Capitol Weekly

May 24, 2025

This Week

We have less than 10 days to go! Final deadlines are quickly approaching and deals are being made on priority legislation for both chambers. Many of the last minute deals included the State Budget (SB 1), public school funding (HB2), ban on THC products (SB 3), and bail reform (SJR 5).  Many other bills were being held hostage until deals could be struck on these priorities. These issues are politically charged, and emotions ran high during floor debate in the House.

Saturday is the last day a Senate Bill can be voted out of a House Committee. Tuesday, May 26^th, is the last day the House can pass a Senate Bill, and Wednesday, May 27^th, is the last day the Senate can pass a House Bill.

You might remember the chart below from our earlier Capitol Weekly Updates. This chart shows the movement of bills through the legislative process.

This week, the House concurred in the Senate amendments to HB 9 and HJR 1 by Rep. Morgan Meyer (R-Dallas). HB 9 provides property tax relief to businesses by increasing the exemption for income-producing tangible personal property from $2,500 to $125,000 per business location. This exemption applies to property such as inventory, machinery, and equipment used for income production. This business tax relief would require voter approval of the proposed constitutional amendment (HJR 1).

The House also passed two bills and their corresponding joint resolutions aimed at cutting property taxes for homeowners. SB 4 (HJR 2) by Sen. Paul Bettencourt (R-Houston) increases the homestead exemption from $100,000 to $140,000. SB 23 (HJR 85) also by Sen. Paul Bettencourt (R-Houston) provides an additional $60,000 exemption for elderly and disabled homeowners. These constitutional amendments are certain to receive voter approval in November.

The House and Senate have also agreed to $3 billion in property tax rate compression included in the state budget bill (SB 1) by Sen. Joan Huffman (R-Houston, that still awaits final approval by both chambers.  Rate compression is the most beneficial tax relief for TCC member companies.

On Thursday, the Texas House and Senate reached a historic agreement on HB 2 by Rep. Brad Buckley (R-Killeen). Lt. Governor Dan Patrick and Speaker Dustin Burrows tout that this legislation marks the single largest investment in public education in the state’s history. The bill allocates $8.5 billion in new funding, including a record $4.2 billion for teacher and staff pay raises. It also provides $1.3 billion to help school districts manage rising operating expenses like insurance and utilities. HB 2 invests nearly $2 billion in updating special education funding formulas and expanding programs such as full-day pre-K, early learning interventions, and Career & Technical Education (CTE). Additionally, $430 million will go toward improving school safety. The agreement reflects a bipartisan commitment to strengthen Texas schools, with leaders from both chambers emphasizing the bill’s focus on classroom impact, educator support, and long-term student success across all 1,200 school districts in the state. With this agreement, we expect to see more movement on legislation that was being held up to broker a deal.

On Thursday, the Texas House also passed SB 3, a bill that bans all consumable hemp products containing THC, including popular items like gummies, vapes, and beverages. The bill, authored by Sen. Charles Perry (R-Lubbock) and identified as a top priority by Lt. Governor Dan Patrick, aims to eliminate what proponents describe as a rapidly expanding and largely unregulated market for intoxicating hemp products. Under SB 3, only non-intoxicating CBD and CBG products would remain legal. The legislation also imposes strict regulations requiring child-resistant packaging, labeling requirements, and imposing criminal penalties for violations. This was a to priority for Lt. Governor Dan Patrick who threatened to kill dozens of House bills in the Senate and refusing to pass the state budget bill (SB 1) until the House passed SB 3. The State budget is the only bill the Legislature is constitutionally required to pass - meaning the Governor would be forced to call a Special Session if the budget were not to get final approval.  Lt. Governor Patrick made it clear that he would force a Special Session if the hemp ban did not pass.

The House and Senate both plan to work through the Memorial Day weekend. This leaves just a handful of days until the end of session referred to as Sine Die (Latin for “without a day”) acknowledging the “final day” of session or “no further days”.

TCC Legislative Priorities

Extending the franchise tax credit for research and development investments is a top priority for TCC this session. SB 2206 by Senator Paul Bettencourt (R-Houston) has been set for the House floor on Saturday, May 24th. The bill would extend the franchise tax credit for companies seeking to invest in reseach and development projects in Texas. The program is otherwise currently set to expire in 2026. TCC is a part of the Texans for Innovation coalition and is actively urging legislators to support the bill’s passage this weekend.

SB 7 by Senator Charles Perry (R–Lubbock) is expected to be heard by the full House on Monday. SB 7 is a comprehensive plan to secure our state’s water future by expanding the Texas Water Fund to include infrastructure development projects and enhance connectivity for regional and statewide water infrastructure. HJR 7 by Rep. Cody Harris (R–Palestine) proposes a constitutional amendment to dedicate $1 billion annually from state sales and use taxes for the development of new water projects and improvements to our state’s water infrastructure. HJR 7 would ensure a continuous funding source for water infrastructure projects statewide. A deal was struck late this week on SB 7 and HJR 7 to establish a 50/50 funding split between new water projects and infrastructure improvements. With this new deal, HJR 7 is expected to be voted out of the Senate Finance Committee and go to the full Senate in the coming days. TCC strongly supports SB 7 and HJR 7 to address our state’s water needs and ensure sustainable water resources for continued growth for our industry.

SB 2203 by Sen. Brian Birdwell (R-Granbury) was voted out of the House Environmental Regulation Committee on Thursday and is now in the House Calendars Committee awaiting to be set on a House floor calendar. SB 2203 would streamline the contested case process by requiring the State Office of Administrative Hearings (SOAH) and TCEQ to adopt rules that would prevent  the parties from introducing new issues during a contested case hearing. TCC supports this legislation because it will curtail parties from introducing new issues during a contested case.

SB 30 by Sen. Charles Schwertner (R-Georgetown) was passed out of the House Judiciary and Civil Jurisprudence Committee on Wednesday. The bill would address concerns about large costly legal verdicts, commonly referred to as "nuclear verdicts," in Texas. The bill would implement lawsuit reforms that would protect Texas citizens and businesses from the detrimental effects of inappropriately large verdicts that lead to increased insurance costs and financial instability for small and large businesses. Plaintiff’s lawyers are opposing SB 30 and are running TV ads urging people to call their legislators and oppose. TCC supports SB 30 as a critical step toward fostering a fair and balanced legal environment in Texas.

SB 39 by Sen. Brian Birdwell (R-Granbury) addresses the civil liability of commercial motor vehicle owners and operators in Texas. The bill aims to clarify and potentially limit the circumstances under which these entities can be held liable in civil cases, impacting how liability is assessed in accidents involving commercial vehicles. SB 39 has yet to receive a hearing in the House Judiciary and Civil Jurisprudence Committee and time is quickly running out for it to pass.

SB 1786 by Sen. Brandon Creighton (R-Conroe) would make technical corrections for the community college funding system established by HB 8 last session. HB 8 introduced a performance-based funding model for Texas community colleges. Last week, the Senate concurred with the changes made by the House and SB 1786 has been sent to the Governor’s desk to be signed into law. TCC supports SB 1786 to enhance the effectiveness of the state's community colleges.

HB 322 by Rep. Ryan Guillen (R-Rio Grande City) was voted out of the Senate Education Committee and has been recommended for the Local and Uncontested Calendar. HB 322 amends the Jobs and Education for Texans (JET) Grant Program to allow grant funds to be used for acquiring, implementing, and maintaining technology solutions that support career and technical education programs.

SJR 59 by Sen. Brian Birdwell (R-Granbury) is set for consideration by the full House on Sunday. SJR 59 is a proposed constitutional amendment to enhance funding for the Texas State Technical College (TSTC) System. The bill would establish two dedicated funds for capital projects and equipment purchases for TSTC's educational programs and would provide the institution with greater financial flexibility. TSTC provide career & technical training for skilled workers pursuing career opportunities in industry.

On Thursday, the House concurred in the Senate amendments to HB 2970 by Rep. Dennis Paul (R-Houston). HB 2970  would ensure that projects conducted by the Gulf Coast Protection District (GCPD) do not disrupt two-way traffic along the Houston Ship Channel and requires the Governor to appoint the Chairman. TCC supports the efforts of the GCPD to protect Texas coastal communities from storm surge associated with hurricanes and major storm events without disrupting marine traffic in the Ship Channel. The bill heads to the Governor’s desk to be signed into law

Environmental

With committees no longer considering new bills, TCC is pleased to report that no onerous environmental bills have passed this session. With the support of our Legislative Committee, TCC has successfully defeated nearly one hundred bills that would have been oppressively burdensome and costly to members.

SB 1898 by Sen. Nathan Johnson (D-Dallas) was unanimously voted out of the House Environmental Regulation Committee on Wednesday. SB 1898 would restrict the use of Aqueous Film-Forming Foam (AFFF) (firefighting foams containing PFAS) for testing or training purposes. TCC worked with Senator Johnson on changes that adopt our industry model language for AFFF that restrict the use of AFFF for training purposes while preserving its continued access for industrial emergencies. The bill also includes our industry’s preferred definition for PFAS. Rep. Cody Vasut (R-Angleton) is the House sponsor and is working with TCC to keep the bill clean in the House.

Energy

The House and Senate reportedly have agreed to new language on HB 14 by Rep. Cody Harris (R-Palestine) and it is expected to be voted out of the Senate Business & Commerce Committee in the coming days. HB 14 would promote the development of advanced nuclear reactor projects for dispatchable electric generation in Texas and establish a fund to incentivize investment in advanced nuclear energy. TCC is a strong proponent of this bill because it would promote clean and reliable dispatchable electricity to support our state’s population growth and energy demand growth by Texas industries.

After being voted out of committee last week, SB 6 by Senator Phil King (R-Weatherford) was debated on the House floor Friday before a point of order forced the bill to be sent back to committee. SB 6 would establish a framework for new large scale electricity consumption by implementing new requirements for large loads interconnecting to the ERCOT grid. TCC’s electricity expert worked closely with the bill authors and stakeholders to make changes that address our industry concerns. It is likely that SB 6 cannot be reconsidered by the full House until Tuesday.

SB 819 by Sen. Lois Kolkhorst (R–Brenham) introduces significant regulatory changes for renewable energy projects in Texas by mandating new permitting processes for facilities over 10 megawatts. It also imposes setback requirements of twice the height of the turbine including blades for wind turbines and 200 feet for solar panels from property lines and establishes an annual environmental impact fee to fund a renewable energy cleanup fund. SB 819 was referred to the House State Affairs Committee over a month ago and has yet to receive a hearing. TCC has shared our industry’s concerns about the impact this bill would have on. The bill currently lacks the required votes to get out of committee.

SB 388 by Senator Phil King (R–Weatherford) has yet to receive a hearing in the House State Affairs Committee. The bill replaces the existing natural gas mandate into a dispatchable mandate, requiring that 50% of a generator’s capacity be dispatchable by January 1, 2026, including renewable sources. The Public Utility Commission of Texas (PUCT) must create a dispatchable energy credit trading program for providers that fall short of the mandate. ERCOT is tasked with developing a tracking system and must annually report on newly energized generation facilities, including whether 55% of the added capacity was dispatchable.

HB 3157 by Rep. Drew Darby (R-San Angelo) would allow utilities to implement a charge rate to consumers before going through rate case due diligence with the PUC. HB 3069, also by Rep. Darby, would require ERCOT to look at cost savings well into the future (10 to 15 years) when approving transmission lines. The current timeline is 3 to 5 years. TCC has worked with the bill author to address industry concerns but neither bill has been voted out of the Senate Business and Commerce Committee.

HB 5247 by Rep. Charlie Geren (R-Fort Worth) establishes an alternative capital recovery process for certain utilities. TCC has negotiated changes with the bill author that address industry concerns. HB 5247 was voted out of the Senate Business and Commerce Committee on Thursday and has been recommended for the Senate’s Local and Uncontested Calendar.

HB 2868 by Rep. Will Metcalf (R-Conroe) passed out of the House despite strong opposition by industry, business associations, and consumer advocates.  The bill has been referred to the Senate Business and Commerce Committee. HB 2868 would allow utilities to essentially choose their own capital structure, which is a primary driver in their profit level and one of PUC’s core responsibilities in setting rates. TCC believes the best approach continues to be to allow the utility to prove the need for an equity layer increase rather than allowing them to unilaterally make this decision. This bill shifts risks and costs to customers and reduces utility oversight. Therefore, TCC remains opposed to this legislation.

The Senate

The Senate worked late on Thursday evening and considered HB 2 by Rep. Brad Buckley (R-Killeen). After lengthy negotiations between House and Senate leaders, the two chambers agreed to fund an additional $8.5 billion in public school funding. The bill allocates $8.5 billion in new funding, including a record $4.2 billion for teacher and staff pay raises. It also provides $1.3 billion to help school districts manage rising operating expenses like insurance and utilities. HB 2 invests nearly $2 billion in updating special education funding formulas and expanding programs such as full-day pre-K, early learning interventions, and Career & Technical Education (CTE). Additionally, $430 million will go toward improving school safety.

As part of the school funding agreement, the Senate also passed HB 6 by Rep. Jeff Leach (R-Plano) that addresses the increased incidents of student misconduct, disruptive behavior outside of the classroom, and acts of disrespect toward teachers and staff. Aside from setting standards for suspension, removal, and expulsion of students, the bill also provides protections for teachers and staff who are involved in appropriate disciplinary action during an incident with a student.

The House and Senate have also negotiated an agreement on water funding. However, the Senate has yet to pass HJR 7 by Rep. Cody Harris (R-Palestine) that would establish a dedicated funding source for new water projects and improvements to and the state’s aging water infrastructure The framework for new water projects is addressed in SB 7 which will be considered by the full House on Monday.

The House

This week, the House debated several Bail reform bills.  Governor Abbott has made bail reform a priority to prevent the release of dangerous criminals as a result of abuses of the bail system and prosecutorial negligence - SB 9, SB 40, SJR 1, and SJR 5 all by Sen. Huffman (R-Houston).

SB 9 and SJR 5 both passed out of the House on Tuesday after extensive debate. These bills strengthen Texas’ bail system by prohibiting personal bonds for individuals charged with violent or serious offenses. State leaders have championed these reforms as essential to keeping dangerous offenders off the streets and ensuring that bail decisions rest with accountable, elected judges. Both bills now return to the Senate for final approval of House amendments before heading to the Governor’s desk. For these laws to take effect, Texas voters must approve the constitutional amendment, SJR 5, at the ballot box.

SJR 1 faced significantly more resistance from democrats during the House floor debate. The proposed constitutional amendment, which would require judges to deny bail to undocumented immigrants charged with a felony, failed to secure the two-thirds majority needed for passage. As a result, the measure has been temporarily postponed while House leadership works to rally additional support before it can be sent back to the Senate.