According to the Legislative Budget Board (LBB), the bill would have an estimated negative impact of $1,334,897 to General Revenue–Related Funds for the 2026–27 biennium. The fiscal note states that the bill itself would not make an appropriation, but it could provide the legal basis for a future appropriation to implement the loan program.

The projected costs are administrative rather than loan-capitalization costs. LBB estimates costs of $689,942 in fiscal year 2026 and $644,955 in fiscal year 2027, continuing at roughly similar annual levels through fiscal year 2030. These costs are tied to Health and Human Services Commission implementation of the program, including developing policies for loan applications, determining loan amounts, repayment terms and schedules, and monitoring contracts.

The fiscal note assumes HHSC would need 5.0 full-time equivalent employees each year to administer the program: an Administrative Assistant II, Contract Administration Manager I, Director II, Grant Specialist II, and Program Specialist II. The fiscal note also identifies $48,470 in one-time fiscal year 2026 costs related to implementation.

LBB notes that its analysis does not include an appropriation to establish or fund the loan pool itself. HHSC assumes the program would operate as a revolving loan program, with interest revenue used to fund future loans, but the Comptroller of Public Accounts could not determine the fiscal impact of that interest revenue. No significant fiscal implication to local governments is anticipated.

Texas Policy Research recommends that lawmakers vote NO on HB 5098 because it would create a new state-run loan program administered by the Health and Human Services Commission to finance interoperable care coordination technology for certain health care facilities. While improved electronic health record interoperability may be a worthwhile operational goal, the bill relies on a government-administered financing mechanism rather than private capital, facility investment, vendor financing, philanthropic support, or market-based coordination among providers.

The bill does grow the size and scope of government. It requires the executive commissioner of HHSC to establish and administer a loan program, adopt rules, determine eligibility criteria, set application procedures, develop loan terms and repayment schedules, evaluate applications, and monitor compliance with loan conditions. Those functions move the state beyond regulation and oversight into the role of lender and program administrator for health care technology investments.

The bill also expands agency discretion. Key program details would be set by rule rather than directly in statute, including eligibility standards, loan application procedures, repayment terms, application review, and compliance monitoring. That gives HHSC significant authority to decide which facilities receive state-backed financing and under what conditions. For lawmakers concerned about limited government, this is a central objection: the bill creates a new bureaucratic function and gives an agency broad control over its operation.

The bill increases the burden on taxpayers by creating recurring administrative costs. The LBB estimates a negative impact of $1,334,897 to General Revenue–Related Funds for the 2026–27 biennium. That estimate includes administrative costs only and does not include any appropriation to capitalize the loan pool itself. LBB estimates HHSC would need 5.0 additional full-time equivalent employees each year to implement and administer the program.

Taxpayer exposure is especially notable because the program would offer loans at an interest rate capped at one percent, which is below ordinary market financing. Even if the program operates as a revolving loan program, the state would still bear administrative costs and potential risks associated with program management, defaults, and future demands for appropriations. The bill would not make an appropriation, but LBB states that it could provide the legal basis for an appropriation to implement the bill.

The bill does not appear to impose a direct regulatory burden on individuals or businesses in the traditional sense. It does not require health care facilities to purchase interoperable systems, impose new penalties, or mandate participation in the loan program. However, it would create compliance obligations for facilities that voluntarily accept loans, including adherence to conditions developed and monitored by HHSC. More importantly, it increases government involvement in the health care market by using state-administered financing to favor selected facilities and technology investments.

From a free-enterprise standpoint, the bill creates selective subsidized credit. Preferred facilities could receive loans covering up to 80 percent of eligible costs, while other eligible facilities could receive loans covering up to 50 percent. That structure gives certain facilities access to government-backed financing that competitors may not receive and sets a precedent for other sectors to seek similar state loan programs.

The bill addresses a real issue with the wrong policy tool. A limited-government approach would avoid creating a new state lending program and instead focus on reducing barriers to private technology adoption, encouraging voluntary private-sector coordination, and leaving financing decisions to facilities, lenders, vendors, and civil society rather than state government.

• SB 2358 (Same As)