February 2, 2024, Number 4

Download the full .pdf version here: TML Legislative Update Number 4

Upcoming Texas Primary: Several Legislators Not Returning

The Texas primary election will be held on March 5. Several legislators have announced their retirement or intent to seek another election to a different office – seventeen representatives and two senators. The full list is below:

    Rep. Charles “Doc” Anderson (R – Waco)

    Rep. Rhetta Bowers (D – Rowlett) 

    Rep. Victoria Neave Criado (D – Mesquite) 

    Rep. Craig Goldman (R – Fort Worth)

    Rep. Abel Herrero (D – Robstown)

    Rep. Julie Johnson (D – Carrollton)

    Rep. Jarvis Johnson (D – Houston)

    Rep. Kyle Kacal (R – Bryan)

    Rep. Tracy King (D – Uvalde)

    Rep. Geanie Morrison (R – Victoria)

    Rep. Andrew Murr (R – Junction)

    Rep. Lina Ortega (D – El Paso)

    Rep. Four Price (R – Amarillo)

    Rep. John Raney (R – College Station)

    Rep. Ed Thompson (R – Pearland)

    Rep. Matt Schaefer (R – Tyler)

    Rep. Carl Sherman (D – Lancaster)

    Sen. Drew Springer (R – Muenster)

    Sen. John Whitmire (D – Houston) 

This week, Representative-Elect Jill Dutton won a special election filling the vacant seat of an expelled member in House District 2. She and others will face off again in the March primary for a term to begin in January 2025. To see candidates who are running in your city’s district, click here. The last day to register to vote is February 5 and early voting is set to begin on February 20.

U.S. Department of Labor Issues Final Rule on Employee or Independent Contractor Classification

On January 10, the U.S. Department of Labor (DOL) issued a final rule that revises its prior guidance on how to determine who is an employee or an independent contractor under the Fair Labor Standards Act (FLSA). The rule is effective on March 11.

The final rule continues to affirm that an “independent contractor” is a worker who, as a matter of economic reality, is not economically dependent on an employer for work and is in business for herself. The final rule applies the following six factors to analyze employee or independent contractor status under the FLSA:

  1. opportunity for profit or loss depending on managerial skill;
  2. investments by the worker and the potential employer;
  3. degree of permanence of the work relationship;
  4. nature and degree of control;
  5. extent to which the work performed is an integral part of the potential employer’s business; and
  6. skill and initiative.

DOL has also issued FAQs on the final rule. City officials should carefully review this final rule as misclassifying a worker as an independent contractor could result in significant financial costs, including tax obligations, wage and overtime claims, and fines.

IMLA Seeking City Survey Responses for Amicus Brief

The United States Supreme Court recently announced that it will hear arguments in City of Grants Pass v. Johnson, which deals with the constitutionality of an Oregon city’s local public camping ban against homeless individuals. The Supreme Court’s ruling has important implications for how cities across the country address homelessness moving forward.

The International Municipal Lawyers Association (IMLA) will be filing an amicus brief in the case, and has asked the League to pass along this short survey to our members to help inform their brief.

2024 City Tax and Budget Deadline Memos Now Available

Every year, TML posts a memo containing the annual calendar deadlines for the budget adoption and tax rate setting process. Following the passage of Senate Bill 2 in 2019, the process for adopting a tax rate changed significantly. Because the tax rate adoption process differs significantly based on whether the city’s tax rate will exceed the voter-approval tax rate, there is one memo for deadlines when the rate exceeds the voter-approval rate and one memo for deadlines when the rate does not exceed the voter approval rate. The deadlines in the documents represent the last possible dates for a city to take certain actions related to the budget or tax rate in 2024. Cities should act well in advance of the deadlines in the calendar, if possible.    

For more detailed information about S.B. 2, city officials are encouraged to read the S.B. 2 Explanatory Q&A here.

NLC Holding Series of Free Federal Grant Bootcamps

The National League of Cities (NLC) will be holding a series of free bootcamps to help cities take advantage of federal grant opportunities available through the Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA).

NLC’s grant bootcamps are designed to help cities develop competitive grant applications, with an emphasis on helping traditionally underserved small and mid-sized cities and towns. Each course will run for about four months and include live learning sessions, coaching sessions, office hours, and peer-learning opportunities about:

  • How to execute a community engagement strategy;
  • Incorporate data into grant applications;
  • Assemble project budgets; and
  • Write winning grant applications tailored to specific grant opportunities.

Participants should plan to devote several hours of active participation each month. 

Beginning in February, NLC will start holding bootcamps related to the following grant opportunities:

Promoting Resilient Operations for Transformative, Efficient, and Cost-Saving Transportation (PROTECT) Grant Program

The U.S. Department of Transportation’s (DOT) PROTECT program provides funding for surface transportation-related projects designed to protect and minimize disruptions to their transportation systems, enhance public safety, and promote climate and racial equity.

Safe Streets and Roads for All (SS4A) Grant Program

DOT’s SS4A grant program provides funding to prevent roadway fatalities and improve and enhance roadway safety measures in rural and marginalized communities. The SS4A program offers two types of grants: (1) Planning and Demonstration Grants and (2) Implementation Grants. Planning and Demonstrating Grants provide funding for projects to develop, enhance, or demonstrate a roadway safety Action Plan. Implementation Grants provide funding for projects to implement a roadway safety Action Plan.

Charging and Fueling Infrastructure (CFI) Grant Program

DOT’s CFI grant program provides funding for publicly accessible electric vehicle charging stations and infrastructure in communities and along designated transportation corridors. 

CFI-eligible projects include: 

  • Developing publicly available electric vehicle charging stations and infrastructure;
  • Developing publicly available alternative fueling stations and infrastructure;
  • Electric vehicle and alternative fueling infrastructure operating costs; and
  • Implementing new or improving existing traffic control devices.

Clean Water State Revolving Fund (CWSRF) Loan Program

The U.S. Environmental Protection Agency’s (EPA) CWSRF loan program provides cities with low-interest loans to water infrastructure-related projects. 

CWSRF-eligible projects include:

  • Constructing, repairing, or replacing publicly owned water treatment facilities;
  • Water conservation projects;
  • Water recycling projects; and
  • Stormwater management projects,

Climate Pollution Reduction Implementation Grant (CPRIG) Program

EPA’s CPRIG program provides funding for projects designed to reduce greenhouse gas emissions. The CPRIG program is broken into two phases. 

Phase 1 funding is open to states and certain metropolitan areas funding to design Priority Climate Action Plans that incorporate greenhouse gas reduction measures related to: (1) electricity generation; (2) industry; (3) transportation; (4) buildings; (5) agriculture and natural working lands; and (6) waste management. 

Phase 2 funding is open to cities to implement the measures provided in Phase 1 Priority Climate Action Plans.

Clean Energy Tax Credit (CETC) Program

The Internal Revenue Service’s CETC program allows cities to choose tax credits or elective pay (or “direct pay”) to help fund local clean energy projects. 

CETC-eligible projects include: 

  • Clean energy generation facilities and infrastructure, 
  • Battery storage projects;
  • Community solar energy projects; and 
  • Electric vehicle fleet vehicles and charging infrastructure.

More information about the NLC federal grant bootcamp program can be found here. Interested cities may register for the NLC bootcamp program here.

Texas Restaurant Association Hosts Virtual Town Hall for Local Elected Officials

The Texas Restaurant Association has announced it will hold a virtual town hall meeting for local elected officials from 2:00 to 3:00 PM CST on Monday, February 26. The meeting is designed to be a collaborative discussion with local leaders on efforts to strengthen restaurants across Texas. 

Interested city officials can RSVP to the meeting here

Deadline Approaching: Local Hotel Occupancy Reporting Requirements

Local Hotel Occupancy Tax Reporting

The three-month window for reporting local hotel occupancy tax information opened January 1, 2024. The reporting deadline is March 1.

The 88th Legislature passed H.B. 3727 and S.B. 1420 which, among other things, update the previous reporting statute to require cities to report all uses of hotel occupancy tax revenue, the amount and percentage of the revenue, and the total unspent revenue.

Cities are required to use the comptroller’s online reporting form to submit all required information. Under the new legislation, a city may use a portion of its local hotel occupancy tax revenue for the costs incurred by the city in making and submitting the report to the comptroller. The total amount a city may use for reporting purposes may not exceed: (1) $1,000 if the city has a population of less than 10,000; or (2) $2,500 if the city has a population of 10,000 or more. For more information see the comptroller’s hotel occupancy tax reporting webpage

The comptroller’s website now consolidates all local government reporting information on one webpage, making it easier to comply with reporting requirements passed in recent sessions. City officials can also access information about special district reporting requirements that generally apply to city-related entities like crime control and prevention districts, municipal development districts, municipal management districts, public improvement districts, and sports and community venue districts.

City officials with questions about the requirements can contact the comptroller’s transparency team by email at transparency@cpa.texas.gov or (844) 519-5676.

Federal Infrastructure Bill Update

In November 2021, the federal Infrastructure Investment and Jobs Act (IIJA) was signed into law. The IIJA is altogether a $1.2 trillion bill that will invest in the nation’s core infrastructure priorities including roads, bridges, rail, transit, airports, ports, energy transmission, water systems, and broadband.

The League will monitor state and federal agencies and work with the National League of Cities (NLC) to access the latest information relating to the IIJA. We will provide periodic updates in the Legislative Update on resources for Texas cities on how to access IIJA funding for local infrastructure projects. 

U.S. Department of Transportation (DOT)

DOT is accepting applications for its $2.25 billion Port Infrastructure Development Program (PIDP) grant program. The PIDP seeks to improve port safety, efficiency, and reliability by providing grant funding to state and local government port-related capital projects.

Eligible PIDP applicants include state and local governments, public agencies, and special government districts with transportation authority.

Examples of eligible projects include improvements to:

  • Port loading and unloading infrastructure;
  • Freight transportation infrastructure;
  • Port operations, including port resilience-related projects; or
  • Environmental and emission mitigation measures.

DOT will prioritize eligible projects that align with federal climate change, sustainability, environmental equity and justice, workforce development, job quality, and wealth creation goals.

City officials can find more information about the PIDP program here

Interested applicants must submit PIDP applications by 10:59 PM CST on April 30.

Applications must be submitted online here.

U.S. Federal Home Loan Bank (FHLB)

The FHLB of Dallas will soon begin accepting applications for its Affordable Housing Program (AHP) grant program. The AHP seeks to increase affordable housing by providing subsidies to state and local governments to help finance the purchase, construction, or rehabilitation of affordable owner-occupied or rental housing for households with incomes at or below 80 percent of the local median income.

Eligible applicants include state and local governments, Tribal governments, state and local housing authorities, non-profit organizations, and private sector entities.

AHP subsidies must be used for owner-occupied and rental projects.

  • Owner-occupied projects are defined as one or more owner-occupied units in a single-family or multi-family building, condominiums, cooperative housing, and manufactured housing, for low-income households.
  • Rental projects are defined as one or more dwelling units by households that are not owner-occupants, including overnight and emergency shelters, transitional housing for homeless households, mutual housing, single-room-occupancy housing, and manufactured housing, where at least 20 percent of the units do not exceed 50 percent of the local median income.

All projects must be developmentally feasible and likely to be completed and occupied. Owner-occupied projects must have at least a 5-year useful life. Rental projects must have at least a 15-year useful life and reach at least 75 percent occupancy within one year of completion.

Eligible AHP costs include:

  • Purchase costs, including down payment and closing costs;
  • Rehabilitation or construction costs;
  • Homebuyer education and counseling; and
  • Refinancing existing loans, provided that equity proceeds are used to develop ADP-eligible housing.

The FHLB of Dallas will prioritize projects focused on first-time homebuyers or creating or retaining rental units in Texas, Arkansas, Louisiana, Mississippi, and New Mexico.

AHP-applicant evaluation criteria include:

  • Use of donated or conveyed-government-owned property (5 points);
  • Applicant type (5 points);
  • Targeted income groups (20 points);
  • Targeting underserved communities and populations (15 points);
  • Creating economic opportunity (5 points);
  • Promoting community stability, including affordable housing preservation (15 points); and
  • Bank district priorities (35 points).

City officials can find more information about the AHP program here.

Interested applicants may submit AHP applications between April 2 and May 1

Applications may be submitted online here

TML member cities may use the material herein for any purpose. No other person or entity may reproduce, duplicate, or distribute any part of this document without the written authorization of the Texas Municipal League.