The bill, H.B. No. 226, introduces a new provision to the Government Code that limits the authority of political subdivisions in Texas to issue public securities. Specifically, it adds Section 1201.006, which states that a political subdivision cannot authorize additional debt if the resulting annual debt service exceeds a specified limit. This limit is set at 10 percent of the average property tax collections from the three preceding fiscal years, ensuring that local governments maintain fiscal responsibility and do not overextend their financial obligations.

The bill emphasizes that this limitation applies regardless of any other laws or municipal charter provisions that may exist, thereby establishing a clear and uniform standard for local government debt management. The proposed changes are set to take effect 91 days after the conclusion of the legislative session, allowing for a transition period for local governments to adjust to the new regulations.

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