Would have settled through “unaccounted-for energy”
  • Johnson – In what situations would a TDU need to enter into that kind of contract?
    • In remote areas, battery could back up a distribution service if it has reliability issues, batteries could support operations and give voltage stability

 

Cyrus Reed, Lonestar Chapter of Sierra Club – for

  • In energy only wholesale market, for energy and ancillary, important we understand ownership and take advantage of batteries in terms of reliability
  • TDU could use energy storage for reliability
  • Not sure if 40 megawatts is enough, though we could come back next session to up that if it passes
  • Would love to see other NWA’s, non-wires alternatives, that could be useful as reliability tool on contract basis, but could look at that later
  • We have been participating in ERCOT storage, doing a good job incorporating storage into market
  • Menendez – If you have thoughts on how to improve bill, why would you not share them? 40 mega watt limitation vs regional use: what if we broke it up into substations/cities that would have limitations? Would love to work through battery or NWA alternatives that could prevent or offset tragedy we just went through
    • Not the context of this bill, but could love to work within communities to keep cities from shutting down
  • Hancock- Batteries typically last four hours
    • Batteries would not have prevented this crisis, but could have been a nice buffer

 

Suzanne Bertin, Texas Advanced Energy Business Alliance – for

  • Great market-based solution; this is a good start, moving forward
  • We need more battery storage to help with local resilience; if this bill passed last session, we would have been better prepared for this crisis
  • Suggested improvements: battery storage is not the only technology to contribute to local resilience – onsite solar, mobile batteries, demand response, battery cars are options to look in to moving forward
  • Recommend removing 40-megawatt cap
  • “Capital lease” language should be reconsidered
  • Menendez – We know limitations on time for battery usage, but part of problem in crisis was ERCOT load shed. Some plants were tripped off because energy was so out of balance. In times of spikes or dips, batteries could be demand respond to allow for smoother transition. Would you agree?
    • Yes
  • Menendez – There was low compression at natural gas plants because compression stations lost power. If they had batteries, compression could have continued

 

Joel Yu, Enchanted Rock – for

  • Micro-grid developer in Houston, provided long duration, reliable coverage for customers during outages and ran power back into grid
  • Provided support to ERCOT grid, shows usefulness of power distribution
  • Provisions: Language should include all distributed energy resources on a technology neutral basis
  • “Capital leases” should be removed as its associated with transfer of ownership

 

Michele Richmond, Texas Competitive Power Advocates – for

  • Recognizes a successful market in Texas relies on competition
  • Bill affirms that financial risk of development should be borne by competitors in market, not by taxpayers

 

Steven Vavrick, Broad Reach Power – for

  • Batteries take energy off the grid when there is too much circulating and put energy back into the grid when there is a shortage
  • Ancillary service allows stability and immediate response
  • We build standalone batteries, but look to collocate with other resource environments
  • Batteries are a good investment for Texas due to the continued growth of power demand and ERCOT’s market-based regulations
  • PUC has been clear that batteries are a generation asset, not a transmission asset
  • Nichols – 239 megawatts in batteries, how long will they last with a full charge?
    • Ranges with each facility. Should be calculated more like barrels or a storage tank, discharge rate effects time. At full rate of discharge, each battery has a one-hour duration
  • Menendez – Not all batteries need to be discharged at the same time?
    • No, ERCOT is spacing them out. We are building many batteries across the state to have a network of reliability assets. Could have an infinite battery that you could charge and recharge, that is the future of ERCOT
  • Hancock – Our market has become more volatile as we are growing in renewables and our base load capacity has shrunk
    • Necessity is the mother of invention; everyday, batteries are getting better and cheaper

SB 415 left pending

 

SB 566 (Buckingham) – Relating to electricity service provided by certain municipally owned utilities.

  • Creates system for all Austin Energy rate payers to appeal to PUC for a review of their rates
  • Current law dictates that retail payers and municipalities living outside of city limits have the ability to safeguard against unfair rates by appealing to PUC; those inside of city limits, such as Austin Energy rate payers, have no such safeguard
  • Austin Energy rate payers must appeal to Austin City Council; the Board of Austin Energy is made up of city council members, who approved the rates and who’s budget authority benefits from the general fund transfer of revenues generated from these rates
  • This bill provides a check on monopoly, allowing payers an opportunity to appeal to PUC; PUC will be required to compare Austin Energy costs with similar, competitive markets

 

Mark Dombroski, Austin Energy – against

  • Our services reflect community that we serve
  • We are community owned; rates are focused on stability and affordability, keeping bill predictable and affordable
  • Austin Energy system average rate is below average Texas rate; rates are determined in open and transparent process
  • Financial policies call for a review of cost every five years, last in 2016; we encourage all customers and organizations to actively participate and voice opinions
  • In 2016, agreed with over 20 customer groups to lower rate 6.7% percent, $42.5 million
  • In 2020, we completed a cost-of-service study and determined that our current rates are adequate to recover our cost
  • Bill would add regulatory burden to a community process that has already been approved, increase cost and make it difficult for citizens to have a say; bill proposal may not produce a better outcome
  • Buckingham – If you have transparent processes, why do you oppose an appeal that goes through PUC, who works for every other utility?
    • This bill would only apply to Austin Energy, one of 72 municipal utilities, and would compare us to rates in the unregulated market
  • Buckingham – How much money does Austin Energy transfer to the city of Austin’s general fund annually? I hear estimates of around $150 million
    • We have a general fund transfer permitted by state code and policies. This year is $114 million, 8% of revenue. We also pay for the city resources we use, included in that $150 million that you mentioned.
  • Buckingham – Your board is unique in its composition, aren’t you the only board that is Austin city council?
    • Correct, our board sets rates, approves budgets and bonds. Unsure how unique that is.
  • Hancock – Austin Energy handled the storm well, thank you.

 

Russell Keene, Texas Public Power Association – against

  • Local governance has controlled rate process which is transparent, fair, and equitable; bill is unnecessary at this time
  • Bill takes particular customer class in one single utility
  • Rates are unique between cities, built around load demand and load shape; commercial and industrial rates are unique in calculation
  • Thinks local governance works well, understand there is one customer who is not happy
  • Feel like bill is unnecessary at this time
  • Hancock – Describe how negotiation works in a monopoly
    • Rates are not set across the board, there is flexibility. There is negotiating ability if you have a lot of demand
    • Customers will not move into a municipality without understanding or considering utility cost
    • Everyone puts up rates so customers can see the charge, they don’t disclose energy charge in industrial contracts because they are fungible
  • Hancock – Once the facility has built in the city, how do they negotiate?
    • Every five years they will do a full rate review, and treated very carefully
    • A few years ago Austin Energy lowered rate for all classes of customers and most signed rate reduction agreement, but this one customer did not
  • Hancock – That was after legislature looked at the issues that Austin Energy offered the rate reduction
    • Was not here at the time but they do hear Hancock and Buckingham
  • Schwertner – Talking in circles, consumers truly do not have power to negotiate once in that locale. Up to city council
    • Disagree, any city goes through cost-of-service adjustment, some annually
  • Schwertner – Still done at city council level, but there is no one on one negotiation between consumer of large MW industrial complex and municipality
    • I believe there is, a large industrial user can work with their representative or general manager for the lowest rate possible; if cost cannot be cut, it will be explained transparently
    • Every commodity has a floor – a point where it cannot be pushed any lower
    • The utility is a department of the city, economic development is important to our towns; no one is raising rates arbitrarily
    • No one subsidizes residential cost with commercial; no cost shifting between various types of customers
    • Utility is a department of the city, whether managed by the board or overseen by city council, about 50/50 across the state
    • Nationally, 60% are council managed and 40% are board managed
  • Paxton – Sounds less like negotiation and more like benevolent dictatorship. Can a residential customer in Austin negotiate?
    • A customer inside city limits can appeal to the council; for those that live out of town, there is a mechanism where a group of them can appeal to the PUC
  • Johnson – Austin Energy vs commercial providers: do we have any indication that businesses are upset with your services and rates?
    • Economic development this year is strong across the state; our utilities are spending cap x and welcoming new customers with robust growth
  • Johnson – If the city decided to double rates, what are the consequences?
    • People would vote with their feet and not move here, you would not see Tesla plant; people would move to Texas
  • Johnson – Economic consequences are of grave concern to city council and residents of region. When examining solutions, we should pinpoint the problem, and maybe it is the lack of recourse. If we created a generic right of appeal, say that groups of ten could appeal for example, would that be a burden?
    • Yes burden
  • Johnson – Would you have to hire someone new?
    • City council members care for their constituents; people can be voted out of office for rates
  • Johnson – Would there be less accountability if your board was not made up by council?
    • No
  • Buckingham – Are you aware of the last time Austin did an independent review based on the 2012 appeal to PUC? PUC determined that half of Austin Energy rates were unreasonable. Austin Energy agreed with majority of stakeholders to lower the rates, only in exchange for the party’s agreement to oppose any effort to support an appeal. Basically a gag order
    • I cannot speak to that
    • Austin put five-year reviews in place, we have had two now and determined they were overcharging and tried to balance it out
  • Menendez – Could you provide the committee with a comparison of rates from across the state? A competitive marker. Would like to know what we are dealing with, how rates compare. Needs to be balanced; it is owned by the city and therefore owned by the citizens. As a former city councilman, you never wanted to see a rate increase because you would never hear the end of it so takes it very seriously
    • Happy to

 

Edward Henigin, Data Foundry – for

  • Rates are excessive due to a rate ordinance that we believe is illegal under Texas code; we would like to appeal to the organization best suited to understand and adjudicate this issue, the Public Utilities Commission of Texas
  • In Houston, we have access to competitive market, in Austin we are a captive customer
  • Paying 25% more in Austin than Houston, big difference to bottom line, and our cost goes to our customers
  • State government is one of Austin Energy’s largest customers; taxpayers across Texas are paying these excessive rates
  • The driver for Austin Energy costs is the overhead for their generation plants
  • Austin Energy bills all customers for capital and operating cost of plants, $308 million per year
  • Nacogdoches power plant costs $43 million before producing any energy
  • Rates are unjust, but government is not a public utility expert; we want to appeal to PUC, the body who is designed to handle this
  • Hancock – What % of your cost is electricity?
    • 25% of total operating cost, massive
  • Johnson – Was that 25% differential due to increases in last few years?
    • Differential has been in place for a while
    • An argument today is that a business can choose where it lands and use local costs to make choice, but our business serves local consumers. If we were to deploy in a different city, Austin would be underserved
  • Johnson – If you serve Austin customers and you pay more for electricity, that cost is built into what you charge Austin customers, correct? What is the big deal?
    • It costs consumers more than it should
  • Johnson – Consumers are spending more money because you have to pay an unjust rate?
    • Yes
  • Menendez – Is Data Foundry in litigation over this issue? What stage?
    • Yes, after 2016 rate case, which was transparent until the end when negotiations between the city and large industrials behind closed doors
    • Filed suit in county court to challenge legality of rate ordinance
    • At state supreme court now, heard our argument a few months ago; we expect to hear from them soon
  • Menendez – Outcome of this lege could impact the court case currently pending?
    • We are specifically challenging the legality of the rate ordinance through courts; if we had an option to go through PUC, we would rather do that
    • If we were to prevail in courts, timeline is long and uncertain
  • Menendez – You would rather this bill to play out so you could more quickly negotiate a better rate?
    • Yes, would rather ability to appeal to PUC instead of going through legal courts
  • Paxton – You mentioned that Austin Energy has illegal rate ordinance? Could you articulate what is illegal?
    • Periodically, city council passes ordinance which sets rate for their department, Austin Energy
    • Included in the base rates are the capital costs and operating expenses for their power plants, about $308 million a year
    • Under Texas code, you are only to include the specific cost for rendering services to the public in your rates
    • The power plants that Austin Energy owns does not serve Austin Energy customers, they will tell you that; those power plants sell power competitively on the ERCOT market – they are serving third parties
    • ERCOT rules prohibit self-dealing; they cannot sell or utilize that power themselves
    • All of Austin Energy’s generation is dispatched and sold to serve everyone else In Texas, not Austin customers
    • Austin Energy carries all overhead and fixed costs in our rates; the Nacogdoches example: carrying costs are $43 million without actual production of energy, that cost is in our base rates though it is sold to third parties in ERCOT
  • Paxton – The Austin Energy ordinance in conflict with state code and that is what you are suing over?
    • Yes

SB 366 left pending

 

SB 760 (Springer) – Relating to the removal of solar power facilities.

  • Establish requirements for solar power facility agreements, to include provisions related to the decommissioning facilities by having a bond
  • Oil, gas, coal, and wind energy companies are statutorily required to pay to decommission and properly dispose of equipment
  • Modeled after HB 2845, which established best industry practices for decommissioning
  • Nationwide, 8 million tons of solar panels will need to be recycled by the end of the decade, 80 million tons by 2050
  • Texas is top five solar producing states, solar panels will fill landfills; want to address solar as it is continuing to grow
  • Allows persons who are harmed by violations to be entitled to appropriate injunction relief to prevent further violations
  • Legislature requires a guarantee of a solar power facility agreement to remove the guarantee’s solar power facility safely from the landowner’s property and provides financial assurance of the guarantee’s obligation of removal
  • Nichols – Would this apply to only new solar plants?
    • Correct, not retroactive; only applies going forward

 

Charlie Hemmeline, Texas Solar Power Association – on

  • Solar is attractive: clean, low-cost power, local tax investment, grid gets diversification and resource adequacy
  • We want to make sure land is well taken care of and Texans are not burdened with abandoned energy infrastructures
  • Contracts with landowners cover removal of facilities, restoration of land, and financial assurances
  • Solar power is here for the long haul, we want to be good stewards of Texas land and good partners with Texas land owners
  • Hancock – What is the anticipated lifespan of these panels?
    • 30-35 years

 

Brent Bennett, Texas Public Policy Foundation – for

  • This bill supports environmental protection and equalizing regulations with other energy producers
  • Environmental protections is about land and water as well as air; solar uses roughly 10x more land than other facilities, will overtake land of natural gas infrastructure
  • Important to get ahead of this issue
  • Solar panels are difficult to dispose of, more expensive to break down and recycle rather than buy new ones; we are working to incentivize recycling
  • Johnson- What financial assurance are we envisioning, what would satisfy requirements? Gas comparison?
    • Financial assurance must be fulfilled within 10 years of project commencement, must ensure proper disposal plan. Representative of what is done in oil/gas power. Trying to level ground, make comparable for each industry

SB 760 left pending

 

SB 872 (Hancock) – Relating to the expiration of the dry cleaner environmental response program.

  • Created in 2003, established new environmental standard for dry cleaners and a fund to assist the assessment and remediation of contamination caused by dry cleaning solvents
  • Revenue sources for the self-funded program come from participant registration fees and solvent fees – no general revenue
  • More than 100 sites remain in the most recent fund prioritization list and new sites continue to be added
  • Set to expire September 2021, bill extends to 2041

 

Erica Payne, Oak Park Cleaners – for

  • Fabulous partnership between dry cleaners in Texas and the TECQ, which oversees the fund
  • Would strongly like to keep this funding, move funds in right direction while keeping it out of our purview
  • Good resources for environmental awareness

 

Danny Bahlman, Southwest Dry Cleaners Association – for

  • Most dry cleaners are second and third generation family businesses, no large corporate owned cleaners in Texas; employs 14,000 in the state of Texas
  • Perchloroethylene is a carcinogen and soil and water contaminant
  • No cleanup funds available before the TECQ, cost over $1 million per location in larger cities prior to this bill
  • Asking to prolong this coverage; allows business to be passed to next generation without debt

SB 872 left pending

 

SB 876 (Hancock | et al.) Committee Substitute – Relating to the county in which a motor vehicle dealer may apply for the registration of and title for certain vehicles sold by the dealer.

  • Texas License Motor Vehicle Dealerships are required under section 501 of transportation code to title and register sold vehicles
  • During pandemic, flexibility to allowed dealers to title and register vehicles at any willing county tax accessor collector
  • Committee substitute further expands flexibility for registration and transaction of all kinds. Someone living on the outskirts of a county may be closer to the tax office of another county; regulations opened up to individuals as well as dealers to be more customer friendly
  • Menendez – Not all counties have same registration fees, how does the bill address this?
    • Counties have to be willing to do this. Would require flexibility from counties who commit
    • Our focus is the ease of constituents who may be closer to an adjoining county
    • Fosters competition
  • Johnson – Does this have an effect on sales tax?
    • We are focused on registration fees
    • No local sales tax implications
  • Nichols – Is it restricted to adjacent counties? Any limitation on driving four counties away?
    • No, we have people who will drive and hour and a half to drive to work. Allows them to choose. Ease of choice

 

Vicki Truitt, Self – on

  • Currently, dealer is required to apply for title and initial registration as directed by the purchaser; the purchase can designate which county receives their taxes and fees
  • I want my money to go to my county
  • Personal story: dealership, in spite of request, did not transfer sales tax to designated county
  • Rural Texas needs help through sales taxes and fees

 

Tammy McRae, Montgomery Tax Accessor Collection of Texas – against

  • Potential negative impact on rural counties
  • The county that processes paperwork is allowed to keep road and bridge fee, 5% of sales tax and portion of registration fee
  • Fees are an important county resource; would be forced to raise taxes in some areas if there is no other source of revenue
  • Many dealers hold their transactions, which burdens tax collectors in processing
  • Hancock – This was used during pandemic, what impact did the counties see?
    • Speaking for Montgomery county, no impact; I processed fees from Harris County and Montgomery received those funds
    • Hancock – So the rural county actually benefited?
    • I would not classify Montgomery as rural
  • Hancock – But it is possible that rural counties benefit?
    • Money should go where residents lived
    • Sabine County does not have car dealership, the closest dealerships are in Lufkin or Nacogdoches. A dealer would not want to drive to process a transaction. Sabine would be the one to lose

 

Robert Braziel, Texas Automobile Dealers Association – for

  • Provides flexibility to dealers, currently limited to county of residence of the buyer or where the vehicle is purchased
  • During pandemic, when certain offices were closed, that paperwork could be filed by another office so dealers could get funded
  • Even as offices are opening, we continue to see back logs that could be distributed to other counties to be processed in a timely fashion
  • Processing county gets five-dollar fee to incentivize that paperwork to be completed
  • Nichols – Explain sales tax?
    • 5% of collected sales tax goes to processing county
  • Nichols – On registration and processing, that fee just covers cost? The fee is not income for the county, but 5% of sales tax is a monetary addition to the counties
  • When web dealers were used, web dealer can allocate the county road and bridge piece to the county of which the buyer is present
  • Nichols – From a dealer’s standpoint, you want to find place that can process faster, not trying to redirect where tax goes?
    • Exactly
  • Nichols – Worried about where that sales tax goes
    • Hancock – We can address that

 

Shay Luedeke, Tax Accessor Collector Association of Texas – against

  • Consumer is presented with DMV form, VTR136, which gives buyer choice of sales tax distribution
  • If customer selects that their fees go to a specific county, dealer must comply
  • With this bill, the taxpayer would be ignored – the dealers may go wherever they choose to process work
  • Current form is not honored by all dealers, taxes are not sent where they have been selected; we do not see the paperwork when it is filed
  • Dealers would go against wishes, rural counties with no dealerships will suffer
  • Hancock – If a form was added to this bill and sent to tax collectors, would that help with accountability? Traceability to make sure tax accessors and dealers both abided by customer wishers
    • Only if we can reject forms that were sent to wrong county against consumer will
  • A lot of dealers will type county in form without telling customers
    • Nichols – I am sure a lot of customers do not know about that option, which we can not do much about
    • Correct

 

Donna Willis, Linn County – against

  • Will be crippling, if not lethal, for rural counties with a population under 10,000 and harmful to rural counties with less than 10-15,000
  • 175 counties that would be hurt, 2/3 of Texas
  • No new dealerships in my county, count on Lubbock and close dealerships to comply with VTR136
  • If bill is passed, sales tax would plummet
  • $320,000 in registration money from last year, will be cut in half by cutting registration fees
  • Penalizing small counties
  • Nichols – Most concerned about sales tax revenue?
    • And registration
  • Nichols – Registration is only supposed to cover costs, not net revenue?
    • We use every dollar we can get, disbursed throughout the county

SB 876 left pending

 

SB 911 (Hancock) Committee Substitute – Relating to the regulation of restaurants and third-party food delivery services, including the issuance of certain permits to restaurants.

  • Third party delivery companies were vital to the restaurant industry during the pandemic
  • Bad actors in delivery space have mislead consumers into thinking a partnership exists between delivery company and restaurant, making it difficult for restaurants to remedy problems that arise from noncontracted delivery companies
  • SB 911 prohibits companies from charging noncontracted restaurant fees and requiring delivery companies to remove non-partnered restaurants within ten days of receiving notice
  • Bill creates clear definition of restaurant
  • Prohibits the cities from enforcing local laws that conflict with the partnership agreement
  • Committee Substitute provides restaurants, under the newly created definition, an alternative way to acquire food and beverage certificates
  • Substitute also removes language that requires third party delivery company to express the alterations of a restaurant’s pricing to the consumer as a separate charge from the food and beverage
  • In order to remove fiscal note, removes optional food safety training program

 

Philip Robert Brinson, Neighborhood Beer Garden and Bar Association of Texas – against

  • New definition of restaurant is specifically intended to exclude business, such as bars and food trucks: “that operates its own permanent food service facility with commercial cooking equipment on its premises”
  • Seeks to disqualify bars that were allowed to open as restaurants with food trucks during the pandemic
  • TACB extended eligibility to allow food service facilities to be inclusive of food trucks in August 2020
  • Language intended to limit competition, which has fostered Texas classics; food trucks have become integral part of Texas economy
  • Hancock – This bill provides viable options and alternatives for receiving certification
  • Bars do not have resources to function as a restaurant and could not apprehend a food and beverage certificate. Food trucks allowed revenue to be used to get certificates
  • If this language is included, that option will be foreclosed to them. If restaurants are singled out, bars will be denied the opportunity to use food truck revenue to acquire food and beverage certificate

 

Kelsey Streufert, Texas Restaurant Association – for

  • SB911 Critical to recovery, takeout and delivery were growing in popularity before pandemic and escalated during
  • Definition is important to distinguish difference between restaurant and bar as an alternative to get food and beverage certification; we left the current law in place, which has allowed bars and food trucks to work together for a certificate
  • Paxton – Bill does not create an either/or, more of a both/and?
    • Yes, bars do not lose anything

SB 911 left pending