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, thereby ensuring that local governments maintain fiscal responsibility and do not overextend their financial obligations.

The bill emphasizes that this limitation applies notwithstanding any other laws or provisions in municipal charters, reinforcing the intent to standardize the debt service cap across political subdivisions. The legislation is 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 regarding debt issuance.

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