Texas Bar Journal • September 2025

The 89th Session Overview

Written by Royce Poinsett

Texas legislators filed more than 8,700 bills and passed over 1,200, with Gov. Greg Abbott vetoing 28 measures. Some of the most significant legislative action is summarized here.

State budget. SB 1 enacts a balanced two-year state budget with a record $338 billion in overall spending, a 1.2% increase over the prior biennium’s budget. HB 500 provides another $16 billion in supplemental appropriations. As discussed below, billions of spending in various arenas is contingent on voter approval of constitutional amendments in November. The Legislature left over $3.9 billion in projected revenue unspent and another almost $24 billion parked in the state’s “rainy day fund.”

Property tax relief. Under SB 4 and SJR 2 Texas voters can approve raising the general homestead exemption from $100,000 to $140,000, and under SB 23 and SJR 85 they can approve raising the exemption for Texans 65 or older or with disabilities from $110,000 to $200,000. On the business property front, under HB 9 and HJR 1 voters can approve an increase to the business inventory tax exemption from $2,500 to $125,000. All told the Legislature allocated over $10 billion in state funds toward this new property tax relief through property tax compression (essentially, using state funds to “buy down” local school taxes) and over $41 billion to sustain similar relief established in prior sessions. More than 15% of the state’s current spending is now devoted to property tax relief.

Public education. HB 2 provides public schools with $8.5 billion in new funding for teacher and staff pay raises, early learning, special education, armed campus security, and other priorities. SB 2 creates “education savings accounts” to allocate public money to pay for private school tuition and expenses of around $10,500 for most students, up to $2,000 for homeschoolers and up to $30,000 for special education students (beginning with the 2026-2027 school year). Funding is capped at $1 billion for the first two years, with future Legislatures determining how large the program will eventually become. HB 6 provides public schools with more flexibility in disciplining disruptive and violent students. HB 1481 requires school districts to adopt policies restricting student cellphone access and usage during the school day. SB 10 requires the display of the Ten Commandments in public school classrooms, and SB 11 requires schools to set aside time for students and staff to take part in voluntary prayer and scripture reading. SB 13 gives school boards (as opposed to school librarians) final say over the materials allowed in public school libraries.

Higher education. SB 2972 limits the time, manner, and place of protest activities on college campuses. SB 37 gives public university system boards of regents (appointed by the governor) new authority over the hiring of top administrators and the approval of curriculum content and limits the power of faculty senates.

Drugs. SB 3 would have banned the consumable hemp products with synthetic THC (tetrahydrocannabinol) that have proliferated in Texas since the Legislature legalized hemp farming in 2019. But the governor vetoed that bill, opining that an outright ban would not survive legal challenges and calling on the Legislature to pass new legislation with a more “regulatory” approach. The Legislature also passed (and the governor did sign) HB 46 to expand the state’s medical marijuana program by adding new qualifying ailments. And SB 2308 permits clinical trials on the psychedelic drug ibogaine, to determine its efficacy in treating substance use disorders and other mental health conditions.

Immigration and foreign activity. SB 8 requires Texas sheriffs to collaborate with federal authorities in carrying out immigration enforcement in local jails. SB 17 bans citizens of China, Russia, North Korea, and Iran (excepting U.S. citizens or permanent residents) from owning land in Texas.

Energy. The state budget appropriates an additional $5 billion to the Texas Energy Fund to further incentivize the construction of new power generation to meet the state’s fast-growing energy needs and $350 million to a new Texas Advanced Nuclear Development Fund (established by HB 14). SB 6 gives Texas the authority to shut off power to “large load” facilities (such as bitcoin mining, data centers, and factories) during power shortages.

Business law. A package of wide-ranging corporate law reforms (SB 29, SB 1057, SB 2337, and HB 40), including new liability protections for companies and their officers and directors, seeks to entice more companies to incorporate in Texas.

Judicial pay raises. SB 293 increases the base pay for district court judges from $140,000 to $175,000.

Media production. SB 22 allots $1.5 billion over 10 years for increased rebates to attract more film, television, commercial, and video game production to Texas, with enhanced incentives for “faith-based” productions.

Housing supply. SB 15 overrides municipal zoning rules to allow new subdivisions with smaller lots, while HB 24 significantly reduces the ability of neighboring landowners to block zoning changes.

Water infrastructure. If voters approve, SB 7 and HJR 7 will allot $20 billion over 20 years to continue securing the state’s future water infrastructure and supply.

Bail reform. In a sweeping overhaul of the Texas bail system, SB 9 restricts who is eligible for release on cashless personal bonds and allows the state to appeal bail decisions, SB 40 bars cities from using public funds to bail defendants out of jail, and SJR 5 (if approved by voters) will require judges, in certain cases, to deny bail to individuals accused of committing specific violent felonies.

Dementia research. SB 5 and SJR 3 create the Dementia Prevention and Research Institute of Texas to study dementia, Alzheimer’s disease, Parkinson’s disease, and other brain conditions and, if approved by voters, will dedicate $3 billion in state funding.

Abortion. SB 31 clarifies when doctors may perform abortions in situations where the mother’s life is threatened. SB 33 prohibits cities from using taxpayer dollars to assist people in traveling out of state to obtain an abortion.

Transgender issues. HB 229 strictly defines “man” and “woman” based on an individual’s reproductive organs at birth and applies the new definitions across all state statutes and records.

Gaming. SB 3070 scraps the scandal-plagued Texas Lottery Commission and transfers lottery and bingo oversight to the Texas Department of Licensing and Regulation, with a new ban on online lottery ticket sales. Bills authorizing casinos and sports betting did not receive a hearing this session.

Technology. HB 149 imposes some initial “guardrails” around the use of artificial intelligence by state agencies and private businesses. SB 441 establishes civil liability for the creation and distribution of “deepfake” sexual images of nonconsenting individuals. SB 2420 establishes age verification and parental consent requirements for a minor to download, or make purchases within, applications.

ROYCE POINSETTis a government relations attorney, registered lobbyist, and principal in Poinsett PLLC. He represents businesses and associations at the Texas Capitol.