The bill, H.B. No. 161, seeks to enhance the authority of the Texas Attorney General to investigate and take action against local governments for violations of law. It introduces a new Subchapter E to Chapter 402 of the Government Code, which defines "local government" as municipalities or counties and establishes the procedures for the Attorney General's investigations and actions. The Attorney General is empowered to investigate alleged violations and, if warranted, bring legal action against the local government. The bill also outlines the consequences for local governments during the pendency of such actions, including restrictions on adopting certain tax rates and receiving state grant funds.

Additionally, the bill specifies the burden of proof for local governments defending against these actions, requiring them to demonstrate compliance with the law. It establishes jurisdiction for these cases in the First Business Court Division and the Fifteenth Court of Appeals, and it details the implications of a judgment in favor of either the Attorney General or the local government. If the Attorney General prevails, the local government faces penalties, including restrictions on tax rates and grant funding for five years, while a local government that wins 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.

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