Overall Vote Recommendation

Vote No; Amend

Principle Criteria

Free Enterprise

Property Rights

Personal Responsibility

Limited Government

Individual Liberty

Digest

House Bill 500 is a comprehensive supplemental appropriations bill that allocates significant general revenue funds to various Texas state agencies and initiatives for a two-year period beginning on the effective date of the Act. The bill addresses both urgent financial needs—such as the stabilization of retirement funds and infrastructure upgrades—and strategic investments in areas like mental health, public safety, and aerospace research. It authorizes new appropriations, reallocates previously authorized but unused funds, and grants specific flexibilities in fund transfers and usage. In the Committee Substitute for HB 500, the bill focused primarily on two articles, summarized below:

Article 1: General Government

Employees Retirement System (ERS): HB 500 allocates $1 billion to the ERS for a one-time "legacy payment" aimed at reducing the system's unfunded actuarial liabilities and long-term interest costs. This is a significant move to shore up pension obligations without permanently increasing ongoing state spending.
Crime Victims Fund: The bill appropriates $40.45 million to the Comptroller for transfer to the compensation to victims of crime account (Account 0469), ensuring continued support for this critical public service.
Unspent Funds Reallocated to Historic Preservation: Approximately $104.5 million in unspent funds from a 2021 appropriation is redirected to the Texas State Buildings Preservation Endowment Fund for use in maintaining state properties like the Bob Bullock State History Museum.
Space Exploration and Aeronautics Trust Fund: HB 500 establishes a major investment of $300 million into Texas’s aerospace sector by appropriating funds to the newly created Space Exploration and Aeronautics Research Trust Fund (Account 1203), signaling a state-level commitment to technological innovation and industrial development.
Courthouse Preservation Program: The Texas Historical Commission receives $100 million to continue issuing grants for courthouse preservation across the state, reaffirming the legislature’s commitment to preserving historical infrastructure.
State Insurance Building Replacement: The Texas Facilities Commission is appropriated $145.38 million for the demolition and reconstruction of the State Insurance Building, including authority to use proceeds from the building’s sale for replacement costs.
Legislative Facility Improvements: The State Preservation Board receives $75 million each for capital improvements to the Senate and House facilities, with respective approval required from the Lieutenant Governor and Speaker. Notably, these projects are exempted from competitive bidding requirements under Government Code Section 2269.101.
Jobs, Energy, Technology, and Innovation Act (JETIA) Administration: The Comptroller is given $5.94 million to administer JETIA (Chapter 403, Subchapter T, Government Code), a new economic development framework passed in 2023.
Cybersecurity Infrastructure in Lubbock: $150 million is allocated to the Office of the Governor to grant funds to the Lubbock Reese Redevelopment Authority for the acquisition of critical cybersecurity infrastructure under Homeland Security Strategy B.1.3 of the 2023 General Appropriations Act.

Article 2: Health and Human Services

Medicaid Transfer Authority: HB 500 grants the Health and Human Services Commission (HHSC) the authority to transfer unexpended balances from other strategies to Medicaid Client Services for FY 2024 and FY 2025. A report on such transfers must be submitted by October 1, 2025.
El Paso State Hospital Completion: $150 million is appropriated to HHSC for capital projects at the El Paso Psychiatric Center, including construction and facility upgrades consistent with Strategy G.4.2 of the 2023 appropriations.
Brazoria County Mental Health Facility: The bill allocates $10 million to HHSC for a one-time grant to support the planning and design of a mental health facility in Brazoria County, requiring at least 50% forensic capacity and donated land.
Tarrant County Mental Health Facility: Although the provided file is truncated before this section is fully described, based on the structure of the document, a similar grant is expected for Tarrant County to support a local inpatient mental health facility.

The differences between the originally filed version and the Committee Substitute of HB 500 reflect a significant reshaping of the bill’s priorities, scope, and appropriations. The originally filed version of HB 500, totaling more than 60 pages, was expansive in both funding and ambition. It proposed an enormous $2.5 billion contingent appropriation to the Texas Water Fund, making long-term water supply and infrastructure a central priority. This provision is completely omitted in the Committee Substitute, indicating a clear pivot away from water infrastructure as a top spending item. In its place, the substitute bill introduces entirely new appropriations, most notably a $300 million allocation for the Space Exploration and Aeronautics Research Trust Fund—a dramatic shift in focus toward Texas's investment in aerospace and high-technology innovation.

Another major addition in the substitute version is a $150 million cybersecurity infrastructure grant to the Lubbock Reese Redevelopment Authority. This appropriation did not appear in the filed version and highlights a newly elevated focus on critical infrastructure and homeland security, especially through the lens of digital threats. Alongside this is a $5.94 million appropriation to administer the Jobs, Energy, Technology, and Innovation Act (JETIA), also absent from the filed version. These additions signal that the substitute version aligns more closely with current strategic economic development initiatives, possibly influenced by recent legislative activity or executive priorities.

One of the most visually apparent changes between the two versions is structural. The filed version was comprehensive and included eight articles, spanning multiple policy areas: education, transportation, natural resources, health and human services, criminal justice, economic development, and technology modernization. In contrast, the Committee Substitute version is much shorter and more narrowly framed, focusing on general government and health-related capital projects. This condensation streamlines the bill and suggests that many of the original provisions—especially those dealing with deferred maintenance, IT modernization, and transportation grants—were either deprioritized or deferred for consideration elsewhere.

Mental health infrastructure funding remains a shared priority between the two versions, but the filed version offers more granularity and scope. It includes funding for the planning and construction of multiple regional mental health facilities, expansions to forensic bed capacity across the state, and new staffing allocations. The substitute version retains some of this focus—such as the $150 million for the El Paso State Hospital and $10 million each for Brazoria and Tarrant counties—but omits many of the more granular or regional facility upgrades detailed in the original bill. This change narrows the mental health expansion plan to fewer geographic areas and may limit the original intent to broadly increase statewide inpatient and forensic capacity.

The original bill also included large-scale reappropriations of unexpended and unobligated balances from prior sessions and supplemental acts. These included allocations for school safety, the Texas Enterprise Fund, semiconductor innovation, film incentives, and other high-impact state investments. The Committee Substitute leaves these out almost entirely, suggesting either a legislative decision to handle those balances in separate fiscal legislation or a shift in strategic budget management to reduce legislative complexity in this bill.

Notably, the filed version allocated significant funds to modernize IT systems and infrastructure for a wide array of state agencies. It addressed cybersecurity, network upgrades, legacy system replacements, and digital infrastructure for criminal justice, education, and administrative agencies. These provisions, totaling hundreds of millions of dollars, are excluded from the committee substitute. The omission marks a clear departure from a focus on operational modernization toward a more capital-heavy, infrastructure-focused spending plan.

In summary, the Committee Substitute of HB 500 reflects a tighter, more focused legislative approach that prioritizes strategic capital investment in key areas—space, cybersecurity, and government facilities—over the broad-based, agency-driven, and IT-heavy priorities seen in the filed version. The substitute signals shifting legislative intent to streamline appropriations, concentrate on marquee projects, and possibly defer or redirect broader systemic investments to future vehicles or regular budget processes.

HB 500: Supplemental Budg et Amendment Analyses

Author

Greg Bonnen

Sponsor

Joan Huffman

Co-Sponsor

Cesar Blanco

Juan Hinojosa

Contact the Author

Rep. Greg Bonnen

Capitol Phone:

(512) 463-0729

Capitol Office:

EXT E2.502

E-Mail:

[email protected]

Visit Official Website

Fiscal Notes

According to the Legislative Budget Board (LBB), the fiscal implications of HB 500 are substantial. The Committee Substitute version of the bill would result in a net reduction of approximately $13.74 billion in General Revenue-related funds available for certification through the biennium ending August 31, 2027. This includes a direct appropriation impact of $13.33 billion, with an additional reduction of $414.8 million due to changes in General Revenue-Dedicated account balances. These appropriations span a wide array of state functions, such as public health, infrastructure, education, cybersecurity, and disaster mitigation.

The appropriations in HB 500 are largely one-time expenditures that primarily take place in the fiscal year 2025. For instance, the largest General Revenue fund impacts include over $13.75 billion in FY 2025 alone, with no significant expenditures projected for FY 2026 or beyond. In addition to General Revenue, the bill appropriates funds from various dedicated accounts and special funds, including $122.5 million from federal funds, $100 million from the Volunteer Fire Department Assistance Fund, and $200 million from the Port Access Account Fund.

The bill also impacts numerous other state-held accounts, such as the Clean Air Account, Water Resource Management, Petroleum Storage Tank Remediation, and several other regulatory and infrastructure-focused accounts. The variety of funding sources underscores the comprehensive and cross-sectoral nature of the bill's appropriations.

Importantly, the fiscal note clarifies that the funding for the Foundation School Program included in the bill does not contribute to the net fiscal impact because it was already included in the state’s official revenue estimate. Additionally, the bill includes provisions that would create or recreate dedicated accounts or funds, subject to review under the state’s funds consolidation process, indicating the establishment of new financial instruments for long-term appropriations.

Finally, while the bill represents a significant outlay of state resources, the Legislative Budget Board anticipates no significant fiscal impact to local governments. This suggests that the appropriations are designed to be state-administered and managed, with minimal direct cost shifting to counties, municipalities, or local jurisdictions. Overall, HB 500 represents one of the largest supplemental appropriation efforts in recent cycles, with clear implications for state financial strategy and available future budget flexibility.

Vote Recommendation Notes

HB 500 proposes a massive supplemental appropriations package totaling over $13.7 billion in new General Revenue-related spending for the 2024–25 biennium, marking one of the largest fiscal expansions in Texas legislative history. While it responds to genuine infrastructure and service challenges—such as water supply, cybersecurity, disaster readiness, and public safety—it does so by significantly increasing the size, scope, and role of state government across multiple sectors. The bill funds new mental health facilities, transportation and aviation assets, economic development incentives, and even state-led aerospace and energy programs. It also re-appropriates large amounts of unspent funds from previous legislative sessions and federal relief programs.

From a liberty-oriented standpoint, HB 500 fails to meet the core principles of limited government and free enterprise. Much of the funding is directed toward activities that could and should be led by the private sector or local civil society—such as mental health services, vocational training, and early childhood support. The bill entrenches state control over service delivery and infrastructure development without incorporating adequate sunset provisions, privatization pathways, or transparency and accountability mechanisms. Additionally, large-scale contingent appropriations to funds like the Texas Water Fund and Energy Fund—while framed as strategic—risk opening the door to ongoing fiscal and bureaucratic expansion.

Though some elements of the bill are defensible—such as targeted technology upgrades, deferred maintenance catch-up, or court system improvements—these are embedded within a framework that normalizes state-driven development and redistributes vast public resources with little restraint. The sheer scale of the bill and the philosophy it embodies are incompatible with the idea of a constitutionally limited, fiscally disciplined government.

For these reasons, Texas Policy Research recommends that lawmakers vote NO unless amended to reduce its scope, emphasize private-sector solutions, impose spending limits and sunste caluses, and reinforce core constitutional responsibilities rather than expanding the state control over broad domains of public life.

Individual Liberty: The bill funds a vast array of state programs, many of which expand the role of government in sectors traditionally handled by individuals, communities, or markets. These include not only mental health but also education infrastructure, workforce development, and large-scale transportation planning. While some initiatives (like court technology modernization or storm mitigation) may increase service efficiency, the bill fails to pair its expansions with accountability or opt-out mechanisms that preserve individual autonomy. For example, cybersecurity and surveillance system investments raise privacy risks without clear guardrails. The bill’s scale reflects a government that presumes to know what is best for Texans in diverse areas of life.
Personal Responsibility: By channeling billions of dollars into child care, housing, mental health, vocational rehab, and disaster response programs, the bill replaces voluntary civil society efforts and local community problem-solving with top-down funding streams. Individuals and families are disincentivized from seeking local or faith-based alternatives when the state becomes the primary provider. Additionally, counties and local institutions become reliant on state grants, reducing the incentive for local fiscal stewardship.
Free Enterprise: While the bill includes economic development programs (e.g., aerospace research, port access, nuclear energy), much of this is state-directed industrial policy rather than creating open, competitive environments. Grants to public institutions for workforce programs, hospitals, and infrastructure often bypass private sector solutions. For example, appropriations to space exploration and energy sectors are framed as innovation, but in reality channel tax dollars into ventures where the private market may already be active or better equipped.
Private Property Rights: There’s no direct infringement on private property rights in the bill’s text. However, substantial funding for capital projects in transportation, energy, water, and facilities could lead to land acquisitions, permitting expansions, or eminent domain use in the future. Without clear constraints, the state’s enhanced fiscal power may enable future property encroachments—particularly in infrastructure and environmental projects.
Limited Government: The most dramatic concern is the overwhelming expansion of state scope and spending. HB 500 authorizes more than $13.7 billion in new spending, creates or re-funds dozens of grant programs, directs agency actions in highly specific ways, and sets up new mechanisms that—though currently labeled "one-time"—may establish long-term entitlements. Very few provisions contain sunset clauses, privatization options, or mechanisms to shift programs out of state hands over time. Moreover, the bill's broad contingency funding provisions (e.g., water, energy, nuclear) signal a philosophy of state-as-investor and manager rather than protector of rights and facilitator of markets.

References

HB 500: Supplemental Budg et Amendment Analyses

View Bill Text and Status