| 1 | 1 | | By: Hickland H.B. No. 1433 |
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| 2 | 2 | | |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | |
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| 6 | 6 | | A BILL TO BE ENTITLED |
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| 7 | 7 | | AN ACT |
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| 8 | 8 | | relating to efficiency audits for certain political subdivisions. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Chapter 140, Local Government Code, is amended |
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| 11 | 11 | | by adding Section 140.014 to read as follows: |
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| 12 | 12 | | Sec. 140.014. EFFICIENCY AUDIT. (a) In this section: |
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| 13 | 13 | | (1) "Efficiency audit" means an investigation of the |
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| 14 | 14 | | operations of a political subdivision to examine fiscal management, |
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| 15 | 15 | | efficiency, and utilization of resources. |
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| 16 | 16 | | (2) "No-new-revenue tax rate" means the |
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| 17 | 17 | | no-new-revenue tax rate calculated under Chapter 26, Tax Code. |
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| 18 | 18 | | (3) "Tax year" has the meaning assigned by Section |
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| 19 | 19 | | 1.04, Tax Code. |
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| 20 | 20 | | (b) This section applies only to a political subdivision |
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| 21 | 21 | | other than a school district that is defined as a taxing unit by |
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| 22 | 22 | | Section 1.04, Tax Code. |
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| 23 | 23 | | (c) Except as provided by Subsection (d), the governing body |
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| 24 | 24 | | of a political subdivision that adopts an ad valorem tax rate that |
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| 25 | 25 | | exceeds the no-new-revenue tax rate for five consecutive tax years |
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| 26 | 26 | | shall conduct an efficiency audit. |
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| 27 | 27 | | (c-1) A tax year that occurred before the 2022 tax year is |
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| 28 | 28 | | not included in a determination made under Subsection (c) that a |
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| 29 | 29 | | political subdivision adopted an ad valorem tax rate that exceeds |
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| 30 | 30 | | the no-new-revenue tax rate for five consecutive tax years. This |
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| 31 | 31 | | subsection expires January 1, 2027. |
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| 32 | 32 | | (d) The governing body of a political subdivision all or |
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| 33 | 33 | | part of which is located in an area declared a disaster area by the |
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| 34 | 34 | | governor under Chapter 418, Government Code, may hold an election |
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| 35 | 35 | | to seek voter approval to adopt a tax rate that exceeds the |
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| 36 | 36 | | no-new-revenue tax rate during the two-year period following the |
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| 37 | 37 | | date of the declaration without conducting an efficiency audit |
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| 38 | 38 | | otherwise required under this section. |
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| 39 | 39 | | (e) A political subdivision must pay for the costs |
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| 40 | 40 | | associated with an efficiency audit required under this section. |
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| 41 | 41 | | (f) An auditor selected by the governing body of a political |
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| 42 | 42 | | subdivision must maintain independence from the political |
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| 43 | 43 | | subdivision and complete the efficiency audit not later than three |
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| 44 | 44 | | months after the date the auditor was selected. |
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| 45 | 45 | | (g) The governing body of a political subdivision must hold |
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| 46 | 46 | | an open meeting to discuss the results of an efficiency audit |
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| 47 | 47 | | conducted under this section. Not later than 30 days after the date |
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| 48 | 48 | | of the open meeting, the results of an efficiency audit conducted |
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| 49 | 49 | | under this section must be posted on the political subdivision's |
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| 50 | 50 | | Internet website. |
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| 51 | 51 | | (h) A political subdivision shall provide all documents, |
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| 52 | 52 | | records, and personnel requested by the auditor as needed to |
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| 53 | 53 | | conduct the audit in an efficient manner. |
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| 54 | 54 | | SECTION 2. This Act takes effect September 1, 2025. |
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