A Different Kind of Funding System
Texas passed a $338 billion biennial budget for 2026-2027, the second-largest state budget in the country after California. But the comparison stops at the dollar sign. Texas operates a fundamentally different funding system than most states, and understanding the structure matters more than knowing the total. There is no state income tax. There is no centralized grants portal equivalent to New York's CFA or California's grants.ca.gov. Instead, Texas uses a decentralized system where individual agencies (TCEQ, TWC, CPRIT, TPWD), the Governor's office (TEF, TSIF), and over 500 local Economic Development Corporations each run their own programs with their own application processes. The tradeoff is real. Texas generally offers less regulatory compliance overhead and faster timelines. But discovery is harder: you need to monitor each agency separately, and many of the most valuable programs (Chapter 380/381 agreements, EDC incentives) require direct negotiation with local officials rather than competitive applications. This guide covers the major state programs that are currently open, the unique funds that exist nowhere else, and how the system actually works for organizations trying to find non-federal funding in Texas.
CPRIT: $4 Billion and Counting
The Cancer Prevention and Research Institute of Texas is genuinely one-of-a-kind. No other state has a voter-approved, constitutionally authorized cancer research funding agency of this scale. CPRIT has awarded $4.05 billion since 2010 across 2,218 grants. Texas voters approved a second round of $3 billion in bonds in 2019 (Proposition 6), keeping the fund alive through 2031. CPRIT operates across three tracks. The Academic Research program funds basic and translational research at Texas institutions. The Product Development Research program funds commercialization, moving lab discoveries toward products, making CPRIT as much an economic development tool as a research funder. The Prevention program reserves 10% of funds for delivering evidence-based cancer prevention to underserved populations. The recruitment programs are particularly notable. CPRIT offers up to $6 million to attract researchers from out-of-state institutions to Texas. This has reshaped the cancer research map: MD Anderson, UT Southwestern, and Baylor have all grown significantly through CPRIT recruitment dollars. Currently active FY 2026 RFAs include Core Facility Shared Resource Awards, High-Impact/High-Risk Research Awards, Research Training Awards in Workforce Development, Recruitment of Established Investigators, and Texas Therapeutics Company Awards. Most recruitment RFAs have rolling monthly deadlines on the 20th of each month. For healthcare and biomedical organizations, CPRIT is the largest state-level health research fund in the country.
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The Texas Semiconductor Innovation Fund
Created by HB 5174 (the Texas CHIPS Act of 2023), the Texas Semiconductor Innovation Fund has $948 million in total appropriations ($698 million initial plus $250 million added in 2025). The fund is designed to complement the federal CHIPS and Science Act, not compete with it: companies receiving federal CHIPS Act funding can also receive TSIF grants, creating a stacking opportunity that makes Texas uniquely attractive for semiconductor investment. The numbers so far: 17 projects announced, creating 700+ jobs and $6 billion in capital investment. Recent awards include Tekscend Photomask ($15.2 million for manufacturing capacity expansion, 50 jobs, $223 million in capital investment). Samsung Austin Semiconductor, SpaceX, and Texas Tech University have all received TSIF grants. The Texas CHIPS Office in the Governor's office coordinates strategy. The broader budget allocated $250 million to incentivize high-tech industries and $300 million to the Space Exploration and Aeronautics Research Fund. For companies in semiconductor manufacturing, materials, equipment, or design, the combination of federal CHIPS Act grants and state TSIF creates one of the most favorable funding environments in the country.
TCEQ Environmental Programs
TCEQ runs the Texas Emissions Reduction Plan (TERP), the state's primary environmental grant program. TERP programs are framed as air quality and economic competitiveness measures rather than climate policy, which is why Texas has embraced them even as the state has resisted other environmental funding mechanisms. The 2026 TERP schedule: heavy-duty vehicle and equipment replacement opens April 2026 (first-come, first-served). Locomotive, marine vessel, and stationary equipment repower opens April 2026 (competitive). New emission-reduction technologies opens May 2026 (competitive). Hydrogen vehicles and refueling infrastructure opens August 2026 (competitive). Drayage truck replacement at seaports and rail yards opens August 2026 (first-come, first-served). Natural gas engine repower opens October 2026 (first-come, first-served). The hydrogen vehicle grants in August are notable. Texas is positioning itself as a hydrogen hub, and these grants are among the first state-level programs targeting hydrogen transportation. TCEQ also received an EPA Climate Pollution Reduction Grant for statewide planning. The Comprehensive Roadmap to Reduce Emissions is due to EPA on June 1, 2026, which will shape future federal climate funding eligibility for Texas. An important context note: over $118 million in previously awarded EPA environmental grants to Texas organizations were terminated in early 2025 as part of broader federal grant cancellations. Programs related to environmental education, air quality monitoring, waste contamination, and flood monitoring were cancelled. Unlike New York or California, Texas has no state equivalent to backfill these losses.
Workforce, Parks, and Other State Programs
The Texas Workforce Commission runs several grant programs with rolling or upcoming deadlines. The Skills Development Fund provides up to $500,000 per business for custom worker training, in partnership with eligible applicants (community colleges and other training providers). Proposals are accepted year-round with 12-month grant periods. Skills for Small Business provides up to $2 million for businesses with fewer than 100 employees. The Jobs and Education for Texans (JET) program has $30 million for the FY 2026-2027 biennium, funding career and technical education equipment at community colleges, ISDs, and charter schools. The Governor recently announced over $14 million in career training grant awards. Texas Parks and Wildlife awarded a record $21.2 million in local park grants on January 29, 2026, the highest ever. The budget provides $60 million total for local parks. Two categories: Non-Urban Outdoor Recreation Grants for municipalities under 500,000 population, and Small Community Recreation Grants for towns under 20,000. All grants are 50% matching on a reimbursement basis, and sites must be dedicated as parkland in perpetuity. The Outdoor Recreation Legacy Partnership also channels federal Land and Water Conservation Fund dollars to underserved urban communities. The Texas Department of Agriculture administers the TxCDBG Downtown Revitalization program with a deadline of April 3, 2026 (up to $1 million). The $300 million TEXAS Grant program funds higher education financial aid.
The Enterprise Fund and Local Deal-Making
The Texas Enterprise Fund is the Governor's "deal-closing" grant fund. It awards performance-based grants to companies choosing between a Texas site and an out-of-state competitor. In 2025, TEF companies committed 3,113 new jobs and $4.44 billion in capital investment. Historical award range: $194,000 to $50 million. TEF now has an online portal for applications. But the most distinctive feature of the Texas funding system is Chapter 380/381 agreements. These allow municipalities (Chapter 380) and counties (Chapter 381) to offer direct loans, grants, and services to businesses. There is no standard application process; these are negotiated deal-by-deal between the business and local government. The terms are entirely flexible, limited only by the local government's willingness and ability to structure the deal. Over 500 Economic Development Corporations (EDCs) operate statewide, funded through local sales taxes. EDCs finance business attraction and expansion at the local level. They are the primary point of contact for companies seeking incentives in specific Texas cities. This decentralized approach means that discovery and relationship-building are essential. In New York, you apply through the CFA and a regional council evaluates you. In Texas, you negotiate directly with a city's EDC or a county's economic development office. The advantage is speed and flexibility. The disadvantage is that you need to know who to call. Search Texas funding opportunities
Federal Funding and the OBBBA Impact
Texas faces different OBBBA impacts than New York or California because it never expanded Medicaid. The enhanced FMAP incentive for expansion is gone, and work requirements begin for Medicaid enrollees (80 hours per month of work, community service, or training). Texas already has the largest uninsured population in the nation, and these changes affect hospitals providing uncompensated care. The federal environmental grant terminations hit Texas particularly hard. Over $118 million in previously awarded EPA grants were cancelled. A cancelled Texas Department of State Health Services grant was valued at up to $877 million. Legal challenges are pending. The key difference from states like New York and California: Texas has no state-level programs equivalent to NYSERDA or California's cap-and-invest to backfill lost federal environmental funding. Organizations that depended on federal EPA, DOE, or FEMA programs have fewer state alternatives. The OBBBA also created the $50 billion Rural Health Transformation Program, which benefits Texas given its large rural population. Each state receives at least $100 million annually from 2026 to 2030. For healthcare organizations, this is a significant new stream. For federal contracting, Texas hosts major military installations (Fort Cavazos, Fort Bliss, Joint Base San Antonio), NASA's Johnson Space Center, and multiple DOE facilities. SAM.gov registration is required for all federal opportunities.