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1. Two governments, not one
The most important idea in American law is that there is no single "government." Two governments have authority over almost everyone at once - the federal (national) government and the government of the person's state, which for our clients is usually Texas - and below the state sits a third layer of local government (counties, cities, and special districts). A single transaction can touch all three.
The federal government is one of limited, enumerated powers: it may act only where the Constitution grants authority, chiefly in Article I, Section 8 (regulating interstate commerce, taxing and spending, naturalization, bankruptcy, patents and trademarks, and conducting foreign affairs and treaties). The states have general power, the police power to legislate broadly for public health, safety, and welfare (confirmed by the Tenth Amendment). That is why most everyday law such as contracts, property, family, wills and inheritance, most business formation, most torts and crimes is state law.
Two points carry through the rest of this article. First, the United States (apart from Louisiana) is a common-law system: accumulated court decisions are themselves binding law, alongside written constitutions, statutes, and regulations. Texas is a common-law state. Second, because there are two sovereigns, there are two complete legal systems running in parallel; two constitutions, two legislatures, two bodies of statutes, two sets of agencies and regulations, and two court systems. Much of practicing law is knowing which system you are in, and what happens when they overlap.
2. How laws are made (federal and Texas)
Federal statutes. A bill is introduced in the House or Senate (bills that raise revenue must originate in the House, the Origination Clause, which is why major tax legislation starts there), referred to committee, and voted on the floor. In the Senate, ending debate generally requires 60 votes (cloture), with a narrow exception, budget reconciliation, that lets certain tax-and-spending bills pass by simple majority. Both chambers must pass identical text, after which the bill goes to the President to sign, veto (subject to a two-thirds override), or allow to become law without a signature.
Once enacted, a statute receives a Public Law number, is published chronologically in the United States Statutes at Large (the authoritative, as-enacted text), and is then codified by subject into the United States Code, fifty-plus numbered titles (for example, Title 26 is the Internal Revenue Code). One subtlety matters for careful research: for titles not enacted into "positive law," the Code is only prima facie evidence of the law, and the Statutes at Large controls in a conflict. Effective-date and amendment provisions, often printed as notes, decide which version of a statute governs a given event.
Texas statutes. The Texas Legislature is bicameral (150-member House, 31-member Senate) but meets in regular session only every two years, for 140 days, with optional 30-day special sessions called by the Governor. A bill must pass both chambers in identical form and is then presented to the Governor, who may sign it, veto it, or let it become law without a signature; the Constitution sets out the ten-day rule and a two-thirds override, and Texas also gives the Governor a line-item veto over appropriations that the President lacks (Tex. Const. art. IV, § 14; In re Turner, 627 S.W.3d 654 (Tex. 2021)). Texas statutes are organized into topical codes, Business Organizations, Business & Commerce, Estates, Property, Tax, Government, and Civil Practice & Remedies, among others, and the Texas Constitution is unusually long and is amended often by voter propositions.
3. When laws conflict: which one wins
Because two sovereigns can regulate the same conduct, there is a tie-breaker. Under the Supremacy Clause (Article VI), the Constitution, valid federal laws, and treaties are "the supreme Law of the Land," so when valid federal law conflicts with state law, federal law wins and the state law gives way. The mechanism is preemption, which comes in three forms: express (the statute says so), field (the federal scheme is so pervasive it occupies the area, immigration is the classic example), and conflict (compliance with both is impossible, or state law obstructs the federal purpose). Texas courts apply this framework directly, treating a conflicting state law as having "no effect" (Progressive County Mutual Insurance Co. v. Caltzonsing, 658 S.W.3d 384 (Tex. App.—Corpus Christi–Edinburg 2022, no pet.)).
Two limits keep this from swallowing federalism: only valid federal law (within the enumerated powers) preempts anything, and under the anti-commandeering principle the federal government generally cannot force states to enact or administer federal programs.
The same vocabulary reaches one layer further down. Just as federal law can displace conflicting state law, Texas law can displace conflicting local law, but on different footing: as the Supreme Court of Texas recently explained, federal preemption rests on the U.S. Supremacy Clause, while state preemption of local law rests on the Texas Constitution's prohibition against city charters and ordinances inconsistent with the state constitution or general state law (Butler v. Collins, 714 S.W.3d 562 (Tex. 2025); Tex. Const. art. XI, § 5). For a business inside a Texas city, a municipal ordinance that conflicts with a state statute is generally invalid.
4. What counts as law (and what outranks what)
Within each sovereign, the sources of law are ranked, and the higher one controls when they conflict: constitution → statutes → regulations → agency guidance, with courts interpreting all of it. There are two such stacks, federal and Texas, joined at the top by the Supremacy Clause. A separate idea, the weight of an authority (whether a court is bound by it or merely persuaded), runs alongside the hierarchy.
Constitutions. A constitution sits at the top of each system, and courts may strike down any law that violates it. A state constitution is supreme within the state but cannot drop below the federal floor of rights; it may give more protection, never less.
Statutes. Below the constitution, a statute beats a conflicting regulation or piece of guidance. Recall the distinction from Section 2 between the as-enacted text and the codified text, and the role of effective-date provisions.
Regulations (agency rules). Legislatures delegate detail to agencies, which issue regulations that, when validly adopted under delegated authority and proper procedure, carry the force of law. Federally, the master statute is the Administrative Procedure Act: for most rules, an agency publishes a proposed rule in the Federal Register, takes public comment, and issues a final rule, which is codified in the Code of Federal Regulations. A major recent shift: in 2024, Loper Bright Enterprises v. Raimondo overruled the long-standing Chevron doctrine, so courts now exercise their own independent judgment about what a statute means rather than deferring to an agency's reading; the related major-questions doctrine requires clear congressional authorization for decisions of vast economic or political significance. Texas mirrors the structure: under the Texas APA (Tex. Gov't Code ch. 2001), agencies give at least 30 days' notice and file proposed rules for the Texas Register (§ 2001.023), take and consider comments (§ 2001.029), and a rule is voidable absent substantial compliance (§ 2001.035); rules in force are compiled in the Texas Administrative Code.
Agency guidance. Below regulations is a large layer of agency guidance, documents like IRS revenue rulings and private letter rulings, the USCIS Policy Manual, and the State Department's Foreign Affairs Manual, that explains or interprets the law but generally lacks the independent force of law. Guidance is invaluable for predicting how an agency will act, but a court is not bound by it, and an agency may not use "guidance" to impose what is really a binding rule.
Court decisions. Decisions of the courts are themselves law, governed by stare decisis: a court is bound by higher courts in the same system and merely persuaded by sister or out-of-jurisdiction courts. The federal courts form three tiers: district courts; thirteen courts of appeals (including the Federal Circuit); and the Supreme Court (Unpublished federal opinions issued on or after January 1, 2007 may be cited but are persuasive only — Fed. R. App. P. 32.1; 5th Cir. R. 47.5.4.).
Texas has district courts (broad original jurisdiction, Tex. Const. art. V, § 8), intermediate courts of appeals (id. § 6), and, unusually, two courts of last resort: the Supreme Court of Texas for civil matters and the Court of Criminal Appeals for criminal matters. Two recent additions matter for business clients: the statewide Texas Business Court, which hears complex commercial disputes (for most categories, those with at least $5 million in controversy as of September 1, 2025), and the statewide Fifteenth Court of Appeals.
Executive orders and proclamations. These direct the executive branch and carry legal force only where grounded in constitutional or delegated authority; they cannot override a statute (the framework comes from Youngstown Sheet & Tube Co. v. Sawyer). In 2024–2025 the remedies for challenging such action narrowed: in Trump v. CASA, the Supreme Court held that courts generally may not issue nationwide injunctions sweeping beyond the parties.
Treaties. The Senate approves treaties by a two-thirds vote, and a treaty is supreme law alongside federal statutes, but a non-self-executing treaty requires implementing legislation before a private party can enforce it in court (the rule from a Texas case, Medellín v. Texas). Treaties are decisive in a few areas this firm handles, including income-tax treaties and the treaty-based E-1 and E-2 visas, covered in the Federal Tax Law Overview and U.S. Immigration Law Overview.
5. Federal, Texas, or both?
With the framework in place, most questions start by asking whether a subject is governed mainly by federal law, mainly by Texas law, or both. In short:
Business and entity law is mostly Texas law, companies are formed and governed under the Texas Business Organizations Code, wrapped in federal overlays for securities, antitrust, employment, and bankruptcy (see the Texas Business Law Overview). Contracts are likewise Texas law, built on common law and the Uniform Commercial Code, with a few federal pockets such as the Federal Arbitration Act (see the Texas Contract Law Overview).
Taxes run on two separate tracks. Texas imposes no income tax; its main taxes are the sales-and-use tax and the franchise (margin) tax, plus locally assessed property tax (see the Texas Tax Law Overview), while federal income, employment, and estate and gift taxes run under the Internal Revenue Code (see the Federal Tax Law Overview). Estate planning draws on both: wills, trusts, and probate are Texas law (the Estates and Property Codes), with the federal transfer-tax system layered on top (see the Texas Estate Planning Law Overview).
Trademarks are a dual system, federal registration under the Lanham Act alongside common-law and Texas state rights (see the Federal and Texas Trademark Law Overview). Immigration, by contrast, is exclusively federal: it is governed entirely by the Immigration and Nationality Act and federal agencies, and states may not make immigration law (see the U.S. Immigration Law Overview).
6. How to work through a legal question
A disciplined way to approach any question follows directly from the framework above:
State the question precisely — what actually has to be decided.
Identify the sovereign(s) — federal, Texas, or both.
Identify the forum and what binds it. Federal courts are courts of limited jurisdiction (a case needs a federal question or diversity of citizenship with enough at stake); state courts have general jurisdiction. A federal court hearing a diversity case applies the substantive law of the state (Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938)), so a Texas contract is decided under Texas law even in a federal courthouse. This is why well-drafted contracts specify choice-of-law and forum-selection clauses.
Work down the hierarchy — constitutional limits, then statutory text, then regulations (and whether they are binding legislative rules), then guidance (as interpretation, not as binding law), then the cases interpreting each layer.
Resolve conflicts — between sovereigns, by supremacy and preemption; between local and state rules, by state preemption.
Two literacy notes. Only primary authority - constitutions, statutes, regulations, treaties, and cases - can bind; secondary sources (treatises, the Restatements, and model acts like the UCC) only persuade until a legislature enacts them. And citations signal what you are looking at: 26 U.S.C. § 1 is a federal statute, 26 C.F.R. § 1.1-1 a federal regulation, Tex. Bus. Orgs. Code § 21.101 a Texas statute, and Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024) a case, with the reporter and court showing where it sits in the hierarchy.
7. Sources and further reading
These are the official, system-level sources behind this overview. Where the government publishes an official version, that is the link; for older Supreme Court opinions without a clean government page, links go to the Library of Congress's U.S. Reports or to a reputable free repository. Texas opinions, which have no single free official database, are linked to reputable repositories (Justia, FindLaw, Leagle). Practice-area sources (USPTO, IRS detailed guidance, USCIS and the State Department, the Comptroller) appear in the relevant overview articles.
Constitutions
U.S. Constitution (Constitution Annotated, Library of Congress / GPO): https://constitution.congress.gov/
U.S. Constitution (full text, National Archives): https://www.archives.gov/founding-docs/constitution
Texas Constitution (Texas Legislative Council): https://statutes.capitol.texas.gov/
How laws are made / statutes
The federal legislative process (Congress.gov): https://www.congress.gov/legislative-process
The legislative process (U.S. House of Representatives): https://www.house.gov/the-house-explained/the-legislative-process
Public Laws (Congress.gov): https://www.congress.gov/public-laws
U.S. Statutes at Large (GovInfo): https://www.govinfo.gov/app/collection/statute
United States Code (Office of the Law Revision Counsel): https://uscode.house.gov/
Positive law vs. prima facie evidence (OLRC): https://uscode.house.gov/about/info.shtml
Texas Constitution and Statutes (official): https://statutes.capitol.texas.gov/
Regulations / administrative law
Summary of the Administrative Procedure Act (EPA): https://www.epa.gov/laws-regulations/summary-administrative-procedure-act
A Guide to the Rulemaking Process (Office of the Federal Register): https://www.federalregister.gov/uploads/2011/01/the_rulemaking_process.pdf
Federal Register: https://www.federalregister.gov/
Code of Federal Regulations (official eCFR): https://www.ecfr.gov/
Understanding IRS guidance — a brief primer (example of agency guidance): https://www.irs.gov/newsroom/understanding-irs-guidance-a-brief-primer
Texas Register (Texas Secretary of State): https://www.sos.state.tx.us/texreg/index.shtml
Texas Administrative Code (Texas Secretary of State): https://www.sos.state.tx.us/tac/index.shtml
Texas Government Code ch. 2001 — Texas APA (incl. §§ 2001.023, 2001.029, 2001.035): https://statutes.capitol.texas.gov/Docs/GV/htm/GV.2001.htm
Courts and cited cases
Federal courts — role and structure (U.S. Courts): https://www.uscourts.gov/about-federal-courts/court-role-and-structure
Supreme Court of the United States: https://www.supremecourt.gov/
Texas Judicial Branch: https://www.txcourts.gov/
Texas Business Court: https://www.txcourts.gov/businesscourt/
Fifteenth Court of Appeals: https://www.txcourts.gov/15thcoa/
Fed. R. App. P. 32.1 (citation of unpublished federal opinions): https://www.law.cornell.edu/rules/frap/rule_32.1
U.S. Court of Appeals for the Fifth Circuit — local rules: https://www.ca5.uscourts.gov/
Marbury v. Madison, 5 U.S. 137 (1803): https://supreme.justia.com/cases/federal/us/5/137/
Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938): https://supreme.justia.com/cases/federal/us/304/64/
Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579 (1952): https://supreme.justia.com/cases/federal/us/343/579/
West Virginia v. EPA, 597 U.S. 697 (2022): https://supreme.justia.com/cases/federal/us/597/697/
Medellín v. Texas, 552 U.S. 491 (2008) (Library of Congress, U.S. Reports): https://www.loc.gov/item/usrep552491/
Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024) (slip opinion): https://www.supremecourt.gov/opinions/23pdf/22-451_7m58.pdf
Trump v. CASA, Inc., 606 U.S. 831 (2025) (slip opinion): https://www.supremecourt.gov/opinions/24pdf/24a884_8n59.pdf
Texas cases
Butler v. Collins, 714 S.W.3d 562 (Tex. 2025): https://law.justia.com/cases/texas/supreme-court/2025/24-0616.html
Progressive County Mutual Insurance Co. v. Caltzonsing, 658 S.W.3d 384 (Tex. App.—Corpus Christi–Edinburg 2022, no pet.): https://caselaw.findlaw.com/court/tx-court-of-appeals/2023021.html
In re Turner, 627 S.W.3d 654 (Tex. 2021): https://www.leagle.com/decision/intxco20210810378
Important note. This article is general legal information for educational purposes, not legal advice, and reading it does not create an attorney-client relationship. The law described here, particularly administrative law, tax thresholds, and court structures, changes, and how any rule applies depends on the specific facts. Citations are provided so readers can verify the primary sources. For advice about a particular matter, consult a qualified attorney licensed in the relevant jurisdiction.
