According to the Legislative Budget Board (LBB), HB 3701 is not expected to have a significant fiscal impact on the State of Texas. The legislation provides expanded authority to the Texas A&M University System Board of Regents to construct, acquire, improve, extend, and equip utility systems on university property, but does not require new appropriations or impose state spending obligations. The LBB assumes that any administrative or operational costs associated with the bill's implementation can be absorbed using the university system's existing resources.

From a state finance perspective, this means the bill does not increase general revenue expenditures and does not authorize any new state-backed debt. Instead, it allows the university system to finance utility-related projects through existing institutional mechanisms, such as revenue bonds or system-generated income. The Texas A&M System is authorized to pledge net revenues from utility services and related charges to support such financing, making the model self-sustaining.

In terms of local government, the bill also carries no significant fiscal impact. Because it applies solely to property owned by the university system, and the facilities it governs are internal to the university, there are no imposed costs or administrative burdens on municipalities, counties, or other local entities.

Overall, the fiscal structure of the bill is designed to empower long-term capital improvements without drawing from taxpayer-supported general funds, making it fiscally neutral for both state and local governments.

HB 3701 amends Section 85.24 of the Texas Education Code to explicitly grant the Texas A&M University System Board of Regents the authority to construct and acquire power plants and utility systems on university property, particularly within Brazos County. This legislative change is specifically intended to support the development of an "Energy Proving Ground" at the Texas A&M-RELLIS campus, an initiative aimed at advancing nuclear and other energy technologies in Texas.

The bill analysis highlights the current statutory limitations faced by the university system. Under existing law, the board may improve and equip existing power plants, but lacks the explicit authority to construct or acquire new generating facilities—whether traditional or experimental (e.g., small modular nuclear reactors). HB 3701 addresses this gap by clarifying the board’s authority over utility infrastructure, a critical step to support the state’s ambitions for energy innovation, research, and development in partnership with the private sector. These efforts position Texas at the forefront of next-generation energy solutions without requiring state appropriations or new regulatory burdens.

Moreover, the fiscal note from the Legislative Budget Board affirms that HB 3701 carries no significant fiscal implications for the state or local governments. Any associated costs are expected to be absorbed by the Texas A&M System through existing revenues or debt-financed capital improvements. This makes the bill a fiscally responsible solution that leverages institutional autonomy rather than expanded government expenditure.

In sum, HB 3701 promotes public-private collaboration in energy research, grants operational flexibility to a major state university system, aligns with limited government principles, and achieves all this with no cost to taxpayers. For these reasons, Texas Policy Research recommends that lawmakers vote YES on HB 3701.

• Individual Liberty: The bill does not impose any restriction on individual rights or personal freedoms. On the contrary, by supporting the development of utility infrastructure at a major public research institution, it indirectly promotes the public good, such as energy innovation and campus infrastructure reliability, without mandating individual behavior or infringing on civil liberties. It expands institutional autonomy without negatively affecting students, faculty, or the general public.
• Personal Responsibility: The bill allows the Texas A&M University System to manage its own utilities and allocate operational costs internally, encouraging a model of self-reliance and fiscal responsibility. By giving the Board of Regents authority to determine and assign costs to specific campus buildings or facilities, the legislation fosters a culture where entities within the university system must account for their own utility usage and expenses. This reinforces the principle that services consumed should be paid for directly by those who use them.
• Free Enterprise: Although the bill applies to a public institution, it encourages enterprise-style governance. It enables Texas A&M to function more like a self-sustaining utility provider on its own property, particularly through provisions allowing the board to pledge revenues and issue bonds. This flexibility mirrors free market mechanisms, such as cost recovery and capital investment based on service demand. Furthermore, the proposed Energy Proving Ground at the RELLIS campus is designed to facilitate private-sector energy innovation, thus fostering public-private collaboration in cutting-edge research.
• Private Property Rights: The bill pertains exclusively to university system property and does not alter or encroach upon private property rights. However, to the extent that the university system is empowered to generate its own utilities, it may reduce future reliance on municipal or regional infrastructure. This could reduce pressure on government expansion or eminent domain actions, indirectly reinforcing private property boundaries.
• Limited Government: Perhaps most significantly, the bill reflects the principle of limited government by decentralizing authority. Instead of expanding the role of state agencies or requiring new appropriations, the legislation gives decision-making power to the Texas A&M Board of Regents. It allows a state entity to solve infrastructure challenges internally, without creating new regulatory frameworks or fiscal burdens on taxpayers. The absence of any new rulemaking authority or general revenue impact further supports this principle.

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