According to the Legislative Budget Board (LBB), HB 576 is not expected to result in any significant fiscal impact on the State of Texas. The bill’s provisions—expanding the definition of eligible trustees in real estate foreclosure proceedings—are considered procedural and administrative in nature, and as such, any costs incurred by implementing the changes could be managed using existing state agency resources without the need for additional appropriations.

At the local level, the bill is also not anticipated to have a significant fiscal impact on counties, municipalities, or other local governmental entities. The role of trustees in foreclosure actions does not typically involve local government expenditures, and the bill does not impose new responsibilities or regulatory requirements on these jurisdictions.

Overall, HB 576 is considered fiscally neutral. It makes a targeted change to the statutory definitions within the Property Code without expanding governmental functions or necessitating operational changes within state or local agencies.

HB 576 should be supported because it clarifies statutory language in a way that promotes legal certainty, contractual freedom, and market efficiency—all while avoiding any expansion of government power or imposition of new burdens on taxpayers or regulated parties. The bill addresses ambiguity in Chapter 51 of the Texas Property Code concerning who may serve as a trustee or substitute trustee in nonjudicial foreclosure sales. While the existing statute uses the term “person,” recent interpretations and a 2023 Attorney General opinion suggest that clarification is needed to confirm whether legal entities (such as corporations, trusts, or government agencies) qualify. HB 576 resolves this by explicitly including such entities in the definition.

Importantly, the bill does not grow the size or scope of government. It does not create any new offices, programs, or regulatory authorities. Nor does it grant any new powers to public agencies. It is a clarifying amendment to an existing foreclosure statute that governs private party transactions. Moreover, the bill imposes no new fiscal burden on state or local governments. The Legislative Budget Board confirmed that any administrative costs would be negligible and absorbable within existing resources, ensuring no impact on taxpayers.

The bill also does not increase regulatory burdens on individuals or businesses. In fact, it reduces uncertainty in the foreclosure process and expands flexibility for lenders and borrowers to appoint trustees that best fit their needs. This has the practical effect of improving business efficiency and reducing potential legal disputes, benefiting Texas’s real estate and financial markets.

HB 576 supports the liberty principles of limited government, free enterprise, and personal responsibility without introducing unintended costs or restrictions. It is a well-targeted statutory improvement, and as such, Texas Policy Research recommends that lawmakers vote YES on HB 576.

• Individual Liberty: The bill enhances individual liberty by ensuring that parties to a deed of trust—typically private individuals or businesses—have greater autonomy in selecting who may serve as trustee or substitute trustee in the event of a foreclosure. By expanding the legal definition from a “person” to include any legal entity, the bill empowers individuals and institutions to structure their contracts with fewer arbitrary restrictions imposed by statute.
• Personal Responsibility: The bill reinforces the principle of personal responsibility by preserving the existing foreclosure framework, which holds borrowers accountable for meeting the terms of their agreements. It does not modify the duties of trustees or reduce the consequences of loan default; rather, it clarifies who may carry out trustee responsibilities, thereby upholding the enforcement of private agreements through responsible, agreed-upon third parties.
• Free Enterprise: By broadening eligibility to serve as a trustee to include corporations, partnerships, trusts, and other legal entities, the bill increases access to the foreclosure servicing market. This fosters competition, allows businesses to offer services that were previously limited to individuals, and removes legal ambiguity that may have disincentivized participation. Such deregulation supports innovation and economic activity in the real estate and financial services sectors.
• Private Property Rights: The trustee role in a deed of trust is essential to enforcing property rights when a borrower defaults. The bill does not expand or contract those rights—it simply affirms who may be entrusted with enforcing them. By clarifying the lawful agents involved in foreclosure, the bill strengthens legal predictability and the enforceability of property interests, benefiting both lenders and borrowers in real property transactions.
• Limited Government: Critically, the bill adheres to the principle of limited government. It imposes no new state controls or regulatory mandates. It does not create new agencies or expand governmental power. Instead, it removes ambiguity and potential overreach by specifying that existing legal entities can fulfill trustee roles, freeing market participants from unnecessary statutory constraints.

• SB 372 (Same As)