SB40

Regular Session

Relating to the use by a political subdivision of public funds to pay bail bonds; authorizing injunctive relief.

ModeratePlan for compliance

Low Cost

Effective:2025-09-01

Enforcing Agencies

Texas Civil Courts (via private right of action by taxpayers or residents)

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 (Hard stop on all prohibited disbursements).
Agency Rulemaking: None. This statute is self-executing and enforced by the civil courts. Do not wait for agency guidance; judicial interpretation will define the boundaries.

Immediate Action Plan

Audit Vendor Master File: Immediately identify all 501(c)(3) payees currently receiving municipal or county funds that also engage in bail reform or pretrial release activities.
Review Insurance Coverage: Verify that Public Officials Liability (POL) policies cover defense costs for taxpayer suits seeking injunctive relief, as these are often excluded as non-monetary claims.
Issue Stop-Payment Orders: Schedule automatic termination of any recurring payments to affected entities effective August 31, 2025, pending contract renegotiation.
Segregate Accounts: For nonprofit members, establish a dedicated, isolated bank account for government grants immediately to prevent commingling with bail funds.

Operational Changes Required

Contracts

Grant Amendments: All existing multi-year agreements with social service nonprofits extending past Sept 1, 2025, must be amended immediately. There are no grandfather clauses for existing contracts.
Restrictive Covenants: Insert mandatory language in all future MSAs and grant awards: *"Funds provided under this agreement are strictly prohibited from being used, directly or indirectly, for the payment of bail bonds pursuant to Texas Local Government Code Sec. 140.014."*
Indemnification: Update indemnity clauses to require the nonprofit vendor to cover the political subdivision's legal defense costs if a taxpayer suit arises from the vendor's misuse of funds.

Hiring/Training

Accounts Payable Controls: Finance staff must be trained to flag invoices from nonprofits known to operate bail funds. Implement a "hard stop" in AP software for these vendors requiring secondary legal review before payment release.
Budget Officers: Staff preparing the FY 2025-2026 budget must scrub "indigent defense" and "pretrial services" line items to ensure no allocations violate this statute.

Reporting & Record-Keeping

Fund Segregation: Nonprofits receiving public funds for administrative services (e.g., counseling, housing) while separately operating a bail fund must maintain rigid, auditable segregation of accounts. Commingling public funds with bail capital is now a liability trigger.
Invoice Itemization: Invoices submitted to political subdivisions must move away from "General Support" descriptions. Require detailed itemization proving funds were applied to allowable operational costs only.

Fees & Costs

Litigation Risk: While there are no new state fees, the statute mandates the award of reasonable attorney's fees and court costs to any resident who successfully sues for an injunction. This creates a high financial incentive for plaintiff's attorneys to police your expenditures.

Strategic Ambiguities & Considerations

Fungibility of Funds: The law prohibits paying a nonprofit "to deposit money" for bail. It does not explicitly address "displacement"—where public funds pay for rent/overhead, freeing up the nonprofit's private donations for bail. Until case law settles this, assume a conservative posture: strict separation of accounts is the minimum defense; total divestment from these entities is the safest course.
"Donations from the Public": The prohibition applies to nonprofits that accept "donations from the public." It is unclear if this applies to entities funded solely by private foundations or grants rather than individual public solicitations. Do not rely on this technicality without a specific legal opinion.

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Legislative Timeline

This bill's path through the Texas Legislature

TopicsCivil Remedies & Liabilities Criminal Procedure Criminal Procedure--bail & Pretrial Release Ethics Political Subdivisions State Finances State Finances--management & Control

Official Analysis

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BILL ANALYSIS

Senate Research Center	S.B. 40
89R11665 DNC-F	By: Huffman
	Criminal Justice
	2/7/2025
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

Concerns have been raised that public funds used by a political subdivision for the purposes of bailing an individual out of jail actually works in contradiction to the public's best interest. S.B. 40 seeks to address these concerns by prohibiting the use of public funds of a political subdivision to pay a nonprofit organization that accepts and uses donations from the public to deposit money with a court in the amount of a defendant's bail bond. The bill creates a pathway for a taxpayer or resident of the political subdivision to seek injunctive relief to prevent further action by a political subdivision that violates these restrictions.

As proposed, S.B. 40 amends current law relating to the use by a political subdivision of public funds to pay bail bonds.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 140, Local Government Code, by adding Section 140.014, as follows.

Sec. 140.014. RESTRICTION ON USE OF PUBLIC FUNDS BY POLITICAL SUBDIVISIONS TO PAY BAIL BONDS. (a) Prohibits a political subdivision from spending public funds to pay a nonprofit organization that accepts and uses donations from the public to deposit money with a court in the amount of a defendant's bail bond.

(b) Provides that a taxpayer or resident of a political subdivision, if the political subdivision engages in an activity prohibited by Subsection (a), is entitled to appropriate injunctive relief to prevent further activity prohibited by that subsection and further payment of public funds related to that activity.

(c) Provides that a taxpayer or resident who prevails in an action under Subsection (b) is entitled to recover from the political subdivision the taxpayer's or resident's reasonable attorney's fees and costs incurred in bringing the action.

SECTION 2. Effective date: September 1, 2025.

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Senate Authors

Sen. Joan HuffmanRepublican · Primary Author

Coauthors (18)

House Sponsors

Rep. John SmitheeRepublican · Primary Sponsor

Cosponsors (52)

Bill Text(with markup)

S.B. No. 40

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

	AN ACT
	relating to the use by a political subdivision of public funds to
	pay bail bonds; authorizing injunctive relief.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Chapter 140, Local Government Code, is amended
	by adding Section 140.014 to read as follows:
	Sec. 140.014. RESTRICTION ON USE OF PUBLIC FUNDS BY
	POLITICAL SUBDIVISIONS TO PAY BAIL BONDS. (a) A political
	subdivision may not spend public funds to pay a nonprofit
	organization that accepts and uses donations from the public to
	deposit money with a court in the amount of a defendant's bail bond.
	(b) If a political subdivision engages in an activity
	prohibited by Subsection (a), a taxpayer or resident of the
	political subdivision is entitled to appropriate injunctive relief
	to prevent further activity prohibited by that subsection and
	further payment of public funds related to that activity.
	(c) A party that prevails in an action under Subsection (b)
	is entitled to recover the party's reasonable attorney's fees and
	costs.
	SECTION 2. This Act takes effect September 1, 2025.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


February 11, 2025

TO:	Honorable Pete Flores, Chair, Senate Committee on Criminal Justice

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	SB40 by Huffman (Relating to the use by a political subdivision of public funds to pay bail bonds.), As Introduced

No fiscal implication to the State is anticipated.

Local Government Impact

There could be an impact on political subdivisions that spend public funds to pay nonprofit organizations in the amount of a defendant's bail bond. The political subdivisions could also be liable for attorney's fees and costs if a taxpayer or resident prevails in an injunctive relief action.

Source Agencies:

212 Office of Court Administration, Texas Judicial Council

LBB Staff:

JMc, MGol, CMA

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Frequently Asked Questions

Common questions about SB40

What does Texas SB40 do?

SB 40 enacts a strict prohibition on political subdivisions using public funds to pay bail bonds via nonprofit organizations, enforceable through a private right of action by taxpayers. This legislation effectively creates a "third-rail" for municipal finance departments and social service grant administrators, requiring immediate segregation of funds and revision of grant agreements to avoid litigation and mandatory attorney’s fee awards. Implementation Timeline Effective Date: September 1, 2025 Compliance Deadline: September 1, 2025 (Hard stop on all prohibited disbursements).

Who authored SB40?

SB40 was authored by Texas Senator Joan Huffman during the Regular Session.

When was SB40 signed into law?

SB40 was signed into law by Governor Greg Abbott on June 16, 2025.

Which agencies enforce SB40?

SB40 is enforced by Texas Civil Courts (via private right of action by taxpayers or residents).

How urgent is compliance with SB40?

The compliance urgency for SB40 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

What is the cost impact of SB40?

The cost impact of SB40 is estimated as "low". This may vary based on industry and implementation requirements.

What topics does SB40 address?

SB40 addresses topics including civil remedies & liabilities, criminal procedure, criminal procedure--bail & pretrial release, ethics and political subdivisions.

Legislative data provided by LegiScanLast updated: November 25, 2025

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