87R12898 TYPED
By: Noble H.B. No. 2695
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. Subtitle A, Title 4, Local Government Code, is
amended by adding Chapter 109 to read as follows:
CHAPTER 109. MISCELLANEOUS FINANCIAL PROVISIONS AFFECTING
MUNICIPALITIES
Sec. 109.001. REVENUE CAP ON DEFUNDING MUNICIPALITY. (a)
In this section:
(1) "Combined revenues" means the combined revenues of
a municipality's general fund, enterprise funds, and special
revenue funds. The term does not include:
(A) grant monies and other revenues received from
other governmental entities; and
(B) transfers between funds of the municipality.
(2) "Defunding municipality" means a municipality
that is a defunding local government under Section 140.013.
(3) "Revenues" has the definition assigned to the term
for cities by the Governmental Accounting Standards Board and the
Government Finance Officers Association. The term includes both
operating and non-operating revenues.
(b) Except as provided by Subsection (c), a defunding
municipality may not increase their combined revenues for a fiscal
year above their combined revenues for the immediately preceding
fiscal year.
(c) The limitation in Subsection (b) does not apply to
revenues used to repay voter approved bonded indebtedness,
excluding certificates of obligation.
(d) Before the governing body of a defunding municipality
may adopt a budget for a fiscal year, the chief fiscal officer for
the defunding municipality must verify in writing that the budget
complies with Subsection (b). If a defunding municipality adopts a
budget that exceeds the combined revenues allowed under Subsection
(b), a taxpayer of the defunding municipality may bring a lawsuit,
not later than the 30th day after the date the defunding
municipality adopts the budget, to obtain an injunction against the
budget or the property tax rate adopted for the same fiscal year.
It is a defense in a lawsuit for an injunction under this subsection
that the municipality does not qualify as a defunding municipality
or is no longer considered to be a defunding municipality for
purposes of this section.
(e) A municipality is no longer considered to be a defunding
municipality 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 municipality
has reversed the reductions described by Section 140.013(a)(1).
SECTION 2. Chapter 140, Local Government Code, is amended
by adding Section 140.013 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.
SECTION 3. 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 4. This Act takes effect September 1, 2021.