According to the Legislative Budget Board (LBB), HB 1268 is projected to have a negative net impact of approximately $1.91 million on General Revenue funds for the biennium ending August 31, 2027. The costs stem primarily from the administrative and staffing expenses necessary to implement the Texas Technology and Innovation Program under the Office of the Governor (OOG). This estimate does not include grant disbursements, which remain indeterminate and would vary based on the number of applications and the level of funding appropriated by the Legislature for the program.

The OOG anticipates the need to hire 6.5 full-time equivalent (FTE) employees to manage the program, including positions for management, program specialists, compliance analysis, legal counsel, IT support, and accounting. The estimated FTE and operating costs for fiscal years 2026–2027 total $1.74 million. Additionally, office space for new staff would cost approximately $21,209 over two years.

There are also projected technology-related costs associated with building and maintaining a grant management portal, estimated at $117,600 for the fiscal year 2026 and $258,800 across the five-year period through 2030. No significant fiscal impact on local governments is expected, as the program’s scope and expenditures are confined to state administration and grant distribution.

HB 1268 would establish a new state-run economic development initiative—the Texas Technology and Innovation Program—to provide matching and supplemental grants to businesses receiving federal SBIR and STTR funding. While the intent is to enhance Texas’s competitiveness in high-tech and research sectors, the bill represents a clear expansion of state government into an area many argue should be left to the private market or federal initiatives alone.

Though the bill includes fiscal safeguards, such as funding contingency language and caps on grant awards, it still creates a permanent new program with ongoing staffing, operational, and technology costs—projected at nearly $2 million per biennium—not including the actual grants themselves. Even with mechanisms to solicit private donations, the infrastructure and authority granted to the Texas Economic Development and Tourism Office point toward mission creep and long-term public dependency on government-led business incentives.

For those who prioritize Limited Government and believe the state should not pick winners and losers in the marketplace, HB 1268 raises fundamental concerns. While innovation and job growth are worthwhile goals, this bill rests on the assumption that government can—and should—actively guide and subsidize specific sectors of the economy. It duplicates federal efforts and imposes new administrative burdens, and over time, it risks becoming a vehicle for politically influenced economic favoritism.

As such, Texas Policy Research recommends that lawmakers vote NO on HB 1268.

• Individual Liberty: The bill does not infringe on civil liberties, nor does it compel participation or impose new restrictions on individuals or businesses. In fact, it could give entrepreneurs more financial options to pursue innovation. By creating a new program where the state allocates taxpayer resources to certain firms, it risks establishing a system of privileges, which may undermine equal treatment and erode the neutrality of the state in the marketplace.
• Personal Responsibility: The program shields some businesses from the full financial risks of R&D by offering public grants as a supplement to federal money. While recipients must still meet federal standards, this could dilute the principle that private ventures should bear the consequences of their own risks and rewards. There's no mechanism for measuring ROI or penalizing failure, which can reduce accountability for the use of public funds.
• Free Enterprise: While the bill purports to promote innovation and entrepreneurship, it does so by injecting state money into specific business activities, effectively picking winners and losers in the marketplace. It distorts natural market outcomes by rewarding those with political or bureaucratic access rather than purely market-driven success.
• Private Property Rights: The bill doesn’t interfere with ownership, transfer, or use of private property. Businesses retain full ownership over any innovations or IP generated through the grant-funded work. However, state involvement in innovation ecosystems could open the door to future regulatory entanglements or conditions tied to funding.
• Limited Government: The bill creates a new state program, requires new full-time staff, and authorizes the state to administer grants from public funds. Even though funding is "as available," the state assumes a new ongoing role in managing and expanding economic development policy. It also adds rulemaking authority and back-end systems (such as a grant management portal), signaling bureaucratic growth.

• SB 209 (Same As)