According to the Legislative Budget Board (LBB), HB 3169 would have no net fiscal impact to General Revenue-related funds during the 2026–27 biennium, with no anticipated effect on state revenue through fiscal year 2029. However, the bill is expected to reduce General Revenue beginning in fiscal year 2030, when the qualifying hotel project is projected to become operational. The estimated General Revenue loss is $679,000 in fiscal year 2030, with negative fiscal impacts continuing for 10 years as the municipality receives eligible state tax revenues generated by the project.

The fiscal impact results from extending eligibility for the hotel and convention center tax incentive program to the City of Carrollton. Under the bill, Carrollton would be entitled to receive specified state sales and use tax and state hotel occupancy tax revenues generated by a qualified hotel, as well as associated restaurants, bars, and retail establishments connected to the project. The LBB based its estimate on Carrollton's planned convention center hotel project, an anticipated opening date of September 1, 2029, and comparisons with existing qualified hotel projects operating under current law.

The LBB also concludes that the bill would have a positive fiscal effect for local government. Carrollton would receive the eligible state tax revenues generated by the qualified hotel and related facilities for up to 10 years following the hotel's initial occupancy, providing a dedicated revenue stream to support the convention center project.

HB 3169 expands eligibility for an existing state hotel and convention center tax incentive program by extending its benefits to an additional municipality. While the bill does not create a new state agency, expand regulatory authority, or impose new mandates on individuals or businesses, it nonetheless broadens the scope of an existing government subsidy by making another municipality eligible to receive state tax revenues that would otherwise be deposited into General Revenue.

From a limited-government perspective, the bill represents an incremental expansion of a program that uses preferential tax treatment to encourage specific economic development projects. Rather than allowing convention center and hotel developments to succeed or fail based on market demand and private investment, the program directs state tax revenues to selected projects that satisfy statutory eligibility criteria. Although the Committee Substitute narrows the bill compared to the introduced version, it nevertheless extends the underlying subsidy to another municipality and reinforces a legislative pattern of adding city-specific exceptions to the Tax Code over time.

The LBB projects no fiscal impact during the 2026–27 biennium, but the bill is expected to reduce General Revenue beginning in fiscal year 2030 as state sales and hotel occupancy tax revenues generated by the qualified project are redirected to the participating municipality. While the bill does not increase taxes or impose additional regulatory burdens on businesses or individuals, it increases taxpayer exposure by expanding a program that diverts state revenues from general governmental purposes to subsidize a specific category of local development.

Because the bill expands an existing government subsidy, increases future taxpayer exposure through foregone General Revenue, and continues the practice of providing targeted tax preferences for selected local projects rather than advancing neutral tax policy, the bill does not advance the principles of limited government, free enterprise, or fiscal restraint. Accordingly, Texas Policy Research recommends that lawmakers vote NO on HB 3169.

• Individual Liberty: The bill does not create new mandates, prohibitions, penalties, surveillance authorities, or restrictions on individual conduct. It neither expands nor contracts personal freedoms.
• Personal Responsibility: The bill does not alter individual incentives regarding work, savings, education, healthcare, or dependency on government. It is directed at municipal financing authority rather than individual behavior.
• Free Enterprise: The bill expands a government-directed economic development subsidy by extending preferential tax treatment to a qualifying hotel and convention center project. This favors one class of development over competing private investments, distorts market competition, and perpetuates a system in which government allocates economic benefits through statute rather than allowing investment decisions to be driven solely by market demand.
• Private Property Rights: The bill does not affect ownership rights, land use restrictions, eminent domain, permitting requirements, or the use and enjoyment of private property. Although it concerns hotel development, it does not alter underlying property rights.
• Limited Government: While the bill does not establish a new agency or regulatory program, it expands the scope of an existing state economic incentive by making another municipality eligible for tax rebates and the redirection of state tax revenues. It also increases future taxpayer exposure through foregone General Revenue and continues the Legislature's practice of expanding municipality-specific exceptions to the Tax Code rather than narrowing government intervention in economic development.

• SB 1703 (Same As)