HB 325

relating to a limit on municipal and county expenditures.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Chapter 140, Local Government Code, is amended
by adding Section 140.014 to read as follows:
Sec. 140.014.  LIMIT ON ANNUAL EXPENDITURES.  (a)  In this
(1)  "Board" means the Legislative Budget Board.
(2)  "Consumer price index" means the average over a
calendar year of the index the board considers to most accurately
report changes in the purchasing power of the dollar for consumers
(3)  "Inflation rate" means the amount, expressed in
decimal form rounded to the nearest thousandth, computed by
determining the percentage change in the consumer price index for
the preceding calendar year as compared to the consumer price index
for the calendar year preceding that calendar year.
(4)  "Population growth rate" means the rate of growth
of the state's population during the preceding calendar year,
expressed in decimal form rounded to the nearest thousandth,
determined by the board in accordance with the most recent
population estimates published by the United States Census Bureau.
(b)  This section applies only to a political subdivision
that is a municipality or county.
(c)  Except as provided by Subsection (e), a political
subdivision's total expenditures from all available sources of
revenue in a fiscal year may not exceed the greater of:
(1)  the political subdivision's total expenditures
from all available sources of revenue in the preceding fiscal year;
(2)  an amount determined by multiplying:
(A)  the political subdivision's total
expenditures from all available sources of revenue in the preceding
(B)  the sum of one and the rate most recently
published by the board under Subsection (d).
(d)  Not later than January 31 of each year, the board shall
publish a rate equal to the product of the population growth rate
(e)  A political subdivision's total expenditures from all
available sources of local revenue in a fiscal year may exceed the
amount described by Subsection (c) if:
(1)  the political subdivision's voters approve the
additional expenditures for that fiscal year at an election called
for that purpose and held on a uniform election date; or
(2)  the governor declares or renews a declaration of a
state of disaster under Section 418.014, Government Code, in that
fiscal year, and the governor's designation of the area threatened
includes all or part of the geographic territory of the political
(f)  For purposes of this section, the following are not
considered an available source of revenue:
(1)  money received from the issuance of bonds approved
(2)  a grant, donation, or gift.
SECTION 2.  Section 140.014, Local Government Code, as added
by this Act, applies only to a fiscal year of a municipality or
county that begins on or after December 1, 2025.
SECTION 3.  This Act takes effect September 1, 2025.