House Bill No. 223 introduces new financial regulations for municipalities and counties in Texas by amending the Local Government Code. It adds two sections, 140.014 and 140.015, which establish limits on annual expenditures and require transparency in budget summaries. Specifically, Section 140.014 sets a cap on total expenditures for political subdivisions, allowing them to exceed this limit only under certain conditions, such as voter approval or in the event of a declared disaster. The cap is determined by the greater of the previous year's expenditures or an adjusted amount based on population growth and inflation rates published annually by the Legislative Budget Board.

Section 140.015 mandates that municipalities and counties provide a summary of their adopted budgets within 20 days of approval, detailing total budget amounts and expenditures across various categories. Additionally, a proposed budget summary must be made available 20 days prior to public hearings, allowing for comparisons with previous fiscal years. These provisions aim to enhance fiscal responsibility and transparency in local government budgeting processes, with the new regulations taking effect for fiscal years beginning on or after December 1, 2025.

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