SB1851

What triggers the restriction: the attorney general must determine that the municipality failed to have its records and accounts audited and an annual financial statement prepared as required by Section 103.001, or failed to file the statement and auditor’s opinion with the municipal secretary or clerk by the deadline described in the act—before the 180th day after its fiscal year ends. This adds a tax-rate consequence to existing financial-reporting duties; it does not create the annual audit requirement for the first time. Final law, Section 103.005(b)–(c); Existing audit duty.

What the city cannot do: it may not adopt a property-tax rate above its calculated no-new-revenue rate for the tax year beginning on or after the determination, or for a subsequent tax year beginning before it corrects the applicable audit/preparation or filing failure. The law restricts rate adoption; it does not impose a monetary fine or automatically refund prior taxes. Final law, Section 103.005(c).

Not a freeze on each tax bill: the no-new-revenue rate is a statutory calculation using the prior levy and current taxable values, with adjustments for lost and new property. It is not simply last year’s tax rate, and an individual owner’s bill is not guaranteed to stay the same. The act applies only to rate adoption for tax years beginning on or after September 1, 2025. Because a tax year is the calendar year, the first potentially covered tax year is 2026, subject to the attorney general’s determination and correction timing. Final law, Sections 1–3; Tax-year definition; Rate calculation, subsection (c).

Passage: all five published versions have the same operative provisions. Both committees reported the bill without amendments, and the amendment index lists none. Introduced; Senate committee; Senate-passed; House committee; Final law; Version index; Amendment index.

Compare the published text versions in the official text index. A change is not attributed to a specific amendment here without a verified record.

Residents gain a complaint route and an enforcement incentive for timely city financial reporting. A noncompliant city may lose room to raise its tax rate above the statutory benchmark, which can constrain revenue choices until the failure is corrected under the act’s timing rules. No particular city is declared noncompliant by this bill, and individual taxpayer savings are not specified. Final law.

The March 30 fiscal note anticipates no significant state fiscal implication and assumes state costs can be absorbed with existing resources. It expressly says a municipality could be affected by the rate restriction after an attorney-general determination; it does not estimate that city’s revenue loss. The act itself makes no appropriation. Official fiscal note; Final law.