Legislative Update: An Examination of Key Bills from the 89th Legislative Session
The 89th legislative session of the Texas Legislature ran from January 14, 2025, to June 2, 2025. During that time, approximately 6,500 bills were filed, with over 300 ultimately passed into law. While these bills dealt with a variety of topics, construction-related issues, including the always vital “lien” and “trust fund” laws, were no exception. Key bills pertaining to the construction industry are detailed below, along with the current legislative status of the bill.
Senate Bill, “SB” 929, implemented a practical change to the Texas mechanic’s lien statute.
As many readers of this article will know, Chapter 53 of the Texas Property Code imposes strict deadlines for sending lien notices and recording lien affidavits. Prior to this session, if a statutory lien notice or filing deadline (under Chapter 53) fell on a weekend or holiday, ambiguity existed regarding whether that deadline was extended to the next business day. Thus, a diligent lien claimant needed to act before the weekend to avoid potentially losing its perfected lien rights. SB 929 addresses this issue. Any such deadline automatically extends to the first business day following the weekend or holiday. This clarification benefits general contractors, subcontractors, and suppliers alike, because it gives the mechanic’s lien statute uniformity with traditional calculations of deadlines under Texas law. The bill passed and was signed into law by Governor Abbott on May 21, 2025 (effective immediately).
SB 841 amended the Texas Construction Trust Fund Act to allow a “qualified assignee” to also be a beneficiary of the construction trust.
Before this legislative session, under the Texas Construction Trust Fund Act, a beneficiary was defined as an artisan, laborer, contractor, subcontractor, or materialman who labors or furnishes labor or material for the construction or repair of an improvement on specific real property. In some cases, general contractors were not allowed to pursue subcontractors who had accepted payment but failed to pay their own subcontractors or suppliers, as only unpaid parties had a legal remedy. SB 841 sought to make this remedy available to any assignee of the party who did not receive payment by classifying an assignee as a beneficiary of the trust funds paid or received. Under the bill, an assignment of interest in unpaid trust funds is only enforceable if made in writing, not earlier than the date the assignee has paid the beneficiary in good and sufficient funds for the assignment, and is not made part of the beneficiary’s construction contract. Further, the assignee must be a beneficiary, trustee, or property owner on the contract, and written notice of the assignment must be provided to the property owner and contractor no later than the seventh day after the assignment is made. The bill seeks to restore the ability of contractors and suppliers to recover unpaid funds by providing for a qualified assignee of a trust fund claim. The bill passed and became effective September 1, 2025.
House Bill, “HB” 2960, voids venue selection clauses calling for out of state venue in disputes arising from construction projects in Texas.
Introduced in response to In re MVP Terminalling, LLC, a 2024 case out of the 14th Court of Appeals which held that because out of state venue provisions were “voidable” under existing law, prohibitions on such clauses could be waived by the parties, HB 2960 amended the Texas Business and Commerce Code to make such provisions void (as opposed to voidable). This adds the necessary clarity to the Texas law prohibiting out-of-state venue selection clauses for Texas contractors. Accordingly, once an out-of-state venue selection clause is determined void under the statute, an action must be brought in the county in Texas where the property subject to the litigation is located, absent an agreement between the parties after the dispute arises. HB 2960 went into effect on September 1, 2025.
SB 783 was introduced in an effort to update regulations for the construction and alteration of residential and commercial buildings.
Specifically, the bill amends Chapter 3000 of the Texas Government Code, which limits governmental actions affecting residential and commercial construction by adding additional exceptions to prohibitions on local ordinances imposing building standards. The additional exemptions include an energy code adopted by the State Energy Conservation Office (SECO) or the Health and Safety Code, an energy and water conservation design standard established by the SECO, and a high-performance building standard approved by the Board of Regents under the Education Code. The bill further clarifies that a new version of the IRC may not be amended or adopted more than once every six years, and requires SECO to first conduct an analysis calculating the impact on housing attainability and the incremental construction cost, including the payback period for any requirements that are more stringent than are in effect immediately before the change takes effect. The bill was introduced with the intention of allowing the SECO to adopt the 2021 IECC and the energy chapter of the 2021 IRC. The bill passed and became effective as of September 1, 2025.
SB 840 amended Chapter 211 of the Local Government Code to loosen zoning restrictions for the development of multi-family and mixed-use housing in commercial / office zones in certain cities.
The bill also restricts fees on new multi-family developments, allows the conversion of commercial spaces into residential use, and preempts certain municipal zoning regulations related to density, parking, height, and setbacks. This legislation benefits developers desiring to convert existing commercial buildings and those constructing new multifamily projects without zoning district limitations. This bill impacts approximately 20 cities across Texas, applying only to those with populations over 150,000 in counties with populations of 300,000. The bill was passed and went into effect on September 1, 2025.
SB 785 seeks to address a growing demand for affordable housing by removing regulatory barriers to the installation of HUD-code manufactured homes.
The bill limits a municipality’s ability to impose additional regulations on manufactured homes that are HUD-compliant. While passed, SB 785 does not take effect until September 1, 2026.
Like several bills this session, HB 1922 was introduced to clarify ambiguity in existing law relating to the accrual of claims under Texas’ “Right to Repair Statute” for government contractors.
The bill specifies that a cause of action accrues on the date the pre-claim report identifying the alleged defects is postmarked by the U.S. Postal Service. The date of the accrual of a cause of action for all other purposes is unaffected by the bill, including the date of an occurrence under applicable insurance policies, and whether the action is barred by limitations or repose. The bill is designed to protect contractors from disputes over technical filing dates. The bill passed and became effective September 1, 2025.
SB 687 extends existing protections for architects and engineers to registered professional land surveyors, as defined by the Occupations Code.
Construction contracts with land surveyors, like contracts with architects and engineers, can no longer contain certain duty-to-defend provisions. Further, the contractual duty of care is defined as services performed with the professional skill and care ordinarily provided by competent land surveyors practicing under the same or similar circumstances and professional licenses. Thus, this bill extends existing protections to an additional class of professionals. SB 687 became effective September 1, 2025.
HB 3005 clarifies that a bona fide dispute for a public work construction contract does not include an audit that continues for more than 60 days after the date of substantial completion.
This bill seeks to prevent delays in agreed-upon payments and the release of retainage already earned by contractors in projects subject to audits (to bring public projects in line with the goals of the Texas Prompt Payment Act). This benefits contractors and will likely facilitate the prompt payment of monies owed. This bill passed and applies to contracts entered into after September 1, 2025.
HB 3228 strengthens protections for landowners by requiring wind and solar facility agreements to require the provider to recycle and dispose of all components should the project be decommissioned.
This bill passed and became effective September 1, 2025.
HB 14 creates the Texas Advanced Nuclear Energy Office to oversee nuclear energy initiatives, funding programs, and provide regulatory assistance.
This bill was introduced in response to ERCOT’s projection that energy demand could reach 150 gigawatts by 2030. In addition to requiring additional studies, it establishes a reimbursement grant of up to $12.5 million, or half of the total project amount, for qualifying projects. The bill’s emphasis on promoting nuclear energy in Texas could pave the way for new construction projects and create opportunities for securing government funding. HB 14 passed and went into effect on September 1, 2025.
SB 1555 establishes a program to make more funds available for construction in Texas.
This program is designed to administer and fund the construction of railroad and rail-pedestrian grade separation projects at the intersection and crossings of railroads that are not part of the state highway system. All grants awarded under this program must be approved by the Texas Transportation Commission and require at least 10 percent of the total project cost to be provided by a source other than the state. This bill passed and took immediate effect on May 24, 2025.
As you can see, 2025 was an active session for construction-related bills, and 2026 promises to be no different! Keep a close eye on legislative activity and updates from the Cokinos | Young team to ensure you are informed of the latest developments.
About the Authors
James Richards is one of a small group of attorneys in the State of Texas to be Board Certified in Construction Law by the Texas Board of Legal Specialization. James serves as a trusted advocate and advisor for his clients and maintains a practice focused on construction, business, real estate, and related legal matters. If you have questions about the new legislative changes, or a related legal inquiry, James can be contacted via email at JRichards@CokinosLaw.com.
Allison Miller a trial attorney with extensive experience in construction, business, personal injury, and related disputes across Texas. Allison takes a practical, results-oriented approach to litigation, exploring creative settlements, mediation, arbitration, and trial strategies to achieve the best outcomes for her clients. If you have any questions about the new legislative updates, or a related legal inquiry, Allison can be contacted via email at AMiller@CokinosLaw.com.
About Cokinos | Young
Cokinos | Young has led Texas construction and real estate law for over three decades. And today, our 100+ dedicated professionals operate coast to coast and proudly handle all aspects of construction law for owner/developers, project managers, general contractors, design professionals, subcontractors, sureties, and lenders. We provide both dispute resolution and transactional services to clients through all phases of commercial, industrial, pipeline, offshore, civil, and residential construction. Our reputation was built on relentless commitment to client service and the industries we serve, and that remains our primary driver. Dedicated. Resilient. Expertise. That’s Cokinos | Young. Learn more at cokinoslaw.com.