INDEPENDENT FINANCIAL AUDIT.

(a) Before a political subdivision may increase an existing impact fee or adopt a new impact fee for a service area where an impact fee had previously been adopted, the political subdivision must conduct an independent financial audit in accordance with this section.

(b) An independent financial audit conducted under this section must be performed by an independent auditor who:

(1) is a certified public accountant or public accountant licensed by the Texas State Board of Public Accountancy; and

(2) is not, and has not been during the 12 months preceding the commencement of the audit, under contract to provide any other service to the political subdivision or a related entity of the political subdivision.

(c) An independent financial audit conducted under this section must provide, if applicable, a detailed accounting of:

(1) the amount of funds collected from any impact fee imposed by the political subdivision in the service area;

(2) the amount of interest accumulated under Section 395.025 on impact fees collected by the political subdivision in the service area;

(3) any proposed capital improvements or facility expansions to be financed from an impact fee collected by the political subdivision in the service area that were not constructed, as described by Section 395.025, including the categories of each improvement and expansion;

(4) the amount of funds collected from impact fees by the political subdivision in the service area that have not been spent;

(5) each impact fee collected by the political subdivision in the service area;

(6) the allocation of each impact fee made to the political subdivision in the service area;

(7) any waived impact fees in the service area under Section 395.016(g);

(8) any requested refunds of impact fees in the service area under Section 395.025;

(9) any impact fees in the service area refunded under Section 395.025; and

(10) any errors or omissions of credits in impact fee calculations for impact fees in the service area.

(d) An independent financial audit conducted under this section must be submitted to the political subdivision and advisory committee described by Section 395.058. Before the political subdivision may increase an existing impact fee or adopt a new impact fee for a service area where an impact fee had previously been adopted, the political subdivision must hold a public hearing on the results of the audit received under this subsection.

(e) A political subdivision shall make available to the public on the political subdivision's Internet website an applicable independent financial audit at least 30 days before:

(1) the publication of notice required under Section 395.044; and

(2) the adoption of an order as required under Section 395.053.

(f) A political subdivision may use money collected from an impact fee to conduct an audit required under this section.