According to the Legislative Budget Board (LBB), HB 3483 would not have a significant fiscal implication for the State of Texas. While the bill may result in a reduction of revenue deposited into the General Revenue–Dedicated Water Resource Management Account No. 153—due to the removal of certain oversight requirements for special utility district bond issuance, any such reduction is anticipated to be minimal and absorbable within existing budget structures.

The exemption of special utility districts from the review provisions under Sections 49.181 and 49.182 of the Water Code could lead to fewer oversight-related fees being collected by the Texas Commission on Environmental Quality (TCEQ). However, the fiscal note suggests that this potential decline in revenue would not significantly impact the state’s financial operations, likely due to the relatively modest volume or dollar amount of such fees.

Additionally, no significant fiscal implications are expected at the local government level. The bill's enabling provisions may facilitate greater borrowing capacity for special utility districts, but any associated administrative or operational costs are presumed to be offset by local control and the discretionary nature of bond issuance. In essence, the fiscal effects are expected to be minimal, manageable, and unlikely to burden state or local budgets.

HB 3483 proposes to exempt special utility districts from TCEQ oversight when issuing bonds and to expand their status under the Government Code to give them broader borrowing authority akin to cities, counties, and other large entities. While intended to promote local infrastructure development, particularly water and utility projects, the bill does so by removing financial review requirements and oversight mechanisms designed to ensure the responsible use of public funds. These changes raise serious concerns regarding fiscal accountability, transparency, and taxpayer protection.

One of the primary concerns is that the bill eliminates the requirement that special utility districts seek approval from the Texas Commission on Environmental Quality (TCEQ) before issuing public debt. That oversight exists to help ensure districts are financially capable of repaying bonds and that proposed projects are both necessary and feasible. Without this safeguard, districts could take on debt with limited scrutiny or due diligence, increasing the likelihood of overextension or financial mismanagement. If a district defaults or becomes financially unstable, local taxpayers and utility ratepayers—not the state—would likely shoulder the burden through higher utility fees or additional local taxes.

Additionally, while the bill does not expand the state government per se, it increases the scope of authority held by local governmental subdivisions without strengthening corresponding accountability measures. These special utility districts are typically governed by unelected boards, and their fiscal decisions often receive limited public attention. Granting them broader authority to issue debt without regulatory review could lead to a pattern of unchecked financial activity that undermines the principle of limited government. Empowering local entities to act with the financial independence of cities or counties, without the same voter accountability, represents a significant policy shift with long-term implications.

Furthermore, while the bill does not impose new regulatory burdens on individuals or businesses, it could indirectly affect the private sector. Businesses operating within the boundaries of a district that incurs excessive debt could face increased service fees or unstable utility infrastructure if the district mismanages funds. The absence of financial vetting could also harm investor confidence in Texas's broader system of local government financing.

In conclusion, although the bill seeks to remove red tape and promote infrastructure investment, it does so at the expense of fiscal discipline and taxpayer safeguards. The removal of independent financial review, combined with expanded debt authority for districts with limited public oversight, creates an environment vulnerable to fiscal mismanagement. Therefore, Texas Policy Research recommends that lawmakers vote NO on HB 3483 in order to preserve accountability, protect taxpayers, and maintain the integrity of Texas’s local government finance system.

• Individual Liberty: Though the bill does not directly restrict personal freedoms, it poses a risk to individual liberty by potentially enabling unaccountable local entities to take on public debt without sufficient oversight. If financial mismanagement leads to higher local taxes or fees, residents’ economic freedom and control over their property are indirectly diminished. Liberty is not only about freedom from regulation, but also protection from irresponsible government decisions that impact individuals' financial lives.
• Personal Responsibility: The bill does not meaningfully promote or undermine personal responsibility. However, it removes state-level checks that reinforce responsible governance at the district level. When government entities are freed from oversight without a corresponding accountability mechanism, the principle of responsibility is weakened, not for individuals, but for those in positions of public trust.
• Free Enterprise: The bill could support infrastructure expansion, which might benefit local business development by improving utility services. However, it also opens the door to fiscal instability, which can discourage investment and create unpredictable service conditions. Moreover, by granting special utility districts preferential borrowing powers without sufficient checks, it could distort market competition and reduce fairness, an affront to true free enterprise, which depends on transparency and equal rules for all.
• Private Property Rights: Special utility districts often have taxing authority and the ability to place liens on properties for unpaid utility fees or assessments. By increasing these districts’ capacity to issue debt without oversight, the bill raises the risk that property owners could face new or higher costs, without direct input or recourse. This threatens the long-term integrity of private property rights, particularly if debt obligations later justify increased service fees or special assessments.
• Limited Government: This is where the bill is most problematic. It expands the financial power of special-purpose local governments—many of which are governed by appointed or minimally accountable boards—while removing a key layer of state oversight. That creates a pathway for public entities to take on significant fiscal obligations without voter approval or third-party review. Limited government depends not just on size, but on restrained, accountable governance. By weakening oversight and broadening borrowing authority, the bill undermines this principle.