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A BILL TO BE ENTITLED
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AN ACT
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relating to a limit on local government expenditures. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 140, Local Government Code, is amended |
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by adding Section 140.014 to read as follows: |
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Sec. 140.014. LIMIT ON ANNUAL EXPENDITURES. (a) In this |
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section: |
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(1) "Board" means the Legislative Budget Board. |
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(2) "Consumer price index" means the average over a |
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calendar year of the index the board considers to most accurately |
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report changes in the purchasing power of the dollar for consumers |
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in this state. |
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(3) "Inflation rate" means the amount, expressed in |
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decimal form rounded to the nearest thousandth, computed by |
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determining the previous three-year average percentage change in |
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the chained consumer price index for the three preceding calendar |
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years published by the Bureau of Labor Statistics. |
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(4) "Population growth rate" means the rate of growth |
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of the state's population during the preceding three-year average |
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percentage change for the last three calendar years, expressed in |
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decimal form rounded to the nearest thousandth, determined by the |
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board in accordance with the most recent population estimates |
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published by the United States Census Bureau. |
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(b) This section applies to all political subdivisions. |
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(c) Except as provided by Subsection (e), a political |
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subdivision's total expenditures from all available sources of |
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revenue in a fiscal year may not exceed the greater of: |
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(1) the political subdivision's total expenditures |
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from all available sources of revenue in the preceding fiscal year; |
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or |
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(2) an amount determined by multiplying: |
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(A) the political subdivision's total |
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expenditures from all available sources of revenue in the preceding |
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fiscal year; and |
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(B) the sum of one and the rate most recently |
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published by the board under Subsection (d). |
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(d) Not later than January 31 of each year, the board shall |
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publish a rate equal to the sum of the population growth rate and |
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the inflation rate. |
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(e) A political subdivision's total expenditures from all |
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available sources of local revenue in a fiscal year may exceed the |
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amount described by Subsection (c) if: |
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(1) the political subdivision's voters approve the |
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additional expenditures for that fiscal year at an election called |
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for that purpose and held on a uniform election date. |
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(f) For purposes of this section, the following are not |
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considered an available source of revenue: |
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(1) money received from the issuance of bonds approved |
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by the voters; or |
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(2) a grant, donation, or gift. |
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SECTION 2. Section 140.014, Local Government Code, as added |
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by this Act, applies only to a fiscal year of a municipality or |
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county or special purpose district that begins on or after December |
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1, 2025. |
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SECTION 3. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2025. |