New Texas laws in effect on Jan. 1: property taxes, insurance, and limits on AI

There were 31 new Texas laws that took effect on Jan. 1, ranging from property tax reform to insurance industry changes, most of which may impact businesses across the Rio Grande Valley. 

Lawmakers argued that the tax on intangible personal property, which Texas was one of eight states that still levied until this year, discouraged business investment. Now the value of patents, intellectual property, and trademarks is no longer taxable. 

HB22 was authored by State Rep. Candy Noble, R-Lucas, and sponsored by State Sen. Adam Hinojosa, R-Corpus Christi. 

Municipalities must now hold an election after a natural disaster before adopting a property tax rate that’s higher than previously approved by voters. The goal is to limit how much taxing entities can raise property taxes after natural disasters for essential assistance only. The bill was filed in response to a double-digit tax increase in Harris County after Hurricane Beryl. 

HB30 was written by State Rep. Ellen Troxclair, R-Lakeway, and sponsored by State Sen. Paul Bettencourt, R-Houston. 

Limits on the use of artificial intelligence are now in place. For example, companies may not collect biometric data, such as fingerprints, without an individual’s consent and use it to train AI models. Likewise, any AI used in healthcare settings requires patients’ permission. 

HB149 was penned by State Rep. Giovanni Capriglione, R-Southlake, and sponsored by Charles Schwertner, R-Georgetown. 

Landowners who inherit property once used for agricultural purposes that continues to be used as such won’t have to pay property taxes based on the market value of the land – unless land use changes. The goal of this bill is to prevent heirs from paying even one year’s worth of taxes based on market value. 

HB1244 was authored by State Rep. Ryan Guillen, R-Rio Grande City, and sponsored by Senator Bettencourt. 

There’s a new law that postpones delinquency charges on property tax payments if the tax collector’s office is closed on the delinquency date, and the tax bill is due the next day it’s open. 

HB1392 was written by State Rep. John Bucy III, D-Austin, and sponsored by Republican Senator Bettencourt. 

Insurance companies must now provide policyholders with a written reason for why their policies were declined, canceled, or not renewed. The goal is to give policyholders more information. 

HB2067 was penned by State Rep. Dennis Paul, R-Houston, and co-sponsored by State Sen. Juan Chuy Hinojosa, D-McAllen. 

A new law preserves property tax exemption status for charitable organizations that operate nursing homes for senior citizens in Texas. 

HB2525 was authored by State Rep. Drew Darby, R-San Angelo, and sponsored by State Sen. Angela Paxton, R-McKinney. 

Municipalities may grant property tax exemption status to cemeteries without a formal application, and if the chief appraiser is aware that the property is a cemetery, even if the property owner is unidentifiable. The law would expand property tax exemptions to properties used as cemeteries that were not previously eligible for tax-exempt status. 

HB2723 was co-authored by State Rep. Terry Canales, D-Edinburg, and sponsored by State Sen. Royce West, D-Dallas. 

Property owners who split their tax bills into two payments have more time to pay taxes without incurring penalties and interest if there’s a delay in how quickly taxing entities mail tax information. It applies to tax bills mailed after Nov. 30 that would be due before Dec. 1. 

HB2742 was penned by State Rep. Cody Vasut, R-Angleton, and sponsored by Senator Paxton. 

Oil and gas companies with horizontal shale wells now have a new economic incentive to extract as much as they can from each well. Often in the industry, after initial production, wells may sit unused because they’re not as profitable. Vertical wells already have a similar deal, known as the Enhanced Oil Recovery Tax Incentive. 

HB3159 was written by Representative Darby and sponsored by State Sen. Phil King, R-Weatherford. 

Texas is making it easier for individuals inheriting timberland by removing late-application penalties, as many heirs do not realize that a new application for an open space or timberland appraisal is required. 

HB3370 was authored by State Rep. Trent Ashby, R-Lufkin, and sponsored by State Sen. Robert Nichols, R-Jacksonville. 

Lawmakers streamlined the process for heavy equipment rental dealerships to file property taxes. 

HB3424 was written by Representative Capriglione and sponsored by Senator Bettencourt. 

The Texas Workforce Commission is closing a loophole with a new law that permitted bad actors to qualify for unemployment benefits. Individuals would mislead the state if they were discharged without being eligible for unemployment benefits and use a fake employer. The law clarifies that instead of using simply the employer who paid for the last 30 hours of work, it would be the previous company the unemployment claimant worked for. 

HB3699 was authored by State Rep. Hubert Vo, D-Houston, and sponsored by State Sen. Carol Alvarado, D-Houston. 

A new law enables digital processing of public securities as a cost-effective alternative to printing documents. 

HB4395 was authored by State Rep. Chris Turner, D-Grand Prairie, and sponsored by Senator West. 

Administrative fees, once collected by financial institutions for non-real property loans and secondary mortgages, once submitted to the Texas Comptroller’s office, have been eliminated to improve efficiency and reduce government fees. 

HB4738 was written by State Rep. Charlie Geren, R-Fort Worth, and sponsored by State Sen. Judith Zaffirni, D-Laredo. 

The Texas Comptroller will no longer require retail charge agreement holders — basically retail stores or financial institutions — to remit 50 cents from every delinquency charge of $10 or more, which previously funded research for the Finance Commission. The fee will no longer be collected as part of a government efficiency and cost-reduction initiative. 

HB4739 was penned by State Rep. Geren and sponsored by Sen. Schwertner. 

Lawmakers are preparing the legal code to attract a national stock exchange by streamlining the state’s franchise tax. 

SB1058 was written by State Sen. Tan Parker, R-Flower Mound, and sponsored by Representative Capriglione. 

Lawmakers revamped the insurance code to mitigate the retaliatory tax burden on Texas insurance companies operating in other states, thereby lowering the tax rate for those businesses. 

SB1455 was written by State Sen. Brent Hagenbuch, R-Denton, and sponsored by State Rep. Cole Hefner, R-Mt. Pleasant. 

The state updated its regulation to ensure continuing care retirement communities, which are often faith-based organizations that provide skilled nursing facilities for residents, qualify for Texas Department of Insurance certificates. 

SB1522 was authored by State Sen. Charles Perry, R-Lubbock, and sponsored by State Rep. Toni Rose, D-Dallas.

Texas Realtors will be required to offer a written agreement with a potential buyer of residential properties before showing the property or the buyer making an offer, to provide transparency about the business interaction, which may include commission. 

SB1968 was authored by Sen. Schwertner and sponsored by State Rep. E. Sam Harless, R-Spring. 

Lawmakers are extending and expanding a state franchise tax credit for companies involved in research and development. It was slated to expire in December 2026. Instead, it’s increasing from 5% to 8.7% of new research and development expenditures in Texas eligible for exemption. 
SB2206 was authored by Sen. Bettencourt and sponsored by Rep. Geren.