87R10019 TYPED By: Harris, Goldman, et al. H.B. No. 2362 A BILL TO BE ENTITLED AN ACT relating to municipalities and counties that adopt budgets that defund law enforcement agencies. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Chapter 140, Local Government Code, is amended by adding Sections 140.013 and 140.014 to read as follows: Sec. 140.013. DEFUNDING LOCAL GOVERNMENT. (a) A defunding local government is a municipality or county: (1) that adopts a budget for a fiscal year that, in comparison to the local government's preceding fiscal year, reduces: (A) the appropriation to the local government's law enforcement agency; (B) the number of peace officers the local government's law enforcement agency is authorized to employ; (C) funding for peace officer overtime compensation for the local government's law enforcement agency; or (D) funding for the recruitment and training of new peace officers to fill each vacant peace officer position in the local government's law enforcement agency; and (2) for which the criminal justice division of the governor's office issues a written determination finding that the local government has taken an action described by Subdivision (1). (a-1) In making a determination of whether a local government is a defunding local government according to the budget adopted for the first fiscal year beginning on or after September 1, 2021, the criminal justice division of the governor's office shall compare the funding and personnel in that budget to the funding and personnel in the budget of the preceding fiscal year or the second preceding fiscal year, whichever is greater. This subsection expires September 1, 2023. (b) A local government is considered to be a defunding local government until the criminal justice division of the governor's office issues a written determination finding that the local government has reversed the reductions, adjusted for inflation, described in Subsection (a)(1). (c) The criminal justice division of the governor's office shall: (1) compute the inflation rate used to make determinations under Subsection (b) each state fiscal year using a price index that accurately reports changes in the purchasing power of the dollar for local governments in this state; and (2) publish the inflation rate in the Texas Register. Sec. 140.014. LIMIT ON ANNUAL EXPENDITURES BY DEFUNDING LOCAL GOVERNMENT. (a) This section applies to a defunding local government under Section 140.013. (b) A defunding local government's total expenditures from all available sources of revenue in a fiscal year may not exceed the defunding local government's total expenditures from all available sources of revenue in the defunding local government's fiscal year immediately preceding the fiscal year during which the criminal justice division of the governor's office issued the written determination declaring the local government to be a defunding local government under Section 140.013. (c) A local government is no longer considered to be a defunding local government for purposes of this section when the criminal justice division of the governor's office issues a written determination in accordance with Section 140.013(b) finding that the local government has reversed the reductions described by Section 140.013(a)(1). (d) Revenue received from the issuance of bonds approved by voters or from a grant, donation, or gift is not considered an available source of revenue for purposes of this section. SECTION 2. Section 140.013, Local Government Code, as added by this Act, applies only to the adoption of a budget by a municipality or county for a fiscal year that begins on or after the effective date of this Act. SECTION 3. This Act takes effect September 1, 2021.