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 necessitate competitive bidding. This change means that municipalities will only be required to follow competitive bidding procedures for contracts exceeding $100,000, thereby streamlining the procurement process for smaller expenditures. Additionally, the bill modifies the requirements for municipalities when making expenditures between $3,000 and $100,000. Under the new provisions, municipalities must contact at least two historically underutilized businesses on a rotating basis, as per the information provided by the comptroller. If no such businesses are identified in the municipality's county, they are exempt from this requirement. The changes will take effect on September 1, 2025, and will only apply to purchases made after that date.

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