BILL ANALYSIS

C.S.H.B. 4283

By: LaHood

State Affairs

Committee Report (Substituted)

BACKGROUND AND PURPOSE

The bill author has informed the committee that when local governments implement laws that violate state law or the state constitution, it undermines the rule of law and creates confusion among citizens, businesses, and law enforcement about which rules apply. The bill author has further informed the committee that this allows local entities to disregard higher legal authority, which weakens the structure of governance and can lead to selective compliance with laws, and that local governments should follow the law. C.S.H.B. 4283 reinforces the principle that local governments must operate within the boundaries set by state law and the state constitution by establishing a structured and formal process for the Texas Attorney General to investigate and report on local laws that may be in violation and by creating civil penalties as strong fiscal incentives for municipalities and counties to comply with state law.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

C.S.H.B. 4283 amends the Government Code to authorize the attorney general to conduct an investigation to determine whether a municipal or county law, defined by the bill as an ordinance, order, rule, or similar measure adopted by the governing body of a municipality or county, violates state law or the state constitution. The bill requires the attorney general, if the attorney general conducts such an investigation, to do the following:

· prepare a report on the findings of the investigation;

· if the attorney general determines that the municipal or county law that is the subject of the investigation violates state law or the state constitution, include a statement to that effect in the report;

· submit a copy of the report to the governing body of the affected municipality or county; and

· if the report indicates that a municipal or county law adopted by the municipality or county violates state law or the state constitution, include with the report an additional notice that does the following:

o clearly and concisely explains the attorney general's reasons for finding that the municipal or county law violates state law or the state constitution; and

o states that the municipality or county must resolve the violation before the 30th day after the date the municipality or county receives the report in order to avoid the penalties described by the bill's provisions.

The bill establishes that no further action is required of the attorney general or the municipality or county if the report states that the attorney general finds that the municipal or county law does not violate state law or the state constitution.

C.S.H.B. 4283 does the following if the report states that the attorney general finds that the municipal or county law violates state law or the state constitution and the municipality or county that adopted the municipal or county law does not resolve the violation, subject to an appeal by the county or municipality, within the period prescribed by the bill's provisions:

· makes the municipality or county liable to the state for a civil penalty of not more than $3,000 for each day after the date the municipality or county receives the report; and

· until the municipality or county has resolved the violation or prevails in an appeal under the bill's provisions, prohibits the governing body of the municipality or county, as applicable, from doing the following:

o authorizing the issuance of bonds; and

o if a municipal law is the subject of the violation, initiating an annexation procedure under Local Government Code provisions relating to municipal annexation.

The bill authorizes the attorney general to bring an action in district court to recover the civil penalty and enforce the penalties imposed under the bill's provisions and to recover reasonable attorney's fees and court costs incurred in bringing such an action. The bill waives governmental immunity to suit and from liability to the extent of liability created by the bill.

C.S.H.B. 4283 authorizes a municipality or county to bring an action in district court to appeal a determination of a violation of state law or the state constitution by the attorney general. The bill establishes that, during the pendency of such an action, a municipality or county is not liable for the civil penalty. The bill does the following if a municipality or county does not prevail in an action:

· makes the municipality or county liable to the state for a civil penalty of:

o not more than $9,000 for each day the appeal was pending in district court; and

o not more than $3,000 for each day after the date of the final disposition of the action that the municipality or county has not resolved the violation; and

· until the later of the fifth anniversary of the date of the final disposition of the case or the date that the municipality or county resolves the violation subject to the action, prohibits the governing body of the municipality or county, as applicable, from doing the following:

o authorizing the issuance of bonds; and

o if a municipal law is the subject of the appeal, initiating an annexation procedure under Local Government Code provisions relating to municipal annexation.

EFFECTIVE DATE

April 1, 2026.

COMPARISON OF INTRODUCED AND SUBSTITUTE

While C.S.H.B. 4283 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.

While both the introduced and substitute authorize the attorney general to conduct an investigation to determine whether a municipal law violates state law or the state constitution, the substitute also authorizes the attorney general to conduct such an investigation for a county order, and updates corresponding provisions to reflect that addition to the authorization.

Whereas the introduced required the attorney general to conduct an investigation authorized by the bill to determine whether a municipal law violates state law or the state constitution and to prepare a report on the findings of the investigation, the substitute authorizes but does not require the attorney general to conduct such an investigation into a municipal or county law, and only requires the report if the attorney general conducts an investigation.

Whereas the introduced prohibited the governing body of a municipality that does not resolve a violation of state law or the state constitution within the prescribed period from initiating an annexation procedure under Local Government Code provisions relating to municipal annexation or authorizing the issuance of bonds until the attorney general determines that the municipality has resolved the violation, the substitute prohibits the governing body of a municipality or county that does not resolve a violation of state law or the state constitution within the prescribed period from authorizing the issuance of bonds, and, if a municipal law is the subject of the violation, initiating a municipal annexation procedure until the municipality or county has resolved the violation or prevails in an appeal.

The substitute omits the provisions in the introduced that required the attorney general to do the following:

· submit written notice to the comptroller of public accounts instructing the comptroller to withhold any money due under Tax Code provisions relating to the distribution of trust funds to a municipality that does not resolve a violation of state law or the state constitution within the prescribed period until the attorney general notifies the comptroller that the municipality has resolved the violation; and

· provide to the municipality a copy of the written notice.

Whereas the introduced authorized the attorney general to bring an action in a court of competent jurisdiction to recover the civil penalty imposed under the bill's provisions, the substitute authorizes the attorney general to bring an action in district court to recover the civil penalty and enforce the penalties imposed under the bill's provisions. The substitute includes the following provisions absent from the introduced:

· an authorization for the attorney general to recover reasonable attorney's fees and court costs incurred in bringing such an action; and

· a provision waiving governmental immunity to suit and from liability to the extent of liability created by the bill.

The substitute omits the following provisions of the introduced:

· the requirement for the attorney general to consult with the governing body of a municipality in determining whether the municipality has resolved a violation of state law or the state constitution and to provide written notice of a resolution to the governing body and the comptroller; and

· the prohibition against the comptroller distributing money to the municipality under Tax Code provisions relating to the distribution of trust funds during the period beginning on the date the comptroller receives notice to withhold the money and ending on the date the comptroller receives written notice of a resolution.

Instead, the substitute includes provisions absent from the introduced that authorize a municipality or county to bring an action in district court to appeal a determination of a violation of state law or the state constitution by the attorney general and establish procedures relating to such an action.

The substitute changes the bill's effective date from September 1, 2025, as in the introduced, to April 1, 2026.