| 1 | 1 | | 89R8353 DNC-D |
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| 2 | 2 | | By: Harris H.B. No. 4097 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | |
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| 6 | 6 | | |
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| 7 | 7 | | A BILL TO BE ENTITLED |
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| 8 | 8 | | AN ACT |
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| 9 | 9 | | relating to the penalty for noncompliance with certain audit |
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| 10 | 10 | | requirements by a municipality. |
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| 11 | 11 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 12 | 12 | | SECTION 1. Chapter 103, Local Government Code, is amended |
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| 13 | 13 | | by adding Section 103.005 to read as follows: |
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| 14 | 14 | | Sec. 103.005. ANNUAL AUDIT AND FILING OF FINANCIAL |
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| 15 | 15 | | STATEMENT; PENALTY FOR NONCOMPLIANCE. (a) In this section: |
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| 16 | 16 | | (1) "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 | | (2) "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) A person may submit a complaint to the attorney general |
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| 21 | 21 | | of a suspected violation of Section 103.001 or 103.003. |
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| 22 | 22 | | (c) Notwithstanding any other law, if the attorney general |
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| 23 | 23 | | determines that a municipality has not had its records and accounts |
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| 24 | 24 | | audited and an annual financial statement prepared based on the |
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| 25 | 25 | | audit as required by Section 103.001 or has not filed the financial |
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| 26 | 26 | | statement and the auditor's opinion on the statement in the office |
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| 27 | 27 | | of the municipal secretary or clerk before the 180th day after the |
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| 28 | 28 | | last day of the municipality's fiscal year as required by Section |
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| 29 | 29 | | 103.003, the municipality may not adopt an ad valorem tax rate that |
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| 30 | 30 | | exceeds the municipality's no-new-revenue tax rate: |
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| 31 | 31 | | (1) for the tax year that begins on or after the date |
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| 32 | 32 | | of the attorney general's determination; or |
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| 33 | 33 | | (2) for a subsequent tax year that begins before the |
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| 34 | 34 | | date the municipality has had an annual audit completed and |
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| 35 | 35 | | financial statement prepared or filed the financial statement and |
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| 36 | 36 | | auditor's opinion on the financial statement with the municipal |
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| 37 | 37 | | clerk, as applicable. |
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| 38 | 38 | | SECTION 2. This Act applies only to the adoption of an ad |
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| 39 | 39 | | valorem tax rate for a tax year that begins on or after the |
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| 40 | 40 | | effective date of this Act. |
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| 41 | 41 | | SECTION 3. This Act takes effect September 1, 2025. |
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