General Appropriations Bill.

Contracts

• "Subject to Appropriation" Review: You must review all multi-year agreements with state agencies (MSAs, vendor contracts). SB1 determines if the agency has the funds to honor the next year of your contract. If a program was defunded, the agency has the statutory right to terminate for convenience immediately.
• Renewal Negotiations: Initiate contact with agency contract managers now to confirm their specific program line-item was fully funded.

Hiring/Training

• Project Management Adjustments: If the budget reduces staffing for regulatory bodies (e.g., TCEQ, TDI), you must train project managers to anticipate doubled lead times for permit approvals and inspections.
• Grant Compliance Staff: If your revenue depends on state grants, you may need to re-train finance staff on updated "Performance Measure" reporting standards often attached to new appropriations.

Reporting & Record-Keeping

• Segregation of Funds: Entities receiving state funds must ensure accounting systems strictly segregate these monies from general operating funds to satisfy Legislative Budget Board (LBB) audit requirements.
• Performance Verification: Prepare for "outcome-based" reporting. Riders attached to SB1 often require vendors to submit quantitative proof of service delivery before the Comptroller will release payments.

Fees & Costs

• Cost Recovery: While SB1 does not typically set statutory fee caps, it sets "Cost Recovery" expectations. If an agency is underfunded, they may aggressively enforce existing fines or maximize allowable fee assessments to bridge budget gaps.
• Cash Flow Management: Anticipate payment delays in September and October 2025 as the state closes one fiscal set of books and opens another.