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Top 5 New Business Laws in Texas in 2023

Updated: Feb 13

It’s a new year, and January 1 almost always brings with it new laws and regulations. In Texas, the big news has been for property taxes (SB 12) and the courts (HB 3774). But there are a few items that businesses, contractors, developers, etc. should be aware of this year.

I did the same for California here. busi


5. Regulation of Hydrofluorocarbons (SB 1210)


SB 1210 amends the Texas Clean Air Act, so that building codes may not prohibit the use of a substitute refrigerant authorized pursuant to federal law. In short, HVAC contractors may now use those substances authorized pursuant to the federal Clean Air Act. See 42 U.S.C. 7671k.

Although that might not seem far-reaching, American manufacturers of HVAC equipment have invested millions in researching and developing new technologies related to refrigerants, but remain unable to use them. Apparently many building codes across the United States do not allow for substitute refrigerants otherwise permitted by federal law. As a result, as some refrigerants are phased out, new ones remain prohibited. SB 1210, by amending Tex. Health & Safety Code section 382.551, changes that at least in the state of Texas.


4. Overhaul of Licensing Regulations (HB 1560)


HB 1560 is an occupational licensing reform bill, affecting a wide variety of industries. Its purpose is to eliminate certain license types, remove unnecessary regulations, and streamline certain licensing programs, particularly with respect to barbers and cosmetologists.

To give you an idea of some changes: people issuing real estate services contracts (home warranties) no longer need a a license from the Texas Real Estate Commission. Polygraph examiners no longer need a license. Combative sports seconds, matchmakers, and event coordinators no longer need a license. And barber and cosmetology licensing is being consolidated to make it easier to obtain a license.


Importantly, HB 1560 gives the Texas Department of Licensing and Regulation and the Texas Commission of Licensing Regulation time to make a determination as to the effects of the deregulation. In short, HB 1560 may be the beginning of other licensing reform to come.


3. Plain Language Statement for Proposed Rules (HB 1322)


HB 1322 seeks to make the rulemaking process easier to understand for the average Texas resident. The bill amends Tex. Gov Code section 2001.023. Effective September 1, 2023, any proposed rule filed with the Secretary of State shall include a plain statement (meaning concise and well-organized) explaining the proposed rule in both English and Spanish. The purpose is to make it clear exactly what a proposed rule would do.


Although this is not business-specific, the change will help small business owners understand the rules and regulations applicable to them and their industries.


2. Expiration of Chapter 313, Subchapters B and C


Chapter 313 is a controversial portion of the Tax Code that has aided in Texas attracting numerous businesses since its adoption in 2001. Chapter 313's role in that attraction largely involved targeted tax breaks. Proponents have called it a key tool in attracting businesses. Critics of Chapter 313 claim that it was frequently abused, and as a result, cost taxpayers (and public schools) billions of dollars. One month in, it is difficult to predict what the long-term effects of the expiration might be.


In addition to the expiration, the Supreme Court of Texas declined to intervene (Cause No. 22-1119) in the case of businesses not having their applications processed by the end of 2022. Those businesses thus lost out on those tax breaks, potentially costing them millions of dollars.


1. James Construction Group, LLC v. Westlake Chemical Corp. (650 S.W.3d 392)


In May 2022, the Texas Supreme Court held that actual notice was insufficient for purposes of a "written notice" requirement in a contract. That wasn't the entirety of the case, but for purposes of this blog post, the Supreme Court ruled that substantial compliance with a strict written notice requirement did not satisfy that written notice requirement. The fact that one party had actual notice did not absolve the notifying party of its contractual obligation to provide written notice.


I'm going to cover this case in a future "Common Clauses" post. For now, please make sure you are aware of, and familiar with, the provisions in your contracts, especially if you use and reuse templates.


Conclusion


These are (in my opinion) the highlights. There are a number of others statutes, case law, and regulations affecting businesses in 2023 in Texas, and they are often industry-specific. It’s a good idea to check in with your business attorney to see if any other changes may affect your business.

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