Texas Enacts New Laws on AI, Tax Relief, and Immigration for 2026

Key Laws Taking Effect in Texas for 2026

A slate of new Texas laws is set to take effect in 2026, addressing key areas such as artificial intelligence (AI) regulation, property tax exemptions for small businesses, immigration enforcement, and streamlined eviction processes. These measures reflect the state’s priorities in fostering economic relief, public safety, and innovation while balancing the needs of various stakeholders.

One of the most significant laws is House Bill 9, which expands property tax exemptions for businesses. Under this legislation, up to $125,000 of business personal property, including inventory, will be exempt from taxation. This move is designed to provide tax relief for small businesses, particularly retailers and manufacturers, by reducing the amount of inventory subject to local property taxes. Business groups have praised the measure as a way to ease operating costs in a challenging economic environment.

Another noteworthy piece of legislation is House Bill 149, which establishes formal regulations governing the use of AI by state agencies and contractors. The law aims to increase transparency, reduce bias, and ensure accountability in AI systems used for government decision-making. As AI tools become more prevalent in areas such as data analysis, public services, and administrative processes, this legislation sets up a framework for oversight to address potential risks while allowing innovation to continue.

On the immigration front, Senate Bill 8 requires Texas sheriffs operating county jails to cooperate with federal immigration authorities through the 287(g) program. This program, a partnership with U.S. Immigration and Customs Enforcement (ICE), allows trained deputies to verify immigration status and carry out certain federal immigration enforcement duties inside local jails. While supporters argue that the measure strengthens cooperation between state and federal authorities, critics have raised concerns about the additional responsibilities and costs it places on local law enforcement.

In the realm of housing, Senate Bill 38 speeds up the eviction process in cases involving squatters or individuals occupying a property without legal permission. The law shortens timelines for courts to act once a landlord files an eviction case related to unlawful occupancy. While landlords are still required to provide notice before filing, the measure limits delays that can keep property owners from regaining control of their homes or rental units. However, tenant advocates have warned that the law could reduce legal protections for individuals in disputed housing situations.

Balancing Innovation and Regulation in AI

The passage of House Bill 149 underscores Texas’s proactive approach to addressing the opportunities and challenges presented by AI. By establishing regulations that promote transparency and accountability, the state aims to position itself as a leader in responsible AI adoption. However, the legislation also recognizes the need to avoid overly restrictive measures that could stifle innovation, striking a balance that supports both ethical use and technological advancement.

The law’s focus on government decision-making reflects a growing awareness of the potential for AI to influence critical public services. By setting standards for AI use in areas such as data analysis and administrative processes, Texas is taking steps to ensure that these systems are deployed in a manner that benefits the public while minimizing risks.

However, the success of the legislation will depend on effective implementation and ongoing oversight. As AI continues to evolve, Texas will need to remain adaptable, updating its regulations to address emerging challenges and ensuring that AI systems are used in a way that aligns with the state’s values and priorities.

Economic Relief and Public Safety at the Forefront

The expansion of property tax exemptions under House Bill 9 is a clear indication of Texas’s commitment to supporting small businesses. By reducing the tax burden on inventory, the state aims to provide much-needed relief to retailers and manufacturers, helping them navigate economic uncertainties and invest in growth. This measure is particularly timely, as many businesses continue to grapple with the lingering effects of the pandemic and broader economic challenges.

At the same time, the state’s focus on public safety is evident in both Senate Bill 8 and Senate Bill 38. The former strengthens cooperation between local and federal authorities in immigration enforcement, reflecting concerns about unauthorized immigration and its impact on public safety. However, the measure has sparked debate, with critics arguing that it could strain local law enforcement resources and potentially lead to profiling or mistrust within communities.

Senate Bill 38, meanwhile, addresses the need for more efficient resolution of housing disputes. By streamlining the eviction process in cases of unlawful occupancy, the law aims to protect property owners’ rights while ensuring that legal protections for tenants are not unduly compromised. However, the balance between these interests remains a contentious issue, and the law’s implementation will likely face scrutiny from both landlords and tenant advocates.

Overall, the new laws taking effect in Texas for 2026 reflect a multifaceted approach to addressing the state’s priorities. From fostering innovation in AI to providing economic relief and enhancing public safety, these measures signal Texas’s commitment to adapting to the challenges and opportunities of the modern era.