By: Hickland H.B. No. 1433
A BILL TO BE ENTITLED
AN ACT
relating to efficiency audits for certain political subdivisions.
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. EFFICIENCY AUDIT. (a) In this section:
(1) "Efficiency audit" means an investigation of the
operations of a political subdivision to examine fiscal management,
efficiency, and utilization of resources.
(2) "No-new-revenue tax rate" means the
no-new-revenue tax rate calculated under Chapter 26, Tax Code.
(3) "Tax year" has the meaning assigned by Section
1.04, Tax Code.
(b) This section applies only to a political subdivision
other than a school district that is defined as a taxing unit by
Section 1.04, Tax Code.
(c) Except as provided by Subsection (d), the governing body
of a political subdivision that adopts an ad valorem tax rate that
exceeds the no-new-revenue tax rate for five consecutive tax years
shall conduct an efficiency audit.
(c-1) A tax year that occurred before the 2022 tax year is
not included in a determination made under Subsection (c) that a
political subdivision adopted an ad valorem tax rate that exceeds
the no-new-revenue tax rate for five consecutive tax years. This
subsection expires January 1, 2027.
(d) The governing body of a political subdivision all or
part of which is located in an area declared a disaster area by the
governor under Chapter 418, Government Code, may hold an election
to seek voter approval to adopt a tax rate that exceeds the
no-new-revenue tax rate during the two-year period following the
date of the declaration without conducting an efficiency audit
otherwise required under this section.
(e) A political subdivision must pay for the costs
associated with an efficiency audit required under this section.
(f) An auditor selected by the governing body of a political
subdivision must maintain independence from the political
subdivision and complete the efficiency audit not later than three
months after the date the auditor was selected.
(g) The governing body of a political subdivision must hold
an open meeting to discuss the results of an efficiency audit
conducted under this section. Not later than 30 days after the date
of the open meeting, the results of an efficiency audit conducted
under this section must be posted on the political subdivision's
Internet website.
(h) A political subdivision shall provide all documents,
records, and personnel requested by the auditor as needed to
conduct the audit in an efficient manner.
SECTION 2. This Act takes effect September 1, 2025.