Item 6 - IGRO Memorandum to City Council 89th Texas Legislature Sine Die — original pdf

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M E M O R A N D U M TO: Mayor and City Council THROUGH: Jon Fortune, Deputy City Manager FROM: Carrie Rogers, Intergovernmental Relations Officer DATE: Tuesday, June 3, 2025 SUBJECT: Intergovernmental Relations Office – State Legislative Update 89th Texas Legislature Adjourns Sine Die The Texas Legislature adjourned their 89th Session Sine Die on Monday, June 2, 2025, at 12 p.m. A list of bills filed this session that would impact the City of Austin operations are attached. The Intergovernmental Relations Office will work with the Law Department and all City departments to review final bills passed and begin the work of implementing new laws. The legislative team, with regular engagement by Mayor Kirk Watson, worked with legislators throughout the session, including weekly committee schedules and daily floor alerts prepared for delegation members. The legislative team also collaborated routinely with city departments, peer cities and community stakeholders on shared priorities. We extend enormous appreciation to our partners, most especially the Austin legislative delegation, and Members across the state and their staff for working with our legislative team. The following update is based on information currently available. Local Government Preemption Several bills were filed relating to preemption of local government. • Senate Bill (SB) 2858 by Senator Creighton did not pass. SB 2858, considered the next iteration of House Bill (HB) 2127 passed during the 88th Texas Legislature, would have preempted local regulations that conflict with state statutes regarding, elections, health and safety, and criminal justice. The bill would have authorized the Attorney General to investigate alleged violations within three months and possibly withhold sales taxes during that time. • SB 18 by Representative Hull did not pass. The bill would have prohibited municipal libraries from receiving state or other public funding if they host events where a man presenting as a woman, or a woman presenting as a man, reads a story to a minor. PAGE: DATE: SUBJECT: 2 of 7 June 3, 2025 IGR State Legislative Update • SB 412 by Senator Middleton passed the Legislature and has been signed by the Governor, effective September 1, 2025. The bill amends the Texas Penal Code to remove the affirmative defense for individuals – such as educators, librarians, or parents – who distribute or display material deemed "harmful to minors" under the justification of having a scientific, educational, governmental, or similar purpose. • SB 689 by Senator Hughes did not pass. The bill would have prohibited local governments from having an equity office or spending funds on equity-related programming or policies. • HB 4552 by Representative Gerdes did not pass. The bill would have prohibited state and local governments and their vendors from implementing or supporting initiatives, training, or contracting practices that differentiate or give preference based on race, sex, color, ethnicity, gender identity, or sexual orientation. • HB 3225 by Representative Alders did not pass. The bill would have prohibited access by minors to sexually explicit materials in municipal libraries, establish age verification measures to ensure minors could not access such materials, require an annual review of library materials, and impose a $10,000 civil penalty per violation. Finance Bills relating to local government debt instruments, limiting local government expenditures and capping debt moved steadily throughout the session. • SB 1453 by Senator Bettencourt passed the Legislature and has been sent to the Governor, with a January 1, 2026, effective date. SB 1453 would limit the current debt portion of the tax rate calculation to be the "minimum" dollar amount required to be expended to meet debt obligations. • SB 1883 by Senator Bettencourt passed the Legislature and has been sent to the Governor. The bill requires an independent financial audit before increasing or adopting a new impact fee and prohibits a city from increasing an impact fee within three years of the first date it was adopted or last increased. • HB 19 by Representative Meyer did not pass. The bill would have placed restrictions on the use of certificates of obligation by local governments. • HB 30 by Representative Troxclair has been signed by the Governor and will become effective January 1, 2026. The bill repeals the provision authorizing cities to adopt an ad valorem tax rate that exceeds the voter-approval tax rate without holding an election in the year following the year in which a disaster occurs and modifies the voter approval rate in disaster areas. HOT Taxes SB 1756 by Senator Birdwell did not pass. The bill would have amended several sections of Chapter 351 of the Tax Code to impose a permanent cap on Project Financing Zones (PFZs) limiting cities to only one qualified project under those sections. The City currently has one PFZ, with three qualified projects associated with it – the Convention Center, Long Center, and Palmer Events Center. The Convention Center has been approved as a commenced by the State Comptroller, and thus, qualifies as the City’s first (and under this bill, only allowable) Qualified Project. PAGE: DATE: SUBJECT: 3 of 7 June 3, 2025 IGR State Legislative Update Video Streaming Services and City Franchise SB 924 by Senator Hancock passed the Legislature and has been sent to the Governor. The effective date is September 1, 2025. The bill will exclude “video services,” such as Disney, Hulu, and Netflix, from City franchise fees when they also use infrastructure in City ROW. The City is currently in litigation with the streaming service providers. Film Incentives SB 22 by Senator Huffman passed the Legislature and has been sent to the Governor. SB 22 sets out provisions related to the Texas Moving Image Industry Incentive Program and the establishment and funding of the Texas Moving Image Industry Incentive Fund. Austin Firefighters Retirement Fund (AFRF) Reform HB 2802 by Representative Bucy passed the Legislature and has been sent to the Governor. The effective date is September 1, 2025. HB 2802 was the agreed-upon vehicle for reforms to the Austin Firefighters Retirement Fund pension. These reforms establish an actuarially determined contribution with risk-sharing provisions for the City and firefighters. The bill also creates a new benefit tier for new firefighters hired on or after January 1, 2026. Austin Firefighters Collective Bargaining SB 777 by Senator Hughes passed the Legislature and has been sent to the Governor. The bill was filed in response to a Texas Supreme Court decision that invalidated a Houston charter provision affecting pay for Houston firefighters. This decision also had the likely effect of invalidating other charter provisions relating to collective bargaining, including the impasse resolution procedure in Austin City Charter Art. IX, Sec. 7 that was overwhelmingly approved by Austin voters. The City and the Austin Firefighters Association reached a compromise to create a statutory carve-out for Austin that preserves the existing Austin Charter impasse resolution procedure and its financial guardrails by including it in Chapter 174. De-escalation Tools HB 3669 by Representative Guillen did not pass. The bill would have changed the classification of “stun-guns” as currently defined in the Texas Penal Code – removing stun-guns from classification as a “firearm.” Law Enforcement Personnel Files SB 781 by Senator King and HB 2486 by Representative Hefner did not pass. The bills would have prohibited the release of certain personnel files. PAGE: DATE: SUBJECT: 4 of 7 June 3, 2025 IGR State Legislative Update Housing, Land Use and Permitting Several bills were filed focused on growing the affordable housing stock in Texas. The legislative team worked closely with the authors and those involved to limit impacts on the City’s public service role in these processes. • SB 15 by Senator Bettencourt passed the Legislature and has been sent to the Governor. The bill requires a city to allow 3,000 square foot lots on unplatted land of five or more acres. • SB 673 by Senator Hughes did not pass. The bill would have prohibited local governments from regulating accessory dwelling units. • SB 840 by Senator Hughes passed the Legislature and has been sent to the Governor. The bill allows residential by right in non-residential base zones. • HB 21 by Representative Gates creates additional requirements for housing finance corporations, including limits on area of operation, stricter income limits, and annual auditing – non-compliant developments lose tax-exemption for that year. HB 21 passed legislature and has been signed by the Governor and is effective immediately. • HB 24 by Representative Orr passed the Legislature and has been sent to the Governor. The bill changes the notice and protest rights for large-scale rezonings, the protest rights for adjacent property owners in certain circumstances, adds a presumption of validity for certain types of zoning cases after 60 days, and establishes a requirement to post a sign as part of the notice provisions. • HB 2464 by Representative Hefner (joint authored by Representative Cole) passed the Legislature and has been sent to the Governor. The bill limits city authority to regulate no- impact home-based businesses and imposes restrictions on city regulation of other home- based businesses (but does not apply to short-term rentals). Disannexation SB 1844 by Senator Paxton passed the Legislature and has been signed by the Governor. The bill allows property owners to disannex from a city if the property is located adjacent to a navigable waterway, the property was not annexed between 2017 and 2019, and most of the properties in the area do not receive water and wastewater service from a city. A city must disannex the area within 60 days upon receipt of a valid petition. However, upon disannexation, a city will not be required to refund taxes or fees. Extra-territorial Jurisdiction (ETJ) HB 2512 by Representative Geren passed the Legislature and has been sent to the Governor. The bill limits the areas that can be released from the ETJ of certain Texas cities. While most of the bill is bracketed to only apply to Fort Worth, the bill also addresses some of the issues cities have experienced implementing SB 2038 (88th Legislative Session) As finally passed, the bill adds provisions related to releasing from an ETJ by an election. Specifically, it requires the City to provide notice when the City receives a petition, it limits election petitions to those property owners who reside in the area that is proposed to be released, and allows property owners to opt out of being released from the ETJ . PAGE: DATE: SUBJECT: 5 of 7 June 3, 2025 IGR State Legislative Update Homelessness SB 2623 by Senator Creighton and SB 241 by Senator Flores did not pass. SB 2623 would have restricted homelessness navigation services within 1,500 feet of a school or higher education institution and within 500 feet of a park. SB 241 would have established a process through which residents could submit complaints to the Attorney General if a local entity failed to “take action” on homeless encampments – and the Attorney General could subsequently withhold City funding if they determined the City was not responding to concerns in a timely manner. SB 617 by Senator Schwertner passed the legislature and has been signed by the Governor and is effective September 1, 2025. The bill requires municipalities to conduct public hearings when providing housing for individuals experiencing homelessness. Aquifer Storage and Recovery Project HB 1523 by Representative Gerdes did not pass. The bill would have prohibited the Texas Commission on Environmental Quality from issuing a Class V injection well permit to the City of Austin for the proposed Aquifer Storage and Recovery Project in Bastrop and Lee Counties. Electric Utilities Several bills were filed relating to electric utilities. • SB 6 by Senator Phil King passed the Legislature and has been sent to the Governor. The bill establishes interconnection standards for large loads such as data centers. It aims to validate load forecasting, give the connecting utility financial assurance, address cost allocation and require large loads to curtail during ERCOT emergency load shed. • SB 1202 by Senator King passed the Legislature and has been sent to the Governor. The bill allows qualified third parties to inspect home backup power systems without requiring city approval and mandates that city permits for such systems must be processed within three business days after notice of the inspection is received. The bill includes an exemption for a municipal electric utility to enforce tariff, interconnection and service policies. • SB 1252 by Chairman Schwertner passed the Legislature and has been signed by the Governor. The bill prohibits regulation and inspection of residential back up generation but includes an exemption for a municipal electric utility to regulate the installation or inspection of a residential energy back up system within the utility’s service area. • SB 1789 by Chairman Schwertner passed the Legislature and has been signed by the Governor. The bill establishes structural integrity standards for all electric utility transmission and distribution poles. The Public Utility Commission will establish these standards, and the utility must submit its plan annually. The plan requires inspection, maintenance, remediation and replacement of poles on a timeline established by the commission. • HB 144 by Representative Ken King passed the Legislature and has been sent to the Governor. The bill would require all electric utilities to submit a report to the Public Utility PAGE: DATE: SUBJECT: 6 of 7 June 3, 2025 IGR State Legislative Update Commission for approval, regarding the management and inspection of its distribution system. • HB 145 by Representative Ken King passed the Legislature and has been sent to the Governor. The bill will require all electric utilities to file a wildfire management plan with the Public Utility Commission, which includes operations and procedures, vegetation management and de-energization plans and if it is approved it can be used as evidence to mitigate liability. Project Connect Four bills were filed that would have prohibited the current funding structure of Project Connect. SB 2519, SB 3067, SB 3071 by Senator Bettencourt, and HB 3879 by Representative Troxclair failed to pass. Sister Cities HB 128 by Representative Orr passed the Legislature and has been sent to the Governor. The effective date is September 1, 2025. The bill requires the withdrawal from sister city agreements with cities in China, Iran, North Korea, or Russia. The impact for the City of Austin will be the withdrawal from a Sister City agreement with Xishuangbanna, China, which started 28 years ago. Congress Avenue HB 146 by Representative Geren did not pass. The bill would have restricted the City’s authority to close lanes of Congress Avenue (north bridge abutment at Cesar Chavez Street to 11th Street) for events, construction and work zone safety. A bill to establish a District of Austin failed to pass committee earlier this session, and two bills to turn Congress Avenue over to the Department of Public Safety did not pass. Appropriations / Pass-Through Funding There is only one bill that must pass each session – the Appropriations bill. • The Legislature’s final budget bill, SB 1, includes various federal formula funding that passes through state agencies. In addition, $1 million has been appropriated for Springwood Park in the City of Austin, Williamson County. The IGR Grants Division will work with the Texas Parks and Wildlife Department through the appropriate grant set-up, compliance and reporting process. All unexpended and unobligated balances remaining as September 1, 2025, that were appropriated in 2023 from the Economic Stabilization Fund to the Health and Human Services Commission will carry over to finish construction of a 240-bed replacement campus of the Austin State Hospital. The UT Austin Dell Medical School is slated to receive $67,217,313 over the 2026-2027 biennium. The Capitol Complex North project is expected to continue, with funding from the Texas Facilities Commission. • SB 7 by Senator Perry passed the Legislature and has been sent to the Governor. The bill establishes the Texas Water Fund Advisory Committee to oversee the Water Fund and revises the eligible uses of the New Water Supply for Texas Fund. PAGE: DATE: SUBJECT: 7 of 7 June 3, 2025 IGR State Legislative Update Important Dates Ahead The Governor’s veto deadline is Sunday, June 22, 2025. At this time, the Governor may sign a bill, veto a bill, or allow it to become law without his signature. The legislative team is coordinating with the Law Department to conduct a comprehensive action plan with departments to incorporate expected changes in law impacting city operations. We will provide a post-session briefing to the City Council in July. Should you have any questions, please contact me at carrie.rogers@austintexas.gov or 512.923.7577. cc: T.C. Broadnax, City Manager Erika Brady, City Clerk Corrie Stokes, City Auditor Mary Jane Grubb, Municipal Court Clerk Judge Sherry Statman, Municipal Court CMO Executive Team Department Directors Intergovernmental Relations Office Office of Intergovernmental Relations / 89th Texas Legislature Bill Outcomes As of Tuesday, June 3, 2025 PUBLIC SAFETY ................................................................................................................................................................................ 2 LAND USE & HOUSING ...................................................................................................................................................................... 3 EXTRATERRITORIAL JURISDICTION AND DISANNEXATION .............................................................................................................................. 6 ECONOMIC DEVELOPMENT / INTERNATIONAL AFFAIRS ................................................................................................................................ 7 WATER, ELECTRIC, CLIMATE, ENVIRONMENT ........................................................................................................................................... 7 FINANCE ...................................................................................................................................................................................... 13 REGULATIONS / PREEMPTION ............................................................................................................................................................. 14 PERMITTING / IMPACT FEES................................................................................................................................................................ 17 HOUSING / HOMELESSNESS .............................................................................................................................................................. 17 MENTAL HEALTH ............................................................................................................................................................................ 18 DIVERSITY, EQUITY, AND INCLUSION .................................................................................................................................................... 19 PROJECT CONNECT ......................................................................................................................................................................... 20 QUALITY OF LIFE, ARTS AND CULTURE .................................................................................................................................................. 20 LOBBYING..................................................................................................................................................................................... 21 ODDS AND ENDS ............................................................................................................................................................................ 21 Office of Intergovernmental Relations Working Document / Subject to Change 1 of 22 Public Safety Bill HB 41 HB 2802 Summary Prohibits local governments from using drones from China, Iran, North Korea, Russia, or Syria. Austin Firefighters Retirement Fund Pension Reform HB 2802 by Representative Bucy was the agreed- upon vehicle for reforms to the Austin Firefighters Retirement Fund (AFRF) pension. These reforms establish an actuarially determined contribution with risk-sharing provisions for the City and firefighters. The bill also creates a new benefit tier for new firefighters hired on or after January 1, 2026. Prohibits the release of sustained and non- sustained complaints (G-file). Mandates that Firearm Buyback programs are prohibited. A municipality may not adopt or enforce an ordinance, order, or other measure in which the municipality participate in a program that purchases firearms. Amends the Texas Penal Code to exclude certain stun guns (i.e. Taser 10) from the definition of a “firearm”. Austin Firefighters Association Collective Bargaining. Amends the Local Government Code to allow municipalities to resolve collective bargaining impasses with firefighters through existing charter provisions or agreements. Mandates binding interest arbitration via a three- member panel considering factors like HB 2486 HB 3053 HB 3669 SB 777 Effective Date N/A Status Did not pass 9/1/25 Sent to Governor Department / Ordinance Impact Austin Fire Department, Austin Police Department, Watershed Protection, Emergency Medical Services Austin Fire Department, Financial Services, Labor Relations As soon as practicable after September 1, 2025, the governing body of a municipality subject to Chapter 183 (S.B. 598), Acts of the 64th Legislature, Regular Session, 1975 (Article 6243e.1, Vernon's Texas Civil Statutes), shall appoint a member to the board of trustees under Section 2.02(a)(4), Chapter 183 (S.B. 598), Acts of the 64th Legislature, Regular Session, 1975 (Article 6243e.1, Vernon's Texas Civil Statutes), as added by this Act, to serve a term beginning 1/1/26. N/A Did not pass Austin Police Department, Labor Relations, Office of Police Oversight 9/1/25 Sent to Governor Austin Police Department, Office of Police Oversight Although the bill does not directly impact Austin ordinances, it indirectly impacts Resolution 20220616-086. N/A Did not pass Austin Police Department, Labor Relations, Office of Police Oversight 9/1/25 Sent to Governor Labor, Law, Austin Fire Department, Financial Services SB 777 by Senator Hughes and HB 3171 by Representative Lujan were identical bills filed in response to a Texas Supreme Court decision that invalidated a Houston charter provision affecting pay for Houston firefighters. This decision also had the likely effect of invalidating other charter provisions relating to collective bargaining, including the impasse Office of Intergovernmental Relations Working Document / Subject to Change 2 of 22 Bill Summary Effective Date Status Department / Ordinance Impact comparable compensation and municipal finances. resolution procedure in Austin City Charter Art. IX, Sec. 7 that was overwhelmingly approved by Austin voters. As originally filed, these bills created significant uncertainty for cities with collective bargaining under Texas Local Gov’t Code Chapter 174, since they allowed municipal charters or collective bargaining agreements to supersede the impasse resolution standards in the law and did not include any kind of financial guardrails. Austin has adopted Chapter 174 for its firefighters. The City and the Austin Firefighters Association reached a compromise to create a statutory carve-out for Austin that preserves the existing Austin Charter impasse resolution procedure and its financial guardrails by including it in Chapter 174. SB 777, as amended and agreed between the City and the AFA, has been forwarded to the Governor. Austin Police Department, Labor Relations, Office of Police Oversight Did not pass Did not pass Convention Center; Parks and Recreation SB 781 SB 1065 Prohibits release of sustained and non-sustained complaints (G-file). Prevents private entities leasing government land from prohibiting guns at events. N/A N/A Land Use & Housing Bill HB 21 HB 24 (Companion to SB 844) Summary Reforms housing finance corporations (HFCs) by restricting their operations to their sponsoring jurisdictions unless approved by affected local governments. Creates additional requirements for housing finance corporations, including limits on area of operation, stricter income limits, and annual auditing -- non-compliant developments lose tax-exemption for that year. Changes the notice and protest rights associated with larger-scale rezonings. It also changes the protest rights for adjacent property owners. Effective Date Effective Immediately Status Signed by Governor Housing Department / Ordinance Impact 9/1/25 House concurred with Senate Amendments (5/29) Law, Watershed Protection, Development Services, Planning This will require amendments to the Land Development Code. Office of Intergovernmental Relations Working Document / Subject to Change 3 of 22 Bill HB 1585 HB 2464 HB 4506 SB 15 SB 673 SB 840 Summary Restricts housing finance corporations (HFCs) to owning residential developments solely within the boundaries of their sponsoring local governments. Eliminates prior authority for HFCs to operate outside their jurisdictions. Limits the City’s authority to regulate no-impact home-based businesses (a/k/a home occupations). The bill does not limit the City’s authority to regulate short-term rentals. Authorizes municipalities to send electronic notice for zoning cases if a person requests electronic notice. Establishes size and density requirements for residential lots that are zoned single-family, at least five acres and unplatted. Requires cities to allow accessory dwelling units (ADUs) and establishes the maximum regulations that apply to ADUs Provides for conversion of commercial property to residential by-right of property owner. Effective Date N/A Status Did not pass Law, Housing Department / Ordinance Impact Effective Immediately Sent to Governor Law, Development Services This bill will likely require amendments to the Land Development Code. 9/1/25 Sent to Governor Law, Watershed Protection, Development Services, Planning 9/1/25 Sent to Governor This bill will require amendments to City Code and may need to ok technology expenditures. Law, Watershed Protection, Development Services, Planning N/A Did not pass Planning, Development Services, Watershed Protection This bill will likely require amendments to City Code. 9/1/25 Sent to Governor Law, Watershed Protection, Development Services, Planning SB 844 (Companion to HB 24) Changes the notice and protest rights associated with larger-scale rezonings. It also changes the protest rights for adjacent property owners. N/A Did not pass This bill gives residential by right in base zones that allow commercial, office, retail, and warehouse. It also gives residential by right as part of a conversion of an existing commercial building. Austin Water’s impact fees are affected. Potential impact to Austin airport overlay and density bonus programs. Law, Watershed Protection, Development Services, Planning Companion to HB 24 which passed. Office of Intergovernmental Relations Working Document / Subject to Change 4 of 22 Bill SB 854 SB 1450 SB 2477 SB 2835 Summary Requires a municipality to allow multifamily or mixed-use developments on land owned or leased by religious organizations. Gives applicants a right to third-party review and inspections. Allows for the conversion of office property to residential by-right of property owner. Limits impact fees on these redevelopments. Authorizes municipalities to permit certain mid- rise apartment buildings (up to six stories and four units per floor) to have a single stairway, provided they meet fire safety standards, including two-hour fire-rated stair enclosures, automatic sprinklers, and emergency egress protocols. Effective Date N/A Status Did not pass Department / Ordinance Impact Law, Watershed Protection, Development Services, Planning N/A Did not pass Law, Watershed Protection, Development Services, Planning 9/1/25 Sent to Governor Development Services, Planning, Austin Water 9/1/25 Sent to Governor Development Services, Planning, Austin Fire This bill may require changes to the Building Code if the recent changes to the Building Code are less restrictive than state law. Office of Intergovernmental Relations Working Document / Subject to Change 5 of 22 Extraterritorial Jurisdiction and Disannexation Bill HB 950 HB 2494 HB 2512 SB 1509 SB 1844 Summary Mandates that municipalities provide full municipal services (e.g., police, fire, EMS, water, wastewater, solid waste, roads) to land annexed for full purposes. Expands the process for property owners to petition for disannexation from municipalities that fail to provide essential services (e.g., water, wastewater). Limits the ability of property owners to petition for release from a municipality's extraterritorial jurisdiction (ETJ) and addresses some issues that arose from implementing SB 2038. Prohibits municipalities from adopting or enforcing regulations within their extraterritorial jurisdictions (ETJs). Expands property owners' ability to petition for disannexation from municipalities that do not provide water and wastewater and are adjacent to a navigable water way. Effective Date N/A Status Did not pass Austin Water, Financial Services, Fire, Fleet Services, Housing, Planning, Watershed Protection Department Department / Ordinance Impact N/A Did not pass (see companion bill SB 1844) Austin Water, Development Services Department, Housing, Planning, Parks and Recreation Department, Transportation, Watershed Protection Department 9/1/25 Sent to the Governor Austin Water, Planning, Watershed Protection Department, City Clerk N/A Did not pass Austin Water, Emergency Services, Development Services Department, Planning, Watershed Protection Department 9/1/25 Signed by Governor Austin Water, Development Services Department, Housing, Planning, Parks and Recreation Department, Transportation Public Works, Watershed Protection Department This bill allows properties who have been part of the City before 2017 to disannex for the failure to provide water and wastewater services. Office of Intergovernmental Relations Working Document / Subject to Change 6 of 22 Economic Development / International Affairs Bill HB 128 Summary Mandates that Texas governmental entities must withdraw from any sister-city agreements with China, Iran, North Korea, or Russia by October 1, 2025. SB 878 Makes explicit that municipalities may not grant ad valorem tax exemptions through Chapter 380, Local Government Code. Instead, that may only be done through Chapter 312, Tax Code. NOTE: the City does not provide tax exemptions through Chapter 380 agreement. Effective Date 9/1/25 Status Sent to Governor Department / Ordinance Impact Economic Development, Office of Arts, Culture, Music, and Entertainment The impact for the City of Austin will be the withdrawal from a Sister City agreement with Xishuangbanna, China, which started 28 years ago. Economic Development Did not pass Water, Electric, Climate, Environment Bill HB 14 Summary Creates incentive program for new nuclear energy and provides training for workforce. Effective Date 9/1/25 Status Sent to the Governor HB 29 Requires a water loss audit validation for large cities Effective Immediately Sent to Governor HB 144 Requires an electric utility to file a distribution maintenance plan with the Public Utility Commission and update maintenance, repair and remediation efforts. Effective Immediately Sent to the Governor Department / Ordinance Impact Austin Energy - will provide incentives for new nuclear and workforce training if Austin Energy decides to build new nuclear Austin Water Will require Austin Water to conduct an annual validation of our water loss audit. Austin Energy - Requires a rulemaking at the Public Utility Commission as well as filing and updating at the Commission. Office of Intergovernmental Relations Working Document / Subject to Change 7 of 22 Bill HB 145 HB 517 Summary Requires an electric utility to file a wildfire mitigation plan with the Public Utility Commission and gives some liability protection if that plan is approved. Restricts property owners' association from imposing fines for discolored vegetation or turf during a period of residential watering restriction. Effective Date Effective Immediately Status Sent to the Governor Department / Ordinance Impact Austin Energy - Requires Austin Energy to submit a wildfire mitigation plan to the Public Utility Commission 9/1/25 Signed by the Governor Austin Water HB 516 HB 704 HB 747 HB 1523 Requires hydrant water outage notices to fire departments. Prohibits disconnection of residential utility services—including electric, natural gas, propane, water, and sewer—on weekends, state holidays, the day before such days, or during extreme weather emergencies. Removes Universal Plumbing Code and dictates that only the 2015 International Plumbing Code can be used in Texas. Prohibits Texas Commission on Environmental Quality from authorizing an Aquifer Storage and Recovery injection well permit in Bastrop and Lee counties to the City of Austin. N/A N/A N/A N/A HB 1606 Requires Disclosure of how to request vegetation management. 9/1/25 Sent to Governor HB 1674 Mandates biosolids PFAS (per- and polyfluoralkyl substances) testing and land application prohibitions. N/A Did not pass HB 1991 Requires water and electric rates and fees to be posted on both city and department website and update within 30 days with any change. 9/1/25 Sent to Governor Office of Intergovernmental Relations Working Document / Subject to Change 8 of 22 Will not require Austin Water action but will have positive conservation impacts. The bill restricts property owners’ associations from imposing fines on homeowners for discolored vegetation during a prescribed residential watering restriction while the watering restriction is in place and for at least 30 days after the restriction has been lifted. Austin Water, Fire Austin Water, Austin Energy Did not pass Did not pass Did not pass Austin Water Did not pass Austin Water Would prohibit a planned Austin Water Aquifer Storage and Recovery project in Bastrop County Austin Energy- Requires Austin Energy to post information on how customers can request vegetation management on its webpage. Austin Water Would have caused major operations disruptions and costs for biosolids management Austin Water and Austin Energy – will need to coordinate rate and fee updates on City of Austin website and Austin Water and Austin Energy Bill HB 3228 HB 2867 HB 3055 HB 3429 HB 3778 HB 3809 HB 3824 HB 3535 SB 1290 HB 3734 HB 3970 HB 4313 (Companion to SB 2235) HB 4972 Summary Requires wind and solar developers to include recycling requirements in their agreements with landowners Establishes a tiered cap on late payment fees for municipally owned water and sewer utilities. Prevents a city from acquiring property from outside the county where the city is primarily located. Requires public water systems that add fluoride to drinking water to disclose information on each customer’s bill. Defines Geothermal Energy as Dispatchable and allows its inclusion in Texas Energy Fund. Ensures that agreements with landowners require battery removal and clean up provisions in lease contracts. Requires state fire marshal to adopt safety and testing standards for utility scale batteries and owner of utility scale battery required to offer training to first responders beginning in January 1, 2027 Requires backup generation at wastewater package plants. Effective Date 9/1/25 N/A N/A N/A N/A 9/1/25 9/1/25 Status Sent to the Governor Did not pass Department / Ordinance Impact Austin Energy - impact will be included through contractual agreements with renewable facilities Austin Water Did not pass Austin Water. Potential implications for possible future acquisitions for Aquifer Storage and Recovery, Water Quality Protection Lands, and Balcones Canyonlands Preserve Austin Water Did not pass Did not pass Austin Energy Sent to the Governor Passed both Chambers Austin Energy - Any additional costs would be reflected in contract arrangements with utility scale battery companies. Austin Energy - Requires any owner of utility scale battery system to offer fire safety training to first responders. N/A Did not pass Austin Water N/A Requires testing water supply for mifepristone and other estrogen compounds. Establishes an expedited interconnection process for large electric loads (e.g., data centers) that commit to reducing grid demand during emergencies through on-site generation or curtailment. Prohibits political subdivisions from using public funds to plan, create, or operate environmental projects, such as those aimed at reducing greenhouse gas emissions or promoting public awareness. Prohibits General Fund Transfer from a water and electric utility. N/A N/A N/A Did not pass Austin Water Did not pass Austin Energy Did not pass Austin Water, Watershed Protection Department Did not pass Austin Water, Austin Energy Office of Intergovernmental Relations Working Document / Subject to Change 9 of 22 Bill HJR 7 SB 6 SB 7 SB 75 SB 388 SB 383 SB 480 Summary Constitutional amendment for dedicated water infrastructure funding. Effective Date N/A Status House and Senate Not Reconciled Department / Ordinance Impact Austin Water, Watershed Protection Establishes interconnection standards for large loads, addresses load verification and cost allocation and provides financial securities to interconnecting utilities. Omnibus major statewide water infrastructure funding. Effective Immediately Passed both Chambers N/A House and Senate Not Reconciled Establishes the Grid Security Commission to enhance the electric grid and municipalities from electromagnetic pulses, terrorist attacks and severe weather Requires 50 percent of wholesale energy market generation to be natural gas Prohibits Interconnection of Offshore Wind. Allows local governments to contract with other governments for water resource research. 9/1/25 Sent to Governor N/A Did not pass N/A Effective Immediately Did not pass Sent to Governor SB 482 Increases penalty from a class A misdemeanor to a third-degree felony for harassment of utility workers. 9/1/25 Sent to Governor May provide funding for water and wastewater infrastructure projects. Austin Energy- This bill will provide more certainty to Austin Energy infrastructure planning to accommodate new data centers or other large loads. Austin Water, Watershed Protection May provide funding for water, wastewater, and flood infrastructure projects. Austin Energy- No direct impact. New Commission will provide legislative recommendations but Legislature would have to implement any new requirements. Austin Energy- Bill would have increased costs to electric customers. Austin Energy Austin Water The bill is permissive and could encourage collaboration between entities. Austin Water, Austin Energy- Enhances penalties and should decrease violence or threats to utility workers providing restoration services to the community. SB 616 Allows City of Georgetown and Medina County Aquifer Storage and Recovery projects that transect the Edwards Aquifer. Effective Immediately Signed by the Governor Austin Water SB 715 Moved up date for firming requirement in wholesale energy market from new generation interconnected in 2026 which was prospective to retroactive and including all generation. N/A Did not pass No direct impact but sets a positive precedent for ASR in the region Austin Energy- This would have added costs to all electric customers including those of Austin Energy. Office of Intergovernmental Relations Working Document / Subject to Change 10 of 22 Bill SB 1036 SB 1202 SB 1252 SB 1253 Summary Establishes customer protections and licensing requirements for solar sales people and installers. Provides for third party review of installation of residential back up generation. Prohibits regulation and inspection of residential back up generation. Requires impact fee credits to builders and developers for certain water conservation and reuse projects. Effective Date 9/1/25 9/1/25 9/1/25 Status Sent to the Governor Sent to Governor Department / Ordinance Impact Austin Energy- This will help protect customers buying solar panels from unscrupulous operators. Austin Energy Includes exemption allowing municipal electric utility to review and inspect Austin Energy Signed by Governor 9/1/25 Sent to Governor Includes exemption for municipal electric utility. Austin Water SB 1261 Changes Texas Water Development Board financing of water supply projects included in the state water plan. 9/1/25 Sent to Governor SB 1566 Allows utility providers to connect services (e.g., water, sewer, electricity) to properties removed from a municipality's extraterritorial jurisdiction (ETJ) under SB 2038 (2023), provided the provider holds a certificate of convenience and necessity. 9/1/25 Conference Committee Requires the City to develop a program to provide certain impact fee credits Austin Water Allows Austin Water to potentially finance certain large projects with 50-year loan terms Austin Water This is related to SB 2038 from last session (ETJ release). The bill seeks to eliminate confusion for residents and property owners seeking utility connections in areas formerly within a municipality's extraterritorial jurisdiction by providing for an exception to that prohibition for properties within an area removed from a municipality's extraterritorial jurisdiction. Austin Water not currently impacted – only applies to public water systems whose supply is groundwater. Currently, Austin Water’s sole water source is surface water. SB 1662 SB 1697 Authorizes the Texas Commission on Environmental Quality (TCEQ) to provide up to 24 hours' advance notice to certain public drinking water supply systems before conducting complaint-driven water quality testing. Requires the Public Utility Commission to develop a customer information guide for residential solar and post to electric utility website 9/1/25 Sent to Governor 9/1/25 Signed by the Governor Austin Energy – Austin Energy to link to customer information guide and ensure its own guide is in alignment Office of Intergovernmental Relations Working Document / Subject to Change 11 of 22 Bill SB 1789 SB 2148 Summary Establishes transmission and distribution system resiliency standards and requires submission of annual report to the Public Utility Commission and allows for administrative penalties. Requires the Public Utility Commission and ERCOT to conduct biannual simulated or tabletop load shedding exercises with electric providers. Effective Date 9/1/25 Status Sent to Governor 9/1/25 Sent to Governor SB 2204 Makes changes to Texas Water Development Board grant funding and contract management. 9/1/25 Signed by the Governor N/A Did not pass Department / Ordinance Impact Austin Energy – Requires rulemaking at the Public Utility Commission, filing and alignment with Austin Energy City Council. Allows Public Utility Commission penalties for noncompliance. Austin Energy Requires electric utilities to participate in ERCOT Load Shed Emergency Exercises by the end of 2026 Austin Water - This may impact how Austin Water applies for TWDB funding. Research needed by Austin Water to determine impacts. Austin Water, Watershed Protection Department SB 2235 (Companion to HB 4313) SB 2268 SB 2321 Prohibits political subdivisions from using public funds to plan, create, or operate environmental projects, such as those aimed at reducing greenhouse gas emissions or promoting public awareness. Clarifies that the Texas Energy Fund allows municipally owned electric utilities are eligible and appropriates $5B. Directs the Texas Commission on Environmental Quality (TCEQ) to exercise enforcement discretion on emissions regulations during electric grid emergencies to ensure power reliability. SB 2662 Requires water and sewer utilities to include drought contingency plans (DCPs) in their rate schedules. Grants the Public Utility Commission authority to enforce compliance, including service restrictions for violations. Effective Immediately Sent to Governor Office of Intergovernmental Relations Working Document / Subject to Change 12 of 22 9/1/25 9/1/25 Passed both Chambers Passed both Chambers Austin Energy – could participate in this program Austin Energy Allows TCEQ discretion on emission limits of electric generation during ERCOT Energy Emergencies, including Austin Energy units at Decker and Sand Hill. Austin Water - This may require additions to the Austin Water Drought Contingency Plan (DCP), including the development of a clearer discontinuation of service process and inclusion of enforcement provisions. Council approval required for any changes to Austin’s DCP, last approved by Council in November 2024. Finance Bill HB 30 HB 3537 HB 4370 HB 5267 SB 1024 SB 1173 SB 1756 SB 1901 Summary Effective Date Status Department / Ordinance Impact Repeals the provision authorizing cities to adopt an ad valorem tax rate the exceeds the voter-approval tax rate without holding an election in the year following the year in which a disaster occurs and modifies the voter approval rate in disaster areas. Proposes to cap annual local government expenditures to the prior year's total, adjusted for inflation and population growth. Expands the types of projects eligible for funding by public improvement districts and similar entities to include geothermal water conveyance systems and other infrastructure improvements. Caps annual municipal and county expenditures to the prior year's total, adjusted for inflation and population growth. Caps issuance of outstanding anticipation notes to 5 percent of annual budget and cannot authorize certificate if voters denied approval of bond for same purpose in preceding five years, subject to certain exceptions. Raises the threshold at which competitive bidding is required for city purchases from $50,000 to $100,000; and increase the threshold at which competitive bidding in relation to historically underutilized businesses is required from $50,000 to $100,000. Limits municipalities to using hotel occupancy tax revenue for only one qualified project (e.g., hotel or convention center) per statutory authorization. SB 1901 authorizes the Texas Treasury Safekeeping Trust Company to reallocate to the Texas Opioid Abatement Fund Council statewide opioid settlement agreement money that was distributed or should have been distributed to counties or municipalities to address opioid-related harms in those 1/1/26 Signed by Governor Financial Services N/A Did not pass Financial Services 9/1/25 Sent to Governor Austin Energy- No direct impact. N/A N/A Did not pass Financial Services Did not pass Financial Services Effective Immediately Passed Financial Services, Citywide N/A Did not pass Financial Services, ACCD Effective Immediately Passed Financial Services, Austin Public Health Office of Intergovernmental Relations Working Document / Subject to Change 13 of 22 Bill Summary communities if a county or municipality does not deposit the money before the second anniversary of the date on which the money was distributed or submits in writing to the trust company a document indicating that the municipality or county affirmatively forfeits or refuses to accept the money. The bill also establishes a conflict of interest provision applicable to Texas Opioid Abatement Fund Council members and to clarify and strengthen the administration of the council by revising current law relating to the administration of the Texas Opioid Abatement Fund Council and the opioid abatement trust fund. Prohibits municipalities from regulating land use, zoning, or development standards in their extraterritorial jurisdictions (ETJs), including areas annexed for limited purposes. Mandates disannexation of such areas upon valid petition or election. Requires a 60% supermajority vote by a local governing body to propose general obligation bonds. If voters reject a tax rate increase, a 75% supermajority is needed to propose the same increase in the following year. Aims to enhance fiscal discipline and uphold voter decisions. Requires municipalities to provide written notice to property owners in a tax increment reinvestment zone before adopting an ordinance to issue tax increment bonds. SB 2522 SB 2529 SB 2539 Effective Date Status Department / Ordinance Impact N/A Did not pass Planning, Watershed Protection N/A Did not pass Financial Services N/A Did not pass Financial Services Regulations / Preemption Bill HB 2433 Summary Requires accommodations intermediaries (e.g., online booking platforms) to collect and remit state, municipal, and county hotel Effective Date Status Department / Ordinance Impact N/A Did not pass Development Services, Financial Services Office of Intergovernmental Relations Working Document / Subject to Change 14 of 22 Bill Summary Effective Date Status Department / Ordinance Impact HB 2767 HB 2844 HB 3798 (companion to SB 1927) HB 4552 HB 4809 SB 689 SB 924 occupancy taxes directly to the Texas Comptroller Prohibits local governments from regulating "online global marketplaces"—defined as platforms facilitating transactions between users—and from requiring these platforms to disclose user information without a subpoena or court order. Regulation of food service establishments, including retail food stores and mobile food vendors; requiring an occupational license; imposing fees; authorizing an administrative penalty Prohibits municipalities from restricting or imposing mitigation fees on the removal of Ashe juniper trees (mountain cedar) from residential properties. Prohibits state and local governments and their vendors from implementing or supporting initiatives, training, or contracting practices that differentiate or give preference based on race, sex, color, ethnicity, gender identity, or sexual orientation. Establishes provisions for the appraisal of properties eligible for ad valorem tax exemptions due to their historical or archaeological significance. Prohibits diversity and inclusion offices and programs in local government. Prohibits cities from charging a franchise fee for video programming accessed via a service that enables users to access N/A Did not pass Development Services, Financial Services 9/1/25 7/1/26 N/A N/A Sent to Governor Public Health Did not pass Watershed Protection, Development Services Did not pass Office of Equality and Inclusion Effective Immediately Sent to Governor May have an impact on the tax exemption ordinance designed to be beneficial to owners of H-zoned properties, specifically § 11-1-22 - DETERMINATION OF EXEMPTION AMOUNT. N/A 9/1/25 Did not pass City Wide Senate concurred with House amendments (5/29) Financial Services Office of Intergovernmental Relations Working Document / Subject to Change 15 of 22 Bill Summary Effective Date Status Department / Ordinance Impact content or other services offered over the internet, including streaming content. The committee substitute, among other things, provides that companies holding a state- issued certificate of franchise on September 1, 2025 must continue to provide cities compensation for use of a public right-of- way. Prohibits municipalities from restricting or imposing mitigation fees on the removal of Ashe juniper trees (mountain cedar) from residential properties. Expands state preemption over local regulations, particularly by voiding ordinances that relate to the Elections Code, Penal Code, and Health and Safety Code. Expands state preemption over local regulations on land use, business operations, and more. Invalidates local rules that conflict with state law and strengthens enforcement. Strictly defines man and woman based on reproductive organs and requires state documents to reflect sex assigned at birth Preempts local governments from declaring a property a historic landmark without the property owner’s consent. SB 1927 (companion to HB 3798. SB 2858 SB 3016 SB 229 SB 2639 N/A N/A Did not pass Watershed Protection, Development Services Did not pass Office of Equality and Inclusion N/A Did not pass Development Services, Planning 9/1/25 Sent to Governor Office of Equity, Austin Public Health, Law N/A Did not pass Planning Office of Intergovernmental Relations Working Document / Subject to Change 16 of 22 Permitting / Impact Fees Bill HB 23 SB 1883 Summary Allows developers to bypass municipal review processes by hiring licensed third- party professionals to review and approve development documents and conduct inspections. Impact fee, requires an independent financial audit before increasing or adopting a new impact fee, and prohibits a city from increasing an impact fee within three years of the first date it was adopted or last increased. Housing / Homelessness Effective Date Status N/A Did not pass Department / Ordinance Impact Development Services, Planning, Austin Water, Watershed Protection 9/1/25 Sent to Governor Austin Water – Austin Water research needed to determine impacts of audit requirement. Historically Austin Water has increased impact fees every 5 years. Bill HB 636 (Companion to SB 2488) SB 241 SB 617 Summary Effective Date Status Department / Ordinance Impact Directs the Texas Department of Housing and Community Affairs, in collaboration with the Texas Homeless Network, to implement a statewide homeless data sharing network. Tightens enforcement of public camping bans, penalizes cities that are perceived to discourage enforcement, and creates a state complaint process for violations. Requires municipalities to provide at least 90 days' public notice and hold a public hearing before converting government- controlled properties into housing for homeless individuals. N/A Did not pass Homeless Strategies Office N/A Did not pass Homeless Strategies Office, Austin Police Department, Austin Resource Recovery 9/1/25 Signed by Governor Homeless Strategies Office, Development Services, Housing, Financial Services Office of Intergovernmental Relations Working Document / Subject to Change 17 of 22 Bill SB 2487 SB 2488 (Companion to HB 636) SB 2623 Summary Effective Date Status Department / Ordinance Impact Omnibus mental health services bill that would allow counties with populations over 1.2 million to establish 24/7 crisis centers offering mental health assessments, stabilization, detoxification, and housing coordination. Directs the Texas Department of Housing and Community Affairs, in collaboration with the Texas Homeless Network, to implement a statewide homeless data sharing network. Prohibits homelessness navigation services near schools and parks. N/A Did not pass Homeless Strategies Office, Austin Public Health N/A Did not pass Homeless Strategies Office N/A Did not pass Homeless Strategies Office Mental Health Bill HB 1656 SB 1164 Summary Authorizes licensed paramedics, with medical director approval, to detain individuals experiencing a mental health crisis who pose an imminent risk of serious harm, when immediate action is necessary and law enforcement is unavailable. Expands criteria for emergency mental health detentions to include individuals exhibiting severe emotional distress or deteriorating mental condition, even without overtly dangerous behavior. Standardizes peace officer documentation and procedures for such detentions. Effective Date N/A Status Did not pass Department / Ordinance Impact Office of Medical Director, Emergency Medical Services 9/1/25 Sent to Governor Office of Medical Director, Emergency Medical Services, Austin Police Department Office of Intergovernmental Relations Working Document / Subject to Change 18 of 22 Diversity, Equity, and Inclusion Summary Bill HB 167 HB 1521 (Companion to SB 689) HB 2770 SB 689 Prohibits state and local governmental entities from establishing or funding diversity, equity, and inclusion (DEI) offices or initiatives, unless required by federal law. Also bars requiring DEI statements in employment practices. Prohibits state and local governmental entities from establishing or maintaining diversity, equity, and inclusion (DEI) offices or initiatives, unless required by federal law. Also bars requiring DEI statements in employment practices. Prohibits municipalities from funding or implementing diversity, equity, and inclusion (DEI) initiatives, including DEI- related training, hiring practices, events, and partnerships, unless required by federal law. Mandates that municipal policies prioritize individual merit over identity classifications. Prohibits state and local governmental entities from establishing or maintaining diversity, equity, and inclusion (DEI) offices or initiatives, unless required by federal law. Also bars requiring DEI statements in employment practices. Effective Date Status N/A Did not pass Department / Ordinance Impact Aviation, AW, Capital Delivery Services, Human Resources, Innovation, Library, Office of Equity & Inclusion, Planning, Project Connect, Public Health, SMBR, Transportation, Watershed Protection N/A Did not pass Aviation, AW, Capital Delivery Services, Human Resources, Innovation, Library, Office of Equity & Inclusion, Planning, Project Connect, Public Health, SMBR, Transportation, Watershed Protection N/A Did not pass AW, Capital Delivery Services, Housing, Office of Equity & Inclusion, Planning, Project Connect, SMBR, Transportation Public Works, Watershed Protection N/A Did not pass Aviation, AW, Capital Delivery Services, Human Resources, Innovation, Library, Office of Equity & Inclusion, Planning, Project Connect, Public Health, SMBR, Transportation Public Works, Watershed Protection Office of Intergovernmental Relations Working Document / Subject to Change 19 of 22 Project Connect Bill HB 3879 SB 2519 SB 3067 SB 3071 Summary Creates a cause of action for taxpayers who believe a taxing unit has “materially deviated” from the purpose or purposes identified in a tax rate election (TRE). Limits how taxing entities can use voter- approved property tax revenue by prohibiting its use for repaying bonds or public securities through local government corporations and allowing property owners to seek an injunction if the taxing entity materially deviates from the stated purpose of the tax. Limits the authority to use ad valorem tax revenue derived from a tax rate election to pay for a public security, including revenue transferred to a LGC to secure or make payments on a public security. Creates a cause of action for taxpayers who believe a taxing unit has “materially deviated” from the purpose or purposes identified in a tax rate election (TRE). Quality of Life, Arts and Culture Bill HB 3225 Summary Prohibits access by minors to sexually explicit materials in municipal libraries, establish age verification measures to ensure minors could not access such materials, require an annual review of library materials, and impose a $10,000 civil penalty per violation. Effective Date Status Department / Ordinance Impact N/A Did not pass Transportation and Public Works, Project Connect N/A Did not pass Transportation and Public Works, Project Connect N/A Did not pass Transportation and Public Works, Project Connect N/A Did not pass Transportation and Public Works, Project Connect Effective Date Status N/A Did not pass Department / Ordinance Impact Office of Arts, Culture, Music, and Entertainment, Austin Public Library Office of Intergovernmental Relations Working Document / Subject to Change 20 of 22 Bill SB 22 SB 18 SB 412 Summary Sets out provisions related to the Texas Moving Image Industry Incentive Program and the establishment and funding of the Texas Moving Image Industry Incentive Fund. Prohibits municipal libraries from receiving state or other public funding if they host events where a man presenting as a woman, or a woman presenting as a man, reads a story to a minor. Amends the Texas Penal Code by removing the affirmative defense for individuals—such as educators, librarians, or parents—who distribute or display material deemed "harmful to minors" under the justification of having a scientific, educational, governmental, or similar purpose. Effective Date Status 9/1/25 Sent to Governor Department / Ordinance Impact Office of Arts, Culture, Music, and Entertainment, Economic Development N/A Did not pass Office of Arts, Culture, Music, and Entertainment, Austin Public Library Sept. 1, 2025 Signed by Governor Office of Arts, Culture, Music, and Entertainment, Austin Public Library Lobbying Bill HB 223 Summary Effective Date Status Department / Ordinance Impact Requires municipalities to use competitive bidding for contracts with lobbyists and government relations firms, ending the previous exemption. 9/1/25 Senate amendment analysis distributed. Financial Services, Intergovernmental Relations Odds and Ends Bill HB 1393 Summary Authorizes Texas to observe daylight saving time year-round, contingent upon federal legislation permitting such a change. Effective Date Effective only if Congress enacts Status Department / Ordinance Impact Sent to Governor Citywide Office of Intergovernmental Relations Working Document / Subject to Change 21 of 22 Bill Summary HB 2463 SB 776 SB 765 SB 1964 Applies statewide, including both Central and Mountain time zones. Prohibits governmental construction contracts from barring contractors from recovering compensatory damages for delays caused solely by the governmental entity. Exempts government-held information related to fraud detection and deterrence (e.g., risk assessments, protocols, investigative materials) from public disclosure under the Texas Public Information Act. Establishes a regulatory framework for the use of artificial intelligence (AI) by state and local governments. Effective Date enabling legislation N/A Status Department / Ordinance Impact Did not pass Law, Development Services 9/1/25 Signed by the Governor Law, Citywide 9/1/25 Set on the Senate Items Eligible Calendar for May 30, 2025. Communications & Technology Management, Office of Information Security Office of Intergovernmental Relations Working Document / Subject to Change 22 of 22