TX SB2963

Authorizes the Texas Attorney General to investigate alleged violations of law by municipalities and counties and bring legal action against them in the name of the state

Imposes immediate financial penalties on local governments while litigation is pending: withholding of sales tax payments, prohibition on adopting property tax rates above the no-new-revenue rate, and denial of state grant funds

Places the burden of proof on the local government to demonstrate compliance with the law by a preponderance of evidence, rather than requiring the state to prove the violation

Grants exclusive original jurisdiction to the First Business Court Division with mandatory initial hearings within 30 days; appeals go exclusively to the Fifteenth Court of Appeals

If the Attorney General prevails, the local government loses its entire sales tax suspense account balance to the state general revenue fund and faces a 5-year prohibition on raising property taxes above the no-new-revenue rate and receiving state grants

Takes effect September 1, 2025, and applies only to alleged violations occurring on or after that date