According to the Legislative Budget Board (LBB), the fiscal implications of HB 127 are projected to be minimal for the state.  This assessment is based on the assumption that agencies such as the Texas Higher Education Coordinating Board and public higher education institutions can implement the bill's provisions — including the establishment and operation of the Higher Education Research Security Council — using existing resources.

The bill includes various new administrative functions: enhanced research security screening, regulation of gifts and contracts from foreign adversaries, oversight of foreign travel, and academic software reviews. While these functions imply additional administrative responsibilities, the fiscal note concludes that affected agencies and institutions can absorb these duties without needing additional appropriations.

Potential revenue effects — such as collections from civil penalties or increased fines related to trade secret theft — are acknowledged in the fiscal note but deemed indeterminable. These depend on the number and severity of violations or prosecutions, which cannot be reliably forecast. Importantly, the note also finds that the bill would not have a significant impact on local governments or correctional systems.

Overall, the bill’s financial footprint is expected to be negligible in the short term, though the extent of long-term costs or enforcement-related expenditures may vary depending on institutional compliance levels and enforcement activity.

HB 127 reflects a well-structured and timely response to the growing concern over foreign influence and espionage threats within Texas's public higher education system. The bill establishes multiple safeguards to reduce the risk of intellectual property theft and foreign adversary infiltration, while promoting institutional accountability, transparency, and coordination across Tier One research institutions. With the creation of the Higher Education Research Security Council, Texas is poised to take a proactive, decentralized approach to strengthening research security without overly burdening the Texas Higher Education Coordinating Board (THECB), as proposed in the originally filed bill.

The bill aligns well with core liberty principles. It bolsters national and institutional security without unduly compromising individual liberty. Institutions are not prohibited from engaging in foreign collaboration altogether; rather, the bill ensures that such engagement is subject to security-conscious review and disclosure. Additionally, by mandating enhanced due diligence, contract certification, and risk-based researcher screening, the bill fosters a culture of personal responsibility at both the individual and institutional levels. The provisions barring contracts with foreign adversary companies — unless certain risk exceptions are met — also reinforce accountability in public procurement.

HB 127 minimizes its fiscal footprint, with the Legislative Budget Board confirming no significant cost to the state is anticipated. Enforcement mechanisms, such as civil penalties and vendor debarment, are likely to deter misconduct without placing undue financial strain on state agencies or institutions. The bill's delayed implementation and compliance-focused design also give higher education institutions sufficient runway to adapt systems, develop internal expertise, and align with federal guidelines.

In conclusion, the bill achieves a prudent balance between national security, academic freedom, and administrative feasibility. It strengthens institutional self-governance, protects taxpayer-funded research from espionage risks, and sets Texas on a path toward national leadership in research integrity. For these reasons, Texas Policy Research recommends that lawmakers vote YES on HB 127.

• Individual Liberty: The bill does not directly infringe on the constitutional rights of individuals, including students, researchers, or faculty. However, it does introduce more rigorous background screening and data collection for foreign researchers and restricts certain student associations from accepting foreign funding. While this could be viewed as a constraint on academic and organizational autonomy, the narrowly tailored restrictions are grounded in national security and research integrity, not political ideology or viewpoint discrimination. Overall, it maintains a reasonable balance between personal liberty and state interests in security and transparency.
• Personal Responsibility: The bill enhances the accountability of individuals and institutions engaged in sensitive research. It holds university staff, vendors, and administrators responsible for understanding and complying with rules about foreign gifts, contracts, and affiliations. Institutions are required to screen foreign researchers for red flags related to foreign adversary ties, and vendors must certify their compliance with contract prohibitions. These provisions underscore the principle that individuals and organizations must be responsible stewards of taxpayer-supported research and public trust.
• Free Enterprise: The bill introduces limitations on contracting with certain foreign companies and bars companies tied to foreign adversaries or under federal sanctions from bidding on public university contracts. While this might be seen as a restriction on open commerce, these limitations are specifically tailored to national security interests and offer exceptions where no reasonable alternatives exist. Importantly, domestic businesses remain unaffected, and the bill preserves open procurement within a secure framework, aligning with fair competition principles.
• Private Property Rights: Though the bill does not directly target private property ownership, it indirectly restricts the ability of foreign adversary-controlled entities to enter into contractual relationships with institutions of higher education—especially in sectors such as software, research infrastructure, and educational services. This constraint is a policy decision grounded in national defense and academic integrity concerns, and the impact is focused on foreign entities rather than domestic property owners or individuals.
• Limited Government: The creation of the Higher Education Research Security Council introduces a new layer of oversight, which may appear contrary to small-government principles. However, this council is composed of institutional representatives rather than new bureaucrats and is designed to promote decentralized, institution-led governance rather than expanding centralized state control. Additionally, the substitute version reduced some reporting and approval powers previously proposed for the Texas Higher Education Coordinating Board, thereby avoiding unnecessary administrative expansion.

• SB 2430 (Same As)