According to the Legislative Budget Board (LBB), the fiscal implications of HB 2494 are minimal for both state and local governments. Specifically, the analysis concludes that there is no anticipated fiscal impact to the state and no significant fiscal impact to units of local government​.

This assessment reflects the bill’s nature as a regulatory reform rather than a mandate requiring new expenditures. It modifies procedures for disannexation petitions and expands legal remedies for property owners, but does not require the state to fund new programs or services. The Office of Court Administration, listed as a source agency, did not project increased court caseloads significant enough to impact state or local judicial budgets.

For municipalities, while there is potential for reduced revenue if areas are disannexed, leading to loss of property tax or utility fee collections, these impacts are not considered significant across the state. The bill targets only situations where municipalities have failed to provide promised services, potentially limiting its application to already underserved or neglected areas that may not be generating substantial revenue in the first place. Additionally, disannexation could relieve municipalities of obligations to extend costly infrastructure to these areas.

In summary, HB 2494 is expected to be budget-neutral at the state level and fiscally manageable at the local level, with no significant new costs projected under its current provisions.

HB 2494 strengthens property owner protections by enhancing the right to disannexation from municipalities that fail to deliver services as promised. It builds upon Texas's post-2017 reforms that ended forced annexation and continues the legislature’s effort to ensure municipal accountability and service equity. The committee substitute broadens the scope of the original bill by allowing a majority of property owners, not just registered voters, to initiate disannexation petitions. This correction aligns the process more closely with property rights rather than electoral technicalities, giving voice to a wider set of stakeholders who bear the tax burden and often lack representation in municipal decision-making.

The bill further creates enforceable standards for service delivery, including a new benchmark: failure to connect most properties in the affected area to the city's water and wastewater systems can now be a basis for disannexation. This addition provides a measurable and objective test that reinforces fairness in municipal governance. Importantly, the bill makes procedural improvements to the petition and court processes, ensuring greater clarity and speed while eliminating some of the bureaucratic hurdles tied to voter verification. These changes support the principle of limited government by curbing municipal overreach and imposing tangible consequences for non-performance.

The fiscal analysis confirms there is no anticipated cost to the state and no significant impact to local governments, making the bill a fiscally responsible measure. Additionally, the legislative intent clearly reflects a continuity of pro-property rights policy dating back to SB 6 in 2017. With strong alignment to all five core liberty principles—individual liberty, personal responsibility, free enterprise, private property rights, and limited government—this bill offers a necessary check on municipal authority and deserves support. Therefore, Texas Policy Research recommends that lawmakers vote YES on HB 2494.

• Individual Liberty: The bill restores a measure of self-determination to property owners who may have been subjected to annexation without receiving the corresponding municipal services. By allowing property owners—not just registered voters—to petition for disannexation, the bill recognizes a broader class of individuals who are impacted by annexation policies and affirms their right to exit political control that fails to serve them. This directly supports individual liberty by reducing involuntary subjugation to ineffective local governance.
• Personal Responsibility: The bill enforces accountability on both sides. Property owners must follow a structured legal process and meet the requirements for disannexation, while municipalities are held responsible for providing timely and essential services such as water and wastewater infrastructure. The added legal remedies—including expedited court processes and mandatory attorney fee reimbursement—reinforce that municipalities must honor service commitments or face consequences.
• Free Enterprise: When municipalities annex areas but fail to extend infrastructure or services, it often hampers private development and deters investment. By enabling disannexation in such scenarios, the bill removes bureaucratic and regulatory burdens from underserved property owners. This encourages local economic development by giving individuals and businesses more freedom to manage their property outside inefficient municipal oversight.
• Private Property Rights: The core of the bill is a reassertion of property rights. By switching eligibility from “qualified voters” to “property owners,” the bill better aligns the legal remedy with the actual stakeholders affected by annexation. It prioritizes the rights of those who bear the financial and developmental burdens of being included in city limits without receiving the intended benefits, restoring a fair balance between authority and ownership.
• Limited Government: The bill acts as a structural check on municipal power, ensuring that cities cannot unilaterally expand their tax base without fulfilling the corresponding obligation to provide services. It places limits on municipal jurisdiction, particularly in cases where annexation procedures were not properly followed. This fosters a more restrained, accountable form of local government consistent with Texas’s constitutional traditions.

• SB 1844 (Same As)