According to the Legislative Budget Board (LBB), HB 346 is projected to have a significant fiscal impact on the state’s General Revenue Fund. The bill would result in an estimated net negative fiscal impact of $240 million for the 2026–2027 biennium. This stems primarily from the provision eliminating all state-level business registration and licensing fees for the first year of operation for new business entities. The estimated ongoing annual revenue loss is $120 million, continuing through at least 2030.

The fiscal estimate is based on approximately 400,000 new businesses registering in Texas each year, with the most common formation cost being $300 per entity. The fiscal note clarifies that this estimate is conservative—if broader interpretations of the bill lead to the elimination of additional fees from other state agencies, the total revenue loss could be substantially higher.

Despite this revenue loss, the bill is not expected to generate significant new costs for the state agencies involved. Administrative duties such as reporting and fund allocation by the Texas Workforce Commission and the Comptroller's Office are assumed to be absorbable within existing resources. No notable fiscal implications for local governments are anticipated under the bill as introduced.

Overall, while HB 346 imposes a marked fiscal cost, it is designed to stimulate economic activity and support small business development across Texas.

By eliminating state licensing and registration fees for a business’s first year, the bill directly reduces regulatory and financial obstacles that disproportionately affect startups and small enterprises. These changes reinforce individual liberty and free enterprise by empowering Texans to engage in commerce without undue burden from government-imposed costs.

Importantly, the bill does not grow the size or scope of government in a meaningful way. Although it requires the Texas Workforce Commission and the Comptroller to submit annual reports on support for new businesses, these are administrative functions that can be fulfilled within existing resources. The bill does not create new agencies, new programs, or new bureaucracies. It repurposes and better targets current economic development and workforce funds, ensuring that a share of them—5%—benefit businesses operating for less than five years.

HB 346 also does not increase the tax burden on Texans. The projected fiscal impact stems from an estimated $120 million annual revenue reduction due to waived business registration fees—not from new taxes or increased rates. This is a deliberate trade-off that reflects the policy choice to support economic growth by allowing more entrepreneurs to enter the marketplace with fewer upfront costs.

Furthermore, the bill reduces regulatory burden, especially on individuals launching new businesses, by eliminating certain fees and encouraging streamlined access to state programs. It imposes no new regulations, mandates, or compliance requirements on private actors.

Taken together, the bill respects fiscal responsibility, enhances opportunity, and minimizes government intrusion into private enterprise. Texas Policy Research recommends that lawmakers vote YES on HB 346.

• Individual Liberty: The bill enhances individual liberty by making it easier for Texans to start a business without needing to pay burdensome fees upfront. It reduces state interference in the decision to become self-employed or start an enterprise, removing a regulatory and financial barrier to economic freedom.
• Personal Responsibility: By eliminating initial fees but not offering ongoing subsidies, the bill encourages individuals to take initiative and ownership of their economic futures. It helps people help themselves—removing a hurdle, but not the responsibility to succeed.
• Free Enterprise: HB 346 promotes competition and entrepreneurship. It gives smaller, newer businesses a better shot at participating in public contracts and economic programs already in place. It doesn’t create special carve-outs—just ensures fair access in systems often dominated by large or well-established players.
• Private Property Rights: The bill does not directly impact property rights. However, by supporting new business creation, it can indirectly encourage the productive use of property, such as leasing storefronts, opening home-based businesses, or investing in commercial space.
• Limited Government: This is the most nuanced area. On one hand, the bill imposes new reporting duties on agencies and sets expectations for how existing economic development funds are allocated. On the other, it reduces state-imposed fees, does not create new agencies or programs, and uses existing resources without increasing the overall size of government. While some may question the use of economic development funds in general, the bill doesn’t expand them—just aims for fairer access, which is a modest and arguably liberty-enhancing reform within the existing framework.