SB 1851

relating to the penalty for noncompliance with certain audit
requirements by a municipality.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Chapter 103, Local Government Code, is amended
by adding Section 103.005 to read as follows:
Sec. 103.005.  ANNUAL AUDIT AND FILING OF FINANCIAL
STATEMENT; PENALTY FOR NONCOMPLIANCE.  (a)  In this section:
(1)  "No-new-revenue tax rate" means the
no-new-revenue tax rate calculated under Chapter 26, Tax Code.
(2)  "Tax year" has the meaning assigned by Section
(b)  A person may submit a complaint to the attorney general
of a suspected violation of Section 103.001 or 103.003.
(c)  Notwithstanding any other law, if the attorney general
determines that a municipality has not had its records and accounts
audited and an annual financial statement prepared based on the
audit as required by Section 103.001 or has not filed the financial
statement and the auditor's opinion on the statement in the office
of the municipal secretary or clerk before the 180th day after the
last day of the municipality's fiscal year as required by Section
103.003, the municipality may not adopt an ad valorem tax rate that
exceeds the municipality's no-new-revenue tax rate:
(1)  for the tax year that begins on or after the date
of the attorney general's determination; or
(2)  for a subsequent tax year that begins before the
date the municipality has had an annual audit completed and
financial statement prepared or filed the financial statement and
auditor's opinion on the financial statement with the municipal
SECTION 2.  This Act applies only to the adoption of an ad
valorem tax rate for a tax year that begins on or after the
SECTION 3.  This Act takes effect September 1, 2025.