According to the Legislative Budget Board (LBB), HB 4044 is projected to result in a net negative impact to General Revenue-related funds of approximately $3.36 million over the 2026–2027 biennium. Additionally, it will lead to an estimated $640,000 loss to the Property Tax Relief Fund during the same period. Because the Property Tax Relief Fund supports the Foundation School Program, any revenue shortfall must be offset with General Revenue, increasing the fiscal responsibility of the state to backfill this gap​.

The revenue impact stems from the bill's provision to exempt public institutions of higher education and university systems from certain limitations under Section 47(c)(2) of the Internal Revenue Code. These limitations currently restrict tax-exempt entities from claiming federal historic rehabilitation tax credits. By lifting these barriers, HB 4044 expands the class of eligible entities whose qualifying rehabilitation expenditures can generate transferable franchise and insurance premium tax credits. This expansion increases the potential volume of credits issued, which, in turn, reduces tax collections.

The estimated annual cost to General Revenue is about $1.68 million per year beginning in 2026 and extending through 2030, with consistent annual losses reflected in the five-year forecast. These reductions are primarily attributed to lowered franchise and insurance premium tax liabilities due to credit claims.

Importantly, the LBB’s analysis finds no fiscal implications for local governments, as the bill affects state-level tax credit allocations rather than property tax bases or local spending mandates​.

HB 4044 proposes to reauthorize the eligibility of public institutions of higher education and university systems in Texas to participate in the Texas Historic Preservation Tax Credit Program by exempting them from federal tax-exempt use and depreciation limitations that would otherwise disqualify them. While the bill does not create a new credit or regulatory program, and technically operates within an existing tax incentive framework, its effect is to grant significant public financial institutions yet another revenue tool—one backed by taxpayers—to subsidize capital projects they are already well positioned to fund.

The core concern with HB 4044 is not about historic preservation itself, but about who benefits and who bears the cost. Public universities in Texas already receive substantial support from taxpayers through direct General Revenue appropriations, dedicated funding sources (such as the Available University Fund), tuition-backed revenue bonds, and federal aid. Many institutions, particularly large systems like the University of Texas and Texas A&M, have endowments worth billions of dollars, often larger than those of entire private universities. These schools also retain the ability to issue debt, raise student fees, and leverage political influence to secure additional funding from the legislature. Given these resources, it is not fiscally or ethically justifiable to further reduce the state’s tax collections to subsidize their building projects—especially through a credit that, by design, reduces the tax liability of others who do not benefit from the credit.

HB 4044 would shift millions of dollars in state tax liabilities—$3.36 million over the 2026–27 biennium alone, with additional impacts to the Property Tax Relief Fund that must be backfilled with General Revenue​. This is not costless. Other taxpayers will ultimately bear this burden, whether through higher taxes, reduced services, or increased competition for scarce budget dollars. Worse still, unlike targeted funding mechanisms that undergo legislative scrutiny through the budget process, tax credits are an “off-budget” form of spending that bypass normal accountability checks. This erodes transparency and weakens legislative control over fiscal priorities.

Additionally, the bill expands the scope of a credit originally intended to encourage private-sector investment in preservation. By opening access to large public institutions—entities that do not operate under market pressures and already benefit from public privileges—the bill distorts the original intent of the program. It creates a situation where already-subsidized entities receive preferential treatment, while ordinary taxpayers and small businesses, many of whom do not qualify for such credits or lack the capital to take advantage of them, are left sharing the increased burden.

While the bill does not grow the regulatory state or create new bureaucracies, its fiscal structure and policy assumptions reflect a misallocation of taxpayer resources. Rather than focusing limited public funds on essential services or tax relief, HB 4044 would indirectly subsidize construction and restoration projects for institutions that already command immense wealth and political capital.

For these reasons, and in keeping with principles of tax equity, limited government, and fiscal responsibility, Texas Policy Research recommends lawmakers vote NO on HB 4044.

• Individual Liberty: At first glance, HB 4044 doesn’t appear to impact individual liberty directly. It does not restrict or expand personal freedoms in the conventional sense (e.g., speech, religion, bodily autonomy). However, it does indirectly undermine individual liberty by shifting the cost of public policy onto taxpayers who have no say in how the benefits are allocated. By offering a tax credit to large, publicly funded institutions—funded in part by revenue from individuals—it reduces resources available for core public functions or future tax relief. When citizens must pay more because favored institutions pay less, that affects their economic freedom.
• Personal Responsibility: The bill potentially discourages institutional self-reliance. Public universities already benefit from significant state and federal subsidies and have access to tuition-backed debt and large endowments. By offering these institutions another financial advantage through transferable tax credits, HB 4044 rewards dependence on state-managed financial advantages rather than fiscal discipline or self-sufficiency. This undermines the principle that public institutions should operate within the limits of their own considerable resources rather than seek carve-outs at taxpayer expense.
• Free Enterprise: While HB 4044 does not regulate private businesses, it distorts the free market by granting public institutions—entities that do not face the same market pressures as private actors—access to tax credits designed to incentivize private investment. This places private developers at a competitive disadvantage. When public institutions with vast endowments and tax-exempt status compete for the same limited pool of credits as small businesses or nonprofit developers, it warps the market, creating an uneven playing field and misallocating capital.
• Private Property Rights: The bill does not directly interfere with private property rights, nor does it impose new restrictions or mandates on property owners. However, by steering tax benefits toward publicly owned property, it subtly shifts the public investment focus away from private historic properties. This could diminish the incentive for private property owners to invest in preservation projects, displacing private initiative with public sector dominance.
• Limited Government: HB 4044 expands the use of the tax code as a tool for indirect public spending. Though it doesn’t create a new government agency, it increases the scope of government involvement in the market through tax expenditure policy. The state would be forgoing millions in tax revenue—money that must either be replaced or cut from essential services. By doing so outside the appropriations process, the bill circumvents normal budget scrutiny and accountability, effectively using the tax code to do what should be done through transparent spending debates. This violates the principle of limited government, which favors neutral tax policy, restrained fiscal practices, and accountability in spending.