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2025-067 89th Legislative Implementation September 05,2025 Report No. 2025-067 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: Provide a summary of bills passed by the 89th Legislature's Regular Session that require the City of Denton to implement new procedures and/or make code amendments. BACKGROUND: The 891h Legislature convened on January 14, 2025, and adjourned on June 2, 2025 for the biannual, 140-day legislative session. In total, 8,719 bills were filed and 1,213 were passed and/or sent to the Governor.As a political subdivision of the State,the City of Denton has a vested interest in the actions taken by the State Legislature during session. Of the 1,213 bills passed,roughly 260 of them relate to city business. Following the veto period, which ended on June 22, 2025, staff reviewed the bills passed and have developed plans to implement the bills that require action from the City of Denton. DISCUSSION: This report outlines the bills that necessitate policy or code amendments, departmental process changes, new training or reporting requirements, and other implementation efforts across City departments. It also includes estimated timelines for Council consideration and implementation. Regulation Bill Summary Action Est. Council Est. Consideration Implementation HB 2464 Prohibits municipalities from Policy/Code 11/19/2025 11/19/2025 regulating a home-based business Amendment HB 303 Deregulation of honey production Department N/A 9/l/2025 operations. process change SB 1008 Regulation of food service industry. Department 1 N/A 9/l/2025 process change HB 2844 Regulation of mobile food service Policy/Code Spring 2026 7/l/2026 establishments. Amendment HB 2464 prevents cities from prohibiting the operation of or requiring a license or permit to operate a no-impact home-based business. The bill became effective immediately upon passage, and staff have reviewed all home occupation business requests to ensure compliance. The new law requires an update to the Denton Development Code to amend existing definitions of a"no-impact home business", as well as amending the use specific standards for home businesses. Implementation will be completed upon Council consideration on October 21, 2025. September 05,2025 Report No. 2025-067 HB 303 prevents cities from regulating honey production operations. The City does not currently regulate the production of honey but does regulate sellers of honey as a permitted agricultural vendor or farmers market food vendor. With the implementation of this law, the City will not regulate sole honey production operations and establishments and/or vendors that sell only honey products will not be required to obtain a farmers market food permit. HB 303 goes into effect and all process changes were be implemented on September 1, 2025. SB 1008 provides new provisions for city regulation of the food service industry. Specifically, restricting the requirement(s) of a permit, license, or certification of food service establishments to only if the same requirement(s) would apply to a similar entity or person within the city limits, and prohibits a city from charging an establishment for a permit fee for the retail sale of alcohol if the establishment has already paid a fee to any county, city, or public health district, or a fee that would be paid to the Texas Department of State Health Services. Additionally, it prohibits a city from requiring a food service establishment to obtain a sound regulation permit, charging a sound regulation fee, or otherwise prohibiting sound-related activity. The implementation of this law will require minor department process changes, including the development of a schedule of fees to be submitted to the Department of State Health Services. Currently, the City only regulates and/or permits establishments that would be regulated by the Department of State Health Services at a cost that is less than the DSHS permitting fee and does not prohibit sound-related activities at a food service establishment outside of the current city sound regulation that does not conflict with this new or existing state law. The implementation of this law were completed on September 1, 2025. HB 2844 preempts a city, county, or public health district from requiring small-scale and/or mobile food businesses to obtain a permit or pay a permitting fee to operate a food service establishment if the business holds a permit issued by the Texas Department of State Health Services for that purpose or is a licensed food manufacturer. Additionally, it preempts a city's authority to regulate mobile food vending in a way that conflicts with state law and requires the Health and Human Services Commission to adopt rules for mobile food vendors to address health and safety risks. This new law will require amendment(s) to the City of Denton Code of Ordinances,Chapter 13—Food and Food Service Establishments by July 1,2026. Staff will present these changes to Council for consideration in Spring of 2026. Additionally, the bill continues to allow cities to regulate mobile food businesses through the zoning code and fire code. Staff are currently working on the proposed code amendments presented to Council on April 1, 2025, as well as conducting the food truck public engagement as requested by Council. September 05,2025 Report No. 2025-067 Land Use Bill Summary Action Est. Council Est. Consideration Implementation HB 24 Modifies procedures for changes to a Policy/Code 11/18/2025 11/18/2025 zoning regulation or district boundary Amendment HB 2025 Modifies the filing for record of a plat, Department N/A 9/l/2025 replat, or amended plat or replat of a process change subdivision of real property or a condominium. HB 2512 Clarifies the requirements for Department N/ 8/1/2025 requesting removal from a ci 's ETJ process change SB 1341 Amends the definition of Policy/Code 11/18/2025 11/18/2025 "manufactured home"to the statutory Amendment citation for the definition of manufactured home under federal law. SB 1883 Relating to the approval of land use Policy/Code 9/30/2025 11/18/2025 assumptions, capital improvement Amendment Tans, and impact fees. SB 2965 Relating to territory in an emergency Department N/A 9/l/2025 services district that is annexed by a process change municipality SB 1567 Relating to the authority of home-rule Code/Policy 11/18/2025 11/18/2025 municipalities to regulate the Amendment occupancy of dwelling units. HB 24 modifies the procedures and requirements for protests of a proposed change to a zoning regulation or district boundary. Specifically, it requires a protest must be written and signed by the owners of, a) at least 20 percent of the area of the lots or land covered by the proposed change, or b) at least 60 percent of the area of the lands or land immediately adjoining the area covered by the proposed change and extending 200 feet from the proposed change area. The implementation of this new law will require amendments to the Denton Development Code to reflect the new procedures and population thresholds for protests. The Council will have the opportunity to review and consider the revisions on November 19, 2025, and implementation will follow Council's consideration. HB 2025 eliminates the requirement for a plat record, replat, or amended plat request to attach a tax receipt indicating that the taxes imposed by the applicable taxing units have been paid or not yet been calculated. The City will modify the current process for plat requests to remove the tax receive requirement as of September 1, 2025. September 05,2025 Report No. 2025-067 HB 2512 requires that a resident may only file a petition for release from the ETJ if the resident resides in the area subject to release, and if a city receives a petition for release, the city must provide notice to the residents and landowners no later than the seventh business day after the date of receipt. Additionally, the bill stipulates that before an area is released from the ETJ by election, a landowner in the area must be provided with an opportunity to have their property remain within the city's ETJ. The bill also explicitly allows the reduction in size of a city's ETJ by an ETJ removal petition without the consent of the City Council. Implementation of this bill will adhere to the City's litigation position. SB 1341 amends the definition of"manufactured home"to the statutory citation for the definition home under federal law.While the implementation of this bill will not require any process changes, the Denton Development Code will be amended to reflect the new definition.Council will consider the code amendment on November 18, 2025. SB 1883 makes several changes to the assessment and collection of impact fees. It requires cities to make land use assumptions and capital improvement plans publicly available at least 60 days prior to the first publication of notice for any public hearing on those plans; it changes the approval threshold for the imposition of an impact fee, now requiring a two-thirds supermajority vote by the governing body; and imposes a three-year moratorium on increasing impact fees after they are adopted or last raised. Additionally, it amends the advisory committee (Capital Improvement Advisory Committee) composition requirements, raising the industry representation threshold from 40 to 50 percent, and removes the provision allowing planning and zoning commissions to serve as the advisory committee. Lastly, it mandates an independent financial audit prior to the adoption or increase of an impact fee. The bill will require the City to amend city ordinances to establish a new Capital Improvement Advisory Committee, as the Planning and Zoning Commission will no longer be eligible to serve in that capacity. Staff will share information regarding this new committee on September 30, 2025. While the bill decreases the frequency of impact fee updates to every three years, work that is currently in progress is allowed to continue under the bill's provisions if it is completed by December 1, 2025. SB 2965 prohibits the disannexation of territory from an emergency services district (ESD) by a city if the city cannot meet or exceed the services currently being provided by an ESD, and creates a process for an ESD to contest the removal of territory from an ESD once it is annexed by a city. The process created by the bill compels a city and an ESD to binding arbitration if there is a disagreement about whether the city can provide adequate emergency services to the area the city seeks to remove from the ESD. There are areas in southern Denton where the City's ETJ overlap with Denton County ESDs. This bill requires minor modifications to department standard operating procedures that were implemented by staff by September 1, 2025. SB 1567 prohibits a city from adopting or enforcing a zoning ordinance that limits the number of people who may occupy a dwelling unit based on age, familial status, occupation, relationship September 05,2025 Report No. 2025-067 status, or relation to each other. The Denton Development Code currently restricts the number of non-related occupants in a single unit to four. A code amendment to remove the existing standards will be necessary to comply with this new law and will be brought to Council for consideration on October 21, 2025. City Administration Bill Summary Action Estimated Estimated Council Implementation Consideration HB 132 Confidentiality of information used Department N/A 9/l/2025 to prevent, detect, respond, or process change investigate a hostile act of a foreign adversary. HB 149 Provides that a government agency Department N/A 9/l/2025 that makes available an artificial process changes intelligence (AI) system that is intended to interact with consumers must disclose to each consumer and limits the use of AI and biometric data. HB 762 Limitation of severance pay for city New/Updated 7/22/2025 8/19/2025 employees and contractors. contract language 00 HB 1522 Relating to notice of a meeting held Department N/A 9/l/2025 under the open meetings law. process change HB 3112 Confidentiality of cybersecurity Department N/A 9/l/2025 discussions Process Change HB 3512 Requires municipal employees and New training N/A 8/31/2026 officials to complete artificial intelligence training. HB 4214 Public access to the mailing address New reporting N/A 9/1/2025 and email to request public requirement information under the public information law. HB 5331 Prohibits a municipality's New contract N/A 9/l/2025 cybersecurity insurance contract language from circumventing state laws related to cybersecurity incident reporting. SB 1173 Increases the competitive bidding Policy/code 10/21/2025 10/21/2025 threshold from $50,000 to $100,000. amendment SB 1964 Requires local governments to New department N/A Awaiting state complete a review of the I process I rule making September 05,2025 Report No. 2025-067 deployment and use of a heightened scrutiny artificial intelligence system. SB 2570 Legal justification for the use of Department N/A 9/1/2025 force with a less-lethal force Process Change weapon. HB 132 amends existing law to make confidential the information collected, assembled, or maintained by or for a governmental entity for the purpose of preventing, detecting, or responding to an act of terrorism or related criminal activity. This new law will modify potential responsive documents subject to the Public Information Act. Staff is aware of this change and are in compliance with the new law by September 1, 2025. HB 149 provides that a government agency that makes available an artificial intelligence (AI) system that is intended to interact with consumers must disclose to each consumer,before or at the time of interaction, that the consumer is interacting with an AI system. It prohibits a government agency from using an Al system for social scoring purposes and prohibits a government entity from developing or deploying an Al system with biometric identifiers of individuals and the gathering of images or other media for the purpose of uniquely identifying a specific individual, if doing so, would infringe any right guaranteed under state or federal law. The City does utilize an Al chat feature on the City website. Staff will update the feature to include a disclaimer to ensure compliance with this new law. The City is not currently in the practice of utilizing social scoring or utilizing Al with biometric identifiers that would infringe upon any state or federal rights protections. Staff is conducting additional reviews to ensure all consumer facing Al is identified and appropriately disclosed. HB 762 limits the severance pay for government employment agreements and contracts entered into after September 1, 2025. For agreements and contracts entered into after September 1, 2025, severance pay for employees and contractors of political subdivisions is limited to no more than 20 weeks, excluding accrued paid time off or vacation leave. Additionally, the bill prohibits the provision of severance pay if the employee or contractor is terminated for misconduct and requires severance agreements to be posted on the subdivision's website. The City's current hiring practice only provides for employment contracts with the four Council appointed positions, City Manager, City Attorney, City Auditor, and Municipal Judge. Staff provided this information to Council on July 22, 2025, and updated contracts were approved by Council on August 19, 2025. HB 1522 modifies the Open Meetings Act to require the notice of a meeting to be posted at least three business days prior to the scheduled date of the meeting,while the previous provision allowed for 72-hour notice. Staff have modified the posting schedule for City Council meetings, as well as all boards, commissions, and committees. It has been the practice for staff to post the City Council meeting agenda by 5:00 pm on the Friday before the Tuesday meeting. With this new requirement, September 05,2025 Report No. 2025-067 City Council meeting agendas will be posted by 5:00 pm on the Wednesday before the meeting. Attached is the posting guide shared with departments to ensure compliance with the new law. HB 3112 modifies the Open Meetings Act to allow governmental bodies to convene in closed session to deliberate matters related to cybersecurity, and/or measures intended to protect critical infrastructure within the entity's jurisdiction. Staff have added this provision to the existing exemptions claimed under the Open Meetings Act and are in compliance with the new law. HB 3512 requires local government employees and elected/appointed officials to complete a certified artificial intelligence (AI) training program. It requires the Texas Department of Information Resources (DIR) to certify at least five Al training programs for state and local employees to utilize. DIR has not yet published the list of training programs and resources on their public webpage. Once it is made available through DIR, staff will provide additional instructions on the training as they incorporate it into the city's existing training program. HB 4214 requires governmental bodies to notify the attorney general of the mailing and electronic address designated to receive written requests for public information and requires the attorney general to create and maintain a publicly accessible database of these addresses. The notice must be provided to the attorney general by October 1 of each year. The Attorney General's Office has communicated their intention to accept these notices once the database is in place. Staff will maintain communication with the office and will implement a procedure to ensure annual compliance. HB 5331 provides that contract language in a cybersecurity insurance contract or contract for goods and services that restricts a state agency or local government's compliance with or otherwise circumvents state laws that require notification of cybersecurity incidents to Texas DIR is void and unenforceable. Staff are reviewing existing contracts to ensure compliance and will provide standard language to this effect on future contracts, amendments, and renewals. SB 1173 increases the competitive bidding threshold from $50,000 to $100,000. The competitive bidding threshold is the threshold at which competitive bidding (procurement process) is required for city purchases. Implementation will require revising the City's procurement policy to reflect the new threshold, which will require Council consideration. Staff will bring this item forward on October 21, 2025. SB 1964 requires local governments to complete a review of a heightened scrutiny artificial intelligence system and provide the review to DIR. Additionally, it directs DIR to establish an Al code of ethics for state agencies and local governments that procure, develop, or use a heightened scrutiny AI system and develop standards for management and governance of these systems. Staff are currently awaiting direction from DIR to ensure compliance with this new law. Staff will also need to review any required notices that need to be provided under Section 2054.711, September 05,2025 Report No. 2025-067 SB 2570 provides that a peace officer or guard of a correctional facility who is engaged in the discharge of their official duties is justified in using force with a less-lethal force weapon when and to the degree the person reasonably believes the force was necessary to accomplish the person's duties,and if the person's use of the weapon is in substantial compliance with the person's training. Staff are reviewing department training materials to ensure compliance and will make amendments to the training as necessary. Denton Municipal Electric (DME) Bill Summary Action Estimated Est. Council Implementation Consideration HB 144 Management, inspection, and New reporting N/A 1/l/2027 reporting requirements for utility requirement distribution poles. HB 145 Risk mitigation planning, liability, New reporting N/A 9/l/2025 and reporting requirements for requirement electric providers. HB 1584 Relating to the creation of a list of Department N/A 9/l/2025 priority facilities by electric process change utilities. HB 1606 Relating to notice provided to a Department N/A 8/31/2025 retail electric customer of the process change procedure for requesting vegetation management near a transmission or distribution line. SB 1202 Third-party review of property Website update N/A 9/l/2025 development documents and inspections of improvements for home backup power installations. SB 1697 Relating to a customer guide to Department N/A Awaiting PUC home solar energy devices. process change guide release SB 1789 Relating to electric service quality Department N/A Awaiting PUC and reliability; providing an process change standards administrative penalty. SB 1991 Relating to information regarding Website update N/A 9/l/2025 certain charges for services provided by municipally owned utility systems. September 05,2025 Report No. 2025-067 HB 144 requires electric utilities that distribute energy to the public to submit to the Public Utilities Commission (PUC) a plan for the management and inspection of distribution poles the utility owns, and no later than May 1 of each year, submit an update to the PUC detailing the entity's compliance with the plan's objectives. This program must be adopted by the PUC by January 1, 2027, and staff will be prepared to comply upon its creation. HB 145 requires electric utilities to insure or self-insure against potential damages the utility may be liable for resulting from personal injury or property damage caused by wildfire. The bill instructs that the PUC has the authority to approve the insurance plan. The bill also requires utilities to submit a wildfire mitigation plan. DMEs existing vegetation management plan will comply with the requirements of this new plan and will submit it to the PUC upon completion of the rulemaking period. HB 1584 requires electric utilities to maintain a list of priority facilities in its retail service area and defines "priority facility" as anywhere considered crucial for public safety, including a hospital,police station, fire station, critical water or wastewater facility, or jail. It requires a utility to provide on its website a mechanism for a facility to request to be added to the priority list, as well as requires the list to be provided to Texas Department of Emergency Management (TDEM) upon request. DME maintains a list of critical infrastructure in the city and will prepare for its inclusion on the city's website in order to comply with the new requirements. HB 1606 requires a municipally owned electric utility to periodically provide information about the procedure for a customer to request vegetation management near a transmission line with bills sent to retail customers. Staff will create additional materials to be included in utility bills that comply with these new requirements. SB 1202 allows authorized third parties to review development documents and conduct inspections required by a regulatory authority to install home backup power generation. Within 15 days of completing the review,the third party must provide notice to the regulatory authority of the results, and in turn the regulatory authority issue approval within two business days of receiving the notice. Implementation will require minor updates to the permitting process and updating the City's website with the new requirements. SB 1697 requires the PUC to develop a guide to provide customers with information on solar energy devices for a home and provides that an electric utility provider should include a link to the guide on the utility's website and provide information about accessing the guide on each utility bill. Staff are currently awaiting the publishing of the PUC's guide and will update the website and append information regarding the guide to utility bills upon its release. SB 1789 requires the PUC to develop standards for pole inspections, repairs, reinforcements, or replacements, and requires electric utilities to report annually on pole maintenance efforts. Additionally, it authorizes the PUC to take action when a utility fails to address degraded September 05,2025 Report No. 2025-067 infrastructure. Staff are currently awaiting the publishing of the PUC's standards and will comply with all requirements including annual reporting. SB 1991 requires a municipally owned utility to publish terms and conditions of operating, maintenance, replacement, or improvement charges on the utility's website within 30 days of the adoption of a change. Currently, rates and descriptions are posted within the timeframe required, and this practice will continue. Staff will review existing procedures and will modify posting language to comply with the new law. CONCLUSION: City staff have conducted a thorough review of the applicable legislation and are actively working to ensure timely and compliant implementation. Where necessary, items will be brought forward for Council consideration in accordance with the timelines outlined in this report. Staff will continue to monitor rulemaking processes and provide updates as additional guidance becomes available from state agencies. ATTACHMENTS: 1. Public Meeting Posting Schedule STAFF CONTACT: Kristi Fogle Chief of Staff Kristi.Fogle@cityofdenton.com (940) 349-8565 REQUESTOR: Staff Initiated STAFF TIME TO COMPLETE REPORT: 40 PARTICIPATING DEPARTMENTS: City Manager's Office, Legal Three (3) Business Day Posting Schedule Effective September 1, 2025 all agendas must be posted three (3) business days prior to the scheduled meeting. DAY TO EFFECTIVE 9/1/25, REQUIRED 3 BUSINESS DAYS FOR A POST MEETING ON Tuesday Wednesday Thursday Friday Monday (8 to 5) 1 2 3 (any time) Wednesday Thursday Friday Monday Tuesday (8 to 5) 1 2 3 (any time) Thursday Friday Monday Tuesday Wednesday (8 to 5) 1 2 3 (any time) Friday Monday Tuesday Wednesday Thursday (8 to 5) 1 2 3 (any time) Monday Tuesday Wednesday Thursday Friday (8 to 5) 1 2 _ (any time) REMEMBER! CITY OF DENTON CLOSURE DAYS DON'T COUNT AS BUSINESS DAYS! Business days are Monday through Friday except for City of Denton recognized holidays. Holidays*that don't count as business days are as follows: New Years Day—January 1 Martin Luther King, Jr.'s Birthday—Observed 3rd Monday in January Memorial Day—Observed last Monday in May Juneteenth National Independence Day—June 19 Independence Day—July4 Labor Day— First Monday in September Veterans Day—November 11 Thanksgiving Day—4th Thursday in November Day after Thanksgiving Day—4th Friday in November Christmas Eve— December 24 Christmas Day— December 25 *Holidays occurring on Saturday will be observed on the preceding Friday and holidays occurring on Sunday will be observed on the following Monday per City of Denton Policy 107.2.