89th Regular Legislative Session Recap: New Texas Laws Every Executive Should Know
As Texas continues to lead the nation in business relocations, innovation, and job creation, the 89th Regular Legislative Session delivered a series of policy wins designed to accelerate growth and reduce barriers for companies operating in—or expanding to—the state. From regulatory modernization and tax certainty to infrastructure investment and international expansion, lawmakers passed strategic, pro-business legislation that strengthens Texas’ long-term competitiveness. Whether you’re a startup founder, corporate site selector, or industry advocate, these key developments provide a clear look at how Texas is shaping a bigger, better future for business.
New Offices
Texas legislators established some key offices to assist in making Texas more business-friendly and expanding the state’s international reach.
1. Senate Bill 14 – Creating the Texas Regulatory Efficiency Office (TREO)
What the Law Does:
Senate Bill 14 establishes the Texas Regulatory Efficiency Office (TREO) within the Office of the Governor. The new office will review and identify outdated, duplicative, or overly burdensome state regulations across all agencies. TREO is charged with publishing best practices, proposing rule consolidations, and streamlining agency processes—especially those affecting licensing, compliance reporting, and administrative forms. The bill also creates a five-member advisory board to guide the office’s priorities and includes a sunset review provision set for 2037.
Why It Matters:
According to the Texas Association of Business (TAB) and Texas Public Policy Foundation, TREO is expected to significantly reduce regulatory friction for small businesses and large employers alike. In a state that already prides itself on its business-friendly environment, TREO adds a proactive mechanism to ensure that government processes evolve with industry needs—cutting down on delays, redundant paperwork, and compliance costs. This office sends a clear message to employers: Texas is committed to moving at the speed of business.
2. Texas International Offices – Expansion into the U.K. and Israel
What the Law Does:
The Texas Legislature provided funding for two new international offices in 2025: one in London and one in Jerusalem. The State of Texas U.K. Office and the State of Texas Israel Office operate under the Texas Economic Development & Tourism Office and are designed to help attract foreign direct investment and job creation into Texas and increase Texas exports into the U.K. and Israel. These offices will support the promotion of the Texas business climate, grow international trade and tourism, and support activities which are critical to the state’s economy.
Why It Matters:
Texas is a gateway to global trade and a leading state for foreign direct investment in the nation. The U.K. and Israel are two of the state’s strongest global partners. The U.K. is a top source of FDI into Texas, and Israel is a leading innovation ecosystem. Byestablishinga formalpresenceinthesemarkets,Texascreatesadirectdiplomaticandcommercialchannelto attract investors, startups, and multinationals. For Texas-based businesses, these offices provide on-the-ground support for international expansion, regulatory navigation, and cross-bordercollaboration.
Other new offices include the creation of the Texas Advanced Nuclear Energy Office.
Tax Advantages
Texas prides itself on being a low-tax state, with a light regulatory touch. New legislation will ensure this remains the case.
3. Senate Bill 2206 – Extending and Expanding the R&D Tax Credit
What the Law Does:
Senate Bill 2206, signed into law in early June 2025, extends and enhances Texas’ R&D franchise tax credit, which was scheduled to expire at the end of 2026. The bill increases the research and development franchise tax credit up to 11% for qualified research expenses and creates a refundable franchise tax credit.
Why It Matters:
Endorsed by a coalition including the Texas Association of Manufacturers, TAB, and Texans for Innovation, SB 2206 positions Texas as a leading destination for high-impact, innovation-driven industries. The Senate sponsor’s press release cites a Baker Institute study projecting the credit will generate 6,662 new jobs annually, drive $445 million in labor income, and add $748 million annually to Texas’s GDP.
TAB’s leadership highlighted how aligning the program with federal standards and simplifying administration make it more accessible to small businesses and veteran-owned startups. The Texas Association of Manufacturers emphasized that this reform reinforces Texas’ standing in advanced tech, biotech, manufacturing, and energy—sectors at the core of the state’s economic engine.
4. House Joint Resolution 4 – Constitutional Ban on Stock Transaction and Occupations Taxes
What the Law Does:
House Joint Resolution 4 proposes a constitutional amendment that would permanently ban two types of taxes in Texas: a tax on financial transactions (such as stock trades) and a general occupation tax imposed on individuals for working in a licensed profession. If approved by voters in the November 4, 2025 election, these prohibitions will be locked into the Texas Constitution, preventing future legislatures from imposing such taxes.
Why It Matters:
This proposed amendment sends a strong message to employers, financial professionals, and entrepreneurs: Texas intends to stay permanently tax-advantaged. This resolution reinforces Texas’ commitment to long-term tax predictability. For licensed professionals—such as engineers, CPAs, and medical providers—it offers clarity and stability. More importantly, the ban on a stock transaction tax positions Texas as a safe haven for financial institutions and investors looking to escape the burdens of regulatory-heavy states. As TAB has stated, this measure ensures that Texas remains a “no surprises” environment for capital markets and professional services—two of the fastest-growing segments of the state’s economy.
Also passed: House Bill 7 increases the personal property tax exemption for businesses to $125,000.
Infrastructure
Texas made some significant investment in securing future infrastructure for the fastest-growing state in the nation.
5. Senate Bill 7 – Investing in Texas Water Infrastructure
What the Law Does:
Senate Bill 7 and House Joint Resolution 7 deliver the largest generational investment in Texas’ water infrastructure. SB 7 assigns the Texas Water Development Board with the responsibility to coordinate water supply conveyance, expands the uses of the New Water Supply for Texas Fund, and dedicates funding in House Joint Resolution 7 to finance water supply and infrastructure projects. HJR 7 is a constitutional amendment to dedicate $1 billion annually of the state’s sales and use taxes to the Texas Water Fund and allows the allocation and use of the revenue.
Why It Matters:
Texas Association of Business (TAB) and more than 100 other business groups supported SB 7 as essential to ensuring the long-term economic viability of Texas. Access to reliable water is a non-negotiable factor for site selectors and industries like agriculture, semiconductors, and logistics. In a state that gained over 1,500 new residents per day in 2024 alone, water demand is rising fast—and this bill provides a scalable solution. For businesses evaluating long-term expansion, SB 7 offers infrastructure confidence that few other states can match.
A Bigger, Better Future in Texas
From cutting regulation and enhancing tax credits to investing in critical infrastructure and expanding globally, Texas’ 89th Regular Legislative Session demonstrates a cohesive vision for sustainable business growth. These policies are more than pro-business—they are smart, targeted, and data-driven. For business leaders looking to scale, relocate, or innovate, the message is clear: Texas is where the future is building.
