89R12133 DRS-D     By: LaHood H.B. No. 4283       A BILL TO BE ENTITLED   AN ACT   relating to the penalties imposed on municipalities for violating   state law and the state constitution.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Chapter 402, Government Code, is amended by   adding Subchapter D to read as follows:   SUBCHAPTER D. REVIEW OF CERTAIN MUNICIPAL LAWS; PENALTIES          Sec. 402.101.  DEFINITION. In this subchapter, "municipal   law" means an ordinance, rule, or similar measure adopted by the   governing body of a municipality.          Sec. 402.102.  REVIEW OF MUNICIPAL LAWS; REPORT. (a) The   attorney general may conduct an investigation to determine whether   a municipal law violates state law or the state constitution.          (b)  The attorney general shall conduct an investigation and   prepare a report on the findings of the investigation and, if the   attorney general determines that the municipal law that is the   subject of the investigation violates state law or the state   constitution, the attorney general shall include a statement to   that effect in the report. The attorney general shall submit a copy   of the report to:                (1)  the comptroller; and                (2)  the governing body of the affected municipality.          (c)  If the report provided to a municipality under   Subsection (b) indicates that a municipal law adopted by the   municipality violates state law or the state constitution, the   attorney general must include with the report an additional notice   that:                (1)  clearly and concisely explains the attorney   general's reasons for finding that the municipal law violates state   law or the state constitution; and                (2)  states that the municipality must resolve the   violation before the 30th day after the date the municipality   receives the report under Subsection (b) in order to avoid the   penalties described by Section 402.104.          Sec. 402.103.  EFFECT OF FINDING OF NO VIOLATION. If the   report under Section 402.102(b) states that the attorney general   finds that the municipal law does not violate state law or the state   constitution, no further action is required of the attorney general   or the municipality.          Sec. 402.104.  EFFECT OF FINDING OF VIOLATION. (a) If the   report under Section 402.102(b) states that the attorney general   finds that the municipal law violates state law or the state   constitution and the municipality that adopted the municipal law   does not resolve the violation within the period prescribed by   Section 402.102(c)(2):                (1)  the municipality is liable to the state for a civil   penalty of not more than $3,000 for each day after the date the   municipality receives the report under Section 402.102(b);                (2)  until the attorney general determines that the   municipality has resolved the violation, the governing body of the   municipality may not:                      (A)  initiate an annexation procedure under   Chapter 43, Local Government Code; or                      (B)  authorize the issuance of bonds; and                (3)  the attorney general shall submit written notice   to the comptroller instructing the comptroller to withhold any   money due to the municipality under Section 321.502, Tax Code,   until the attorney general notifies the comptroller that the   municipality has resolved the violation.          (b)  The attorney general must provide to the municipality a   copy of the notice submitted to the comptroller under Subsection   (a)(3).          (c)  The attorney general may bring an action in a court of   competent jurisdiction to  recover the civil penalty imposed under   this section.          (d)  The attorney general shall consult with the governing   body of the municipality for purposes of determining whether the   municipality has resolved the violation identified in the report   under Section 402.102(b). On the date the attorney general   determines the violation has been resolved, the attorney general   shall provide written notice of the resolution to the governing   body of the municipality and the comptroller.          (e)  The comptroller may not distribute any money to the   municipality under Section 321.502, Tax Code, during the period   beginning on the date the comptroller receives the notice under   Subsection (a) and ending on the date the comptroller receives the   notice described by Subsection (d).          SECTION 2.  Section 321.502, Tax Code, is amended to read as   follows:          Sec. 321.502.  DISTRIBUTION OF TRUST FUNDS. Subject to   Section 402.104, Government Code, at [At] least twice during each   state fiscal year and at other times as often as feasible, the   comptroller shall send to the municipal treasurer or to the person   who performs the office of the municipal treasurer payable to the   municipality the municipality's share of the taxes collected by the   comptroller under this chapter.          SECTION 3.  This Act takes effect September 1, 2025.