87R18324 SCL-F
By: Noble, et al. H.B. No. 2695
Substitute the following for H.B. No. 2695:
By: Shine C.S.H.B. No. 2695
A BILL TO BE ENTITLED
AN ACT
relating to municipalities that adopt budgets that defund municipal
police departments.
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. DETERMINATION OF DEFUNDING MUNICIPALITIES
Sec. 109.001. DEFINITION. In this chapter, "division"
means the criminal justice division of the office of the governor.
Sec. 109.002. APPLICABILITY OF CHAPTER. This chapter
applies only to a municipality with a population of more than
250,000.
Sec. 109.003. DEFUNDING DETERMINATION. Except as provided
by Section 109.004, a defunding municipality is a municipality:
(1) that adopts a budget for a fiscal year that, in
comparison to the municipality's preceding fiscal year, reduces the
appropriation to the municipality's police department; and
(2) for which the division issues a written
determination finding that the municipality has made the reduction
described by Subdivision (1).
Sec. 109.0035. INITIAL DETERMINATION. In making a
determination of whether a municipality is a defunding municipality
under Section 109.003 according to the budget adopted for the first
fiscal year beginning on or after September 1, 2021, the division
shall compare the appropriation to the municipality's police
department in that budget to the appropriation to that department
in the budget of the preceding fiscal year or the second preceding
fiscal year, whichever is greater. This section expires September
1, 2023.
Sec. 109.004. EXCEPTIONS. A municipality is not considered
to be a defunding municipality under Section 109.003 if:
(1) for a fiscal year in which the municipality adopts
a budget that is less than the budget for the preceding fiscal year,
the percentage reduction to the appropriation to the municipality's
police department does not exceed the percentage reduction to the
total budget; or
(2) before the adoption of a budget, the municipality
applies for and is granted approval from the division for a
reduction to the appropriation to the municipality's police
department to account for:
(A) capital expenditures related to law
enforcement during the preceding fiscal year;
(B) the municipality's response to a state of
disaster declared under Section 418.014, Government Code; or
(C) another reason approved by the division.
Sec. 109.005. TERMINATION OF DEFUNDING DETERMINATION. A
municipality's defunding determination under Section 109.003
continues until the division issues a written determination finding
that the municipality has reversed the reduction, adjusted for
inflation, described by Section 109.003(1).
Sec. 109.006. DIVISION DUTIES. (a) The division shall:
(1) compute the inflation rate used to make
determinations under Section 109.005 each state fiscal year using a
price index that accurately reports changes in the purchasing power
of the dollar for municipalities in this state; and
(2) publish the inflation rate in the Texas Register.
(b) The division shall adopt rules establishing the
criteria the division uses to approve reductions under Section
109.004(2).
Sec. 109.007. 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 money and other revenue received from
other governmental entities; or
(B) transfers between funds of the municipality.
(2) "Revenue" has the meaning assigned for
municipalities by the Governmental Accounting Standards Board and
the Government Finance Officers Association as of April 1, 2021,
and to the extent the meanings do not conflict. The term includes
operating and nonoperating revenue.
(b) Except as provided by Subsection (c), a defunding
municipality's combined revenues for a fiscal year may not exceed
the municipality's combined revenues for the preceding fiscal year.
(c) 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).
(e) If a defunding municipality adopts a budget that
violates Subsection (b), a property tax payer of the defunding
municipality may bring an action, not later than the 30th day after
the date the defunding municipality adopts the budget, to obtain an
injunction to prevent implementation of the budget or the property
tax rate adopted for the fiscal year for which the budget was
adopted. It is a defense in the action that the municipality does
not qualify as a defunding municipality or is no longer considered
to be a defunding municipality under Section 109.005.
SECTION 2. Chapter 109, Local Government Code, as added by
this Act, applies only to a budget adopted for a fiscal year that
begins on or after the effective date of this Act.
SECTION 3. This Act takes effect September 1, 2021.