According to the Legislative Budget Board (LBB), HB 406 would have no fiscal impact on the state budget. The bill imposes a new notification requirement on municipalities and counties regarding economic development agreements, but it does not mandate any new state expenditures, revenue adjustments, or create obligations that would affect the state treasury.

For local governments, the bill is expected to result in no significant fiscal impact. Municipalities and counties would need to provide written notice to their local workforce development boards within 14 days of executing, amending, or renewing certain economic development agreements. However, the administrative burden associated with this task is considered minimal. Existing local staff and processes are generally sufficient to handle the new requirement without the need for additional resources or major adjustments.

Overall, HB 406 is a procedural transparency measure that leverages existing local administrative structures and does not require the creation of new programs, funding streams, or staffing increases at either the state or local level.

HB 406 aims to improve transparency in local economic development by requiring municipalities and counties to notify local workforce development boards when they enter into, amend, or renew economic incentive agreements. While the bill’s goal of better communication is understandable, it fundamentally operates within — and reinforces — a system of taxpayer-funded subsidies to private businesses. For those who are philosophically opposed to government economic incentives, HB 406 does not correct or limit that system; instead, it further normalizes it by embedding additional administrative procedures around it.

Moreover, the bill modestly expands the regulatory scope of local government by imposing a new reporting mandate. Even though the fiscal note indicates no significant cost, it nonetheless represents a growth in procedural government oversight at the local level, which runs counter to principles of limited government. HB 406 creates additional bureaucratic duties without addressing the root concern: whether public funds should be used for private economic development at all.

Given these concerns — namely, the reinforcement of corporate welfare practices, the expansion of government obligations, and the lack of any meaningful check on incentive programs themselves — Texas Policy Research recommends that lawmakers vote NO on HB 406. Lawmakers committed to free enterprise, limited government, and taxpayer protection should oppose further entrenching a system that subsidizes private business at public expense.

• Individual Liberty: The bill promotes transparency about how local governments are using public resources for economic development. Making workforce boards aware of deals could, in theory, empower citizens to understand and react to local government decisions that affect job opportunities. However, this impact is indirect — it does not create any new personal freedoms.
• Personal Responsibility: The bill requires local governments to take responsibility for informing relevant stakeholders (local workforce boards) when they make incentive deals. It modestly encourages better stewardship of public information. But again, it does so within a system that uses taxpayer funds for private gain, which raises deeper questions about responsible governance.
• Free Enterprise: While the bill doesn't directly regulate businesses, it indirectly strengthens the infrastructure around economic incentives, which interfere with free market dynamics. Economic development agreements often involve picking winners and losers, distorting competition. By further institutionalizing the process (through mandatory notice procedures), the bill entrenches the state's role in markets rather than limiting it.
• Private Property Rights: The bill has no direct impact on private property rights. It does not propose new takings, eminent domain actions, or property regulations.
• Limited Government: The bill increases local government procedural obligations by adding another mandatory notification step. Although the cost is small and there are no direct fines or heavy enforcement provisions, the bill expands the government’s administrative scope — it mandates more action without shrinking or reforming the economic incentive programs that necessitate it. This conflicts with the principle that government should be kept small, simple, and minimally intrusive.