According to the Legislative Budget Board (LBB), SB 1897 imposes new regulatory duties on the Public Utility Commission (PUC) to oversee the removal of federally banned communications equipment and the monitoring of telecommunications providers. According to the Legislative Budget Board’s fiscal note, the overall fiscal impact on the state cannot be fully estimated due to several unknown variables. These include the number of service providers that will be required to register annually with the PUC, the amount of the registration fee to be set by the Commission, and the volume and severity of violations that may trigger administrative penalties.

The bill mandates that the PUC establish a secure data system and a map of the geographic locations where banned infrastructure is still in use. To carry out these responsibilities, the PUC would require an estimated five additional full-time employees at an annual cost of $596,000. There would also be recurring information technology expenses of approximately $13,500 per year to maintain and secure the provider database.

While the bill permits the assessment of administrative penalties ranging from $5,000 to $25,000 per violation per day, and from $10,000 to $20,000 for knowingly false filings, the expected revenue from these penalties is uncertain. Additionally, noncompliant providers would be disqualified from receiving any state or local funds for communications infrastructure, including disbursements from the Universal Service Fund. Despite these potential enforcement revenues, the absence of reliable data on provider behavior and registration means that both costs and revenues remain indeterminate.

No significant fiscal implications are anticipated for local governments.

SB 1897 is a targeted and security-driven measure that addresses growing concerns over foreign adversary influence in critical communications infrastructure across Texas. Prompted in part by Executive Order 48 from Governor Abbott in 2024, which emphasized strengthening infrastructure resilience, this legislation focuses on removing and banning telecommunications equipment sourced from companies identified by the federal government as national security threats. SB 1897 does not seek to regulate individual behavior or broadly interfere in the private sector but instead sets conditions for providers receiving public funds or participating in key federal programs.

The bill promotes individual liberty and personal responsibility by protecting the public from potential cybersecurity risks while clearly placing the burden of compliance on service providers. It allows replacement infrastructure to be installed without new permits if it mirrors the equipment being removed, thereby safeguarding property rights and avoiding regulatory overreach. Providers must register annually and submit reports if they are part of the Secure and Trusted Communications Networks Reimbursement Program, which ensures oversight without excessive intrusion.

From a fiscal perspective, the bill does present some initial costs to the Public Utility Commission, which anticipates needing additional staff and IT resources to manage enforcement and data systems. However, the bill includes a self-funding mechanism—an annual registration fee—and authorizes penalties for non-compliance. While the total revenue impact cannot yet be estimated due to unknowns in provider response and penalty volumes, the infrastructure and compliance system envisioned is proportionate to the threat addressed. Notably, no significant fiscal burden is expected for local governments.

In totality, SB 1897 reflects a principled balance of security, liberty, and administrative restraint. It upholds free enterprise by avoiding blanket bans on non-banned vendors and supports limited government by aligning state actions with federal security determinations. Given the strategic importance of secure communications and the narrowly tailored scope of the bill, Texas Policy Research recommends that lawmakers vote YES on SB 1897.

• Individual Liberty: The bill advances individual liberty by protecting Texans from potential surveillance or sabotage threats posed by foreign adversaries through compromised communications infrastructure. While the bill imposes restrictions on communications providers, it does not interfere with personal freedoms, civil liberties, or the rights of consumers. By aligning state policy with federal national security determinations, the bill reinforces a safer communications environment without burdening individual users or their choices.
• Personal Responsibility: The bill reinforces the principle of personal (or corporate) responsibility by requiring telecommunications providers to proactively identify, register, and replace equipment sourced from federally banned companies. It imposes meaningful administrative penalties for failure to comply or for knowingly submitting false data. This creates a clear expectation that providers bear responsibility for securing their infrastructure and reporting accurate information to the Public Utility Commission (PUC), aligning with the ethic that those who operate in the public space must be accountable for their conduct.
• Free Enterprise: The bill does restrict providers from using equipment from specific foreign manufacturers on the FCC’s “covered list,” which may reduce some market options. However, this limitation is tied to national security considerations and does not prevent competition among other lawful vendors. The bill does not distort the broader telecom market with price controls or government-preferred suppliers. It narrowly targets vendors identified by federal authorities for posing security threats. While it could raise costs for some rural or small providers needing to replace legacy equipment, these providers may be eligible for federal reimbursement under existing programs.
• Private Property Rights: The bill includes provisions that respect private property rights by allowing the replacement of banned infrastructure without requiring additional state or local permits, provided the new equipment is similar and notice is given. This avoids unnecessary interference with property improvements or infrastructure upkeep. It ensures that landowners and providers can replace equipment efficiently and without added regulatory hurdles.
• Limited Government: While the bill does expand the administrative role of the PUC by requiring annual provider registration, mapping, and compliance monitoring, it does not establish broad or permanent bureaucratic authority. The scope of enforcement is limited to advanced communications infrastructure from federally banned companies and includes a fee-based funding model. The legislation avoids duplicative permitting processes and expressly refrains from granting new rulemaking authority. These features keep the bill consistent with the principle of limited government while enabling essential oversight in the public interest.