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AN ACT
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relating to the penalty for noncompliance with certain audit |
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requirements by a municipality. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 103, Local Government Code, is amended |
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by adding Section 103.005 to read as follows: |
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Sec. 103.005. ANNUAL AUDIT AND FILING OF FINANCIAL |
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STATEMENT; PENALTY FOR NONCOMPLIANCE. (a) In this section: |
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(1) "No-new-revenue tax rate" means the |
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no-new-revenue tax rate calculated under Chapter 26, Tax Code. |
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(2) "Tax year" has the meaning assigned by Section |
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1.04, Tax Code. |
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(b) A person may submit a complaint to the attorney general |
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of a suspected violation of Section 103.001 or 103.003. |
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(c) Notwithstanding any other law, if the attorney general |
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determines that a municipality has not had its records and accounts |
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audited and an annual financial statement prepared based on the |
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audit as required by Section 103.001 or has not filed the financial |
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statement and the auditor's opinion on the statement in the office |
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of the municipal secretary or clerk before the 180th day after the |
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last day of the municipality's fiscal year as required by Section |
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103.003, the municipality may not adopt an ad valorem tax rate that |
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exceeds the municipality's no-new-revenue tax rate: |
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(1) for the tax year that begins on or after the date |
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of the attorney general's determination; or |
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(2) for a subsequent tax year that begins before the |
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date the municipality has had an annual audit completed and |
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financial statement prepared or filed the financial statement and |
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auditor's opinion on the financial statement with the municipal |
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clerk, as applicable. |
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SECTION 2. This Act applies only to the adoption of an ad |
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valorem tax rate for a tax year that begins on or after the |
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effective date of this Act. |
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SECTION 3. This Act takes effect September 1, 2025. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I hereby certify that S.B. No. 1851 passed the Senate on |
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April 16, 2025, by the following vote: Yeas 31, Nays 0. |
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______________________________ |
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Secretary of the Senate |
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I hereby certify that S.B. No. 1851 passed the House on |
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May 10, 2025, by the following vote: Yeas 89, Nays 31, two |
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present not voting. |
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______________________________ |
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Chief Clerk of the House |
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Approved: |
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______________________________ |
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Date |
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______________________________ |
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Governor |