See below for updates:
The Texas Ethics Commission provides an informative FAQ for yard signs:
I. When Is The “Right-Of-Way” Notice Required?
All written political advertising that is meant to be seen from a road must carry a “right-of-way” notice. It is a criminal offense to omit the “right-of-way” notice in the following circumstances:
1. if you enter into a contract or agreement to print or make written political advertising meant to be seen from a road; or
2. if you instruct another person to place the written political advertising meant to be seen from a road.
II. What Should The “Right-Of-Way” Notice Say?
Section 255.007 of the Texas Election Code prescribes the exact language of the notice:
NOTICE: IT IS A VIOLATION OF STATE LAW
(CHAPTERS 392 AND 393, TRANSPORTATION CODE)
TO PLACE THIS SIGN IN THE RIGHT-OF-WAY OF A HIGHWAY.
Note: The notice on political advertising signs printed or made before September 1, 1997, contained a citation to a prior law. You may continue to use those signs if they otherwise comply with the law.
III. Do Yard Signs Have To Have The “Right-Of-Way” Notice?
Yes. The “right-of-way” notice requirement applies to signs meant to be seen from any road. The notice requirement assures that a person responsible for placing signs is aware of the restriction on placing the sign in the right-of-way of a highway.
IV. What About Bumper Stickers?
Bumper stickers do not need the “right-of-way” notice. They do, however, need a political advertising disclosure statement.
V. Where May I Place My Signs And How Long May Signs Be Posted?
For information about exactly where you may or may not place signs, or for information regarding the length of time your signs may be posted, check with your city or county government and with the Texas Department of Transportation at (512) 416-2901.
UPDATE: At some point, the original link stopped working. Here’s a new link.
UPDATE II (Oct. 2012): At some point, the updated link I provided stopped working. Here’s the latest from TXDOT and here’s an updated link to the Texas Ethics Commission’s page on signs.