This report presents the Texas edition of the National Council on Teacher Quality's 2008 "State Teacher Policy Yearbook." The 2008 "Yearbook" focuses on how state policies impact the retention of effective new teachers. This policy evaluation is broken down into three areas that encompass 15 goals. Broadly, these goals examine the impact of state policy on 1) identifying effective teachers, 2) retaining those deemed effective and 3) exiting those deemed ineffective. While Texas is making progress toward meeting some of the goals, significant room for improvement remains in many others. The state completely missed five goals, met a small portion of four, partially met two, nearly met one and fully met three. Texas's best performances are in its requirement of instructional effectiveness in teacher evaluations and its support of differential pay in shortage subject areas and high-needs schools, and performance pay. The state has the most work to do in making tenure decisions meaningful; ensuring only factors that advance teacher effectiveness are required for permanent licenses; ensuring its pension system is portable, flexible and fair; and closing loopholes that allow teachers who have not met licensure requirements to continue teaching. Texas's progress toward meeting these goals is summarized. The body of the report provides a more detailed breakdown of the state's strengths and weaknesses in each area. Texas has an overall performance of D+ for 2008. Goals for each area are appended. (Contains 57 figures.) [Additional support for the 2008 "State Teacher Policy Yearbook" was provided by the Teaching Commission. For the national report, see ED514690.]