According to the Legislative Budget Board (LBB), HB 128 is not anticipated to have a fiscal impact on the State of Texas. That means no state agencies are expected to incur new costs or savings as a result of implementing the provisions of this legislation. Essentially, state government operations related to sister-city agreements would continue normally, just with new restrictions in place regarding which countries can be partnered with.

For local governments, such as cities, counties, or other political subdivisions, the fiscal note finds no significant fiscal implication. While some local entities might need to terminate existing sister-city agreements with designated foreign adversaries, these administrative actions are expected to require only minimal resources and are not considered costly or burdensome.

Overall, the bill is designed to create a policy shift without introducing new spending or requiring additional administrative structures at either the state or local level.

HB 128 represents a careful and focused effort to safeguard Texas governmental entities from foreign malign influence, without growing government or burdening taxpayers. As outlined in the bill analysis, HB 128 responds to federal warnings that the Chinese Communist Party, through the Chinese People's Association for Friendship with Foreign Countries (CPAFFC), has been actively seeking to influence local and state leaders across the United States. To counter this threat, HB 128 prohibits Texas governmental entities from entering into or maintaining sister-city agreements with countries classified as foreign adversaries, specifically China, Iran, North Korea, Russia, or any country similarly designated under Chapter 2275.

Importantly, the bill maintains Texas’s ability to foster positive international relationships by explicitly encouraging agreements with U.S. allies, such as those designated as major non-NATO allies and Taiwan. HB 128 establishes a withdrawal deadline of October 1, 2025, for prohibited agreements, with the withdrawal requirement expiring on January 1, 2027. This approach ensures that any transition is orderly and minimizes disruption.

Critically, HB 128 does not grow the size or scope of government. It imposes a straightforward limitation on governmental activities without creating new agencies, enforcement bodies, or regulatory programs. The Legislative Budget Board confirms that the bill does not impose additional costs on the state or local governments, ensuring no new burden on taxpayers. Furthermore, the bill does not impose any regulatory burden on individuals or businesses, as it exclusively applies to actions by governmental entities.

In sum, House Bill 128 strengthens the integrity of Texas governmental partnerships, reinforces national security interests, respects fiscal responsibility, and upholds key liberty principles. Given that it avoids expanding government power or imposing financial or regulatory costs, Texas Policy Research recommends that lawmakers vote YES on HB 128.

• Individual Liberty: The bill protects individual liberty by preventing Texas governmental entities from forming ties with foreign adversary governments known to engage in espionage, surveillance, and political influence operations. By limiting these potential threats, the bill helps ensure that Texans' freedoms, particularly freedom from foreign influence in local government, are better preserved.
• Personal Responsibility: The bill encourages governmental entities to act responsibly by requiring them to ensure their international relationships align with national security interests. It places the onus on state agencies and local governments to evaluate their agreements and terminate those that involve hostile regimes, reinforcing accountability.
• Free Enterprise: The bill neither restricts nor promotes private economic activity. It exclusively governs relationships between public governmental entities and foreign communities. Private businesses and individuals retain full freedom to engage internationally without new barriers. Thus, the bill has a neutral effect on the free enterprise system.
• Private Property Rights: The bill does not impact individual or business property rights. It does not authorize any taking, regulation, or infringement on private property. Its scope is narrowly confined to public-sector agreements.
• Limited Government: The bill reinforces the principle of limited government. Rather than expanding governmental authority or creating new powers, it imposes a specific restriction: it bars governmental entities from entering into agreements with adversary states. This reduces the potential for inappropriate or harmful government entanglements, aligning government action more closely with its legitimate, limited functions.