H.B. No. 2464 amends the Local Government Code by adding Section 229.902, which grants municipalities the authority to regulate home-based businesses. The bill defines a "home-based business" as one operated from a residential property by the owner or tenant, and outlines specific criteria for what constitutes a "no-impact home-based business." These criteria include limitations on the number of employees and clients, restrictions on visible activities from the street, and noise regulations. The governing body of a municipality is prohibited from adopting ordinances that would prohibit or impose excessive requirements on no-impact home-based businesses, such as requiring licenses or permits, rezoning for non-residential use, or installing fire sprinkler systems in certain residential structures.

Additionally, while municipalities can regulate home-based businesses, they must ensure that such regulations comply with federal, state, and local laws, and that the businesses remain compatible with residential use. The bill also allows municipalities to limit or prohibit businesses that sell alcohol or illegal drugs, operate as structured sober living homes, or are classified as sexually oriented businesses. Importantly, the bill clarifies that it does not interfere with homeowners' associations' rules or the regulation of short-term rental units. The act is set to take effect immediately upon receiving a two-thirds vote from both houses or on September 1, 2025, if that threshold is not met.

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