HCR 35 is a non-binding policy resolution with no direct fiscal impact on the Texas state budget. As a concurrent resolution, it does not appropriate funds, create or amend state statutes, or impose regulatory requirements. Instead, it expresses the will of the Texas Legislature by urging Congress to modify federal tax policy to allow spaceports to be financed using tax-exempt private activity bonds. Consequently, there are no immediate or quantifiable fiscal implications for state or local governments in Texas.

However, if Congress were to act on the resolution’s request, there could be indirect fiscal benefits for Texas over time. By making spaceports eligible for tax-exempt private activity bonds—a financing tool that reduces borrowing costs for private investors—this policy shift could incentivize additional infrastructure development in the state's commercial space sector. This may increase private capital investment, spur job creation, and generate broader economic growth in the aerospace and transportation industries, particularly in regions with existing or planned spaceport facilities.

Additionally, such developments could enhance state and local tax revenues over the long term through increased business activity, property development, and associated economic multipliers. Importantly, these benefits would be achieved without requiring new expenditures or subsidies from the state, preserving budget neutrality while potentially catalyzing economic growth in a strategic, high-tech sector.

Texas Policy Research recommends that lawmakers vote YES on HCR 35 based on its alignment with key liberty principles and its potential to promote economic development in a high-growth, innovation-driven sector. The resolution urges Congress to make spaceports eligible for tax-exempt private activity bonds (PABs)—a well-established financing tool currently available to other transportation-related infrastructure such as airports and seaports. Given Texas’s role as a national leader in aerospace, with five spaceports, NASA’s Johnson Space Center, and more than 2,000 related enterprises, the state is uniquely positioned to benefit from policies that encourage private capital investment in space infrastructure.

The resolution does not impose mandates, regulations, or fiscal obligations on the state. Instead, it leverages federal tax policy to stimulate market-driven growth. Expanding eligibility for tax-exempt PABs could lower financing costs for private developers, catalyze spaceport expansion, create jobs, and enhance the competitiveness of Texas and the broader U.S. space economy. These outcomes are consistent with the principles of free enterprise, personal responsibility, and limited government, particularly because the mechanism avoids direct subsidies or new public spending.

However, there is a valid fiscal policy concern that should be noted. Making additional sectors eligible for tax-exempt bonds reduces federal tax revenue because bondholders are not taxed on the interest income. This tax benefit, while targeted, can have a redistribution effect: if more projects qualify for tax-exempt status, other taxpayers may ultimately bear a greater share of the overall federal tax burden, either through higher taxes, deficit financing, or reduced public services. Though this impact is generally modest and somewhat mitigated by federal volume caps on PABs, it remains an important long-term consideration.

In summary, while the resolution is fiscally conservative in terms of state impact and strategically advantageous for Texas’s economy, it does raise broader equity and tax policy questions at the federal level. These concerns warrant ongoing monitoring but do not outweigh the resolution’s merits in supporting innovation and private investment in aerospace infrastructure.

• Individual Liberty: The resolution does not restrict or enhance individual rights or freedoms. It does not regulate personal behavior, impose civil or criminal penalties, or create new legal obligations for individuals. As such, it maintains the status quo with respect to personal liberty.
• Personal Responsibility: By encouraging private financing of spaceport infrastructure rather than government-owned or taxpayer-funded development, the resolution aligns with the principle of personal responsibility. It promotes a policy environment where private entities take initiative and risk in pursuit of innovation and enterprise, reducing reliance on public subsidies.
• Free Enterprise: The bill promotes free enterprise by expanding access to a tax-exempt financing tool (private activity bonds) that lowers borrowing costs for private investors. This facilitates the private sector development of spaceport infrastructure, enabling greater market competition and innovation in aerospace transportation. It treats spaceports similarly to other transportation sectors already benefiting from this tax status, leveling the economic playing field and empowering private actors.
• Private Property Rights: The bill does not threaten private property rights and instead encourages private sector-led infrastructure development. However, any future expansion of spaceports must be carefully managed to avoid potential abuses of eminent domain. While this resolution does not directly implicate that risk, it’s a factor to monitor in implementation to ensure that property rights are respected.
• Limited Government: This bill exemplifies limited government in two ways: first, by using an existing federal tax mechanism rather than creating new spending programs or regulatory agencies; and second, by urging federal—not state—action, meaning it does not expand the size or scope of Texas government. The approach leverages private capital and market incentives rather than state intervention to address infrastructure needs.

• SCR 12 (Same As)