Texas 2025 - 89th Regular

Texas House Bill HB5266 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	89R13976 CJC/SCL-D
2	2	By: Bell of Montgomery H.B. No. 5266
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7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the authority of the attorney general to investigate
10	10	violations of law by certain local governments and to take action
11	11	against those local governments to enforce the law.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Chapter 402, Government Code, is amended by
14	14	adding Subchapter D to read as follows:
15	15	SUBCHAPTER D. VIOLATIONS OF LAW BY LOCAL GOVERNMENT
16	16	Sec. 402.101. DEFINITIONS. In this subchapter:
17	17	(1) "Local government" means a municipality or county.
18	18	(2) "No-new-revenue tax rate" means the
19	19	no-new-revenue tax rate calculated under Chapter 26, Tax Code.
20	20	Sec. 402.102. ATTORNEY GENERAL INVESTIGATION AND ACTION.
21	21	(a) The attorney general may investigate an alleged violation of
22	22	law by a local government.
23	23	(b) The attorney general may bring an action in the name of
24	24	the state against a local government if the attorney general
25	25	determines after conducting an investigation under Subsection (a)
26	26	that the local government violated a law.
27	27	Sec. 402.103. ENFORCEMENT ACTIONS DURING PENDENCY OF
28	28	ACTION. During the pendency of an action brought under this
29	29	subchapter, with respect to a local government defending the
30	30	action:
31	31	(1) the comptroller shall withhold payment of any
32	32	money due to the local government under Section 321.502 or 323.502,
33	33	Tax Code, as applicable;
34	34	(2) the local government may not adopt an ad valorem
35	35	tax rate that exceeds the local government's no-new-revenue tax
36	36	rate; and
37	37	(3) the local government may not receive state grant
38	38	funds and any pending application for such funds shall be denied.
39	39	Sec. 402.104. BURDEN OF PROOF; INITIAL HEARING. (a) A local
40	40	government defending an action brought under this subchapter has
41	41	the burden of proof to establish by a preponderance of the evidence
42	42	that the local government complied with the law the alleged
43	43	violation of which is the subject of the action.
44	44	(b) The court of original jurisdiction shall set an action
45	45	brought under this subchapter for an initial hearing not later than
46	46	the 30th day after the date the local government defending the
47	47	action was served with process for the action.
48	48	Sec. 402.105. JURISDICTION; APPEAL. (a) The First Business
49	49	Court Division has exclusive original jurisdiction of an action
50	50	brought under this subchapter.
51	51	(b) The Fifteenth Court of Appeals has exclusive appellate
52	52	jurisdiction of an action brought under this subchapter. A party
53	53	must appeal the action not later than the 30th day after the date
54	54	the judgment is signed.
55	55	Sec. 402.106. RESOLUTION OF ACTION IN FAVOR OF ATTORNEY
56	56	GENERAL. (a) If the attorney general prevails in an action brought
57	57	under this chapter:
58	58	(1) the local government defending the action may not,
59	59	during the five state fiscal years following the year in which the
60	60	judgment becomes final:
61	61	(A) adopt an ad valorem tax rate that exceeds the
62	62	local government's no-new-revenue tax rate; or
63	63	(B) receive state grant funds; and
64	64	(2) the court issuing the final judgment resolving the
65	65	action shall provide in the judgment that the state is entitled to
66	66	recover from the local government defending the action a penalty
67	67	equal to the balance of the suspense account maintained for the
68	68	local government under Section 321.501 or 323.501, Tax Code, as
69	69	applicable, that exists on the date the judgment is signed.
70	70	(b) The comptroller shall, on receipt of a copy of the final
71	71	judgment in an action brought under this subchapter that includes a
72	72	provision described by Subsection (a)(2), deposit the balance of
73	73	the suspense account maintained for the local government defending
74	74	the action under Section 321.501 or 323.501, Tax Code, as
75	75	applicable, as of the date the judgment is signed to the credit of
76	76	the general revenue fund.
77	77	Sec. 402.107. RESOLUTION OF ACTION IN FAVOR OF LOCAL
78	78	GOVERNMENT. If a local government prevails in an action brought
79	79	under this subchapter, the comptroller shall, notwithstanding any
80	80	other law, immediately send to the local government the balance of
81	81	the suspense account maintained for the local government under
82	82	Section 321.501 or 323.501, Tax Code, as applicable, as of the date
83	83	the judgment resolving the action is signed.
84	84	SECTION 2. Subchapter D, Chapter 402, Government Code, as
85	85	added by this Act, applies only to an alleged violation of law that
86	86	occurs on or after the effective date of this Act.
87	87	SECTION 3. This Act takes effect September 1, 2025.