According to the Legislative Budget Board (LBB), SB 2167 is not expected to have a significant fiscal impact on the State of Texas. The bill’s provisions, which involve enhanced regulatory authority over massage establishments and schools, including potential license delays and requirements for re-licensing upon location changes, are anticipated to be implemented without requiring new appropriations or significant additional expenditures. The agencies responsible, primarily the Texas Department of Licensing and Regulation (TDLR), are expected to absorb any related costs within their existing resources.

Additionally, there is no projected fiscal impact on local governments. The bill does not create new mandates for municipalities or counties, nor does it impose costs requiring local compliance or enforcement. As such, SB 2167 represents a regulatory change that tightens oversight without altering the fiscal landscape at either the state or local level.

SB 2167 seeks to address a real and pressing issue in the regulation of massage therapy businesses by closing a loophole that allows individuals under investigation for human trafficking to obtain new licenses during pending enforcement actions. The bill authorizes the Texas Department of Licensing and Regulation (TDLR) and its executive director to delay the approval of a license application for up to 90 days if there is an active emergency order against the applicant or if there is “reasonable cause” to suspect that human trafficking has occurred or is likely to occur at the licensed premises or by the applicant or their affiliates. Additionally, the bill requires that massage establishments and schools obtain new licenses when changing locations, rather than amending existing licenses.

While the intent of the bill—to prevent trafficking operations from exploiting regulatory delays—is commendable, the bill raises substantial concerns in relation to several liberty principles, particularly those of Individual Liberty, Limited Government, and Free Enterprise. The authority it grants TDLR is a significant expansion of regulatory discretion, allowing licensing decisions to be delayed based solely on suspicion rather than confirmed evidence or due process. No clear evidentiary standards are provided, and the bill does not offer affected applicants a guaranteed path to contest the delay or seek a timely resolution. This raises due process concerns, particularly for applicants who may face financial harm or reputational damage while waiting for a delayed decision with no mechanism to challenge or rebut the agency’s suspicions.

Additionally, this kind of proactive license delay authority—granted prior to final adjudication—is not broadly available across other TDLR-regulated industries. TDLR already has emergency shutdown powers under existing law (Occupations Code §51.3511), but those powers are generally exercised post-violation or upon evidence-based findings. Granting preemptive delay authority for this sector without procedural safeguards sets a regulatory precedent that could be sought for other professions, expanding the scope of government authority in a way that may erode protections for individuals and small business owners across Texas.

The bill also increases the regulatory burden on businesses. Requiring an entirely new license for any location change introduces added time and cost for business operators without flexibility. Meanwhile, potential delays based on unconfirmed suspicions could disrupt business operations or deter investment in the industry altogether. While the Legislative Budget Board notes that the bill would not increase the size of government or impose new costs on taxpayers, the expanded oversight powers and compliance requirements nonetheless impose additional burdens on individuals and businesses.

For these reasons, Texas Policy Research recommends that lawmakers vote NO on SB 2167 unless amended as described below. The bill, while well-intentioned, cannot be supported in its current form due to its expansion of executive authority without corresponding due process protections, its creation of unequal regulatory treatment across industries, and the additional compliance burdens it imposes on legitimate businesses. Should the legislature amend the bill to include clearly defined evidentiary standards, a process for expedited review or appeal of delayed applications, and safeguards against arbitrary application of the delay authority, a re-evaluation may result in a positive recommendation. Until then, the bill remains incompatible with core liberty principles and should not advance without significant changes. 

• Individual Liberty: The bill authorizes the Texas Department of Licensing and Regulation (TDLR) or its executive director to delay the issuance of a license for up to 90 days if there is “reasonable cause” to believe human trafficking may have occurred or is likely to occur at a given location or by the applicant. However, it does so without requiring a final adjudication, formal criminal charge, or clear due process protections. Individuals and business owners may face significant economic and reputational harm from government action based only on suspicion, with no guaranteed opportunity to respond or appeal during the delay period. This undermines fundamental due process rights, weakening individual liberty.
• Personal Responsibility: The bill reinforces personal responsibility by holding business owners and operators accountable for conditions at their establishments. It also establishes that owners and operators of business entities cannot escape scrutiny by simply shifting operations to new locations or reapplying under different structures. This aligns with the principle that individuals and businesses should be responsible for the consequences of their actions, particularly if they are tied to serious criminal activity like human trafficking.
• Free Enterprise: The bill imposes regulatory burdens that may have a chilling effect on legitimate businesses in the massage therapy industry. By allowing TDLR to pause a license application without a hearing or defined evidentiary standard, the bill injects uncertainty and subjectivity into the licensing process. This could discourage investment, deter location expansion or change, and create risk for law-abiding operators. Moreover, the requirement that a business obtain a new license for any change of address adds friction and cost to routine operational decisions. Such barriers are inconsistent with the principle of a competitive, open marketplace free from excessive government interference.
• Private Property Rights: While the bill does not directly regulate or seize property, it functionally restricts how individuals and businesses can use their property by conditioning continued or new use (i.e., operating a massage establishment or school) on a license that can be delayed or denied based on suspicion. Businesses may be denied the opportunity to operate on property they lease or own during a prolonged investigation, without a formal process to contest the delay. This kind of indirect interference with lawful property use is inconsistent with strong protections for private property rights.
• Limited Government: The bill significantly expands the scope of government authority without corresponding checks. TDLR already has post-violation enforcement tools (e.g., emergency suspension orders), but this bill authorizes pre-emptive regulatory action—delaying a license based on unconfirmed suspicion. This kind of authority is not typical among other TDLR-regulated professions and, without procedural guardrails, opens the door to broader discretionary power. The absence of due process protections, appeal mechanisms, or defined limits on agency discretion makes this a departure from the principle of limited government.