Relating to the eligibility of certain political subdivisions to receive a state loan or grant following the political subdivision's failure to comply with certain financial reporting requirements.

89(R) SB 427 - House Committee Report version - Bill Text

By: Hinojosa of Hidalgo

S.B. No. 427

(Villalobos)

A BILL TO BE ENTITLED

AN ACT

relating to the eligibility of certain political subdivisions to

receive a state loan or grant following the political subdivision's

failure to comply with certain financial reporting requirements.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 140, Local Government Code, is amended

by adding Section 140.014 to read as follows:

Sec.

140.014.

ELIGIBILITY FOR STATE LOANS OR GRANTS

FOLLOWING FAILURE TO COMPLY WITH CERTAIN ANNUAL FINANCIAL REPORTING

REQUIREMENTS. (a) In this section:

(1) "Annual financial statement or report" means:

(A)

a municipality's annual financial statement

required to be filed under Section 103.003;

(B) a county's:

(i)

annual report required to be filed

under Section 114.025; or

(ii)

annual financial exhibit required to

be published under Section 114.022 if the county does not have a

county auditor; or

(C)

a political subdivision's annual financial

statement required to be published under Section 140.006.

(2)

"Disaster" has the meaning assigned by Section

418.004, Government Code.

(b)

Except as provided by Subsection (e), a political

subdivision that fails to file or publish an annual financial

statement or report as required by law is not eligible to receive a

state loan or grant under a state program for the political

subdivision's fiscal year in which the political subdivision was

required to file or publish the statement or report.

(c)

Except as provided by Subsection (e), a political

subdivision created under Section 52, Article III, or Section 59,

Article XVI, Texas Constitution, is not eligible to receive a state

loan or grant in a fiscal year in which:

(1)

the political subdivision is required by financial

reporting requirements prescribed by the agency administering the

state loan or grant to publish a financial statement or report; and

(2)

the political subdivision fails to file or publish

the financial statement or report described by Subdivision (1).

(d)

Each application for a state program for which a

political subdivision may not be eligible for a loan or grant under

this section must:

(1)

include a statement notifying the applicant of the

requirement of this section; and

(2)

require the political subdivision to demonstrate

compliance in the manner prescribed by the state agency

administering the loan or grant.

(e)

Subsections (b) and (c) do not apply to a political

subdivision that:

(1)

fails to file or publish a financial statement or

report because of a disaster; and

(2)

provides the following to the agency administering

the state loan or grant:

(A)

written notice detailing the circumstances

of the disaster and its impact on the compliance with the financial

reporting requirements;

(B)

a disaster declaration issued by the governor

under Chapter 418, Government Code, or any documentation from a

federal, state, or local authority confirming the occurrence of the

disaster;

(C)

a plan for compliance, including an estimated

timeline for filing or publishing the required financial statement

or report; and

(D)

any additional documentation required by the

agency responsible for administering the loan or grant.

SECTION 2. The change in law made by this Act applies only

to a financial statement or report required to be filed or published

on or after January 1, 2026.

SECTION 3. This Act takes effect September 1, 2025.