The Senate Committee on Natural Resources & Economic Development opened a hearing to lay out a series of bills and hear public testimony; no bills were voted on and each was left pending "subject to the call of the chair." The measures discussed address local tax tools and accountability, tourism financing, manufacturing modernization, unemployment fraud protections and monument preservation.

The hearing’s most discussed items included: a proposal (SB 2539) to require local-elected official approval before tax increment reinvestment zones (TIRZ) can issue certain debt; a committee substitute (SB 1250) to let Corpus Christi draw a project-financing-zone that is land-based rather than a fixed three-mile radius over water; an amendment (SB 2298) to add Plano to the list of cities eligible for a Qualified Hotel Project under Chapter 351 of the Texas Tax Code; and SB 2747, which would curb perceived abuses of Chapter 380 economic development rebate agreements that some cities say have redirected sales-tax revenue away from the jurisdictions where economic activity occurs.

Why it matters: committee members and local officials framed several bills as protections for local taxpayers and tools to support local economic development. Witnesses and local officials described measurable budget impacts in some cases — notably Prosper and Georgetown said they each lost about $7 million after a sales-tax remittance arrangement that redirected receipts through rebate agreements. Witnesses also described tourism and convention financing disparities for Corpus Christi and broader accountability concerns for Galveston’s municipal hotel occupancy tax (HOT) arrangements.

Key bill summaries and testimony

SB 2539 (tax increment / debt release): Senator Bettencourt described SB 2539 as a transparency and check-and-balance measure to require county or local elected-official approval before certain tax-increment reinvestment zones can release debt. John Benura, policy analyst at the Texas Public Policy Foundation, testified in favor, saying Texas cities hold nearly $150 billion in debt and arguing the bill would improve taxpayer oversight. Public testimony was closed and the bill was left pending subject to the call of the chair.

SB 1250 (Corpus Christi project financing zone): Senator Hinojosa described a committee substitute that would allow Corpus Christi to designate a contiguous, land-based area with the same acreage as a three-mile radius PFC (project financing zone) so the city’s PFC does not include mostly water and therefore misses hotel revenue. Laura Abib of the Texas Comptroller’s office confirmed the substitute moves the zone from ocean to land without increasing total square mileage; Roland Barrera, Corpus Christi city councilman, and tourism stakeholders testified in support. The committee substitute was left pending.

SB 2298 (Plano qualified hotel project): Senator Paxton explained the bill would add Plano to the Chapter 351 Qualified Hotel Project program to support a hotel adjacent to the Plano Event Center. John Muns, Plano mayor, and Andrew Fortune of Plano testified in support, saying a nearby hotel would allow the convention center to host events it currently cannot. The bill was left pending.

SB 2747 (Chapter 380 rebate agreements): Senator Paxton described situations in which Chapter 380 rebate agreements were used, he said, to redirect sales tax without new jobs or investment. He said Prosper lost about $7 million after sales-tax reporting was shifted under an arrangement that rebated 75% to another city and paid a consultant; Mayor David Bristol of Prosper and Mayor Josh Schroeder of Georgetown testified that similar arrangements cost their cities roughly $7 million each. Testimony described consultants (named in the hearing as Barnwell Advisors) receiving substantial portions of the rebate. The bill would clarify that Chapter 380 agreements cannot be used solely to reassign tax revenue across jurisdictions. The measure was left pending.

SB 2925 (task force on modernizing manufacturing): Senator Johnson, on behalf of Senator Blanco, said the substitute creates a task force to study barriers and recommendations for modernizing Texas manufacturing, with additional members representing organized labor and the Texas Education Agency added in the committee substitute. Representatives from Schneider Electric and the Texas Advanced Energy Business Alliance supported the bill. The bill was left pending.

SB 2993 (Texas Presidential Library Promotion Program): Senator Johnson described the bill to create a fund and a program at the Texas Historical Commission to renovate, market and develop a mobile exhibit tied to Texas’ three presidential libraries (LBJ, George H.W. Bush, George W. Bush). No witnesses registered to testify; public testimony opened and closed with the bill left pending.

SB 2532 (hotel-occupancy-tax accountability for eligible coastal municipalities; Galveston): Senator Middleton described a measure to modify the voter-approval tax-rate calculation so that when municipal hotel-occupancy-tax funds (HOT) are diverted from statutorily authorized tourism uses, the city’s property tax rate calculation factors in that diversion. Supporters (Texas Travel Alliance, local hoteliers and restaurateurs) said the bill increases transparency and protects tourism-related infrastructure; City of Galveston officials said they oppose the committee substitute as drafted, saying it singles out Galveston and could undermine the Park Board arrangement created by local ordinance and voter approval. The committee left the bill pending.

SB 1520 (Texas Bicentennial Trail): Senator Alvarado laid out a bill directing the General Land Office to coordinate completion of a Texas Bicentennial Trail linking the Alamo and the State Capitol; the bill prohibits use of eminent domain for acquisition and sets a completion target of January 1, 2036. Gary Merritt, CEO of the Great Springs Project, testified in support. The bill was left pending.

SB 1950 (unemployment program integrity): Senator Creighton said SB 1950 updates work-search requirements, adds identity-verification and cross-checks and increases penalties for unemployment fraud, including longer lockouts for proven fraud. The Texas Workforce Commission (Chuck Ross, director of the division of fraud deterrence and compliance monitoring) described a surge of imposter fraud during the pandemic and noted the agency had implemented many cross-checks and ID verification processes; he reported confirmed payments tied to ID fraud in the low hundreds of thousands in the most recent fiscal reporting but described much larger exposure earlier in the pandemic. Advocates and policy groups urged care so legitimate claimants are not unduly burdened. The bill was left pending.

SB 317 (Monument Protection Act): Senator Creighton described a measure to establish a framework for removal or relocation of historical monuments with public input and to use the Texas Preservation Trust Fund for preservation or context. Supporters from historical preservation organizations testified in favor; public testimony closed and the bill was left pending.

Ending note: Committee members repeatedly closed public testimony on each bill with the same disposition — public testimony closed and the bill left pending “subject to the call of the chair.” No final votes were recorded in the hearing.

Quotes from the hearing

"Texans are heavily burdened by their property tax bill…local government often takes advantage of taxpayers by using financing instruments that do not necessarily raise the tax rate," said John Benura, policy analyst, Texas Public Policy Foundation, speaking in favor of SB 2539.

"The committee substitute simply moves the area to encompass the land mass and not the ocean part of the zone," said Laura Abib, Texas Comptroller of Public Accounts, on SB 1250.

"In 2022, Prosper experienced a sudden and significant drop in monthly sales tax collections from one of our largest remitters…we have lost over $7,000,000," said David Bristol, mayor of Prosper, in support of SB 2747.

"Unemployment insurance is not a victimless crime…we can strengthen identity verification and cross checks," said Senator Creighton about SB 1950; Chuck Ross of the Texas Workforce Commission described how imposter fraud surged during the 2020–21 pandemic period.

The committee recessed subject to the call of the chair; committee staff said witnesses and authors will be available for follow-up as needed.