The start of a new year brings a sweeping update to the legal environment in the Lone Star State, with dozens of Texas laws officially taking effect on January 1, 2026. These changes represent a broad spectrum of priorities, from the regulation of emerging technology to significant financial relief for small business owners. One of the most prominent additions is House Bill 149, also known as the Texas Responsible Artificial Intelligence Governance Act, which creates a formal framework for how automated systems interact with the public. This legislation requires government agencies to disclose AI usage and establishes a statewide council to monitor ethical standards and data privacy.
Law enforcement agencies and local governments are also navigating new mandates regarding coordination and safety protocols. Senate Bill 8 requires all Texas sheriffs to enter into formal agreements with federal authorities to manage immigration-related warrants within county jails. This measure aims to standardize enforcement across the state, ensuring that local and federal officers work in tandem to process individuals in custody. To support smaller jurisdictions, the state has established a grant program to help cover the administrative and personnel costs associated with these new reporting requirements.
Public safety and property rights are further addressed through Senate Bill 38, which targets the increasing issue of unauthorized property occupation. This law streamlines the eviction process for squatters, providing landlords with a faster adjudication path to regain possession of their real estate. By shortening court timelines and expanding notice options, the state seeks to reduce the financial burden placed on owners by prolonged civil cases. These updates to the Texas laws reflect a proactive approach to managing the state’s rapid growth and the complexities of its modern economy.
New business inventory tax exemptions and financial relief
Entrepreneurs and home-based business owners are set to benefit from one of the most significant tax adjustments in recent years through House Bill 9. This law raises the exemption threshold for business personal property from $2,500 to $125,000, effectively removing a major financial hurdle for thousands of small enterprises. Tangible assets such as office furniture, machinery, tools, and inventory are now shielded from local property taxes up to this new limit. This change follows a voter-approved constitutional amendment intended to foster a more competitive environment for local commerce and innovation.
The application of this exemption provides a material advantage for multi-location businesses, as the $125,000 deduction applies to each separate physical address where a company holds property. Large manufacturers and retail chains can utilize these “stackable” exemptions to reduce their overall tax liability across different taxing units. However, the law includes specific provisions to prevent a single business from claiming multiple exemptions at one location through different legal entities. Property owners must still file an annual rendition with their local appraisal district to certify their eligibility and document the market value of their assets.
In addition to property tax relief, the state is extending support for technological advancement through the renewal of various franchise tax credits. Senate Bill 2206 maintains incentives for research and development activities, encouraging companies to locate their laboratory and testing facilities within the state. This move aims to complement the growing manufacturing sector and provide a stable pipeline for high-tech job creation. By lowering the cost of doing business, these Texas laws seek to maintain the state’s reputation as a top destination for corporate relocation and domestic entrepreneurship.
Artificial intelligence governance and consumer protection
The introduction of House Bill 149 marks a definitive step in the state’s effort to manage the risks associated with high-speed technological growth. This regulatory framework focuses on transparency, requiring any business that uses AI to disclose when an automated system is interacting with a resident. The law specifically prohibits the use of AI for “social scoring” by government entities and restricts the collection of biometric data without explicit consent. These protections are designed to safeguard civil liberties while ensuring that automated decision-making does not lead to unlawful discrimination or privacy violations.
A unique feature of this legislation is the creation of a statewide “AI sandbox” for controlled testing of new software and algorithms. Companies participating in this program can receive limited immunity from certain administrative penalties while they evaluate the safety and efficacy of their products. This provides a safe environment for developers to refine their tools before they are deployed to the general public. The newly formed Texas Artificial Intelligence Council will serve as an advisory body, reviewing current trends and providing recommendations on future updates to these Texas laws.
Consumer protection also extends to the digital marketplace through the App Store Accountability Act. This measure requires app store operators and developers to implement age-verification systems to protect minors from accessing age-inappropriate content. Operators must now obtain parental consent before allowing users under the age of 18 to make in-app purchases or download certain software. While this act has faced various legal challenges regarding its implementation, it remains a central part of the state’s plan to increase digital safety for families and young users.
Streamlined property rights and squatter eviction protocols
Property owners and real estate managers are finding new tools for asset protection under Senate Bill 38, which officially overhauls the eviction process. The law enables law enforcement to take more direct action in cases of unauthorized occupancy where no legal lease agreement exists. Owners must provide valid proof of ownership, such as a deed or title, to initiate the expedited removal of individuals who have no legal claim to the premises. This shift from a purely civil matter to one involving more immediate law enforcement oversight is intended to deter fraudulent claims of tenancy.
The new protocols require that eviction trials and subsequent appeals be resolved within a 21-day window, a significant reduction from previous timelines that could stretch for months. Tenants involved in these disputes must continue to pay rent into the court’s registry during the appeal process to maintain their right to possession. These Texas laws also standardize notice options, allowing landlords to deliver legal citations via mail, in-person, or even electronically if previously agreed upon in writing. This consistency across all 254 counties helps to reduce the confusion and delays often associated with local court variations.
These changes are part of a larger effort to balance tenant protections with the rights of property owners to secure their assets. While the law provides for faster removals, it does not strip away the basic due process rights of legitimate renters who have a valid lease in place. Judges are now authorized to issue summary decisions in cases where unauthorized occupants fail to respond to removal complaints. This legal modernization ensures that the state’s housing market remains stable and that property owners can manage their units without the fear of long-term illegal occupations.
Disaster recovery and local tax code adjustments
The final slate of updates includes critical provisions for how local governments manage recovery efforts following natural disasters. House Bill 30 allows for the implementation of a “Disaster Debris Rate,” which helps cities and counties manage the high costs of cleanup and infrastructure repair. This measure provides a more efficient pipeline for local leaders to access necessary funds without needing to hold a public election immediately following a crisis. It aims to accelerate the restoration of community services and the removal of hazardous materials from public spaces.
To protect taxpayers, the law also prevents local governments from unilaterally raising property tax rates above the voter-approved limit in the year following a disaster. This ensures that while local leaders have the tools to recover, residents are not burdened with sudden, permanent tax hikes during a time of financial stress. These Texas laws create a more predictable fiscal environment for both municipal governments and the families they serve. The balance between emergency flexibility and taxpayer protection is a key theme of the state’s disaster response strategy.
Other notable measures include Senate Bill 11, which provides protections for victims of human trafficking who were coerced into committing non-violent offenses. This law ensures that victims can seek justice and rehabilitation without being penalized for actions they were forced to perform under duress. Together, these legislative updates reflect a comprehensive approach to governance that addresses technology, security, and social welfare. As the state moves further into 2026, the real-world impact of these policies will continue to shape the daily lives of millions of people.
