The bill, H.B. No. 226, introduces a new limitation on the authority of political subdivisions in Texas to issue public securities, specifically concerning local government debt. It adds Section 1201.006 to Subchapter A of Chapter 1201 in the Government Code, 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 a maximum of 10 percent of the average property tax collections from the three preceding fiscal years, regardless of any other laws or municipal charter provisions.

The bill aims to ensure fiscal responsibility among local governments by capping their ability to incur debt based on property tax revenues. It is designed to prevent excessive borrowing that could lead to financial strain on local budgets and taxpayers. The provisions of this act will take effect 91 days after the conclusion of the legislative session.

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