H.B. No. 5405 amends the Local Government Code to increase the threshold for competitive bidding requirements by municipalities. Specifically, the bill raises the expenditure limit from $50,000 to $100,000 for contracts that require competitive bidding. Additionally, it modifies the requirement for municipalities to contact historically underutilized businesses, increasing the threshold from $50,000 to $100,000 for expenditures that necessitate outreach to these businesses. The bill stipulates that municipalities must still comply with established procedures for competitive sealed bidding or proposals, utilize reverse auction procedures, or follow methods outlined in Chapter 2269 of the Government Code for expenditures exceeding the new threshold. The changes will take effect on September 1, 2025, and will only apply to purchases made on or after that date, with prior purchases governed by the existing law.

Statutes affected:
Introduced: Local Government Code 252.021, Local Government Code 252.0215 (Local Government Code 252)