Texas Capitol Report

An update on the 89th Texas Legislative Session

The 89th Texas Legislative Session has officially come to an end. Here are some key highlights to be aware of:

Water Infrastructure

Senate Bill 7 & House Joint Resolution (HJR) 7 created the administrative structure and framework to fund water projects over the next two decades with a $20 billion package. One billion dollars will be allocated annually to the Texas Water Fund for creating new water supplies and repairing the existing and aging infrastructure. This proposal will be on the November ballot. Additionally, House Bill (HB) 500 allocated an additional $2.5 billion into the water fund. This is, by far, the largest state investment in water infrastructure in Texas history.

Energy

House Bill 14 created the Texas Advanced Nuclear Energy Office to position the state at the front of America’s nuclear renaissance. The entity will synchronize the nuclear energy development efforts and make Texas known as a national leader in nuclear technology.

Senate Bill 1535 launched a nuclear energy workforce development program to complement this initiative, and this program ensures that the state has the workforce and the skills to expand this sector.

The Texas Energy Fund received additional funding of $5 billion this session for grid power generation.

Property Tax Relief

Senate Bill 4 & 23 both expand the property tax exemptions that Texas offers, raising the homestead exemption for school district property taxes by $40,000 and raising the exemption for homeowners aged 65 and older or with disabilities to $200,000. Both exemptions are pending voter approval in November.

Family Law

Senate Bill 1404 addresses procedural improvements in suits affecting the parent-child relationship under the Texas Family Code, incorporating electronic communication for legal service and notice, focusing on safety and privacy in child custody and support cases.

Labor & Employment

Senate Bill 2615 restricts remote work for higher education staff, signaling a shift in employment policies and workplace flexibility within public institutions.

Real Estate

House Bill 21 prohibits a Housing Finance Corporation (HFC) from owning a residential property outside the jurisdiction of its local sponsor without obtaining approval from the city or county where it is located. Properties currently owned by HFC’s located out of the jurisdiction must secure local approval by December 31, 2026 or lose their tax exemption.

Implementation Phase: Where Laws Become Reality

With the legislative session now concluded, the real work of transforming newly passed legislation into operational policy begins. State agencies are currently drafting rules, developing compliance frameworks, and establishing enforcement mechanisms for this session's key bills. This implementation phase presents both opportunities and risks that require careful navigation.

Our team is actively monitoring agency rulemaking processes, participating in public comment periods, and engaging with regulatory staff to ensure our clients' interests are protected during this critical translation from legislative intent to practical application. The decisions made in agency conference rooms over the coming months will often have more immediate impact on your operations than the bills themselves.

Strategic Stakeholder Engagement

The upcoming months represent prime time for building the relationships and coalitions that drive successful policy outcomes. We're currently organizing and participating in stakeholder meetings across key issue areas, bringing together industry leaders, advocacy groups, and government officials to discuss emerging challenges and collaborative solutions.

These stakeholder sessions serve multiple purposes: they provide early intelligence on developing policy trends, create opportunities to educate decision-makers about industry perspectives, and establish the foundation for effective advocacy campaigns. Our clients who participate in these discussions consistently find themselves better positioned when legislative debates begin.

Regulatory Development

The regulatory landscape remains dynamic even between legislative sessions. Several major regulatory initiatives are currently in various stages of development that could substantially affect our clients' operations.

Our regulatory practice is tracking these developments closely, analyzing proposed rules for potential impacts, and preparing strategic responses. Early engagement in the regulatory process is often more successful than attempting to influence outcomes after rules are finalized.

Positioning for the 90th Legislative Session: The Advantage of Early Engagement

Policy development for the next legislative session is already underway. Legislative staff are researching issues, drafting concept papers, and consulting with stakeholders to shape the bills that will be introduced when lawmakers reconvene. Committee chairs are identifying their priority issues, and advocacy organizations are developing their legislative agendas.

This pre-session period represents the most valuable time for strategic policy engagement. Issues addressed now, before positions harden and political dynamics crystallize, can be shaped proactively rather than reactively. Our clients who engage early in this process consistently achieve better outcomes than those who wait until bills are filed.

The window for maximum influence is open now. Whether you're seeking to advance legislation, prevent problematic proposals, or simply ensure your voice is heard in key policy discussions, the groundwork must be laid in the coming months. Our government affairs team is ready to help you navigate these opportunities and develop a strategic approach tailored to your specific objectives.