By Lauren Fairbanks and J Pete Laney
TAD Governmental Relations
Interim legislative committees continue to meet, with the pace of hearings picking up in the Texas House and Senate. A majority of the hearings will wrap up in the next couple of months. The committees then will begin compiling interim reports which are recommendations for the upcoming legislative session.
Screwworm
It is the Texas Association of Dairymen’s priority to continue monitoring the New World screwworm situation to help protect Texas’ dairy industry. As always, please remain vigilant and promptly report any suspected cases to a local veterinarian and the Texas Animal Health Commission. Stay up to date with Texas NWS reporting from the TAHC here, and find a complete list of resources below in this newsletter and on this special TAD web page.
Call for Budget Cuts
Texas’ top elected officials have instructed agencies, appellate courts and universities to cut spending by 3% in their Legislative Appropriations Requests (LARs) for the next two years as a starting point for budget deliberations. Gov. Greg Abbott, Texas House Speaker Dustin Burrows and Lt. Gov. Dan Patrick are framing the request as being fiscally conservative while also funding priorities such as property tax cuts. K-12 public education funding and the state’s new school choice program are exempt from the 3% cut, as is funding needed to maintain various social programs required by state law and to cover payroll growth in state pension systems and employee benefits.
The $338 billion budget passed by the Legislature in 2025 will cover spending through August 2027. The 3% cut directive applies to the budget requests agencies will submit for next year’s legislative session, when lawmakers will approve a new state spending plan covering September 2027 through August 2029. The leaders outlined four priorities for the next legislative session beginning in January 2027:
- Affordability for Texas families and homeowners
- Fiscal restraint through 3% spending cuts — Most state agencies must reduce baseline budget requests by 3%
- Steady education funding — Protecting historic investments in public education and teacher pay
- Property tax relief — Continuing the $51 billion in property tax relief delivered by the 89th Legislature
Data centers and transmission lines
Legislators continue holding committee hearings on data centers. Recently, Abbott issued a letter directing the Public Utilities Commission (PUC) and Electric Reliability Council of Texas (ERCOT) to perform comprehensive audits on all data center projects in Texas. All data center projects have been suspended pending the completion of all audits.
Dan Diorio, on behalf of the Data Center Coalition, responded by saying, “The Data Center Coalition and its members strive to be good actors where we operate, which is why we are hopeful this directive from the Governor will help separate those who are responsible water and energy stewards from those who are not. Done correctly, this review can showcase the good actors in the data center industry rather than delaying them unnecessarily, ensuring Texas will continue to be the national leader in economic development.”
The Senate Business and Commerce committee met on July 29 to hear the testimony from Texas landowners and their representatives, review the proposed 765kV transmission line route plans, and examine their impact on Texans. Following the 15-hour hearing, Committee Chairman Charles Schwertner released a statement on July 31 calling on the PUC to halt existing certificates of convenience and necessity process (CCN) applications until the Legislature has an opportunity to consider the concerns raised in committee.
While the PUC cannot comment on pending cases, Chairman Thomas J. Gleeson reiterated during his testimony in the Senate Business and Commerce committee that the commission would provide a day for affected landowners to present oral arguments prior to making a decision on the routing cases.
The House State Affairs committee will meet Aug. 19 to hear public testimonies and continue the discussion on 765-kV transmission lines and data centers.
Texas Supreme Court Case on Repurchasing Land
The Texas Supreme Court recently ruled in the State of Texas v. JRJ Pusok Holdings LLC that the State cannot use sovereign immunity to prevent landowners from repurchasing property acquired through eminent domain when it is no longer needed for public use. The Court’s decision confirms that condemnation does not eliminate a landowner’s repurchase rights of the unused part of the property. This decision strengthens the rights of Texas property owners, including farmers and ranchers, by giving them the opportunity to repurchase condemned land the State no longer needs. For more information, click here.
