TABC says 2025 legislative session brought major funding wins; governor vetoes hemp ban, calls special session

TABC Director of Public and Government Affairs Jared Staples and Chief Financial Officer Conrad Swan briefed commissioners on June 24 about the 2025 legislative session outcomes and what the session means for agency operations and budgets.

Staples said the agency received 83% of the new funding it requested and 100% of the rider changes it sought. He listed six new alcohol-related laws that will affect industry operations, including a requirement that some retail sellers scan a customer's ID before off-site alcohol sales, a provision allowing airlines to store alcohol within five miles of served airports, a change to licensing for out-of-state brewers, relaxed age rules for certain private wine sales, expanded event sales for mixed beverage permit holders at Texas Motor Speedway, and a law requiring wholesalers to timely pay distillers for purchases.

Staples also highlighted several general agency laws that will affect TABC: new standards and reporting requirements for state use of artificial intelligence; a digital modernization requirement to improve agency online services and accessibility; creation of a Texas Cyber Command and additional cybersecurity training and testing requirements for agencies; standards for telework authorizations; and establishment of a Texas Regulatory Efficiency Office to review and streamline rules.

Staples told commissioners the governor vetoed Senate Bill 3, which would have banned consumable hemp products containing THC, and announced a special session set for July 21 to consider a regulatory framework for consumable hemp products. Staples said TABC has recently helped draft regulatory language and stands ready to assist the governor and the legislature if requested.

Conrad Swan gave a budget recap showing the agency's base appropriation was received as requested and that several exceptional items secured funding: $5 million for hiring and retaining peace officers, $3 million for IT solutions and quality service, $2.2 million for technology support and licenses, and an appropriation for vehicle replacement included in a supplemental bill. Swan said some appropriations were included in House Bill 500 as supplementals and are available immediately; other funding was placed in the General Appropriations Act for fiscal years 2026-27.

Swan noted riders of interest: one ended a restriction on out-of-state travel for agency employees (with a process to follow), Article IX changes that double stipends available to certified peace officers in Schedule C and allow officers to receive stipends for both education and certification, and a 6% single-year salary increase for certain attorney job classes. He said the agency will engage the Legislative Budget Board to clarify whether agencies must fund the stipend increases or whether there is state funding available.

Why it matters: the legislative outcomes affect agency staffing, training and IT modernization schedules and may affect regulated businesses through new compliance requirements and rule changes. The announced special session on consumable hemp could further expand TABC's regulatory responsibilities.

Ending: Commissioners asked staff to begin internal implementation planning; Director Morlock will lead the agency's rule and implementation work in the coming months and staff will communicate changes to industry stakeholders as rules and guidance are developed.