According to the Legislative Budget Board (LBB), SB 2035 is not expected to have a significant fiscal impact on the state. The bill imposes new regulatory requirements on political committees involved in supporting or opposing ballot measures—namely, the addition of a sworn affidavit to campaign filings certifying that no foreign funding was used for preliminary ballot measure activity. These responsibilities would primarily fall to the Texas Ethics Commission (TEC), which is anticipated to be able to absorb any additional workload within its current budget and staffing resources​.

The bill also introduces a new criminal offense and creates the possibility for civil penalties associated with non-compliance. While this could, in theory, increase activity for the judiciary and criminal justice system, the Office of Court Administration expects no significant financial burden on the state court system. Similarly, the Texas Department of Criminal Justice does not foresee any notable demand on correctional resources resulting from the enforcement of the new misdemeanor offense.

At the local level, no substantial fiscal impact is anticipated either. Costs related to the enforcement, prosecution, or supervision of offenses under the bill are assumed to be minimal and manageable within the existing capabilities of local government entities.

One caveat noted by the Comptroller of Public Accounts is that while the bill includes provisions that could theoretically impact campaign finance behavior or enforcement revenues (such as penalties), the fiscal effect on state revenues is indeterminate at this time due to uncertainty in enforcement volume and outcomes.

SB 2035 seeks to close a notable gap in state election law by prohibiting foreign nationals from contributing to or influencing ballot measure campaigns—a prohibition that currently applies only to candidate campaigns. The bill would impose new compliance obligations on political committees and individuals engaged in supporting or opposing ballot measures, including mandatory affidavits affirming the absence of foreign-sourced funding for preliminary campaign activity. It also establishes new criminal offenses, civil penalties, and a process for expedited civil enforcement in court. While these objectives are grounded in legitimate concerns about election integrity, the implementation details raise serious concerns under several core liberty principles, including limited government, individual liberty, and free enterprise.

At its core, the bill dramatically expands the enforcement authority of the Texas Ethics Commission, Attorney General, and state courts. Political committees would be required to certify their funding sources, affirm the compliance status of all contributors, and face presumptions of violation under certain conditions (e.g., if contributors had prior financial relationships with foreign nationals). In cases of violation, the bill authorizes the state to compel disgorgement of funds, impose personal liability on nonprofit board members, and restrict future lobbying activity. This broad and punitive enforcement framework constitutes a significant expansion of state power, especially in areas touching political expression and association, and risks overstepping constitutional protections of free speech.

Further, the bill introduces significant compliance burdens on organizations and individuals. Political committees, including those formed by grassroots, civic, or nonprofit groups, would face legal risk for accepting contributions that are later determined to have indirect ties to foreign sources. The requirement to investigate donor histories and certify their financial independence from foreign nationals could be unreasonably burdensome, particularly for smaller organizations without dedicated legal or compliance staff. Additionally, language creating criminal liability for public servants who disclose nonprofit donor information—even inadvertently—may have a chilling effect on transparency and public oversight of enforcement.

From a fiscal and operational standpoint, while the Legislative Budget Board has indicated that the state can absorb these responsibilities with existing resources, the bill undoubtedly increases the complexity and cost of compliance for regulated entities. While it does not impose a direct tax burden, the broader regulatory and legal burdens are substantial. This is particularly troubling for organizations acting in good faith but lacking the resources to meet the bill's expansive due diligence and certification mandates.

Because the bill, as currently drafted, conflicts with key liberty principles, particularly by expanding the role of government in sensitive political processes and burdening free political engagement, it cannot be supported in its current form. Substantial amendments would be required to make the legislation compatible with constitutional safeguards and principles of limited, accountable governance. These amendments would need to address the bill’s overbreadth, presumptive liabilities, scope of enforcement, and the procedural safeguards available to affected parties.

Therefore, Texas Policy Research recommends that lawmakers vote NO on SB 2035 unless amended as described. Should the Legislature adopt meaningful revisions that narrow the scope of enforcement, protect civil liberties, and reduce compliance burdens, particularly for smaller or volunteer-run committees, a reassessment of the bill’s merits would be warranted. Until then, the bill imposes more harm than benefit relative to the liberty principles at stake.

• Individual Liberty: The bill imposes new restrictions on political speech and association by regulating how individuals and organizations participate in ballot measure campaigns. The requirement that committees and individuals certify the absence of foreign involvement—even indirectly—extends state oversight into constitutionally protected political activity. The bill presumes guilt in some cases (e.g., where donors had foreign ties in prior years), imposes certification mandates, and opens the door to criminal prosecution for disclosure violations. While aimed at addressing foreign interference, these mechanisms increase the risk of chilling lawful, domestic political participation and impose speech restrictions that may not survive strict constitutional scrutiny. For these reasons, the bill undermines the principle of individual liberty.
• Personal Responsibility: The bill reflects the principle of personal responsibility in that it holds political actors accountable for the origins of their funding and their compliance with election law. By requiring campaign committees and individuals to affirm that they are not accepting money tied to foreign nationals, it creates a higher standard of diligence and ethical conduct. However, while it encourages accountability, it does so in a way that may be disproportionate or infeasible for small or grassroots efforts, effectively penalizing good-faith actors who lack legal resources. Thus, although it affirms personal responsibility in intent, its structure raises concerns about fair and realistic implementation.
• Free Enterprise: The bill imposes significant compliance costs and risks on nonprofit organizations, advocacy groups, and individuals engaged in election-related activities. The bill’s definitions and requirements are broad, capturing entities that may unknowingly be affiliated with foreign funding through donors or partners. Organizations that rely on complex donor networks or bundled contributions may find themselves disqualified from participating in the public discourse or face enforcement action. Furthermore, the threat of personal liability for board members and executives could dissuade civic-minded individuals from leadership roles in nonprofits. These burdens restrict the free flow of political ideas and activity in the civic space, undermining the principle of free enterprise, particularly in the nonprofit and advocacy sectors.
• Private Property Rights: The bill does not directly impact private property rights. It neither restricts nor expands ownership, transfer, or use of property. However, the provisions related to disgorgement of funds and civil penalties may, in some cases, lead to compelled forfeiture of lawfully obtained funds if determined to be linked to a violation. While not a direct property rights issue, this outcome could implicate broader concerns of due process and fairness in financial penalties.
• Limited Government: This is where the bill most clearly conflicts with liberty principles. The bill significantly increases the power of the state over election-related activities by expanding the Texas Ethics Commission’s enforcement authority, authorizing new civil actions and expedited judicial hearings, creating new criminal offenses and civil penalties, and allowing state courts to compel disgorgement, impose personal liability, and enjoin political activity. These measures represent a meaningful increase in regulatory scope, state oversight, and prosecutorial power. In doing so, the bill contradicts the principle of limited government, particularly in areas touching political speech and civil society.