The bill, H.B. No. 161, amends the Government Code by adding a new Subchapter E, which grants the Texas Attorney General the authority to investigate alleged violations of law by local governments, specifically municipalities and counties. The Attorney General can initiate legal action against a local government if it is determined that a violation has occurred. The bill outlines the procedures for such investigations and actions, including the burden of proof on the local government to demonstrate compliance with the law during legal proceedings.

Additionally, the bill establishes specific consequences for local governments during the pendency of an action, such as withholding state funds and restrictions on adopting tax rates. If the Attorney General prevails in the action, the local government will face further penalties, including limitations on tax rates and the forfeiture of funds from a suspense account. Conversely, if the local government wins, it will receive the balance of the suspense account. The provisions of this new subchapter will apply only to violations occurring after the bill's effective date, which is set for 91 days following the end of the legislative session.

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