1. (a) In this section:

   1. (1) "Business" has the meaning assigned by Section 1.002, Business Organizations Code.

   2. (2) "Home-based business" means a business that is operated:

      1. (A) from a residential property;
      2. (B) by the owner or tenant of the property; and

      3. (C) for the purpose of:

         1. (i) manufacturing, providing, or selling a lawful good; or
         2. (ii) providing a lawful service.

   3. (3) "No-impact home-based business" means a home-based business that:

      1. (A) has at any time on the property where the business is operated a total number of employees and clients or patrons of the business that does not exceed the municipal occupancy limit for the property;
      2. (B) does not generate on-street parking or a substantial increase in traffic through the area;
      3. (C) operates in a manner in which none of its activities are visible from a street; and
      4. (D) does not substantially increase noise in the area or violate a municipal noise ordinance, regulation, or rule.

2. (b) The governing body of a municipality may not adopt or enforce an ordinance, regulation, or other measure that:

   1. (1) prohibits the operation of a no-impact home-based business;
   2. (2) requires a person that operates a no-impact home-based business or that owns the property where the business is operated to obtain a license, permit, or other approval to operate the business; or

   3. (3) requires a person that operates a home-based business or that owns the property where the business is operated to:

      1. (A) rezone the property for a non-residential use; or

      2. (B) install a fire sprinkler protection system if the residence where the business is operated consists only of:

         1. (i) a single-family detached residential structure; or
         2. (ii) a multi-family residential structure with not more than two residential units.

3. (c) Subject to Subsection (b), the governing body of a municipality may:

   1. (1) require that a home-based business be:

      1. (A) in compliance with federal, state, and local law, including:

         1. (i) a municipal fire and building code; and

         2. (ii) a municipal regulation related to:

            1. (a) health and sanitation;
            2. (b) transportation or traffic control;
            3. (c) solid or hazardous waste; or
            4. (d) pollution and noise control;
      2. (B) compatible with the residential use of the property where the business is located; and
      3. (C) secondary to the use of the property as a residential dwelling; and

   2. (2) limit or prohibit the operation of a home-based business that:

      1. (A) sells alcohol or illegal drugs;
      2. (B) is a structured sober living home; or
      3. (C) is a sexually oriented business as defined by Section 243.002.

4. (d) This section does not prohibit:

   1. (1) a person from enforcing a rule or deed restriction imposed by a homeowners' association or by other private agreement; or
   2. (2) a municipality from adopting or enforcing an ordinance regulating the operation of a short-term rental unit.

Added by Acts 2025, 89th Leg., R.S., Ch. 336 (H.B. 2464), Sec. 1, eff. June 12, 2025.