89th Legislative Session

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89th Texas Legislative Session

The 89th Texas Legislature concluded its 140-day regular session on Monday, June 2. With more than 9,000 bills filed, this session brought forward major legislative action, including landmark investments in public education, workforce development, and long-term water infrastructure.

As the leading voice for Houston’s business community, the Greater Houston Partnership worked closely with state lawmakers to advance priorities that reflect the scale and impact of our 12-county region, home to more than 7.7 million residents and responsible for nearly one-quarter of the state’s GDP.

In addition to the Partnership’s Executive Priorities, legislators addressed a wide range of issues critical to our region and the state. Below is a selection of key outcomes from the session. This is not an exhaustive list. For full bill tracking and analysis, visit the Texas Legislature Online.
Texas Legislature Online.

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Water Infrastructure
Workforce Development
Public Education Funding
Other Issues

Executive Priority

Water Infrastructure

House Joint Resolution 7
STATUS: Filed with the Secretary of State, On the November 4 constitutional election ballot
This resolution proposes a constitutional amendment to authorize $1 billion per year for the next 20 years for the Texas Water Fund. Texas voters will decide this November whether to allow the state to dedicate available funding for projects that increase the water supply and address aging infrastructure. Texas has similar dedicated funding for transportation projects and the state's rainy day savings account. The Partnership supports the final approval of this constitutional amendment to secure our region's water needs.

Senate Bill 7
STATUS: Signed by the Governor, See the bill for rolling effective dates
This is the omnibus water spending bill that expands the authority for the Texas Water Fund and outlines a path forward to address our state's water supply and infrastructure needs. This bill is closely tied to House Joint Resolution 7, which will ask Texas voters in November to approve dedicating $1 billion per year over the next 20 years to fund water projects. The goal is to allocate 50% of the funding for projects that create a new water supply, and the remainder will be assigned to other eligible projects, including flood infrastructure, repairing leaky and broken pipes, and other related initiatives. This bill was critical for the City of Houston and the region to address the ongoing needs related to growth and business expansion. Click here to read more about the potential impact of both pieces of legislation.

Executive Priority

Workforce Development

House Bill 11
STATUS: Signed by the Governor, Effective Immediately
This new law immediately expands occupational license reciprocity agreements, allowing more out-of-state professionals to work in Texas. This critical bill expands the workforce talent pool and recruitment for the best and brightest to our state.

House Bill 20
STATUS: Signed by the Governor, Effective Immediately
This bill establishes the Applied Sciences Pathway program, which allows high school students in grades 11 and 12 to simultaneously earn their diplomas and workforce certificates through partnerships between school districts or charter schools and institutions of higher education. The program focuses on high-wage, high-growth technical fields and counts student participation toward full-time attendance requirements. It also permits limited course substitutions with career and technical education (CTE) credits. Click here for more on this legislation.

House Bill 120
STATUS: Signed by the Governor, See the bill for rolling effective dates.
This bill enacts wide-ranging reforms to strengthen Texas's college and career readiness efforts for public school students. The bill requires the Texas Education Agency (TEA) to set a statewide career readiness goal, publish postsecondary outcomes by campus, and support data-driven local planning. School districts must adopt detailed annual goals for student credential attainment and long-term consequences, post public reports, and assign staff to track progress.

The bill also expands dual credit access for recent high school graduates in P-TECH and R-PEP programs, boosts funding for CTE programs and certifications, and allows districts to use existing funds to provide post-graduation advising. It creates a new $50,000 Military Pathway Grant for JROTC programs, raises caps on P-TECH and R-PEP funding, and enhances certification reimbursement limits. The accountability system has been updated to tie industry certifications to postsecondary wage and job outcomes, and it sets new rules for revising performance standards. Click here for more on this legislation.

Public School Funding & Early Childhood Education

House Bill 2
STATUS: Signed by the Governor, See the bill for rolling effective dates
This is the omnibus school finance bill that added $8.5 billion in new programmatic funding for public education. The bill includes $4.2 billion in teacher pay raises, bonuses, and retention allotments, as well as support staff. The bill also includes new funding for special education, state aid for insurance costs, expanded workforce data reports, and college and career preparation. Locally, Region IV schools are expected to receive more than $1 billion in combined funding under the new formulas.

House Bill 117
STATUS: Signed by the Governor, Effective Immediately
This bill establishes a Governor’s Task Force to enhance the administration of early childhood education programs in Texas. The task force will comprise leaders from state agencies and experts in early learning, and will examine ways to enhance program efficiency, better alignment, and accessibility for families. It must submit policy and budget recommendations by December 2026 and will be dissolved in 2027.

Senate Bill 1

STATUS: Signed by the Governor. Effective September 1
The General Appropriations Act organizes and authorizes state spending for the next two years. Eight articles make up the individual areas of funding for state agencies, universities, and other state-funded operations. The final budget totals more than $338 billion for the 2026-2027 fiscal year, with key increases in funding for public education, economic development, and health care.

Download the Partnership's report highlighting key investments for the greater Houston region and the state.
Click here to use the Partnership’s Budget Explorer Tool.

House Bill 500

STATUS: Signed by the Governor. Effective Immediately
The Supplemental Budget Bill allocates $13.2 billion to the current state budget, with funds being immediately deployed across several state agencies. Notably, $2.6 billion is earmarked for water projects, such as the infrastructure repairs highlighted by the City of Houston, to shore up the existing supply that is being lost through leaky pipes. HB 500 also provides funding for natural disaster response, a resiliency priority ahead of the summer hurricane season. See the link above for more key funding highlights.

House Bill 4488

STATUS: Signed by the Governor. See the bill for rolling effective dates.
This bill aims to streamline state budgeting by abolishing most special funds, accounts, and revenue dedications created during the 89th Legislature, redirecting those revenues and any related interest to the undedicated general revenue fund. The bill includes exemptions for constitutionally or federally required funds and extends existing provisions governing the use of dedicated revenue through 2027.

House Bill 4486

STATUS: Signed by the Governor. Effective Immediately
This bill allows the State of Texas to utilize funds from various state and federal sources to compensate individuals or businesses that are owed money by the state, such as through legal judgments or unpaid bills. Before any payment is made, the claim must be reviewed and approved by state officials, and it must be supported by proper documentation. The bill also establishes rules for how and when these payments can occur, particularly if funds from the state’s emergency savings account are utilized.

Senate Bill 22

STATUS: Passed into Law. See the bill for rolling effective dates.
This bill overhauls the Texas Moving Image Industry Incentive Program by allocating new funds to support film, TV, and digital media projects that portray Texas in a positive light and align with community values. It sets clear rules on which projects are eligible or excluded, introduces fixed grant amounts based on spending, and offers bonus grants for filming in rural areas, hiring veterans, promoting family or faith-based values, or highlighting Texas heritage. The bill sets a sunset date of 2035 for the program and fund.

House Bill 2765

STATUS: Signed by the Governor. Effective on September 1
This bill expands and modernizes the Rural Economic Development and Investment Program to better support the growth of rural communities in Texas. It raises the population limit for eligible counties from 75,000 to 200,000. It adds new types of entities, such as public utilities and special districts, to the list of eligible recipients for funding. The goal is to improve infrastructure, attract private investment, and create jobs in more rural areas that need help accessing capital for economic development.

House Bill 105

STATUS: Failed to pass
This bill would have updated the Texas Jobs, Energy, Technology, and Innovation Act by creating a new category called “priority projects” for large-scale investments of at least $750 million, which would not have to meet job creation requirements. It also would have simplified wage calculations by focusing only on jobs directly created by the project and set clearer standards for electric generation facilities. The bill's goal was to attract significant investments while making it easier for companies to qualify for incentives.

House Bill 1268

STATUS: Failed to pass
This bill would have created the Texas Technology and Innovation Program to provide matching grants to small Texas businesses that receive federal research and technology funding through the Small Business Innovation Research (SBIR) or Small Business Technology Transfer (STTR) programs. To qualify, businesses must be based in Texas and meet federal eligibility requirements, with limitations on the frequency of grant receipt. The program would help support innovation and tech development in the state, depending on available funding.

Senate Bill 878

STATUS: Failed to pass
This bill aimed to enhance transparency and accountability in local economic development agreements entered into under Chapters 380 and 381 of the Local Government Code and Chapter 312 of the Tax Code. While these programs have helped spur growth, the bill adds new safeguards to prevent misuse of public funds and ensure taxpayer trust. It establishes reasonable limits to keep these incentive programs effective, responsible, and sustainable.

Senate Bill 1754

STATUS: Failed to pass
This bill would have banned local governments from offering property tax breaks or other economic incentives to wind, solar, and battery storage facilities that sell energy to the power grid. The bill argues these projects offer few jobs, lose value quickly, and already benefit from generous federal subsidies. It would still allow incentives for battery storage tied to natural gas plants, which provide more reliable energy.

Senate Bill 2322

STATUS: Failed to pass
This bill would have made it easier for utility-related projects, like dispatchable electric generation facilities, to qualify for property tax breaks under the Texas JETI program. It creates an exception to the usual requirement that applicants prove the tax incentive is essential to their decision to invest in Texas. This change aims to support critical energy infrastructure without forcing companies to justify their site choice as competitively driven.

Senate Bill 1008

STATUS: Signed by the Governor, Effective September 1
This new law limits the amount that local governments can charge food businesses, such as restaurants, food trucks, and vendors, for permits and inspections, ensuring that these fees don’t exceed what the state would charge. It also protects food businesses from excessive local regulations, such as being required to get duplicate food handler permits or pay extra fees for playing music or delivering supplies. The law ensures consistency statewide and makes it easier and cheaper for food businesses to operate by capping fees, restricting redundant permitting, and protecting them from conflicting local ordinances.

Senate Bill 1809

STATUS: Signed by the Governor, Effective September 1
This new law makes it a crime to steal, counterfeit, alter, or misuse gift cards or their digital data to defraud others. It targets scammers who place tampered or counterfeit gift cards in stores or use stolen credit card information to purchase goods. Penalties range from a state jail felony to a first-degree felony, depending on the number of cards involved, and prosecution may occur under this or other applicable laws.

Senate Bill 29

STATUS: Signed by the Governor, Effective Immediately
This new law gives Texas businesses more control over how they’re governed and limits when shareholders can sue company leaders. It allows companies to waive jury trials, restrict access to internal records, and shield directors from liability unless there is proof of serious misconduct. The goal is to make Texas a more business-friendly state, especially for publicly traded companies.

House Bill 4215

STATUS: Signed by the Governor, Effective September 1
This new law establishes statewide rules for delivery network companies—businesses that utilize digital platforms to arrange the delivery of food, beverages, or consumer goods. The bill requires these companies to obtain permits, conduct background checks and driving record reviews, and enforce safety and nondiscrimination policies. It also defines when delivery workers qualify as independent contractors and mandates policies against intoxicated driving and discrimination, with companies required to maintain related records for a minimum of two years.

Senate Bill 21

STATUS: Signed by the Governor, Effective Immediately
This bill establishes the Texas Strategic Bitcoin Reserve by granting the state Comptroller the authority to invest in cryptocurrencies. Funded through legislative appropriations, crypto donations, and earnings, the reserve allows the state to hold and manage digital assets outside the treasury. The comptroller may contract with third parties, stake digital assets, and temporarily transfer funds to cover state cash shortfalls. An advisory committee provides investment guidance, and a public report on the reserve’s holdings and activities is required every two years.

Senate Bill 1300

STATUS: Signed by the Governor, Effective September 1
This bill toughens penalties for organized retail theft and broadens the definition to include people who steal in groups, benefit from others’ thefts, or try to overwhelm store security. It increases the punishment for offenders—up to life in prison for large-scale theft—and makes it easier to prosecute by allowing the use of price tags as proof of value and removing technicalities that could block charges. The bill closes loopholes, clarifies that working with others or using undercover officers isn't a valid defense, and includes gift cards as stolen items.

Senate Bill 1198

STATUS: Signed by the Governor, Effective September 1
This bill expands the definition of “critical infrastructure facility” in Texas law to include licensed or spaceport-operated sites used for launching, landing, testing, or recovering spacecraft—even if the site is still under construction. This means these space-related properties are now protected under laws that impose stricter penalties for trespassing or damaging critical infrastructure.

House Bill 41

STATUS: Failed to pass
This bill would have prohibited Texas government agencies from using drones or related equipment made by companies tied to foreign countries deemed national security risks, such as China. It included exceptions for existing contracts until 2031 and established a state grant program to assist law enforcement in replacing banned equipment. The bill also directed the state to develop a security plan listing risky tech vendors, but the bill failed to pass, so no such restrictions or programs will be implemented.

House Bill 3426

STATUS: Failed to pass
This bill would have required the Texas Department of Public Safety to create a digital version of driver's licenses and ID cards accessible through a secure app on a smartphone. These digital IDs would include all the information from the physical version, work without internet access once downloaded, and could be used like a physical ID, except for voting purposes.

Senate Bill 35

STATUS: Failed to pass
This bill would have required TxDOT to notify legislators when major road projects in their districts were selected for funding and mandated planning and construction of specific highway projects across Texas. It also aimed to improve infrastructure maintenance.

Senate Bill 2425

STATUS: Failed to pass
This bill would have created a comprehensive legal framework for the commercial use of automated motor vehicles—those capable of operating without a human driver—on Texas roads. It outlined new definitions, safety and insurance requirements, emergency protocols, and a permit system for companies using driverless vehicles to transport goods or passengers. The bill also included enforcement procedures and rules for integrating these vehicles into transportation network companies, such as rideshare platforms.

Senate Bill 2722

STATUS: Failed to pass
This bill would have limited how Harris County could spend toll road revenue. It aimed to ensure the money stayed focused on transportation-related needs, like maintaining roads or covering emergency response costs tied to toll roads. It also included strict reporting rules, financial penalties for misuse, and a requirement to fairly distribute leftover funds among county precincts.