Addison staff briefs council on 89th Texas Legislature; bills could affect municipal revenue and local control

City staff updated the Addison City Council on May 6 about several pending measures in the 89th Texas Legislature that could affect municipal revenues, debt authority and local regulatory control.

Sarah, the presenter for the legislative update, told council that the session — which began Jan. 14 and is scheduled to adjourn June 2 — showed a high volume of bills that could affect local governments. She highlighted a set of measures with potential fiscal or regulatory impact on Addison, summarized below.

Bills and potential local impacts (as presented) - House Bill 19: Staff said the bill would limit cities’ ability to issue principal debt and would restrict use of Certificates of Obligation (COs) for a range of projects (parking structures, airports, town halls, parks and similar items). A committee substitute also proposed a formula that could limit annual debt-service to a share of property-tax-derived revenue and would move some CO financing into the maintenance/operations portion of the rate; staff noted significant concerns if such provisions advanced. - House Bill 9 / Senate Bill 32: HB9 would substantially raise the business personal property (BPP) exemption (staff cited a version raising the exemption to $250,000) and staff reported that figure could reduce Addison’s taxable value by an estimated $240,000,000 and cut property-tax revenue by roughly $1,400,000 annually under that version. The senate companion (SB32) proposed a smaller increase (staff referenced a $25,000 threshold) with a correspondingly smaller revenue impact. - House Bill 134 (sales tax sourcing): A bill to move sales-tax sourcing from origin to destination could reduce Addison’s sales tax receipts; staff said estimates ranged from approximately $1,400,000 to $2,800,000 annually for Addison depending on final language. - House Bill 5267 (expenditure cap): Staff said a proposal would cap municipal expenditures across all funds to prior-year levels adjusted by state population and inflation metrics; the town and the Texas Municipal League (TML) have expressed concerns about operational constraints in capital planning. - House Bill 4272 (telecommunications relocation costs): One draft would require municipalities to pay the cost when telecoms must relocate lines for road projects. Staff said that provision could significantly raise capital project costs if it advanced.

Staff noted other development and regulatory proposals under consideration, including bills that would broaden third-party inspection authority in the permitting process, limit municipal enforcement against marketplace platforms for short-term rentals, and reform housing finance corporation authority. The presentation identified HB1585 (as presented) to limit housing finance corporations to their jurisdiction as a town priority and noted progress on companion bills supporting the town’s qualifying-hotel project.

What staff recommended and next steps Sarah said the town’s adopted legislative priorities guide staff advocacy and that staff continues to coordinate with the mayor’s office and with legislators’ offices. She encouraged citizens to submit written testimony to committees and to contact representatives and senators directly if they wish to weigh in. Staff said it will publish a post-session report summarizing enacted bills and will alert council if special sessions are called or if rapid action is needed.

Ending Staff reiterated that many bills remain in committee or in calendar stages and that the town will continue to monitor legislation through the end of the regular session and report back to council after the session.