According to the Legislative Budget Board (LBB) HB 4377 is expected to have a significant negative fiscal impact on the state budget. According to the Legislative Budget Board (LBB), the estimated two-year net impact to General Revenue Related Funds will be a negative $5,694,581 through the biennium ending August 31, 2027. This negative impact is concentrated entirely in fiscal year 2026, with no projected costs or savings in subsequent years.

The fiscal impact arises primarily from the bill's requirement for the Department of Family and Protective Services (DFPS) to destroy all genetic material and delete genetic information by January 1, 2026. Since genetic data exists in both digital and physical formats within DFPS systems, including imaged documents and physical records, the destruction process necessitates extensive digitization and IT integration. DFPS identified approximately 5,280 boxes of records that would need to be digitized. Originally, the department planned to complete this process over 24 months at a cost of $700,000. However, the bill’s accelerated deadline of four months significantly increases costs, resulting in an estimated $4,200,000 needed to complete the digitization in fiscal year 2026.

Additionally, the bill requires implementing an IT solution to identify and delete genetic data within the IMPACT system (Information Management Protecting Adults and Children in Texas). This will necessitate hiring a System Analyst V to complete approximately 2,510 hours of work. The technology implementation cost, including personnel and software expenses, is estimated at $1,960,210 in fiscal year 2026. The bill’s implementation relies heavily on technology to ensure that genetic data is properly identified, removed, and validated within DFPS systems, which adds both personnel and software costs.

There are no anticipated fiscal implications for local government, as the financial burden falls entirely on the state through DFPS’s compliance efforts. In summary, HB 4377 will impose a one-time but substantial fiscal burden on the state, primarily due to the accelerated timeline for digitizing records and the IT modifications needed to meet the bill’s requirements. The high costs stem from the need to compress a two-year project into four months and integrate specialized IT solutions to handle sensitive genetic information securely. While the bill aims to protect privacy by ensuring the destruction of genetic data, its implementation will require considerable financial and technological resources.

HB 4377 addresses significant privacy concerns regarding the retention of genetic material and genetic information collected by the Department of Family and Protective Services (DFPS), particularly in the context of paternity determination during child welfare cases. The bill recognizes that long-term retention of sensitive genetic data, especially when unrelated to ongoing investigations, poses potential risks to individual privacy. Without clear statutory guidelines, there has been uncertainty around how long genetic material can be stored and whether individuals retain any control over their genetic data once collected.

The Committee Substitute for HB 4377 takes a more balanced approach compared to the original version. Initially, the bill mandated the immediate destruction of all genetic material and information once the purpose for paternity testing was fulfilled. However, the substitute introduces a more nuanced policy. It requires DFPS and any contracted testing laboratories to promptly destroy genetic material and delete genetic information after their intended use, but it allows the retention of genetic test results for legal and administrative purposes. These results are designated as confidential under existing statutory provisions, addressing the need to maintain important records while enhancing privacy protections.

Moreover, the substitute bill provides clear definitions of terms such as "genetic test" and "testing laboratory," and expands the scope to include not only DFPS but also any contracted laboratories, ensuring that all entities involved follow consistent data handling protocols. This inclusion helps mitigate risks of data misuse or unauthorized retention by third-party labs, enhancing accountability.

Despite the bill’s strengthened privacy safeguards, there are substantial concerns regarding its fiscal impact. The Legislative Budget Board (LBB) has projected a negative financial impact of $5.7 million through the biennium ending August 31, 2027. This is primarily due to the accelerated timeline for digitizing physical records, which compresses a planned 24-month project into just four months. The cost also includes implementing IT solutions to securely identify and delete genetic information from DFPS systems. These expenses could strain DFPS resources and affect other service areas.

To balance the critical need for privacy protection with practical implementation, the recommendation is to amend the bill by allowing greater flexibility in the digitization timeline. Extending the deadline would alleviate financial pressure while still fulfilling the bill’s goal of safeguarding genetic data. Adjusting the timeline would also allow DFPS to better allocate its existing resources, making the policy both effective and sustainable. Texas Policy Research recommends that lawmakers vote YES; Amend on HB 4377.

• Individual Liberty: HB 4377 positively impacts individual liberty by protecting the privacy of individuals whose genetic material and information are collected by the Department of Family and Protective Services (DFPS). By mandating the destruction of genetic material and the deletion of genetic information once the purpose (typically paternity determination) has been fulfilled, the bill ensures that personal genetic data is not retained indefinitely. This measure helps safeguard individuals' rights to control their personal information, particularly when it is unrelated to ongoing legal or child welfare matters. Additionally, by retaining only the necessary genetic test results under confidentiality provisions, the bill strikes a balance between maintaining essential records and protecting personal privacy.
• Personal Responsibility: The bill indirectly reinforces personal responsibility by ensuring that state agencies handle sensitive genetic information ethically and securely. By setting clear guidelines for data retention and destruction, the bill holds DFPS accountable for responsibly managing the personal data it collects. This approach aligns with the principle that government entities should take proactive steps to protect citizens' personal information, especially when it is no longer needed for its original purpose.
• Free Enterprise: HB 4377 has minimal direct impact on free enterprise since it primarily regulates how a state agency and its contracted laboratories handle genetic data. However, it could indirectly influence private testing laboratories that partner with DFPS by imposing stricter data management requirements. This may require laboratories to implement more robust data destruction practices, potentially increasing operational costs. Nonetheless, by setting clear standards for data handling, the bill encourages responsible practices within the private sector when partnering with government agencies.
• Private Property Rights: The bill does not directly affect private property rights, as it focuses on the management of genetic information rather than physical or real property. However, one could argue that genetic data itself can be viewed as a form of personal property. By mandating the destruction of genetic material once its purpose is fulfilled, the bill respects the concept that individuals should retain control over their own biological data, thereby indirectly upholding the principle of private property in a modern context.
• Limited Government: HB 4377 aligns with the principle of limited government by preventing the unnecessary retention of genetic material and information, thus reducing the potential for state overreach into individuals’ private data. By establishing clear limits on data retention, the bill ensures that the government does not hold onto personal genetic information longer than necessary. However, the bill also introduces a state mandate for data destruction and record-keeping, which some may see as an expansion of government regulation. Nevertheless, this mandate is specifically aimed at protecting privacy rather than increasing government surveillance or data collection.