Relating to competitive requirements for a procurement by a municipality for lobbying, government relations, or similar services.
CriticalImmediate action required
Medium Cost
Effective:2025-09-01
01
Compliance Analysis
Key implementation requirements and action items for compliance with this legislation
Implementation Timeline
Effective Date: September 1, 2025
Compliance Deadline: September 1, 2025 (Strict liability for all new contracts or renewals executed on or after this date).
Agency Rulemaking: None. This is a direct amendment to the Local Government Code. Municipalities will immediately update local procurement policies to enforce this requirement without state-level guidance.
Immediate Action Plan
Audit Expirations: Identify all municipal client contracts expiring after September 1, 2025.
Execute Extensions: Where legally feasible, negotiate and sign multi-year extensions *before* August 31, 2025, to lock in current terms and delay bidding requirements.
Register as Vendor: Ensure your firm is registered as a formal vendor on the purchasing portals of every municipality you represent; you cannot be awarded a bid if you are not in the system.
Segregate Scopes: Redraft engagement letters to clearly distinguish between exempt legal counsel and non-exempt government relations work.
Operational Changes Required
Contracts
Unbundling Services: You must review Master Service Agreements (MSAs). "Legal representation" remains exempt from bidding; "legislative advocacy" does not. These scopes of work must be separated into distinct contracts to protect the exempt status of your legal work.
Renewals: Treat "evergreen" or automatic renewal clauses with extreme caution. A renewal triggered after September 1, 2025, constitutes a new contract. If it was not bid competitively, it is voidable.
Hiring/Training
Proposal Capabilities: Business development teams must shift focus from relationship management to technical proposal writing. You must allocate resources to respond to RFPs/RFQs, including technical scope drafting and compliance matrices.
Vendor Registration: Staff must monitor municipal procurement portals (e.g., CivCast, BidSync, IonWave) rather than relying on direct outreach to City Managers.
Reporting & Record-Keeping
Public Fee Disclosure: Unlike private retainers, fee structures and hourly rates submitted in sealed bids generally become public record upon bid opening. Prepare for your pricing to be visible to competitors.
Fees & Costs
Administrative Overhead: Anticipate increased non-billable hours dedicated to RFP responses.
Insurance Requirements: Municipal RFPs often mandate specific insurance limits (CGL, Professional Liability) that may differ from your current coverage; verify your limits against standard municipal vendor requirements.
Strategic Ambiguities & Considerations
The "Indirect Influence" Standard: The law applies to services intended to "indirectly influence" lawmakers. This creates regulatory risk for Public Affairs, PR, and Strategic Communications firms. It is currently undefined whether grassroots mobilization, bond election marketing, or community engagement campaigns fall under this mandate. Guidance: Until case law clarifies, treat *any* activity involving legislative outcomes as subject to competitive bidding to avoid contract invalidation.
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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.
When municipalities hire a contractor to build a road, provide legal counsel, or deliver public services, they are required by law to go through a competitive bidding process that ensures the best price, the best qualifications, and the best deal for the taxpayer. However, current law exempts a procurement for personal, professional, or planning services, which may include lobbying contracts, from the competitive bidding process requirements. The bill author has informed the committee that as a result, these contracts, which are often worth significant sums of public money, can be awarded without proper oversight, without open competition, and without ensuring taxpayers get the best value for their hard-earned dollars and thus run a risk that the contracts will be awarded based on who you know, not what you know, allowing municipalities to circumvent the very safeguards designed to prevent conflicts of interest, favoritism, and wasteful spending.
C.S.H.B. 223 seeks to hold municipal governments accountable and promote fiscal responsibility by subjecting lobbying, government relations, or similar services to the same competitive bidding process as other contracts.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS
C.S.H.B. 223 amends the Local Government Code to establish that a procurement for lobbying, government relations, or similar services intended to influence state or federal lawmakers on behalf of a municipality is not exempt from competitive bidding or competitive proposal requirements applicable to certain municipal expenditures. The bill's provisions apply only to a contract for procurement made on or after the bill's effective date.
EFFECTIVE DATE
September 1, 2025.
COMPARISON OF INTRODUCED AND SUBSTITUTE
C.S.H.B. 223 differs from the introduced in minor or nonsubstantive ways by conforming to certain bill drafting conventions.
Effective September 1, 2025, Texas municipalities are statutorily prohibited from using the "professional services" exemption to hire lobbyists or government relations firms without a competitive process. All municipal contracts for services intended to directly or indirectly influence state or federal legislation that exceed statutory thresholds (typically $50,000) must now undergo formal competitive bidding (RFP/RFQ), ending the practice of direct appointment based solely on relationships. Implementation Timeline Effective Date: September 1, 2025 Compliance Deadline: September 1, 2025 (Strict liability for all new contracts or renewals executed on or after this date).
Q
Who authored HB223?
HB223 was authored by Texas Representative Giovanni Capriglione during the Regular Session.
Q
When was HB223 signed into law?
HB223 was signed into law by Governor Greg Abbott on June 20, 2025.
Q
How urgent is compliance with HB223?
The compliance urgency for HB223 is rated as "critical". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
Q
What is the cost impact of HB223?
The cost impact of HB223 is estimated as "medium". This may vary based on industry and implementation requirements.
Q
What topics does HB223 address?
HB223 addresses topics including purchasing, purchasing--local, competitive bidding, lobbyists & lobbying and city government.
Legislative data provided by LegiScanLast updated: November 25, 2025
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