Texas House bill by Rep. Villalobos allows municipalities to set employee contribution rates for retirement system

Passed bill authored by State Rep. Denise Villalobos seeks to give municipalities authority to set uniform employee contribution rates within departments participating in the Texas Municipal Retirement System, according to the Texas Legislature website.

In the House, 46 Democrats and 82 Republicans voted in favor of the bill, with no opposition.

Meanwhile, in the Senate, 11 Democrats and 20 Republicans voted in favor, also with no opposing votes.

Denise Villalobos introduced the bill in the Texas House on Friday, Feb. 21, during the 89th regular legislative session.

Villalobos graduated from Texas A&M University-Kingsville in 2015 with a BA.

Villalobos, a Republican, was elected to the Texas State House in 2025 to represent the state’s 34th House district, replacing previous state representative Abel Herrero.

According to the Texas Legislature, the bill’s official text was summarized as follows: ‘Relating to member contributions to the Texas Municipal Retirement System’.

The following is our breakdown, based on the actual bill text, and may include interpretation to clarify its provisions.

In essence, this bill amends Section 855.401(a) of the Government Code to allow each municipality with departments participating in the Texas Municipal Retirement System to designate the rate of member contributions by employees. Municipalities can elect a contribution rate of five, six, seven, or eight percent of an employee’s compensation. All departments within a participating municipality must maintain the same contribution rate. However, municipalities that, before Sept. 1, 1991, opted for different rates across departments may continue with these varied rates based on existing ordinances until they choose to standardize. The act takes effect Sept. 1, 2025.

The bill was co-authored by Rep. Lauren Ashley Simmons (Democrat – District 146).

The bill received its final legislative approval on Friday, May 23, and was signed into law by Gov. Greg Abbott on Friday, June 20.

Bills in Texas go through a multi-step legislative process, including committee review, debates, and votes in both chambers before reaching a final decision. Each session, there are typically thousands of bills introduced, but only a portion successfully navigate the process to become law.

You can read more about the bills and other measures here.