HB 2770 prohibits municipalities from spending public funds on diversity, equity, and inclusion (DEI) initiatives unless required by federal law. It bars local governments from using tax dollars to fund DEI-related departments, programs, hiring practices, training sessions, or economic development partnerships that promote identity-based preferences. Municipalities violating the law may be barred from raising property taxes above the no-new-revenue tax rate for three years and denied state grants for two years. The Texas Attorney General may enforce these provisions in court.