According to the Legislative Budget Board (LBB), HB 105 is projected to have a significant negative fiscal impact on the state’s General Revenue Fund over time, primarily due to expanded eligibility and loosened job and wage requirements for incentive recipients under the Texas Jobs, Energy, Technology, and Innovation (JETI) program. While the short-term impact through fiscal year 2027 is relatively modest—an estimated $4.7 million reduction to the Foundation School Program—the fiscal burden escalates sharply in later years, reaching an estimated $76.9 million in fiscal year 2035. Over the ten-year period from 2026 to 2035, the cumulative loss to General Revenue is projected to total over $470 million, with total school district levy losses exceeding $1 billion.

The fiscal driver of this impact is the bill’s creation of a new class of “priority projects,” which are defined as projects committing at least $750 million in investment by the end of their first tax year in the incentive period. These priority projects, along with electric generation facilities, are exempted from the program’s usual job creation requirements and competitive site selection standards. Furthermore, the bill revises the wage criteria, shifting from a broader calculation that includes all jobs to a narrower measure based solely on required jobs, and changes the wage comparison metric to the county’s manufacturing sector average rather than the broader industry average. These changes are expected to allow a larger number of high-value, but previously ineligible, projects to qualify for property tax limitations.

The Legislative Budget Board, using Comptroller data, modeled 14 potential projects that would likely benefit from the proposed changes but are not eligible under current law. These include both new utility investments and other capital-intensive developments that fall short of the existing wage or site selection requirements. Because school district tax revenue losses under JETI agreements are partially offset by increased state contributions to the Foundation School Program, the state ultimately absorbs a significant share of the revenue impact—contributing to the projected growth in General Revenue costs over the coming decade.

In sum, while the bill is intended to stimulate large-scale private investment in Texas, it does so at a rising cost to state taxpayers and local school districts, particularly as more projects qualify under the broadened terms.

HB 105, relating to the Texas Jobs, Energy, Technology, and Innovation Act, expands and softens the regulatory and fiscal boundaries of the economic incentive framework created by HB 5 (88th Legislature). While the stated goal is to make Texas more competitive in attracting large-scale investments—particularly in energy and manufacturing—the structure and impact of HB 105 raise significant concerns for lawmakers committed to limited government, fiscal restraint, and free market principles.

First, HB 105 deepens the state’s involvement in corporate incentive programs by creating a new category of “priority projects” for companies committing to invest at least $750 million within the first tax year of the agreement period. These projects are explicitly exempted from job creation requirements, a move that undermines the foundational premise that public subsidies should yield clear public benefits. Without any mandate to create jobs or demonstrate need, these tax breaks function less as strategic investments in Texas’s future and more as corporate entitlements.

Second, HB 105 continues a policy trend of favoring large, capital-intensive businesses with preferential treatment that smaller employers, entrepreneurs, and taxpayers do not receive. This violates the principle of free enterprise by distorting market competition and allowing government to pick economic winners and losers. It also erodes public trust, as local school districts are left to absorb tax base losses without meaningful input or recourse.

From a fiscal perspective, the bill imposes substantial and escalating costs. According to the Legislative Budget Board, the Foundation School Program (FSP) would see a growing draw from General Revenue as the state backfills school district tax losses created by JETI agreements. The estimated impact reaches nearly $77 million in FY 2035, with an overall ten-year negative revenue impact exceeding $140 million. This funding diversion away from core educational needs reflects a misalignment of priorities and places long-term pressure on the state’s budget.

Further, the bill diminishes local control and accountability. While it adds a requirement for the Comptroller to notify school districts of incoming applications, it does not grant those districts the power to veto or negotiate the terms of agreements that will directly reduce their tax base. This top-down structure imposes state-level economic decisions on local communities without offering a meaningful voice or protections.

Lastly, HB 105 is a continuation of the same policy framework that many observers criticized under Chapter 313—a program widely seen as inefficient, opaque, and subject to misuse. Rather than correct those flaws, HB 105 reintroduces many of the same dynamics under a new name, with even fewer restrictions for qualifying entities. For those who opposed HB 5 on constitutional, economic, or philosophical grounds, HB 105 only amplifies the concerns.

In summary, while economic development is a valid public interest, HB 105 pursues it through mechanisms that conflict with core liberty principles and impose significant fiscal risk. A vote against the bill affirms a commitment to transparency, equitable taxation, and the belief that government should not intervene in private markets through selective subsidies. Texas Policy Research recommends that lawmakers vote NO on HB 105.

• Individual Liberty: The bill does not enhance individual freedom or autonomy. Instead, it redirects public funds—specifically school district tax revenues—to subsidize large corporations through state-approved property tax abatements. Individuals and small businesses, who do not receive such preferential treatment, are left to bear the relative burden of taxation and underfunded public services. This inequality in tax policy diminishes the notion that all individuals should be treated equally under the law and enjoy the same access to opportunity.
• Personal Responsibility: The bill exempts "priority projects"—those with investments of $750 million or more—from any job creation requirements. This removes any obligation for corporate recipients of tax breaks to deliver measurable public benefits in return, such as hiring local workers. In doing so, The bill allows companies to enjoy significant financial advantages without having to demonstrate reciprocal investment in the community. This undermines the core liberty value that all beneficiaries of government policy should act with responsibility and accountability.
• Free Enterprise: By granting selective tax benefits to large, capital-intensive projects—while leaving other businesses to compete without similar incentives—=the bill distorts the free market. It replaces market-based competition with government-favored investment, encouraging rent-seeking behavior and economic central planning. This is antithetical to a free enterprise system where businesses should succeed or fail based on merit, innovation, and consumer demand—not access to state-approved subsidies.
• Private Property Rights: While the bill doesn’t alter eminent domain laws or directly seize private property, it indirectly undermines property rights by using public school funding mechanisms (via property taxes) to finance private corporate gains. Local property owners may see their school taxes rise or public services decline as a result of reduced district revenue, despite not having consented to the agreement. This loss of local control over property tax dollars compromises the integrity of ownership and stewardship at the community level.
• Limited Government: The bill expands the scope and discretion of the state government to manage economic outcomes by incentivizing certain types of investments. It entrusts the Comptroller and Governor with broad authority to approve agreements and grant massive tax concessions without sufficient local oversight. Additionally, the projected long-term cost to the state—nearing $77 million annually by FY 2035—reflects a growing fiscal commitment that contradicts the principles of restrained, efficient governance.