According to the Legislative Budget Board (LBB), the fiscal implications of HB 3592 are minimal. The bill, which imposes contribution limits on out-of-state donors to candidates and officeholders in Texas and authorizes civil penalties for violations, is not expected to result in significant costs to the state. Specifically, the Texas Ethics Commission, the primary agency responsible for implementing and enforcing the bill’s provisions, anticipates no meaningful fiscal impact from the proposed changes.

Additionally, the Office of Court Administration has reported that any increased caseload related to enforcement or civil proceedings resulting from violations of the new law would not pose a significant burden on the state court system. The bill’s enforcement mechanisms, including formal hearings to assess civil penalties, fall within the existing regulatory capacity of the Ethics Commission and judiciary without the need for additional staffing or appropriations.

At the local level, the legislation is also expected to have no significant fiscal implications. Local governments would not bear any new responsibilities or costs under the bill’s provisions, as regulatory authority and enforcement are retained at the state level.

Overall, while the bill introduces new limitations and enforcement procedures regarding campaign finance, it has been structured in a way that avoids triggering substantial administrative or judicial expenditures. As such, it carries a neutral budgetary impact for both state and local governments.

HB 3592 seeks to impose limits on the amount of political contributions that candidates and officeholders in Texas can receive from donors with out-of-state addresses. While the stated goal of the bill is to reduce external influence and promote accountability in Texas elections, the method it employs raises serious constitutional, ethical, and practical concerns, most notably, its impact on free speech and political participation.

The most critical issue with this bill is its restriction of constitutionally protected political expression. Under longstanding Supreme Court precedent, campaign contributions—particularly those made directly to candidates—are a form of political speech protected by the First Amendment. By capping contributions based solely on where a person lives, this bill discriminates against lawful participants in the democratic process. Two individuals who wish to support the same candidate may be treated unequally, simply because one resides outside Texas. This geographic discrimination is not tied to fraud, misconduct, or any improper influence; it’s purely based on a donor’s mailing address. That’s an arbitrary and constitutionally suspect basis for restricting political participation.

Moreover, the bill sets a dangerous precedent by allowing the government to regulate political speech not on the content or purpose of the expression, but on the source. If the state can limit donations from out-of-state individuals today, what stops it from targeting other classes of contributors tomorrow, such as those employed by certain industries, affiliated with certain movements, or holding certain views? Free speech protections must be content- and viewpoint-neutral; this bill risks undermining that fundamental principle.

Beyond the free speech implications, the bill may actually reduce transparency in elections. Capping direct contributions to candidates doesn't eliminate money from the political process—it simply reroutes it. Out-of-state donors who wish to support a candidate may instead funnel their money into independent expenditure committees, super PACs, or 501(c)(4) organizations, many of which are not required to disclose their donors publicly. Ironically, a bill meant to improve accountability could push more money into untraceable channels, creating the opposite effect.

Additionally, the bill expands the regulatory reach of the Texas Ethics Commission, granting it the authority to investigate and enforce new civil penalties. While the fiscal note suggests minimal budgetary impact, the broader concern is philosophical: expanding government authority over political activity should be done only with compelling justification and robust safeguards. This bill does not meet that standard.

It’s also worth noting that while the Committee Substitute version of the bill removed a provision that would have further limited the activities of political committees based on donor origin, the remaining core proposal still carries clear political implications. Historically, certain political parties and candidates, particularly challengers and those in minority-party positions, rely more heavily on national fundraising networks. This bill’s design, whether intentional or not, would likely have an uneven effect on the political playing field, undermining electoral fairness under the guise of reform.

In conclusion, while the intent to protect the integrity of Texas elections is valid and shared across ideological lines, HB 3592 represents a misguided approach. It limits constitutionally protected rights, could worsen transparency by encouraging re-routed spending, and expands state oversight of political activity without a strong justification. For these reasons, Texas Policy Research recommends that lawmakers vote NO on HB 3592.

• Individual Liberty: This is the most directly affected principle. Political contributions are a widely recognized form of political expression. By capping how much individuals can contribute to candidates based solely on where they live, the bill restricts an individual’s right to freely support candidates who represent their views, even if they reside out of state. This violates the spirit—and likely the letter—of First Amendment protections. True individual liberty requires that people be free to speak, associate, and contribute to political causes without unjustified government interference. This bill sets a precedent for limiting speech based on geography rather than conduct, which undermines a fundamental civil liberty.
• Personal Responsibility: The principle of personal responsibility presumes that individuals and candidates are capable of making their own choices and being held accountable through disclosure and transparency, not preemptive restrictions. Instead of trusting candidates to report and voters to evaluate the sources of campaign funds, this bill imposes a one-size-fits-all rule that suggests the state knows better than the individual. It punishes lawful behavior (making a contribution) without regard for intent or transparency.
• Free Enterprise: While campaign finance isn't a commercial market in the traditional sense, it operates under many of the same dynamics: voluntary exchange, competition, and innovation. Placing geographic limits on contributions distorts this system by artificially restricting the "marketplace of ideas." Candidates and supporters are no longer able to engage freely in political exchange, and innovation in campaign strategy is stifled by government-imposed ceilings based on donor location.
• Private Property Rights: While the bill doesn’t directly seize or regulate private property, it does control how individuals may use their financial resources for political purposes. Money is an extension of one's labor and autonomy. Preventing someone from using their legally earned money to support a candidate of their choice, merely because of where they live, is an indirect but real infringement on property rights. It suggests that citizens’ use of personal funds for political purposes can be arbitrarily limited by the state.
• Limited Government: The bill empowers the Texas Ethics Commission to enforce new regulations, hold formal hearings, and issue civil penalties—thus expanding the scope and complexity of state oversight in campaign finance. This contradicts the principle of limited government, which holds that government should exercise only those powers strictly necessary for public safety and order. There is no evidence that out-of-state contributions, in lawful amounts, are inherently corrupting or disruptive enough to justify this regulatory expansion.

• SB 405 (Same As)