According to the Legislative Budget Board (LBB), the fiscal implications of SB 1405 are expected to be neutral. According to the Comptroller of Public Accounts, there would be no cost to the state from the proposed changes. While the bill makes substantial updates to broadband policy—including new grant programs, higher service standards, and revisions to taxation statutes—it does not create any new funding obligations that would require state appropriations. The activities of the Broadband Development Office and the Comptroller, such as publishing broadband mapping data and administering grants, are not expected to incur additional operational costs beyond current agency capacity​.

From a taxation standpoint, the bill amends Chapter 151 of the Tax Code to clarify that internet access service is not a taxable service, aligning state law with the federal Internet Tax Freedom Act, which preempted states from taxing internet access as of July 1, 2020. Therefore, repealing Section 151.325, which exempted the first $25 of monthly internet access from taxation, is simply a cleanup measure and has no revenue impact. Likewise, updates to Chapter 171 of the Tax Code clarify that qualifying broadband grants are excluded from taxable revenue for franchise tax purposes. These are already standard practices and thus will not affect tax collections or state revenues.

Additionally, the repeal of Chapter 490H (the Governor’s Broadband Development Council) and certain provisions in Chapter 490I simplifies the state’s broadband administrative framework but does not carry fiscal consequences. No new spending mandates or major shifts in funding streams are proposed, and local governments are also not expected to experience any financial impacts as a result of this legislation. In summary, while SB 1405 restructures and modernizes several components of broadband-related policy and tax law, it is carefully designed to do so without affecting the state budget.

SB 1405, though framed as a modernization effort to improve the administration of broadband access across Texas, fundamentally expands and entrenches a government-led approach to what is inherently a private-sector domain. By refining the authority and scope of the Broadband Development Office and increasing regulatory oversight, the bill further institutionalizes a model that centralizes broadband development in state hands—despite ample evidence that private enterprise can and does deliver these services more efficiently, competitively, and with greater responsiveness to consumer demand.

This approach also reflects a broader philosophical concern: the collectivization of broadband as a public utility. Rather than allowing a diverse, decentralized, and competitive marketplace to drive innovation and deployment, the bill reinforces a system where broadband is treated as a centrally planned service, with state agencies determining which areas are “unserved,” setting technical standards, managing grant programs, and adjudicating disputes. Such a framework invites long-term dependency on state funding and opens the door to politicized allocation of infrastructure dollars—ultimately undermining the dynamism of the free market.

From a liberty-oriented lens, this bill contradicts the principle of Limited Government by expanding a role that should not belong to the state in the first place. It also impedes Free Enterprise by crowding out private investment and introducing top-down incentives that distort natural market forces. While SB 1405 may clean up outdated language and provide technical clarity, it does so in furtherance of a system that violates foundational principles of decentralization, individual responsibility, and voluntary exchange.

SB 1405 doesn't just improve a policy framework—it deepens Texas's commitment to a collectivized model of broadband development. For those who believe infrastructure like this is best handled by private industry, the bill represents an expansion of government’s improper role and a continued drift away from market solutions.

As such, Texas Policy Research recommends that lawmakers vote NO on SB 1405.

• Individual Liberty: The bill ostensibly aims to improve broadband access, which could enhance individual liberty by enabling broader access to information, education, and economic opportunity. However, when this access is facilitated through government centralization rather than private sector innovation, it risks replacing individual initiative and voluntary solutions with collective, bureaucratic decision-making. By treating broadband as a public utility and determining who gets access through government-led classifications and funding mechanisms, the bill subtly shifts decision-making power away from individuals and communities.
• Personal Responsibility: The bill removes direct responsibility from individuals and private entities by promoting state-managed investment in broadband infrastructure, especially in unserved or underserved areas. While it may be motivated by good intentions, this state-driven approach reduces the incentive for local innovation, public-private partnerships, or grassroots connectivity solutions. Over time, it may erode a culture of self-reliance in favor of dependency on state-administered programs.
• Free Enterprise: The bill expands a grant and incentive program that directs public funds to broadband development, potentially distorting the market by subsidizing certain providers or regions. Even with neutral criteria, such programs can crowd out existing or potential private investment, especially in rural or marginal markets where return on investment is tight. Instead of letting supply and demand shape broadband deployment, the bill puts a government agency in the position of choosing winners and losers, undermining the competitive forces that are the hallmark of a free enterprise system.
• Private Property Rights: There is no direct impact on property rights, such as eminent domain expansions or utility easements, in the bill. However, the broad infrastructure development authority granted to the Broadband Development Office (BDO) may carry indirect risks down the line if future grant projects lead to property access disputes or further state intervention in physical infrastructure deployment. This area bears watching, especially as the program matures.
• Limited Government: At its core, the bill reinforces and expands a state-centered model of broadband infrastructure. It broadens the responsibilities of the BDO, repeals some outdated provisions but replaces them with even more extensive program management authority, and integrates federal and state tax provisions to incentivize government-coordinated deployment. Though procedurally efficient, these actions strengthen the role of the state in a sector traditionally led by private industry, which directly contradicts the principle of a restrained, minimal government limited to protecting rights rather than provisioning services.

• HB 2838 (Same As)