Texas Isn’t Waiting for Congress on H-1B.

On Oct. 28, Texas Agriculture Commissioner Sid Miller announced that his department will stop awarding state grants to businesses that employ H-1B visa holders, and he challenged the rest of the state’s leadership to follow.

“If a company wants taxpayer support, it should demonstrate a commitment to the people paying the bill. Texas workers should come first. Period.”

The grants in question are small, and the fine print exempts most of what the department hands out, but Commissioner Miller is demonstrating that there are steps state agencies can take absent any federal action on immigration. Miller aimed it at Gov. Greg Abbott, who has already ordered the broadest state freeze on H-1B in the country, and at the one thing Abbott controls that Miller’s rule doesn’t touch: the state’s economic development money.

What Texas already did

On Jan. 27, Abbott ordered every state agency under his control and every public university to stop filing new H-1B petitions through the end of the 2027 legislative session. A university that wants an exception now has to get written permission from the Texas Workforce Commission. Each institution had to report how many H-1B workers it employs, what they do, where they come from and what it did to recruit Texans. “State government must lead by example,” the directive said, “and ensure that employment opportunities – particularly those funded with taxpayer dollars – are filled by Texans first.”

Florida moved first. Gov. Ron DeSantis called for a halt to H-1B hiring at state universities in October 2025, and on March 2 the Board of Governors voted to freeze new H-1B hires at all 12 public universities through at least January 2027. Those universities employ more than 1,000 people on H-1B visas, most of them at the University of Florida. Abbott’s order covers every state agency as well as the universities, and it runs five months longer.

Texas’ numbers are similar. According to the Texas Tribune and the Daily Texan:

• UT Austin reported 280 H-1B employees.
• UT Southwestern Medical Center had 228.
• Texas A&M had about 200, and MD Anderson 171.

Asked whether it had posted each job where Texans could apply, UT Austin said that working out how each position was filled was “not administratively feasible,” and that it is “impermissible to ask applicants about their citizenship, nationality, or immigration status.” The state could not force its universities to prove they had looked for Texans, so it stopped the petitions instead.

The university carve-out

How could a public university file 200 petitions a year with no lottery and no limit? Because Congress exempted them. In October 2000, Congress raised the H-1B cap and took universities, their affiliated nonprofits and every nonprofit or government research organization out of it altogether. It did so weeks before a National Research Council study it had commissioned reported no evident “shortage” of IT workers. Congress offered a solution in search of a problem and, in doing so, incentivized universities to bypass domestic workers – including their own graduates – for the H-1B program. A 2004 study of academic science and engineering found citizens displaced from those jobs by 4.2 percent overall and by 18.6 percent in math and computer science. Foreign-born researchers have held half of all postdoctoral appointments since 1990, and the economist who documented it warned that “competition may be especially steep with minorities.” A 2015 study of the H-1B lottery found that companies that lose it route work through cap-exempt subcontractors instead, which makes the university carve-out a side door for the private sector too.

Federal data cited by KXAN put 337 H-1B holders teaching in Texas public schools, 171 of them in Dallas ISD. Abbott has said he sees no reason for any of them.

States can act

Twelve states banned the knowing hire of illegal workers in the 1970s, a decade before Congress did it nationally in 1986. When Congress declined to mandate E-Verify, states mandated it for their own agencies and contractors first. Ten of the first 12 state mandates covered only public employers and public contractors. The Supreme Court upheld Arizona’s law in 2011. Historians who studied the pattern found that state action is what pushed Congress to act in 1882 and again in 1986.

If that history holds, the freezes in Austin and Tallahassee are what comes before Congress acts.

Where it stops

A governor’s letter will expire. Abbott’s runs out on May 31, 2027. Florida’s board vote runs out in January. The next governor or the next board can let either one lapse without a vote in the legislature. And each covers one state’s universities while the same uncapped pipeline runs through every public university in the other 48.

The freeze also doesn’t reach the state’s incentive money. Neither the Texas Enterprise Fund nor the Texas Semiconductor Innovation Fund distinguishes between an H-1B hire and a Texan. From the semiconductor fund alone, the state awarded $250 million to Samsung Austin Semiconductor last year and $33.6 million to Texas Instruments in July. Both companies are among the largest H-1B employers in Texas.

Milton Friedman called the H-1B program a subsidy, because the visa lets some employers pay less than the market wage. A state grant to an H-1B employer is a subsidy on top of that. Miller’s rule applies that principle to a few hundred thousand dollars in marketing grants. The money that would test it is in the governor’s office.

What about the doctors

Foreign physicians who train here on J-1 visas can skip the requirement to go home for two years if they practice three years in an underserved (i.e. rural) area, and they must do that service in H-1B status. Texas gets 30 of those waivers a year.

The record on that program is weaker than its defenders say. A study of Wisconsin’s waiver physicians found that 30 percent did not complete the three years they owed, and that waiver doctors “leave the rural community at a rate significantly greater than US physicians.” The authors called the program “a short-term solution” and said the answer was more American-born physicians. The most consistent predictor of a doctor practicing in a rural area is having grown up in one.

Congress still has the ultimate call

Two bills would do what the states can’t. Sen. Tom Cotton’s S. 2941, the Visa Cap Enforcement Act, would strike the university and research exemption from the law, count every H-1B worker against the cap again after three years and count waiver physicians against the cap too. Rep. Eli Crane’s H.R. 8443, the End H-1B Visa Abuse Act, would strike the same exemption, cap the program at 25,000 a year and bar every federal agency from hiring nonimmigrant workers, directly or through a contractor. That last provision is Abbott’s freeze, written into federal law for the federal government.

Neither bill depends on who sits in the governor’s office in 2027. Texas and Florida have shown that the public-sector H-1B pipeline can be shut. Congress built it and can close it for good, so that the jobs taxpayers fund go to the Americans who pay for them.