The bill, H.B. No. 294, seeks to enhance the authority of the Texas Attorney General to investigate and take legal action against local governments, specifically municipalities and counties, for violations of law. It introduces a new Subchapter E to Chapter 402 of the Government Code, which outlines the definitions, procedures, and consequences related to such investigations and actions. The Attorney General is granted the power to investigate alleged violations and, if warranted, initiate legal proceedings against the local government. The bill also establishes that during the pendency of such actions, the local government will face restrictions, including the withholding of state funds and limitations on tax rate increases.

Additionally, the bill specifies the burden of proof for local governments defending against these actions, requiring them to demonstrate compliance with the law. It designates the First Business Court Division as having exclusive original jurisdiction over these cases, with appeals going to the Fifteenth Court of Appeals. If the Attorney General prevails, the local government will be prohibited from adopting a tax rate exceeding its no-new-revenue tax rate for five years and may be subject to penalties. Conversely, if the local government wins, it will receive the balance of its suspense account. The provisions of this bill apply only to violations occurring after its effective date, which is set for 91 days following the end of the legislative session.

Statutes affected:
Introduced: ()