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Signed Into Law
Signed June 20, 2025Effective 2025-06-20
HB4850

Regular Session

Relating to programs to promote economic development in the Office of the Governor and to the repeal of the governor's broadband development council.

Government Affairs & Regulatory Compliance Analysis

HB4850: Government Affairs Overview

HB4850 enacts a major deregulation of the "Made in Texas" product labeling standard, lowering the origin requirement from "all or virtually all" to 51% of significant parts and processing. Simultaneously, the law centralizes governance of the Texas Semiconductor Innovation Consortium directly under the Governor’s Office, removing strategic autonomy from the external Executive Committee. Manufacturers must immediately audit supply chains to capitalize on new branding rights, while semiconductor stakeholders must redirect lobbying efforts to the Governor's staff.

Rep. Angie Button·House Bill·Regular Session

Moderate
Low Cost
Effective:2025-06-20
Enforcing Agencies

Office of the Governor • Texas Economic Development and Tourism Office • Texas Semiconductor Innovation Consortium

Business Impact

Who HB4850 Affects

This legislation has regulatory implications for the following Texas businesses and organizations:

Regulatory Priority: moderate

Notable regulatory updates (effective 2025-06-20). Consider how these changes may affect your operations.

🏭

Manufacturing & Business

Affected business types:

  • Manufacturers
  • Industrial facilities
  • Supply chain companies
  • Logistics providers
View all manufacturing & business legislation
🚛

Transportation

Affected business types:

  • Trucking companies
  • Towing operators
  • Fleet operators
  • Logistics providers
View all transportation legislation

Key Operational Considerations

  • 1Marketing & Product Teams: Train staff on the new 51% threshold. They must understand that "Made in Texas" is no longer a subjective claim but a mathematical calculation.
  • 2Procurement Staff: Staff must be trained to flag non-Texas sourcing decisions that might imperil the 51% threshold for key SKUs.

Estimated Cost Impact

lowMinimal cost impact anticipated.

Enforcing Agencies

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HB4850
Relating to programs to promote economic development in the Office of the Governor and to the repeal of the governor's broadband development council.
Moderate Urgency
Passed with Opposition
House Vote139 - 3
YEA
98% in favor142 voting
Senate Vote30 - 1
YEA
97% in favor31 voting
4
Total Opposition Votes
Cost Impact
Low
Effective
2025-06-20
Enforcing Agencies
Office of the GovernorTexas Economic Development and T...Texas Semiconductor Innovation C...
Primary Author: Rep. Angie Button
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: June 20, 2025 (Immediate effect due to supermajority passage).
  • Compliance Deadline: June 20, 2025. You may begin using the "Made in Texas" label under the new 51% standard immediately. Conversely, you must cease reporting to the now-defunct Broadband Development Council immediately.
  • Agency Rulemaking: The Office of the Governor (TEDTO) is now required to develop a comprehensive semiconductor strategic plan (Sec. 481.6565). No statutory deadline exists for this plan, creating a "regulatory gray zone" regarding how future semiconductor grants will be prioritized until the plan is published.

Immediate Action Plan

  • 1. Audit Inventory: Identify SKUs that were previously rejected for "Made in Texas" labeling. Calculate if they now meet the 51% threshold.
  • 2. Update Digital Assets: If compliant, update website copy and digital marketplaces to reflect "Made in Texas" status on June 20, 2025.
  • 3. Secure Supply Chain: Request "Certificates of Origin" from major Texas vendors to substantiate your 51% calculation.
  • 4. Redirect Advocacy: If in the semiconductor sector, move government relations focus from the Consortium Board to the Executive Director of the Texas Economic Development and Tourism Office (TEDTO).
  • 5. Purge Contacts: Remove the Governor’s Broadband Development Council from all regulatory distribution lists.

Operational Changes Required

Contracts

  • Supply Chain Agreements: Review Master Supply Agreements (MSAs) for components used in "Made in Texas" products. You must amend these contracts to require vendors to provide immediate notification of manufacturing location changes. A vendor silently shifting production from Texas to Mexico could drop your total Texas content below 51%, creating immediate liability for false advertising.
  • Grant Agreements: Semiconductor entities currently negotiating with the state should pause and review terms. Signatory authority has shifted; ensure your contracts reference the Office of the Governor rather than the Consortium’s Executive Committee.

Hiring/Training

  • Marketing & Product Teams: Train staff on the new 51% threshold. They must understand that "Made in Texas" is no longer a subjective claim but a mathematical calculation.
  • Procurement Staff: Staff must be trained to flag non-Texas sourcing decisions that might imperil the 51% threshold for key SKUs.

Reporting & Record-Keeping

  • Origin Verification Files: For every SKU carrying the "Made in Texas" label, you must generate and retain a Bill of Materials (BOM) analysis. This document must explicitly calculate the cost of "significant parts" and the location of "significant processing" to prove the 51% threshold is met in the event of a DTPA (Deceptive Trade Practices Act) audit.
  • Semiconductor Reporting: The reporting burden has shifted from the Consortium to the Governor's Office. External stakeholders are no longer responsible for the biennial report to the Legislature.

Fees & Costs

  • No New Fees: The bill does not introduce new filing fees.
  • Marketing Savings: Businesses previously barred from the "Made in Texas" label due to minor out-of-state components can now utilize the brand, potentially increasing market share without altering supply chains.

Strategic Ambiguities & Considerations

  • "Significant Parts and Processing": Section 10 lowers the threshold to 51% of "significant parts and processing," but the statute does not define "significant." It is unclear if this is calculated by cost, weight, or volume.
  • *Risk:* Excluding packaging or labor costs from the calculation could alter your percentage.
  • *Guidance:* Until the Governor's Office issues specific rules, calculate based on Cost of Goods Sold (COGS) excluding packaging to remain defensible.
  • Semiconductor Strategic Plan: The law transfers power to the Governor to create a plan but provides no metrics for success. This grants the Governor's Office broad discretion to pivot funding priorities (e.g., from R&D to manufacturing incentives) without legislative input.

Need Compliance Guidance on This Legislation?

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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

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Legislative Timeline

This bill's path through the Texas Legislature

Filed
Mar 13, 2025
Passed House
May 7, 2025
Passed Senate
May 20, 2025
Signed
Jun 20, 2025
Effective
Jun 20, 2025
TopicsAeronauticsBusiness & CommerceBusiness & Commerce--generalGovernorTransportationTransportation--aviationEconomic Development & Tourism Office, TexasScience & TechnologyResearch & DevelopmentGovernor's Broadband Council
03

House Authors

Rep. Angie ButtonRepublican · Primary Author
Joint Authors

Senate Sponsors

Cosponsors (1)

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

Explore more bills from this author and on related topics

More from Rep. Angie Button

View all bills by Rep. Angie Button

Related by Topic

View more Aeronautics legislation
Quick Reference

Frequently Asked Questions

Common questions about HB4850

Q

What does Texas HB4850 do?

HB4850 enacts a major deregulation of the "Made in Texas" product labeling standard, lowering the origin requirement from "all or virtually all" to 51% of significant parts and processing. Simultaneously, the law centralizes governance of the Texas Semiconductor Innovation Consortium directly under the Governor’s Office, removing strategic autonomy from the external Executive Committee. Manufacturers must immediately audit supply chains to capitalize on new branding rights, while semiconductor stakeholders must redirect lobbying efforts to the Governor's staff.

Q

Who authored HB4850?

HB4850 was authored by Texas Representative Angie Button during the Regular Session.

Q

When was HB4850 signed into law?

HB4850 was signed into law by Governor Greg Abbott on June 20, 2025.

Q

Which agencies enforce HB4850?

HB4850 is enforced by Office of the Governor, Texas Economic Development and Tourism Office and Texas Semiconductor Innovation Consortium.

Q

How significant are the changes in HB4850?

The regulatory priority for HB4850 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of HB4850?

The cost impact of HB4850 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does HB4850 address?

HB4850 addresses topics including aeronautics, business & commerce, business & commerce--general, governor and transportation.

Q

What are the key dates for HB4850?

Key dates for HB4850: Effective date is 2025-06-20. Rulemaking: Develop a comprehensive strategic plan for the promotion of the semiconductor economy in the state (Sec. 481.6565). (No specific statutory deadline). Consult with legal counsel regarding applicability.

Q

Which Texas businesses are affected by HB4850?

HB4850 primarily affects Texas businesses and commercial enterprises, transportation and logistics companies, technology companies and data processors. These businesses should review the legislation with their legal and compliance teams to understand potential impacts.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026