According to the Legislative Budget Board (LBB), HB 20 is not expected to have a significant fiscal impact on the state. The responsibilities assigned to the Office of the Attorney General and the Texas Division of Emergency Management, such as creating educational materials, developing and administering the voluntary certification program, maintaining a public registry, and issuing an official seal, are anticipated to be carried out within their existing budgets. The analysis assumes that any costs associated with these new duties can be absorbed using current resources.

Similarly, no significant fiscal implication is anticipated for local governments. While the bill requires state or local agencies to consider an organization’s certification status when awarding disaster-related funds, this procedural step is not expected to generate additional costs at the local level. In short, both state and local implementation of HB 20 should proceed without the need for new appropriations or significant shifts in existing funding.

HB 20 takes a targeted, preventative approach to addressing fraudulent charitable solicitations that often emerge during disasters, without imposing broad mandates or heavy-handed regulation. It establishes two main components: a voluntary state-run certification program for disaster relief organizations and a requirement that educational materials on identifying and avoiding fraudulent solicitations be published online by the Texas Division of Emergency Management (TDEM) and the Attorney General’s consumer protection division. The certification program, administered by the Attorney General in consultation with TDEM, is intended to help donors distinguish reputable organizations from potentially fraudulent ones, especially in high-pressure disaster contexts where bad actors can divert funds away from genuine relief.

The program is designed to be entirely voluntary, meaning no disaster relief organization is compelled to participate in order to operate or solicit donations. For those that opt in, the Attorney General will establish eligibility criteria, an application process, renewal and revocation procedures, and issue a state-recognized seal. Certified organizations will be listed in a public online registry, and state or local entities administering disaster-related grants must consider certification status when evaluating funding applications. These measures aim to incentivize transparency and accountability while preserving full operational freedom for organizations that choose not to participate.

From a fiscal and governmental scope perspective, the Legislative Budget Board anticipates no significant cost to the state or local governments, as the duties can be absorbed by existing resources. The bill does expand the scope of the Attorney General’s and TDEM’s work by creating a new, ongoing program and associated rulemaking, but it does not require new agencies, staff expansions, or substantial budget increases. Because participation is voluntary and the bill does not impose licensing or operational mandates on all charities, the regulatory burden on individuals and businesses is minimal. Non-certified organizations remain free to conduct fundraising exactly as before.

HB 20 is consistent with principles of limited government and free enterprise. It focuses on providing tools for informed decision-making rather than restricting market entry. By relying on voluntary participation, it promotes personal responsibility among both charitable organizations (to maintain credibility) and donors (to use available resources when deciding where to give). It also enhances transparency in the disaster relief sector without reducing the variety or number of organizations able to operate in Texas.

For these reasons, minimal taxpayer impact, respect for voluntary association, consumer protection benefits, and targeted fraud prevention without sweeping new regulation, Texas Policy Research recommends that lawmakers vote YES on HB 20. It strengthens public confidence in disaster-related charitable giving while maintaining the flexibility and openness of the existing charitable landscape.

• House Select Committee on Disaster Preparedness & Flooding: 7Y/0N (2 Absent)