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 establishes 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 provisions in municipal charters, thereby creating a uniform standard for local government debt management. The act is set to take effect 91 days after the conclusion of the legislative session, reinforcing the urgency for political subdivisions to adhere to these new financial constraints.

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