TX HB5405

Raises the threshold for mandatory competitive bidding on municipal contracts from $50,000 to $100,000, allowing municipalities to make purchases up to $100,000 without formal competitive sealed bidding or proposals

Adjusts the historically underutilized business (HUB) outreach requirement to apply to expenditures between $3,000 and $100,000 (previously $3,000 to $50,000), requiring municipalities to contact at least two HUB vendors on a rotating basis for purchases in this range

Exempts municipalities from the HUB outreach requirement if no historically underutilized business is identified in the county where the municipality is located

Applies only to purchases made on or after the effective date, with prior purchases governed by existing law

Takes effect September 1, 2025