H.B. No. 140 introduces a new provision to the Texas Government Code that limits the authority of political subdivisions 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, regardless of any other laws or municipal charter provisions that may allow for higher debt levels.

The bill aims to ensure fiscal responsibility among local governments by capping their ability to incur debt based on historical property tax revenue. This measure is intended to promote sustainable financial practices and prevent excessive borrowing that could burden taxpayers. The act is set to take effect 91 days after the conclusion of the legislative session.

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