Relating to programs to promote economic development in the Office of the Governor and to the repeal of the governor's broadband development council.
ModeratePlan for compliance
Low Cost
Effective:2025-06-20
Enforcing Agencies
Office of the Governor • Texas Economic Development and Tourism Office • Texas Semiconductor Innovation Consortium
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.
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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.
The bill author has informed the committee that current law regarding certain programs within the Office of the Governor, including the "Made in Texas" labeling program, the Governor's Broadband Development Council, the Aerospace and Aviation Office, and the Texas Business and Community Economic Development Clearinghouse, should be revised and updated. C.S.H.B. 4850 seeks to provide necessary updates to the law regarding certain programs.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS
C.S.H.B. 4850 amends the Government Code to revise provisions relating to certain programs within the Office of the Governor and the Texas Economic Development and Tourism Office.
"Made in Texas" Labeling Program
C.S.H.B. 4850 changes the threshold of all significant parts and processing of a product originating in Texas at which a person may sell, advertise, or offer for sale in Texas the product using "Made in Texas" or equivalent phrasing as follows:
·removes the specification that all or virtually all significant parts and processing of the product originated in Texas; and
·specifies instead that not less than 51 percent of all significant parts and processing of the product originated in Texas.
Governor's Broadband Development Council
C.S.H.B. 4850 repeals Government Code provisions relating to the establishment and administration of the governor's broadband development council.
Aerospace and Aviation Office
C.S.H.B. 4850 expands the composition of the aerospace and aviation advisory committee appointed by the governor to include one qualified member representing a federal entity or the United States armed forces.
Texas Business and Community Economic Development Clearinghouse
C.S.H.B. 4850 removes the specification that the method by which the Texas Business and Community Economic Development Clearinghouse is to provide information and assistance to businesses and communities in Texas is through the use of a statewide toll-free telephone service.
Repealer
C.S.H.B. 4850 repeals Chapter 490H, Government Code.
EFFECTIVE DATE
September 1, 2025.
COMPARISON OF INTRODUCED AND SUBSTITUTE
While C.S.H.B. 4850 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.
While both the introduced and the substitute expand the composition of the aerospace and aviation advisory committee appointed by the governor to include one qualified member from a federal entity or the U.S. armed forces entity, the substitute omits the specification included in the introduced that such a member serves as a liaison to the office and the advisory committee.
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 urgent is compliance with HB4850?
The compliance urgency for HB4850 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
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.
Legislative data provided by LegiScanLast updated: November 25, 2025
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